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2023 ReportPeers and competitors of Major Drilling Group International:
De Grey Mining LimitedA N N U A L R E P O R T
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Middle Island
RESOURCES LIMITED
C o r p o r a t e D i r e c t o r y
ABN 70 142 361 608
DIRECTORS
Peter Thomas
(Non-Executive Chairman)
Brad Marwood
(Executive Director)
Bruce Stewart
(Non-Executive Director)
COMPANY SECRETARY
Dennis Wilkins
REGISTERED OFFICE
Suite 2
11 Ventnor Avenue
West Perth WA 6005
SHARE REGISTER
Automic Pty Ltd
Level 2
267 St Georges Terrace
Perth WA 6000
Telephone: 1300 288 664
www.automicgroup.com.au
AUDITORS
Elderton Audit Pty Ltd
Level 2
267 St Georges Terrace
Perth WA 6000
EMAIL
info@middleisland.com.au
INTERNET ADDRESS
PRINCIPAL PLACE OF BUSINESS
www.middleisland.com.au
STOCK EXCHANGE LISTING
Middle Island Resources Limited
shares are listed on the Australian
Securities Exchange (ASX code: MDI).
Suite 1
2 Richardson Street
West Perth WA 6005
POSTAL ADDRESS
PO Box 1017
West Perth WA 6872
SOLICITORS
Williams and Hughes
28 Richardson Street
West Perth WA 6005
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2021Operations Overview
2021
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Operations Overview
Directors’ Report
Corporate Governance Statement
Auditors Independence Declaration
Consolidated Statement Of Profit Or Loss And Other Comprehensive Income
Consolidated Statement Of Financial Position
Consolidated Statement Of Changes In Equity
Consolidated Statement Of Cash Flows
Notes To The Consolidated Financial Statements
Directors’ Declaration
Independent Auditors’ Report
ASX Additional Information
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M I D D L E I S L A N D R E S O U R C E S L I M I T E D A N N U A L R E P O R T 2 0 2 1
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O p e r a t i o n s O v e r v i e w
CORPORATE
Finance
Middle Island Resources Limited (ASX: MDI, Middle Island or the Company), held aggregated cash and liquid investments of
A$3.5m as of 30 June 2021, comprising A$3.2m in cash and A$0.3m in Tajiri Resources Corporation (TSXV: TAJ) ordinary
shares. A further 21.6 million options remain to be exercised, 1.3 million options to be exercised before 8 November 2021
and 20.3 million representing further possible proceeds of A$3,642,376 prior to the option exercise date of
31 January 2022.
Capital Structure
As at 30 June 2021 the Capital Structure comprised 122.4 million ordinary shares and 21.6 million unlisted options.
Acuity Controlled Placement Agreement
On 30 September 2020, the Company announced that it had utilised the Controlled Placement Agreement (CPA) with
Acuity Capital (refer to ASX Releases dated 31 July 2017, 27 March 2020 & 30 September 2020) to raise A$800,000
(inclusive of costs) by agreeing to issue 38,095,000 ordinary MDI shares to Acuity Capital at an issue price of A$0.021. The
issue price represented a 22% premium to the 15-day VWAP of A$0.017 to 30 September 2020 and a 31% premium to
the last closing price of A$0.016 on 30 September. Settlement occurred on 2 October 2020 with the shares being issued
out of the Company’s LR 7.1 capacity.
The Acuity CPA request was triggered in June 2020, when Middle Island was not aware of the extent to which options would
be exercised, to ensure the Company had sufficient working capital to complete the expanded feasibility program and study.
Once it became clear that the exercise of options would easily accommodate these anticipated costs, the request was suspended
and ultimately closed.
Demerger of Barkly Copper-Gold Assets
As per ASX release of 9 March 2021, the Board resolved to demerge Barkly Operations Pty Ltd (BOPL) (Demerger) and
ultimately IPO BOPL on the ASX (IPO), subject to shareholder approval at a Middle Island Shareholder Meeting. BOPL, a
wholly-owned subsidiary of Middle Island, is the holder of the Barkly copper-gold project (Barkly) in the NT (refer below for
further details).
Following the disappointing Sandstone gold project feasibility study outcome, the views of various stakeholders were canvassed
as to the merits of demerging Barkly. A final decision is yet to be made as to whether to spinout or not. Other options are
being considered and each needs to be assessed in the context of all prevailing circumstances. If the spinout is put to
shareholders, the intent is that Eligible Shareholders of MDI will receive free shares in BOPL in the same proportion as their
respective holdings in Middle Island, as well as a priority entitlement to apply for shares in any Barkly IPO.
No assurance is given in relation to the likelihood of BOPL making application to list or, if made, such application being
successful.
