Share prices of Middle Island Resources (ASX: MDI) zoomed 42 per cent on Thursday amid reports that it purchased a gold mine in Niger. Besides its new acquisition, Middle Island has exploration prospects in two other African nations, in Liberia and Burkina Faso.

Middle Island paid $1.36 million to SML, a Canadian company, to acquire 80 per cent of the Samira Hill plant and goldmine in Niger. Blue Ocean Equities mining analyst Trent Allen described the buy-in as a transformational deal.

"It means the company has a defined JORC-rated deposit, which it didn't have before. Plus, it's gone from being purely an explorer to being a producer in a few months. It's a big jump," Mr Allen said, quoted by The Sydney Morning Herald.

The gold mine has a 1.2 million ounce resource and three years production life of 100,000 ounces annually, although Middle Island estimates production would be between 40,000 and 50,000 ounces a year.

Under the deal, SML will keep 1.2 per cent of the smelter return on production if gold price go beyond $1,450 an ounce. Currently, gold price is at $1,290 per ounce.

The remaining interest in the gold project is held by the Niger government.

With the boost in its share prices, Middle Island's market capitalization went up to $10 million, and the management expects the deal would allow it to raise another $5 million.

Rick Yeates, managing director of Middle Island, said in a statement, "Although representing an option on the gold price in the short term, this acquisition completes the remaining piece in Middle Island's highly prospective Sirba project strategy, providing the opportunity to process all deposits identified by Middle Island and its partners within the project area itself, as well as the wider Sirba project, at a centrally located milling facility that is in sound working order."

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