The receipts will be used to fund construction obligations and mining operations at the Pan Gold Mine in eastern Nevada. Pan is in the late stages of construction with the first gold pour currently scheduled for late January 2015.
Midway’s President and CEO, Ken Brunk, stated, "I would like to express our thanks to CBA and our shareholders for placing their faith in the team here at Midway. That faith, expressed through the placement of debt and equity for the timely completion of Pan will enable Midway Gold to enter the realm of gold producers in Nevada at a time when the ability to raise either debt or equity for mining projects is a serious industry challenge.
The total capital expenditure for Pan construction is estimated at $76 million. We have spent approximately $55 million to date on construction as of November 30. We anticipate spending an additional $21 million for completion of construction and an additional $8 million for mining operations and other working capital items, net of revenue credits, until the project is expected to generate cash flow in March 2015. We have experienced significant reductions in initial capital requirements by eliminating a Midway-owned mining fleet, employing run of mine leaching at South Pan and by diligent cost reduction efforts at the project level as well as at the corporate level. We have accomplished these items while still progressing Pan to production and advancing our second project, Gold Rock, through the permitting process.
Recent updates to our leach pad-stacking plan have resulted in a slightly lower working capital requirement for the project in 2015. The project finance facility has therefore been reduced from $45 million to $43 million while the $10 million cost overrun facility will remain in place to fund any cost overruns during construction and start-up of operations.
Our mining contractor at Pan began mining activities in September and is currently building up to a target mining rate of 60,000 tons per day (ore and waste). We expect to begin irrigation of the leach pad in mid-December to achieve our target for a late January gold pour. We believe we are positioned for an exciting 2015 as Midway becomes Nevada’s next gold producer."
