Sipa Resources Ltd (ASX:SRI) is preparing for a period of significant exploration activity in the remainder of 2024 with drill programs scheduled across two of its key projects in Western Australia.
Reverse circulation (RC) drilling is planned to kick off in November at Sipa’s 100%-owned Paterson North Gold-Copper Project in the highly endowed Paterson Province.
An aircore drilling program is set to begin in December at the 100%-owned Skeleton Rocks Project in the Southern Cross region.
Paterson North drilling
At Paterson North, 11 RC holes for 2,000 metres will target structural extensions to previously identified gold-copper mineralisation at the Obelisk prospect and will test a series of linking and extensional structures to the north and south.
Obelisk is a +1.2-kilometre-long zone of gold and copper anomalism and is the most well-understood mineralised system within Sipa’s Paterson North Project.
Better previous results from Obelisk include 0.2 metres at 22.5 g/t gold and 2.0% copper from 422.6 metres in one hole and 3 metres at 1.8% copper and 0.9 g/t silver from 95.8 metres, including 0.2 metres at 4.6% copper and 7.5 g/t silver in another hole that also returned 0.5 metres at 2.5 g/t gold and 0.3% copper.
This program is the first drilling to be undertaken by the company since the project reverted to 100% Sipa ownership and reflects a shift towards vector-style exploration, rather than model-driven exploration.
The drilling is expected to start in mid-November and take approximately two weeks to complete.
Paterson North Project covers more than 1,000 square kilometres and is near Rio Tinto’s Winu, Calibre and Magnum deposits and is about 115 kilometres north of the Telfer gold-copper mine.
Drill-for-equity deal
To support the Paterson North drilling, Sipa has entered into a drill-for-equity agreement with experienced WA drilling contractor Topdrill, which allows Sipa, at its election, to satisfy up to 30% of drilling costs invoiced by Topdrill through the issue of ordinary shares.
The issue price will be determined by the 5-day volume weighted average price (VWAP) that the company’s shares trade at immediately preceding each invoice date.
Shares issued under the drill-for-equity agreement will be escrowed for six months from the invoice date.
Topdrill will also be issued one option for every four shares issued, with a 2-year timeframe and an exercise price of 1.5x the issue price of the shares.
Corporate activity
Sipa is buoyed by the recent corporate activity in the Paterson region, with a number of significant transactions highlighting the exploration and development potential of the region, given the large nature of the deposits that occur.
Recent transactions include:
- Greatland Gold PLC (AIM:GGP, OTC:GRLGF) purchasing Telfer and the surrounding tenements and infrastructure from Newmont for US$475 million.
- Rio Tinto (ASX:RIO) Exploration Pty Ltd purchasing Antipa Minerals Ltd (ASX:AZY)’s 32% share of the Citadel Joint Venture Project for A$17 million.
The potential sale of Rio Tinto's large Winu Project has also been reported in financial news outlets.
Sipa sees these events as being positive for further M&A activity and development in the region.
Skeleton Rocks drilling
At the Skeleton Rocks Project planning for aircore drilling at the Nicoletti trend is well advanced, with drilling scheduled to begin in December, once the cropping season has been completed.
Nicoletti is a +7.5-kilometre-long east-west trend of magnetic stratigraphy, interpreted to be ultramafic rocks.
Previous drilling by Sipa at Nicoletti was completed over a 400-metre strike within the overall trend, returning anomalous nickel in several holes.
Better results included:
- 16 metres at 0.4% nickel, 287ppm cobalt and 1.7% chromium; and
- 12 metres at 0.3% nickel, 200ppm cobalt and 0.5% chromium.
The aircore drilling will test to the east and west of the previous drilling with a series of north-south traverses.
Access agreements are already completed for key areas, with discussions progressing on others.
Portfolio review
Sipa continues to assess its asset mix to ensure that its projects are ‘right-sized’ to enable continual and cost-effective exploration, as well as to ensure regular and meaningful newsflow.
The company is looking to further refine its portfolio via acquisition, divestments as well as joint ventures.