Midway tables preliminary Spring Valley number (May 08, 2006)

AMEC E&C Services has pinned down a preliminary resource estimate for Midway Gold’s (MDW-V, MDWGF-O) developing Spring Valley project, in Pershing Cty., Nev.

Based on some 164 widely spaced holes, measured resources are estimated at 2.1 million tonnes running 1.1 grams gold per tonne, for 67,500 contained ounces gold. The indicated resource category is home to 7.9 million tonnes averaging 0.74 gram gold, for 171,643 contained ounces, with another 7.8 million tonnes of inferred material grading 0.84 gram gold, or 195,375 oz. The estimates are based on a gold price of US$450 per oz. and a cutoff grade of 0.03 gram gold.

The resource is contained within a 0.5 by 1-km area to a depth of 300 metres. The area comprises the Pond, Sill, and Porphyry zones, which coalesce into a single system. Gold mineralization is hosted in altered Permo-Triassic rhyolite breccias, flows, tuffs, porphyry dykes and sills intruding along a large diatreme vent complex.

So far, only 20% of the diatreme’s margin has been drill tested. Mineralization remains open to the north, south, west, and at depth.

“The resource is an encouraging start for the project, especially with the drilling as widely spaced as it currently exists,” says Midway chief executive Alan Branham. “The resource is open in several directions, at depth and especially to the south and west, where current drilling is finding gold in the West Diatreme target.”

A pair of holes returning 1.5-metre intervals running 139.2 grams gold and 11.34 grams gold, respectively, highlights recent drilling there. The holes encountered paleoplacer gravels on bedrock, which overlies low-grade disseminated gold. The gravels are situated on the west flank of a diatreme breccia, 300 metres west of the main diatreme. Midway says the gravels are derived from the main Spring Valley diatreme.

Meanwhile, drilling also cut gold-bearing porphyry on the west side of the diatreme, generally yielding 0.3 to 2.8 grams gold over 1.5 to 15 metres. The zone remains open in all directions.

Midway has two drill rigs completing stepout and infill drilling. The company hopes to receive a permit to allow the drilling of up to 500 more holes by June.

Midway recently picked up another 16 sq. km of land to fill in gaps between its pre-existing claims and those acquired from Coeur d’Alene Mines (CDM-T, CDE-N).