MIDAS GOLD REPORTS MINERAL RESOURCE ESTIMATE FOR GOLDEN MEADOWS TAILINGS
Reprocessing of Tailings May Provide Opportunity for Environmental Remediation and Economic Benefits
VANCOUVER, BRITISH COLUMBIA - Midas Gold Corp. (TSX:MAX / OTCQX:MDRPF) today reported results of an independent mineral resource estimate for a significant portion of the historic tailings located on its Golden Meadows Project in the Stibnite-Yellow Pine Mining District, Valley County, Idaho. These historic tailings were produced by prior operators during the 1920s through 1950s and currently occupy an impoundment located in the Meadow Creek Valley near the Hangar Flats deposit. These historic tailings present a potential opportunity for Midas Gold to remediate pre-existing disturbance by reprocessing these tailings, while contemporaneously providing potential value to shareholders. A summary of the mineral resource estimate, based on the drill data previously reported on October 7, 2013, is tabulated below:
Table 1: Mineral Resource Estimate for Historic Tailings (2)
| Cut-Off Grade (1) | Classification | Tonnes (000s) | Gold Equiv. (g/t) (3) | Gold (g/t) | Gold (000s oz) | Antimony (%) | Antimony (000s lbs) | Silver (g/t) | Silver (000s oz) |
|---|---|---|---|---|---|---|---|---|---|
| 0.75 | Indicated | 2,526 | 1.64 | 1.19 | 96 | 0.17 | 9,476 | 2.94 | 239 |
| 0.75 | Inferred (2) | 176 | 1.59 | 1.16 | 7 | 0.16 | 631 | 2.71 | 15 |
(1) Cut-off grade in grams gold per metric tonne.
(2)Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no assurance that mineral resources will be converted into mineral reserves. Mineral resources are subject to further dilution, recovery, lower metal price assumptions and inclusion in a mine plan to demonstrate economics and feasibility of extraction. The mineral resource estimate includes 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 available project information is currently not sufficient to convert the estimated mineral resources to mineral reserves.
(3) In situ gold equivalent values based on $1,350/oz gold, $20/oz silver, $4.75/lb antimony, but do not include tungsten. These equivalent grades are provided for illustrative purposes only and do not account for recoveries or payabilities of the various metals, which may vary significantly, depending on the metallurgical process selected.
“The mineral resource estimate for the historic tailings at Golden Meadows creates an opportunity to both clean up a pre-existing issue, while also offering potential to recover significant precious metal and antimony values, should environmental, engineering, metallurgical and economic factors prove to be positive,” said Stephen P. Quin, President and CEO of Midas Gold Corp. “Given the location of the tailings, they would likely be reprocessed early in any future mine plan, providing for the remediation to occur early in the project life.”
The mineral resource estimate is effective October 22, 2013 and was prepared for Midas Gold by Cameron Consulting, Liberty Lake, WA. A substantial majority of mineral resources are located on private land owned by Midas Gold.
Drill Program
Drilling in and around the historic tailings consists of 73 holes, including 27 historic direct-push and reverse circulation holes (mostly monitoring wells), 42 auger holes completed in 2013 (totaling 978m), two PQ-diameter core holes, and four PQ-diameter Sonic holes completed in 2012.
The details of the 2013 drilling and sampling program, along with illustrations, used to support the mineral resource estimate are described in more detail in the news release dated October 7, 2013, and are summarized herein. The 2013 drilling program was completed with a conventional hollow-stem auger system with a 7.6cm inner tube driven in advance of the auger flights for continuous recovery of materials and to eliminate cross-contamination. These drill holes range between 8m and 52m in depth and are all vertical. Drill holes were completed on an approximately 75m x 75m grid across the main tailings area.
Excluding holes outside of the tailings area and those that intersected no tailings, the database used in the mineral resource estimate comprises 38 Midas Gold augered drill holes and three sonic drill holes totaling 1,055m of which, 339m have assay results for tailings (four of the 42 Midas Gold holes failed to intersect tailings and were not utilized in the mineral resource estimate). Historic drill holes were only used to aid in construction of the tailings solid. Samples of the tailings from Midas Gold’s auger drill program were collected from the auger inner tube on 0.61m (2ft) intervals, split by the on-site geologist and assayed by ALS Chemex. A total of 35 Shelby tube samples were collected to determine wet and dry densities for the tailings material. The bulk density samples have a simple average of 1.495 g/cm3 as determined by Strata, geotechnical engineering consultants.
