Midway Gold Tops 4.
5MM Oz Gold Under
the Investor Radar
Alan Branham
President & COO
Our next guest’s company has 4.5 million
ounces gold in the measured, indicated
and inferred categories, a JV with one
of the largest mining companies in the
world, and four advanced stage proj-
ects in Nevada and Washington. This is
a company we’ve written about in the
past, too, back when Midway Gold had
just a fraction of the ounces it has today
and yet was trading much higher. It’s all a
little perplexing considering the price of
gold and the developments the company
has made, but there you go—markets
are fickle that way. For investors though,
this presents an opportunity. President
and COO of Midway Gold, Alan Branham,
explains the significance of his company’s
advanced stage projects to investors.
R
esource Intelligence: Your company has found
a lot of gold, Alan. You have Spring Valley,
an excellent project in which Barrick has
taken a big part as an explorer, earning towards
a 60% interest. You also have a new project with
1.9 million more ounces of gold. I don’t think
the market is taking all this into consideration.
Why do you think that is?
Alan Branham: The last year has been a tough time
for a lot of companies, and to be honest, during
that period we really haven’t promoted the com-
pany very much. Now that the markets are see-
ing strength again, particularly in gold, we have
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decided we need to let the market know what we
have developed and discovered. In the last year
we have announced three updates in our gold re-
sources: 1.8 million ounces at Spring Valley, 1.9
million ounces at Golden Eagle and a little over
600,000 ounces at Pan, so you can see we’ve been
hard at work this whole time.
RI: Your Spring Valley agreement with Barrick is
impressive. Any time Barrick gets involved in a
project like this you’ve
got to imagine that
they’re looking for a “Five years ago we had
world-class deposit.
a twinkle in our eye
AB: I would guess
that Barrick’s corpor- and an idea that we
ate strategy is to find
something in excess
could find gold. Now
of five million ounces. five years later we have
Spring Valley offers
opportunities like a little over 4.5 million
that. It’s a very large
and new discovery. It’s
ounces in four distinct
over a mile (1.6km) deposits.”
long and half a mile
(0.8km) wide and ~President & COO,Alan Branham
over 1,700 feet (519
metres) deep.
RI: How long have you been working on Spring
Valley?
AB: We made the initial discovery in January
of 2006. We’ve been drilling steadily there ever
since.
RI: What attracted Barrick to the project specific-
ally?
AB: I think number one, the size. It is a very large
gold deposit, it’s brand new and it’s a new type of
deposit for Nevada that has a very large upside—
a gold porphyry. We have over 400 holes on it
and it’s still open in three directions.
RI: Can you explain a little bit about the por-
phyry, about the type of deposit, in a way that
investors can evaluate.
AB: Imagine a very large volcanic eruption where
you have magma moving up and it gets trapped
in the earth’s crust and around that edge of the
magma are veins full of quartz and gold. Then
bury it over with about 50 feet of gravel and
that’s what you have at Spring Valley. It comes
up very close to the surface and that’s why it is
still there—the old timers couldn’t see the hid-
den deposit.
So far, we only have holes down about 2,000 feet
(610 metres) with continuous mineralization
from 50 feet (15 metres) down to 1,700 feet (519
metres) and it’s still open.
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Booth # 2403A
www.midwaygold.com
877.475.3642
RI: It’s going to cost a lot to develop this project
but your partner Barrick has deep pockets.
AB: That’s right. They have five years to spend $30
million to earn a 60% interest in the project. Last
year they spent $4 million and completed about
37,000 feet of drilling. This year they’re sched-
uled to invest $5 million to keep the agreement
in place.
RI: A good question
for investors is what
is the rock value?
Looking at the rock
evaluators at www.
shareknow.net, I see
$20 per tonne rock.
So this is a low cost
operation?
AB: That’s right. It’s a
heap leach type oper-
ation where the min-
ing and milling costs
are typically less than
$5 a tonne.
RI: At your other ad-
vanced stage project,
Golden Eagle, you’ve proved up 1.9 million
ounces gold in a very short period of time.
AB: Yes, historically it was held by two different
companies and had about 250 drill holes in it.
