Midway Gold Corp. (TSX and NYSE-MKT: MDW) (the “Company” or
“Midway”) reports on the construction progress at its Pan gold
project in Nevada. Pan is in late stage construction with a first
gold pour expected in January 2015. A US$55M Project Finance
Facility with Commonwealth Bank of Australia was closed in July
2014 with first draw on the loan expected in November.
Ken Brunk, Midway’s President and CEO stated, “Midway continues
to advance steadily to gold production at Pan. This milestone is
what we have worked so hard toward these past few years. The reward
for the effort is near. Our successes at Pan include permitting in
record time, securing our debt financing in an extremely selective
environment, and the placement of a hedging program to help protect
our operations in an uncertain gold price environment. We are
benefiting from the employment of contract mining at very
competitive costs to all-in owner mining and have utilized
Run-of-Mine leaching on South Pan to harness further potential for
efficiencies. We believe our current cash on hand in combination
with the expected draws on the debt financing will be sufficient to
fund construction at Pan as well as working capital requirements
through startup. We continue to look for ways to remain cost
efficient in this environment while maintaining a strong core from
which to grow.
To that effect, we continue to advance the Environmental Impact
Statement process at our second project, Gold Rock, to achieve a
targeted second quarter 2015 Record of Decision. Even further, we
have worked to realize additional value to our shareholders with
impressive resource growth at Spring Valley this year. We are
continually thankful to our Midway team for their perseverance
through the volatility of these markets and we are all looking
ahead to operations and cash flow in 2015.”
Milestones at Pan:
- Pregnant solution pond is complete and
final integrity tests were completed in October
- The barren pond is now completed and
undergoing final integrity tests
- Storm related repairs are complete
- Carbon columns and other related
equipment are set in place
- Mining commenced in September and
approximately 500,000 tons have been placed on the leach pad
- Staffing of Ledcor is currently at 3
crews covering 2 shifts per day with 24/7 operations expected to
commence by month end
- Pan operations staff have moved to site
from the Ely offices
- Detailed start-up planning is well
underway and operating training has commenced
Third Quarter Financial Results
The Company also reported its financial results for the period
ended September 30, 2014. These results have been filed with the
United States Securities and Exchange Commission in the Company’s
quarterly report on Form 10-Q, and with the relevant securities
regulators in Canada.
The Company’s operating loss for the three months ended
September 30, 2014 was $4,547,497 compared to $3,964,571 for the
corresponding period in 2013. The Company began stacking ore on the
leach pad during September 2014, placing 350 recoverable ounces on
the pad. Using expected gold prices, reduced by further processing,
shipping and royalty costs, the Company recognized a $266,054
inventory write-down. Further contributing to the Company’s
operating loss was increased depreciation and accretion, salaries
and benefits, and office and administration. Accretion expense
increased as a result of the Company’s asset retirement obligation
due to the advancement of the Pan Project. Office and
administration expense, salaries and benefits expense increased as
a result of the Pan office general and administrative costs no
longer being allocated to mineral exploration expenditures in
conjunction with the commencement of construction in January 2014.
Offsetting these increased expenses was a reduction in spending on
legal, audit and accounting expenses due to the Company incurring
significant legal, tax advisory and accounting fees during the
three months ended September 30, 2013 related to a non-recurring
restructuring of the Company’s subsidiaries.
The Company incurred other expense of $56,558 in the current
quarter compared to $291,878 during the same period of 2013. As a
result of the change in the parent Company’s functional currency
from the Canadian dollar to the U.S. dollar effective January 1,
2014, there was no gain or loss recorded on the change in the fair
value of derivative liability for the three months ended September
30, 2014. The Company recorded a gain of $988,443 related to the
change in the fair value of derivative liability for three months
ended September 30, 2013. Additionally, the Company recorded a
foreign exchange loss of only $25,462 during the three months ended
September 30, 2014 compared to a foreign exchange gain of
$1,259,322 for the corresponding period in 2013 due to the change
in functional currency.
The Company’s consolidated net loss attributable to common
shareholders for the quarter ended September 30, 2014 was
$7,815,980 or $0.05 basic and diluted loss per share compared to
loss of $3,983,821, or $0.05 basic and diluted loss per share for
the comparable period in 2013.
