UNITED STATES SECURITIES

AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2013
OR
¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from              to

Commission file number: 001-33894

MIDWAY GOLD CORP.

(Exact name of registrant as specified in its charter)

British Columbia	98-0459178
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
Suite 280 – 8310 South Valley Highway
Englewood, Colorado	80112
(Address of principal executive offices)	(Zip Code)

(720) 979-0900

(Registrant’s Telephone Number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    x Yes  ¨  No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). xYes  ¨  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.  See the definitions of “large accelerated filer” and “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act (Check one):

Large accelerated filer   ¨        Accelerated filer  x   Non-accelerated filer    ¨   Smaller Reporting Company ¨

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) ¨  Yes  x   No

Number of Common Shares outstanding at October  28, 2013:  130,878,372

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION		4
Item 1.	Financial Statements	4
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures about Market Risk.	46
Item 4.	Controls and Procedures	46
PART II - OTHER INFORMATION		47
Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds.	47
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
SIGNATURES		49

2

EXPLANATORY NOTE

All amounts in this interim report on Form 10-Q are expressed in Canadian dollars,unless otherwise indicated.

3

PART I – FINANCIAL INFORMATION

Item 1.Financial Statements.

MIDWAY GOLD CORP.

CONSOLIDATED INTERIM BALANCE SHEETS

(Expressed in Canadian dollars, except shares) (unaudited)

	September 30,		December 31,
	2013		2012
Assets
Current assets:
Cash and cash equivalents	$	58,373,402	$	75,052,836
Amounts receivable		152,194		39,379
Prepaid expenses and other current assets		334,768		142,643
Total current assets		58,860,364		75,234,858
Long term assets:
Investments (notes 4 and 5)		-		13,750
Reclamation deposits (note 8)		-		853,110
Property, equipment and mine development (note 6)		12,826,286		8,005,959
Mineral properties (note 7)		51,678,962		49,922,926
Other long term assets		76,207		-
Total Assets	$	123,441,819	$	134,030,603
Liabilities and Stockholders’ equity
Current liabilities:
Accounts payable and accrued liabilities (note 13)	$	2,202,219	$	1,710,674
Preferred share dividends payable		1,467,196		-
Preferred share dividends tax payable		1,061,992		-
Warrant liability (note 4)		19,638		-
Total current liabilities		4,751,045		1,710,674
Long term liabilities:
Derivative liabilities (note 4 and 10)		12,902,696		28,496,516
Future income tax liability		-		3,172,512
Other long term liabilities		138,432		-
Total liabilities		17,792,173		33,379,702
Redeemable preferred shares (note 10)
Series A Preferred Shares - unlimited, no par value;
Issued and outstanding – 37,837,838 (2013 and 2012);
redemption price - U.S.$1.85		46,680,179		44,261,122
Stockholders’ equity (note 9):
Common stock authorized – unlimited, no par value; Issued and outstanding – 129,618,228 and 128,451,298 at September 30, 2013 and December 31, 2012, respectively		139,557,696		138,304,344
Additional paid in capital		5,346,532		11,418,155
Accumulated other comprehensive income (loss) (note 11)		270,778		(436,344)
Deficit accumulated during exploration stage		(86,205,539)		(92,896,376)
Total stockholders' equity		58,969,467		56,389,779
Total Liabilities and Stockholders' equity	$	123,441,819	$	134,030,603

Commitments (note 8 and 12)

Subsequent events (note10)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

4

MIDWAY GOLD CORP.

CONSOLIDATED INTERIM STATEMENTS OF OPERATIONS

(Expressed in Canadian dollars, except share and per share amounts) (unaudited)

	Three months ended September 30, 2013		Three months ended September 30, 2012		Nine months ended September 30, 2013		Nine months ended September 30, 2012		Cumulative period from inception (May 14,1996) to September 30, 2013
Expenses
Consulting (note 13)	$	68,312	$	181,609	$	381,972	$	285,484	$	1,878,364
Depreciation		140,960		116,899		382,215		283,903		1,640,626
Gain on sale of subsidiary		-		-		-		-		(2,806,312)
Interest and bank charges		825		958		2,186		2,202		917,087
Investor relations		11,003		20,122		22,360		99,913		1,522,350
Legal, audit and accounting		581,840		289,977		3,311,900		727,999		8,030,040
Management fees		-		-		-		8		210,778
Mineral exploration expenditures (Schedule)		1,605,572		1,929,882		4,173,755		5,097,446		69,856,984
Mineral property interests written-off		-		-		-		-		4,643,637
Mineral property interests recovered		-		-		-		-		(60,120)
Office and administration		300,772		270,769		931,916		646,332		3,720,175
Salaries and benefits		1,163,197		1,096,261		3,801,241		3,284,169		22,043,959
Transfer agent and filing fees		22,912		(9,073)		125,294		97,397		1,154,232
Travel		69,178		76,079		250,391		223,839		1,791,273
Operating loss		3,964,571		3,973,483		13,383,230		10,748,692		114,543,073
Other income (expense):
Foreign exchange gain (loss)		(1,259,322)		45,292		2,262,994		28,739		4,295,600
Gain on change in fair value of derivative liabilities		988,443		176,515		15,574,007		176,515		12,924,065
Interest and investment income		40,397		7,103		128,188		23,176		1,049,934
Gain (loss) on disposal of equipment		(2,681)		-		(2,681)		-		523,468
Gain on sale of investments		-		-		-		-		44,077
Investment write down		(43,125)		-		(43,125)		-		(173,125)
Unrealized loss on investments		-		(346)		-		(8,933)		(609,220)
Other expense		(15,590)		(2,633)		(24,393)		(490,135)		(450,732)
		(291,878)		225,931		17,894,990		(270,638)		17,604,067
Net (income) loss before income tax		4,256,449		3,747,552		(4,511,760)		11,019,330		96,939,006
Income tax recovery (expense)		272,628		231,633		2,179,077		203,772		10,733,467
Net (income) loss	$	3,983,821	$	3,515,919	$	(6,690,837)	$	10,815,558	$	86,205,539
Preferred share cumulative dividend		1,478,516		-		4,367,633		-		4,646,205
Accretion of Redeemable preferred shares		949,370		-		2,697,943		-		2,851,606
Net (income) loss attributable to common shareholders	$	6,411,707	$	3,515,919	$	374,739	$	10,815,558	$	93,703,350
Net (income) loss per share (note 3)
Basic:
Weighted average number of shares outstanding		129,605,544		127,188,712		128,840,275		118,571,642
Net (income) loss per share	$	0.05	$	0.03	$	-	$	0.09
Diluted:
Weighted average number of shares outstanding		129,605,544		127,188,712		166,678,113		118,571,642
Net (income) loss per share	$	0.05	$	0.03	$	0.04	$	0.09

The accompanying notes are an integral part of these unaudited consolidated financial statements.

5

MIDWAY GOLD CORP.

Consolidated INTERIM StatementS of COMPREHENSIVE (Income) Loss

(Expressed in Canadian dollars) (unaudited)

	Three Months ended September 30, 2013		Three Months ended September 30, 2012		Nine Months ended September 30, 2013		Nine Months ended September 30, 2012
Net (income) loss for the period	$	3,983,821	$	3,515,919	$	(6,690,837)	$	10,815,558
Unrealized loss on investment (note 5)		7,500		346		13,750		51,250
Transfer of realized loss to Statement of Operations		(43,125)		-		(43,125)		-
Currency translation adjustment		1,180,729		872,514		(677,747)		935,599
Comprehensive (income) loss	$	5,128,925	$	4,388,779	$	(7,397,959)	$	11,802,407

The accompanying notes are an integral part of these unaudited consolidated financial statements.

6

MIDWAY GOLD CORP.

CONSOLIDATED INTERIM STATEMENTS OF CASH FLOWS

(Expressed in Canadian dollars) (unaudited)

	Nine months ended September 30, 2013		Nine months ended September 30, 2012		Cumulative period from inception (May 14,1996) to September 30, 2013
Cash provided by (used in):
Operating activities:
Net income (loss)	$	6,690,837	$	(10,815,558)	$	(86,205,539)
Items not involving cash:
Depreciation		382,215		283,903		1,640,626
Stock-based compensation		993,953		1,477,501		13,188,506
Unrealized foreign exchange (gain) loss		64,711		(139,894)		(1,598,175)
Investment write down		43,125		-		173,125
Unrealized loss on investment		-		8,933		609,220
Non-cash interest expense		-		-		234,765
Gain on change in fair value of derivative liabilities		(15,574,007)		(176,515)		(12,924,065)
Other current assets written off		-		218,044		218,044
Future income tax (recovery) expense		(3,237,223)		(203,772)		(11,791,613)
Loss (gain) on sale of subsidiary		-		-		(2,806,312)
Loss (gain) on sale of equipment		2,681		-		(523,468)
Loss (gain) on sale of investments		-		-		(44,077)
Mineral property interests written off		-		-		4,643,637
Mineral property interest recovery		-		-		(60,120)
Change in non-cash working capital items:
Amounts receivable		(42,002)		(36,447)		(63,462)
Prepaid expenses		(204,024)		259,923		(318,562)
Accounts payable and accrued liabilities		448,988		398,710		2,289,438
Other liabilities		1,080,184		-		1,080,184
		(9,350,562)		(8,725,172)		(92,257,848)
Investing activities:
Proceeds from sale of subsidiary		-		-		254,366
Proceeds from sale of equipment		-		-		22,820
Proceeds from sale of mineral property		-		-		1,339,002
Proceeds from sale of investments		-		-		321,852
Mineral property acquisitions		(1,482,858)		(913,718)		(24,490,266)
Deferred acquisition costs		-		-		(23,316)
Additions to property, equipment and mine development		(4,874,255)		(5,004,881)		(15,143,792)
Reclamation deposit		871,203		(249,120)		(396,362)
		(5,485,910)		(6,167,719)		(38,115,696)
Financing activities:
Advance from Red Emerald Ltd.		-		-		12,010,075
Common stock issued, net of issue costs		-		15,803,591		103,849,381
Preferred shares issued, net of issue costs		-		-		68,295,156
Preferred share dividends paid		(1,925,655)		-		(1,925,655)
Deferred financing costs		(52,515)		-		(52,515)
Promissory note		-		-		2,000,000
Repayment of promissory note		-		-		(2,000,000)
Convertible debenture		-		-		6,324,605
		(1,978,170)		15,803,591		188,501,047
Effect of exchange rate changes on cash:		135,208		(170,469)		245,899
Increase (decrease) in cash and cash equivalents		(16,679,434)		740,231		58,373,402
Cash and cash equivalents, beginning of period		75,052,836		10,191,069		-
Cash and cash equivalents, end of period	$	58,373,402	$	10,931,300	$	58,373,402

Supplementary cash flow information (note 15)

The accompanying notes are an integral part of these unaudited consolidated financial statements.

7

MIDWAY GOLD CORP.

CONSOLIDATED INTERIM STATEMENT OF STOCKHOLDERS’ EQUITY

(Expressed in Canadian dollars, except shares) (unaudited)

	Convertible Preferred Shares			Stockholder’s Equity (Deficit)
	Number of Preferred Shares	Preferred Shares		Number of shares	Common stock		Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit during the development stage		Total stockholders’ equity
Balance, May 14, 1996 (date of inception)	-	$	-	-	$	-	$	-	$	-	$	-	$	-
Shares issued:	-		-
Private placements	-		-	700,000		168,722		-		-		-		168,722
Net loss	-		-	-		-		-		-		(114,800)		(114,800)
Balance, December 31, 1996	-		-	700,000		168,722						(114,800)		53,922
Shares issued:	-		-
Initial public offering	-		-	2,025,000		590,570		-		-		-		590,570
Principal shares	-		-	750,000		7,500		-		-		-		7,500
Private placement	-		-	1,000,000		1,932,554		321,239		-		-		2,253,793
Exercise of share purchase warrants	-		-	1,000,000		2,803,205		-		-		-		2,803,205
Acquisition of mineral property interest	-		-	1,000,000		2,065,500		-		-		-		2,065,500
Finder’s fee	-		-	150,000		309,825		-		-		-		309,825
Net loss	-		-	-		-		-		-		(2,027,672)		(2,027,672)
Balance, December 31, 1997	-		-	6,625,000		7,877,876		321,239		-		(2,142,472)		6,056,643
Shares issued:	-		-
Exercise of share purchase warrants	-		-	100,000		332,124		(32,124)		-		-		300,000
Acquisition of mineral property interest	-		-	200,000		246,000		-		-		-		246,000
Finder’s fee	-		-	150,000		224,250		-		-		-		224,250
Net loss	-		-	-		-		-		-		(1,943,674)		(1,943,674)
Balance, December 31, 1998	-		-	7,075,000		8,680,250		289,115		-		(4,086,146)		4,883,219
Consolidation of shares on a two for one basis	-		-	(3,537,500)		-		-		-		-		-
Net loss	-		-	-		-		-		-		(2,378,063)		(2,378,063)
Balance, December 31, 1999	-		-	3,537,500		8,680,250		289,115		-		(6,464,209)		2,505,156
Net loss	-		-	-		-		-		-		(4,718,044)		(4,718,044)
Balance, December 31, 2000	-		-	3,537,500		8,680,250		289,115		-		(11,182,253)		(2,212,888)
Net earnings	-		-	-		-		-		-		2,427,256		2,427,256
Balance, December 31, 2001	-		-	3,537,500		8,680,250		289,115		-		(8,754,997)		214,368
Shares issued:	-		-
Private placement	-		-	4,824,500		2,133,786		246,839		-		-		2,380,625
Exercise of share purchase warrants	-		-	4,028,000		1,007,000		-		-		-		1,007,000
Exercise of stock options	-		-	32,000		12,800		-		-		-		12,800
Financing shares issued	-		-	31,250		35,000		-		-		-		35,000
Acquisition of mineral property interest	-		-	4,500,000		3,600,000		-		-		-		3,600,000
Share issue costs	-		-	-		(544,260)		-		-		-		(544,260)
Stock-based compensation	-		-	-		-		27,000		-		-		27,000
Net loss	-		-	-		-		-		-		(1,657,651)		(1,657,651)
Balance, December 31, 2002	-		-	16,953,250		14,924,576		562,954		-		(10,412,648)		5,074,882
Shares issued:	-		-
Private placement	-		-	700,000		638,838		201,162		-		-		840,000
Exercise of share purchase warrants	-		-	294,500		73,625		-		-		-		73,625
Share issue costs	-		-	-		(19,932)		-		-		-		(19,932)
Stock-based compensation	-		-	-		-		531,000		-		-		531,000
Net loss	-		-	-		-		-		-		(1,352,679)		(1,352,679)
Balance, December 31, 2003	-		-	17,947,750		15,617,107		1,295,116				(11,765,327)		5,146,896
Shares issued:	-		-
Private placement	-		-	2,234,400		2,122,269		175,407		-		-		2,297,676
Exercise of share purchase warrants	-		-	213,500		300,892		(46,267)		-		-		254,625
Exercise of stock options	-		-	250,000		157,000		(27,000)		-		-		130,000
Share issue costs	-		-	-		(183,512)		-		-		-		(183,512)
Stock-based compensation	-		-	-		-		941,478		-		-		941,478
Net loss	-		-	-		-		-		-		(2,994,702)		(2,994,702)
Balance, December 31, 2004 carried forward	-	$	-	20,645,650	$	18,013,756	$	2,338,734	$	-	$	(14,760,029)	$	5,592,461

The accompanying notes are an integral part of these unaudited consolidated financial statements.

8

MIDWAY GOLD CORP.

