THE BOURSE WHISPERER: Middle Island Resources (ASX: MDI) announced results from pit optimisation of the Wirraminna deposit Mineral Resources.
Midlle Island Resources’ Wirraminna deposit is located immediately adjacent to the company’s 100 per cent-owned Sandstone gold project in Western Australia within one kilometre of the associated gold processing plant.
Middle Island declared a JORC 2012-compliant Mineral Resource estimate in December last year of 550,000 tonnes at 1.3 grams per tonne gold for 23,000 ounces of gold at a 0.5g/t gold lower cut-off grade for Wirraminna.
The company had open pit optimisations completed on the December 2017 Mineral Resource model using a base case Australian dollar gold price of $1,600 per ounce, as well as utilising other input parameters derived from the December 2016 Sandstone project Pre-Feasibility Study.
At a gold price of $1,600 per ounce the optimal pit shell, based on the maximum undiscounted operating cash flow, includes 72,000 tonnes at a grade of 1.97g/t gold for a strip ratio of 9:1.
According to Middle Island, this equates to a mill recovered 4,200 ounces of gold from a pit shell depth to a maximum of 45 metres from surface that is wholly contained within the oxide zone.
The company believes opportunity remains to further extend and enhance the Wirraminna deposit via follow-up drilling, including infill and extension drilling of Inferred Mineral Resources, and confirming the location of historic higher-grade holes.
To that end, it is planning further RC drilling and will obtain additional data, prior to updating pit optimisations, considering pit design work and Ore Reserve estimation.
“The positive drilling results, Mineral Resource estimation and pit optimisation work on the Wirraminna deposit serves to further extend the production profile for the proposed Sandstone gold operation,” Middle Island Resources managing director Rick Yeates said in the company’s announcement to the Australian Securities Exchange.
“However, the quantum and grade of the deposit is presently insufficient to trigger a mill recommissioning decision in isolation.
“Drilling indicates that substantial potential remains to extend the deposit, and the location of higher grade historic drill intercepts of 11 metres at 23.8 grams per tonne, 16 metres at 14.6 grams per tonne and 19 metres at 4.85 grams per tonne gold remain unresolved.
“As such, a program of infill and extension RC drilling is planned to address these opportunities.”