Midway Gold plans takeover of Pan-Nevada

Vancouver – Midway Gold (MDW-V, MDWGF-O) looks to boost its Nevada footprint and gold resource through a planned takeover of fellow explorer Pan-Nevada Gold (PNV-V, PNVFF-O).

Under the proposed “friendly” acquisition, Midway will issue one share and one-half a purchase warrant for every four shares of Pan-Nevada. Warrants will be exercisable at $4.00 per share for 12 months. About 7.8-million Midway shares would be issued under the planned deal.

Midway Gold continues exploration drilling at its flagship Spring Valley project located about 30 km northeast of Lovelock in Pershing Cty, Nevada. A preliminary estimate conducted earlier this year at Spring Valley reviewed a measured and indicated resource of 9.1 million tonnes at 0.82 gram gold per tonne, about 239,000 contained 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 about 300 metres. Mineralization remains open to the north, south, west and to depth.

Earlier this year Barrick Gold (ABX-T, ABX-N) acquired an initial 6% equity position in Midway and subsequently boosted its holdings to 8.9% of the junior.

Pan-Nevada’s premier project is the Pan gold project located at the southern end of the Battle Mountain-Eureka Trend in east-central Nevada’s White Pine Cty. Pan contains sediment-hosted Carlin-style gold mineralization at relatively shallow depths (primarily oxide) and has a 2005 measured and indicated resource of 17.2 million tonnes averaging 0.65 gram gold plus an additional 7.5 million inferred tonnes at 0.58 gram gold (for total contained gold of about 500,000 ozs.) in the North and South deposits. Extensive additional drilling is expected to expand the resource in a revised study expected in early 2007.

“We are excited to pursue this friendly acquisition of Pan Nevada,” stated Midway Gold president and CEO Alan Branham. “The Company would see an opportunity to more than double our current resource holdings.”

Pan-Nevada’s CEO John E. Watson commented, “The combination makes excellent strategic sense for both firms and our shareholders. Our strategies and geographic emphases are very similar and several of our properties share both geographic proximity and geologic models.”

The deal will require approval of Pan-Nevada shareholders. A condition of the plan is that more than 50% of Pan-Nevada shares enter into a lock-up agreement.

Shares of Midway dropped about 8% on the news, closing down 25 at $2.95 apiece while Pan-Nevada rallied more than 11% to close up 7 at 67 per share.