Construction Update For Pan Gold Project

DENVER - Midway Gold Corp reported a progress update for the Pan Mine, the Company’s first open pit, heap leach operation in Nevada. Following thorough review of Pan operations and construction progress in 2014, Midway expects a first gold pour in the first quarter of 2015. Construction at Pan is approximately 85% complete.

Midway’s President & CEO, William Zisch stated, Since coming on board December 10th, I have had the chance to review many aspects of the Pan Project and Pan Operations. This update reflects our recent reviews and the current status of the Pan Project and Operations.

As we ramp up operations, we are evaluating the performance of the mine and will look at opportunities to improve efficiency while considering ways to optimize production. When we complete construction and begin leaching, I will be in a position to provide meaningful operating guidance for 2015.

Since 2010, the Midway team has advanced from exploration through development at a commendable pace and is now preparing to complete mine construction and commence production. As might be expected during our final stage of construction and commissioning, there are many critical path actions items, and any unplanned events have the potential to result in delays. Two recent developments have resulted in delays that will push our previous end of January estimate for first gold to a broader projection for production in the first quarter of 2015. A mechanical malfunction in one of our two production water wells has extended the time required to fill our operating pond to the level necessary to initiate irrigation of the ore on the pad. The well is currently under repair and plans for a third production well are in progress to mitigate this risk in the future. A second source of delay is related to the issuance of building and occupancy permits at the state and county level. It has been an ongoing challenge for our team to accurately predict and control the time required for issuance of these final operating permits. We have broadened our timeline for first production to the first quarter of 2015 due to these uncertainties.

The total capital expenditure for Pan construction is estimated at $81 million and the preliminary estimate of project spending as of the end of December 2014 is about $69 million. We have drawn $37 million of the $53 million project finance facility that is in place with Commonwealth Bank of Australia.

Mining operations with Ledcor continue to ramp up. At the end of 2014, 1.7 million tons had been placed on the leach pad. We are currently assessing the timing for first irrigation and leaching of the heap. This will rely, in part, on our ability to return to full pumping capacity from the second production well. When we do initiate leaching from our first well, our production will be constrained until we place the repaired second well back into service. At that point, we will be able to apply solution to meet our design capacity and allow us to "catch up" to the ore that has been placed on the pad.

The Pan project is a simple, oxidized, Carlin-style gold deposit mineable by shallow open pit methods and treatable by heap leaching. Pan completed the required NEPA permitting process in December 2013, and is currently in late-stage construction with gold production expected in the first quarter of 2015. Midway contracted with Ledcor in 2014 to provide all mining-related services including manpower and equipment. This approach reduces the capital required for Pan construction and startup. Based on metallurgical work completed in 2013, the Company initially plans to leach run-of-mine material, therefore eliminating the originally planned 2-stage crushing circuit in the first years of mining at Pan.