THE DRILL SERGEANT: Middle Island Resources (ASX: MDI) announced a new Mineral Resource for the Two Mile Hill deeps deposit within the company’s 100 per cent-owned Sandstone gold project in Western Australia.
Middle Island Resources declared a 500,000 ounces of gold Inferred Mineral Resource, which had been estimated by independent consultants, Mining Plus Pty Ltd, for the Two Mile Hill deeps gold deposit.
The company explained the new Mineral Resource is comprised of 480,000 ounces of gold associated with the tonalite-hosted portion of the deposit and 20,000 ounces of gold within the banded iron formation (BIF)-hosted element.
The addition of the Two Mile Hill deeps underground deposit brings the aggregate Sandstone project’s JORC Code 2012 Mineral Resources to 624,000 ounces of gold, representing a near five-fold increase in Mineral Resources that the company expects will expand once its current drilling campaign is complete.
“The addition of 500,000 ounces of formal Mineral Resources to the Sandstone project inventory is an extremely pleasing outcome that allows a far greater degree of transparency in valuing both the Sandstone gold project and the company,” Middle Island Resources managing director Rick Yeates said in the company’s announcement to the Australian Securities Exchange.
“What is also pleasing is that, in the grade modelling applied by Mining Plus in resource estimation of the tonalite deeps deposit, the grade shells and distribution of gold mineralisation closely mirror MDI’s observations in logging the diamond core.
“Equally, Mining Plus’s application of contemporary mining and processing parameters and costs to confirm the deposit as a formal Mineral Resource, affirms the company’s view that this substantial deposit will ultimately provide a significant complement to our planned on-site gold production profile.
“The lower 200 metres (from 500m to 700m depth) of the prior Exploration Target also remains to be confirmed as a Mineral Resource via additional diamond drilling at a later date.
“The current aggressive exploration and resource definition campaign, collectively comprising some 17,300 metres of drilling, is now well advanced and there is a high likelihood that this campaign will significantly add to or upgrade additional open pit Mineral Resources prior to completing the updated pre-feasibility study.”
Middle Island also released drilling results that included a mouth-watering intercept of:
4 metres at 90.6 grams per tonne gold.
This was accompanied by a further intercept of:
8m at 3.35g/t gold.
The company reported both results from new and initial assay results achieved at the McClaren prospect, which comprises part of a recently completed Phase 1 RC drilling program at Sandstone.
Middle Island considers that, subject to resampling and infill drilling, there is a likelihood McClaren will prove to represent a new open pit deposit to complement the project’s mill recommissioning inventory.
McClaren is one of a cluster of three proximal gold prospects, also including McIntyre and Ridge, all of which are hosted within the southeast extension of the Shillington banded iron formation (BIF) package close to the company’s Sandstone gold processing plant.
“The bonanza grade intercept of 4 metres at 90.6 grams per tonne (almost 3oz/t) is an exciting early outcome from the Phase 1 RC drilling results at McClaren,” Yeates said.
“However, it is as much to do with the now apparent continuity of mineralisation in this and surrounding holes, that, subject to resampling and infill drilling, suggests the McClaren prospect may well prove to represent an additional new open pit deposit to supplement the planned recommissioning inventory.
“We eagerly await drilling results for the nearby McIntyre and Ridge prospects, and the current geological mapping, which may provide evidence that mineralisation associated with all three prospects may be linked.
“It is worth noting that McClaren and the adjacent two prospects all lie within granted Mining Lease M57/129 and only 2.5 kilometres from the company’s 100 per cent-owned, 600,000 tonnes per annum gold processing plant.
“I am equally encouraged by the initial drill intercepts within basalts in the northeast quadrant of the Two Mile Hill open pit deposit, which have the potential to extend and/or upgrade Sandstone’s existing Mineral Resources.
“Open pit optimisation studies indicate this quadrant of the deposit is very sensitive to Mineral Resource upgrades and/or additions within the basalt, potentially deepening the entire open pit by at least 20 metres, and possibly as much as 40 metres, thereby significantly increasing the overall open pit inventory.”