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Midway Gold Corp Reports Operating Results (10-Q)

November 08, 2010 | About:

Midway Gold Corp (MDW) filed Quarterly Report for the period ended 2010-09-30.

Midway Gold Corp has a market cap of $54.76 million; its shares were traded at around $0.61 . MDW is in the portfolios of Chuck Royce of Royce& Associates.

Highlight of Business Operations:

Investor relations and travel totalled $240,338 (2009 - $135,973) an increase of $104,365 over the comparative period. Management attended several investor shows and contracted video interviews and paid for research in North America in the nine months ended September 30, 2010 compared to participating in only one investor show in the comparative period. Midway has focussed its investor relations efforts on increasing the market s 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 Global 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 $155,582 (2009 - $468,690) a decrease of $313,108 over the comparative period. The current period included a one-time charge of $27,073 of agent s 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 $2,416,344 (2009 – $906,003). 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 $27,615 (2009 - $173,372). Management fees earned from Barrick for the Spring Valley project were $14,552 (2009 - $23,624).

Director s fees, salaries and benefits were $1,362,969 inclusive of $651,923 of non-cash stock based compensation. The majority of the stock based compensation was included in the salaries and benefits for the nine months ended September 30, 2010. In the comparative period $1,522,310 included $939,450 of non-cash stock based compensation. Beginning in May 2010 the Company began building a management team to transition from an exploration company to a gold production company and as such we anticipate these costs will continue to increase.

The Company began the 2010 year with cash and cash equivalents of $1,740,322. During the nine months ended September 30, 2010, the Company expended $3,849,347 on operations, invested a total of $549,059 in mineral properties and equipment and received $6,658,813 from share subscriptions net of share issue costs to end at September 30, 2010 with cash and cash equivalents of $4,000,729.

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. 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.

Read the The complete Report

About the author:

Charlie Tian, Ph.D. - Founder of GuruFocus. You can now order his book Invest Like a Guru on Amazon.

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