Middle Island Declares 13% Increase in Two Mile Hill Open Pit Mineral Resource, Stock Up 5%

Summary

• Middle Island reported completion of an updated resource estimate for the Two Mile Hill open pit gold deposit within Sandstone project.
• Two Mile Hill open pit Mineral Resource has increased by 13 per cent to 1.25Mt at 1.36g/t Au for 55,000oz.
• Sandstone’s current total project Mineral Resources have also risen to 657,500oz gold.
• Two Mile deposit can be economically extracted through open mining pit techniques and processed via the existing gold processing plant at Sandstone.
• The deposit will now be re-optimised for consideration as an Ore Reserve in the 2020 feasibility study.

In a significant development, gold explorer Middle Island Resources Limited (ASX:MDI) has announced the completion of an updated resource estimate for the Two Mile Hill open pit gold deposit within its flagship Sandstone gold project.

The stock of Middle Island marked an uptick of 5 per cent to $0.021 following the release of its key update (as at 1:40 PM AEST).

The updated resource estimate has been reported post conclusion of the infill and extension drilling conducted as part of Middle Island’s 2020 exploration and resource definition drilling program (+40,000m) currently progressing at Sandstone.

The drilling campaign at Sandstone project is exclusively focussed on the definition of further open pit Mineral Resources before their inclusion for estimation as Ore Reserves in the project’s 2020 feasibility study (FS).

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13% Increase in Two Mile Hill Open Pit Mineral Resource

Two Mile Hill is one of ten gold deposits at Sandstone that are the subject of Middle Island’s continuing drilling campaign and feasibility study in 2020.

The Company has declared a 13 per cent rise in the Two Mile Hill open pit Mineral Resource within Sandstone project, to 1.25Mt at 1.36g/t Au for 55,000oz. Consequently, the proportion of the Two Mile Hill open pit deposit categorized as an Indicated Mineral Resource has also increased to 95 per cent.

Notably, the new Two Mile Hill resource upgrade closely tracks a 52 per cent surge in the Shillington Mineral Resource reported recently.

With this resource upgrade, Sandstone’s current total project Mineral Resources have also risen to 657,500oz gold. It is worth noting that these updated Mineral Resources do not comprise the five new satellite gold discoveries where resource definition drilling is currently being finalised.

To update the Mineral Resource Estimate (MRE) at Two Mile Hill, Middle Island commissioned EGRM Consulting Pty Ltd, which previously completed MRE estimate for Two Mile Hill deposit in 2016. The latest MRE estimate is based on reverse circulation (RC) percussion and diamond (DD) drilling diversely conducted by Herald Resources Limited, Sundowner Minerals NL, Middle Island and Troy Resources NL.

The recent Two Mile Hill deposit grade estimates have been categorized in line with the guidelines laid out in the 2012 JORC Code. Besides, the grade estimate is contingent on mineralisation constraints devised to encapsulate all anomalous mineralisation at a nominal 0.1g/t Au lower cut-off.

Two Mile Hill Prospects for Eventual Economic Extraction

The pit optimisations, employing 2020 feasibility input parameters at a range of gold prices, signify that Two Mile deposit can be economically extracted through open mining pit techniques and processed via the existing gold processing plant at Sandstone.

Middle Island has already undertaken metallurgical test work at Two Mile Hill, where average open pit gold recoveries of 95.3 per cent at a grind size of 106µm are displayed. The Company has planned to address some of the aspects concerned with Two Mile Hill open pit deposit within the 2020 feasibility study, including:

• The update of current environmental studies, which are over 10 years old.
• An additional sterilisation drilling as an RC sterilisation drilling programme was finalised by the Company in 2016, but the greater inventory, mainly a result of the considerable gold price increase since 2016, may require an extension of the sterilised area.
• An expansion of the tailings capacity for the anticipated increased inventory.

Way Ahead

Middle Island has planned two additional oxide diamond core holes at Two Mile Hill to confirm bulk density and geotechnical parameters. The deposit will now be re-optimised for consideration as an Ore Reserve in the 2020 feasibility study.

Besides, the Company is expected to announce resource estimates for the five new satellite open pit deposits, together with extensions to the Twin Shafts and Goat Farm deposits following the receipt and compilation of the Phase 2 drilling campaign results.