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Midway Gold Corp Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: May 17, 2010 02:16PM
Midway Gold Corp (MDW) filed Quarterly Report for the period ended 2010-03-31. Midway Gold Corp has a market cap of $53.12 million; its shares were traded at around $0.687 .MDW is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations:
In the first quarter of 2010 the Company paid a total of $205,490 (US$196,478) including $108,490 (US$103,728) paid to Gold Standard Royalty Corporation an annual advance minimum royalty of the greater of US$60,000 or the US dollar equivalent of 108.05 ounces of gold valued by the average of the London afternoon fixing for the third calendar quarter preceding January 1 of the year in which the payment is due. Annual lease payments totaling $97,000 (US$92,750) made up the balance of the first quarter property acquisition payments.
Exploration expenses were $148,476 (2009 - $265,929). The details of the expenses in each period may be found in the schedule to the unaudited consolidated interim financial statements. Exploration levels are determined by the success of previous exploration programs on each project and cash available to fund additional programs. Exploration salaries and labor include the non-cash estimated fair value of stock based compensation for stock options granted to technical employees in the period of $11,405 (2009 - $102,063). Management fees earned from Barrick for the Spring Valley project were $4,520 (2009 - $6,745).
Salaries and benefits were $233,142 (2009 - $487,770). In the current quarter $233,142 was net of a $376 credit of stock based compensation relating to a forfeiture of stock options granted to a consultant so that the cash cost of this category was $233,518. In the comparative quarter $487,770 included $291,807 of stock based compensation so that the cash cost of this category was $195,963.
Our auditors report on our 2009 consolidated financial statements includes an additional explanatory paragraph that states that our recurring losses from operation raise substantial doubt about our ability to continue as a going concern. The Company began the 2010 year with cash and cash equivalents of $1,740,322. During the three months ended March 31, 2010, the Company expended $658,211 on operations, invested a total of $402,690 in mineral properties and equipment and received $432,104 from share subscriptions net of accrued share issue costs to end at March 31, 2010 with cash and cash equivalents of $1,111,525.
On April 12, 2010 the Company issued 1,333,333 units at $0.60 per unit for proceeds of $800,000 by way of a non-brokered private placement for which the Company had received share subscriptions of $456,000 at March 31, 2010 and had paid or accrued $23,896 of share issue costs. Each unit consisted of one common share and one share purchase warrant. Each share purchase warrant entitles the holder to purchase one additional common share until October 9, 2011 (the Expiry Date) at an exercise price dependent upon the time of exercise, as follows, at an exercise price of $0.70 per common share if exercised by October 9, 2010, at an exercise price of $0.80 per common share if exercised after October 9, 2010 but on or before April 9, 2011, and at an exercise price of $0.90 per common share if exercised after April 9, 2011 but on or before the Expiry Date.
Midway has an obligation to reclaim its properties after the surface has been disturbed by exploration methods at the site. As of March 31, 2010, we have accrued US$39,840 ($40,470 at March 31, 2010 compared to $41,872 at December 31, 2009) related to reclamation and other closure requirements at our properties which is unchanged from the estimate made at from December 31, 2009. These liabilities are covered by a combination of surety bonds and restricted cash totaling $270,598 at March 31, 2010 (December 31, 2009 - $279,126). We have accrued as a curren t liability what management believes is the present value of our best estimate of the liabilities as of March 31, 2010; however, it is possible that our obligations may change in the near or long term depending on a number of factors.
Stocks Discussed: MDW,