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Midas Gold (TSX: MAX) CEO Stephen Quin: U.S. Forest Service Begins Analysis of Stibnite Gold Project, Final Record of Decision Expected Q1 2019

March 28, 2017

Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is CEO of Midas Gold (TSX: MAX) (OTC: MDRPF), Mr. Stephen Quin. Stephen, thank you for joining me again.

Stephen Quin: Thank you for having me, Gerardo.

Gerardo Del Real: Well, you had some good news this morning. The headline reads, "U.S. Forest Service begins analysis of Midas Gold Stibnite Gold Project. Draft Record of Decision expected in 2018 and the final in early 2019." So obviously adding a layer of formality to the process that I think is important. And hopefully you can provide some of the details there.

Stephen Quin: Certainly, Gerardo. We're pleased with the Forest Service announcement. And essentially, as the news really says, this initiates the analysis stage of the permit application that we filed back in September. In December, they declared it administratively complete, which means essentially there was sufficient information to begin the process.

They then move through a process to line up a contractor or third-party contractor who will actually do the analysis for them, and to enter a cost-sharing, cost-recovery agreement with Midas Gold because we essentially fund the analysis process. And now they are kicking that off and that starts us moving down the path to a draft EIS or Environmental Impact Statement, which we expect to come out in Q1 2018.

But before that happens, that process or that draft statement includes public stakeholder, interested parties’ comment period which is called public scoping, which will happen likely in Q2 this year, this quarter coming up. And that basically provides the opportunity for the public to express interest or express comments on what's there already, or point out things that they think should be analyzed.

So it's a very inclusive, consultative approach, and that allows the Forest Service to ensure that all different options and considerations are taken into account during that process. All that falls together into a draft EIS which then gets published. And then there's another essentially comment period following that where, again, the public, interested parties, stakeholders, etc. all get to look at how the Forest Service took their comments and addressed them, incorporated them, etc.

And then that leads to a final EIS which is the basis for Record of Decision, and the Record of Decision is basically what allows the final issuance of permit which allows you to start construction.

Gerardo Del Real: Excellent. Excellent. And again, that final Record of Decision is expected in the first quarter of 2019. Is that correct?

Stephen Quin: Yeah. That's correct. There's always risk of delays obviously and there's always potential opportunities to do things quicker. So we'll be working together to make the process effective, complete, comprehensive, but also timely. So there's ways we can save time. We'll look at that. But there's items that come up that need a bit more time, they will be incorporated as well. So I think it's a reasonable time frame particularly given the amount of work that has been done to date ahead of filing the permit application.

This isn't being sprung on anybody out of the blue. We've been extensively consulting the wide variety of groups there for the last three plus years. And so the project's very well understood and many of the comments have been addressed in the various versions of the project that we've seen since 2012 when we did a PEA, a Preliminary Economic Assessment. The pre-feasibility that followed at the end of 2014 was different to the Preliminary Economic Assessment because we addressed a series of concerns and comments in that earlier proposal.

And then the plan of restoration operations after permit application is different to the pre-feasibility again, because basically in 2015 and 2016, again, we extensively consulted with interested parties and said, "Okay, we accepted a lot of comments or addressed a lot of points in the past two years. Now you've got the new version. What additional comments or other points do you have?"

So we continually try to address those comments and concerns and points and perspectives that people have and address them in each version of the documents. And so, because of that process, a lot of the concerns or points that people might want to have addressed have already been addressed in those modifications we've made over that time period. But obviously, the formal process undertaken by the Forest Service provides yet another avenue for those discussions to continue.

Gerardo Del Real: Absolutely. I had the opportunity to visit the project last year and I must say that I was really impressed with just how engaged everybody was at the local level. All the important stakeholders seem to be informed, there seem to be great communication between the company and the local board and the locals in general. And I must say it was impressive how well Midas has gone about preempting a lot of the potential hiccups that sometimes come up and present themselves in the permitting process.

Can we talk about near-term catalysts? Stephen, I know that we're expecting assays if I'm not mistaken. And obviously, I get excited for that because the last time you reported assays, you reported the best hole for the Stibnite Gold Project in the project's history if I'm not mistaken. Can we talk about that a bit?

Stephen Quin: Sure, certainly. So as a parallel track to the permitting and regulatory process, we're moving the feasibility study forward so that when we're permitted we have a feasibility so we're able to move forward to the project very quickly. And two components of that feasibility that we've been working on since mid-last year, have been the metallurgical side. And we put out a press release a while ago, about a month ago now, on updates on all the metallurgical work that's been ongoing and that's continuing.

And then the second area was optimizing the resource estimate, because between the Preliminary Economic Assessment and the pre-feasibility study, about a million ounces came out of the mine plan primarily because you can't use inferred resources in a pre-feasibility study. So the obvious thing is to look to bring those ounces back in. And it's more complex than that, but there are opportunities to bring ounces back in.

And so we've been doing drilling in the latter part of 2016 and into early 2017 to essentially optimize those resource, definitely bring some of the inferred back in, potentially add additional ounces, various things like that. And the results have been very encouraging to date. As you say, the best hole we've ever announced came out in the last press release. And we have about four holes left to come. And we're just waiting for final assays on the drilling finished about a month ago. And usually takes about a month to get all the assays in. So we're anticipating those results coming fairly shortly.

Gerardo Del Real: Wonderful. Now, can we also anticipate a summer drilling program, Stephen?

Stephen Quin: We're looking at that. Essentially, the next step is to incorporate all the drill results into our resource model, initially on just a very preliminary basis just to look and make sure that we dot all the i’s and cross the t’s of what we are anticipating to do with those drill holes we completed. And then we'll reassess, "Well, oh, do we need one more hole here or three more holes there to finalize that process?"

So that's one aspect of a potential future drill program. And then the second aspect is, there are still more ounces which we have not even touched yet that we could potentially bring back into the model. And so, do we move on and start attacking those ounces with additional drill holes? So that's a decision and a discussion we'll have once we've kind of completed our view and update which will happen over the next couple of months.

Gerardo Del Real: Excellent. Excellent. Well, Stephen, again, I'm excited for the assays that are pending. Hopefully, we can have you back on once those come in. And I want to thank you for your time today. I appreciate it.

Stephen Quin: You're welcome, Gerardo, and always appreciate the interest.

Gerardo Del Real: Absolutely. Chat soon, Stephen.

Stephen Quin: Thanks Gerardo. 

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