THE INSIDE STORY: Middle Island Resources (ASX: MDI) clearly signalled its intentions with a recent land acquisition and an outstanding gold intercept.
Middle Island Resources consolidated its grip on the 100 per cent-owned Sandstone gold operation, located between Mt Magnet and Leinster in the East Murchison Mineral Field of Western Australia with the strategic pick-up of the adjacent Wirraminna gold project.
Through its 100 per cent-owned subsidiary, Sandstone Operations, Middle Island executed an Option Deed to acquire a 100 per cent interest in the Wirraminna gold project from two prospectors, Kym McClaren and Karl Mansen.
The deal came with a price tag of $300,000 payable at any time within the next four years, during which Middle Island will have access to explore for sub-surface gold.
The vendors will retain the surface gold rights to a depth of two metres prior to option exercise.
The 40.64 hectare Wirraminna gold project adjoins the western boundary of Middle Island’s existing Sandstone gold project but, more importantly, lies only one kilometre west of the company’s 600,000 tonnes per annum Sandstone gold processing plant.
“There are several aspects of significance with the Wirraminna project that we feel should spark market interest,” Middle Island Resources managing director Rick Yeates told The Resources Roadhouse.
“We identified Wirraminna early on as being of real strategic significance for our Sandstone operation.
“There are three principal attractions to the project, apart from the proximity to the Sandstone processing plant.
“There is already a JORC 2004-compliant Resource identified on the block.”
The Wirraminna project hosts an Inferred Resource (JORC 2004) of 106,300 tonnes at 2.07 grams per tonne for 10,674 ounces of gold.
Mineralisation is associated with a steeply dipping, northwest-trending, high grade quartz lode (Wirraminna line) that remains open at depth and, to a lesser extent, along strike to the northwest and southeast.
Although JORC 2004-compliant, the Wirraminna Resource obviously indicates the presence of gold mineralisation, which Middle Island hopes to upgrade to a standard consistent with the 2012 JORC Code guidelines in 2017-18 by completing a rigorous program of infill RC and diamond core drilling.
The Wirraminna project also hosts two identified, yet unquantified, mineralised laterite occurrences at surface.
These, in turn, are associated with the intersection of three distinct mineralised trends, being the Wirraminna, Goat Farm and Twin Shafts lines.
To date there has not been a great deal of meaningful exploration undertaken beneath or between these laterite occurrences, particularly along the Goat Farm line.
“The mineralisation we see at Wirraminna is a somewhat unique style of mineralisation compared to what we see elsewhere within the Sandstone project,” Yeates explained.
“It is very much an oblique, quartz, lode system, and certainly in the Sandstone district we know these types of deposits can be quite persistent at depth.
“We think there is a lot more potential – not just for an open pit, but also for a subsequent underground operation.
“The Wirraminna Trend has been subjected to a generous amount of near-surface drilling with not a lot completed at depth.
“We think this trend has plenty of legs and the opportunity to expand on the current 10,674 ounces is significant.”
The Wirraminna transaction makes infinite sense when taken in context with the findings of a recent study on the adjacent Sandstone project, providing a potential catalyst for the early re-commissioning of the Sandstone operation.
“Our overall strategy is to extend and enhance the production profile for the re-commissioning of the Sandstone operation,” Yeates said.
“To do that, we basically need 10,000 to 20,000 ounces of higher grade gold mineralisation up the front end of the schedule to improve the project’s initial capital payback.
“The Wirraminna acquisition is a big step forward in providing that and, while it may not be the entire answer, it is at least part of the answer to an early re-commissioning of the Sandstone mill.
“As such, in the second half of the calendar year we are planning some RC and pre-collared diamond drilling to verify, and hopefully extend, the existing Wirraminna Resource.”
Wirraminna also appears to incorporate the western margin of a substantially larger, intrusive-related target at depth, inferred from gravity data.
The majority of this target lies within Middle Island’s 100 per cent-owned tenure.
The recent Wirraminna purchase hasn’t distracted Middle Island from exploration on its existing Sandstone project, where it recently announced remarkable gold assay results from three diamond drill holes completed at the Two Mile Hill prospect.
The diamond coring program, co-funded under Round 14 of the Western Australa Government’s Exploration Incentive Scheme (EIS), was testing the down-plunge extent of gold mineralisation within the Two Mile Hill intrusive to a greater depth than any previous drilling.
The deepest hole to be drilled to date at the Two Mile Hill prospect, MSDD156, returned a gold intersection of 415.2m at 1.34g/t gold, ending in mineralisation.
The cored portion of MSDD156 is mineralised from start to finish and remains open at depth, with the final interval comprising 66.9m at 3.27g/t gold (from 432m to end of hole at 498.9m).
“This is a fabulous intercept that, while not necessarily contributing to the immediate recommissioning of the Sandstone project, does achieve two very clear objectives,” Yeates said.
“One: It demonstrates the potential longevity of the Sandstone project.
“And two: It brings Sandstone back into the spotlight – it’s not a new discovery, however, the intercept does re-introduce Two Mile Hill to the market as a deposit that could potentially be of far greater significance than the currently envisaged Sandstone production scenario.”
The drilling confirms the presence of a substantial gold-mineralised tonalite plug or stock measuring 250m in strike and up to 80m in width that is persistently mineralised to at least 500m depth.
The results increase the possibility of bulk underground mining beneath the proposed open-pit cutback at Two Mile Hill.
“The intercept demonstrates potential well beyond the realms of the proposed open pit cutback and the high-grade BIF-hosted mineralisation adjacent to the tonalite we are considering for underground mining,” Yeates said.
Middle Island Resources Limited (ASX: MDI)
…The Short Story
2 Richardson Street
West Perth WA 6005
Ph: +61 8 9322 1430
Peter Thomas, Rick Yeates, Beau Nicholls