Midway Gold has signed a term sheet with Barrick Gold Exploration, a wholly owned subsidiary of Barrick Gold, for an exploration agreement and option to joint venture Midway’s Spring Valley gold project in Pershing County, Nevada, USA. Alan Branham, President and CEO of Midway Gold: “We believe that Barrick has the capability to develop Spring Valley into a producing mine. As evidenced by our recent results from 2008 drilling, the deposit continues to expand. Barrick has been an excellent partner by investing $12.3 million in equity placements in Midway since 2006 and by providing technical advice as we have expanded the discovery.”
The parties have settled on terms granting Barrick the exclusive right to earn a 60% interest in the project by spending $30,000,000 on the property ($4,000,000 guaranteed in the first year) over five years. Barrick may increase its interest by 10% (70% total) by spending an additional $8,000,000 in the year immediately after investing 60%. Midway will coordinate geologic and administrative activities during the earn-in period for a negotiated administrative fee.
Spring Valley has an NI 43-101 compliant Inferred resource estimate of 45 Mt grading 0.0196 oz/t Au for a total of 992,152 oz. The deposit is 1,067 m long and 1,067 m wide and has been tested to a depth of 427 m. Midway has expanded drilling beyond this announced resource with an additional 89 holes in 2008 which is currently being compiled and updated. Results for eight holes are pending.