Annual General Meeting
At the Company’s AGM held on 26 November 2020, in excess of 96% affirmative votes were received on all resolutions.
Director Appointment
As per ASX release of 21 January 2021 Non-Executive Director, Mr Beau Nicholls, resigned from the Board of Middle Island,
effective 31 January 2021. Mr Nicholls continues to provide his expertise to the Company as a Technical Geologist on a
casual ‘as needs’ employee basis. As Mr Dennis Wilkins was appointed as an alternate director for Mr Nicholls, his
appointment as an alternate director also ceased on 31 January 2021.
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M I D D L E I S L A N D R E S O U R C E S L I M I T E D A N N U A L R E P O R T 2 0 2 1
During the quarter to 30 June 2021, the Managing Director, Mr Rick Yeates and the Company
entered into discussions about MDI’s need for a Managing Director. The discussions were
concluded post end of quarter, with the position of Managing Director (and hence Rick Yeates in
that role) being made redundant. Brad Marwood, a Non-Executive Director, agreed to become a
temporary part time Executive Director to assist with day-to-day management of the Company, and
Mr Bruce Stewart was appointed as a Non-Executive Director.
Strategy
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To increase the value of the Barkly copper-gold project via exploration; and
To continue to pursue opportunities to realise a return from its Sandstone assets by, inter alia,
exploring the project’s potential to deliver new discoveries and seeking to amalgamate proximal
holdings and resources though acquisitions and corporate activity
BARKLY COPPER-GOLD PROJECT (100%) – NORTHERN TERRITORY
Middle Island’s 100%-owned Barkly Project comprises 13 Exploration Licences covering an aggregate
5,220km2, as shown in Figure 1. The Barkly tenements are focussed on an interpreted eastward
extension of the economically prospective Warramunga Formation, referred to as the East Tennant
Ridge, under shallow Georgina Basin cover. This model is consistent with major recent mineral
discoveries in basement rocks reported from ‘blind’ targets veneered by younger sedimentary cover
in WA’s Paterson Province (Winu and Havieron) and extensions of the prolific Victorian gold belts
under Murray Basin sedimentary cover (Four Eagles and Tandarra). These regional examples were, at
least in part, similarly generated as a result of extensive, collaborative, government research projects.
Significant examples of ‘blind’ IOCG deposits discovered beneath substantial sedimentary cover
include BHP’s Olympic Dam and Oak Dam deposits in South Australia, which are respectively
overlain by approximately 400m and 900m of post-mineral sedimentary cover.
The Georgina Basin extends east from Tennant Creek across the Queensland border to Mount Isa
and is subdivided by several basement highs into smaller sub-basins. The principal basement high,
the East Tennant Ridge, runs northeast under the Barkly Project area, where the interpreted depth of
cover ranges from 100m to 250m along the ridge axis, increasing to ~800m on the flanks of the
ridge.
The East Tennant Ridge is of particular significance in that, aside from phosphate exploration within
the overlying Georgina Basin, previous exploration activity within the Proterozoic basement rocks is
extremely limited or non-existent.
Figure 1. Middle Island tenure comprising the Barkly copper-gold super-project, NT.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2021
Crosswinds Copper Prospect
During a reconnaissance site visit in December 2020, Middle Island discovered the Crosswinds copper prospect, located
immediately adjacent to the sealed Barkly Highway approximately 13km southeast of Barkly Homestead, within EL32297.
The mineralisation comprises predominantly malachite (copper carbonate), with subordinate chrysocolla (copper silicate)
and tenorite (copper oxide), exposed in a table-drain adjacent to the Barkly Highway (Figure 2).
Figure 2. Crosswinds Copper Prospect - Malachite (copper carbonate) mineralisation exposed in table drain.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2021 Mineralisation is exposed over an interval of 130m along a table drain, as shown in Figure 3.
Figure 3. Crosswinds Copper Prospect – Plan of chip sampling traverse and pXRF results.
The copper mineralisation is intimately associated with ubiquitous secondary calcrete and silcrete
development, reflecting surface weathering of limestones comprising the Cambrian-age Georgina
Basin.
Spot pXRF readings taken at the time of discovery range from 24.8% to 76.2% Cu. These
results were confirmed by subsequent composite chip samples, collected over continuous 20m to
65m intervals, ranging from 0.63% to 0.93% Cu and aggregating 130m at 0.76% Cu (refer
ASX Release dated 23 December 2020).
The Crosswinds prospect is interpreted to represent secondary copper mineralisation that
has migrated up growth faults that extend from primary copper-gold mineralisation
within the Proterozoic basement rocks, through the otherwise unmineralised Cambrian
Georgina Basin sediments to precipitate at surface, as shown diagrammatically in Figure 4.
