Midway Gold Adds 1.8 km of Potential Strike Length at Spring Valley Project, Nevadaadmin
Midway Gold Corp. reports that exploration drilling conducted in the fourth quarter of 2010 has resulted in an extension of the mineralized strike length by about 1.8 km to the south-southwest of the previously known gold resource at Spring Valley. The step out in reverse circulation drill hole SV10-499 intersected 12.2 m of 1.2 gram per tonne (g/t) Au including 1.5 m of 7.8 g/t Au mineralization, showing strong, relatively shallow Spring Valley-type mineralization in similar structures and host rocks to the existing gold resource. The drill hole is south of the property acquired late last year and described in the press release dated December 8, 2010 (see illustration below). The gold resource remains open to the northwest, to the south, and to depth.
Highlights of fourth quarter drill results reported to the Company by Barrick Gold Exploration Inc. (“Barrick”) includes several high grade intercepts (further described in the table below):
* Hole SV-511C with 62.5 m of 2.2 g/t Au including 1.5 m of 22.4 g/t Au, 1.5 m of 305.0 g/t Au, and 1.5 m of 21.1 g/t Au; and 42.7 m of 0.9 g/t Au including 1.5 m of 12.5 g/t Au. * Hole SV-502C with 3.3 m of 3.0 g/t Au including 0.8 m of 17.8 g/t Au, and 10.5 m of 1.6 g/t Au including 1.0 m of 28.0 g/t Au.
* Hole SV-510 with 25.9 m of 0.8 g/t Au including 1.5 m of 4.6 g/t Au, and 12.2 m of 3.6 g/t Au including 1.5 m of 96.0 g/t Au.
These holes intersected mineralization below the rim of the north edge of the conceptual pit and to depth and could therefore expand the length and width of the resource as well as at depth.
“Midway believes that these results are strong evidence that the new, untested parcels acquired last year could potentially contain significant resources at relatively shallow depths,” said Ken Brunk, President and COO. “It will be exciting to watch the development of this potentially world-class gold system.”
Barrick has informed Midway that it intends to conduct and fund the minimum required program of US$7 million in 2011 for a cumulative amount of US$16 million by December 31, 2011. Drilling in 2011 is expected to focus on expanding the resource and evaluating satellite targets, particularly within the recently acquired land south of the existing resource. Under the terms of the March 9th, 2009 agreement between Midway and Barrick, Barrick will earn a 60% interest in the project by completing work expenditures of US$30 million before December 31, 2013.
Midway has commissioned an independently prepared NI 43-101 compliant resource update to estimate how much the resource may have expanded due to Barrick’s drill programs since 2009. As of March, 2009, the Inferred Resource was 1.8 million ounces of gold contained within 80 million tonnes grading 0.72 g/t gold. See the Midway press release dated March 2, 2009 and the subsequent NI 43-101 technical report filed on SEDAR March 30, 2009 for more details. The open pit outline shown below is based upon a $715 gold price pit from the 1.8 million ounce Inferred Resource.