Shares in Denver-based Midway Gold Corp. (TSX-V:MDW) (NYSE:MDW) rose as much as 8% after announcing that it has arranged a $70 million private placement of preferred shares with Hale Capital Partners at a price of $1.85 per share.

After a trading suspension was lifted mid-afternoon Midway added 11 cents in New York to close at $1.46 affording the company a market value of $187 million. Year to date the company, like many of its peers, are showing significant losses – it is down just over 30%.

The conversion price of the preferred shares which also carry an annual, cumulative preferred 8% dividend payable quarterly in cash or common shares represents a premium of 37% to the closing price of Midway yesterday.

The primary use of proceeds from the private placement will be to advance the Pan heap leach gold project towards production, including the ordering of long-lead time capital equipment, as well as engineering studies to advance the Gold Rock project in Nevada.

Midway says its goal is to develop a production profile of 180,000 – 200,000 oz/year within 5 years by putting Pan into production by 2014 and Gold Rock by 2016.