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Sipa Resources has RC drill spinning at Paterson North as part of busy 2022 field season

Published: 09:25 21 Jun 2022 AEST

Sipa Resources Ltd - Sipa Resources has RC drill spinning at Paterson North as part of busy 2022 field season

Sipa Resources Ltd (ASX:SRI) has a comprehensive reverse circulation (RC) drill program underway at the Paterson North Project joint venture with Rio Tinto Exploration Pty Limited (RTX) in Western Australia’s prolific Paterson Province.

This is the next step in an agreed exploration program at the project in proximity to Rio Tinto’s Winu discovery and which is part of a farm-in and joint venture agreement with RTX that Sipa manages.

Funding for Paterson North exploration is provided by RTX as part of a farm-in commitment to earn, in stages, up to 80% of the project.

“Exciting step forward”

Sipa Resources managing director Pip Darvall said: “The commencement of drilling at Paterson North marks an exciting step forward for the company and its farm-in partner, Rio Tinto Exploration.”

The campaign is expected to run for around six weeks and will comprise 3,000-4,000 metres of RC drilling testing primarily regional targets.

This follows an extensive target generation, review and prioritisation program that leveraged the combined expertise of Sipa and RTX.

Ahead of schedule

Drilling has started slightly ahead of the schedule from the previously announced timeline of late June/early July.

"It follows an extensive period of technical collaboration between the two companies and commencing the program ahead of schedule is a great result,” Darvall said. “We look forward to updating investors as the campaign progresses.”

As part of the 2022 exploration program, Sipa and RTX will also implement airborne electromagnetics and gradient array IP to obtain additional geophysical data over the project area.

RTX earn-in

Under the terms of the agreement, RTX can earn a 70% interest in the Paterson North project by sole funding expenditure of $12 million, being $6 million to earn 55% and a further $6 million to earn to 70%.

RTX can increase its interest to 80% by sole funding to the earlier of a JORC resource with A$1 billion of in-ground value or the completion of an ‘Order of Magnitude Study’.

Start of busy field season

The Paterson North drilling marks the start of a busy 2022 field season for Sipa at its northern WA project suite.

Additional drilling is set to begin over the next two months at two other properties within this suite:

  • Barbwire Terrace, a 50/50 joint venture between Sipa and Buru Energy Ltd (ASX:BRU) (with Sipa as the operator), prospective for lead/zinc mineralisation; and
  • Wolfe Basin, a 100%-owned project with drilling planned in close proximity to base-metals anomalism observed in Sipa’s 2020 RC drilling program.

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on 7/12/23