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Middle Island weighs expansion of Sandstone

19th April 2021

By: Esmarie Iannucci

Creamer Media Senior Deputy Editor: Australasia

     

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PERTH (miningweekly.com) – A feasibility study into the re-commissioning of the Sandstone gold project, in Western Australia, as a standalone project has found that the project would require a capital investment of some A$35.49-million.

ASX-listed Middle Island Resources on Monday said that the re-commissioning of the 500 000 t/y processing plant was based on a total mineral resource of some 268 100 oz of gold over a number of deposits. 

“The doubling and upgrading of the openpit mineral resource at the Sandstone project last year delivered a considerable improvement in the potential economic return, compared with the 2016 prefeasibility study, significantly increasing the value of our project and the company in the process,” said MD Rick Yeates.

The standalone feasibility study’s economic outcome was marginal, Yeates added, although cash flow positive at a gold price of A$2 500/oz.

A decrease in the gold price, exchange rate movements, and escalation in the cost of some capital items, personnel, contract mining and fuel since mid-2020 have adversely affected the economic outcomes anticipated in the 2016 study, he added.

Meanwhile, a mill upgrade study, which evaluated the plant being expanded to 750 000 t/y, has found that it could be done at a capital cost of A$25.7-million, after the 500 000 t/y refurbishment.

If the upgrade is completed simultaneously to the refurbishment, the capital cost for the expansion project would be around A$18.5-million.

“What the mill upgrade study suggests is that the 750 000 t/y upgrade, combining Middle Island’s openpit mineral resource with those of peer companies situated within trucking distance of Sandstone, is worth pursuing as the path to rendering otherwise uneconomic projects viable,” said Yeates.

“Irrespective of a consolidation or improved market conditions, the company’s other openpit targets and underground deposits represent the opportunity for organic growth, as amply demonstrated by the success of last year’s feasibility drilling programme, which delivered five new satellite deposits.

“Work on these opportunities is being considered,” he added.

Edited by Creamer Media Reporter

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