Continuing its practice of delivering solid quarterly results, aspiring gold project developer, Middle Island Resources Limited (ASX:MDI) has announced another set of robust quarterly update for the period ended 31st March 2020.
Middle Island made considerable progress at its flagship Sandstone gold project during the quarter, in line with its overarching strategy, primarily targeted at recommissioning of Sandstone processing plant (kept on care and maintenance) as early as possible, via a dual approach:
The gold explorer expects the success of these approaches to underpin a Sandstone mill recommissioning decision. Moreover, the Company believes the extraordinary initial success of its current drilling campaign, coupled with economic fallout resulting from the COVID-19 pandemic which may strengthen the already rising gold price, improves potential for the realisation of its Sandstone gold project strategy.
In this context, let us now browse through the key operational activities undertaken by the Company at Sandstone project during the March quarter 2020:
Progressed Substantially with 2020 Drilling Campaign
Middle Island progressed at a remarkable pace with its major ~17,300m exploration and resource definition drilling campaign during the quarter, which was commenced in January 2020 at Sandstone project. The campaign collectively comprises a sequential series of aircore (AC), reverse circulation (RC) and diamond drilling programs.
Appreciably, the Company finalised two planned series of programs - initial AC drilling program and Phase 1 RC drilling program – proposed under the massive drilling campaign.
The Company’s Phase 1 RC drilling program completed during the quarter, comprised of 172 holes (13,400m) and was targeted at evaluating six existing open pit deposits and eight new prospects.
As per the Company, the initial assays are very encouraging, with the identification of one deposit enhancement (Two Mile Hill), and three out of five prospects (McClaren, McIntyre and Old Town Well) appearing to signify new open pit deposits to supplement the planned mill re-commissioning inventory, subject to 1m re-sampling and infill RC drilling.
Given the success resulting from initial results of the Phase 1 RC drilling program, Middle Island believes the proposed Phase 2 RC drilling program (~3,000m) needs to be radically expanded. The Company expects the expansion of Phase 2 RC drilling program to defer the updated PFS till September 2020 quarter.
Estimated Two Mile Hill Deeps Resource
In a noteworthy development, independent consultants, Mining Plus Pty Ltd, estimated an Inferred Mineral Resource of 500,000oz gold for the Two Mile Hill deeps deposit at Sandstone gold project.
Following the addition of the latest Two Mile Hill deeps deposit, Sandstone project’s Mineral Resources (JORC Code 2012 Edition) expanded to 624,000oz gold in aggregate terms, indicating a near five-fold surge in JORC Code 2012 Mineral Resources.
Middle Island believes a considerable rise in aggregate Mineral Resources offers far greater valuation transparency of both its flagship Sandstone project and the Company.
Received Additional Barkly Super-Project Allocations
Notably, Middle Island was allocated between 19 per cent and 95 per cent of each of the four competing exploration licence applications within the highly prospective Barkly Super-Project during the quarter.
These allocations, representing some 1,363km2, comprised:
- ELA32297 – 35 of 186 blocks allocated (19%), representing 110.92km2
- ELA32298 – 137 of 228 blocks allocated (60%), representing 443.37km2
- ELA32301 – 230 of 242 blocks allocated (95%), representing 740.70km2
- ELA32304 – 21 of 73 blocks allocated (29%), representing 67.80km2
Collectively, the Company’s Barkly Super-Project now encompasses ten exploration licence applications covering 3,253km2, which includes an additional six exploration licence applications (representing ~1,890km2) that were already accepted in full last year.
The Company does not anticipate last of its 10 exploration licence applications covering the Barkly Super-Project in the NT to be approved until at least August 2020.
Review of Financial Performance
During the quarter, the Company closed a fully underwritten, non-renounceable, pro-rata entitlement issue of 1 new ordinary share for every 2 ordinary shares held on the record date, at an issue price of $0.004 per new share, along with a free attaching option (exercisable at 0.8c) for each new share subscribed, to raise $2.35 million before costs.
Subsequently, the Company’s General Meeting was held on 31st March 2020 to:
- variously ratify the issue of Placement shares and options,
- approve the issue of the Placement and Underwriter options, and
- elect Mr Brad Marwood as a non-Executive Director.
All these resolutions were unanimously passed in the General Meeting.
As at 31st March 2020, the Company had cash and liquid investments totalling $2.28 million, including $2.14 million in cash and $0.14 million in Tajiri Resources Corporation (TSXV:TAJ) ordinary shares.
As on 29th April 2020, MDI traded at $0.012.