Midas explores consolidated Idaho gold property

Vancouver – Recently-launched Midas Gold (MAX-T) is working through a 20,000-metre drill program at its consolidated gold property in Idaho’s Stibnite-Yellow Pine district as it looks to prove up the project’s potential.

Now known as the Golden Meadows project, the area has seen extensive historic exploration and some open-pit mining, but in recent years fractured land ownership hindered further development. But a collaboration with Vista Gold (VGZ-T) in April saw Vista contribute its Yellow Pine deposit to Midas’ adjacent holdings of the Hangar Flats and West End gold deposits for a 35% share of Midas Gold.

The deal gave Midas Gold, established at the beginning of the year, a 43-sq.-km land package that hosts numerous mineralized zones on mostly patented ground with no royalties. With the property package established, Midas went on to list publicly on the TSX in mid-July with a $40-million initial public offering of 12.3 million shares at $3.25 each. The exercise of an over-allotment option brought in a further $5.3 million.

The new company is led by Stephen Quin, who until the end of 2010 was the president and COO of Capstone Mining (CS-T). At Capstone, he co-won AME BC’s E.A. Scholz Award for excellence in mine development for his role in brining the Minto mine in the Yukon to production. Quin was also CEO of Sherwood Copper before he managed its merger with Capstone.

Now the company is looking to both upgrade the current resources, spread over several deposits in the area, while also looking to establish mineralization between the known deposits. Midas has drilled about 5,100 metres over 21 holes so far, with assays results out on the first four.

Holes 11-56 and 11-57, drilled to infill the Yellow Pine deposit, respectively hit 122.2 metres grading 2.32 grams gold per tonne from 17 metres downhole, and 90.8 metres carrying 2.92 grams gold from 30 meters depth.

Hole 11-58, drilled to expand the Hangar Flats deposit, hit 45.6 metres carrying 2.81 grams gold from 76 metres depth, and 39 metres averaging 2.24 grams gold from 168 metres. The company reports that the latest drilling at Hangar Flats indicates that the deposit is a series of stacked, north-plunging ellipsoidal zones.

Finally, hole 11-66 hit 53.3 metres grading 4.12 grams gold from 96 metres depth in an area between the past-producing Yellow Pine and Homestake pits. The intersection was hit below a cap of unmineralized rock in a similar structure to Yellow Pine, leading the company to note the possibility of discovering more blind mineralization on the trend.

Thanks to over 150,000 metres of historic drilling the area, Midas Gold already has several compliant deposits.

The Yellow Pine deposit hosts sulphide resources of 4.3 million indicated tonnes grading 2.19 grams gold for 304,000 oz. gold and 28.1 million inferred tonnes grading 2.32 grams gold for 2.1 million oz. gold, while the oxide resource has already been largely mined out and currently sits at a little over 30,000 oz.

Roughly a km east, the West End deposit hosts an oxide resource of 7.5 million indicated tonnes grading 0.96 gram gold for 232,000 oz., and a sulphide resource of 18.3 million indicated tonnes grading 1.51 grams gold for 889,000 oz., and 7.7 million inferred tonnes grading 1.40 grams gold for 348,000 oz.

And about 3 km south of Yellow Pine, the Hangar Flats deposit hosts a sulphide resource of 9.7 million indicated tonnes grading 2 grams gold for 625,000 oz. and 15.6 million inferred tonnes grading 2.44 grams gold for 1.2 million oz.

All told, and combining the oxides and sulphides, Midas holds resources of 2.1 million indicated gold oz. and 3.7 million inferred oz. gold in the area. There are also significant levels of silver antimony, and tungsten, but not enough data to incorporate them into the resource. All deposits remain open along strike and at depth and the company plans to have updated resources out in the first half of 2012.

The resources are a combination of intrusive-related and sediment-hosted deposits, with at least five intrusive events documented in the area. On all deposits quartz veins are closely associated with faults and are indicative of higher-grade zones of mineralization.

Midas’s share price has hit a high of $3.55 and a low of $3 since it started trading in mid-July. The company’s share price closed down 5¢ at $3.45 on the latest results, with 104 million shares outstanding.