Middle Island Resources Share Price Quiet on Maiden Resource Estimate

Middle Island Resources Share Price Quiet on Maiden Resource Estimate

The Middle Island Resources Ltd [ASX:MDI] share price is steady today despite news of the prospective miner’s latest resource estimate at the Sandstone Gold Project in WA.

The MDI share price has been in a steady decline since reaching its peak of 26 cents per share at the end of July.

mdi asx

Source: Tradingview

At time of writing there has been no change in the MDI share price, which is trading at 1.7 cents per share.

And the price of gold has sunk 0.51% or US$9.50 to US$1,907 per ounce.

High grades don’t always translate to high volume

MDI today announced its latest resource estimate from the Plum Pudding and Old Town Well satellite open pit deposits at its Sandstone Gold Project.

asx mdi 1

Source: Middle Island Resources

Combined, Plum Pudding and Old Town Well will add another 24,200oz of gold to the project.

Bringing the total resource estimate at Sandstone to 692,000 ounces.

Perhaps this is a little disappointing when Old Town Well returned results of:

  • 3m at 20.6 grams of gold per tonne (g/t)
  • 14m at 2.22g/t
  • 6m at 3.23g/t

REVEALED: What’s Next for Aussie Gold Stock Prices? Learn more.

90% of which is classified in the indicated category — the second highest level or geological confidence when estimating a resource size.

MDI said the two satellite sites are the first of five new satellite open pit deposits quantified by Middle Island’s 50,000 metre drilling campaign in 2020.

So, why the lack of share price action?

We’ve noted similar reactions in MDI’s share price before.

The thing is, today’s resource estimate is barely a drop in the ocean when it comes to large-scale gold production.

See the pink square on the map above?

That’s MDI’s processing plant, capable of processing 600 kilotons per annum.

Plum Pudding and Old Town Well combine for 770ktpa.

Meaning they add just over a year in theoretical mine life to the project (by my calculations).

Not a bad thing, just something investors aren’t overly excited by.

When will we see the share price move?

Of the remaining three satellite deposits, MDI said resource estimates would be progressively updated when the assay laboratory backlog is resolved.

The thing to note here is that this includes the McIntyre satellite deposit.

The deposit returned gold grading similar to Old Town Well, but the intersections appear to be significantly larger.

For example:

  • 13m at 1.94g/t
  • 9m at 3.53g/t
  • 26m at 1.38g/t
  • 18m at 1.36g/t

So, there could be potential for a more significant change in the share price when we see these results.

There still might be more of an upside to MDI’s share price too, with Australia tipped to soon knock China off the top spot as the undisputed global leader in gold exploration, mining, and production. In our latest report, gold expert Shae Russell breaks down what Australia becoming the new gold ‘epicentre’ means for gold and your Aussie gold stocks. Click here to download the free report.

Kind regards,  

Lachlann Tierney

For The Daily Reckoning Australia