The last year has been both an active and fruitful twelve months for Sipa Resources. The Perth-based explorer (ASX: SRI), which specialises in gold, base metals and nickel, has in the last year or so, raised almost AU$10 million, entered into a Strategic Exploraton Alliance with Chilean copper giant Antofagasta and continued greenfield exploration work at their Thaduna and Woodline prospects with some exciting results.
Exploration, particularly of greenfield sites, is a costly business. In the September quarter, Sipa entered into a strategic copper exploration alliance in Western Australia with Antofagasta, one of the world’s largest copper producers. Antofagasta contributed $1 million to the late 2011 fundraising which is primarily earmarked to be spent on the continuing exploration of Thaduna and Woodline, Antofagasta also supplies funding to Sipa to search for significant copper deposits throughout Western Australia. Five exploration licences, named the Lily Tank Project, have already been applied for in the Wolf Basin in the Kimberly Region of Western Australia and will be considered by the Alliance.
Antofagasta’s $1 million was only part of AU$9.8 million raised towards the end of last year. The rest of the fundraising breaks down into $5.67 million from a Share Purchase Plan and $3.2 million through a Placement to sophisticated shareholders and clients of Blackswan Equities. The Share Purchase Plan, announced in October 2011, was initially forecast to raise $3.5 million but was oversubscribed by $2.1 million and culminated in the Directors agreeing to accept the oversubscription, closing the SPP at $5.67 million and leaving Sipa cashed up, with $11 million in the bank.
Chairman Ian Pearce said at the time “this is a terrific outcome and we are pleased to once again have the backing of our loyal shareholders and believe the take-up represents overwhelming support to continue to sole fund our Thaduna and Woodline projects.”
Thaduna in particular is the focus of a great deal of the company’s attention. The 100 per cent Sipa-owned 936 km2 copper prospect in the Gascoyne Region of Western Australia has been explored over the past seven years by various methods including geological mapping, airborne and ground magnetic, electromagnetic and induced polarisation geophysics, systematic shallow geochemical sampling and RAB, RC and Diamond drilling.
This greenfield project is only 25 kilometers from the DeGrussa copper/gold discovery (10.7 million tonnes grading 5.1 percent Cu and 1.7 g/t Au). Indeed, exploration at Thaduna, predicted, pre-DeGrussa discovery, that the presence of nearby old copper mines may be the ‘smoke’ indicating the presence of something major nearby. Exploration has turned up some exciting results, particularly from the Enigma Prospect.
Deep drilling commenced at Enigma in July, but of course this was only the latest stage in exploration at Enigma. March saw three diamond core holes drilled, while the IP geophysical survey was still underway. The three diamond drill holes competed at Enigma in the first quarter each intersected thick intervals—up to 39 metres—of copper mineralisation. These three drill holes were the first effective deep drill test within the footprint of a ‘secondary copper blanket’ which measures at least 4 kilometers by 1.5 kilometers. When completed in May the IP survey turned up more intense gradient array and pole-dipole anomalies than those that had been drilled in March.
“A moving loop Time Doman Electromagnetic (EM) survey was then completed along the three pole-dipole traverses reported on in May 2012. Each line detected very strong EM conductors, partially overlapping the strongest gradient array/ pole-dipole anomalies. These conductors are modelled as coalescing, moderately south dipping, ‘sheets’ over a strike length of about two kilometres,” said Sipa Managing Director, Mike Doepel in a company statement issued on the eve of the drilling program’s commencement.
These conductors are just north of the Enigma secondary copper blanket. Four strong IP chargeability/ resistivity anomalies were identified and the strong EM conductor projected to surface. Deep Reverse Circulation (RC) holes are scheduled to be drilled into the coincident IP/EM anomalies and a discrete IP anomaly to the south.
As stated on the company website, “Enigma is a very large, and unusual -- at least for Western Australia -- occurrence of secondary copper. For instance, the original WMC 1980 Nifty secondary copper discovery of 30 million tonnes grading 1.1% was 1 kilometre long by 200 to 300 metres wide. Several of those could fit into the widely-drilled Enigma Prospect. The primary source could be substantial.”
Thaduna, while an exciting prospect, is far from Sipa’s only concern. The Woodline Gold and Basemetals project, which Sipa owns 100 per cent of 487 km2 and 70 per cent of 249 km2 with Comet Resources (and may earn 70 per cent of 30 km2 held by Image Resources NL.) is located in Western Australia’s south eastern Goldfields Region. Exploration for gold and base metals has been going on since 2005—the same year that AngloGold Ashanti—Independence Group discovered the Tropicana Gold Deposits, known to be more than 5 million ounces) about 300 kilometers northeast of Woodline.
The March quarter saw RAB drilling continuing at Woodline, specifically at the Adiemanthus, Leucippus, Phaedrus and Cleanthes Prospects. Adiemanthus and Ommaney turned up corridors of anomalous gold values and four prospects. According to the results from the quarterly report issued on April 26 2012, this outcome offers a guide to likely emphasis for follow-up drilling. “Given the relatively wide drill line spacing of 200 meters at Adiemanthus and Ommaney, these results are encouraging and provide focus for follow-up RAB and RC drilling.”