Midway Gold

Midway Gold

(MDW : TSX : $1.07), Net Change: 0.04, % Change: 3.88%, Volume: 22,326
Going All the Way. Midway Gold announced the signing of a binding commitment letter with Commonwealth Bank of Australia for a US$55 million, three year senior secured project finance facility. Terms are for $45 million, at LIBOR plus 325-375 bps, for the development of the permitted and under construction Pan open pit, heap leach project in central Nevada.

The terms of the project finance facility include a hedging (US$1,300) component on approximately 11% of the payable production after the first six months of production. A small cost overrun facility, of $10 million at LIBOR plus 525-575 bps is also available to the company.

Canaccord  notes that the facility is superior to previous assumptions of $37 million, at a rate of 12% over 5 years. He views the resolution of the financing risk for the Pan project as a strong positive for the company as they have not only shown the ability to permit their project, but also attract an operating team to manage the production, commit to a reputable mining contractor in Ledcor, and secure attractive financing terms for the remainder of the funds required to build the Pan project.

We anticipates more news flow going forward from the development of the Pan project to production, estimated for the second half of 2015, as well as resource updates for the
Spring Valley JV and Gold Rock projects

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