Block Model and Resource Estimation Procedures
For resource estimation purposes, gold, antimony and silver were composited over 0.61m lengths. A review of capping by graphic probability plots and decile methods results in no cap for gold, a cap of 0.6% for antimony and 10g/t for silver in order to minimize the influence of population outliers. Two low outliers and one high outlier were removed from the density dataset.
The block sizes used in the mineral resource model are 15.24m x 15.24m x 1.524m (50ft x 50ft x 5ft) in the x, y, and z directions, respectively. Each block was assigned a unique dry bulk density estimate based on interpolation of density samples by inverse distance weighting to the second power (ID2) method.
All gold, antimony, and silver grade estimates were made using 0.61m down-hole composites and ordinary kriging methods. Composites were weighted by correlogram models and the correlogram anisotropy guided the shape of the search ellipsoids. The gold search ellipsoid was weighted 1.5:1 along an azimuth of 325o, the antimony search ellipsoid was weighted 2:1 along an azimuth of 330o, and the silver search ellipsoid was weighted 2:1 along an azimuth of 310o, all with a plunge of 0o, reflecting the layer cake nature of the tailings. The vertical search was limited to 1/10th the principal axis searches, which were 175m, 220m, and 200m for Au, Sb, and Ag, respectively. All blocks in the model were estimated in a single pass with a minimum of one and maximum of twelve composites per block. No more than three composites from the same drill hole, representing slightly more than a block height, were included in a block estimate, forcing the search neighborhood to include more weight from data in neighboring holes than otherwise.
The historic tailings material is covered by spent-ore material stockpiled from prior heap leach operations conducted in the 1980s and 1990s. The spent-ore material averages 12m thickness and ranges from 2m to 20m thick. Because Midas Gold is evaluating potential use of this material for construction purposes and because conceptual site lay-outs described in the 2012 Preliminary Economic Assessment (the “2012 PEA”) would require relocation of this material prior to any pending construction activities, mineral resources were not constrained within an optimized pit and are reported as in-situ resources only since it is assumed the spent-ore material will be utilized for other purposes.
Classification
The resource estimate is classified as Indicated and Inferred resources according to Canadian Institute of Mining, Metallurgy and Petroleum (CIM) definition standards. Resource classification considered confidence criteria such as: (1) the drill hole spacing; (2) bench plots of kriging variance, a measure of estimation uncertainty; (3) and anisotropic distance to the nearest composite. Areas of inferred mineral resources primarily occur around the margins of the tailings material where drilling was restricted due to logistical and environmental considerations.
Sensitivity
Table 2 below shows potential mineral resources in all classes at a range of cut-off grades. The mineral resource estimate for the tailings shows only moderate sensitivity to grade cut-off grade. No material <0.60 g/t Au is estimated in the block model.
Table 2: Sensitivity of Mineral Resource to Cut-off Grade(2)
| Cut-Off Grade(3) | Tonnes (000s) | Gold (g/t) | Gold (000s oz) | Antimony (%) | Antimony (000s lbs) | Silver (g/t) | Silver (000s oz) |
|---|---|---|---|---|---|---|---|
| 0.60 | 2,878 | 1.16 | 107 | 0.16 | 10,479 | 2.85 | 264 |
| 0.65 | 2,868 | 1.16 | 107 | 0.16 | 10,453 | 2.85 | 263 |
| 0.70 | 2,827 | 1.17 | 106 | 0.17 | 10,363 | 2.87 | 261 |
| 0.75(1) | 2,703 | 1.18 | 103 | 0.17 | 10,107 | 2.92 | 254 |
| 0.80 | 2,537 | 1.21 | 99 | 0.17 | 9,706 | 2.99 | 244 |
| 0.85 | 2,367 | 1.24 | 94 | 0.18 | 9,217 | 3.04 | 232 |
| 0.90 | 2,232 | 1.26 | 91 | 0.18 | 8,776 | 3.08 | 221 |
| 0.95 | 2,103 | 1.28 | 87 | 0.18 | 8,347 | 3.11 | 210 |
| =>1.00 | 1,972 | 1.30 | 83 | 0.18 | 7,906 | 3.14 | 199 |
(1) Base Case
(2)Readers are advised that mineral resources that are not mineral reserves do not have demonstrated economic viability. There is no assurance that mineral resources will be converted into mineral reserves. Mineral resources are subject to further dilution, recovery, lower metal price assumptions and inclusion in a mine plan to demonstrate economics and feasibility of extraction. The mineral resource estimate includes 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 available project information is currently not sufficient to convert the estimated mineral resources to mineral reserves.
