Colorado-based Midway Gold announced Monday that it has closed a US$55 million project finance facility with the Commonwealth Bank of Australia.
The loan facility will be used to fund continued development of Midway’s Pan Gold Mine now under construction in western White Pine County, Nevada. Pan’s first gold pour is expected in the fourth quarter of this year.
Gold will be mined from two separate pits at an average annual production of 81,000 gold ounces at an average cash cost of $584 per ounce and a fully loaded cost of $824/oz.
The operation is expected to have a mine life of nine years with proven and probable reserves of 864,000 gold ounces and 1.13 million measured and indicated ounces.
The loan facility is comprised of two tranches including a project finance facility of US$45 million, plus a cost overrun facility of US$10 million. The facility is secured by all of assets of the Pan project. It also includes an 11% life of mine production hedging program.
Project capex for the open pit, heap leach operation is estimated at $99 million.
The operation will use Ledcor Group as a contract miner.
Midway’s operation is permitted for twice the current size of the Pan mine. Its sister gold project Gold Rock is located eight kilometers away from Pan. Production at Gold Rock is targeted to begin in 2017.
The company is also involved in the Spring Valley Joint Venture with Barrick Gold, which has a 70% interest in the JV. Barrick will fund everything to production.