Sipa Resources (ASX:SRI) will celebrate its 30-year listed anniversary next year, which is quite a unique position for a junior exploration company. The Australian gold, base metals and nickel exploration company has experienced major success in its history. Sipa discovered the Panorama copper-zinc project in the Kimberley and the Mount Olympus gold mine in the Ashburton terrain; the latter became a profitable gold mine in the early 2000s.
In keeping with the company’s ideology of breaking new ground and intrepid exploration, Sipa’s second managing director Lynda Burnett is taking the company on a fresh venture with two major exploration projects shaping up in Uganda. Burnett is leading the generation of the Kitgum Pader base metals & gold project, located in the north near the South Sudan border, containing the Akelikongo nickel-copper deposit and the Pamwa lead-zinc system.
“Sipa’s brand is that it is a cutting edge mineral explorer. It doesn’t follow others, it tends to be a frontier, new ideas explorer.”
“Others tend to watch where we are going and follow us. Our Uganda project is a classic example of that type of thinking, coupled with innovative, technically driven exploration.”
2015 was a successful year for Sipa in many respects. It began with the sale of its Thaduna copper project to Sandfire Resources for AUS$2 million, Sipa then launched a raise mid-year and drew over $6 million from the raising in order to continue the Uganda projects with drilling programmes and geological surveys. The sizeable cash raise came at a time when the market was struggling to raise any money at all, especially a junior explorer. According to Burnett, the confidence in the market was based on the anticipation that Sipa were onto the next large nickel-sulphide system similar to Nova on the Fraser Range, Western Australia but in a new unexplored frontier, in Uganda.
“We know we have a large nickel-sulphide system but we haven’t managed to find the high grades that would send us into the stratosphere, we are still looking for that elusive great money hole.”
The end of northern Uganda’s civil war in the late 2000s coincided with a US$50 million project co-funded by the World Bank and a number of development funds to stimulate investment in the minerals sector in the country, part of which included flying aeromagnetic surveys and broad mapping projects over nearly all of Uganda and here came the real interest.
“These new datasets that showed there was some real potential in areas previously mapped as non-prospective gneiss on the old published maps.”
Since the war, the majority of NGOs pulled out, however their legacy is a number of buildings in the town of Kitgum that we are using as our offices and accommodation. The roads are continually being upgraded and a new 600 MW hydropower station is being built nearby on the River Nile. The hydropower station is being built by Chinese investment and Burnett said this is indicative of much of the new infrastructure investment in East Africa a lot of which is to support East African oil development interests.
Sipa’s initial diamond drilling programme commenced at the Akelikongo prospect in early 2015 and identified the mineral system to be a “chonolith” or conduit style intrusive nickel-copper pipe. The drilling programme produced results showing a pipe of interpreted length of over 1km long and over 300m wide, with nickel and copper mineralised zones of between 30-100m of disseminated nickel-sulphide at about 0.2-0.5 per cent nickel and between 0.1-0.2 per cent copper. There is also a more confined zone of higher grade with nickel at one to two per cent and copper as high as three per cent on the margins of the disseminated zone which is a key target for us. This higher grade zone that we are chasing now represents the original base of the system where the massive sulphides have pooled.
“The challenge to us now is to follow this zone down plunge to find more of this massive sulphide. Recent drilling has shown that we have widths from 1m up to 11m wide of this stronger higher grade mineralisation. If we can continue to find some better thicknesses of massive sulphide then the system really starts to become a potentially economic proposition.”
Burnett commended the work the drilling partners ADT and Supercore are doing for Sipa in Uganda, carrying out the drilling programmes effectively. The ALS laboratories in South Africa and Australia have been used to assay the samples as well as Ultratrace in Australia.
Akelikongo is still at a very early stage of the exploration discovery journey. In Sipa’s most recent investor relations presentation Burnett compares the project with Sirius Resources’ hugely successful Nova discovery, to demonstrate how significant just the small amount of drilling which has taken place in Uganda could be.
