Despite failing to secure a majority interest in the Samira Hill gold mine, in Niger, ASX-listed Middle Island Resources’ board plans to focus on pursuing other projects to increase shareholder value, as well as to advance the company’s existing gold projects in West Africa.

Mining Weekly reported last month that the acquisition agreement with TSX-listed and West African-focused gold producer Semafo, over the Samira Hill pro- ject, lapsed at the start of October, prompting Middle Island Resources to re-enter negotiations with the Niger government to secure government support for the acquisition.

Middle Island Resources said that it had also failed to reach a commercial outcome to these negotiations by the October 31 deadline, despite its dedicated efforts. The Niger government had instead sought to modify the commercial terms originally agreed upon by Middle Island Resources and the vendor, rendering the proposed new terms outside what was deemed commercially viable by Middle Island Resources.

Middle Island Resources MD Rick Yeates tells Mining Weekly that the company’s efforts to secure a majority interest in the Samira Hill gold mine will con- tinue, but it will also have to look beyond that particular acquisition, should it not eventuate, particularly as the West African exploration season has started.

“Assuming extension applications on the Tialkam and Deba permits at the company’s Sirba goal project, about 100 km south-west of the capital Niamey, in Niger, are forthcoming in the near term, the primary objective of Middle Island Resources will be to bring the Tialkam South resource into reserve status and embark on mine permitting to toll mill the ore through the proximal Samira Hill processing plant as quickly as is practically possible.”

The Sirba project comprises seven granted exploration permits covering an aggregate area of 2 296 km2, in which the company’s interests range from having a 100% interest to the right to earn 70% through stage exploration expenditure.

Yeates says bringing the Tialkam South resource into reserve status will involve infill reverse circulation percussion drilling, geotechnical drilling, more comprehensive metallurgical testwork and bulk density determinations, as well as social and environmental baseline studies.

A budget of about A$2.04-million has been allocated for this purpose on the Sirba project during 2013 and 2014.

While the Middle Island Resources priority lies in developing the Tialkam South prospect, a similar approach will be adopted for the Sefa Nangue prospect within the Deba permit.

Yeates says this approach is consistent with the company’s strategy – prior to the Samira acquisition opportunity – as it provides the shortest route to a cash flow without the need for significant capital expenditure.

Middle Island Resources will also focus on the Reo gold project, about 150 km west of the capital city Ouagadougou, in Burkina Faso.

The project comprises seven granted exploration permits collectively covering 1 166 km2, in which the company has a 100% interest.

Middle Island Resources has identified a significant target at the Madi Zone, within the K4/K5 prospect of the Reo project. It has also identified a further four satellite deposits within a 4 km radius and at the high-grade Morley prospect, 20 km to the north.

These targets collectively represent a significant standalone resource opportunity, says Yeates, adding that indicative metallurgy suggests conventional carbon-in-leach gold recoveries of up to 95%, creating the option of evaluating a less capital intensive, heap leach processing route, should a large low-grade deposit be defined.
Besides advancing its existing projects in West Africa, Middle Island Resources is actively seeking new advanced project opportunities in what is very much a “buyers market”, he says.
The company’s short-term plans entail completing a drill-out and studies on the Tialkam South inferred resource, which is currently scheduled for the first quarter of 2014, as no work will commence until the Tialkam and Deba permit extensions have been approved.

“We also hope to undertake further staged auger and air core drilling within the K4/K5 target at the Reo gold project, in Burkina Faso, to better understand the resource potential of this significant target,” notes Yeates.
The longer-term plans for 2014 at the Reo gold project will involve staged air core and reverse circulation drilling campaigns and further metallurgical studies on the K4/K5 and Morley prospects, which collectively represent a significant resource target.

A budget of about A$1.94-million has been allocated for this purpose on the Reo project for 2013 and 2014,” concludes Yeates.