Proposed hub to revitalise area

Pending the acceptance of a hostile takeover bid for Alto Metals, Middle Island Resources is looking to progress plans to create a gold processing hub in central Western Australia.

The proposed hub would centre around the Sandstone Mill, which Middle Island acquired in mid-2016 and has since devised plans to turn into a regional gold facility that would potentially take advantage of up to 15 deposits comprising 1.2 million ounces of gold from its own tenements and the surrounding area.

Middle Island Managing Director Rick Yeates said it would be the only processing plant for 160km and would take in a number of deposits, predominantly within a 100km radius, that would otherwise be stranded.

“It would be very good for the region if it was to go ahead,” he said. “Sandstone is an absolutely delightful town which is well run by a very competent shire, but they have had a rough ride of late and had to close the primary school in 2014.

“This type of project would be great for the Sandstone community and would reinvigorate an economically and socially significant part of Western Australia.”

Although there are a number of potential benefits associated with the project, the stalled takeover of Alto Metals has presented a hurdle.

According to Mr Yeates, the explorer’s board has rebuffed or ignored Middle Island’s multiple attempts to engage since late 2016.

Mr Yeates said the success and longevity of the gold processing facility would primarily rely on Middle Island’s own deposits, but would need additional feedstock from other deposits to collectively provide the critical mass necessary to justify a sustainable operation.

Getting to that point could be dependent on Alto Metals’ shareholders accepting the hostile takeover bid launched at the start of March, something Mr Yeates said was commercially logical and highly beneficial to all involved.

“It will be in the best interests of both sets of shareholders to combine assets, and I am con dent Alto shareholders will see this as a great opportunity,” he said.

“I would have much preferred it to be a friendly merger rather than a hostile one, but we just haven’t been able to get any meaningful engagement from the majority of Alto directors that have come and gone over this period despite giving them every opportunity, so we felt it necessary to let the Alto shareholders decide.”

Should the bid be successful, Mr Yeates said the next step would be to review Alto Metals’ estimates of its deposits.

“We would complete pit optimisations on its deposits using our costings, which would include haulage costs, and then incorporate those into the schedule to come up with a reserve position for the combined assets,” he said.

“The next step is obviously making sure we can access the funding necessary for the recommissioning of the processing facility but, as this process is reasonably well advanced, we’re con dent of securing that.”

Funding would lead to a recommissioning decision, a process Mr Yeates was hopeful would occur in the second half of 2019, with the recommissioning itself expected to follow four to six months after.

“We would look to recommission initially on our three permitted deposits and then integrate our other yet-to-be- permitted deposit, plus the Alto deposits, into the schedule in the best possible combination for blending purposes,” he said.

“We would look to be in production next calendar year.”

Once operational, Mr Yeates would look to encourage growth in the local area by supporting the concept of a residential workforce where practical before looking further afield for workers.

“We would then turn to a drive-in, drive-out option, drawing on Mount Magnet, Leinster and other surrounding areas, before the fall-back position of fly-in, fly-out employees,” he said. “Inevitably at least a proportion of the workforce would need to be FIFO.”

Mr Yeates said he was con dent the strength of the Australian gold industry at present would translate to success for the proposed processing mill, with the Australian dollar gold price helping tougher, lower-grade deposits get started.

“The really encouraging thing about the gold industry, not just in WA but in Australia in general, is the application of technological innovation, which is driving down costs,” he said.

“I’ve seen several instances of this, including at our Two Mile Hill deeps underground deposit, where technology – in our case ore sorting – can potentially transform a marginal deposit into one that adds considerable mine life and production pro le to an operation.

“I think that’s another encouraging thing that really gives the gold industry an edge.”

Image: Middle Island’s Sandstone gold mill and conveyor.

latest news

Rio Tinto to buy third RFDS jet for WA

A new state-of-the-art jet is set to join the Western Australian aeromedical fleet of the Royal Flying Doctor Service (RFDS) following a further $15 million investment by Rio Tinto.

Read more

Newmont brings autonomy to Boddington

Newmont Corporation has announced that its Board of Directors unanimously approved investment in an Autonomous Haulage System (AHS) at Boddington in Australia to enhance safety and productivity, while also extending mine life. Once fully operational in 2021, Boddington will be the world’s first open pit gold mine with an autonomous haul truck fleet.

Read more

Impact raises $2.1 million to elevate Broken Hill

Perth-based explorer, Impact Minerals has announced that it has received firm commitments to raise $2,100,505 (before costs) via a placement of 233,389,497 ordinary shares.

Read more

Middle Island waits with bated breath

The explorer behind one of the largest gold drilling programs commenced by a junior in Western Australia this year says first key assays can now be expected as early as mid-next month.

Read more

Chris Tuckwell calls time at contractor MACA

Chris Tuckwell has called time on his 11-year run at Perth-based services contractor MACA and will leave the company early next month.

Read more

Gold prices climb amidst coronavirus fears

Gold has surged more than 1 per cent to fetch more than US$1600 ($2389.92) an ounce as Apple’s surprise warning about the impact of the coronavirus outbreak fuelled concerns about global economic weakness, driving investors to lower-risk assets.

Read more

 

industry insight

Top end open for business

The Northern Territory is better known for its tongue-in-cheek tourism campaigns than it is for

...
Products and Technology

Revolutionising conveyor health monitoring 

Taking real-time data and using it to enhance asset management, improve reliability and deliver ground-breaking predictive capabilities, Aura IQ is

...
People and Projects

A nickel renaissance 

It is 50 years since Western Australian nickel grabbed the world’s attention as a burgeoning commodity, and now new industries are placing it back on the global stage. 

Occupational Health and Safety

Improving the balance

Operating at the top of an industry recognised for continually pushing the envelope when it comes to export figures, it is unsurprising Rio Tinto would look to improve

...

interview

Simplifying supply chains

When a Japan-bound ship carrying coal from Dalrymple Bay Coal Terminal set sail from Queensland in August, it cemented a...

Read more