The bankruptcy of Midway gold and the perhaps temporary closure of the Pan Mine in White Pine County illustrates that the business of mining gold is not a sure thing and definitely not for the faint of heart.
Midway Gold declared bankruptcy last Monday and by Friday the company announced that mining activity at it Pan site 50 miles south of Ely would be suspended and up to half of its work force would be laid off.
It was less than two years ago that the Pan project broke ground and just this year when the mine celebrated its first pour of gold.
But even as the celebration was going on rumors began circulating that despite the initial science Pan was not producing as much gold as was expected.
The bottom line is that no one know how much gold is in a mine until it is mined, said one gold industry executive. Every other forecast or number is just a guess.
The quality of those guesses often vary by the size of the mine and which company is behind it. According to industry watchers Midway was run on a comparative shoe string and there was little margin in the company reserves to allow a slower than expected start up.
Industry analyst stated that Midway had no where near the deep pockets that Newmont or Barrick has to develop a property. Yet even for the big boys gold mining yields far more misses than hits and it is still a gamble.
