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MINING | Middle Island Resources | ASX

MIDDLE ISLAN Significant gold assets in Western Australia and West Africa


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MINING | Middle Island Resources | ASX

Rick Yeates began putting Middle Island Resources together in February 2010 on the back of his resignation from Coffey Mining, the firm which bought RSG Global – the company he co-founded back in 1987. Under Yeates’ stewardship, Middle Island quickly accumulated gold assets in West Africa before listing on the ASX in December 2010. Over the next few years, the company consolidated its work in Burkina Faso, Liberia and Niger but was soon halted in its tracks in the latter nation, which blocked the purchase of the Samira Hill gold mine. However, the company bounced back from this setback by widening its exploration lens beyond Africa, acquiring the Sandstone Gold Project in Western Australia in July 2016. This asset, along with the Reo Project in Burkina Faso are the company’s two flagship projects today. After having its fingers burnt in Niger, it quickly became imperative for Middle Island to locate a project which would mitigate shareholder exposure to sovereign risk. Consequently, Middle Island’s conservative and deliberated approach saw it go down the safer, albeit well-trodden, path of mining in Western Australia’s gold fields, acquiring


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MINING | Middle Island Resources | ASX


Resource Global Network Sandstone after a meticulous three-year search.

Western Australia “We were also very specifically looking for an advanced near-term production asset that had the potential to generate a cash flow from which we would be able to fund further exploration activity,” says Yeates. “Sandstone was a near-term development opportunity because it has a 600,000-tonne processing plant in reasonably good order, and importantly the cost required to refurbish and recommission that project was achievable.” The Sandstone Gold Project is located around 400km Northwest of Kalgoorlie in a mineralabundant region which has seen sustained surface, underground and open-pit mining activity since the 1890s. In excess of one million ounces (1Moz) of gold has been produced from the Sandstone area by a number of mining companies throughout its extensive history, with gold mineralisation occurring in the triangularshaped greenstone belt. Prior to Middle Island assuming ownership of the project, the last resource statement was undertaken by Troy Resources in 2011, which recognised an aggregate of 11 million tonnes (Mt) at 1.4g/t for 480,000oz Au. Middle Island moved quickly to build on these figures, undertaking its own pre-feasibility


MINING | Middle Island Resources | ASX


ResourceGlobal GlobalNetwork Network Resource study (PFS) in 2016. However, the results

The processing plant at Sandstone has been

concluded that the project’s recommissioning

in care and maintenance since 2010, but

was uneconomical based on the Two Mile Hill

remains in a remarkably healthy condition

and Shillington open-pit deposits alone.

because the area is blessed with fresh ground water.

Yet responding to adversity once again, Middle Island decided to defer a

Therefore, the company will not have to

recommissioning decision and went back

invest vast sums of time and money to

to drilling around the existing deposits to

get the plant back up and running. The

extend and enhance the production profile.

renovation work was fully costed at $9.3 million as part of the PFS.

During the last 10 months the firm has made a number of important discoveries, most

“We are conscious that this [overall cost] is

notably the Two Mile Hill tonalite target,

still a fair hurdle but we are confident we can

which was shown to be mineralised from

get there in the end.”

end-to-end and top-to-bottom after three further diamond drill holes were completed.

With this in mind, Middle Island has pencilled in late December 2017 as the earliest date

“This is a significant result because it

it would be in a position to revisit a mill

highlights the bulk underground mining

recommissioning decision, however Yeates

potential of that target, most likely via sub-

maintains this is dependent on many

level caving, along with the open-pit potential

variables and is by no means guaranteed.

which had already been figured into the original schedule.”

West Africa Middle Island remains active in West Africa,

The other major recent discovery was the

despite exiting from Niger soon after it

identification of gold targets at the Davis

ran into problems, and is still very much

prospect in the Southwest corner of the

committed to the Reo Project in Burkina Faso.

project. “We generated four very cohesive gold-arsenic anomalies down there and have

“The Reo Project was an opportunity that

just completed drilling across two of those,”

was presented by Newmont, as they felt

reveals Yeates.

the project didn’t quite have the potential to come up with the 5Moz target they were

“All these anomalies are within 1km of the

looking for, but we felt it still had plenty of

processing plant which, along with the

merit and were more than content to identify

recently optioned Wirraminna deposit,

a 1-2Moz target.”

could represent a catalyst for the mill recommissioning.”

The subsequent deal was structured as a share sale agreement, meaning that


MINING | Middle Island Resources | ASX

Newmont came on board as a cornerstone

However, the project remains in the early

corporate shareholder in the company.

stages and there is still lots of work to be done in the shape of infill drilling, with most

Yeates stresses that having the support of

of the targets defined at a broad, 400-800

a major international miner was crucial for

metre line spacing, which needs to be infilled.

the company from a marketing perspective, especially during the first five years of its

Middle Island is currently prioritising the

existence.

development of the Sandstone project and is hopeful of getting another company on

“In addition, from a geological perspective the board to do the heavy lifting on the Reo project is at the Northern end of the Boromo project, taking it through to feasibility, and HoundĂŠ greenstone belts, where the

although Yeates affirms it will look to

two coalesce. These have proved very

recommence work in its own right should this

prolific belts in terms of gold exploration and not be possible. discoveries.�


Australian Resource Business Global Network contribute up to 5% of its exploration budget each year to social development initiatives in local communities. “It’s just a recognition that those local communities are our hosts and we effectively stay in their villages while we are there. “Our objective is to become a part of the community wherever we go, whether its Western Australia or West Africa. Rather than simply working with the community we endeavour to integrate ourselves as much as possible. “For an exploration company that is a big ask, but I think we have found a good balance, and certainly I am extremely proud of some of the work we have done.” Yeates is adamant that the current outlook for gold across global markets is very good, based on a pure supply and demand In any case, the company is patiently waiting

equation where demand is currently

three pending renewal permits at Reo and

outstripping the identification of new

is naturally reluctant to pull the trigger on

reserves.

further exploration, especially being in Africa where these things take time.

It is this fundamental belief that is underpinning a growing confidence that

Middle Island is also acutely aware of its

Middle Island’s flagship projects in Australia

position in the West African communities

and Burkina Faso will deliver profitable

which share the land on which it explores,

returns when they eventually come online.

and takes great pride in its commitment to

a j

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Published by Anderson Murray Media Ltd

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RGN | Middle Island Resources  

significant gold assets in Western Australia and West Africa

RGN | Middle Island Resources  

significant gold assets in Western Australia and West Africa