The pieces are coming together for ASX-listed Middle Island Resources with positive developments from its ongoing feasibility study aimed at bringing the company’s wholly owned Sandstone gold processing plant back to life.
Located in the Goldfields, the processing plant at Sandstone was constructed in 1994 with a capacity of 250,000 tonnes of ore per annum. It was upgraded to a 600,000-tonne capacity in 1999 and operated through to 2010 before being mothballed by prior owners.
The ongoing feasibility study to recommission the plant and the scoping study on expanding the feed to 750,000 tonnes of ore per annum, could be transformational for Middle Island. The two studies are due for release in the coming weeks and will no doubt be highly anticipated by the market.
Final contract mining costs have now been received and can be incorporated into the feasibility study. Technical work such as pit geotechnics, water supply, tailings storage, metallurgy and environmental aspects of the project has now been concluded without any material issues according to the company.
Middle Island is initially planning to grow the mineral resources within the company’s 100 per cent owned concessions before generating ore for the plant from third parties within economic trucking distance of the project.
The company is delivering on the resource expansion front with an aggressive drilling campaign in 2020 that doubled Sandstone’s open pit mineral resources to 746,500 ounces of contained gold from numerous deposits within the project tenure. Five new shallow satellite deposits were discovered as part of the campaign.
Management reported the scoping study that is looking at the expansion opportunity for the plant is already pointing towards a positive outcome should ore from third parties be secured. Middle Island remains in discussions with other parties as it looks to lever the Sandstone plant’s location amongst numerous stranded deposits.
It says there are at least 15 gold deposits within 100 kilometres of Sandstone that may require a processing facility. In total, this equates to some 1.8 million ounces that could be looking for a home.
The company also enjoys significant infrastructure advantages on site, including existing tailings storage, bore fields, fuel tanks, workshops, laboratory and mine equipment.
Middle Island sees the plant as a pathway to generate cashflow to self-fund exploration and provide dividends for shareholders. Positive economics from the feasibility and scoping studies could end up being a watershed moment for the Perth-based explorer.
Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au
By Matt Birney
