Middle Island raises $4m

Gold explorer Middle Island Resources has received commitments to raise $4 million under a share placement, with the proceeds to fund continued drilling at the company’s Sandstone project in Western Australia.

Middle Island is planning at least 13,000 metres of reverse circulation and diamond drilling to in-fill and extend four recent discoveries at Sandstone, as well as upgrade its mineral resources prior to the completion of a pre-feasibility study anticipated in the third quarter of this financial year.

The West Perth-based company said the funds raised would also go towards recommissioning the Sandstone processing plant, which is expected to produce 600,000 tonnes of gold per year.

Middle Island recently identified four new gold deposits – McLaren, McIntyre, Old Town Well and Plum Pudding – as part of its Phase 1 RC drilling program for 2020, which are located within 2.5 kilometres of the processing plant.

The company is expected to report the remaining 30 per cent – or 4,200 metres – of assay results within the next two weeks, managing director Richard Yeates said.

He said the equity raising would allow Middle Island to embark on a substantially expanded Phase 2 drilling campaign.

The company will issue approximately 363.6 million shares priced at 1.1 cents per share, with Bell Potter Securities acting as lead manager.

The offer represents a 15.4 per cent discount to the company’s last closing price and a 17.3 per cent discount to the five-day volume-weighted average price, Middle Island said.

Settlement of the placement is anticipated for May 19.

The company remains in a trading halt, pending a further announcement.