Middle Island Resources Limited (ASX: MDI)

Middle Island Resources has outlined a schedule of exploration and corporate activities focused on its stated intentions of recommissioning its 100 per cent-owned Sandstone gold processing plant at the earliest opportunity.

Middle Island’s exploration to date at the Sandstone project has been largely focussed on assessing brownfields targets, such as the Two Mile Hill deposit.

This has left the majority of greenfields targets untested or inadequately tested.

Advancing the Two Mile Hill deposit will remain a priority, but while that carries on, further exploration will hone in on identifying and quantifying additional open pit deposits of sufficient gold grade to facilitate a recommissioning decision.

Identification of the targets to be drilled goes back to 2017 when a Weights of Evidence (WoE) targeting study of the Sandstone gold project was carried out by structural geologist Dr Brett Davis that identified and ranked prospective areas within the project area.

Of these targets only one target, the Davis prospect, has so far been tested.

Two traverses of reconnaissance RC holes (5 holes) were drilled across the Davis East and Davis West anomalies to determine the nature and tenor of associated saprolitic mineralisation, encountering broad zones of ferruginous quartz veining within saprolitic ultramafic rocks.

Initial results included a best intercept at Davis West of:

1 metre at 1.88 grams per tonne gold from 23m depth.

The new program of eight RC holes will test the two blind gold anomalies that were not drilled previously, and to follow up on the results from the previous RC drilling.

Other WoE targets were identified besides the Davis target, situated within the southern portion of the Sandstone project.

Historical exploration activities in this area were restricted to broad spaced soil sampling and limited shallow vacuum and RAB drilling that failed to adequately test beneath the transported cover.

A planned program of geochemical auger and aircore drilling, comprising approximately 200 holes, will test eleven WoE targets across the southern portion of Mining Lease M57/129.

Other proposed work will follow up a 2018 program of geological mapping, rock chip sampling, and soil sampling on the Dandaraga tenement.

Three cohesive gold in soil anomalies were identified as the Agnes, Enigma and Central (Swede) gold anomalies.

A 20-hole RC drill program is proposed to test these gold soil anomalies for a mineralised bedrock source.

Drilling will comprise several East-West orientated sections across the trend of the soil anomalies, these will also test the extension along strike of mineralisation associated with historic gold workings at Swede, Agnes, and Enigma.

Middle Island recently acquired the 158.4 square kilometre Well Exploration Licence (E57/1102), subject to finalising a heritage agreement that occupies the southern end of the western limb of the Sandstone anticlinorium.

The tenement has received minimal exploration activity in the past, and what was done was mainly broad spaced soil sampling across the northern third of the tenement.

An initial, more systematic, low cost programme of geological mapping, rock chip sampling and soil sampling is proposed to determine to gold potential of the tenement.

Results from a 2018 RC program on the McIntyre project have encouraged Middle Island to test the extensions of the intersected mineralisation.

“A recommissioning decision for the Sandstone gold operation is predicated on defining adequate gold resources, at an acceptable grade, to justify the modest recommissioning costs and ensure sustainable production,” Middle Island Resources managing director Rick Yeates said.

“This is being progressively achieved via a dual approach; systematic exploration on Middle Island’s own tenure and engagement with neighbouring companies to consolidate adjacent deposits.”

Middle Island recently reached out to neighbour Alto Metals (ASX: AME), offering an all scrip off‐market take‐over offer for all that company’s issued ordinary shares.

Middle Island considers combining of the assets of the two companies would create a company with near-term cash flow potential and considerable production and exploration upside.

The company believes access to the Sandstone processing plant would provide Alto with an immediate, proximal and cost-effective processing solution for its gold resources that is not otherwise available.

“The collective Middle Island‐Alto gold assets offer a substantial growth opportunity for current and future shareholders of the Combined Group, via low capital intensity and a near-term production profile,” Yeates said.

“The further potential is to significantly extend this production profile via Middle Island’s Two Mile Hill underground deposits, consolidate further proximal deposits within a 100 kilometre radius, and amalgamate an entire greenstone belt offering significant resource and exploration upside.”

At the time of writing, Alto Metals had advised its shareholders to take no action and await further advice from the Board.


Email: info@middleisland.com.au
Web: www.middleisland.com.au

Directors: Peter Thomas, Rick Yeates, Beau Nicholls, Dennis Wilkins