CONSOLIDATED INTERIM STATEMENT OF STOCKHOLDERS’ EQUITY - CONTINUED

(Expressed in Canadian dollars, except shares) (unaudited)

	Convertible Preferred Shares			Stockholder’s Equity (Deficit)
	Number of Preferred Shares	Preferred Shares		Number of shares	Common stock		Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit during the development stage		Total stockholders’ equity
Balance, December 31, 2004 brought forward	-	$	-	20,645,650	$	18,013,756	$	2,338,734	$	-	$	(14,760,029)	$	5,592,461
Shares issued:	-		-
Private placement	-		-	4,075,800		3,266,095		773,335		-		-		4,039,430
Exercise of stock options	-		-	165,500		124,364		(31,964)		-		-		92,400
Exercise of share purchase warrants	-		-	1,743,000		1,543,844		(4,844)		-		-		1,539,000
Share issue costs	-		-	-		(184,660)		-		-		-		(184,660)
Stock-based compensation	-		-	-		-		488,075		-		-		488,075
Net loss	-		-	-		-		-		-		(4,402,715)		(4,402,715)
Balance, December 31, 2005	-		-	26,629,950		22,763,399		3,563,336		-		(19,162,744)		7,163,991
Shares issued:	-		-
Private placements	-		-	5,725,000		10,760,355		944,645		-		-		11,705,000
Exercise of stock options	-		-	306,000		325,530		(111,330)		-		-		214,200
Exercise of share purchase warrants	-		-	3,227,000		4,182,991		(768,491)		-		-		3,414,500
Acquisition of mineral property interest	-		-	40,000		88,000		-		-		-		88,000
Share issue costs	-		-	-		(248,512)		-		-		-		(248,512)
Stock-based compensation	-		-	-		-		992,400		-		-		992,400
Net loss	-		-	-		-		-		-		(7,241,228)		(7,241,228)
Balance, December 31, 2006	-		-	35,927,950		37,871,763		4,620,560		-		(26,403,972)		16,088,351
Shares issued:	-		-
Private placement	-		-	2,000,000		5,400,000		-		-		-		5,400,000
Pan-Nevada acquisition	-		-	7,764,109		25,000,431		2,028,074		-		-		27,028,505
Exercise of stock options	-		-	595,000		1,485,415		(694,515)		-		-		790,900
Exercise of share purchase warrants	-		-	3,395,605		10,777,930		(2,081,407)		-		-		8,696,523
Share issue costs	-		-	-		(28,000)		-		-		-		(28,000)
Stock-based compensation	-		-	-		-		1,502,912		-		-		1,502,912
Unrealized loss on investments	-		-	-		-		-		(120,000)		-		(120,000)
Adjustment of future income tax liability to mineral properties	-		-	-		-		-		-		(389,955)		(389,955)
Net loss	-		-	-		-		-		-		(10,666,106)		(10,666,106)
Balance, December 31, 2007	-		-	49,682,664		80,507,539		5,375,624		(120,000)		(37,460,033)		48,303,130
Shares issued:	-		-
Private placement	-		-	14,521,500		6,174,441		956,509		-		-		7,130,950
Acquisition of mineral property interest	-		-	30,000		88,500		-		-		-		88,500
Exercise of stock options	-		-	479,000		1,186,462		(453,212)		-		-		733,250
Exercise of share purchase warrants	-		-	108,500		364,404		(209,405)		-		-		154,999
Share issue costs	-		-	-		(139,705)		-		-		-		(139,705)
Stock-based compensation	-		-	-		-		501,028		-		-		501,028
Unrealized loss on investments	-		-	-		-		-		(502,225)		-		(502,225)
Investment write-down	-		-	-		-		-		622,225		-		622,225
Net loss	-		-	-		-		-		-		(16,165,394)		(16,165,394)
Balance, December 31, 2008	-		-	64,821,664		88,181,641		6,170,544		-		(53,625,427)		40,726,758
Shares issued:	-		-
Exercise of stock options	-		-	33,333		32,815		(11,164)		-		-		21,651
Exercise of share purchase warrants	-		-	12,500,000		4,456,509		(956,509)		-		-		3,500,000
Stock-based compensation	-		-	-		-		1,152,238		-		-		1,152,238
Unrealized gain on investment	-		-	-		-		-		53,850		-		53,850
Realized gain on sale of investments	-		-	-		-		-		(53,850)		-		(53,850)
Net loss	-		-	-		-		-		-		(2,642,176)		(2,642,176)
Balance, December 31, 2009, carried forward	-	$	-	77,354,997	$	92,670,965	$	6,355,109		-	$	(56,267,603)	$	42,758,471

The accompanying notes are an integral part of these unaudited consolidated financial statements.

9

MIDWAY GOLD CORP.

CONSOLIDATED INTERIM STATEMENT OF STOCKHOLDERS’ EQUITY - CONTINUED

(Expressed in Canadian dollars) (unaudited)

	Convertible Preferred Shares			Stockholder’s Equity (Deficit)
	Number of Preferred Shares	Preferred Shares		Number of shares	Common stock		Additional paid-in capital		Accumulated other comprehensive loss		Accumulated deficit during the development stage		Total stockholders’ equity
Balance, December 31, 2009, brought forward	-	$	-	77,354,997	$	92,670,965	$	6,355,109	$	-	$	(56,267,603)	$	42,758,471
Shares issued:	-		-
Private placement	-		-	1,333,333		514,365		285,635		-		-		800,000
Public offerings	-		-	17,738,666		8,294,058		1,504,996		-		-		9,799,054
Share issue costs	-		-	-		(1,431,027)		212,109		-		-		(1,218,918)
Exercise of share purchase warrants	-		-	12,500		14,024		(4,024)		-		-		10,000
Stock-based compensation	-		-	-		-		838,601		-		-		838,601
Unrealized gain on investment	-		-	-		-		-		13,125		-		13,125
Net loss	-		-	-		-		-		-		(5,826,972)		(5,826,972)
Balance, December 31, 2010	-		-	96,439,496		100,062,385		9,192,426		13,125		(62,094,575)		47,173,361
Shares issued:	-		-
Exercise of share purchase warrants	-		-	8,611,356		10,849,874		(1,578,554)		-		-		9,271,320
Exercise of stock options	-		-	729,997		743,200		(290,451)		-		-		452,749
Bought deal offering	-		-	7,500,000		11,742,000		-		-		-		11,742,000
Share issuance At-the-Market Program	-		-	568,626		1,518,845		-		-		-		1,518,845
Share issue costs	-		-	-		(990,900)		-		-		-		(990,900)
Stock-based compensation	-		-	-		-		3,626,687		-		-		3,626,687
Unrealized gain on investment	-		-	-		-		-		13,750		-		13,750
Net loss	-		-	-		-		-		-		(15,527,179)		(15,527,179)
Balance, December 31, 2011	-		-	113,849,475		123,925,404		10,950,108		26,875		(77,621,754)		57,280,633
Shares issued:
Public offerings	-		-	12,261,562		13,370,717		-		-		-		13,370,717
Issuance of preferred shares	37,837,838		44,240,154	-		-		-		-		-		-
Share issue costs	-		(411,266)	-		(1,437,675)		-		-		-		(1,437,675)
Exercise of share purchase warrants	-		-	1,533,650		1,644,073		(417,153)		-		-		1,226,920
Exercise of stock options	-		-	737,501		701,391		(275,706)		-		-		425,685
Share issuance At-the-Market Program	-		-	69,110		100,434		-		-		-		100,434
Stock-based compensation	-		-	-		-		1,593,140		-		-		1,593,140
Accretion of cost of Redeemable preferred shares	-		153,662	-		-		(153,662)		-		-		(153,662)
Dividends Payable	-		278,572	-		-		(278,572)		-		-		(278,572)
Unrealized gain / (loss) on investment	-		-	-		-		-		(56,250)		-		(56,250)
Unrealized foreign exchange gain / (loss)	-		-	-		-		-		(406,969)		-		(406,969)
Net loss	-		-	-		-		-		-		(15,274,622)		(15,274,622)
Balance, December 31, 2012	37,837,838		44,261,122	128,451,298		138,304,344		11,418,155		(436,344)		(92,896,376)		56,389,779
Shares issued:
Dividend share issuance	-		-	1,166,930		1,253,352		-		-		-		1,253,352
Share issue costs	-		(314)	-		-		-		-		-		-
Stock-based compensation	-		-	-		-		993,953		-		-		993,953
Accretion of cost of Redeemable preferred shares	-		2,697,943	-		-		(2,697,943)		-		-		(2,697,943)
Dividends Payable	-		(278,572)	-		-		(4,367,633)		-		-		(4,367,633)
Unrealized gain / (loss) on investment	-		-	-		-		-		(13,750)		-		(13,750)
Investment write down	-		-	-		-		-		43,125		-		43,125
Unrealized foreign exchange gain / (loss)	-		-	-		-		-		677,747		-		677,747
Net income (loss)	-		-	-		-		-		-		6,690,837		6,690,837
Balance, September 30, 2013	37,837,838	$	46,680,179	129,618,228	$	139,557,696	$	5,346,532	$	270,778	$	(86,205,539)	$	58,969,467

The accompanying notes are an integral part of these unaudited consolidated financial statements.

10

MIDWAY GOLD CORP.

SCHEDULE OF MINERAL EXPLORATION EXPENDITURES

 (Expressed in Canadian dollars) (unaudited)

	Three months ended September 30, 2013		Three months ended September 30, 2012		Nine months ended September 30, 2013		Nine months ended September 30, 2012		Cumulative period from inception (May 14,1996) to September 30, 2013
Exploration costs incurred are summarized as follows:
Pan project
Assays and analysis	$	1,358	$	-	$	1,358	$	3,807	$	933,246
Drilling		-		451		-		(58,436)		3,712,110
Engineering and consulting		31,427		1,666		65,781		27,303		3,657,060
Environmental		-		4,499		32		11,551		706,681
Field office and supplies		126,622		102,853		208,812		230,467		1,152,821
Legal		-		1,814		6,076		32,887		343,595
Property maintenance and taxes		-		86,102		1,200		89,047		960,347
Reclamation costs		(4,946)		2,245		1,896		6,014		(6,856)
Reproduction and drafting		4,102		2,998		6,084		6,415		85,849
Salaries and labor		378,504		410,196		999,378		687,280		3,896,192
Travel, transportation and accommodation		41,242		87,963		142,076		116,541		762,277
		578,309		700,787		1,432,693		1,152,876		16,203,322
Gold Rock project
Assays and analysis		7,150		46,789		124,361		136,202		612,313
Drilling		-		395,422		413,109		421,749		2,678,834
Engineering and consulting		33,036		63,811		181,366		287,361		885,040
Environmental		338,790		181,632		581,367		533,569		1,454,288
Field office and supplies		17,980		66,336		196,731		152,229		590,695
Legal		114		875		16,111		8,581		60,077
Property maintenance and taxes		167,589		98,654		236,411		112,985		776,934
Reclamation costs		84		122		6,600		12,301		39,398
Reproduction and drafting		704		1,720		2,381		2,503		41,764
Salaries and labor		48,542		151,473		469,222		361,812		1,230,397
Travel, transportation and accommodation		15,280		14,973		66,935		45,729		204,871
		629,269		1,021,807		2,294,594		2,075,021		8,574,611
Spring Valley project
Assays and analysis		-		-		-		-		3,329,900
Drilling		-		-		-		-		10,261,359
Engineering and consulting		-		4		(205)		30,347		2,738,419
Environmental		-		-		-		-		300,445
Field office and supplies		-		693		160		6,960		566,960
Legal		-		9,703		3,627		63,282		502,584
Operator fee		-		-		-		-		108,339
Property maintenance and taxes		-		8,396		-		8,396		496,317
Reclamation costs		-		(45)		12		89		30,975
Reproduction and drafting		-		20		4		110		30,172
Salaries and labor		-		2,822		1,195		18,040		1,280,297
Travel, transportation and accommodation		-		112		121		1,692		858,664
		-		21,705		4,914		128,916		20,504,431
Sub-total balance carried forward	$	1,207,578	$	1,744,299	$	3,732,201	$	3,356,813	$	45,282,364

The accompanying notes are an integral part of these unaudited consolidated financial statements.

11

MIDWAY GOLD CORP.

SCHEDULE OF MINERAL EXPLORATION EXPENDITURES - CONTINUED

(Expressed in Canadian dollars)  (unaudited)

	Three months ended September 30, 2013		Three months ended September 30, 2012		Nine months ended September 30, 2013		Nine months ended September 30, 2012		Cumulative period from inception (May 14,1996) to September 30, 2013
Sub-total balance brought forward	$	1,207,578	$	1,744,299	$	3,732,201	$	3,356,813	$	45,282,364
Tonopah project
Assays and analysis		-		-		-		19,496		552,388
Drilling		-		-		-		(64)		2,834,782
Engineering and consulting		-		14		2,335		14,545		4,453,406
Environmental		1,498		-		2,271		-		238,409
Field office and supplies		931		2,734		1,166		14,886		291,942
Legal		-		46		30		440		165,817
Property maintenance and taxes		69,533		73,963		70,055		74,471		708,522
Reclamation costs		10		-		281		4,912		39,519
Reproduction and drafting		-		79		6		177		23,637
Salaries and labor		6,074		12,615		7,575		86,815		962,343
Travel, transportation and accommodation		896		1,132		1,093		6,925		480,909
		78,942		90,583		84,812		222,603		10,751,674
Golden Eagle project
Assays and analysis		-		7		-		7		21,700
Drilling		-		-		-		-		3,638
Engineering and consulting		-		13,734		3,212		62,579		449,745
Field office and supplies		6		569		500		3,098		5,936
Legal		-		18		66		527		22,115
Property maintenance and taxes		473		-		3,653		8,527		33,557
Salaries and labor		40		2,227		2,947		7,167		18,923
Travel, transportation and accommodation		6		89		240		539		21,879
		525		16,644		10,618		82,444		577,493
Pinyon project
Engineering and consulting		-		-		273		-		273
Field office and supplies		907		-		4,384		-		4,384
Legal		-		-		480		-		480
Property maintenance and taxes		69,190		-		124,306		-		124,306
Reclamation costs		10		-		36		-		36
Reproduction and drafting		-		-		101		-		101
Salaries and labor		5,920		-		26,968		-		26,968
Travel, transportation and accommodation		874		-		2,567		-		2,567
		76,901		-		159,115		-		159,115
Sub-total balance carried forward	$	1,363,946	$	1,851,526	$	3,986,746	$	3,661,860	$	56,770,646

The accompanying notes are an integral part of these unaudited consolidated financial statements.

12

MIDWAY GOLD CORP.

SCHEDULE OF MINERAL EXPLORATION EXPENDITURES - CONTINUED

(Expressed in Canadian dollars)  (unaudited)

	Three months ended September 30, 2013		Three months ended September 30, 2012		Nine months ended September 30, 2013		Nine months ended September 30, 2012		Cumulative period from inception (May 14,1996) to September 30, 2013
Sub-total balance brought forward	$	1,363,946	$	1,851,526	$	3,986,746	$	3,661,860	$	56,770,646
Abandoned properties
Acquisition costs and option payments		-		-		-		-		40,340
Assays and analysis		-		859		-		77,095		188,275
Drilling		-		-		-		177,012		1,273,920
Engineering and consulting		-		3		-		56,359		3,802,398
Foreign exchange gain		-		-		-		-		81,600
Field office and supplies		-		219		3		38,071		349,637
Freight		-		-		-		-		234,956
Legal and accounting		-		2		-		3,233		469,997
Marketing		-		-		-		-		91,917
Interest on convertible loans		-		-		-		-		1,288,897
Property maintenance and taxes		-		12,204		-		32,653		563,085
Processing and laboratory supplies		-		-		-		-		941,335
Recoveries		-		-		-		-		(39,850)
Reclamation costs		-		(50)		-		8,301		51,597
Reproduction and drafting		-		-		-		-		6,215
Mining costs		-		-		-		-		693,985
Salaries and labor		-		2,875		17		121,380		162,791
Security		-		-		-		-		350,584
Travel, transportation and accommodation		-		125		44		24,819		470,696
Utilities and water		-		-		-		-		59,425
		-		16,237		64		538,923		11,081,800
Property investigations
Assays and analysis		1,550		12,820		1,550		22,254		200,078
Drilling		-		-		-		565		169,694
Engineering and consulting		-		-		-		174,734		385,125
Environmental		-		-		-		-		22,761
Field office and supplies		-		-		-		5,545		25,539
Legal		-		-		-		-		10,952
Property maintenance and taxes		240,076		46,867		185,012		655,437		1,017,255
Reclamation costs		-		-		-		-		3,048
Reproduction and drafting		-		-		-		394		5,336
Salaries and labor		-		2,432		-		27,421		38,725
Travel, transportation and accommodation		-		-		383		10,313		126,025
		241,626		62,119		186,945		896,663		2,004,538
	$	1,605,572	$	1,929,882	$	4,173,755	$	5,097,446	$	69,856,984

The accompanying notes are an integral part of these unaudited consolidated financial statements.

