Midway Gold Ups Resource and Gets Boost for Budget at Spring Valley

Midway Gold Ups Resource and Gets Boost for Budget at Spring Valley

Denver-based Midway Gold (TSX:MDW,NYSE:MDW) is off to a good start this week following a double whammy announcement regarding both a resource upgrade and a budget boost. The Nevada-focused gold company saw its share price climb 4.12 percent following the news.

Causing all the fuss is no doubt the exciting 102-percent increase in the mineral resource estimate for Midway's Spring Valley project. It now sits at 4.37 million ounces of measured and indicated gold. Additionally, the company has bumped up the measured and indicated resource's grade by 20 percent. The project's inferred resource now comes to 1.07 million ounces. To get to those results, the company revised its previous estimates using the results collected from the 2011 to 2013 drilling seasons.

As one Midway investor noted in a Seeking Alpha article, "[t]his update re-emphasizes there's deep value in Midway Gold, beyond the near-term production Pan project in Nevada."

The Investment Doctor also points out that while the resource update wasn't unexpected, it does put the project "in the league of major exploration projects in the USA." The substantial increase in average grade is also encouraging as it could be construed as an indication that the project's economics will be superior.

Likewise, Haywood Securities analyst Geordie Mark views Midway's news as positive for the company, explaining in a research note to clients that the updated resource "not only heightens the total known gold endowment on the project, but also shows a significant increase in the contained ounces and grade of gold within M&I resources. Whittle Pit constrained resources at Spring Valley also stand at 3.73 Mox gold grading 0.84 /g/t using $1,300 per ounce gold price."