Midas Gold (TSX: MAX) CEO Stephen Quin on Permitting Process On Track for a Q4 2019 Draft EIS for the Stibnite Gold Project in Idaho

October 9, 2019

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President and CEO of Midas Gold (TSX: MAX)(OTC: MDRPF), Mr. Stephen Quin. Stephen, how are you today?

Stephen Quin: Doing good. I'm down in Idaho, visiting our project down here.

Gerardo Del Real: I understand it's been a productive week. You had some good news today – the news actually came out yesterday, late. You announced that permitting for Midas Gold's Stibnite Gold project continues to advance. This is actually the second straight month without a delay. That, obviously, is a step in the right direction.

You're also on track for the Draft EIS to be published by the end of the year. Of course, we all know that the feasibility study will be completed following the release of the Draft EIS.

A lot there. I'd love for you to provide some color, Stephen?

Stephen Quin: Sure, yeah. The Forest Service, who is our lead agency for the permitting process for our Stibnite Gold project, does an update every quarter – basically, the first business day of each calendar quarter, so every three months – and updates the schedule whereby they anticipate the permitting process to reach various milestones. As investors know, last year and early this year, we had a number of delays where we saw the project schedule extended, as they were requiring more time to do their data collection, data analysis, et cetera.

We were encouraged in the July update, on the 2nd of July, there was no scheduled delay after having seen three or four before that. Then, we recently just saw the October schedule updates, on October 2nd, where, again, there was no schedule extension to the permitting process. That means we've gone a long time now without any further extensions to the process. That's pretty encouraging. Hopefully we're past the delays, and we're looking forward to staying to the schedule from here on in.

Gerardo Del Real: I mentioned it was a step in the right direction. I have to believe that there was a lot of pressure from the bipartisan group, the very supportive bipartisan group of lawmakers, there in the state of Idaho that has been very receptive to the professionalism of Midas Gold and the way that you've gone about being transparent and advancing the project. I have to imaging that helped a bit, Stephen?

Stephen Quin: Yeah, there's a lot of attention on this project for a variety of reasons. It's a big project, even on a US-wide perspective. It's definitely a significant project as far as Idaho goes, very significant as far as Idaho goes. It's also unique, because of the brownfield nature of the site where we're prepared to take on the legacy history of the site and all the disturbance that is there, and clean it all up as part of re-developing the site.

There's a lot of people watching this process very closely, and definitely interested in seeing it completed in a timely manner. They definitely communicate their perspective.

Gerardo Del Real: The one thing that probably ended up being a benefit to you and the company, Stephen, as a result of the delays in 2017, is that it put you in a position now whereby the time you publish your feasibility study, which we're hoping will be, obviously, immediately after the draft EIS, which is scheduled, as I mentioned, to be published by the end of this year.

The one thing that it helped Midas Gold with is it allowed for you to now have an environment where it seems like $1,500 gold is the norm. I know that the feasibility study is looking to work in the results of a number of project optimizations, and updated mineral resource estimate, and the results of optimized metallurgy and processing. All of those, I have to believe, are much funner to tweak with $1,500 gold as opposed to $1,250 or $1,300 gold?

Stephen Quin: Yeah, for sure. It's better to be lucky than smart, shall we say. There is silver lining to the permitting delays, in that when we're looking, say a year ago, we were looking at a $1,200-ish, $1,250 gold price environment. That would have been less than the gold price used in the prefeasibility study, back in 2014.

Now, we're seeing, as you say, a gold price hanging around $1,500. It doesn't mean we're going to use $1,500 as the base case in the study, but we're probably going to end up somewhere in the range of what we used in the prefeasibility study. We'll definitely be looking at upside scenarios at higher gold prices. The gold price is significantly up, $250 higher than it was a year ago. That will have a significant economic benefit.

As long as the gold price stays where it is, or maybe even a bit higher, by the time the study comes out, that will obviously provide some clearer indications of the upside potential of the project, because there is a lot of gold in this project. The price affects a large number of ounces.

Gerardo Del Real: Definitely a lot of leverage there. You and I had the opportunity to chat at the Beaver Creek Precious Metals Summit. You've had an opportunity, now, to take that in a bit. I know that you went to the Denver Gold Show immediately afterwards.

Can you provide a brief recap on the momentum in the precious metals space? Just the amount of interest contrasted with the past several years, where, frankly, it was all of us patting each other on the back, telling each other it was going to be okay.

Stephen Quin: Right. Yeah, I think you're right. We definitely saw a more upbeat crowd. I would say particularly in Beaver Creek more than Denver. I think Denver, which tends to be the larger companies, wasn't as upbeat as Beaver Creek was. I think that probably illustrates where the investor interest is.

The big gold companies responded to the rising gold price. I think investors are looking at the smaller gold companies and the pre-production gold companies, companies like that, and saying, "Hey, actually there's more upside and opportunity in those companies." There's a lot more attention there.

We had a definitely packed schedule. I think between the two conferences, we had about 65, 66 meetings over a five-day period. It was a pretty packed schedule.

The one comment I would make is that you still haven't seen the generalist investors really show up in force at these conferences. To me, that says we're not at the top yet. We're still seeing the attendance dominated by private equity groups, by corporates, and by gold funds. The generalists were noticeable by their absence.

I think that's, in many ways, an encouraging sign, because as the gold price maintains its current strength, or potentially strengthens more, those investors will get forced to have to come to the table. They bring a lot more capital to the table and that should provide continued upward momentum.

Gerardo Del Real: I'm looking at a two-year chart of Midas Gold. This is the opportunity, folks. We have $1,500 gold, a permitting process that gets smoother by the quarter, and yet, the share price is still pretty much where it was two years ago and, eerily, exactly where it was about a year ago. Anything you'd like to add to that, Stephen?

Stephen Quin: Yeah. Maybe somebody will write a paper on this after we're all done, but that famous Lassonde chart of the lifecycle of a mining share. You get into this orphan period, there are different names used when you're in the guts of the permitting process. The market just loses interest. Yet, you're just on the beginning, just leading up to the next major up leg, as you get permitted and into construction and development. You've already got a project that's been shown to be economic by the prefeasibility study that's already out there.

Your risk-reward, versus playing the exploration end of the spectrum, where you're hoping somebody might find something that's economic, you have a company that's showing there's something economic. You're at the point of turning that valuation around until it becomes a very desirable investment. You know, it requires patient investors through that period, because not a lot happens, there's not much excitement around permitting.

Then, that suddenly turns. You've got your permits, and you're one your way to construction, and so on. There's a major revaluation exercise that follows that. These are opportunities to accumulate at the bottom of those cycles. In fact, there's a US Global paper out I was looking at today, a slide show, and they drew circles as where the risk-reward was most in the investor's favor. They were drawing the circles over this, exactly where we are at the moment, at the bottom of that orphan period.

It's frustrating when you are making progress, and you're demonstrating value, and you've got a rising gold price, and the stock, you believe, should be much higher. You've just got to keep pushing your way through that process, and the revaluation will come when we're through it.

Gerardo Del Real: Well, you've done an excellent job of it, Stephen. Thank you so much for the update, and looking forward to chatting the next quarter, hopefully.

Stephen Quin: Great. Thanks very much, Gerardo, for talking with me.

Gerardo Del Real: Thanks again.

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