- Middle Island Resources’ (MDI) shares have dropped on the market this morning after posting an underwhelming feasibility study for its Sandstone gold project in WA
- The company is aiming to re-commission the project, but due to a low gold price, movements in exchange rates, and increasing capital and contracting costs since mid-2020, the economic outcome from the Sandstone feasibility study fell below expectations
- The latest mineral resource estimate across these 10 deposits shows 7.38 million tonnes of resources at an average grade of 1.3 grams per tonne of gold for 268,100 ounces of gold
- On the market this morning, Middle Island is down 29.8 per cent and is trading at 16.5 cents per share
Shares in Middle Island Resources (MDI) have taken a beating today after the company released an underwhelming feasibility study for its Sandstone gold project in WA.
The study comes alongside a mill upgrade study for the project as Middle Island works to re-commission the project.
However, the gold explorer said a falling gold price, movements in exchange rates, and increasing capital and contracting costs since mid-2020 mean the economic outcome from the Sandstone feasibility study fell below expectations.
Drilling work over 2020 increased the number of open-pit deposits assessed in the feasibility study to 10.
According to Middle Island, the latest mineral resource estimate across these 10 deposits shows 7.38 million tonnes of resources at an average grade of 1.3 grams per tonne of gold for 268,100 ounces of gold.
Of this, almost 73 per cent of the total resource falls under the indicated\ category, with the rest reported as inferred.
Notably, all phase two drilling includes the latest open-pit mineral resource estimates.
Middle Island has stated that recommissioning as a stand-alone project is not justified at the current gold price of less than $2300 per ounce. As a result, the company did not declare an ore reserve.
“The doubling and upgrading of the open pit Mineral Resources at the Sandstone project last year delivered a considerable improvement in the potential economic return, compared to the 2016 PFS, significantly increasing the value of your project and company in the process,” Managing Director Rick Yeates said.
“What the mill upgrade study suggests is that the 750,000 tonnes per annum upgrade, combining MDI’s open-pit Mineral Resources with those of peer companies situated within trucking distance of Sandstone is worth pursuing as the path to rendering otherwise uneconomic projects viable,” he added.
On the market this morning, Middle Island is down 29.8 per cent and is trading at 16.5 cents per share at 11:18 am AEST.