Condensed Consolidated Interim Balance
Sheet
(Expressed in Canadian dollars)
(unaudited)
September 30, December
31, 2014 2013 Assets Cash and Cash Equivalents $
22,978,965 $ 51,363,302 Prepaid Expenses and Other Current Assets
2,805,168 533,920 Property, Equipment and Mine Development
63,766,278 16,750,950 Mineral Properties 57,762,195 53,200,288
Other Long-Term Assets 8,442,021 1,999,562 Total
Assets $ 155,754,627 $ 123,849,022 Current Liabilities $
10,897,851 $ 5,836,501 Long-Term Liabilities 3,838,280 8,363,376
Redeemable Preferred Stock 50,738,937 47,482,972 Shareholders’
Equity 90,279,559 62,166,173 Total Liabilities and
Shareholders’ Equity $ 155,754,627 $ 123,849,022
Condensed Consolidated Interim Statement
of Operations
(Expressed in Canadian dollars, except
shares) (unaudited)
Three Months Ended September
30, 2014 2013 Operating Loss $ 4,547,497 $
3,964,571 Other Expense 56,558 291,878 Net Loss
Before Income Tax 4,604,055 4,256,449 Income Tax (Recovery) Expense
477,245 (272,628) Net Loss $ 5,081,300 $ 3,983,821
Preferred Stock Cumulative Dividend 1,591,536 1,478,516 Accretion
Of Redeemable Preferred Stock 1,143,144 949,370 Net
Loss Attributable To Common Shareholders $ 7,815,980 $ 6,411,707
Weighted Average Number Of Shares Outstanding (Basic)
172,870,093 129,605,544 Basic Loss Per Share $ 0.05 $ 0.05
Weighted Average Number Of Shares Outstanding (Diluted) 172,870,093
129,605,544 Diluted Loss Per Share $ 0.05 $ 0.05
Condensed Consolidated Interim Statement
of Cash Flows
(Expressed in Canadian dollars)
(unaudited)
Nine Months Ended September
30, 2014 2013 Cash and Cash Equivalents,
Beginning of Period $ 51,363,302 $ 75,052,836 Net Cash Used
in Operating Activities (14,568,759) (9,350,562) Net Cash Used in
Investing Activities (41,219,886) (5,485,910) Net Cash Provided by
(Used in) Financing Activities 24,958,968 (1,978,170) Effect of
Exchange Rate Changes on Cash: 2,445,340 135,208
Cash and Cash Equivalents, End of Period $ 22,978,965
$ 58,373,402
As of September 30, 2014 the Company had a cash balance of
$22,978,965 with working capital of $14,886,282. The Company’s
decreased cash balance is the result of the development of the Pan
Project. The Company spent $39.7 million on the Pan project during
2014 as it readies the project for production. The Company has
established an aggregate U.S.$55 million senior secured credit
facility consisting of a U.S.$45 million project financing facility
and a U.S.$10 million cost overrun facility that is available to
fund development and construction of the Pan Project.
To review Midway’s Quarterly Report on Form 10-Q for the quarter
ended September 30, 2014, including the Company’s Management’s
Discussion and Analysis, visit any of the following websites:
www.sedar.com, www.sec.gov or www.midwaygold.com.
Change in Series A Preferred Director
Mr. Nathaniel Klein informed Midway’s board of directors that he
resigned as a member of the Board and as the Series A Preferred
Director effective November 4, 2014. In connection with Mr. Klein’s
resignation, Mr. Trey Anderson was appointed as the Preferred
Director.
Mr. Trey Anderson is a Vice President at Hale Capital Partners
(“HCP”). Prior to joining HCP, Mr. Anderson served as Vice
President of Corporate Development and Board member at Hattrick
Sports Group, a European gaming technology company and portfolio
company of Presidio Financial Partners, a private equity fund
focused on technology and growth equity investments. Before
assuming an operating role, Mr. Anderson worked at Presidio
Financial Partners as a member of the investment and corporate
advisory teams. Prior to joining Presidio, Mr. Anderson was an
Analyst at Credit Suisse in the Technology group, where he focused
on technology M&A transactions. Mr. Anderson earned a B.S. in
Biomedical Engineering, Electrical Engineering and Economics from
Duke University.