(3) Cut-off grade in grams gold per metric tonne.
Validation
The block model was verified to ensure that no estimated variables had negative values or were un-estimated and that maximum values for gold, antimony, and silver were consistent with the respective element’s cap, or maximum composite values. Block factors and spatial limits of the model were visually compared to the tailings and topographic wireframes representing the model limiting surfaces. Model sections and benches displaying the raw down-hole assay data were visually cross checked against composite values and estimated block values.
The block model total tailings volume exactly matched the tailings solid volume. The tonnage weighted average density estimated, 1.494 g/cm3, compares closely to the simple average of the measurements at 1.495 g/cm3.
A nearest-neighbor estimate provided a check for global bias on the Kriged gold estimate, and compared well to the Kriged estimate. The Kriged estimate also compared well to the length-weighted average grade of the gold composites and the estimated value derived from back-calculating expected tailings grades from past mining, milling and production records.
Metallurgical Testing
Composite samples from the 2012 Sonic holes were sent to SGS Labs for preliminary metallurgical testing and results indicate that recoveries similar to those achieved for hard rock mineralization utilized in the 2012 PEA are achievable (see news release dated September 4, 2012). Additional testing is planned to further evaluate possible processing and recovery methods that might be suitable for these materials.
Potential for Economic Viability and Compliance with National Instrument 43-101
The mineral resources meet the test of potential economic viability, as required under NI43-101, since the cut-off grade used in the base case is the same as that used in the 2012 PEA for in situ hard rock mineralization, preliminary metallurgical testing has been completed that suggests similar recoveries to those used in the PEA, the coarser waste above the tailings are potential construction materials for future operations, and the remediation of these tailings offers potential environmental benefits.
The mineral resource estimates presented herein follow the guidelines of the Canadian Securities Administrators’ National Instrument 43-101 and conform to the required CIM Estimation of Mineral Resource and Mineral Reserves Best Practices Guidelines. Mineral resources have been classified in accordance with the “CIM Standards - For Mineral Resources and Reserves: Definitions” (November 27, 2010), and Companion Policy 43-101CP, as amended by the Canadian Securities Administrators (CSA) and enacted on June 30, 2011. The mineral resource estimate was prepared by consulting geologist Donald Cameron, SME Registered Member and MMSA QP Member, and an Independent Qualified Person as defined in the instrument. Mr. Cameron is the Qualified Person responsible for the mineral resources reported herein. He has read and approved the relevant technical portions of this news release related to the mineral resource estimate for which he is responsible.
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set forth in National Instrument 43-101 and reviewed by Stephen P. Quin, P. Geo., President and CEO of Midas Gold Corp. The exploration activities at the deposit were carried out under the supervision of Richard Moses, CPG, Qualified Person and Field Operations Manager for the Golden Meadows Project.
The mineral resources at the Golden Meadows Project exist within areas of historic disturbance resulting from mining and mineral processing activities by prior operators. In order for Midas Gold to advance the Golden Meadows Project, the Project will be subject to a number of Federal, State and local laws and regulations and will require permits to conduct its activities. However, Midas Gold is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, market or political factors that would materially affect the mineral resources stated herein or prevent it from advancing the project.
Sampling Procedures and Quality Assurance
The technical information in this news release has been prepared in accordance with Canadian regulatory requirements set out in National Instrument 43-101 (“NI43-101”) and reviewed and approved by Stephen P. Quin, P. Geo., President and CEO of Midas Gold Corp., and a Qualified Person. The exploration activities at Golden Meadows were carried out under the supervision of Richard Moses, C.P.G., Qualified Person and Site Operations Manager for the Golden Meadows Project. All gold assays are by a 30g Fire Assay charge followed by an atomic absorption finish (with a 0.005g/t lower reporting limit). Samples reporting values > 6g/t are re-analyzed using a 30g Fire Assay charge followed by a gravimetric finish. Silver is analyzed via a 4-acid digestion followed by an ICP finish (with a 0.5g/t lower reporting limit). Samples reporting values > 10g/t Ag are reanalyzed using a 50g Fire Assay charge followed by a gravimetric finish. Antimony is analyzed via a 4-Acid digestion with ICP finish with a 5g/t lower reporting limit. Samples reporting values >500g/t Sb are reanalyzed using XRF fusion. Some intervals may not add or subtract correctly due to rounding, but the differences are deemed insignificant. Analyses are carried out by ALS CHEMEX in their Reno and Winnemucca, Nevada and Vancouver, British Columbia laboratories. Blank and standard samples are used for quality assurance and quality control and a review of the results of analyses of the blanks, standards and duplicates by the Company’s Qualified Person and Independent Qualified Person indicates values are within normal and acceptable ranges.
