Gold Prices Climb Amid Geopolitical Tensions; Middle Island with Right Assets at Right Time

  • Jan 09, 2020 AEDT
  • Team Kalkine
Gold Prices Climb Amid Geopolitical Tensions; Middle Island with Right Assets at Right Time

The ASX-listed gold stocks have posted strong gains as a result of US-Iran tensions that aggravated after Iran fired missiles at US troops in Iraq. The recent attack by Iran on two military bases of the US led to a jump in the gold price to about USD 1,600 per ounce on 8th January 2020.

The increase in gold prices is in line with the discussion in our previous article: Optimistic 2020 Gold Outlook Brightens Middle Island’s Growth Prospects

The safe haven asset saw its prices react considerably post the attack amidst growing political and economic uncertainty, resulting in a surge in share prices of gold miners.

In addition to the several gold stocks, the stock of the Middle Island Resources Limited (ASX:MDI) improved significantly by 25 per cent on 8th January 2020. Middle Island is a well-known gold explorer based in Australia, that operates with a belief that gold prices will continue to rise over the medium and long-term.

The Company’s activities are targeted at its flagship, Sandstone Gold Project, which is located in a supreme location and has an aggregate mineral resource of 12.7Mt at 1.4g/t Au for 537,000 oz units of gold. The Sandstone project already contains a 600,000tpa processing plant at the site, giving an upper hand to the Company.

Focus on Recommissioning of the Sandstone Gold Plant

Middle Island’s key objective is to recommission its Sandstone processing plant as early as possible via consolidation of proximal third-party deposits and/or standalone PFS update and/or exploration.

Installing a new processing plant of 600,000tpa capacity usually requires enormous capital and at least 12 months; however, the Sandstone processing plant can be refurbished and upgraded at a cost of just $10.3 million within 5 months.

Moreover, the Company’s processing plant includes the following facilities:

  • Fuel tanks, contract diesel-generated power plant, laboratory, workshops and mine offices.
  • Permitted bore field and tailings storage facility.
  • Conventional grinding, milling and carbon-in-pulp leach circuits.
  • Considerable inventory of equipment & spares.
  • Fully equipped camp on freehold title in Sandstone township nearby.
  • Well-kept airport to assist FIFO operations.

These advantages associated with the Sandstone processing plant make it a key asset for Middle Island.

The Company is well on track to develop the Sandstone Project towards production. It has recently planned to raise $2.35 million via Entitlement Issue and has received the support of a well-known investor, Mr Stephen Copulos to foster the development of its flagship project.

The Company is looking forward to undertaking a reverse circulation and aircore drilling campaign at Sandstone Project in the near-term to convert historic mineral resources and assess new targets within the project’s permitted tenure in Q1 2020. The Company has further planned to recommence PFS update after receiving the new drilling results in June 2020 quarter.

First Mover in East Tennant IOCG Province

In addition to the Sandstone project, the Company has recently identified the Barkly Copper-Gold Super-Project in East Tennant IOCG (iron oxide-copper-gold) Province, obtaining the first mover advantage.

The Barkly project signifies low entry cost and low initial exploration cost opportunity to identify high-grade targets of interest to mid-tier and key resources companies.

The Company applied for 10 applications aggregating 3,912km² between Tennant Creek & Mount Isa, out of which six got accepted, while the remaining four are still under discussion.

As per the Company’s Managing Director, Mr Rick Yeates, the divestment of the Reo gold project in Burkina Faso provided the opportunity for Middle Island to identify a new project, with the focus very much on a lower risk, Australian gold or copper-gold opportunity.

The Company will commence the exploration at the Barkly Super Project during the 2020 dry season post meeting the regulatory requirements.

Rallying gold prices provide an opportunity for gold explorers like Middle Island to take advantage of the rise in prices and investors to add the commodity to their portfolios. In addition, the strengthening gold prices offer an optimistic outlook for the gold companies leveraged to the commodity.


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