Midway Gold Finalizes Joint Venture with Barrick

HELENA, MT - Midway Gold Corp. reported that it has signed a definitive agreement with Barrick Gold Exploration Inc., a wholly owned subsidiary of Barrick Gold Corporation for an exploration agreement and option to joint venture Midway's Spring Valley gold project, Pershing County, Nevada.
"This agreement represents a milestone in the development of Spring Valley and fulfills our goal to advance the project towards a production decision," said Alan Branham, President and CEO of Midway Gold Corp. "We believe that Barrick has the capability to develop Spring Valley into a producing mine. As evidenced by our recent updated resource estimate, the deposit continues to expand. Barrick has been an excellent partner by investing $12.3 million in equity placements in Midway since 2006 and by providing technical advice as we have expanded the discovery. They are one of Midway's largest shareholders at 8.48 per cent. This partnership leverages our $24.0 million investment in the project.
The parties have settled on terms granting Barrick the exclusive right to earn a 60% interest in the project by spending US$30,000,000 on the property (US$4,000,000 guaranteed in the first year) over five years. Barrick may increase its interest by 10% (70% total) by spending an additional US$8,000,000 in the year immediately after vesting at 60%. At Midway's election, Barrick may also earn an additional 5% (75% total) by carrying Midway to a production decision and arranging financing for Midway's share of mine construction expenses with the carrying and financing costs plus interest to be recouped by Barrick once production has been established.
Midway will coordinate geologic and administrative activities during the earn-in period for a negotiated administrative fee.
Spring Valley is a porphyry/diatreme hosted gold system beneath pediment gravels. An updated Canadian NI 43-101 compliant inferred resource of 87.75 million tons grading 0.021 ounce per ton gold (opt) for a total of 1,835,615 ounces using a cut-off grade of 0.006 opt gold was reported on March 3, 2009.
The company's address is 600 Lola Street, Suite 10, Helena, MT 59601, (406) 475-9595, fax: (406) 475-9596, email: [email protected].