Shelf Expiration and Renewal
Our existing short form base shelf prospectus filed with the
British Columbia, Alberta and Ontario Securities commissions is set
to expire in January of 2015, which led the Company to pursue a
renewal in the ordinary course of business. On November 5, 2014,
Midway filed a preliminary short form base shelf prospectus
and shelf registration statement on Form S-3, which, subject to
approval by the United States Securities and Exchange Commission
and the British Columbia, Alberta and Ontario Securities
Commissions, provide that the Company may offer and issue, from
time to time, common shares, warrants, rights and units of the
Company with a maximum aggregate offering price of
US$50,000,000.
About Midway Gold Corp.
Midway Gold Corp. is a precious metals company with a vision to
explore, design, build and operate gold mines in a manner
accountable to all stakeholders while assuring return on
shareholder investments.
Midway Gold Corp.Jaime Wells, 720-979-0900Investor
Relationsjwells@midwaygold.comwww.midwaygold.com
Neither the TSX Exchange, its Regulation Services Provider (as
that term is defined in the policies of the TSX Exchange) nor the
NYSE MKT accepts responsibility for the adequacy or accuracy of
this release.
This press release contains forward-looking statements about the
Company and its business. Forward looking statements are statements
that are not historical facts and include, but are not limited to,
statements about the Company's intended work plans, milestones,
construction schedule, operational progress and schedule, timing of
gold production, ability to draw on the Project Finance Facility,
and other statements, estimates or expectations. Forward-looking
statements are typically identified by words such as: “may”,
“should”, “plan”, “believe”, “predict”, “expect”, “anticipate”,
“intend”, “estimate”, postulate”, “target” and similar expressions
or the negative of such expressions or which by their nature refer
to future events. The forward-looking statements in this press
release are subject to various risks, uncertainties and other
factors that could cause the Company's actual results or
achievements to differ materially from those expressed in or
implied by forward looking statements. There can be no assurances
that the conditions precedent to draw on the Project Finance
Facility will be met or we will draw on the credit facility even if
we complete the conditions precedent. Other risks, uncertainties
and factors include, without limitation, risks related to the
timing and completion of the Company's intended work plans,
potential delay of material deliveries, ability to meet debt
covenants and obligations, risks related to fluctuations in gold
prices; uncertainties related to raising financing in a timely
manner and on acceptable terms; changes in planned work resulting
from weather, logistical, technical or other factors; the
possibility that results of work will not fulfill expectations and
realize the perceived potential of the Company's properties;
uncertainties involved in the interpretation of drilling results
and other tests and the estimation of gold resources and reserves;
the possibility that required permits may not be obtained on a
timely manner or at all; the possibility that capital and operating
costs may be higher than currently estimated and may preclude
commercial development or render operations uneconomic; the
possibility that the estimated recovery rates may not be achieved;
risk of accidents, equipment breakdowns and labor disputes or other
unanticipated difficulties or interruptions; the possibility of
cost overruns or unanticipated expenses in the work program;
changes in interest and currency exchanges rates; local and
community impacts and issues; environmental costs and risks; and
other factors identified in the Company's SEC filings and its
filings with Canadian securities regulatory authorities.
Forward-looking statements are based on the beliefs, opinions and
expectations of the Company's management at the time they are made,
and other than as required by applicable securities laws, the
Company does not assume any obligation to update its
forward-looking statements if those beliefs, opinions or
expectations, or other circumstances, should change. Although the
Company believes that such forward-looking statements are
reasonable, it can give no assurance that such expectations will
prove to be correct. For the reasons set forth above, investors
should not attribute undue certainty to or place undue reliance on
forward-looking statements.
The Shelf Registration Statement on Form S-3 relating to
these securities has been filed with the Securities and Exchange
Commission but has not yet become effective. These securities may
not be sold nor may offers to buy be accepted prior to the time the
Shelf Registration Statement on Form S-3 becomes effective. The
Shelf Registration Statement on Form S-3 may be accessed through
the SEC's website at http://edgar.sec.gov. Any offering of the
securities covered under the shelf registration will be made solely
by means of a prospectus and an accompanying prospectus supplement
relating to that offer.
This press release is not an offer to sell or a solicitation of
an offer to buy, nor shall there be any sale of securities in any
state or jurisdiction in which such offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of any such state or jurisdiction.
Midway Gold Corp.Jaime Wells, 720-979-0900Investor
Relationsjwells@midwaygold.comwww.midwaygold.com
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