Junior gold explorer Aurumin Limited has taken control of a 784,000 ounce gold resource through the acquisition of the Sandstone gold project from Middle Island Resources near the town of Sandstone in WA. The acquisition will add to Aurumin’s existing nearby 65,000-ounce gold resource base at its Johnson Range project in addition to providing a new prospective hunting ground for further discoveries.
Aurumin says the economies of scale provided by Middle Island’s ounces will provide the shot in the arm needed to scrub up the economics at its own project.
A feasibility study conducted over the Sandstone project by Middle Island in 2021 showed the Sandstone gold project could be profitable however not as a stand-alone asset and the bringing together of the two projects will likely provide a fresh perspective on both.
Aurumin believes it has enough additional mill feed options from its significant exploration ground around Sandstone to make the former Middle Island project profitable.
The Sandstone project houses a sizeable resource of 22 million tonnes going 1.1 grams per tonne gold for a total 784,000 ounces with a lot of potential exploration upside according to Aurumin. Aurumin’s nearby 64,700 ounce Johnson Range resource comes in at a solid 2.5 grams per tonne gold.
Importantly, Aurumin says the Sandstone project houses over 1,300 ounces per vertical metre in underground resources.
Aurumin is planning to roll a drill rig in asap post acquisition with the aim of boosting the gold grade and increasing the resource base.
A series of 11 satellite deposits were developed by Middle Island that Aurumin plans to assess along with an additional five new exploration targets that could potentially provide supplementary mill feed.
The Perth-based explorer also has an arsenal full of processing infrastructure at the Sandstone project including a 500,000 tonne per annum processing plant that is upgradable to 750,000 tonnes a year. The company now also has control of a series of camps, offices, an airstrip and bore fields that will prove invaluable if it manages to make the leap into production.
Middle Island will now focus its attention on its rapidly developing Crosswinds project within the emerging Tennant Creek mineral hub in the Northern Territory that is prospective for “IOCG” style copper-gold mineralisation.
Middle Island will however pick up around 20 per cent of Aurumin as part of the deal, guaranteeing continued access to whatever upside Aurumin can eke out of the project. Middle Island will also pick up a further 9m shares in Aurumin that are still subject to Aurumin shareholder approval, taking its holding in Aurumin well north of 20 per cent.
Middle Island says its Crosswinds project shows a lot of promise with induced polarisation surveying lighting up targets below previously defined surface copper mineralisation. It now has plans in place to commence an aggressive drilling campaign in April following the recent $6m cash injection from the Sandstone asset sale.
If nearology means anything, Middle Island’s Barkly project is on the money, with major players like Rio Tinto, Newmont , Evolution and others all staking claims in the area.
The deal struck between Middle Island and Aurumin looks to be one of those rare win-win situations. Aurumin will get to realise the value of its existing gold ounces whilst adding another huge deposit to kickstart the economics of its own Sandstone project and Middle Island puts $6m in the drill kitty alongside a healthy suite of Aurumin shares to focus its efforts on its rapidly evolving Tennant Creek copper play - whilst retaining exposure to Sandstone gold through its Aurumin holding.
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