Sipa Resources Limited (ASX:SRI) (FRA:SPO) sees the coming year is shaping up to be one of very active exploration after a year of challenge and transformation.
The company has made meaningful progress on its suite of exploration projects in Western Australia (WA) and east Africa.
They include the Paterson North Copper-Gold Project adjacent to Rio Tinto PLC’s (LON:RIO) recent Winu discovery in the Pilbara, Wolfe Basin Base Metals Project in the Kimberley region and the Kitgum-Pader Nickel-Copper Project in northern Uganda.
Following a strategic review of its portfolio, Sipa relinquished early-stage projects in Queensland and South Australia due to access constraints.
Sale of royalties
It sold several royalty interests and received $1 million in cash and around $1.25 million in shares in Vox Royalty Corp (CVE:VOX).
Chairman Tim Kennedy said: ”The strategic sale of our royalty portfolio meant that we were able to make meaningful progress on our suite of exploration projects without the need to raise additional capital in a time of market weakness.”
New 100%-owned projects secured during the year included the Warralong Gold Project in the northern Pilbara and the Skeleton Rocks Gold Project in the Southern Cross district, WA.
First pass reconnaissance style exploration has started on both of these projects and will be accelerated once tenements are granted.
Warralong Gold Project
The Warralong project covers more than 50 kilometres of the Lalla Rookh Shear Zone in a ‘lookalike’ tectonic and geological setting to the recent discoveries by De Grey Mining Limited (ASX:DEG), which lie on the sub-parallel Tabba Shear zone.
Sipa has since expanded its ground position to five tenements covering over 1000 square kilometres of prospective rocks.
The tenements are progressing through the Native Title and granting processes.
In the meantime, Sipa is undertaking work to progress the project and generate drill targets.
Field reconnaissance programs have enabled Sipa to trial different options for sampling through the shallow cover blanketing the area.
Public domain geophysical data was also acquired and the re-processed magnetics show numerous features interpreted as younger intrusions and previously unrecognised greenstone units in basement rocks.
Further work will be undertaken to test their validity as drill targets using recently acquired detailed aeromagnetics in combination with additional stream sediment samples.
Wolfe Basin Base Metals Project
The Wolfe Basin project covering around 780 square kilometres, is 80 kilometres south of Halls Creek in the Kimberley region.
Exploration at Wolfe Basin is primarily targeting sediment-hosted base metals, with strong support of the mineralisation model coming from the identification of two outcropping ironstone, lead-zinc rich gossans.
Reverse circulation drilling is planned for mid-October with an initial program of 1,500 metres that can be expanded if favourable results are received.
Up to 50% of the direct drilling costs to be covered by a successful Exploration Incentive Scheme application.
Paterson North Copper-Gold Project
Sipa’s Paterson North project consists of the Great Sandy joint venture where Sipa has now earned an 89% interest under a farm-in and joint venture agreement with Ming Gold Limited, and a further 100%-owned tenement.
Subsequent to year-end, Sipa entered into a farm-in and joint venture agreement with Rio Tinto Exploration to fund further exploration on the tenements.
Barbwire Terrace Zinc-Lead-Silver Project
The Barbwire project tenements cover the targeted Devonian carbonate sequences adjacent to the Fitzroy Trough.
There are multiple lines of evidence indicating that zinc-lead rich fluids also flowed to the carbonates of the Barbwire Terrace forming the southwest margin of the trough.
Two significant northwest-trending fault corridors and the adjacent stratigraphy are prime target areas for mineralisation.
Synthesis of high-quality datasets generated for petroleum exploration presents an opportunity for detailed definition of geology and targeting of mineralisation, and has been enhanced by the recent joint venture with Buru Energy Limited (ASX:BRU) (OTCMKTS:BRNGF) (FRA:BUD).
Uganda nickel-copper project
The 100%-owned Uganda project is prospective for intrusive hosted nickel-copper sulphide deposits and contains a nickel-copper sulphide discovery at Akelikongo.
From August 2018 to April 2020 exploration on the project was managed by Sipa under the terms of an earn-in and joint venture agreement with Rio Tinto.
Rio subsequently withdrew from the project on April 30, 2020, by which time US$4.5 million had been expended by the joint venture.
Subsequently, holding costs for the project have been minimised while an alternative pathway to fund future exploration is found.
The impact of COVD-19 travel restrictions and local lockdowns in Uganda have made the process of finding funding solutions more difficult.
The year was marked by the arrival of Sipa’s new managing director Pip Darvall, who recently served as managing director of Jindalee Resources Limited (ASX:JRL).
He was previously the exploration manager for Atlas Iron Limited before starting his own consultancy company specialising in resource project evaluation and management.
Shortly after the end of the financial year, John Forwood joined the board to replace Karen Field, who will step down at the 2020 annual general meeting.