- Middle Island secured two new Exploration Licence Applications at the Barkly Super Project.
- The Feasibility Study into re-commissioning of the Sandstone Gold Project is complete indicating positive cash flow at a gold price above AU$2,500/oz.
- The Company paid AU$250,000 to Troy Resources and got the 2% legacy royalty terminated for the Sandstone Project.
- MDI will release the auger drilling geochemical result soon and based on the assessment, a drilling program will follow.
The junior mineral exploration company Middle Island Resource Limited (ASX:MDI) reported a busy quarter, working on its two-fold strategy. The first one is to increase the resource potential of the Barkly Copper Project through exploration, and the second one is to enhance Sandstone gold project, leading to re-commissioning of the processing plant.
During the June quarter, MDI secured two new Exploration Licence Applications (ELA) that lies along the structural and stratigraphic strike from Middle Island’s recent Crosswind’s copper discovery. The new ELAs add 1,158km2 of area, bringing the Barkly Super project aggregate area to 5,220km2.
MDI attended the AGES conference in the Northern Territory to mark its presence at the unveiling of the Minex CRC East Tennant drill core. One of the hole-NDIBK04 drilled under the National Drilling Initiative by Minex CRC intersected the localised semi-massive copper mineralisation along with over 300m of disseminated to blebby sulphides to end of the hole.
Gravity map of the region (Image source: Company update, 30 July 2021)
Middle Island had submitted the NT Government co-funding applications to carry on detailed airborne and ground magnetic surveys. The Company was successful in its application for the airborne magnetic survey and the survey is due to commence in September 2021.
MDI wraps up Feasibility Study of the Sandstone Gold Project
Middle Island completed the Feasibility Study (FS) on re-commissioning the Sandstone Gold Project on a standalone basis during the last quarter. The findings of the FS indicate that re-commissioning is feasible at a gold price above AU$2,500/oz.
Project location of Sandstone Gold Project (Image source: Company update, 30 July 2021)
MDI estimates over 70% of Sandstone region is under transported cover, making historical soil geochemistry data redundant. The Company commenced an auger drilling geochemical survey in the first week of July 2021 to test five new targets on the tenement area.
Copyright © 2021 Kalkine Media, Data source: Company update 30 July 2021
The exploration and resource definition plan includes assessing the 10km strike length, which is under 70% transported cover. The Company plans on an extensive exploration program to delineate new deposits while extending the current Mineral Resources.
To know more read more: Middle Island Resources Expedites Development of Sandstone & Barkly Projects in 2H 2020
MDI saves big on the Sandstone royalty
MDI acquired the Sandstone Project from South America focused gold producer Troy Resources Ltd (ASX:TRY) back in 2016. Based on the terms of the agreement, MDI was required to pay 2% net smelter royalty to Troy on future productions.
MDI paid a one-time AU$250,000 payment to terminate the royalty clause in the agreement. Troy has accepted the payment and cancelled the smelter royalty.
The FS study showed a total yield of 89,453 ounces of gold at the current resource level. At an average gold price of AU$2,300/oz, MDI could estimate a significant reduction in the project cost and rise in net return by US$4.1 million.
- Auger drilling is complete, and assay results will be shared soon. MDI will assess the drill geochemistry data to a depth of 20m to identify gold targets on Sandstone Project.
- In case any target with significant potential is identified, AC and RC drilling to follow on the targets.
- MDI is planning on extensional and infill resource drilling on existing deposits.
- Review of the CAPEX and OPEX of the Sandstone project and optimising the costs in the operating phase.
Cash & Finance position
At the end of the June quarter, MID reported cash and liquid investments of AU$3.5 million. The Company had AU$3.2 million in cash and AU$0.3 million in Tajiri Resources Corporation.
The shares of MDI closed the day trade at AU$0.105 with a market cap of AU$13.46 million as of 30 July 2021.