Director buys shares at 1.8c (ASX 7-2-17). Normally a good sign!
Following initial assessment, the management at MDI seem to have taken a prudent and conservative approach to the company's exciting Sandstone Gold project in WA. By consolidating the existing data which outlined the 480,000oz gold resource, and reinterpreting the resource using extremely conservative technical parameters, along with a plan to outline a JORC 2012 compliant resource in stages, gradually, management seem to be preparing MDI for sustainable growth.
By taking a short-term downgrade last December MDI may well have now been set up for a longer-term upgrade as potential good news flows over the coming months (ASX 18-1-17). Short-term market consolidations often (but not always) provide contrarian investors with what may be very good buying opportunities.
According to the company (ASX 19-12-16) nothing has changed. The resource is still there, just the strategy has changed.
From the company's ASX report of 16th Dec2016:
"Priority now to be given to building a larger mineable gold inventory across the whole Sandstone project before a mine re-start... Strategies already underway to source additional mill feed internally and through third party options... MDI’s priority is now on identifying additional sources of mill feed, variously including prospects at Shillington West, Macintyre, Plum Pudding South, the isolated intercept of 4m at 17.6g/t Au recently returned from sterilisation drilling at Two Mile Hill, along with the deep, high value Two Mile BIF targets.
Revised MDI Strategy In light of a deferral of mill re-commissioning at Sandstone, MDI’s priority focus will be on the identification of suitable, additional mill feed.
Several of these strategies are as follows:-
Brownfields and greenfields exploration within the Company’s Sandstone leases, especially targets with the potential to provide higher grade, open pit mill feed.
Various examples include the Shillington West, Macintyre, Plum Pudding South prospects, and the isolated intercept of 4m at 17.6g/t Au recently returned from sterilisation drilling at Two Mile Hill.
A detailed evaluation of the Macintyre target is nearing completion, and a review of Plum Pudding South and Shillington West has commenced.
Continued exploration and conceptual studies on the deeper, high grade, Two Mile Hill BIF targets that include true width intercepts of 22m at 23.8g/t, 8m at 56.0g/t and 5m at 26.5g/t Au from resampling.
Following the successful $150,000 EIS grant application for co-funded drilling on this target (ASX Release 14 December 2016), it is planned to commence the next phase of diamond drilling in the March quarter of 2017 (January to March 2017).
Commissioning of a ‘weights of evidence’ targeting study over the entire tenure, to commence early in the March quarter of 2017.
Discussion with holders of third-party deposits and examination of additional exploration opportunities within the wider Sandstone area. Discussions and data reviews have commenced on several initial opportunities.
The decision to defer the re-commissioning of the Sandstone processing plant and infrastructure is prudent in the circumstances. This deferment provides the opportunity to identify and systematically explore the considerable gold potential of the project in order to extend and enhance the current production profile."
Note: I remain a shareholder in and positive supporter of MDI, although needing to sell some MDI in Dec 2016 due to financial pressures relating to a debt, pressure which was alleviated in December.