Sipa Resources Limited (ASX:SRI) (FRA:SPO) chairman Tim Kennedy explained at the annual general meeting the company’s decision to diversify the nature of its exploration portfolio and put more weighting towards gold projects.
He said: “The current focus is on Western Australian gold projects that can be explored year-round.
“As a starting point we have secured a ground position in the highly endowed Southern Cross region and will commence systematic exploration as access to the ground becomes available.
“With our ability to fund these projects bolstered through the strongly supported capital raising in September this year we anticipate a busy year of exploration ahead.
“We have refined our project portfolio and now have a strong platform from which to move forward.”
The company received firm commitments from sophisticated and professional investors for a heavily oversubscribed placement to raise around $2.3 million to ensure ongoing financial stability and the ability to complete its exploration programs and it converted its royalty portfolio to a combination of cash and shares through a deal with Vox Royalty Corp (CVE:VOX).
Farm out opportunities
In recent years the company has been almost entirely focused on big-picture Tier 1 base metal dominant opportunities in under-explored terrains such as in Paterson Province and in Northern Uganda but these types of projects come with a high technical risk, high expenditure requirements and long timeframes.
Kennedy said: “While we will always seek to have quality frontier-type projects in our portfolio, our strategy for these projects will be to cost-effectively add value through targeting and first-pass exploration programs and if they pass this phase then make a decision on whether to continue funding them internally or seek to farm them out to companies with the economic backing to rapidly advance exploration.
“The Paterson Project and Barbwire Terrace Projects clearly fall into this category and we have made a strategic decision to bring in joint venture partners.
“Similarly, the Akelikongo Nickel project in Uganda falls into this category and that is why we entered into a JV with Rio Tinto Limited (ASX:RIO).
“Rio has since withdrawn and the project is on care and maintenance while we seek an alternative partner.”
Warralong exploration plans
Kennedy said: “Warralong in the Northern Pilbara is a frontier-type project seeking to take advantage of newly identified gold mineralisation styles in the region.
“In alignment with our strategy, we are currently conducting the first phases of targeting and exploration at Warralong.
“To complement these frontier projects, the company has secured projects within established mineral belts with strong exploration potential that can be cost-effectively advanced within favourable timeframes.”