Middle Island Delivers Solid Performance in December 2019 Quarter

Continuing its practice of delivering solid quarterly results, gold explorer Middle Island Resources Limited (ASX:MDI) has reported another robust quarterly findings for the December 2019 quarter.

During the quarter, the Company continued to focus on its primary strategy of recommissioning its flagship Sandstone gold processing plant, via a dual approach:

• Progressing one or more of numerous possible consolidations of proximal third-party gold deposits within the Sandstone district in WA.
• Exploring close proximity, already permitted, greenfields targets within its existing Sandstone tenure to detect low strip ratio, higher grade, open pit deposits to improve the front end of the planned production re-start schedule.

Let’s scroll through some key developments announced by the Company during the quarter below:

Key Developments at Sandstone Project

In the backdrop of a higher and more persistent Australian dollar gold prices, the Company undertook a re-optimisation of open pit deposits (the Two Mile Hill, Shillington and Wirraminna) at Sandstone project early in the December quarter.

The Company had engaged external consultants to conduct a series of Whittle Optimisations contingent on two input parameters being updated from those applied in the 2017 Pre-Feasibility Study (PFS). The re-optimisation study showed that the Sandstone gold processing plant could be successfully refurbished employing feed from the Company’s existing Mineral Resources.

Based on the optimistic outcome of re-optimisation study, the Company commenced an update of the PFS to revise all parameters in advance of a recommissioning decision.

In addition to commencing the PFS update, the Company simultaneously undertook a detailed technical review of the open pit exploration opportunities within its tenure, which identified 17 priority targets and deposits within 5km range of the gold processing plant that provide substantial potential to improve open pit Mineral Resources. The Company notified that 14 of the 17 targets and deposit extensions are located on fully permitted Mining Leases.

The PFS update was later deferred in favour of a significant 17,400m exploration and resource definition drilling campaign, targeted exclusively on the 17 open pit deposits and targets prioritised following the technical review.

To Know More About Drilling Campaign, Click Here

The Company has recently commenced the initial phase of the drilling campaign, while the entire campaign is expected to be finalised during the March quarter 2020. Subsequent to completion of the drilling campaign, the Company intends to recommence the PFS update in the June quarter 2020.

On safety, environmental & social front, a revised Mine Closure Plan for the Sandstone gold project was prepared and submitted to the WA Department of Mines, Industry Regulation and Safety (DMIRS) in November 2019. The Company is also undertaking the rehabilitation of disturbed areas at the Sandstone gold project in accordance with POW and environmental audit requirements.

Maiden Move into Northern Territory

Middle Island secured first-mover advantage during the December quarter in iron oxide-copper-gold (IOCG)-prospective, East Tennant area by identifying a new project, the Barkly Copper-Gold Super Project.

The Company applied for 10 exploration licences encompassing an aggregate area of 3,912 sq. km within the East Tennant region, which represent its maiden entry into one of the NT’s historically strong mineralised copper-gold province.

Out of the 10 tenement applications, six have been accepted while an additional four applications are currently the subject of partly or wholly competing applications rendered by several companies, whose outcome will be judged on the technical merit of proposed exploration programs in the March 2020 quarter.

Several tenement applications of Middle Island in the Barkly area partially coincide with competing applications by Newcrest Mining Limited (ASX:NCM), Rio Tinto Limited (ASX:RIO) and others. The Company mentioned that these competing tenement applications are likely to be evaluated and allocated in January 2020, with other regulatory protocols taking at least an additional four months to May 2020, prior to grant.

Moreover, the Company expects the field work to reasonably commence during the 2020 dry season.

Other Developments in December 2019 Qtr

In addition to the key developments discussed, the Company also reported the following announcements during the quarter:

• Annual General Meeting was held in Perth on 28^th November 2019, in which all resolutions were passed, with over 99 per cent affirmative votes recorded in each case.
• Alto Metals Limited’s (ASX:AME) takeover offer was allowed to lapse on 29^th November 2019; however, the Company’s directors still remain firm on the belief that combining its gold assets with Alto offers a substantial growth opportunity for:
  • Processing the two companies’ Mineral Resources via the Company’s proximal gold plant,
  • Near-term gold production, and
  • Consolidating the entire Sandstone greenstone belt under a single entity.
• The Company elected to withdraw from the Dandaraga Option Agreement following unsatisfactory 2019 reverse circulation (RC) drilling results at Dandaraga.
• Highly experienced mining engineer, Mr Brad Marwood was appointed as a Non-Executive Director of the Company.

A Quick Look at Financial Updates

During the quarter, the Company announced a two-tranche placement of up to 260 million new fully paid ordinary shares at $0.004 per share to raise up to $1.04 million. The Placement, which was made to new unrelated professional and sophisticated investors, was corner stoned by famous mining investor, Mr Stephen Copulos.

Following the completion of Tranche 1 Placement, the Company and its new substantial shareholders cancelled the Tranche 2 Placement by mutual agreement. Subsequently, the Company announced a pro-rata, non-renounceable, fully underwritten Entitlement issue to raise gross proceeds of about $2.35 million, before costs.

As at 31 December 2019, the Company held aggregated cash and liquid investments of $764,000, comprising $302,000 in ordinary shares of Tajiri Resources Corporation (TSXV:TAJ) and $462,000 in cash.

Therefore, the combination of committed capital and cash at bank sees the Company starting 2020 with some $2.8 million. The Company has estimated a cash outflow of ~$2.12 million for the March 2020 quarter, out of which $1.7 million is likely to be spent on exploration and evaluation activities.

MDI closed the trading session at $0.004 on 30^th January 2020.

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