Midway Gold Corp.

Midway Gold Corp.
Pan-Nevada Gold Corporation

Pan-Nevada Gold Corporation

December 12, 2006 11:23 ET

Midway Plans Acquisition of Pan-Nevada Gold Corporation

Strategic Acquisition Increases Gold Resources and Strong Exploration Opportunities on Four Major Gold Trends in Nevada

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - Dec. 12, 2006) - Midway Gold Corp. (TSX VENTURE:MDW) ("Midway") is pleased to announce that it has entered into a Letter of Intent that provides for a proposed acquisition of Pan-Nevada Gold Corporation (TSX VENTURE:PNV) ("Pan-Nevada") by way of a Plan of Arrangement (the "Arrangement") with the combined entity to carry on under the Midway Gold Corp. name. Under the Arrangement, Pan-Nevada shareholders will receive one Midway share and one-half of one Midway share purchase warrant for every four Pan-Nevada shares held. Each whole warrant will entitle the holder to purchase one additional Midway share at a price of $4.00 per share, for a term of 12 months. Pan-Nevada options and warrants will be convertible under the Arrangement into Midway options and warrants, on the same basis.

"We are excited to pursue this friendly acquisition of Pan Nevada," states Alan Branham, President and CEO of Midway. "The Company would see an opportunity to more than double our current resource holdings. Pan-Nevada's Pan Project reported over 500,000 ounces in a 43-101 compliant resource (15,875,000 tons grading 0.019 gold oz/ton, and 8,302,000 tons grading 0.017 gold oz/ton - see Pan-Nevada release dated February 8, 2005) with a new resource update currently underway, which will report on over 200 holes drilled since February, 2005 and which is expected to enlarge that resource further. This is a shallow oxide gold resource, in a Carlin-type gold deposit setting, that is said to be open for further expansion. Another Pan-Nevada project is currently being reviewed by independent engineers for new 43-101 compliant resources. Midway will engage in a more detailed due diligence review to be completed by January 31, 2007."

Mr. John E. Watson, CEO of Pan-Nevada, added, "The combination of Pan-Nevada and Midway makes excellent strategic sense for both firms and our shareholders. Our strategies and geographic emphases are very similar and several of our properties share both geographic proximity and geologic models. The combined company will have a strong presence in all the major gold trends of Nevada, making it an unusually well-situated exploration and development player in this gold province."

Potentially, this merger represents a new company in which Midway would control four currently expanding deposits on the four major gold trends in Nevada. Two of the Pan-Nevada properties have strategic proximity to the Spring Valley and Midway projects. This allows Midway a chance to offer to their shareholders a larger resource base, as well as multiple opportunities for rapid exploration discoveries and expansion on several fronts, especially along the Cortez, Humboldt, Round Mountain, and Carlin trends.

The transaction will be effected under a British Columbia court-approved Plan of Arrangement, on completion of which Pan-Nevada will be a wholly-owned subsidiary of Midway. Due diligence and execution of the definitive Arrangement Agreement are to be completed on or before January 31, 2007, and the transaction will be subject to approval by a Pan-Nevada shareholders, the TSX Venture Exchange and the B.C. Supreme Court. It is a condition of the Arrangement that holders of more than 50% of Pan-Nevada shares enter into a lockup agreement in support of the Arrangement. On completion, two Pan-Nevada representatives will be nominated to the Midway Board. Pan-Nevada has agreed to pay Midway a 2% break fee in the event the Arrangement is superseded by a superior proposal made to Pan-Nevada. Midway has agreed to pay Pan-Nevada transaction expenses of up to $200,000 in the event of Midway's termination of the transaction in certain circumstances.

Midway Gold Corp. is a precious metals exploration company, listed as a Tier 1 issuer on the TSX Venture Exchange under the symbol "MDW". Midway focuses on the creation of value for shareholders by exploring and developing high-grade, quality precious metal resources in stable mining areas. Details of Midway Gold's projects are available on the company's website at www.midwaygold.com.

Pan-Nevada Gold Corporation is a junior gold exploration company, listed on the TSX Venture Exchange under the symbol "PNV", which focuses on acquiring and exploring precious metals projects in Nevada. The company is headquartered in Vancouver, British Columbia, Canada with an operations office in Evergreen, Colorado, USA. Details of Pan-Nevada's projects are available on its website at www.pannevada.com.

This release has been reviewed and approved by Midway's President and CEO, Mr. Alan Branham, (MSc. and CPG), as well as by Pan-Nevada's CEO, Mr. John E. Watson.


Alan Branham, President and CEO


John E. Watson, Chief Executive Officer

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.

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