(MENAFN - ProactiveInvestors - Australia) Middle Island Resources (ASX: MDI) is aggressively pursuing its 1.1 million ounce gold target in West Africa, positioning itself closer to achieving this with the delivery of more high grade intercepts from the K4/K5 Prospect at the Reo Gold Project.
Importantly, the K4/K5 is one of the prospects, along with Morley, that has previously been confirmed as a substantial target capable of reaching the minimum resource objective.
A program of rotary air blast drilling has produced new highlight assays of 8 metres at 1.86 grams per tonne (g/t) gold, including 4 metres at 3.16g/t, as well as 4 metres at 12.2g/t and 4 metres at 3.4g/t.
Demonstrating the consistently high grade nature of the K4/K5 prospect, previously reported intercepts include 18 metres at 2.51g/t gold, 13 metres at 2.23g/t, 4 metres at 16.2g/t, 4 metres at 14g/t, and 12 metres at 4.11g/t.
Mineralisation occurs over a 6 kilometre diameter area of the composite K4/K5 target, being variously present in the northern (K4), north-eastern and southern (K5) areas of the prospect.
Middle Island will prioritise the K4/K5 prospect for follow-up rotary air blast, reverse circulation percussion and diamond core drilling early in the 2012-13 field season.
The reconnaissance and infill auger drilling campaign at Reo has now been completed, representing a campaign total of 9,341 holes (69,528m), with the results for some 1,720 holes still pending.
Fast tracking assays
To speed up the advance towards the delivery of a minimum 1.1 million ounce resource base in West Africa, Middle Island has purchased its own dedicated, containerised, sample preparation laboratory from South Africa, which will remove dependence on over-committed West African laboratories.
The facility will be initially located in Ouagadougou, the capital of Burkina Faso, to process samples generated from the company's Reo Project in Burkina Faso, and the Nassil and Dogona projects in neighbouring Niger.
The facility will provide the flexibility to air freight sample pulps to any recognised laboratory in the world for analysis, greatly reducing sample turnaround times.
Excess capacity in the sample preparation facility will be offered to peer-group companies to defray operating costs, with several companies already expressing strong interest in doing so.
News flow is expected to ramp from July to October as a more substantial flow of exploration results are released.
Reo
The Reo Project covers 1,166 square kilometres and includes 7 permits plus some additional ongoing tenure consolidation. Reo is located 150 kilometres west of Ouagadougou in Burkina Faso, in an area with excellent access and infrastructure.
The highest priority has been assigned to the Morley and K4/K5 prospects which were identified from soil sampling and airborne magnetics.
Morley encompasses a soil anomaly that carries elevated gold values of up to 500 parts per billion over a 3,250 by 800 metre strike zone, and contains a series of 6-12 metre wide stacked lodes that trend from east to west, and dip to the north.
K4/K5 encompasses an artisanal field that was recently worked by 10,000 miners who were evicted in mid-2011.
The field is covered by transposed laterite and comprises the largest and highest tenor soil anomaly within the Reo Project area.
Analysis
Promisingly, Newmont Mining Corporation (NYSE: NEM) has a 10% stake in Middle Island Resources, also providing a project generation opportunity for the company.
Institutions hold 18% of the company, the support from this sector of the market is telling and a strong sign of the upside valuation potential viewed in the company.
The company is currently developing four gold projects in Burkina Faso, Niger and Liberia.
Middle Island has a minimum exploration target of 1.1 million ounces of gold in resources by December 2012.
A 1 million ounce resource base could ultimately translate and evolve Middle Island into an 80,000 to 100,000 ounce a year producer, which is a strong start to critical mass required in West Africa.
The company looks capable of being re-rated in market valuation and share price in 2012 as exploration activity ramps up and as it increases the size of the global resource base.
