Sipa Resources has a bank of mineral royalties that stand as a testatment to its doggedness over the decades in the search for a company-making project.

It doesn’t have one yet – and the royalties over projects now owned by others are yet to kick in – but the search goes on.

Managing director Lynda Burnett made that clear at a presentation to the Melbourne Mining Club’s Cutting Edge series last week.

“We want Tier one discoveries, not just add-ons or brownfields discoveries,’’ Burnett told the gathering at the town hall.

Sipa (ASX:SRI) is trading at a princely 1c a share for a market cap of $12 million — or $9.8 million if its June cash of $2.2 million is taken in to account. (See share price graph below)

So it can be said that try as it has (75% of all funds raised have gone in to the ground), the Tier 1 discovery is not in sight. Or is it?

Today’s interest is in Sipa’s nickel-copper Kitgum Pader project in north Uganda, about 50km south of the border with South Sudan (see map below).

It sits on the margin of a super-craton which discoveries like Nova in WA tell us can host nickel sulphide intrusive orebodies. Sipa pegged the ground in 2012 and in 2014, it hit nickel sulphides in a RAB drill hole.

All that is by way of background to the main event earlier this year when the mighty Rio Tinto (ASX:RIO) signed up for a potentially big spending joint venture over Kitgum Pader, presumably on the basis that it too believes it has the potential to be a new nickel-copper province.

Rip Tinto deal

The staged option could see Rio Tinto earn a 75 per cent interest by spending up to $US57 million, plus refund cash spent of up to $US2 million.

Sipa gets to manage the joint venture for the first 18 months, which in itself was a nice endorsement of its reputation as a serious explorer.

Things are starting to happen at Kitgum Pader, with Burnett telling the Cutting Edge event that originally, she thought things would move slowly on the ground.

“But it looks like we will be drilling in the next month or so. And once we start drilling we hope to continue for at least six months.’’

Sipa Resources shares (ASX:SRI) over the past five years
Sipa Resources shares (ASX:SRI) over the past five years

It is a rare event for a $12 million market cap junior to be paired up with the likes of Rio Tinto in the hunt for an elephant-sized discovery. A gravity program has been firming up targets to be tested with diamond holes. The drilling program will be one to watch.

Copper and gold discovery

Sipa has another string to its bow.

It is one the junior is hoping to crack it big-time with — a copper-gold discovery in WA’s remote Paterson province where the mighty Rio Tinto, funnily enough, is rumoured to have found something special among the sand dunes.

Rio has yet to confirm it has made a copper discovery but satellite imagery shows that in a location among the sand dunes — some 120km north-west of Newcrest’s ageing 25m ounce Telfer gold-copper mine — it is building a 40-man camp to support a big drilling program.

The camp is about 8km from the south-west tenement boundary of Sipa’s Paterson North project where it has been active since 2016.

The Rio discovery has sparked something of a pegging rush in the Paterson by both big and small mining companies.

Exploration tenements have been pegged all the way to the coast, with Sipa’s ground now surrounded by Rio Tinto and Andrew Forrest’s Fortescue.

At Sipa’s most advanced prospect, Obelisk, a drilling rig is being mobilised to test a target identified by the latest remote sensing techniques.

The target is about 250m north-west of where drilling last year returned broad intersections of low-grade copper mineralisation, including 64.8m grading 0.1% copper.


Disclosure: Barry FitzGerald is a committee member of the Melbourne Mining Club, a not-for-profit organisation formed to promote the minerals industry.


This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.