Middle Island in West African expansion
THE BOURSE WHISPERER: Having just listed in December 2010 one of the ASX’s newest gold plays in West Africa has wasted little time making itself noticed by moving into an area dominated by some of the bigger players in the field.
Middle Island Resources has entered a five year, US$5 million joint venture agreement to secure the Nuon River project, a significant semi-contiguous gold prospective landholding covering 2,918 square kilometres of eastern Liberia.
Some of its new neighbours now include the likes of BHPB, Arcelor-Mittal and China Union.
“The project is one of the most technically prospective gold terrains in West Africa, being located at the boundary between the Archaean (Man Shield) and Proterozoic (Birimian) components of the West African Craton,” Middle Island Resources managing director Rick Yeates said in a company announcement.
“The Nuon River project lies immediately along strike from La Mancha Resources’ five million ounce gold deposit in adjacent Côte d’Ivoire – so the joint venture seals a long-held objective of Middle Island to secure a major land package in the most prospective emerging gold frontier of West Africa.”
The newly-announced Nuon River expansion is centred on the right for Middle Island to earn from private company, Superior Mineral Resources, an initial 75% interest in the 657 square kilometre Grand Gedeh permit within the project area.
The terms include an initial US$100,000 cash payment, and aggregate staged exploration expenditure of up to US$5 million, comprising:
– Year 1 – US$500,000 for an initial 15% participating interest
– Year 2 – US$1.0 million for the second 15% interest (30%)
– Year 3 – US$1.5 million for the third 15% interest (45%)
– Year 4 – US$1.0 million for the fourth 15% interest (60%)
– Year 5 – US$1.0 million for the fifth 15% interest (75%), or
– The completion of a positive feasibility study, whichever is the earlier.
The new ground, which has not been subject to modern exploration, also includes a 100% interest in a further four adjacent Liberian permit applications recently granted to a wholly-owned Middle Island subsidiary.
These four permits comprise: Cestos Shear, (781sqkm), Zwedru, (856sqkm), Zwedru North, (301sqkm), and Putu, (323sqkm).
The Cestos Shear, Zwedru and Zwedru North permits completely envelop the Grand Gedeh permit, collectively representing a cohesive block of tenements some 2,595sqkm in area, securing what Yeates described as, “what is considered to be the highest priority area of exploration interest”.
The fourth permit, Putu, lies some distance to the south, in a similar geological environment, covering a considerable number of gold occurrences mapped by the US Geological Survey.
Yeates said the Grand Gedeh permit includes a long history of significant artisanal alluvial and saprolite gold mining activity with numerous significant stream sediment anomalies identified throughout the permit.
One readily accessible prospect, Big Hill, was defined by a broad, 2km long, open ended, high tenor soil anomaly the company said is pock-marked by abundant active and historic artisanal shafts down to 40 metres depth.
Yeates said Liberia had emerged in recent years as a well-run west African democracy that was keen to attract foreign investment, and had sound, well administered mineral legislation in place.
The expansion is the first for Middle Island since its listing on the ASX year following an oversubscribed A$12.5 million IPO.
Significantly, the world’s largest goldminer, Newmont Mining Corporation, emerged as a 10% stakeholder in the company, and, with a primary exploration focus on developing gold plays in West Africa’s Burkina Faso and Niger.
“Importantly, the move into Liberia is part of our original growth plan,” Yeates continued.
“We had wanted to move into eastern Liberia and include any such assets in our portfolio for the successful IPO and ASX listing but were prevented from doing so while permitting and other project approval processes awaited finalisation.
“Middle Island plans to acquire further Liberian assets as part of our overall tenement consolidation activity.
“However, our primary focus remains exploring for and identifying major new gold deposits in the three west African countries hosting our total asset portfolio.”