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Midas Gold and Franco-Nevada Enter into $15 M Transaction for Golden Meadows Project

Midas Gold Corp. ("Midas Gold") today announced that it and its subsidiaries (the "Midas Group") have entered into a US$15.0 million transaction with Franco-Nevada Corporation ("Franco-Nevada") and one of its subsidiaries whereby the Midas Group has agreed to sell certain rights to a royalty on future gold production from the Golden Meadows Project in Valley County, Idaho (the "Agreement"), as well as a subscription agreement (the "Sub-Agreement") for two million warrants exercisable for shares of Midas Gold.

"The transactions with Franco-Nevada and its subsidiary provide significant funding to continue advancing the evaluation of the world-class Golden Meadows gold-silver-antimony-tungsten project," said Stephen Quin, President & CEO of Midas Gold. "We appreciate Franco-Nevada's endorsement of the merits of the Golden Meadows Project and its potential to be a significant producer of gold and other metals." Midas Gold intends to use the proceeds of the transactions to fund on-going mineral resource evaluation, metallurgical, engineering design, and environmental baseline data collection and evaluation at the Golden Meadows Project with a view to completing a prefeasibility study on the Golden Meadows Project and, if warranted, filing an application for the development of a mining operation, as well as for general working capital.

Transaction Summary

The subsidiaries of Midas Gold that hold the mineral title to the Golden Meadows Project (the "Vendor Group") have entered into the Agreement with a subsidiary of Franco-Nevada (the "Payee") whereby the Vendor Group has granted the Payee a perpetual 1.7% net smelter returns ("NSR") royalty on any future gold production from the Golden Meadows Property, subject to the normal terms and conditions for such a royalty, in exchange for the sum of US$14.65 million. Importantly, the royalty excludes antimony, silver and other valuable by-products that may be produced from the Golden Meadows Property, if and when development proceeds.

The Midas Group has the right to repurchase one-third of the NSR royalty for the sum of US$9.0 million for three years from the closing of the transaction. In addition, the NSR royalty rate may be adjusted based on the capacity of the project, when and if approved by Midas Gold for development, if the approved mill throughput is different to the 20,000 tonnes per day scenario set out in the Preliminary Economic Assessment reported by Midas Gold in a news release dated September 4, 2012. The Vendor Group has also granted the Payee a first right of refusal on any new or existing royalty or stream interests from the Golden Meadows Property. The royalty interest will be registered against title and the payment thereof will be secured by a mortgage registered against the Golden Meadows Property.

In conjunction with the Agreement, Midas Gold has entered into the Sub-Agreement with Franco-Nevada, whereby Franco-Nevada has, for the sum of US$0.35 million, subscribed for two million warrants that are exercisable into shares of Midas Gold at an exercise price of $1.23 per share for a period of ten years from the date of issuance. Midas Gold may force exercise of the warrants if the price of the shares of Midas Gold exceeds $3.23 for a period of thirty consecutive trading days. Completion of both transactions is subject to, among other things, acceptance by the Toronto Stock Exchange in respect of the issuance of the warrants and satisfaction of certain closing conditions.

The transactions are expected to close on or about May 9, 2013.

Advisors

Haywood Securities Inc. acted as financial advisor to Midas Gold and its board of directors in respect of this transaction.

Source: http://www.midasgoldcorp.com/

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