Midway drilling pushes Spring Valley northwards

Vancouver – Drilling by Midway Gold (MDW-V, MDWGF-O) on the North Hill target at its Spring Valley project in northwestern Nevada has tied into a new zone of gold mineralization.

The 18-hole program at North Hill returned up to 10.7 metres grading 7.3 grams gold per tonne in hole SV06-200, including a 1.5-metre high-grade intercept of 55.4 grams gold associated with rhyolite dikes and sills intruding the northeast edge of the Spring Valley diatreme. Mineralization was encountered in 14 of the holes with several cutting longer intercepts of lower-grade gold.

Results from the North Hill drill program extend gold mineralization beyond the modeled resource, over an area of 450 metres by 300 metres. With the initial program comprised mostly of vertical holes, Midway has moved to angle-hole infill drilling to test a number of near-surface, high-angle dikes and faults that may host higher-grade gold.

Additionally, deep drilling on the main diatreme zone encountered further gold mineralization. Intercepts of one gram gold over 55 metres (from 290 metres depth) and nine metres of 2.6 grams gold were reported from the program. A trio of deep holes indicates mineralization extends at least 200 metres beneath the modeled resource.

A preliminary estimate conducted earlier this year at Spring Valley reviews measured and indicated resources of 9.1 million tonnes at 0.82 gram gold, containing about 239,000 ozs. of gold. The calculation was based on 164 drill holes, uses a US$450 per oz. gold price and a 0.35 gram gold cut-off grade. An additional 7 million tonnes of inferred resource averaging 0.84 gram gold (195,000 contained ozs.) was also estimated within a potential pit shell.

Gold mineralization at Spring Valley is hosted along the margin of a large diatreme-porphyry intrusive complex. Midway’s drilling has resulted in the merging of a number of previous defined zones into a larger single zone about one km long by 500 metres wide and extending to a depth of 300 metres. Mineralization at Spring Valley remains open to the north, south, west and to depth.

“I am encouraged to see expansion of the gold inventory to the North Hill, at depth, and in the West Diatreme area,” stated Midway president and CEO Alan Branham. “I look forward to infilling these wide space exploration holes with angle drill holes and drilling deeper to expand the resource. The recently announced private placement financing that includes Barrick Gold Corporation, allows us to begin conversion of these exploration holes into resource and expand drilling to test the new targets generated this summer.”

Midway also recently announced a planned $5-million private placement financing comprised of two million units at $2.50 apiece. Barrick Gold (ABX-T, ABX-N) has agreed to purchase half the offering, boosting its holding in Midway to 8.9%. Earlier this year the gold major bought two million units of the explorer at $1.80 per unit giving it an initial 6% equity position.

Shares of Midway Gold rallied to close up a dime to $2.95 apiece on the latest drill results. The company posts a $97-million market capitalization given its 32.9 million shares outstanding.