- Middle Island made remarkable progress at its Sandstone gold project during June quarter.
- The Company completed Phase 1 RC drilling campaign and commenced Phase 2 RC and Diamond Drilling Campaign during the quarter.
- The ongoing Phase 2 RC and diamond drilling is targeted at infill and extension of five new satellite deposits to an Indicated Resource classification.
- The Company has so far finalised around 30,000m of resource definition and exploration drilling at Sandstone in 2020.
- MDI remains well funded and debt free to conclude the 2020 Sandstone drilling campaign and feasibility study.
The stock of gold exploration company, Middle Island Resources Limited (ASX:MDI), marked an uptick of 4.2 per cent on 23rd July 2020 following the release of its robust quarterly results for the period ended 30th June 2020 on the ASX. Can we say, Middle Island has undertaken numerous significant developments during the quarter.
It is worth noting that Middle Island’s activities and operations around its flagship Sandstone gold project remained relatively unscathed by COVID-19 pandemic during the quarter amid its close collaboration with the Sandstone Shire.
Besides, the economic fallout from the coronavirus pandemic continues to bolster underlying gold market fundamentals which, together with the remarkable success of the ongoing drilling campaign, bodes well for the fruition of Middle Island’s Sandstone gold project strategy.
Let us quickly gaze through the significant advancements that defined June 2020 quarter for the Company:
Phase 1 RC Drilling Campaign
Middle Island successfully concluded the 17,300m Phase 1 RC drilling campaign during the quarter, discovering five new satellite open pit deposits at Sandstone project - Ridge, Old Town Well, McClaren, McIntyre and Plum Pudding.
Located on permitted Mining Leases, the five new satellite open pit deposits are expected to substantially improve the proposed open pit mining inventory to underpin the feasibility study (FS) and planned recommissioning of Sandstone project.
Besides these five deposits, the Company also completed the infill/extension drilling at Two Mile Hill, Wirraminna, Goat Farm, Shillington and Twin Shafts deposits during the quarter.
Phase 2 RC and Diamond Drilling Campaign
Following the completion of Phase 1 RC drilling campaign, Middle Island commenced Phase 2 RC and diamond drilling campaign during the quarter, completing 141 RC holes (8,283m) by quarter’s end.
While Phase 2 RC resource definition drilling involves ~13,800m of RC drilling at the five new satellite deposits and Shillington extension, the Phase 2 diamond drilling comprise ~1,000m of HQ3 oxide coring from the surface (notionally two holes per satellite target).
The continuing Phase 2 RC and diamond drilling is aimed at infilling and extending the five new satellite deposits to an Indicated Resource classification to complement the proposed recommissioning inventory for Sandstone’s fully-permitted on-site gold mill.
The Company has also planned an exploratory RC drilling at the end of the Phase 2 campaign to evaluate a sizeable 1.1km long, undrilled target corridor, described as the Shillington Gap, discovered between the Shillington and Ridge deposits.
Detailed geological mapping was also concluded during the quarter near the McClaren-McIntyre-Ridge satellite gold deposits. The geological mapping, along with high resolution airborne magnetic data and continuing RC and diamond drilling, is expected to support in resolving the complex structural and stratigraphic architecture in this high-grade area.
Airborne Magnetic Survey and UAV Terrain Survey
The June 2020 quarter also observed the completion of a new high resolution airborne magnetic and radiometric survey by MagSpec Airborne Surveys Pty Ltd over the core project tenements. Additionally, Land Surveys Pty Ltd finalised a high-resolution drone terrain survey over the two permitted Mining Leases and Wirraminna Prospecting Licence, ahead of feasibility study update.
Preliminary Mineral Resource Estimates and Pit Optimisations
The preliminary Mineral Resource estimates and pit optimisations were also finalised during the quarter on all new five satellite deposits to aid in planning Phase 2 resource definition RC and diamond drilling.
The Company notified that infill and extension resource definition drilling has been concluded at the existing Two Mile Hill, Goat Farm, Shillington, Wirraminna and Twin Shafts deposits, while updated resource estimates are being completed. Following the receipt and compilation of Phase 2 drilling results, the final resource estimates and pit optimisations will be gradually embarked on the new satellite deposits.
As most of the elements of the formerly planned pre-feasibility study (PFS) have been finalised to full feasibility stage, Middle Island has decided to expand the study update confidence to a full feasibility study (FS).
Following the upgrade of the PFS, the Company has rescheduled its FS outcome until late December 2020 quarter amid the success of the 2020 drilling campaign which requires a considerable expansion of initially planned drilling to quantify new satellite discoveries.
MDI’s Financial Position
Middle Island’s aggregate cash and investments as at 30th June 2020 stood at $5.14 million, including $4.0 million capital raised through an oversubscribed Placement in May 2020. During and subsequent to the June quarter, around 203 million MDI options have been exercised, increasing the Company’s cash balance by a further $1.58 million.
Notably, CY2020 has proved to be a successful one for Middle Island, with the Company increasing the number of shareholders by 235 per cent, market capitalisation by 864 per cent, cash balance by 835 per cent and trading liquidity by 508 per cent.
Kalkine Image (Data Source: MDI ASX Update)
In addition to these activities, Middle Island expects the formal grant of six of its 10 exploration licence applications comprising the Barkly super-project once coronavirus travel restrictions are lifted or at the Company’s earlier election. The remaining four applications are anticipated to become available for grant in the September quarter.
Subsequent to the grant of applications, the Company’s initial work will focus on:
- securing any outstanding open file and pre-competitive data,
- modelling of exploration targets, and
- planning of high-resolution geophysical surveys to refine modelled targets to prepare for drill testing.
Middle Island remains debt free and well-funded to finalise the 2020 Sandstone drilling campaign and feasibility study. With AUD denominated gold price near record levels, Middle Island expects additional Mineral Resources identified by the current drilling campaign to substantially enhance the outcome of the FS, leading to a positive recommissioning decision in late 2020.