The Nevada gold developer, Midway Gold (MDW:TSX), has broken ground at their Pan project after receiving the final environmental permit from the authorities south of the border. This morning the company announced that they have broken ground and that construction is now underway at Pan. They expect the build out to take less than 9 months and for it to be complete by Q3/2014.
On December 20th, the company announced it had received a signed record of decision (ROD) on the final environmental impact statement (EIS) for the Pan gold project which signified full completion of the required National Environmental Policy Act (NEPA) and EIS process. The ROD represented the final step in the federal permitting process and allows construction to begin.
"This groundbreaking ceremony is the kickoff for building the Pan mine," said Ken Brunk, Midway's President and CEO. "It is an opportunity for us to acknowledge those who drove the process from exploration through permitting and development."
The Pan project is expected to cost $99 million to construct and is expected to produce an average of 81,000 ounces per year. The project hosts a low-grade, bulk tonnage, Carlin-style deposit with 1.1 million ounces at 0.44g/t gold in the Measured and Indicated category.
In speaking with one of the company's largest shareholders, the project is unique, not only because it is a near-term, low-cost producing gold asset, but also because the ore body is very amenable to heap leaching. Much of the ore will be run-of-mine, meaning that little to no crushing will be required. This significantly lowers energy and processing costs. Recoveries of +75% are still obtained under this method. The deposit is shallow, with very little pre-stripping required. In fact, the LOM strip is only 1.8:1. This enables the mine to operate at very low LOM operating costs. They estimate fully-loaded costs to be approximately $824/oz over the life of the mine.
Midway also has a sister deposit to Pan called Gold Rock which is located only 8km away from Pan. They are targeting a 2016 start-up for Gold Rock and believe they will be able to stream-line its development by utilizing the expertise from Pan. Gold Rock is a small deposit now, but is open in all directions. It would operate as another open-pit heap leach operation with similar geological characteristics to Pan.