13

1.  Nature and continuance of operations

Midway Gold Corp. (the “Company”) was incorporated on May 14, 1996 under the laws of the Province of British Columbia and its principal business activities are the acquisition, exploration and development of mineral properties.

The Company has not generated any revenues from operations.  These consolidated financial statements have been prepared on a going concern basis which assumes the Company will be able to realize its assets and discharge its liabilities in the normal course of business in the foreseeable future.  The Company has incurred operating losses for the three and nine months ended September 30, 2013 of $3,964,571 and $13,383,230, respectively.  Further operating losses are anticipated in the development of its business.  Since inception of May 14, 1996 to September 30, 2013 the Company’s accumulated deficit totals $86,205,539.  Management believes that the Company’s cash on hand of $58,373,402 at September 30, 2013 is sufficient to finance exploration and development activities and operations through at least the next twelve months.

The Company’s ability to continue on a going concern basis beyond the next twelve months depends on its ability to successfully obtain additional financing for substantial capital expenditures and to successfully reach gold production from our Pan project in order to achieve planned principal operations.  While the Company has been successful in the past in obtaining financing, there is no assurance that it will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to the Company. 

These financial statements do not reflect adjustments that would be necessary if the going concern assumption were not appropriate.

2.Significant accounting policies and change in accounting policy

The consolidated interim financial statements included herein have been prepared by the Company, without audit, in accordance with the rules and regulations of the United States Securities and Exchange Commission (“SEC”) pursuant to Rule 10-01 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to such SEC rules and regulations, although the Company believes that the disclosures included are adequate to make the information presented not misleading.  Certain reclassifications have been made to prior period financial statements to conform to the current period presentation.

In management’s opinion, the unaudited consolidated interim financial statements contained herein reflect all adjustments, consisting solely of normal recurring items, which are necessary for the fair presentation of our financial position, results of operations, and cash flows on a basis consistent with that of our prior audited consolidated financial statements. However, the results of operations for interim periods may not be indicative of results to be expected for the full fiscal year. The Company’s 2012 Annual Report on Form 10-K includes a summary of significant accounting policies and should be read in conjunction with this Form 10-Q.

Recently issued accounting pronouncements

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists. The guidance requires an entity to present an unrecognized tax benefit, or a portion of an unrecognized tax benefit, in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss or tax credit carryforward, unless such tax loss or credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes resulting from the disallowance of a tax position. In the event that the tax position is disallowed or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit shall be presented in the financial statements as a liability and shall not be combined with deferred tax assets.

14

The guidance is effective for annual reporting periods beginning after December 15, 2013, and interim periods within those annual periods, and is to be applied prospectively. The adoption of this standard will not have a significant impact on the Company’s consolidated financial statements.

In March 2013, the FASB issued Accounting Standards Update ("ASU") 2013-05, “Parent's Accounting for the Cumulative Translation Adjustment upon Derecognition of Certain Subsidiaries or Groups of Assets within a Foreign Entity or of an Investment in a Foreign Entity”, an amendment to FASB Accounting Standards Codification ("ASC") Topic 830, “Foreign Currency Matters” ("FASB ASC Topic 830"). The update clarifies that complete or substantially complete liquidation of a foreign entity is required to release the cumulative translation adjustment ("CTA") for transactions occurring within a foreign entity. However, transactions impacting investments in a foreign entity may result in a full or partial release of CTA even though complete or substantially complete liquidation of the foreign entity has not occurred. Furthermore, for transactions involving step acquisitions, the CTA associated with the previous equity-method investment will be fully released when control is obtained and consolidation occurs. This ASU is effective for fiscal years beginning after December 15, 2013. The adoption of this standard will not have a significant impact on the Company’s consolidated financial statements.

In February 2013, the FASB issued ASU 2013-04, “Obligations Resulting From Joint and Several Liability Arrangements for Which the Total Amount of the Obligation is Fixed at the Reporting Date, an amendment to FASB ASC Topic 405, Liabilities” ("FASB ASC Topic 405"). The update requires an entity to measure obligations resulting from joint and several liability arrangements for which the total amount of the obligation is fixed as of the reporting date as the sum of the obligation the entity agreed to pay among its co-obligors and any additional amount the entity expects to pay on behalf of its co-obligors. This ASU is effective for annual and interim periods beginning after December 15, 2013 and is required to be applied retrospectively to all prior periods presented for those obligations that existed upon adoption of the ASU. The adoption of this standard will not have a significant impact on the Company’s consolidated financial statements.

Recently adopted accounting policies

In February 2013, the FASB issued ASU 2013-02, “Other Comprehensive Income (Topic 220)”. The objective of this update is to improve the reporting of reclassifications out of accumulated other comprehensive income. The amendments in this update seek to attain that objective by requiring an entity to report the effect of significant reclassifications out of accumulated other comprehensive income on the respective line items in net income if the amount being reclassified is required under U.S. GAAP to be reclassified in its entirety to net income in the same reporting period. For other amounts that are not required under U.S. GAAP to be reclassified in their entirety to net income in the same reporting period, an entity is required to cross-reference other disclosures required under U.S. GAAP that provide additional detail about those amounts. This accounting standard update is effective prospectively for annual and interim periods beginning after December 15, 2012.  The Company adopted ASU 2013-02 on January 1, 2013 and its adoption did not have a significant impact on the Company’s consolidated financial statements.

In October 2012, the FASB issued ASU 2012-04, “Technical Corrections and Improvements”. The amendments in this update cover a wide range of Topics in the Accounting Standards Codification. These amendments include technical corrections and improvements to the Accounting Standards Codification and conforming amendments related to fair value measurements. The amendments in this update were effective for fiscal periods beginning after December 15, 2012. The Company adopted ASU 2012-04 on January 1, 2013 and its adoption did not have a significant impact on the Company’s consolidated financial statements.

In December 2011, the FASB issued ASU 2011-11 “Balance Sheet: Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). This update requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. The objective of this disclosure is to facilitate comparison between those entities that prepare their financial statements on the basis of U.S. GAAP and those entities that prepare their financial statements on the basis of IFRS. The amended guidance is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The Company adopted ASU 2011-11 on January 1, 2013 and its adoption did not have a significant impact on the Company’s consolidated financial statements.

15

3.Net (income) loss per share

Basic (income) loss per common share is computed using the weighted-average number of common shares outstanding during the period.  Diluted (income) loss per common share is calculated using the weighted-average number of common shares outstanding for the period and include the dilutive effect of preferred shares using the if-converted method and exercise of stock options and warrants.

The two-class method is used to calculate basic and diluted (income) loss per common share since preferred shares are a participating security under ASC 260 Earnings per share. The two-class method is an earnings allocation formula that determines income per share for each class of common stock and participating security according to dividends declared (or accumulated) and participation rights in undistributed earnings. Under the two-class method, basic (income) loss per common share is computed by dividing net (income) loss attributable to common shareholders after allocation of income to participating securities by the weighted-average number of common shares outstanding during the year. Diluted (income) loss per common share is computed using the more dilutive of the two-class method or the if-converted method. In periods of net loss, no effect is given to participating securities since they do not contractually participate in the losses of the Company.

Basic and diluted (income) loss per share for the three and nine month periods ended September 30, 2013 and 2012 are calculated as follows:

		Three months ended			Nine months ended
		September 30,			September 30,
	2013		2012		2013		2012
Basic (income) loss per share:
Numerator:
Net (income) loss attributable to common shareholders	$	6,411,707	$	3,515,919	$	374,739	$	10,815,558
Denominator:
Weighted-average common shares for basic (income) loss per share		129,605,544		127,188,712		128,840,275		118,571,642
Basic (income) loss per share	$	0.05	$	0.03	$	-	$	0.09
Diluted (income) loss per share:
Numerator:
Net (income) loss attributable to common shareholders	$	6,411,707	$	3,515,919	$	374,739	$	10,815,558
Effect of Gain on change in fair value of derivative preferred liability		-		-		14,427,439		-
Effect of Accretion of redeemable preferred shares		-		-		(2,697,943)		-
Effect of Preferred shares dividend		-		-		(4,367,633)		-
Effect of Canadian corporate dividend tax		-		-		(1,061,992)		-
Diluted (income) loss	$	6,411,707	$	3,515,919	$	6,674,610	$	10,815,558
Denominator:
Weighted-average common shares for basic (income) loss per share		129,605,544		127,188,712		128,840,275		118,571,642
Effect of dilutive securities:
Preferred Series A shares		-		-		37,837,838		-
Stock Options		-		-		-		-
Dilutive potential common shares		-		-		37,837,838		-
Total shares		129,605,544		127,188,712		166,678,113		118,571,642
Diluted (income) loss per share	$	0.05	$	0.03	$	0.04	$	0.09

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For the three and nine months ended September 30, 2013 and 2012, the effects of the assumed exercise of the combined stock options and warrants of 4,134,167 and4,670,834, shares of common stock, respectively, were excluded from the calculation of diluted net income per share as the effect would be anti-dilutive. 

4.Fair value measurements

ASC 820 establishes a fair value hierarchy which prioritizes the inputs used in measuring fair value into three broad levels as follows:

Level 1- Quoted prices in active markets for identical assets or liabilities.

Level 2- Inputs other than the quoted prices in active markets that are observable either directly or indirectly.

Level 3- Unobservable inputs based on the Company’s assumptions.

The Company’s Level 1 assets at December 31, 2012 includedinvestments in common shares available for sale with no trading restrictions as determined using a market approach based upon unadjusted quoted prices for identical assets in an active market.

The Company’s Level 2 liabilities include two derivative liabilities.  The first relates  to warrants issued as part of a public offering on July 6, 2012 (note 9(xxxix)).  The Company determines the fair value of the warrant liability using the Black-Scholes option pricing model and records the change in the fair value of the warrant liability at each reporting period through the Statement of Operations.  The second is an embedded derivative liability related to the convertible Series A Preferred Shares issued as part of a private offering closed on December 13, 2012 (note 10).  The Company engaged a third party valuation firm to determine the fair value of the derivative liability and the Company records the change in the fair value of the derivative liability at each reporting period through the Statement of Operations.  

The Company did not have any Level 3 assets or liabilities at September 30, 2013 or December 31, 2012.

The determination of fair value for financial reporting purposes at September 30, 2013 utilizing the applicable framework is as follows:

Financial Instrument		Quoted Prices in Active Markets for Identical Assets		Significant other observable inputs		Significant unobservable inputs		Total at September 30, 2013
Liabilities
Warrant liability	$	-	$	(19,638)	$	-	$	(19,638)
Preferred share liability		-		(12,902,696)		-		(12,902,696)

Financial instruments measured at fair value as at December 31, 2012 were as follows:

Financial Instrument		Quoted Prices in Active Markets for Identical Assets		Significant other observable inputs		Significant unobservable inputs		Total at December 31, 2012
Assets
Available-for-sale securities	$	13,750	$	-	$	-	$	13,750
Liabilities
Warrant liability	$	-	$	(1,166,381)	$	-	$	(1,166,381)
Preferred share liability		-		(27,330,135)		-		(27,330,135)

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5.Investments

On October 26, 2010, as consideration of certain area of interest obligations of NV Gold Corporation (“NVX”) that applied to the Roberts Gold project, the Company was issued 250,000 common shares of NVX.

During the three and nine month periods ended September 30, 2013, the Company wrote off the investment resulting in a realized loss of $43,125 for both periods.  During the three and nine month periods ended September 30, 2012, the Company recorded a net unrealized loss of $346 and $51,250, respectively, on the common shares of NVX in accumulated other comprehensive income.

	September 30, 2013
	Number of shares		Cost		Realized gains (losses)		Fair Value
Available for sale – common shares	250,000	$	43,125	$	(43,125)	$	-
	December 31, 2012
	Number of shares		Cost		Accumulated unrealized gains (losses)		Fair Value
Available for sale – common shares	250,000	$	43,125	$	(29,375)	$	13,750

6.  Property, equipment and mine development

At September 30, 2013 and December 31, 2012, property, equipment and mine development consisted of the following:

	September 30,		December 31,
	2013		2012
Land	$	567,628	$	548,125
Buildings and leasehold improvements		737,823		519,699
Computer equipment and software		1,181,851		944,708
Trucks and autos		409,732		365,747
Office equipment		235,690		190,721
Field equipment		278,447		227,850
Mine development		10,686,975		6,057,111
Subtotal		14,098,146		8,853,961
Accumulated depreciation		(1,271,860)		(848,002)
Totals	$	12,826,286	$	8,005,959

Depreciation expense for the three and nine months ended September 30, 2013 was $140,960 and $382,215, respectively compared to depreciation expense for the three and nine months ended September 30, 2012 of $116,899 and $283,903, respectively.  The Company evaluates the recoverability of long lived assets when events and circumstances indicate that such assets might be impaired.

Beginning on January 1, 2012, the Company began to capitalize into mine development;permitting, engineering and costs associated with other development activities related to the Pan project as part of the Company’s plans to advance the Pan project to production.  When a project is determined to contain proven or probable reserves, costs incurred in anticipation of production are capitalized into Mine development.  Interest costs, if any, incurred during the development phase, would be capitalized until the assets are ready for their intended use.  When a project commences commercial production and the project is determined to contain proven or probable reserves, amortization and depletion of capitalized costs will be computed on a unit-of–production basis over the expected reserves of the project based on estimated recoverable gold equivalent ounces.  Depreciation of related capitalized equipment is computed on a straight-line basis over the estimated economic life.

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7.Mineral properties

Details on the Company’s mineral properties are found in note 6 to the audited consolidated financial statements for the year ended December 31, 2012.

		September 30,		December 31,
Mineral property		2013		2012
Pan	$	34,709,938	$	34,490,915
Gold Rock		1,826,188		972,245
Spring Valley		4,975,930		4,790,292
Tonopah		7,885,426		7,508,054
Golden Eagle		2,238,327		2,161,420
Pinyon		43,153		-
	$	51,678,962	$	49,922,926

(a)     Pan property, Nevada

The Company assumed a mineral lease agreement for a 100% interest in the Pan property which requires the Company to pay advance minimum royalties on an annual basis.  The minimum advance royalties will be creditable against a sliding scale Net Smelter Returns (“NSR”) production royalty of between 2.5% and 4%.  The Company must incur a minimum of U.S.$65,000 per year for work expenditures, including claim maintenance fees, during the term of the mining lease.  On January 2, 2013, the Company paid advanced royalties of $283,194 (U.S.$287,448). 

(b)     Gold Rock property, Nevada

Through a series of four royalty agreements and one assignment, the Company acquired claims that currently comprise the Gold Rock property.  The royalty agreements are subject to sliding scale royalties on NSR ranging between 2% and 6% based upon gold price and advanced minimum royalty payments recoverable from commercial production.  Through the nine months ending September 30, 2013, the Company has paid advanced royalties of $314,218 (U.S.$318,725) in advanced minimum royalty payments. 

