Middle Island Uncovers Fifth New Gold Deposit at Sandstone, Stock Zooms 14%

Summary

• A fifth new gold deposit has been identified at Ridge prospect from Phase 1 RC drilling program at Sandstone gold project.
• Better intercepts of 10m at 3.02g/t, 8m at 4.48g/t, 7m at 2.29g/t and 4m at 3.32g/t Au have been attained from Shillington deposit from infill and extension drilling.
• A substantial undrilled exploration target has also been uncovered over a 1.15km strike length of the extremely mineralised Shillington BIF package between the Shillington deposit and Ridge prospect.
• A southern extension has been confirmed from infill drilling at Goat Farm deposit, which would permit a 2004 JORC Mineral Resource upgrade to JORC 2012 status.
• Highly successful Phase 1 RC drilling results have paved way for Phase 2 program, expected to commence next week.

Middle Island Resources Limited (ASX:MDI) has released final set of results from 13,400m Phase 1 RC drilling program concluded at Sandstone gold project this year, identifying fifth new BIF-hosted satellite gold deposit at Ridge prospect.

Following the update, MDI stock surged by ~14 per cent, closing the trading session at $0.016 on 29^th May 2020. In the past 3 months the shares have surged by 75%, comfortably beating the benchmark index ASX 200.

The latest RC drilling results announced by Middle Island comprise 1m assay results derived from drilling at Ridge prospect (4 holes; 342m), Goat Farm deposit (21 holes; 1,275m), Shillington deposit (13 holes; 1,440m), and 4m composite assay results from the G2 and G3 gravity targets (7 holes; 876m).

Although no significant 4m composite gold assay outcomes were returned from RC drilling at the G2 and G3 gravity targets, robust results have been attained from Ridge prospect, Goat Farm and Shillington deposits. These results, together with the previously attained outcomes from Phase 1 drilling, pave way for Phase 2 program at Sandstone which is likely to be kick-started next week.

Fifth New Deposit Discovered at Ridge Prospect

Recent geological mapping by Middle Island, a geophysical review and reassessment of drilling results enabled discovery of mineralised BIF and metasediments at the Ridge prospect, which includes the following historic intercepts:

• 13m at 3.81g/t Au
• 9m at 2.21g/t Au
• 8m at 4.14g/t Au
• 5m at 3.81g/t Au
• 3m at 8.77g/t Au

Notably, shallow dipping mineralisation is delineated over a 225m strike length at Ridge prospect, which represents fifth new deposit at Sandstone.

The latest drilling and mapping conducted over the complex of proximal BIF-hosted deposits consisting of McIntyre, McClaren and Ridge, along with recent nugget located close to McIntyre, provides strong indication that the area of Ridge prospect offers significant resource potential. The extensions to this area would be investigated in Phase 2 RC drilling program.

Better Intercepts Achieved at Shillington Deposit

The RC drilling was conducted at several holes on the area between the Shillington and Shillington North deposits to establish an adequately mineralised link to blend the two into a single open pit. In conjunction with a higher gold price and subject to completing pit re-optimisation and updating the resource estimate, the RC drilling perhaps has successfully attained this objective, with better intercepts of:

• 10m at 3.02g/t (from 121m in MSRC313),
• 8m at 4.48g/t from 45m and 7m at 2.29g/t from 83m (in MSRC316), and
• 4m at 3.32g/t Au (from 21m in MSRC319).

A single RC hole was also finalised on a new section to the south of the Shillington deposit, which delivered new intercepts of 2m at 1.92g/t from 62m and 3m at 6.86g/t Au from 67m in MSRC322.

The results obtained from Shillington deposit indicate that modest Mineral Resource additions and/or upgrades could be anticipated between and peripheral to the deposits. Middle Island believes that an additional drilling in Phase 2 would be needed to confirm a resource extension at the southern extremity of the Shillington deposit.

Notably, a major undrilled exploration target has also been discovered over a 1.15km strike length of the extremely mineralised Shillington BIF package between the southern-most RC drill hole at Shillington deposit (3m at 6.86g/t Au) and northern-most RC drill hole at Ridge prospect (3m at 8.77g/t Au), following re-interpretation of airborne magnetic data.

Both the southern-most RC drill hole at Shillington and the northern-most RC drill hole at the Ridge Prospect remain undrilled and completely open below cover to the southeast and northwest respectively.

The Company intends to initiate testing of this target horizon through extensional drilling at both deposits in the Phase 2 program.

Southern Mineralised Extension Confirmed at Goat Farm

The infill and extension drilling conducted at the Goat Farm deposit returned new RC drill intercepts, comprising multiple 2m to 10m intervals of around 1g/t Au in saprolite and laterite, highlighted by 10m at 1.73g/t Au (from 58m in MSRC387).

Broadly consistent with previous drilling results, the latest outcomes effectively validated continuity of mineralisation between the current Goat Farm and Twin Shafts open pits (southern mineralised extension), that would permit Goat Farm 2004 JORC Mineral Resource upgrade to 2012 JORC status.

In a nutshell, geological mapping and excellent drilling results obtained from a cluster of new BIF-hosted deposits incorporating McIntyre, Ridge and McClaren, now probably linking to Shillington, provide framework for considerable resource potential to be addressed in the approaching Phase 2 RC and diamond drilling programs.

Management Commentary