The aspiring gold project developer of Western Australia, Middle Island Resources Limited (ASX: MDI) made substantial progress towards recommissioning the Sandstone gold project during the September quarter 2019. The companyâs activities were centred on its flagship, Sandstone Gold Project, which already includes a 600,000 tonnes per annum capacity of gold processing plant on site.

Middle Island continued to focus on its primary strategy of recommissioning the Sandstone project during the September quarter, prioritising consolidation over exploration. The company considers consolidation as the more direct route to recommissioning as it circumvents the time and cost required for exploration and resource definition and generates a better cash flow from which to fund exploration.
In line with its primary strategy, the company performed the following activities during the quarter:
Advanced Discussions with Three Proximal Third Parties
The company continued discussions with three other parties holding gold deposits within a 100km radius of the Sandstone processing plant during the quarter. These alternative opportunities presented similar or better economic outcomes to that represented by Alto deposits.
The company extended its Alto Takeover Offer to 29th November 2019, which lapsed subsequent to the September quarter. The company notified that it will continue to engage in meaningful dialogue with the Alto Board of Directors seeking to add value for shareholders of both the companies.
Post the September quarter, new project opportunities resembling Alto deposits were identified by the company that enabled it to discover a new Australian-based project, Barkly Super Project. The project presented the company with a first-mover advantage in the highly prospective IOCG (iron oxide-copper-gold) province east of Tennant Creek.
To identify the project, the company deployed its technical resources in exploring new greenfields Au and Cu/Au exploration opportunities in highly prospective, terrains within Australia. Moreover, the company closely monitored the collaborative research projects being carried out by Federal and State geological surveys active in detecting and modelling new exploration opportunities under relatively shallow basin cover.
The company lodged 12 Exploration Licence applications in the December quarter following a diligent prioritisation process.
Exploration Progress at Sandstone Project
During the quarter, the company received the assays relating to the reconnaissance RC drilling program, conducted over the Agnes and Corktree targets at the Dandaraga property. These targets represent two of three cohesive gold anomalies identified by soil geochemical surveys at Dandaraga in 2018.
Further, a draft report was obtained from Spectral Geoscience during the quarter on the results of a review of the hyperspectral data collected from diamond drill hole MSDD156 by the Hylogger system at Western Australiaâs State core library.
The review was conducted to:
- Supplement the structural study by identifying targeting vectors for mineralisation.
- Assist in settling a para-genetic model for the Two Mile Hill tonalite deeps gold deposit and potentially discerning resource modelling constraints.
The company mentioned that the initial interpretation of the review suggested that white micas with a wavelength of 2200-2202nm throughout the entire primary Two Mile Hill tonalite, appear to show a close spatial relationship with higher gold values. This finding represented a non-visual, possible vector to gold mineralisation that might notify the application of more strong resource modelling constraints.
The conclusions on the hyperspectral study are likely to be finalised during the December quarter.

Source: Companyâs Report (31st October 2019)
The company continued to focus on prospecting activities around the Three Mile Hill area during the quarter as it realised limited tribute gold nugget production of 37.95oz from M57/128 and M57/129. It has extended the tribute gold production agreement by a letter of variation to incorporate the recently granted Jew Well exploration licence (E57/1102).
In addition, the company divested its Reo Gold Project during the quarter to focus entirely on the Sandstone gold project.

Further, Middle Island has planned the following activities for the remainder of FY20:
- Refine the definition of high-grade basalt intercepts in the northeast quadrant of the Two Mile Hill open pit deposit.
- Aircore interface (palaeo-surface) geochemical drilling along the western margin of Davis Prospect.
- RC drilling to test at least four palaeo-surface gold/arsenic geochemical anomalies at the Davis Prospect.
- Aircore drilling to extend and close off the partially defined southern WoE palaeo-surface gold geochemical anomalies (POW approved).
- Reconnaissance RC drilling of three new WoE palaeo-surface gold geochemical anomalies (POW approved).
- Laterite aircore drilling of two defined targets proximal to the Wirraminna deposit (POW approved).
- Initial reconnaissance RC drilling of the modelled, shallower G2 & G3 gravity targets proximal to Two Mile Hill (POW approved).
- Possible EIS diamond drilling of one or more of the Two Mile Hill gravity targets (POW approved).
- Updated resource estimate and pit optimisation on the Two Mile Hill open pit deposit.
As per Middle Islandâs Managing Director, Mr Rick Yeates, the company continued to focus on advancing consolidation opportunities during the September quarter. He mentioned that the company had prioritised multiple exploration targets in its own right, as an alternative strategy to meet the same corporate objective and provide considerable optimism for shareholders.
MDI last traded on 16th December 2019 at $0.005.
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