(c)     Spring Valley property, Nevada

The Company signed an exploration and option to joint venture agreement (the “Barrick Agreement”) with Barrick Gold Exploration Inc. (“Barrick”), a wholly owned subsidiary of Barrick Gold Corporation, effective March 9, 2009.  As ofSeptember 30, 2013 Barrick has informed the Company that they have completed the expenditure requirement to earn a 60% interest in the Spring Valley property on April 19, 2013, and that they intend to incur an additional U.S.$8,000,000 in exploration expenditures to increase their interest in the property to 70%.  

At the Company’s election, Barrick may also earn an additional 5%  (75% total) by carrying the Company to a production decision and arranging financing for the Company’s share of mine development expenses, with the carrying and financing costs plus interest to be recouped by Barrick once production has been established.

(d)     Tonopah property, Nye County, Nevada

Through a series of agreements, amendments and payments the Company acquired a 100% interest in the Tonopah property.  The acquisition is subject to a sliding scale royalty on NSR between 2% and 7% from any commercial production, based on changes in gold prices and an advance minimum royalty, recoverable from commercial production, of U.S.$300,000 per year payable on each August 15.  In July of 2013, the Company paid $316,635 (U.S.$300,000) to cover the requirement of the 2013 advanced minimum royalty. 

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(e)     Golden Eagle property, Washington

The Company purchased a 75% interest in the Golden Eagle, Washingtonproject from Kinross Gold USA Inc. (“Kinross”) in August 2008, at a cost of $1,537,950 (U.S.$1,500,000)and purchased a 25% interest in the Golden Eagle project from Hecla Limited at a cost of $500,200 (U.S.$483,333). Kinross retained a 2%NSR royalty and was granted a first right of refusal to toll mill ore from the Golden Eagle property at their Kettle River Mill. 

(f)     Pinyon property, Nevada

The Company entered into an earn-in agreement with Aurion Resources (“Aurion”) in November 2012 for claims. The Company can earn up to a70% interest in the Pinyon property.  The Company can also earn an additional 5%(75% total) by arranging mine financing.  As of September 30, 2013 the Company has a spent a total of $200,380.

8.  Reclamation deposit

The Company is required to post bonds with the Bureau of Land Management (“BLM”) for reclamation of planned mineral exploration and development programs associated with the Company’s mineral properties located in the United States.  For the Company’s mineral properties that are being actively explored under funding arrangement agreements, the funding partners are responsible for bonding for the surface disturbance created by the exploration programs funded by each of them on those projects. 

At September 30, 2013 the Company has purchased surety bonds for reclamation bonds covering the Company’s projects in the amount of U.S.$846,491.  The surety bonds are in place for a one year period through May of 2014, at which point the Company can elect to renew the surety bonds or deposit the full cash amount of the reclamation bonds with the Bureau of Land Management.

As of December 31, 2012 the Company had posted reclamation deposits of $853,110 (U.S.$857,525) directly with the BLM.  During the nine months ended September 30, 2013 the full U.S.$857,525 ($871,203) of the reclamation deposits were released and refunded back to the Company in connection with the surety bonding.

9.Share capital

(a)     The Company is authorized to issue an unlimited number of common shares and preferred shares.

(b)     Share issuances

(i)     During 1996, the Company issued 420,000 common shares at $0.25 per share by way of a non-brokered private placement for proceeds of $98,722 net of issue costs.  In addition the Company issued 280,000 flow-through common shares at $0.25 per share by way of a non-brokered private placement for proceeds of $70,000.

(ii)     During 1997, the Company completed an initial public offering of 2,000,000 common shares at $0.35 per share for proceeds of $590,570, net of issue costs.  In connection with this offering, the Company’s agent received a selling commission of 10% or $0.035 per share and was issued 25,000 shares as a corporate finance fee.

(iii)     During 1997, the Company issued 1,000,000 units at $2.50 per unit by way of a private placement for proceeds of $2,253,793 net of issue costs.  Each unit consisted of one common share and one non-transferable share purchase to purchase one additional common share at $3.00 per share until February 14, 1998.  The proceeds of the financing of $2,500,000 were allocated $2,178,761 as to the common shares and $321,239 as to the warrants.   During 1998 100,000 of the warrants were exercised and 900,000 expired.  In connection with this private placement, the Company’s agent received a selling commission of 7.5% of the proceeds of the units sold or $0.1875 per unit and a corporate finance fee of $15,000.

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(iv)     During 1997, the Company issued 750,000 common shares as performance shares for proceeds of $7,500 that were held in escrow in accordance with the rules of the regulatory authorities of British Columbia.  The shares were released 25% in each of 1998, 1999, 2000 and 2001.

(v)     During 1997, pursuant to an equity participation agreement to acquire an interest in Gemstone Mining Inc. (“Gemstone”), a Utah Corporation that by agreement the creditors of Gemstone were issued 1,000,000 units of the Company on conversion of a debt of $2,065,500 (U.S.$1,500,000). Each unit consisted of one common share and one non-transferable share purchase to purchase one additional common share at U.S.$2.00 per share that was immediately exercised for proceeds of $2,803,205 (U.S.$2,000,000).  The first one-third tranche of a conditional finders’ fee was satisfied by the issue of 150,000 common shares in connection with the acquisition of Gemstone.

(vi)     During 1998, the Company issued 100,000 common shares pursuant to the exercise of share purchase warrants for proceeds of $300,000.

(vii)     During 1998, the Company issued 200,000 common shares in connection with the acquisition of Gemstone as well as the second tranche of finder’s fee in connection with that acquisition.  The Company’s option to acquire Gemstone expired on January 31, 1998 and the remaining one-third tranche were not issued.

(viii)     During 1999, the Company consolidated its issued share capital on a two old for one new basis and changed its name from Neary Resources Corporation to Red Emerald Resource Corp.

(ix)     During 2002, the Company issued 3,500,000 units at $0.25 per unit for proceeds of $875,000 by way of a short form offering document under the policies of the TSX Venture Exchange.  Each unit consists of one common share and one common share purchase warrant that entitled the holder to purchase one additional common share at $0.25 per share until October 19, 2002.  The Company also issued 150,000 common shares as a finance fee in connection with this offering, and issued the agent 875,000 share purchase warrants exercisable at $0.25 per share until April 19, 2004.  During 2002 the Company issued 1,134,500 special warrants at $1.25 per special warrant for proceeds of $1,418,125.  Each Special Warrant automatically converted to a unit comprising one common share and one share purchase warrant that entitled the holder to purchase one additional common share at $1.55per share until November 6, 2003.  The proceeds of the financing of $1,418,125 were allocated on a relative fair value basis as $1,171,286 to common shares and $246,839 as to the warrants.  During 2003 all of the warrants expired unexercised.  In connection with the offering the Company paid the agent a 10% commission totaling $113,450, issued the agent 40,000 common shares as a finance fee in connection with this offering, and issued the agent 170,175 share purchase warrant exercisable at $1.55 per share until July 5, 2003.

(x)     During 2002, the Company issued 4,028,000 common shares pursuant to the exercise of share purchase warrants for proceeds of $1,007,000.

(xi)     During 2002, the Company issued 32,000 common shares pursuant to the exercise of stock options for proceeds of $12,800.

(xii)     During 2002, the Company issued 31,250 common shares as additional consideration to a director who loaned the Company $780,000 bearing interest at 12% per annum.  The loan and interest was repaid prior to December 31, 2002.

(xiii)     During 2002, the Company acquired Rex Exploration Corp. (“Rex”) in exchange for 4,500,000 common shares of the Company.

(xiv)     During 2003, the Company issued 700,000 units at $1.20 per unit for proceeds of $840,000 by way of a non-brokered private placement.  Each unit consists of one common share and one share purchase warrant that entitled the holder to purchase one additional common share at $1.50  until May 25, 2004.  The proceeds of the financing of $840,000 were allocated $638,838 as to common shares and $201,162 as to the warrants.  During 2004 161,000 of the warrants were exercised and 539,000 expired.  Share issue expenses were $19,932.

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(xv)     During 2003, the Company issued 294,500 common shares pursuant to the exercise of share purchase warrants for proceeds of $73,625.

(xvi)     In January 2004, the Company issued 400,000 units at $2.00 per unit for proceeds of $800,000 by way of a private placement.  Each unit consisted of one common share and one non-transferable share purchase warrant that entitled the holder to purchase one additional common share at $2.35 per share for a six month period.  The proceeds of the financing of $800,000 were allocated on a relative fair value basis as $624,593 to common shares and $175,407 as to the warrants.  All of the warrants expired unexercised in 2004.  The Company issued 40,000 common shares as a finder’s fee for this private placement.

(xvii)     In August 2004, the Company issued 1,020,000 units at $0.75 per unit for proceeds of $765,000 by way of a private placement.  Each unit consisted of one common share and one non-transferable share purchase warrant that entitled the holder to purchase one additional common share at $0.80 per share until August 25, 2005.  All of the warrants were subsequently exercised.  The Company issued 55,650 common shares as a finder’s fee for this private placement.

(xviii)     In December 2004, the Company issued 700,000 units at $0.85 per unit for proceeds of $595,000 by way of a private placement.  Each unit consisted of one common share and one non-transferable share purchase warrant that entitled the holder to purchase one additional common share at $1.00 per share until December 20, 2005.  All of the warrants were subsequently exercised.  The Company issued 18,750 common shares as a finder’s fee for this private placement.

(xix)     In February 2005, the Company issued 2,500,000 units at $0.85 per unit for proceeds of $2,125,000 by way of a private placement. Each unit consisted of one common share and one non-transferable share purchase warrant that entitled the holder to purchase one additional common share at $1.00 per share until February 16, 2006. The proceeds of the financing of $2,125,000 were allocated on a relative fair value basis as $1,598,457 to common shares and $526,543 as to warrants.  There were 23,000 warrants exercised in fiscal year 2005 and the balance exercised in fiscal year 2006. The Company issued 75,800 common shares for $64,430 and paid $69,700 in cash as a finder’s fee and incurred $26,709 in additional issue costs for this private placement.

(xx)     In July 2005, the Company issued 1,000,000 units at $1.15 per unit for proceeds of $1,150,000 by way of a private placement. Each unit consisted of one common share and one-half non-transferable share purchase warrant that entitled the holder to purchase one additional common share at $1.15 per share until July 27, 2006.  The proceeds of the financing of $1,150,000 were allocated on a relative fair value basis as $995,193 to common shares and $154,807 as to warrants.   All of the warrants were exercised in fiscal year 2006. The Company incurred $15,560 in issue costs.

(xxi)     In August 2005, the Company issued 500,000 units at $1.40 per unit for proceeds of $700,000 by way of a private placement. Each unit consisted of one common share and one-half nontransferable share purchase warrant that entitled the holder to purchase one additional common share at $1.45 per share until August 22, 2006. The proceeds of the financing of $700,000 were allocated on a relative fair value basis as $608,015 to common shares and $91,985 as to warrants.   All of the warrants were exercised in fiscal year 2006. The Company incurred $8,261 in issue costs.

(xxii)     In January 2006, the Company issued 40,000 common shares at a value of $88,000 pursuant to a purchase and sale agreement to purchase mining claims for the Spring Valley project.

(xxiii)     In May 2006, the Company issued 3,725,000 units at $1.80 per unit for proceeds of $6,705,000 by way of a private placement.  Each unit consisted of one common share and one-half nontransferable share purchase warrant.  Each whole warrant entitled the holder to purchase one additional common share at $2.70 per share until May 16, 2007. The proceeds of the financing of $6,705,000 were allocated on a relative fair value basis as $5,998,846 to common shares and $706,154 as to warrants.   The Company incurred $65,216 in issue costs.  By May 16, 2007 1,725,000 of the warrants were exercised and 137,500 expired unexercised.

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(xxiv)     In November 2006, the Company issued 2,000,000 units at $2.50 per unit for proceeds of $5,000,000 by way of a private placement. Each unit consisted of one common share and one-half nontransferable share purchase warrant.  Each whole warrant entitles the holder to purchase one additional common share at $3.00 per share until November 10, 2007.  The proceeds of the financing of $2,000,000 were allocated on a relative fair value basis as $1,761,509 to common shares and $238,491 as to warrants.   The Company paid $88,750 in finders’ fees and incurred $94,546 in issue costs for this private placement.  By November 10, 2007 908,782 of the warrants were exercised and 91,218 expired unexercised.

(xxv)     On April 16, 2007, the Company issued 7,764,109 common shares at a value of $25,000,431along with 308,000 stock options at a value of $608,020 and 870,323 share purchase warrants at a value of $1,420,054 in connection with the acquisition of Pan-Nevada Gold Corporation.  By December 31, 2007, 154,000 of the stock options had been exercised and 761,823 share purchase warrants had been exercised.  By December 31, 2008 the remaining 108,500 share purchase warrants were exercised and 84,000 stock options had been exercised.  On October 11, 2008 the final 70,000 stock options expired not exercised.

(xxvi)     On August 24, 2007, the Company issued 2,000,000 common shares at $2.70 per common share for proceeds of $5,400,000 by way of a private placement.  The Company incurred $28,000 in share issue costs.

(xxvii)     On March 31, 2008, the Company issued 30,000 common shares at a value of $88,500 pursuant to a lease assignment of mining claims for the Gold Rock project. The Company incurred $1,489 in share issue costs.

(xxviii)     On June 12, 2008, the Company issued 1,421,500 common shares at $2.00 per common share for proceeds of $2,843,000 by way of a private placement.  The Company incurred $75,371 in share issue costs.

(xxix)     On August 1, 2008 the Company issued 600,000 common shares at U.S.$2.50 per common share for proceeds of $1,537,950 (U.S.$1,500,000) by way of a private placement with Kinross. The Company incurred $39,450 in share issue costs.

(xxx)     On November 12, 2008 the Company issued 12,500,000 units at $0.22 per unit for proceeds of $2,750,000 by way of a private placement. Each unit consisted of one common share and one share purchase warrant.  Each warrant entitles the holder to purchase one additional common share at $0.28 per share until May 12, 2009.  The proceeds of the financing of $2,750,000 were allocated on a relative fair value basis as $1,793,491 to common shares and $956,509 as to warrants.   The Company incurred $23,395 in issue costs for this private placement.  In the year ended December 31, 2009 all of the 12,500,000 warrants were exercised for proceeds of $3,500,000.

(xxxi)     In addition to the 84,000 stock options reported exercised in paragraph (xxv), during 2008, the Company issued a further 395,000 common shares pursuant to the exercise of stock options for proceeds of $613,250.

(xxxii)     During 2009, the Company issued 33,333 common shares pursuant to the exercise of stock options for proceeds of $21,651.

(xxxiii)     On April 9, 2010, the Company issued 1,333,000 units at $0.60 per unit for proceeds of $800,000 by way of a private placement. Each unit consisted of one common share and one share purchase warrant.  Each warrant entitles the holder to purchase one additional common share until October 9, 2011 at an exercise price as follows: $0.70 if exercised on or before October 9, 2010; $0.80 if exercised after October 9, 2010 but on or before April 9, 2011; and $0.90 if exercised after April 9, 2011 but on or before October 9, 2011.  The proceeds of the financing of $800,000 were allocated on a relative fair value basis as $514,365 to common shares and $285,635 as to warrants.The Company incurred $95,529 in issue costs for this private placement. 

