Middle Island Resources is set to restart targeting and drilling at its Sandstone gold project in Western Australia’s Murchison region in a bid to add ounces and fine tune the economics of its recently delivered project feasibility study. The company is aiming to unearth at least 25,000 ounces of new resources on its own ground or from a nearby third-party source.
A potential stepping stone has been identified in the form of five near-mill geochemical targets. These include Jew Well Central, 10 kilometres south of the plant, where there is 5 km of untested greenstone belt.
Middle Island estimates more than 70 per cent of the Sandstone region is covered by transported cover with historical soil geochemistry ineffective. The company will utilise low cost first-pass auger drilling geochemistry to penetrate the top 20m to define gold targets below transported cover.
Managing director Rick Yeates said aircore and RC drilling would be used to follow-up any identified targets from geochemical work.
Extensional and infill resource definition drilling is also planned on several existing deposits.
Aggressive exploration in 2020 succeeded in expanding open pit resources to nearly 270,000 ounces at an average gold grade of 1.2g/t in 10 deposits that featured in Middle Island’s recent Sandstone feasibility study.
The study pointed to a cash flow positive but marginal project using a A$2,500/ounce gold price. Middle Island wants to lift available resources to support an expansion of its Sandstone gold plant from 600,000 tonnes per annum to 750,000tpa at modest capital cost. The higher throughput would “significantly lower operating costs”, according to the company.
Middle Island has also reported inferred underground resources of about 500,000 ounces at its Two Mile Hill deposits north of the Sandstone plant.
Planning is underway for a 700m-deep diamond hole to probe untested portions of the tonalite-hosted mineralisation below existing resources at Two Mile Hill. The deep diamond hole will test below a resource where an earlier diamond hole intercepted 160m grading 2.13g/t gold.
Two Mile Hill and Shillington dominate the mineral resource which Middle Island detailed in March this year.
The total open-pittable resource was put at 7.38 million tonnes grading 1.2 g/t gold, while the Two Mill Hill and Two Mile Hill BIF deposits totalled 14.2 Mt at 1.1 g/t, with banded iron formation, or “BIF” deposits representing 200,000 tonnes grading 3.1 g/t.
Proposed auger drilling will take place on the Hospital Hill, Three Mile and Central target on the Sandstone permits and at North target and central target on the Jew Well permit.
The focus on Sandstone gold has sharpened for Middle Island which disclosed in its March quarter report that it has set in motion a planned demerger of the company’s Barkly copper-gold project in the Northern Territory.
However, in an update last week Middle Island said 10 deep strategic holes completed by Minex CRD under Australia’s federally-funded National Drilling Initiative returned positive indicators and the company had secured a new exploration licence of 809sq.km, taking the holding to a total 5,220sq.km.
The Barkly update said of the demerger proposal that opposing views have been put by both shareholders and a market participant.
Middle Island said: “Those views are the subject of ongoing consideration and further reasoned views of shareholders are encouraged.”
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By Matt Birney
