Midway Gold (TSX: MDW; NYSE: MDW) may be in the thick of building its first gold mine at the Pan project in Nevada — with the first gold pour expected in the fourth quarter — but that hasn’t stopped the junior developer from advancing what it hopes will become its second gold mine, just 10.5 km southeast.
Since incorporating the results from stepout drilling at the Gold Rock deposit in 2012 and 2013, Midway Gold has expanded the project’s resource footprint.
In the measured and indicated category, tonnage has increased by 56%, grade by 7% and contained ounces by 65%, while in the inferred category tonnage has grown by 36%, grade by 19% and contained ounces by 62%.
Measured and indicated resources stand at 20.22 million tonnes grading 0.79 gram gold per tonne for 513,000 contained oz. gold. Inferred resources add 24.30 million tonnes averaging 0.69 gram gold per tonne for 536,000 contained oz. gold.
Based on the updated resource, Midway Gold says it will proceed with a preliminary economic assessment. The project is already well into the permitting process, and the company expects to complete its environmental impact statement by September.
“The significant increase in defined resources . . . and elevated grade may mean that Gold Rock has the critical mass to warrant exploitation,” Haywood Securities analyst Geordie Mark wrote in a research note.
Management says it can leverage its experience developing and permitting the open-pit, heap-leach Pan project to help advance Gold Rock. Gold Rock — 104 km west of Ely, Nev., in the Pancake Range of western Pine County — is also similar in size and geologic characteristics to the Pan project, the company says.
News of the updated resource sent Midway Gold shares up 7% to close at $1.04. Over the last year the junior has traded in a range of 76¢ to $1.60.