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(xxxiv)     On June 16, 2010, the Company issued 11,078,666 units at $0.60 per unit for proceeds of $6,647,199 by way of a brokered offering in Canada and a non-brokered offering in the United States. Each unit consisted of one common share and one-half share purchase warrant.  Each whole warrant entitles the holder to purchase one additional common share until June 16, 2012 at an exercise price of $0.80.  The proceeds of the financing of $6,647,199 were allocated on a relative fair value basis as $5,142,202 to common shares and $1,504,997 as to warrants.   The Company issued 658,840 agent’s warrants which entitle the holder to purchase one common share until June 16, 2010 at an exercise price of $0.80.  These warrants have been recorded at the estimated fair value at the issue date of $212,109.  The fair value of warrants was determined using a risk free interest rate of 1.82%, an expected volatility of 131%, an expected life of 2 years, and zero dividends for a fair value per warrant of $0.32.  In addition, the Company paid finders’ fees in the amount of $395,304 and incurred other cash share issue costs of $307,553.

(xxxv)     In September 2010, the Company issued 12,500 common shares pursuant to the exercise of share purchase warrants for proceeds of $10,000.

(xxxvi)     In  November 2010, the Company closed a public offering  and the Company issued 6,660,000 units at U.S.$0.60 per unit, each unit comprising one common share and one half of one non-transferable common share purchase warrant.  Each whole warrant entitles the holder to purchase one common share of the Company at a price of U.S.$0.90 per share until November 12, 2012, subject to acceleration provisions. The proceeds of the financing of $4,070,725 were allocated first to the fair value of the warrants at $918,870 with the residual amount of $3,151,855 to common shares.

The Company incurred $176,288 in issue costs and paid $244,244 to the agent as commission for this public offering.  On February 9, 2011, the Company gave notice to the Warrantholders that it accelerated the expiry date of the warrants to March 14, 2011 and by that date 2,650,000 warrants were exercised and 680,000 warrants expired unexercised.

(xxxvii)     On June 6, 2011, the Company issued 7,500,000 common shares upon the close of a “bought deal” public offering for U.S.$1.60 per share.  Gross proceeds on the purchase were $11,742,000 (U.S.$12,000,000).  The Company incurred $151,839 in issue costs and paid the agent $587,100 (U.S.$600,000) as a commission for this public offering.

(xxxviii)     On September 23, 2011, the Company announced that it had established an "At-the-Market" ("ATM") issuance program under which it may sell up to a maximum of 6,000,000 of its common shares.  The ATM issuance program is available to the Company on an as needed basis.  Subject to market conditions and funding requirements, the Company may, at its discretion, from time totime sell all, some, or none of the reserved shares during the term of the ATM program.  Any common shares issued under the ATM program will be sold through ATM issuances in the United States.  No ATM issuances will be made through the facilities of any Canadian securities exchange.  Any ATM issuances will be made at market prices prevailing at the time of the sale and, as a result, prices may vary.  During the three months ended September 30, 2013, the Company did not issue any shares pursuant to the ATM program.As of September 30, 2013, the Company has issued a total of 637,736 shares and received net proceeds of $1,554,957 pursuant to the ATM program.  The ATM issuance program was terminated at the Company’s discretion on July 29, 2013.

(xxxix)     In July 2012, the Company closed a public offering and issued 12,261,562 units at U.S.$1.28 per unit, each unit comprising one common share and one half of one non-transferable common share purchase warrant.  Each whole warrant entitles the holder to purchase one common share of the Company at a price of U.S.$1.85 per share for a period of 18 months following the closing of the public offering, subject to acceleration provisions. The gross proceeds of the financing of U.S.$15,694,799 were allocated first to the fair value of the warrants at U.S.$2,616,006 with the residual amount of U.S.$13,725,687 to common shares.  The Company incurred $1,437,675 in issue costs and paid $244,244 to the agent as commission for this public offering which was recorded during Q3 of 2012.

(xxxx)     On July 2, 2013, the Company issued 1,166,930 shares in the amount of $1,253,352 for the payment of the quarterly dividends on the Series A Preferred Shares, net of withholding taxes (note 10).

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(c)     Stock options

The Company adopted the 2013 Stock and Incentive Plan (the “2013 Plan”) after approval of the 2013 Plan by the Company’s Shareholders at the Annual General and Special Meeting on June 20, 2013.  The 2013 Plan is designed to replace the 2008 Stock Option Plan (the “Plan”); however, all outstanding option grants as of June 20, 2013 will remain under the 2008 Stock Option Plan.  Upon adoption of the 2013 Plan on June 20, 2013, the 2008 Stock Option Plan ceased to be available for the granting of new stock options.

The 2013 Plan permits a fixed aggregate number of common shares to be issuable under all awards under the 2013 Plan of 16,628,914 (“Award Cap”), which was equivalent to 10% of the Company’s common shares plus Series A Preferred Shares as of April 18, 2013. The total number of common shares issuable to insiders at any time and issued to insiders of the Company within any one-year period pursuant to stock options granted under the 2013 Plan, together with any other security based compensation arrangements of the Company, may not exceed 10% of the issued and outstanding common shares and preferred shares.  The number of common shares issuable for Awards made under the 2008 Stock Option Plan is deducted from the Award Cap. The Award Cap represents the maximum number of shares issuable under both plans. 

The exercise price of a stock option granted under the 2013 Plan will be determined by the Compensation Committee at the time the option is granted, but the exercise price may not be less than 100% of the fair market value of the Company’s common shares on the date of grant of such option.  The fair market value is the closing price of one common share on the trading day immediately preceding the date of grant on the NYSE MKT. Stock options granted under the 2013 Plan are subject to the following restrictions: (i) a promissory note is not permitted as payment for a stock option; (ii) the maximum term for stock options is 10 years from the date of grant; and (iii) unless otherwise fixed, stock options expire three months after the person to which they have been granted is terminated (12 months if due to death) or when options expire during a trading restriction, expiry is extended to the third trading day after a period during which trading in the common shares was prohibited or restricted pursuant to the policies of the Company.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option pricing model. The option pricing model requires the input of subjective assumptions which are based on several different criteria.  Expected volatility is based on the historical price volatility of the Company’s common stock.  Expected dividend yield is assumed to be nil, as the Company has not paid dividends since inception on common shares.  Expected forfeitures are calculated based upon historical experience of options. The expected life is estimated in accordance with SEC Staff Accounting Bulletin No. 107, “Share-Based Payment” for “plain vanilla” options. Risk free interest rates are based on U.S. government obligations with a term approximating the expected life of the option.  

The stock-based compensation for options vesting during the three and nine months ended September 30, 2013 and 2012, is included in the consolidated statement of operations as follows:

	Three Months ended September 30, 2013		Three Months ended September 30, 2012		Nine Months ended September 30, 2013		Nine Months ended September 30, 2012
Salaries and benefits	$	184,360	$	331,677	$	787,979	$	1,234,526
Mineral exploration expenditures		40,420		83,408		142,381		188,023
Consulting		17,484		72,488		63,593		54,952
Total	$	242,264	$	487,573	$	993,953	$	1,477,501

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2008 Stock Option Plan – TSX Stock Exchange

The estimated unrecognized compensation cost from unvested options as of September 30, 2013 was approximately $529,210, which is expected to be recognized over the remaining vesting period of 1.42 years, and has a weighted average remaining contractual term of 2.46 years.

The weighted-average grant date fair value of options is summarized below for the nine months ended September 30, 2013 and 2012.

	September 30, 2013		September 30, 2012
Unvested Beginning of Year	$	2.12	$	1.80
Granted		0.55		1.33
Vested		0.63		0.85
Expired		(1.01)		(1.42)
Unvested End of Period	$	0.82	$	1.49

The following table summarizes activity for compensatory stock options during the nine months ended September 30, 2013:

	Number of Shares	Weighted Average Exercise Price		Aggregate Intrinsic Value		Number of Shares Exercisable
Outstanding, January 1, 2013	7,817,501	$	1.35	$	2,570,692	7,082,504
Granted	2,745,000		1.14		-	-
Exercised	-		-		-	-
Cancelled	(804,167)		1.58		-	-
Outstanding, September 30, 2013	9,758,334	$	1.27	$	1,123,733	7,662,492

The following table summarizes information about outstanding compensatory stock options as of September 30, 2013:

	Options Outstanding				Options Exercisable
Exercise Prices	Number of Shares	Remaining Contractual Life (years)	Weighted Average Exercise Price		Number Exercisable	Weighted Average Exercise Price		Aggregate Intrinsic Value
$0.56 - $1.00	4,134,167	1.4	$	0.73	4,134,167	$	0.73	$	1,123,733
$1.01 - $1.60	2,551,667	4.3		1.18	961,656		1.22		-
$1.61 - $2.20	3,022,500	2.8		2.07	2,516,669		2.07		-
$2.21 - $2.80	50,000	2.9		2.34	50,000		2.34		-
	9,758,334	2.6	$	1.27	7,662,492	$	1.24	$	1,123,733

2013 Stock Option Plan – NYSE MKT Stock Exchange

The estimated unrecognized compensation cost from unvested options as of September 30, 2013 was approximately U.S.$59,535, which is expected to be recognized over the remaining vesting period of 2.85 years, and has a weighted average remaining contractual term of 4.85 years.

The weighted-average $U.S. grant date fair value of options is summarized below for the nine months ended September 30, 2013 and 2012.

	September 30, 2013		September 30, 2012
Unvested Beginning of Year	$	-	$	-
Granted		0.44		-
Vested		-		-
Expired		-		-
Unvested End of Period	$	0.44	$	-

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The following table summarizes activity for compensatory stock options during the nine months ended September 30, 2013:

	Number of Shares	Weighted Average Exercise Price (U.S.)		Aggregate Intrinsic Value (U.S.)		Number of Shares Exercisable
Outstanding, January 1, 2013	-	$	-	$	-	-
Granted	150,000		0.96		-	-
Exercised	-		-		-	-
Cancelled	-		-		-	-
Outstanding, September 30, 2013	150,000	$	0.96	$	-	-

The following table summarizes information about outstanding compensatory stock options as of September 30, 2013:

	Options Outstanding				Options Exercisable
Exercise Prices	Number of Shares	Remaining Contractual Life (years)	Weighted Average Exercise Price (U.S.)		Number Exercisable	Weighted Average Exercise Price (U.S.)		Aggregate Intrinsic Value (U.S.)
$0.56 - $1.00	150,000	4.9	$	0.96	-	$	-	$	-
	150,000	4.9	$	0.96	-	$	-	$	-

d)     Share purchase warrants:

Total outstanding warrants at September 30, 2013 were 6,130,781. The exercise price on all warrants outstanding was U.S.$1.85 per share and each warrant entitles the holder to purchase one additional common share until January 6, 2014, subject to acceleration provisions.  U.S. GAAP requires the value of share purchase warrants issued with an exercise price denominated in a currency other than the Company’s Canadian dollar functional currency to be considered as a liability and this liability is stated at fair value each reporting period.  The Company adjusted the fair value of the warrant liability as of December 31, 2012 to $1,166,381, calculated using the Black-Scholes option pricing model. As of September 30, 2013, the fair value of the warrant liability was adjusted to $19,638, calculated using the following assumptions: common share price of $0.96; expected life of 3.22 months; volatility of 62%; no dividend yield; a risk free interest rate of 0.13% and an exchange rate of 1.0303. Thegain of $93,209 and $1,146,743 related to the change in the fair value of the warrants has been reported in “Gain on change in fair value of derivative liabilities” within Other Income in the Consolidated Statement of Operations for the three and nine months ended September 30, 2013, respectively.

During the three and nine months ended September 30, 2013, the Company did not issue any warrants.

A summary of the Company’s stock purchase warrants as of September 30, 2013 is presented below:

	Number of Warrants	Weighted Average Exercise Price (U.S. $)		Remaining Contractual Life (years)
Balance, December 31, 2012	6,130,781	$	1.85	1.02
Issued	-		-	-
Exercised	-		-	-
Expired	-		-	-
Balance, September 30, 2013	6,130,781	$	1.85	0.27

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10.  Redeemable preferred shares

In December 2012, the Company issued 37,837,838 Series A Preferred Shares at U.S.$1.85 per share for gross proceeds of $68,936,000  (U.S.$70,000,000) by way of a private placement.  The Company incurred a total of $641,333 in share issuance costs, of which the Company proportionately allocated $229,753 to the embedded derivative liability and, the remaining share issuance costs of $411,580 are presented net of the redeemable preferred shares on the Consolidated Balance Sheet.  There is an eight percent (8%) annual dividend, compounding monthly, payable quarterly on the Series A Preferred Shares. At the Company’s option, it may pay the 8% dividend with common shares, net of withholding taxes, in-lieu of cash, based on the closing price of the Company’s common shares as quoted by the NYSE MKT on the trading day immediately prior to the payment date. 

2013 Dividend	Date Declared	Record Date		Dividend Per Share		Total Dividend (CAD)	Payment Date	Payment Type
Preferred Series A Holders	March 11, 2013	March 25, 2013	$	0.04	$	1,699,140	April 1, 2013	Cash
Preferred Series A Holders	June 20, 2013	June 24, 2013		0.04		1,479,868	July 2, 2013	Shares 1,166,930 shares
Preferred Series A Holders	September 17, 2013	September 23, 2013		0.04		1,467,197	October 1, 2013	Shares 1,260,144 shares
			$	0.12	$	4,646,205

Canadian tax legislation requires a corporate tax to be paid on all cash or in-kind dividends declared and paid by a Canadian entity on taxable preferred shares.  Therefore, the dividends declared during the nine months ended September 30, 2013, resulted in a Canadian corporate “Part VI.1” current tax payable of $1,061,992.  The Company is entitled to a deduction for tax purposes equal to 3.5 times Part VI.1 taxes paid.  Therefore, future Canadian corporate tax savings, if realized, should approximately offset the preferred dividend tax expense.

The holders of each Series A Preferred Share are able to convert the shares into common shares on a one-for-one basis at any time.  After December 13, 2013, the Company can pro-ratably force conversion of the shares into common shares on a one-for-one basis provided that the weighted average price of the common shares exceeds U.S.$3.70 on each trading day during 20 consecutive trading days immediately prior to both the delivery of an applicable mandatory conversion notice and the applicable mandatory conversion date.  From and after the date which is five years from the issuance date of the Series A Preferred Shares (December 13, 2017), the Company or each holder of Series A Preferred Shares has the right, exercisable by 30 days' notice in writing, to redeem or to require the Company to redeem in cash any portion of the Series A Preferred Shares at U.S.$1.85 per share plus accumulated unpaid dividends.  If the outstanding Series A Preferred Shares had been converted as of September 30, 2013, 37,837,838 common shares would have been issued and the fair value of those common shares based upon the closing price on the NYSE MKT as of September 30, 2013 of U.S.$0.96 would have been U.S.$36,324,324.  If the common share price was above U.S.$1.85, there would be no change to the number of common shares issued upon conversion.

Holders of the Series A Preferred Shares have consent rights over a variety of significant corporate and financing matters, including, but not limited to, the voluntary or involuntary liquidation, dissolution or winding-up of the affairs of the Company, the issuance of any common shares or common share equivalents for less than $1.85 per share or any amendment to the Company’s articles in a manner adverse to the holders of Series A Preferred Shares. 

Of the 37,837,838 Series A Preferred Shares sold, EREF-MID II, LLC and HCP-MID, LLC purchased a combined 17,837,838 Series A Preferred Shares.  Hale Fund Management, LLC, (“HFM”) is the manager of EREF-MID II, LLC. Hale Capital Partners, LP, (“HCP”) is the sole member of HCP-MID, LLC.  Hale Fund Partners, LLC, (“HFP”) is the general partner of HCP. Hale Capital Management, LP, (“HCM”) is the manager of HCP.  Hale Fund Management, LLC, (“HFM”), is the general partner of HCM and exercises voting and investment power over the Series A Preferred Shares held by HCP-MID, LLC.  Mr. Martin Hale, a member of the Company’s board of directors, is the (i) CEO of HCP, (ii) the sole owner and managing member of HFP and (iii) the sole owner and CEO of HFM. 