“[The comparison] is saying we can see it’s a big system and it’s got the same size potential to it but we need to do a lot more drilling to understand it and work out where the massive sulphides have formed.”
One way Sipa will be identifying this potential is the continued use of moving loop and fixed loop electromagnetic surveys. However, EM does not always provide a unique solution to identify massive sulphides due to a sulphide rich country rock and significant conductive graphite also in the country rock.
“[For the EM] we are using Spectral Geophysics from Botswana. They have been very good partners, really intrepid and they work with the local people to help with the surveys.”
Moving forward at Akelikongo, Sipa will continue to test down plunge whilst firming up its 3D geological model, meanwhile progressing work at its Pamwa lead-zinc project around 10km to the south of Akelikongo.
Pamwa is essentially the project Sipa entered Uganda on. Sipa’s founder Mike Doepel and the late Nick Archibald together found some rocks near Pamwa that Archibald thought were analogous with the Broken Hill mine, one of the world’s biggest mines. The area was prospected and assaying of rock sampled led to identifying anomalous lead zinc and silver mineralisation.
Soil sampling quickly became the most effective way of testing the geochemistry of the area on a large scale and the Pamwa soil anomaly was identified in mid-2013. 2014 and 2015 saw drilling programmes of shallow RAB holes and some limited diamond drilling.
“We are currently going in and doing some quite detailed shallow drilling to try and get some continuity and understanding of the controls to the bedrock mineralisation. Given we are in a new terrain, in order to find a deposit, we really need to understand the mineralisation processes.
A key part of Sipa’s work in Uganda is its approach to community involvement and social responsibility. Burnett gave a heartfelt account of the work in this area.
“When you work in a country like Uganda, as a mineral explorer you stand out a lot. To be accepted you must become part of the community. We really listen to the things the local people need and want and most just want a better life for themselves and their children.
“We are really trying to empower people and (most) importantly we have found real opportunity on the education side. No one wants handouts that don’t lead to anything.”
Sipa’s Days for Girls programme provides primary age girls with education and reusable sanitary kits which are washable and last for three years. It means they can stay at school for the five days a month they have their period and gives them an equal opportunity to continue schooling.
While Uganda is the primary focus going forward, Sipa is also progressing its new copper and gold prospect in Australia.
In March 2016, Sipa announced a new farm-in and joint venture agreement to acquire an 80 per cent interest in Ming Gold’s Great Sandy copper-gold project in Western Australia.
The farm-in is comprised of an initial $1 million to acquire 51 per cent equity and then another $2 million for the full 80 per cent.
The Great Sandy tenement is located in the northern part of the ‘globally recognised’ Paterson Province in Western Australia.
Burnett puts Sipa’s entry down to the crucial work already undertaken by Ming in gravity and aeromagnetic data collection to demonstrate what is beneath the 50-100m sand overburden. Ming also used Strike Drilling to aircore drill effectively to bedrock.
“The key to the success of this area is the work Ming did, that’s what really attracted us. In my view Ming and Strike cracked the code in how to effectively drill to bedrock here. The work they did was really key to us getting involved.”
Burnett is very optimistic about the whole area, in her view it is completely under-explored. She believes there are granites in the Great Sandy tenement that represent the same geological context and style of hydrothermal system that formed Newcrest Mining’s giant >25Moz Telfer gold and copper deposit 120km away.
“You can’t tell the size of the system from a few wildcat holes but we definitely have all the ingredients to be finding significant mineral deposits in the ground we have.”
Looking forward, Burnett’s vision for Sipa Resources is to find a world class discovery with high profitability.
“It’s totally achievable, you find the right ground, you put yourself in a strong position to succeed through good quality systematic exploration and you can achieve those discoveries. You just need to know where to be and how to explore,” she concluded. “And a bit of luck always pays off!”