Sipa Resources Ltd (ASX:SRI) (FRA:SPO), which is transitioning to focus more on gold exploration in 2021, has executed a package of farm-in and joint venture agreements over a number of tenements prospective for gold mineralisation in the Murchison area of Western Australia.
These agreements give Sipa immediate access to granted tenure in a highly prospective part of the Western Australian Goldfields, with recent discoveries and adjacent consolidation activity underway.
The combined area of the farm In tenements and recently acquired Sipa 100%-owned tenements is around 260 square kilometres.
Sipa’s focus will be to finalise the necessary approvals for drilling as soon as possible.
One tenement has an approved program of work and once heritage requirements are achieved, it will be available for drill testing.
The new Murchison project represents a low-risk opportunity for Sipa to explore for gold in a prolific district with excellent infrastructure, access and high levels of nearby activity.
Key terms of the deal
Sipa has entered into three binding farm-In and JV agreements on identical terms across the tenement package.
The key terms, with the dollar amounts and drill metres representing the totals across all of the farm-in tenements, are:
➢ Sipa to spend $300,000 to earn 51% and form a joint venture;
➢ A minimum of 2,250 metres of drilling must be undertaken by Sipa prior to withdrawal;
➢ Sipa to subsequently spend a further $500,000 to earn 90%;
➢ The vendor’s 10% is free-carried to a decision to mine, at which point, the vendor may contribute or convert its interest to a 1% net smelter royalty; and
➢ The vendor retains the right to recover alluvial gold (from a depth of less than 2 metres), and the right to acquire deposits which Sipa determines are likely to host less than 10,000 ounces.
Known gold occurrences
All project areas are adjacent to, and along strike from known gold occurrences, and overlie prospective geology and fertile structures in the Murchison and Abbotts greenstone belts, where there has been limited, to no drill testing of basement rocks.
The southeastern tenement group lies adjacent to Monument Mining’s Burnakura Mine with existing resources of around 380,000 ounces while the northwestern tenements lie along major shear zones that continue to the northeast where the Garden Gully project is being progressed by Ora Gold Limited (ASX:OAU) (FRA:TJ3).
More weighting on gold projects
The farm-in and joint-venture deals are in line with the company's decision to diversify its exploration portfolio and put more weighting towards gold projects.
On November 19, 2020, Sipa’s chairman Tim Kennedy told shareholders: “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.”