About Midas Gold and the Stibnite-Yellow Pine Project
Midas Gold Corp., through its wholly owned subsidiaries Midas Gold Inc. and Idaho Gold Resources, LLC, is focused on the exploration and, if warranted, development of deposits in the Stibnite‐Yellow Pine district of central Idaho. The principal gold deposits identified to date within the Project are the Hangar Flats, West End and Yellow Pine deposits, all of which are associated with important structural corridors. Independent mineral resource estimates were reported for all three deposits in a news release dated June 27, 2012 and are detailed in a consolidated technical report entitled “Preliminary Economic Assessment Technical Report for the Golden Meadows Project, Idaho” dated August 15, 2012, (the “Technical Report”) is available on Midas Gold’s website at www.midasgoldcorp.com or under Midas Gold’s profile on SEDAR at www.sedar.com. This Preliminary Economic Assessment outlines a concept for the development of a large scale, long life, low cost open pit gold mining operation producing gold and by-product antimony based on the estimated mineral resource, as well as outlining a number of opportunities for potential enhancement of the conceptual project.
Forward-Looking Statements
Statements contained in this news release that are not historical facts are “forward-looking information” or “forward-looking statements” (collectively, “Forward-Looking Information”) within the meaning of applicable Canadian securities legislation and the United States Private Securities Litigation Reform Act of 1995. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action; the timing and costs of future exploration activities on the Corporation’s properties; success of exploration activities; permitting time lines and requirements, requirements for additional capital, requirements for additional water rights and the potential effect of proposed notices of environmental conditions relating to mineral claims; planned exploration and development of properties and the results thereof; planned expenditures and budgets and the execution thereof. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, “potential” or “does not anticipate”, “believes”, “anomalous” or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”. Statements concerning mineral resource estimates may also be deemed to constitute forward-looking statements to the extent that they involve estimates of the mineralization that may be encountered if the Golden Meadows Project is developed. In making the forward-looking statements in this news release, the Corporation has applied several material assumptions, including, but not limited to, that the current exploration and other objectives concerning the Golden Meadows Project can be achieved and that its other corporate activities will proceed as expected; that the current price and demand for gold will be sustained or will improve; that general business and economic conditions will not change in a materially adverse manner and that all necessary governmental approvals for the planned exploration on the Golden Meadows Project will be obtained in a timely manner and on acceptable terms; the continuity of the price of gold and other metals, economic and political conditions and operations. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Corporation to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. Such risks and other factors include, among others, risks related to the availability of financing on commercially reasonable terms and the expected use of proceeds; operations and contractual obligations; changes in exploration programs based upon results of exploration; changes in estimated mineral resources; future prices of metals; availability of third party contractors; availability of equipment; failure of equipment to operate as anticipated; accidents, effects of weather and other natural phenomena and other risks associated with the mineral exploration industry; environmental risks, including environmental matters under U.S. federal and Idaho rules and regulations; impact of environmental remediation requirements and the terms of existing and potential consent decrees on the Corporation’s planned exploration on the Golden Meadows Project; certainty of mineral title; community relations; delays in obtaining governmental approvals or financing; fluctuations in mineral prices; the Corporation’s dependence on one mineral project; the nature of mineral exploration and mining and the uncertain commercial viability of certain mineral deposits; the Corporation’s lack of operating revenues; governmental regulations and the ability to obtain necessary licenses and permits; risks related to mineral properties being subject to prior unregistered agreements, transfers or claims and other defects in title; currency fluctuations; changes in environmental laws and regulations and changes in the application of standards pursuant to existing laws and regulations which may increase costs of doing business and restrict operations; risks related to dependence on key personnel; and estimates used in financial statements proving to be incorrect; as well as those factors discussed in the Corporation’s public disclosure record. Although the Corporation has attempted to identify important factors that could affect the Corporation and may cause actual actions, events or results to differ materially from those described in Forward-Looking Information, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information.
Except as required by law, the Corporation does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
Note to US Investors
This news release has been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43 101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures. “Indicated mineral resource” and “inferred mineral resource” have a great amount of uncertainty as to their existence and a great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “indicated mineral resource” or “inferred mineral resource” will ever be upgraded to a higher category. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. Accordingly, information contained in this News Release contain descriptions of the Company’s mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations there under.