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U.S. GAAP requires that embedded derivatives not closely related to the host contract be bifurcated from the host contract and accounted for at fair value.  Because the convertible instrument is denominated in U.S. dollars and the functional currency of the Company is Canadian dollars, the Company recorded an embedded derivative liability to account for the conversion features of the Series A Preferred Shares.  Pursuant to derivative accounting guidance under ASC 815, the embedded derivative liability is to be re-measured at each reporting period with changes in the liability being recorded through earnings.  The fair value of the embedded derivative liability as of September 30, 2013 was $12,902,696, calculated using a volatility of 48.8%, a credit spread of 20.1%, common stock closing price of U.S.$0.955, risk-free rate of 1.24% and USD to CAD exchange rate of 1.0303.  Theincomeof $895,234 and $14,427,439for the gain on change in fair value of derivative liabilities has been reported in Other Income in the Consolidated Statement of Operations, for the three and nine months ended September 30, 2013, respectively.

The balance of the Company’s redeemable preferred shares and changes in the carrying amount of the redeemable preferred shares are as follows:

	Redeemable Preferred Shares
Balance as of December 13, 2012	$	43,828,888
Accretion of Redeemable preferred shares		153,662
Preferred share cumulative dividend		278,572
Balance as of December 31, 2012	$	44,261,122
Accretion of Redeemable preferred shares		2,697,943
Preferred share cumulative dividend		4,367,633
Declared Preferred share cumulative dividend		(4,646,205)
Share issuance costs		(314)
Balance as of September 30, 2013	$	46,680,179

11.  Accumulated other comprehensive (income) loss

The components of AOCI as of September 30, 2013 were as follows:

	Unrealized (gain) loss on investment		Currency Translation Adjustment		Total AOCI
Balance as of December 31, 2012	$	29,375	$	406,969	$	436,344
Other comprehensive (income) loss before reclassifications		13,750		(677,747)		(663,997)
Amounts reclassified from accumulated other comprehensive income		(43,125)		-		(43,125)
Net current-period other comprehensive income		(29,375)		(677,747)		(707,122)
Balance as of September 30, 2013	$	-	$	(270,778)	$	(270,778)

12.  Commitments

The Company has obligations under operating leases until 2020 for its corporate offices in Englewood, Colorado, until 2014 for offices in Ely, Nevada and until 2015 for office equipment.  Future minimum lease payments for non-cancellable leases with initial lease terms in excess of one year are included in the table below.

The Company has signed an agreement relating to the development of the Pan project which as of September 30, 2013 would require a U.S.$100,000 fee to be payable upon termination.  In addition, the Company has cancellable contract obligations related to consulting service agreements until 2016.

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	Payments due by period
	Current Year		One – Three Years		Four – Five Years		Thereafter		Total
Operating Lease obligations	$	88,468	$	602,979	$	568,083	$	698,269	$	1,957,799
Contract obligations		129,904		47,016		3,503		1,236		181,659
Total	$	218,372	$	649,995	$	571,586	$	699,505	$	2,139,458

13.  Related party transactions

On May 19, 2012, the Company entered into a consulting agreement with its former Chief Executive Officer for a term of twelve months.  Under the agreement the former Chief Executive Officer provided advisory services from time to time to the Company.For the three and ninemonths ended September 30, 2013, the Company paid consulting fees of niland $65,776, respectively to the Company’s former Chief Executive Officer (“CEO”) under this agreement. For the three and nine month periods endedSeptember 30, 2012, the Company paid $44,244 and $65,177, respectively, to the former Chief Executive Officer under the agreement.

Mr. Fritz K. Schaudies was appointed as interim Chief Financial Officer effective August 20, 2013and is being paid under a consulting agreement.  For the three and nine month periods ended September 30, 2013, the Company paid $28,556 to Mr. Schaudies under the agreement.  Mr. Schaudies previously served as Chief Financial Officer of the Company from March 18, 2011 to May 8, 2013.

Included in accounts payable and accrued liabilities, amounts payable to directors and officers at September 30, 2013 and December 31, 2012, were $45,606 and $15,032, respectively.

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.

For information on the related parties involved in the Series A Preferred transaction see note 10.

14.  Financial instruments

In all material respects, the carrying amounts for the Company’s cash and cash equivalents, amounts receivable, other assets, other liabilities, accounts payable and accrued liabilitiesapproximate their fair values due to theshort term nature of these instruments. Investments and derivative liabilities at September 30, 2013 and December 31, 2012 are recorded at fair values (note 4).

15.  Supplemental disclosures of cash flow information

Supplemental cash flow information for the nine months ended September 30, 2013 and 2012 is as follows:

	September 30, 2013		September 30, 2012
Accrual of preferred share cumulative dividend	$	4,367,633	$	-
Accretion of redeemable preferred shares		2,697,943		-
Common share issuance for payment of preferred dividend		1,253,352		-

16.  Segment disclosures

The Company considers itself to operate in a single segment, being mineral exploration and development, with all of the Company’s long-lived assets being located in the United States at September 30, 2013 and December 31, 2012.

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Item 2.                 Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q. This discussion and analysis contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of many factors, including, but not limited to, those set forth under the heading “Risk Factors and Uncertainties” in our Annual Report on Form 10-K filed with the SEC on March 12, 2013, and elsewhere in this Quarterly Report on Form 10-Q.

This discussion and analysis should be read in conjunction with the accompanying unaudited interim consolidated financial statements and related notes. The discussion and analysis of the financial condition and results of operations are based upon the unaudited interim consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities, disclosure of any contingent liabilities at the financial statement date and reported amounts of revenue and expenses during the reporting period. On an on-going basis we review our estimates and assumptions. The estimates were based on historical experience and other assumptions that we believe to be reasonable under the circumstances. Actual results are likely to differ from those estimates under different assumptions or conditions, but we do not believe such differences will materially affect our financial position or results of operations. Critical accounting policies, the policies we believe are most important to the presentation of our financial statements and require the most difficult, subjective and complex judgments, are outlined below in “Critical Accounting Policies,” and have not changed significantly.

Cautionary Note Regarding Forward-Looking Statements

In addition, certain statements made in this Quarterly Report on Form 10-Q may constitute “forward-looking statements”. These forward-looking statements involve known or unknown risks, uncertainties and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Except for historical information, the matters set forth herein, which are forward-looking statements, involve certain risks and uncertainties that could cause actual results to differ. Potential risks and uncertainties include, but are not limited to, unexpected changes in business and economic conditions;  significant increases or decreases in gold prices; changes in interest and currency exchange rates;  unanticipated grade changes; metallurgy, processing, access, availability of materials, equipment, supplies and water; determination of reserves; results of current and future exploration activities; results of pending and future feasibility studies; joint venture relationships; political or economic instability, either globally or in the countries in which we operate; local and community impacts and issues; timing of receipt of government approvals; accidents and labor disputes; environmental costs and risks; competitive factors, including competition for property acquisitions; and availability of external financing at reasonable rates or at all. Forward-looking statements can be identified by terminology such as “may,” “will,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” “continues” or the negative of these terms or other comparable terminology, or which by their nature refer to future events. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.Forward-looking statements are made based on management’s beliefs, estimates, and opinions on the date the statements are made, and we undertake no obligation to update such forward-looking statements if these beliefs, estimates, and opinions should change, except as required by law.

Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates

The mineral estimates in this Quarterly Report on Form 10-Q have been prepared in accordance with the requirements of the securities laws in effect in Canada, which differ from the requirements of United States securities laws. The terms “mineral reserve”, “proven mineral reserve” and “probable mineral reserve” are Canadian mining terms as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) - CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended.

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These definitions differ from the definitions in United States Securities and Exchange Commission (“SEC”) Industry Guide 7 under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.

In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases.

Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable. Disclosure of “contained ounces” in a resource is permitted disclosure under Canadian regulations; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC Industry Guide 7 standards as in place tonnage and grade without reference to unit measures.

Accordingly, information contained in this Quarterly Report on Form 10-Q and the documents incorporated by reference herein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.

Historical results of operations and trends that may be inferred from the following discussion and analysis may not necessarily indicate future results from operations.  In particular, the current state of the global securities markets may cause significant fluctuations in the price of the Company’s securities and render it difficult or impossible for the Company to raise funds which may be necessary to develop any of its present or future mineral properties.

Disclosure on Passive Foreign Investment Company

U.S. shareholders of our common shares should be aware that the Company believes it was classified as a PFIC during the taxable year ended December 31, 2012, and based on current business plans and financial projections, management believes there is a significant likelihood that the Company will be a PFIC during the current taxable year. If the Company is a PFIC for any year during a U.S. shareholder’s holding period, then such U.S. shareholder generally will be required to treat any gain realized upon a disposition of common shares, or any so-called “excess distribution” received on their common shares, as ordinary income, and to pay an interest charge on a portion of such gain or distributions, unless the shareholder makes a timely and effective “qualified electing fund” (“QEF Election”) or a “mark-to-market” election with respect to the common shares. A U.S. shareholder who makes a QEF Election generally must report on a current basis its share of the net capital gain and ordinary earnings for any year in which the Company is PFIC, whether or not the Company distributes any amounts to its shareholders. However, U.S. shareholders should be aware that there can be no assurance that the Company will satisfy record keeping requirements that apply to a QEF Election, or that the Company will supply U.S. shareholders with information that such U.S. shareholders require to report under the QEF Election rules, in event that the Company is a PFIC and a U.S. shareholder wishes to make a QEF Election.

Thus, U.S. shareholders may not be able to make a QEF Election with respect to their common shares. A U.S. shareholder who makes the mark-to-market election generally must include as ordinary income each year the excess of the fair market value of the common shares over the taxpayer’s basis therein. Each U.S. shareholder should consult his or her own tax advisor regarding the U.S. federal, U.S. state and local, and foreign tax consequences of the PFIC rules and the acquisition, ownership, and disposition of Common Shares.

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Overview

Company Overview

We are engaged in the acquisition, exploration, and, if warranted, development of gold mineral properties in North America. Our mineral properties are located in Nevada and Washington. Our Pan project is in the development stage.TheGold Rock, Spring Valley, Tonopah and Golden Eagle gold properties are exploration stage projects with identified gold mineralization. The Pinyon project is an early stage exploration project.

We are currently working towards transitioning from a development stage company to a gold production company with plans to advance the Pan property, located in White Pine County, Nevada, through to production by the second half of 2014.

Recent Developments

Preferred Series A Dividend Declared and Paid

On September 17, 2013 our Board of Directors (the “Board”) declared the third dividend payment to the holders of Series A Preferred Shares with a record date of September 23, 2013,  totaling $1,467,197 (U.S. $1,421,014), which was paid on October 1, 2013 in common shares less applicable tax withholdings, through the issuance of 1,260,144 common shares to the holders of the Series A Preferred Shares.

Resignation of Mr. Labate as Chief Financial Officer

On August 20, 2013, Mr. John A. Labate resigned as our Chief Financial Officer for personal reasons.  We appointed Mr. Fritz K. Schaudies as interim Chief Financial Officer effective August 20, 2013.  Mr. Schaudies previously served as our Chief Financial Officer from March 18, 2011 to May 8, 2013.

Property Highlights for the Third Quarter 2013:

· Pan project – Permitting continues to advance with the Bureau of Land Management (“BLM”) incorporating public commentsfrom the Draft Environmental Impact Statement (“DEIS”) into the final Environmental Impact Statement (“EIS”).  Permitting remains on schedule, with production planned in 2014.

· Gold Rock project – A mining Plan of Operations submitted to the BLM was declared complete, starting the EIS process.  Gold Rock is scheduled to be the Company's second operating gold mine.

· Spring Valley project – Barrick is continuing their earn-in expenditures to increase theirinterest in the property to 70%.  Drilling in 2013 focused on in-fill drilling in the main resource area to upgrade the quality of the resource for future reserve calculations.  We expect Barrick to complete their earn-in near the end of 2013, one year ahead of schedule.

Activities on our properties in the third quarter ended September 30, 2013, and up to the date of this Quarterly Report on Form 10-Q, are described in further detail below.

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The map below shows the location of our properties located in Nevada, USA. 

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Pan Project, White Pine County, Nevada

The Pan property is located at the northern end of the Pancake mountain range in western White Pine County, Nevada, approximately 22 miles southeast of Eureka, Nevada, and 50 miles west of Ely, Nevada.  Access is via a dirt road running south from US Highway 50. Eureka has a population of about 2,000. Water is readily available from wells on of the property. Permitting and engineering are underway to extend power lines to the property.

Highlights

Permitting continues to be a high priority with a goal of initial production on the Pan project in 2014. The DEIS has been completed and public comments are being incorporated into the final EIS.  A Record of Decision is expected before the end of 2013, which will be followed by the commencement of construction.  Applications for over 40 other permits are in progress. We have received some critical permits such as the Water Pollution Control Permit and the Class I Air Quality Operating Permit, which authorize the construction, operation and closure of approved mining facilities once the EIS is complete and a Record of Decision has been received from the BLM.

Preliminary results from metallurgical test work on run-of-mine (“ROM”) bulk samples at Pan suggest the South Pan ore can be processed with ROM leaching and that a crusher installation at Pan can be deferred for at least 18 to 24 months. Representative samples of true ROM ore were collected from a trial blast in July 2013 at South Pan. The samples were tested in large columns to simulate a ROM leaching operation by Kappes-Cassidy & Associates (KCA) laboratories in Reno. Observed gold recoveries showed 92% recovery after 58 days. These excellent leaching results and leach kinetics lead the project team and management to conclude that ROM leaching is a viable option for South Pan.

To optimize the Pan project cost parameters in order to deliver better returns to our shareholders, we are updating the Pan project technical and financial information, completing detailed engineering, re-evaluating operating costs, re-visiting capital costs, improving the construction plan and schedule, performing in-depth risk analyses of every aspect of the project and examining financing alternatives for the balance of funding needed to bring the project to production in the second half of 2014.

We are pursuing a combination of project and equipment financing alternatives, and have received proposals from several major commercial funding sources. We have been working with financial advisors to assess the amount of financing needed and the various options available in the current financial market to secure the remaining capital necessary to fund Pan to production.  

Mineral Reserves and Resources

Cautionary Note to U.S. Investors – In this Quarterly Report on Form 10-Q we use the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource”, which are geological and mining terms as defined in accordance with NI 43-101 under the guidelines adopted by CIM, as CIM Standards in Mineral Resources and Reserve Definition and Guidelines.  U.S. investors in particular are advised to read carefully the definitions of these terms as well as the “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates” above.

A resource estimate for the Pan project was reported in October 2011 based on results from 2011 drilling. The Measured and indicated resource estimate exceeds one million ounces of gold as summarized in Table 1. The updated resource was prepared by Gustavson Associates, LLC (“Gustavson”).

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Table 1: Mineral Resource Estimate, Pan Project, Nevada

Measured Resource
Cutoff (gpt)	Tonnes	Grade (gpt)	Gold ounces
0.27	27,352,000	0.59	520,000
0.21	30,857,000	0.55	547,000
0.14	36,920,000	0.49	579,000
0.07	50,924,000	0.38	622,000
Indicated Resource
Cutoff (gpt)	Tonnes	Grade (gpt)	Gold ounces
0.27	27,126,000	0.52	453,000
0.21	32,652,000	0.47	495,000
0.14	43,118,000	0.40	551,000
0.07	73,925,000	0.27	645,000
Measured Plus Indicated Resource
Cutoff (gpt)	Tonnes	Grade (gpt)	Gold ounces
0.27	54,478,000	0.56	974,000
0.21	63,509,000	0.51	1,042,000
0.14	80,037,000	0.44	1,130,000
0.07	124,849,000	0.32	1,268,000
Inferred Resource
Cutoff (gpt)	Tonnes	Grade (gpt)	Gold ounces
0.27	1,771,000	0.58	33,000
0.21	2,229,000	0.51	37,000
0.14	3,928,000	0.36	45,000
0.07	9,693,000	0.20	63,000

Note: The tonnage and total ounces of gold were determined from the statistical block model.  Average grades were calculated from the tonnage and total ounces and then rounded to the significant digits shown.  Calculations based on this table may differ due to the effect of rounding.  See “Cautionary Note to U.S. Investors Regarding Reserve and Resource Estimates.”

