Reports of big Rio copper find in WA fuel talk of ‘nearology’ opportunities

Special report: Is $10 million Sipa Resources (ASX: SRI) about to become a lucrative “nearology” play for investors?

If the growing speculation about a massive Rio Tinto copper find in WA is right, Sipa could have one of the best seats in the house.

Highly regarded resources journalist Barry FitzGerald, whose weekly Garimpeiro column is published on Stockhead, has reported that the speculation is reaching fever pitch in mining circles.

FitzGerald says the latest bout has been fuelled by revelations that Rio’s purported discovery in WA’s remote North Paterson region is to get its own airstrip.

Rio refuses to confirm or reject the talk of its find – though it is not disputing FitzGerald’s report about the impending construction of the airstrip.

FitzGerald’s sources suggest it could be Rio’s best find in 25 years.

“The most recent satellite fly-over shows there has been lots of activity at the discovery, 120km north-north-west of the nearest point of civilisation, Newcrest’s once-great Telfer gold-copper mine,” he writes.

Sipa's Paterson North copper and gold project includes the Great Sandy project which hosts the Obelisk copper gold discovery. Map: Sipa — Sipa’s Paterson North copper and gold project includes the Great Sandy
project which hosts the Obelisk copper gold
discovery. Map: Sipa

FitzGerald notes that since he first reported whispers of the find in April, the drill lines have extended south by another 400m.

“The 40-man camp is in and the drill core lay-down area is expanding,” he writes. “Rio has also bulldozed a new access track to the north-west.

“Whatever Rio is on to, it has triggered one of biggest land grabs by a single company in recent memory.

“Last year Rio held 1000 sq km of the North Paterson in its own name and 1335 sq km in joint ventures.

“Now it’s got more than 11,000 sq km in its own name (all the way to the coast at Eighty Mile beach between Port Hedland and Broome) and 1760 sq km in joint venture. Oh, Fortescue has coat-tailed it in and has 5300 sq km under its belt.”

Industry chatter

FitzGerald said his first report in April stemmed from satellite imagery and industry chatter that Rio’s drilling was returning 140m intersections of visible copper mineralisation from a depth of 40m.

In his latest column, he says: “More recent chatter is that it is Rio’s best discovery in 25 years, that it could be as big as Mt Isa and that Rio is so annoyed by the satellite spying that it is cleaning up the drill collars and raking the surrounding sand dunes golf-style to throw us all off the trail.

“Then there are the whispers from some other big-name miners — who ought to know if the broader Paterson is going to become hotter than hot on the strength of the Rio discovery — that it is the real deal.”

Fitzgerald goes on to note that if Rio does eventually confirm it has found something special, “it will unquestionably be great news for the juniors active in the area”.

The junior explorer closest to the Rio action is Sipa Resources, which at 0.9c has a market cap of just $10 million.

Sipa owns the Great Sandy copper-gold project, which sits just 10km to the east of Rio’s land (see map above).

Strong targets

Sipa has identified several strong geophysical targets, one of which has already led to the discovery of a significant copper-rich polymetallic mineral system known as the Obelisk prospect.

At Obelisk, where the 2018 exploration program is underway, broad bedrock zones have been delineated for more than 4km at greater than 0.05% copper, with discrete higher-grade gold-copper zones.

“The North Paterson province is increasingly emerging as one of the most active and prospective new exploration frontiers in Australia, with active exploration programs underway by major mining companies such as Rio Tinto and Newcrest,” Sipa said.

“In addition, FMG has recently joined the search with tenements pegged immediately to the north-west and east of Sipa’s ground-holdings.

“This high level of activity, combined with recent reports of exploration success in the district, highlight its world-class potential and under-explored nature.

“Since entering a Farm-In and Joint Venture with Ming Gold Ltd in June 2016, Sipa has successfully progressed exploration on its large ground-holding, resulting in the discovery of a significant copper-rich polymetallic mineral system at Obelisk.”

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