Feb 23 2011
Midas Gold, Inc. today announced independent mineral resources estimates for Hangar Flats and West End, two of the three deposits comprising the Golden Meadows Project, Valley County, Idaho; an updated estimate for the third deposit and largest gold deposit at Golden Meadows, Yellow Pine, is currently in process.
These mineral resource estimates were prepared by SRK Consulting (US) Inc. ("SRK") in accordance with Canada's National Instrument 43-101. The substantial majority of these mineral resources are located on patented mineral claims.
"The mineral resource estimates for Hangar Flats and West End give Midas Gold a substantial base from which to grow," said Stephen Quin, President & CEO of Midas Gold. "Assuming closing of the Midas Gold-Vista Gold transaction, which will add the mineral resources at Yellow Pine to these totals, Midas Gold will be in an enviable position, holding rights to a very substantial gold mineral resource located within the United States," he said. "In addition, considerable upside potential remains to these estimates, with opportunities to expand all three known gold deposits along strike and to depth. Further, there is excellent potential to discover entirely new deposits based on information contained within an extensive exploration database."
Hangar Flats Mineral Resource Estimate
The Hangar Flats mineral resource estimate is effective January 31, 2011 and is based on a geologic model consisting of a single rock type, cut by the Meadow Creek Fault Zone. The model blocks are 6m x 6m x 6m in the x, y, & z directions, respectively. Each model block is assigned a unique specific gravity based on rock type. All block grade estimates were made using 3m down hole composites. An Inverse Distance Weighting to the second power (ID2) algorithm was employed to generate a categorical indicator grade shell based on a 0.25g/t Au threshold. ID2 was also used for the gold grade estimation. The results of the resource estimation provided a CIM classified Indicated and Inferred Mineral Resource. The mineral resources have been classified as Indicated and Inferred based primarily on sample support and sample spacing and, as a result of the former, all resources supported primarily by historic data are classified as inferred, whereas all mineral resources supported by the Midas drilling are classified as indicated.
The base case Hangar Flats Mineral Resources are reported herein at two different cut-off grades, depending on the material type. The oxide material is reported at a 0.3g/t gold cut-off based on a mining cost of US$1.50/t, a processing cost of US$5.00/t, recovery of 85%, G&A cost of $2.00/t, a 5% NSR and a US$1,200/oz gold value. The sulfide material is reported at a 0.65g/t gold cut-off based on a US$1.50/t mining cost, US$20/t processing cost, 95% recovery, G&A cost of $2.00/t, a 5% NSR and a US$1,200/oz gold value. However, Midas Gold has an option to purchase the 5% NSR and so it will not be applicable in future economic considerations.
The mineral resources are confined within a conceptual Whittle® pit design based on the same parameters used for the cut-off grade and a 45° pit slope. The strip ratio for the Whittle pit design is 7.3:1. However, the mineralized trends, as indicated by drilling, extend into areas currently classified as waste within the Whittle pit. As a result, there is potential for a reduction in the indicated strip ratio once infill drilling is completed in 2011, assuming that additional mineral resources are delineated within the Whittle pit.
The Hangar Flats trend is open to the north, where mineralization has been continuously traced by trenching, wide spaced drilling and underground exploration drifts for a distance approximately equivalent to that currently hosting the currently defined mineral resources at Hangar Flats. Further, work to delineate and expand additional mineral resources will be a priority exploration focus in 2011.
West End Mineral Resource Estimate
The West End mineral resource estimate is effective February 16, 2011 and is based on a geologic model consisting of five general rock types, which are cut by three high angle faults. The model blocks are 20ft x 20ft x 20ft in the x, y, & z directions, respectively. Each model block is assigned a unique specific gravity based on rock type. All block grade estimates were made using 10ft down hole composites. An Inverse Distance Weighting to the second power algorithm was employed to generate a categorical indicator grade shell based on a 0.01oz/t Au threshold. An inverse distance weighting squared (ID2) algorithm was also used for the gold grade estimation. The results of the resource estimation provided a CIM classified Indicated and Inferred Mineral Resource. The quality of the drilling and data is very good and the Mineral Resource was classified mainly according to the general drillhole spacing.
The base case West End Mineral Resources are reported at two different cut-off grades, depending on the material type. The oxide material is reported at a 0.274g/t gold cut-off based on a mining cost of US$1.50/t, a processing cost of US$5.00/t, recovery of 85%, G&A cost of $2.00/t and a US$1,200/oz Au value. The sulfide material is reported at a 0.549g/t gold cut-off based on a US$1.50/t mining cost, US$20/t processing cost, 95% recovery, G&A cost of $2.00/t and a US$1,200/oz gold value. The mineral resources are confined within a conceptual Whittle® pit design based on the same parameters used for the cut-off grade and a 50° pit slope based on historic mining practices. The strip ratio for the Whittle pit design is 2.6:1.
