Canaccord Genuity Initiates Coverage with Buy Recommendation on Midway Gold Corp - Video Posted on InvestmentPitch.com
Vancouver, British Columbia--(Newsfile Corp. - April 11, 2013) - Canaccord Genuity has initiated coverage on Midway Gold Corp. (TSXV: MDW) (NYSE MKT: MDW). Analyst Joe Mazumdar gives the company a speculative buy recommendation, and a 12-month risk-adjusted target price of $1.65, a premium of 41% over the $1.17 price the day the report was issued.
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Midway Gold is a development stage gold company with a pipeline of projects in Nevada.
The company's primary project in the Pan Gold, an open pit, heap leach project, that is currently in the permitting stage, with the company expecting a decision by the 3rd quarter of 2013, leading to production by 2015.
Canaccord forecasts an upfront capex of US$110 million to deliver an average production profile of 60 to 65 thousand ounces of gold per year at a cash cost, including royalties, of US$800 to 810 per ounce over a 10-year mine life. The Pan gold project has the potential to provide internal rates of returns of 20 to 25% and paybacks of 3 to 3.5 years.
The Gold Rock project, another open pit, heap leach project, is located only 8 kilometres southeast of the Pan project. The Gold Rock project is a Carlin-style gold deposit with the resource open in all directions. The company is seeking to grow the resource base and deliver a scoping study in the 2nd half of 2013. Canaccord estimates the Gold Rock project will require approximately US$100 million to deliver an average annual production profile of 70,000 ounces of gold per year, at a cash cost, including royalties, of US$670 to 680 per ounce, over a 9-year mine life beginning in 2017. The Gold Rock project has the potential to provide internal rates of returns of 30 to 35% and paybacks of 2 to 2.5 years.
Ken Brunk, Midway's President & CEO, stated, "We are moving forward at Midway. We are building a mining company. Initiating the permit process at Gold Rock is part of our strategy of developing a pipeline of projects leading to future production. We want to leverage the experience gained from permitting the Pan project along with the relationship we've developed with the Ely BLM office. Our first priority remains getting our Pan project into production near term. We are positioning Gold Rock to be our next mine after Pan"
At the Spring Valley project, Barrick is the company's partner, and project operator. This project already has a large resource, with expansion potential to the north, south, and depth.
Analyst Joe Mazumdar stated, "The company offers exposure to a significant growth profile as production ramps up in 2015 to 2018 from their low to moderate technical and execution risk Pan and Gold Rock open pit/heap leach projects in central Nevada."
Midway Gold currently trades at $1.10, and with 128 million shares outstanding, is capitalized at $141 million.
For more information of these, and the company's other properties, please visit the company's website www.midwaygold.com, or call Jamie Wells at 877-475-3642 or by email at infodata@midwaygold.com.
For more information about Canaccord Genuity or to obtain a copy of their research report, contact your nearest Canaccord Genuity office. Their branches are listed on their website at www.canaccord.com.
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