A Feasibility Study was completed November 15, 2011 showing robust economics for the Pan project. Mineral reserves were based upon a design pit that maximized revenue based on a $1,200 per ounce three-year trailing average price of gold. Cutoff grades of 0.21 gpt in the South pit and 0.27 gpt in the North & Central pits produced the project’s highest NPV.  Reserve estimates are summarized in Table 2.

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Table 2:  Total Pan Mineral Reserves, November 2011

Pit	Cutoff Grade	Metric Tonnes	Gold Grade	Ounces Gold
Area	(grams/tonne)	(x 1000)	(grams/tonne)	(x 1000)
Proven
North & Central	0.27	13,085	0.60	251
South	0.21	12,160	0.61	236
All Pits		25,245	0.60	487
Probable
North & Central	0.27	10,994	0.50	178
South	0.21	12,073	0.51	199
All Pits		23,067	0.51	377
Proven plus Probable
North & Central	0.27	24,078	0.55	429
South	0.21	24,233	0.56	435
All Pits		48,311	0.56	864

Note: The tonnage and total ounces of gold were determined from the statistical block model. Average grades were calculated from the tonnage and total ounces and then rounded to the significant digits shown. Calculations based on this table may differ due to the effect of rounding.

The Feasibility Study was prepared to the standards of NI 43-101. The open pit mineral reserves and resources were completed by Gustavson, with Terre Lane and Donald E. Hulse acting as the qualified persons. An updated report “Updated NI 43-101 Technical Report, Feasibility Study for the Pan Project, White Pine County, Nevada” dated November 29, 2012 was filed to clarify responsibilities of the Qualified Persons. This updated report made no changes in the feasibility study numbers.

We believe there is no material difference between the mineral reserves as disclosed in our NI 43-101 Feasibility Study and those disclosable under SEC Industry Guide 7, and therefore no reconciliation is provided.  The Pan project has known reserves under SEC Industry Guide 7 guidelines; therefore, the project is considered to be in the development stage.

Mining and Production

The Pan gold deposit contains near-surface mineralization that can be extracted using open pit mining methods. Results from mineral extraction tests indicate that the ore can be processed by conventional heap leaching methods.  Ore from the South Pan pit will be processed ROM, while ore from the North Pan pit will be crushed before being placed on the leach pad.  Pregnant solutions will be treated in an adsorption/desorption recovery (ADR) plant.

During the three months ended September 30, 2013 and 2012 we incurred expenditures of $578,309 and $700,787 at the Pan project, respectively and $1,432,693 and $1,152,876 in the nine months ended September 30, 2013 and 2012, respectively.  These expenditures were primarily for salaries and labor, which were 65% and 70% of mineral exploration expenditures during the three and nine months ended September 30, 2013, respectively.  For the comparable period during 2012, expenditures were primarily for salaries and labor, which were 59% of mineral exploration expenditures during the three and nine months ended September 30, 2012.

During the three and nine months ended September 30, 2013, we capitalized into property, equipment and mine development $2,523,412 and $4,455,746 of Pan expenditures, respectively, for permitting, mitigation, engineering, site characterization, metallurgy, mine planning, and detailed design.  For the comparable periods during 2012, we capitalized $2,176,070 and $4,224,020 of Pan Expenditures.

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Gold Rock Project, White Pine County, Nevada

The Gold Rock property is located in the eastern Pancake Range in western White Pine County, Nevada. The property is eight miles southeast of our Pan project. Access is via the Green Springs road from US Highway 50 approximately 65 miles from Ely, Nevada. Water for exploration purposes is available from wells in the region under temporary grant of water rights.  It is anticipated that power will be available from the line being extended to serve the nearby Pan Project.

Gold Rock is scheduled to be our second operating gold mine.  A gold resource has been defined on the project and numerous drill targets with potential for expanding that resource have been identified.  Additional drilling is planned, but the Pan project has priority for available funds in the near term.

A mining Plan of Operations submitted to the BLM has been declared complete, beginning the EIS process.  Scoping meetings for the EIS were held in September, followed by a public comment period. 

We incurred $629,269 and $2,294,594 of expenditures at the Gold Rock project in the three and nine months ended September 30, 2013,  respectively.  Environmental costs represented 54% and 25% of the expenditures for the three and nine months ended September 30, 2013, respectively, while reverse circulation drilling costs accounted for 18% of expenditures for the nine months ended September 30, 2013.  For the three and nine months ended September 30,  2012, we incurred $1,021,807 and $2,075,021, of which 39% and 20% were drilling costs, environmental costs represented 18% and 26% of expenditures, and 15% and 17% was related to salaries and wages, respectively.

Spring Valley Project, Pershing County, Nevada

The Spring Valley property is located in the Spring Valley Mining District, Pershing County, Nevada, approximately 20 miles northeast of the town of Lovelock.  The property is accessed via paved and dirt roads east of US Interstate 80.  Water for exploration purposes is available from water wells drilled on the property under temporary grant of water rights.  Power is accessible from existing power lines; however, capacity is unknown.

The Spring Valley project is under an exploration and option agreement with Barrick.  Barrick is funding 100% of the costs to earn a joint venture interest in the project. Barrick informed us that they had incurred $30,000,000 in exploration expenditures as of April 19, 2013, completing the earn-in requirement for a 60% interest in the property.  Additionally, Barrick stated their intention to spend an additional $8,000,000 in exploration expenditures to increase their interest in the property to 70%.  We expect Barrick to complete the earn-in around the end of 2013, one year ahead of schedule.  Drilling in 2013 focused on in-fill drilling in the main resource area to upgrade the quality of the resource for future reserve calculations.

During the three months ended September 30, 2013 and 2012, we incurred nil and $21,705 of expenditures on the Spring Valley Project, respectively.  For the nine months ended September 30, 2013 and 2012, we incurred $4,914 and $128,916.  In 2013, we incurred costs that primarily related to legal and accounting fees.  The costs incurred in 2012 were primarily related to funding engineering and legal costs incurred on the portion of the Seymork land that falls outside of the area of interest under the Barrick joint venture agreement.

Tonopah Project, Nye County, Nevada

The Tonopah property is located in Nye County, Nevada, approximately 15 miles northeast of the town of Tonopah, 210 miles northwest of Las Vegas and 236 miles southeast of Reno.  The property is over the northeastern flank of the San Antonio Mountains and in the Ralston Valley. Water for exploration purposes is available from water wells for a fee from municipal sources.  Power is accessible from existing power lines crossing the property; however, capacity is unknown and may be limited.

There was no new exploration activity on the property during the three months ended September 30, 2013.

We incurred $78,942 and $84,812 of expenditures at the Tonopah project in the three and nine months ended September 30, 2013, respectively.  For the comparable periods in 2012, we incurred $90,583 and $222,603.  The expenditures for all periods were primarily related to property maintenance and taxes.

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Golden Eagle Project, Ferry County, Washington

The Golden Eagle property is located on private land in the Eureka (Republic) mining district in Ferry County, Washington. The property is two miles northwest of the town of Republic, Washington and is accessed by the Knob Hill county road.

There was no new exploration activity on the project during the three months ended September 30, 2013.

We incurred $525 and $10,618 of expenditures at the Golden Eagle project in the three and nine months ended September 30, 2013, respectively, primarily related to property maintenance and taxes.  For the comparable periods in 2012, we incurred $16,644 and $82,444 primarily for engineering studies.

Pinyon Project, White Pine County, Nevada

Pinyon is a disseminated gold target near the Gold Rock and Pan projects. A portion of the claims were acquired in 2012 as part of an agreement with Aurion Resources allowing us to earn-in to a joint venture over a five year period. The Pinyon property is located in White Pine County, Nevada approximately 20 miles southeast of Eureka, Nevada. It is 10 miles north of the Gold Rock project and 6 miles east of the Pan project. Access is by 5 miles of dirt road running south-southeast from US Highway 50, at a point about 17 miles southeast of Eureka, Nevada. Water is available from wells that service the Pan and Gold Rock projects. Power is expected to be available from the Pan or Gold Rock projects. 

Exploration activity on the project during the three months ended September 30, 2013 included geologic mapping and surface sampling.  Results are pending.

We incurred $76,901 and $159,115 of expenditures at the Pinyon project in the three and nine months ended September 30, 2013, respectively, primarily for property maintenance and taxes.  We did not incur any expenditures for the comparative periods of 2012.

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Results of Operations

Three months ended September 30, 2013 compared to the three months ended September 30, 2012

The following table summarizes our results of operation for the three months ended September 30, 2013 compared to the three months ended September 30, 2012:

	Three Months ended September 30, 2013		Three Months ended September 30, 2012		Change
Expenses
Consulting		68,312		181,609		(113,297)
Depreciation		140,960		116,899		24,061
Interest and bank charges		825		958		(133)
Investor relations		11,003		20,122		(9,119)
Legal, audit and accounting		581,840		289,977		291,863
Mineral exploration expenditures		1,605,572		1,929,882		(324,310)
Office and administration		300,772		270,769		30,003
Salaries and benefits		1,163,197		1,096,261		66,936
Transfer agent and filing fees		22,912		(9,073)		31,985
Travel		69,178		76,079		(6,901)
Operating loss		3,964,571		3,973,483		(8,912)
Other income (expenses)		(291,878)		225,931		(517,809)
Income tax recovery		272,628		231,633		40,995
Net (income) loss	$	3,983,821	$	3,515,919	$	467,902

Significant differences between the periods are as follows:

Consulting expense during the three months ended September 30, 2013 decreased $113,297 to $68,312 from $181,609 during the three months ended September 30, 2012.  The decreased consulting expenses related to the expiration of a consulting agreement with the Company’s former CEO and a decrease in non-cash stock based compensation for our consultants.

Depreciation expense during the three months ended September 30, 2013 was $140,960 compared to $116,899 during the comparable period of 2012, an increase of $24,061, or 21%. This was primarily due to a 24% increase in depreciable assets from the comparable period of 2012.

Legal, audit and accountingexpensetotaled $581,840 for the three months ended September 30, 2013, compared to $289,977 in the comparable period, an increase of $291,863.During the three months ended September 30, 2013 we incurred approximately $186,000 of fees due to the graduation of our stock from being listed on the TSX.V stock exchange to the TSX stock exchange.  In addition, we continued to utilize financial consultants during most of the three months ended September 30, 2013 to meet the demands related to SEC and SEDAR filing requirements and the investigation of different financing options to meet our capital demands as we bring the Pan project into production.

Mineral exploration expense for the three months ended September 30, 2013 decreased $324,310, or 17%, from the same period of 2012.  Details of the expenses in each period may be found in the schedule of mineral exploration expenses to the unaudited consolidated interim financial statements.  Exploration levels are determined by the success of previous exploration programs on each project and cash available to fund additional programs. 

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As we are currently focused on bringing the Pan project into production, the cash expenditures for exploration have been reduced in order to preserve capital for completion the Pan project.  Beginning on January 1, 2012, we began to capitalize certain permitting and engineering activities as part of our plans to advance the Pan project to production, and in the three months ended September 30, 2013 the Company capitalized $2,523,412 of these costs as compared to $2,176,070 for the comparable period in 2012.

Office and administration expense for the three months ended September 30, 2013 were $300,772 compared to $270,769 during the comparable period of 2012, an increase of $30,003 or 11%.  This increase is a result of increased overhead costs including insurance, information systems and rent in both our Englewood and Ely offices, due to our continued growth.

Salaries and benefits expense during the three months ended September 30, 2013 was $1,163,197 inclusive of $184,360 of non-cash stock based compensation, compared to $1,096,261 and $331,677 during the comparable period of 2012, respectively.  The cash component of salaries and benefits has increased period over period as a result of additional employees added during the nine months ending September 30, 2013 as well asregular annual pay raises and recruitment and relocation fees for new employees added in 2013.We use an option pricing model to estimate the value of stock options granted to officers, directors, employees and consultants.  We use the Black-Scholes model, which requires considerable judgment selecting the subjective assumptions that are critical to the results produced by the model, to calculate the estimated fair value.  We record the estimated fair value as an expense on a pro-rata basis over the vesting period of the options.

Other income (expense) for the three months ended September 30, 2013 was an expense of $291,878 compared to an income of  $225,931 during the comparable period of 2012, a net decrease of $517,809.  During the three months ended September 30, 2013, we recorded a gain on the change in the fair value of derivative liabilities of $988,443 ($93,209 warrant liability and $895,234 derivative preferred liability) and a foreign exchange loss of $1,259,322.

Income tax recovery for the three months ended September 30, 2013 was $272,628 compared to $231,633 during the comparable period of 2012.  An income tax recovery of $582,429 recorded during the three months ended September 30, 2013 related to a decrease of the future income tax liability that is associated with the acquisition of the Pan and Gold Rock projects, which was offset by a Canadian preferred share dividend tax expense of $309,801.

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Nine months ended September 30, 2013 compared to the nine months ended September 30, 2012

The following table summarizes our results of operation for the nine months ended September 30, 2013 compared to the nine months ended September 30, 2012:

	Nine Months ended September 30, 2013		Nine Months ended September 30, 2012		Change
Expenses
Consulting		381,972		285,484		96,488
Depreciation		382,215		283,903		98,312
Interest and bank charges		2,186		2,202		(16)
Investor relations		22,360		99,913		(77,553)
Legal, audit and accounting		3,311,900		727,999		2,583,901
Management fees		-		8		(8)
Mineral exploration expenditures		4,173,755		5,097,446		(923,691)
Office and administration		931,916		646,332		285,584
Salaries and benefits		3,801,241		3,284,169		517,072
Transfer agent and filing fees		125,294		97,397		27,897
Travel		250,391		223,839		26,552
Operating loss		13,383,230		10,748,692		2,634,538
Other income (expenses)		17,894,990		(270,638)		18,165,628
Income tax recovery		2,179,077		203,772		1,975,305
Net (income) loss	$	(6,690,837)	$	10,815,558	$	(17,506,395)

Significant differences between the periods are as follows:

Consultingexpense during the nine months ended September 30, 2013 was $381,972 compared to $285,484 during the comparable period of 2012, an increase of $96,488 or 34%.  The increase was related to fees paid under the consulting agreement entered into with our former CEO during the first six months of the year, as well as various other business consultants which we have engaged to help our growing business needs and shifting of priorities as we move closer to production from the Pan mine.

Depreciationexpense during the nine months ended September 30, 2013 was $382,215 compared to $283,903 during the comparable period of 2012, an increase of $98,312. This was primarily due to a 22% increase in depreciable assets from the comparable period of 2012.

Legal, audit and accountingexpense totaled $3,311,900 for the nine months ended September 30, 2013, an increase of $2,583,901 from $727,999 for the nine months ended September 30, 2012.  During the nine months ended September 30, 2013 we incurred significant increases in legal and financial advisory service expenses. The increase in legal expenses related to matters involved with our advancement from a development stage company to gold production including general legal issues, land claims and other corporate matters. We also incurred significant legal and accounting fees involved in a non-recurring restructuring of our subsidiaries.  We continued to utilize financial consultants during the nine months ended September 30, 2013 to meet the demands related to SEC and SEDAR filing requirements and the investigation of different financing options to meet our capital demands as we bring the Pan project into production.