When the economy sputtered in 2008 we had
the opportunity to acquire both sides of the pro-
ject and then put it together as a 43-101 compli-
ant resource. This is something that years ago, at
$350 gold, wasn’t considered economical. But at
$1,100 gold it has far greater potential.
In the inferred category, Golden Eagle has 4.6
million tonnes at 1.3 or so grams per tonne. The
indicated category really adds to our bottom
line, though, with 28.5 million tonnes grading
1.89 grams per tonne. So 1.7 million ounces of
gold are actually in the more certain indicated
category.
RI: What do you know about the metal? How
amenable it is to mining and costs?
AB: A lot of scoping level work has been done.
There is an oxide cap and we know that’s very
attractive. The sulfide ore body at depth is amen-
able to at least three different recovery tech-
niques. We’re in the process now of optimizing
that to see how cheaply it can be done. We’re go-
ing to apply some new techniques that may make
this very attractive.
RI: Golden Eagle is in Washington. What is that
like as a mining jurisdiction?
Midway Gold Corp.
- Continued
AB: Permitting will be more difficult because it’s
not as commonly done in Washington as it is in
Nevada or Wyoming, for example. But Kinross
Gold Corporation opened their Buckhorn mine
last year just forty miles away from this project,
so we expect that permitting can be done. The
beautiful thing about this is that it’s situated on
100% private ground that we own outright.
In terms of infrastructure, Golden Eagle is lo-
cated three miles from the town of Republic and
there is a paved road that goes right up to the ore
body. Many of the miners that work for Kinross
work and live in the town of Republic.
RI: What sort of time frame are you looking at to
get you through feasibility and a mining deci-
sion?
AB: There are two options in that regard. There
is a short term cash flow possibility here, where
we could mine off the high-grade oxide cap and
ship it to a nearby mill to generate some revenues
right away. In the longer term, we would consid-
er developing the much larger sulfide orebody. In
the meantime, we’ll possibly start a scoping study
later this year after we do more metallurgic work.
RI: What is your current cash position?
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TSX Venture and NYSE Amex: MDW
AB: Currently, just over a million dollars in the
treasury, which will keep the drills turning for
now, but we’ll soon take this to the markets for
a financing to move us forward to the next de-
velopment stage.
RI: Who are your major shareholders? How much
do you hold and how much do institutional in-
vestors and companies hold?
AB: Our shareholder base is about 40 to 50 per-
cent institutions, insiders, friends and family. Bar-
rick Gold Corporation holds a little over 8% and
we also have Kinross and Coeur as shareholders.
RI: What is it about your team’s experience that
has so many of your friends and family and other
investors holding on?
AB: We have four geologists that work for the
company and most of these fellows have 20 to 30
years experience each. They have all come from
large scale mining companies that have proven
track records. So my team knows how to find
gold. That’s what we do well and you can see it
in the resources that we put together through dis-
covery and acquisition.
RI: You have other projects as well. Are you act-
ively exploring on those as well?
Booth # 2403A
www.midwaygold.com
877.475.3642
AB: We do have a very nice set of deposits called
Pan and Gold Rock. There is a lot of good ex-
ploration potential.
RI: You’ve got a lot of projects on the go to work
with and you’re pretty focused on the Golden
Eagle and Spring Valley. Summarize for investors
what makes this a worthwhile investment and
something to look at?
AB: As an investor, I know what I look at, which is
management and opportunities for growth. Five
years ago we had a twinkle in our eye and an idea
that we could find gold. Now five years later we
have a little over 4.5 million ounces in four dis-
tinct deposits.
I think that the advantage that Midway has over
many companies is that we have multiple oppor-
tunities for growth. Our Spring Valley deposit is
being carried by one of the largest gold mining
companies in the world, with no share capital
equity dilution to our shareholders whatsoever.
We have Golden Eagle with 1.9 million ounces
of gold already and a lot of room for growth.
And we have exploration discoveries at Pan and
Gold Rock that have yet to be followed up. So
we have multiple ships out on the ocean bringing
back treasure for our shareholders. Our team has
demonstrated its ability to find and prove up gold
discoveries and build a solid portfolio for growth.
Milestones:
• 2010: Complete a financing
• Q2 2010: Midway project drill
results
• Q3 2010: Spring Valley
progress update
• Q4 2010: Golden Eagle drill
results
• 2011: Pan scoping study
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