Midway Gold Corp Reports Operating Results (10-Q)
Midway Gold Corp has a market cap of $35.3 million; its shares were traded at around $0.44 . MDW is in the portfolios of Chuck Royce of Royce& Associates.
Highlight of Business Operations: Investor relations and travel totalled $193,260 (2009 - $119,995) an increase of $73,265 over the comparative period. Management attended several investor shows and contracted video interviews and paid for research in North America in the six months ended June 30 2010 compared to participating in only one investor show in the comparative period. Midway has focussed its investor relations efforts on increasing the markets awareness of Midway by travelling to meet potential investors and attendance at selected industry investor shows. This category of costs will be expected to increase as Midway retained Windward at the end of April 2010 to assist the Company with public relations and investor relations counselling and efforts at a cost of US$5,000 per month plus approved expenses.
Legal, audit and accounting was $105,550 (2009 - $396,585) a decrease of $291,035 over the comparative period. The current period included a one-time charge of $27,073 of agents legal fees associated with a 2009 private placement that the Company withdrew and did not complete. The comparative period costs were higher due to significant legal and auditing costs as the Company investigated and evaluated business opportunities.
Exploration expenses were $434,650 (2009 $422,359). 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 $18,992 (2009 - $156,305). Management fees earned from Barrick for the Spring Valley project were $9,348 (2009 - $16,846).
The Company began the 2010 year with cash and cash equivalents of $1,740,322. During the six months ended June 30, 2010, the Company expended $1,520,923 on operations, invested a total of $435,749 in mineral properties and equipment and received $6,725,624 from share subscriptions net of share issue costs to end at June 30, 2010 with cash and cash equivalents of $6,509,274.
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 June 30, 2010, we have accrued US$59,840 ($63,706 at June 30, 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 $289,921 at June 30, 2010 (December 31, 2009 - $279,126). We have accrued as a current liability what management believes is the present value of our best estimate of the liabilities as of June 30, 2010; however, it is possible that our obligations may change in the near or long term depending on a number of factors.
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