The West End mineral resource is open along strike to the NE and SW and down dip to the SE. These areas will be a priority exploration focus in 2011. In addition, Midas believes there is potential for stacked mineralized systems under- and over-lying the West End mineral resource, based on wide spaced drilling and surface sampling. This potential will be further evaluated in 2011.
Yellow Pine Deposit
The independent resource estimate for the Yellow Pine deposit was initially announced by Vista Gold on November 19, 2003, and the "Yellow Pine Project, Idaho, USA, Technical Report" was filed on SEDAR on December 12, 2003". Vista Gold subsequently incorporated those mineral resources in the "Preliminary Assessment of the Yellow Pine Project, Yellow Pine, Idaho" filed on SEDAR on December 15, 2006.
Since the 2006 preliminary assessment for Yellow Pine, there has been no drilling within the area of the mineral resource estimate for Yellow Pine. As part of the consolidation of the Midas Gold and Vista properties, Midas Gold has retained SRK to complete a new mineral resource estimate for the Yellow Pine deposit using similar technical parameters as those used for the Midas properties. Given that Midas Gold has recovered additional historic data, the different approaches to the estimation of mineral resources and current economic conditions used by SRK, combined with the lack of recent drilling at Yellow Pine, the mineral resource estimate for Yellow Pine may change. Further, SRK is likely to require some additional confirmatory drilling at Yellow Pine before SRK can classify the deposit in the indicated or measured categories. Therefore, following the combination, the mineral resources at Yellow Pine are expected to be reclassified into the inferred category until Midas Gold can complete the confirmatory drilling during the summer of 2011. SRK is expected to complete its new mineral resource estimate for the Yellow Pine deposit by the end of March 2011.
When and if the consolidation of the Midas Gold and Vista Gold properties is complete, the development options and economic assumptions contained in 2006 preliminary economic assessment should no longer be relied upon, given that the passage of time and the consolidation of the deposits in the district, will result in different assumptions and approaches to the economic considerations.
The Yellow Pine mineral resource remains open to expansion in a number of directions, particularly along strike to the northeast towards the past producing Homestake area. Subject to completion of the Midas Gold - Vista Gold transaction, this potential will be evaluated by Midas Gold in 2011.
Update on Midas-Vista Transaction
Further to Vista Gold's news release of December 7, 2010, Midas Gold and Vista Gold have advanced the formal documentation of the terms and conditions set out in the letter of intent between the parties and expect to execute the formal documentation shortly. Midas Gold anticipates that it will then be sending a proxy statement for a special meeting of the shareholders of Midas Gold, Inc. to seek shareholder approval of the transaction.
Compliance with National Instrument 43-101
Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for mineability, selectivity, mining loss and dilution. These mineral resource estimates include inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to the measured and indicated categories through further drilling, or into mineral reserves, once economic considerations are applied.
The mineral resources at Golden Meadows are contained within areas that have seen historic disturbance resulting from prior mining activities. In order for Midas to advance its interests at Golden Meadows, the project will be subject to a number of Federal, State and local laws and regulations and will require permit to conduct its activities. However, Midas is not aware of any environmental, permitting, legal or other reasons that would prevent it from advancing the project.
Golden Meadows Project
The Golden Meadows Project encompasses most of the historic Stibnite-Yellow Pine Mining District in South-central Idaho. Midas Gold, Inc. (a private company) owns or controls over 4,000 hectares in the district and has entered into a letter of intent with Vista Gold Corp. to combine Vista's Yellow Pine deposit with Midas Gold's interests to form a new company ("Newco"). As a result, Vista will become a 35% shareholder of Newco.
The Stibnite-Yellow Pine district lies at the intersection of major, regional fault systems and lies on the margin of the western ring fractured margin of the Tertiary Thunder Mountain caldera complex. Gold mineralization within the Golden Meadows Project appears to be related to an intrusion related, gold-rich system overprinted by a younger, epithermal gold system with increased silver and antimony. Historic gold production from the district is approximately one million ounces primarily from; underground higher-grade gold-antimony production at Hangar Flats from 1925-38, open pit mining at Yellow Pine from 1938-52, and from heap leaching of oxide gold occurrences, including West End, Garnet Creek and Homestake, from 1974 to 1997. The deeper sulphide gold potential has seen little modern exploration. The principal gold deposits identified to date within the Golden Meadows Project are Hangar Flats, West End, and Vista's Yellow Pine deposits, all of which are associated with significant structural corridors. In addition, numerous other gold targets have been identified, with potential for both shallow oxide mineralization and deeper sulphide potential.
Compliance with National Instrument 43-101
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 and reviewed by Stephen P. Quin, P. Geo., President and CEO of Midas Gold, Inc. The exploration activities at the West End deposit were carried out under the supervision of Christopher Dail, C.P.G., Qualified Person and Project Manager for the Golden Meadows Project.
Bart Stryhas, PhD, CPG, of SRK is the qualified person, as defined in National Instrument 43-101, responsible for the mineral resource estimates for Hangar Flats and West End deposits reported herein. He has read and approved the relevant technical portions of this news release related to the mineral resource estimates for which he is responsible.