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Mineral exploration expense for the nine months ended September 30, 2013 decreased $923,691, or 18%, from $5,097,446 during the same period of 2012.  Details of the expenses in each period may be found in the Schedule of Mineral Exploration Expenditures to the unaudited consolidated interim financial statements.  Exploration levels are determined by the success of previous exploration programs on each project and cash available to fund additional programs.As we are currently focused on bringing the Pan project into production, the cash expenditures for exploration have been reduced in order to preserve capital for completion the Pan project.  During the nine months ended September 30, 2013 we capitalized $4,455,746 compared to $4,224,020 for the comparable period in 2012 of Pan permitting and engineering costs as part of our plans to advance the Pan project to production. 

Office and administration expense for the nine months ended September 30, 2013 was  $931,916 compared to $646,332 during the comparable period of 2012, an increase of $285,584 or 44%. As noted in the three months results of operations discussion above, this increase is a result of additional overhead costs including insurance, information systems and rent in both our Englewood and Ely offices due to our continued growth.

Salaries and benefits expense during the nine months ended September 30, 2013 was  $3,801,241 inclusive of $787,979 of non-cash stock based compensation, compared to $3,284,169 and $1,234,526 respectively, during the comparable period of 2012.The cash component of salaries and benefits has increased period over period as a result of additional employees added during the three months ending September 30, 2013 as well asregular annual pay raises and recruitment and relocation fees for new employees added.We use an option pricing model to estimate the value of stock options granted to officers, directors, employees and consultants.  We use the Black-Scholes model, which requires considerable judgment selecting the subjective assumptions that are critical to the results produced by the model, to calculate the estimated fair value.  We record the estimated fair value as an expense on a pro-rata basis over the vesting period of the options. 

Other income (expense) for the nine months ended September 30, 2013 was an income of $17,894,990 compared to an expense of $270,638 during the comparable period of 2012, a net change of $18,165,628.  During the nine months ended September 30, 2013, we recorded gains on the change in the fair value of derivative liabilities of$15,574,007 ($1,146,743 warrant liability and $14,427,264 derivative preferred liability, net of $175 of share issuance costs) and a foreign exchange gain of $2,262,994.  In addition, we recorded interest income of $128,188 for the nine months ended September 30, 2013 compared to $23,176in same period in 2012, due to an increase of $47,442,102 in our cash balance period over period.

Income tax recovery for the nine months ended September 30, 2013 was $2,179,077 compared to $203,772 during the comparable period of 2012.  An income tax recovery of $3,237,223 during the nine months ended September 30, 2013 related to a decrease of the future income tax liability that is associated with the acquisition of the Pan and Gold Rock projects, which was offset by a Canadian preferred dividend tax expense of $1,061,992.

Liquidity and Capital Resources

As of September 30, 2013, we had working capital of $54,109,319, consisting of current assets of $58,860,364 and current liabilities of $4,751,045. This represents a decrease of $19,414,865 from the working capital balance of $73,524,184 as of December 31, 2012. Consistent with our plans, our working capital balance fluctuates as we use cash to fund our exploration, development activities and other operating expenses.

We have not generated any revenues from operations.  These consolidated financial statements have been prepared on a going concern basis which assumes we will be able to realize our assets and discharge our liabilities in the normal course of business in the foreseeable future.  We have incurred operating losses for the three and nine months ended September 30, 2013 of $3,964,571 and $13,383,230, respectively; further operating losses are anticipated in the development of our business.  Since inception of May 14, 1996 to September 30, 2013 our accumulated deficit totals $86,205,539.  Management believes that our cash on hand of $58,373,402 atSeptember 30, 2013 is sufficient to finance exploration and development activities and operations through at least the next twelve months.

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Our ability to continue on a going concern basis beyond the next twelve months depends on our ability to successfully raise additional financing for substantial capital expenditures and to successfully reach gold production from our Pan project in order to achieve planned principal operations.  While we have been successful in the past in obtaining financing, there is no assurance that we will be able to obtain adequate financing in the future or that such financing will be on terms acceptable to us. 

We have historically relied on equity financings to fund our operations. From inception through to September 30, 2013, we received $103,849,381 in cash, services, and other consideration through issuance of shares of our common stock and $68,295,156 through issuance of our preferred shares. As of September 30, 2013, we did not have any outstanding debt.

Our most significant expenditures for the remainder of 2013 are expected to be costs associated with the development of our Pan project and further exploration of our other properties.  We also continue to incur operating expenses approximating $850,000 per month for salaries and benefits (exclusive of non-cash stock-based compensation), professional fees, community relations, investor relations, travel and other overhead expenses at our Colorado executive offices and Ely, Nevada locations.

Net cash used in continuing operations was $9,350,562 during the nine months ended September 30, 2013 compared to $8,725,172 during the ninemonths ended September 30, 2012, an increase of $625,390.  This increase is driven largely by legal expenses incurred during the first and second quarters of 2013 associated withgeneral legal issues, land claims and other corporate entity matters as well as an increase in salary expense resulting from an increase in employee headcount.  These increases were offset by a decrease in exploration spending as we have shifted our efforts to a more concentrated development of the Pan project.

Net cash used in investing activities for the nine months ended September 30, 2013was $5,485,910 compared to $6,167,719 during the comparable period in 2012.  Although most of our exploration stage expenditures are recorded as an expense rather than an investment, we capitalize the acquisition cost of land and mineral rights and certain equipment that has alternative future uses or significant salvage value, including furniture, and electronics, and the cost of these capitalized assets is reflected in our investing activities. We also capitalize permitting, engineering and other development activities as part of our plans to develop the Pan project.  Cash used in investing activities during the nine months ended September 30, 2013 consisted of permitting and engineering activities on the Pan project, property and equipment additions of $4,874,255and $1,482,858 for the acquisition of mineral properties.  Cash provided by investing activities of $871,203 came from the return of reclamation bond deposits which were held by various third parties.

Net cash used in financing activities for the nine months ended September 30, 2013 was $1,978,170 primarily for the payment of the first quarter 2013 dividend to our Preferred Shareholders on April 1, 2013 and associated withholding taxes.  During the comparable period in 2012, cash provided by financing activities was $15,803,591, consisting primarily of proceeds from the public offering that closed on July 6, 2012 wherein 12,261,562 units were issued at U.S.$1.28.

Contractual Obligations

We have obligations under operating leases for our corporate offices in Englewood, Colorado and Ely, Nevada and office equipment until 2020.  Future minimum lease payments for non-cancellable leases with initial lease terms in excess of one year are included in the table below.

We have purchased surety bonds during the nine months ended September 30, 2013 for reclamation bonds covering several of our projects in the amount of U.S.$846,491.  The surety bonds are in place for a one year period through May of 2014, at which point we can elect to renew the surety bonds or deposit the full cash amount of the reclamation bonds with the Bureau of Land Management.

We have signed an agreement relating to the development of the Pan project which as of September 30, 2013 would require a U.S.$100,000 fee to be payable upon termination.  In addition, we have cancellable contract obligations related to consulting service agreements until 2016.

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	Payments due by period
	Current Year		One – Three Years		Four – Five Years		Thereafter		Total
Operating Lease obligations	$	88,468	$	602,979	$	568,083	$	698,269	$	1,957,799
Contract obligations		129,904		47,016		3,503		1,236		181,659
Total	$	218,372	$	649,995	$	571,586	$	699,505	$	2,139,458

Off-balance sheet arrangements

There are no off balance sheet arrangements.

Inflation

We do not believe that inflation has had a significant impact on our consolidated results of operations or financial condition.

Environmental Compliance

Our current and future exploration and development activities, as well as our future mining and processing operations, are subject to various federal, state and local laws and regulations in the countries in which we conduct our activities. These laws and regulations govern the protection of the environment, prospecting, development, production, taxes, labor standards, occupational health, mine safety, toxic substances and other matters. We expect to be able to comply with those laws and do not believe that compliance will have a material adverse effect on our competitive position. We intend to obtain all licenses and permits required by all applicable regulatory agencies in connection with our mining operations and exploration activities. We intend to maintain standards of environmental compliance consistent with regulatory requirements.

We have an obligation to reclaim our properties after the surface has been disturbed by exploration methods at the site. As of September 30, 2013, we have accrued $8,624 as a current liability included in Accounts payable and accrued liabilities and $49,697 as a long-term liability, compared to $6,656 as a current liability at December 31, 2012, related to reclamation and other closure requirements at our properties. These liabilities are covered by surety bonding put into place during the nine months ended September 30, 2013 as compared to reclamation deposits totaling $853,110 as of December 31, 2012. We have accrued as a liability what management believes is the present value of our best estimate of the liabilities as of September 30, 2013; however, it is possible that our obligations may change in the near or long term depending on a number of factors.

Critical accounting policies

Critical accounting estimates used in the preparation of the financial statements include our estimate of recoverable value on our property, equipment and mine development, site reclamation and rehabilitation as well as the value assigned to stock-based compensation expense and derivative liabilities. These estimates involve considerable judgment and are, or could be, affected by significant factors that are out of our control.

The factors affecting stock-based compensation include estimates of when stock options might be exercised, stock price volatility and expected forfeitures. The timing of which options are exercised is out of our control and will depend, among other things, upon a variety of factors including the market value of our shares and financial objectives of the holders of the options. We used historical data to determine volatility in accordance with Black-Scholes modeling; however, the future volatility is inherently uncertain and the model has its limitations. While these estimates can have a material impact on the stock-based compensation expense and hence results of operations, there is no impact on our financial condition.

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Embedded derivative liabilities are recorded as liabilities at their estimated fair value at the date of issuance, with subsequent changes in estimated fair value recorded in other income (expense) in our statement of operations in each subsequent period. The embedded derivative liabilities are measured at estimated fair value using the appropriate fair value valuation model. Inherent in these models are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. We estimate volatility at the date of issuance, and at each subsequent reporting period, based on historical volatility. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve. The expected life of the embedded conversion derivative liabilities is assumed to be equivalent to their remaining contractual term. The dividend rate is based on contractual terms of the host contract or historical dividend performance on our common shares. The assumptions used in calculating the estimated fair value of the embedded derivative liabilities represent our best estimates; however, these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and different assumptions are used, the embedded derivative liabilities and the change in estimated fair value could be materially different.

Ourimpairment assessment of mineral properties and equipment is based on market conditions for minerals, underlying mineral resources associated with the assets and future costs that may be required for ultimate realization through mining operations or by sale. Weare in an industry that is exposed to a number of risks and uncertainties, including exploration risk, development risk, commodity price risk, operating risk, ownership and political risk, funding and currency risk, as well as environmental risk. Bearing these risks in mind, we have assumed recent world commodity prices will be achievable. We have considered the mineral resource reports by independent engineers on the Pan, Gold Rock, Spring Valley, Tonopah and Golden Eagle projects in considering the recoverability of the carrying costs of the mineral properties.  All of these assumptions are potentially subject to change and most are out of our control; however,changes to the assumptions are not determinable. Accordingly, there is always the potential for a material adjustment to the value assigned to mineral properties and equipment.

We have an obligation to reclaim our properties after the surface has been disturbed by exploration methods at the site. As a result we have recorded a liability for the fair value of the reclamation costs we expect to incur. We estimate applicable inflation and credit-adjusted risk-free rates as well as expected reclamation time frames. To the extent that the estimated reclamation costs change, such changes will impact future reclamation expense recorded.

Item 3.Quantitative and QualitativeDisclosures about Market Risk.

During the period covered by this Quarterly Report on Form 10-Q there has not been a material change in our market risk from the information disclosed in our Annual Report on Form 10-K filed with the SEC on March 12, 2013.

Item 4.Controls and Procedures.

Disclosure Controls and Procedures

At the end of the period covered by this Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, an evaluation was carried out under the supervision of and with the participation of our management, including the Chief Executive Officer (“CEO”) and Interim Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as amended (“Exchange Act”)). Based on that evaluation the CEO and the CFO have concluded that as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective in ensuring that: (i) information required to be disclosed by us in reports that we file or submit to the SEC under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in applicable rules and forms and (ii) material information required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.

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Changes in Internal Control over Financial Reporting 

During the period covered by this Quarterly Report on Form 10-Q, there were no changes to internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. Legal Proceedings.

None.

Item 1A.Risk Factors.

There are no material changesfrom the risk factors previously disclosed in Midway’s Annual Report on Form 10-K for the period ended December 31, 2012,as filed on March 12, 2013 with the SEC.

Item 2.Unregistered Sale of Equity Securities and Use of Proceeds.

As previously disclosed in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2013, on July2, 2013, we issued 1,166,930 common shares to holders of our Series A Preferred Shares, in lieu of making a cash dividend payment.  The common shares were deemed “restricted securities” as defined in Rule 144(a)(3) of the United States Securities Act of 1933, as amended (the “Act”) and were issued pursuant to exemptions from registration available under Section 4(a)(2) and Section 3(a)(9) of the Act.

In addition, subsequent to the period covered by this Quarterly Report on Form 10-Q, on October 1, 2013, we issued 1,260,144 common shares to holders of our Series A Preferred Shares, in lieu of making a cash dividend payment.  The common shares were deemed “restricted securities” as defined in Rule 144(a)(3) of the United States Securities Act of 1933, as amended (the “Act”) and were issued pursuant to exemptions from registration available under Section 4(a)(2) and Section 3(a)(9) of the Act.

Item 3.Defaults Upon Senior Securities.

None.

Item 4.Mine Safety Disclosures.

We consider health, safety and environmental stewardship to be a core value for our Company.  

Pursuant to Section 1503(a) of the recently enacted Dodd-Frank Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are required to disclose in their periodic reports filed with the SEC information regarding specified health and safety violations, orders and citations, related assessments and legal actions, and mining-related fatalities under the regulation of the Federal Mine Safety and Health Administration (‘‘MSHA’’) under the Federal Mine Safety and Health Act of 1977 (the ‘‘Mine Act’’). During the three months ended September 30, 2013, our U.S. exploration and development properties were not subject to regulation by the MSHA under the Mine Act and consequently no disclosure is required under Section 1503(a) of the Dodd-Frank Act.

Item 5.Other Information. 

None.

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Item 6.                 Exhibits.

Documents filed as part of this Quarterly Report on Form 10-Q or incorporated by reference:

Exhibit Number	Description
2.1	Amended and Restated Arrangement Agreement between Midway Gold Corp. and Pan-Nevada Gold Corporation, dated February 26, 2007, previously filed with the initial registration statement on Form S-1 filed with the Securities and Exchange Commission on August 6, 2007 and incorporated herein by reference.
3.1	Notice of Articles, previously filed with the initial registration statement on Form S-1 filed with the Securities and Exchange Commission on August 6, 2007 and incorporated herein by reference.
3.2	Articles, previously filed with the initial registration statement on Form S-1 filed with the Securities and Exchange Commission on August 6, 2007 and incorporated herein by reference.
3.3	Articles and Notice of Alteration for Series A Rights, previously filed on Form 8-K with the Securities and Exchange Commission on November 26, 2012 and incorporated herein by reference.
31.1*	Certification of Chief Executive Officer pursuant to Rule 13a-15(f) of the Exchange Act
31.2*	Certification of Chief Financial Officer pursuant to Rule 13a-15(f) of the Exchange Act
32*	Certification of Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a or 15(d) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101	Financial statements from the Quarterly Report on Form 10-Q of Midway Gold Corp. for the three and nine months ended September 30, 2013, formatted in XBRL: (i) the Unaudited Consolidated Balance Sheets, (ii) the Unaudited Consolidated Statements of Operations, (iii) the Unaudited Consolidated Statements of Cash Flows, and (iv) the Notes to the Unaudited Consolidated Financial Statements.

* filed herewith

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SIGNATURES

Pursuant to requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MIDWAY GOLD CORP.
November 6, 2013	By:  /s/ Kenneth A. Brunk Kenneth A. Brunk Chairman, Chief Executive Officer, President and Director (Principal Executive Officer)
November 6, 2013	By:  /s/ Fritz K. Schaudies Fritz K. Schaudies       Interim Chief Financial Officer       (Principal Financial and Accounting Officer)

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