Image Source: Company website
- MDI has made a payment of AU$250,000 to Troy Resources to terminate the 2% net smelter return royalty.
- The termination of royalty will reduce the operational cost by an estimated US$4 million.
- Middle Island has commenced auger drilling program at Sandstone Gold Project.
- The infill and extensional drilling in 2021 on Eureka deposit has led to a Mineral Resource update.
Aspiring gold explorer Middle Island Resource Limited (ASX:MDI) has announced a slew of positive updates from Sandstone project.
MDI informed that the legacy royalty has been terminated after payment of AU$250,000 to Troy. The cancellation of the royalty payments provides an accretive value to the project as MDI could save up to US$4.1 million in the Sandstone Gold Project cost.
The project was acquired from Troy Resources in 2016 in a deal that required MDI to pay a 2% net smelter return royalty. The Feasibility Study of the project shows that a total of 2,068kt of mined material of mill inventory at 1.32g/t Au will yield 89,453 ounces of gold at an average recovery rate of 92.9%.
MDI also updated that it has commenced an auger drilling program at its Sandstone Gold Project, located in Western Australia. The Company has identified five targets to be tested during the current exploration program.
Earlier in June, MDI estimated that 70% of the Sandstone region was enveloped by transported cover, making historical soil geochemical data redundant. Hence, the Company decided to build a new soil geochemical dataset and commenced the auger drilling program. The program will test five targets – three on the Sandstone Permit and two on the Jew Well Central Target, comprising 5km of untested greenstone. The greenstone area is largely veneered by transport cover.
Auger drilling plan (Image source: Company update, 7 July 2021)
MDI will drill nearly 3,000m during auger drilling and will take nearly two weeks to complete the campaign. The drilling targets include:
Auger drilling targets (Copyright © 2021 Kalkine Media, Data source: Company update, 7 July 2021)
To test the targets identified during the ongoing auger drilling program, MDI will plan further auger drilling, aircore drilling and RC drilling in due course of time.
An independent Mineral Resource Estimate (MRE) by Ashmore for Eureka deposit led to a modest increase in resource and potential mill feed. The last pit was mined by Troy Mineral Resources (ASX:TRY) back in 2010. A total of 2,281 ounces was produced at a grade of 2.33g/t.
The updated MRE of the deposit is 561kt @ 0.9g/t for 16,200 ounces.
Location of Eureka Deposit on the project (Image source: Company update, 7 July 2021)
Mineral Resource Estimate (Data source: Company update, 7 July 2021)
The shares of MDI closed at AU$0.130 with a gain of 4%. The Company is trading with a market cap of AU$15.3 million as of 7 July 2021.
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