Midway doubles Spring Valley gold resource

Midway Gold (MDW-V, MDW-X) has boosted the inferred gold resource at its Spring Valley project in Nevada.

The latest resource estimate, based on 335 drill holes, totals 50.6 million tons of ore grading 0.0196 oz. gold per ton (0.56 gram gold per tonne) for 992,000 oz.

Midway says that drilling has now identified a coherent gold zone that is about 1 sq. km on surface, reaching about 427 metres depth and open to the northeast, southwest and at depth. The previous resource totalled around 400,000 oz. gold.

The company expects to increase those numbers because the resource did not include gold discovered in all areas of the project.

“There is a significant amount of gold in the North Hill and West Diatreme areas that could not yet be included in this estimate because of a limited drill density or because certain zones have too much overburden,” said Midway’s president and CEO, Alan Branham.

As well, the company only included material occurring within a Lerchs-Grossman shell — an economic test that simulates a break-even pit using current mining costs, and in this case, a gold price of US$650 per oz. — to ensure that the resource would be economic to mine.

In February 2008, Midway plans to start a 27,000-metre drill program focusing on the area between the North Hill and Porphyry zones, and between the West Diatreme and Pond zones. The company will also do stepout drilling to the north and southwest.

The program will test at least eight new outlying gold and sliver targets on the 122-sq.-km property.