Figure 4. Crosswinds Copper Prospect – Diagrammatic cross-section of interpreted setting.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2021Operations Overview Tenure
Following discovery of the Crosswinds copper prospect in December 2020, application was made for a further two
exploration licences (EL32626 & EL32627) to secure tenure immediately to the south of the discovery. Similarly, on release
of the initial results from the Government diamond core drilling, application was made for a further exploration licence
(EL32680) to secure potential strike extensions of copper mineralisation encountered within diamond core hole NDIBK04.
These applications bring the aggregate Barkly Project tenure to 13 exploration licences covering 5,220km2.
Planned Exploration
During the June 2021 quarter, Middle Island attended the unveiling of the Minex CRC East Tennant drill core at the AGES
conference in the Northern Territory. Ten deep stratigraphic holes (~4,000m), completed by Minex CRC under the National
Drilling Initiative (NDI), intersected prospective Proterozoic basement rocks at between 80m and 200m depth (Figure 5).
Pre-collared diamond hole NDIBK04, situated along strike from Middle Island’s tenure, intersected localised semi-massive
copper mineralisation, along with over 300m of disseminated to blebby sulphides to end of hole.
Following the release of pre-competitive government drilling data, Middle Island submitted two NT Government co-funding
applications to complete detailed airborne magnetic and ground gravity surveys, along with possible airborne
electromagnetic survey, during the 2021 dry season. Middle Island was successful with the airborne magnetic survey
application, which will provide a grant of up to A$100,000 towards survey costs. The focus of exploration is to refine
existing geophysical (magnetic and gravity) anomalies, consistent with IOCG-style mineralisation, prior to drilling in 2022.
Due to geophysical contractor availability and COVID-19 travel restrictions, the surveys have necessarily been deferred until,
earliest, December 2021.
Figure 5. East Tennant borehole locations completed by Minex CRC - base layer is gravity coverage,
draped over the first vertical derivative magnetic coverage.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2021 SANDSTONE GOLD PROJECT (100%) – WESTERN AUSTRALIA
The Sandstone gold project is shown in Figure 6.
Figure 6. Sandstone Gold Project
2020-21 Drilling Campaign
During the March 2021 quarter, the Company completed Phase 3 of the substantial 2020/21 drilling
campaign, collectively comprising some 59,000m of exploration, resource definition and sterilisation
drilling (see Figure 7) at the Company’s 100%-owned Sandstone gold project in Western Australia.
The drilling campaigns proved extremely successful, defining five new satellite deposits, with better
intercepts including:-
» McIntyre:
23m @ 2.08g/t, 24m @ 1.95g/t & 18m @ 2.47g/t Au
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Ridge:
4m @ 99.5g/t, 4m @ 50.5g/t, 9m @ 5.41g/t, 7m @ 6.49g/t & 4m @ 5.32g/t Au
» McClaren:
4m @ 90.6g/t, 8m @ 3.35g/t, 3m @ 29.8g/t, 4m @ 5.82g/ & 11m @ 2.11g/t Au
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Plum Pudding: 11m @ 22.5g/t, 7m @ 24.1g/t, 17m @ 8.16g/t & 7m @ 19.0g/t Au
» Old Town Well: 3m @ 20.6g/t, 14m @ 2.22g/t & 6m @ 3.23g/t Au
As part of the Phase 3 RC drilling campaign, infill and extension resource definition drilling was
variously completed at the Ridge, Shillington, Eureka, McIntyre and Goat Farm deposits. The results
were consistent with previous data, but the Mineral Resource estimates are yet to be updated.
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MIDDLE ISLAND RESOURCES LIMITED ANNUAL REPORT 2021Operations Overview Figure 7. Sandstone Gold Project - Open pit gold deposits and targets assessed in 2020/21.
Resource Estimation
Mineral Resource estimates were completed for all existing and new deposits at Sandstone (refer to ASX Releases variously
dated 24 July 2020, 14 August 2020, 2 October 2020, 21 October 2020 and 17 November 2020). The drilling campaigns
defined five new satellite gold deposits and deposit extensions (Figure 2). This work resulted in a doubling of the
open pit Mineral Resources, matching the anticipated best-case outcome.
As at 30 June 2021, Mineral Resources at the Sandstone Project aggregated 784,300oz gold, as shown in Table 1.
Feasibility and Mill Upgrade Studies
As summarised in the ASX Release of 19 April 2021, Middle Island completed the Feasibility Study (FS) into
re-commissioning the Sandstone gold project on a stand-alone basis. At that time, despite every indication otherwise,
recommissioning as a stand-alone project could not be justified at a gold price of
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