In a considerable development, the Australian gold explorer, Middle Island Resources Limited (ASX:MDI) has reported a new 600m gold target at the Sandstone gold project in central Western Australia. The target was one of five targets refined or tested as part of the ~1,800m interface (palaeo-surface) aircore geochemical drilling program concluded in January 2020.
The Company has finally received the assay results for the aircore drilling program, identifying a potentially significant new Tailings South gold target, just 800m to the south of the Company’s Sandstone processing plant.
The Company prioritised interface (palaeo-surface) geochemical aircore drilling results for compilation to provide more precise targeting for the Phase I RC drilling, while the laterite drilling results are yet to be evaluated at length.
Ins and Outs of the New Gold Target
The composite Tailings South gold anomaly defined under interface (palaeo-surface) aircore geochemical drilling, is discovered beneath 8 to 15m of the transported sheetwash cover. The anomaly comprises north trending 300m-long western element (to a maximum 51ppb Au) and a 600m-long eastern element (to a maximum 107ppb Au), both of which are in compliance with major structural orientation, while oblique to the stratigraphic orientation at this point.
The Company added that this anomaly was originally detected by a Weights of Evidence (WoE) structural targeting study finalised in 2017 and is interpreted to be connected with a series of folded banded iron formations (BIFs) dislocated by faulting.
New Target to be Tested in Phase I RC program
Middle Island notified that this target will be the last prospect to be tested under its planned 12,300m Phase I reverse circulation (RC) drilling program, of which about 11,000m have been completed, and the assay results are pending.
The Phase I RC drilling program is being conducted as a part of the major multi-phase open pit drilling campaign (~17,900m) commenced by the Company in January this year to add significant open pit Mineral Resources to the Sandstone gold project. Moreover, the RC drilling campaign kick started in mid-February to validate, expand and/or test around 14 open pit gold targets within 4km of the Sandstone processing plant.
The Phase I RC program is expected to be finalised next week, with twelve of the fourteen deposits and targets tested to date.
The Company mentioned that though pending assays will eventually validate their significance, visual logging of the RC chips has detected broad zones of quartz veining, connected with intense silica-pyrite-haematite alteration, offering considerable support that:
- at least one new gold deposit may have been detected by the RC drilling campaign so far, and
- most of the existing deposits are anticipated to be enhanced and/or extended.
Bright Prospects of Sandstone Project Entering into Production Phase by 2021
Middle Island has planned to initiate Phase II RC drilling program, comprising ~3,000m, following the receipt and compilation of all the Phase I RC results. The Phase II program is targeted to infill and upgrade any Inferred Mineral Resources detected by the Phase I work to an Indicated Mineral Resource classification.
The Phase II program will be conducted simultaneously with ~800m of oxide diamond coring of new deposits, targeted to:
- offer material for additional bulk density determinations, and
- validate geotechnical, metallurgical and waste characterisation parameters, before the PFS update.
The PFS update, to which the Company will apply additional mineral resources derived from the planned major multi-phase drilling campaign, is likely to be completed by the end of the June quarter 2020, potentially leading to a positive recommissioning decision.
Consequently, the Company expects the Sandstone project to be in the production phase by early 2021, following a recommissioning of the processing plant, which is estimated to be undertaken in five months, subject to available finance, and pending a positive pre-feasibility study (PFS) outcome.
Evidently, Middle Island has marked a major milestone with the identification of the new gold target at Sandstone project. The Company is well on track to attain success in its systematic and aggressive Sandstone 2020 exploration and gold development program, planned considering record gold prices and significant local M&A activity, with recent takeover offers made for Alto Metals and Spectrum Metals at substantial premiums.
On 12th March 2020, MDI closed the day’s trade at $0.007 on the ASX.
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