TORONTO (miningweekly.com) – TSX-V-listed explorer Midway Gold has received from the State of Nevada a critical water pollution control permit required for production at its Pan gold project.
The announcement followed on the heels of the company publishing its draft environmental-impact statement, which would be open for public review until May 6.
Midway said with the permit in hand, the Pan project was on track to start construction late this year, with production targeted for mid-2014.
The water pollution control permit authorises the company to construct, operate and close approved mining facilities in White Pine county. The Nevada Division of Environmental Protection had determined that the proposed operation would not degrade the waters of the state and that public safety and health would be protected. There were no surface waters in the project area and the proposed pit did not reach the groundwater table.
The $100-million Pan project comprised an oxidised, Carlin-style gold deposit mineable by shallow openpit methods and treatable by heap leaching.
The project had National Instrument 43-101-compliant proven reserves of 487 000 oz of gold at a grade of 0.60 g/t and probable reserves of 377 000 oz gold at a grade of 0.51 g/t, for a total of 864 000 oz gold at a grade of 0.56 g/t.
A feasibility study completed in November 2011 placed “robust” after-tax net present values, at 5% discount on a range of gold prices, at $123-million at $1 200/oz of gold to $344-million at $1 900/oz of gold.
The after-tax internal rate of return grew from 32% to 79% using the same gold price range.
Precious metals streaming firm Americas Bullion Royalty held a sliding-scale royalty on the Pan project, under which a 4% gross production royalty would be payable when gold is above $450/oz.
Midway Gold’s Toronto-listed shares traded at C$1.27 apiece on Wednesday.