a strong speculative buy - bell potter

Overview
Middle Island Resources Limited (MDI) is focused on early to mid-stage gold exploration in Burkina Faso, Niger and Liberia, where it holds +5,500km2 of tenements. MDI‟s management has long experience of successful African gold
exploration and production.

Key Points

* Aggressive gold exploration program: minimum target of 1.1Moz Au resource within 2 years of listing (Dec ?12). Drilling has started on initial early to mid-stage
targets.

* Focus on Burkina Faso, Niger, Liberia: Underexplored areas with high prospectivity
for gold, close to known deposits, many with extensive artisanal workings.

* Team: among the best-respected professionals in the industry, with average +20
years experience, including former senior managers of RSG Global, Coffey Mining.

*Strong registry: Newmont is a major shareholder, as are major international funds.

*News flow expected: auger, RAB and RC drilling, and possible new acquisitions.

*Funding: $8.2 million cash, ~$2 million quarterly exploration spend. Listed on the ASX
in December 2010 after IPO $12.5m at $0.25/share.


Investment View: a strong Speculative Buy

In the company's own words: "Middle Island Resources represents an early, wellpriced entry into gold in West Africa". It is unusual to find a small cap gold explorer
with such a great deal in its favour, in terms of management, tenements and corporate strategy. MD Rick Yeates team has vast experience in the region, and has designed a model exploration program. The support of Newmont in terms of project generation is invaluable. We expect MDI to be positively re-rated, more thanonce, as it de-risks its initial mid-term target of a 1.1Moz Au resource.