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NEWS

Middle Island keeps the

Sandstone puzzle moving

ections of the gold exploration sector are gion around a central processing hub,”
Sstarting to feel love again from inves- Yeates said, highlighting that the com-
tors and Middle Island Resources Ltd is pany’s plant was the only one within a
hanging in there waiting for its turn. 150km radius.
“Just at the moment the market is re- “That consolidation will logically com- Rick Yeates
warding exploration over production prise four or five companies all within a “Spectrum doesn’t even have a re-
more and we hope to get stuck into a 100km radius, it is all not quantified yet source yet, but quite reasonably they
plethora of targets that we do have,” Mid- but potentially there is 2 moz gold there are anticipating a maiden resource out
dle Island managing director Rick Yeates which would give us decades of produc- of that at some stage. Spectrum is 90km
told Paydirt. tion; that is what we aspire to. south and we are the nearest mill to
Middle Island has been trying to con- “The first piece of the puzzle is re- them; naturally we have been talking to
solidate the region within a 100km radi- commissioning the mill, whether that is them.”
uss of its Sandstone processing facility through exploration or consolidation is Spectrum expects to announce a re-
for more than six months. Efforts to date the question. We have a plethora of tar- source from Penny West later this year,
have been stymied by Alto Metals Ltd’s gets, also in front of us is bridging that putting it on course to assess develop-
reluctance to accept an offer first made gap between open pit and underground ment options based on a high grade,
by Middle Island in April. inventory. If we get that underground high margin operation.
An increased offer of six Middle Is- inventory to work that is 10-15 years of Middle Island’s processing hub at
land shares for each Alto share – a 93% production,” he said. Sandstone could potentially offer Spec-
premium on the original takeover bid in About 90km south of Sandstone, trum a quick route to production and
March – is valid to the end of the month. Spectrum Metals Ltd has been lighting afford it the opportunity to cash in dur-
If the deal gets done, a game-chang- up the Youanmi district since it acquired ing an anticipated sustained run in gold
ing gold play in Western Australia’s the Penny West gold project in Decem- prices.
Sandstone region will be unveiled. ber. Yeates can’t see why the gold price
As a standalone entity, Middle Is- In excess of 22,360m of RC drilling wouldn’t continue to head north, which
land’s backbone is the Sandstone pro- has been completed at Penny West this only adds to his current frustrations.
ject currently consisting of a 600,000 year, with two diamond rigs for a further “It is very frustrating that the enter-
tpa processing facility accompanied by 4,000m in progress at the time of print. prise value per resource ounce doesn’t
four defined open pits and a resource of Yeates said it was the exploration suc- include the value of the mill or the 1-1.5
537,000oz gold. cess of the likes of Spectrum – 14m @ moz gold exploration target. Against our
Meanwhile, seven targets have been 14.5 g/t gold from 124m, including 8m peers, if we were valued at circa $38/oz
identified for priority exploration and a @ 23.4 g/t, 6m @ 47.7 g/t from 150m, rather than $6/oz, it would give us a mar-
further 19 untested targets Middle Island including 2m @ 140 g/t, 9m @ 24.1 g/t ket cap probably north of $50 million,”
is keen to follow up on. from 265m including 3m @ 69.3 g/t, 11m Yeates said.
Adding Alto’s four deposits - all within @ 25.8 g/t from 120m, including 6m @ “That is very frustrating, there is huge
30km of Middle Island’s plant - would 46.8 g/t – which had sparked interest in value to be had in the stock given where
create an enticing proposition to reboot the exploration sector. the gold price is at the moment.”
the mill for $10.3 million (including own- “Exploration is being rewarded, I think
er’s costs and contingency). that is a positive for industry, but that val- – Mark Andrews
“What we are putting out there is a ue is being very selective with the likes of
three-stage strategy and fabulous op- Bellevue Gold [Ltd] and Spectrum repre-
portunity to consolidate an entire re- senting the value out there,” Yeates said.

Spectrum Metals Limited (SpX) is looking to expedite All parties have filed appearances to the Supreme Court
court proceedings in relation to claims by Venus Metals Proceedings, with Spectrum taking all necessary steps to
Corporation Ltd (VMC) of alleged breaches of “fiduciary for a trial to be listed no later than Q1 2020.
duty, breaches of confidence and misuse of Informa- “The SPX board strongly reiterates its view that the claim
tion” that the latter provided to Venus Metals provided made by Venus Metals Corporation Ltd is without merit
to Davide Bosio and paul adams of DJ Carmichael in and the company is further considering any counterclaim
July and august 2018. it may have against VMC in the circumstances,” Spectrum
Venus started proceedings in the Supreme Court of stated in an announcement.
Western Australia against Spectrum and its managing Spectrum has ignited interest in the market this year with
director Adams, DJ Carmichael, Bosio, as well as Spec- its exploration success at Penny West and seen its share
trum’s wholly owned subsidiary Zebra Minerals Pty Ltd price reach a high of 11c after starting the year trading at
in relation to Zebra Minerals’ acquisition of the Penny 1c/share. At the time of print, Spectrum stock was 7.5c/
West gold project. Adams spent 12 years at DJ Carmi- share after it announced a maiden resource of 355,000oz
chael as director, head of equities research. @ 13.8 g/t gold.

Page 14 NOVeMBeR 2019 aUSTRaLIa’S PaYDIRT