SRI 2.63% 3.9¢ sipa resources limited

Sipa Farms into Broken Hill Property

  1. 1,645 Posts.
    Sipa Farms into Broken Hill Property
    03-05 1025

    Agreement has been reached for Sipa Exploration NL (Sipa) to farm-in
    to Golden Cross Resources (GCR) 100%-owned Broken Hill Platinum Group
    Metals and associated nickel, copper and gold and base metal
    property. The 420 sq km property, consists of ELs 5772, 5784 and MC
    159 Broken Hill and lies 25 km east of Broken Hill as shown on
    Figures 1 and 2.

    Sipa may earn a 70% interest in the Project by completing a
    feasibility study to bankable standard by May 2006. As part of the
    agreement, Sipa will purchase 3 million Golden Cross shares on market
    and has undertaken to hold the shares until at least April 2003. Sipa
    will manage exploration and must spend $245,000 by May 2003.

    On receipt of notice that Sipa intend to commence a feasibility
    study, GCR must make an election within 90 days that, upon a decision
    to mine being made, GCR will either:

    * contribute to development in accordance with its 30% interest;
    * dilute to a 20% interest carried to production, repayable from 50%
    of GCR's share of the free cash flow from the project; or
    * take a 2.5% net smelter return royalty.

    The focus of the Project is a poorly-outcropping sinuous belt of
    ultramafic bodies extending at least 9 km from Mulga Springs in the
    south to Moorkaie in the north as shown on Figure 1. Gossan samples
    from five localities along this belt have returned very high grade
    assay results, commonly with values of 15 to 30 g/t combined
    platinum- palladium as shown on Figure 1. A 120 kg gossan sample
    taken from old pits at Mulga Springs averaged 20 g/t platinum, 50 g/t
    palladium, .3% nickel, .7% copper and .6 g/t gold, together with
    significant amounts of rhodium, ruthenium, iridium and osmium. In
    addition, some samples of weathered ultramafic, with evidence of only
    minor oxidised disseminated sulphide, have returned assays of
    combined platinum-palladium to 11 g/t.

    Other ultramafic bodies situated near Mt Darling Creek, 10 km south
    of Mulga Springs, also contain gossans, also with values of 20 to 30
    g/t combined platinum-palladium. It is possible these host rocks
    connect with the Mulga Springs occurrence, but thin cover largely
    obscures outcrop between the occurrences.

    Only two localities (Mulga Springs and Mt Darling Creek) have
    received significant drilling, and then in very restricted areas,
    with most holes testing only the oxidised zone. A 1970s drillhole and
    a recent GCR hole have, however, confirmed significant grades in
    sulphide mineralisation. A drill intersection through the ultramafic
    body at Mulga Springs, announced by GCR to ASX in July 200 1,
    returned 2m of sulphide mineralisation averaging 10.9 g/t platinum,
    22.6 g/t palladium, 4.45% nickel and 6.12% copper from 45m depth.
    This nickel-copper sulphide mineralisation indicates that the other
    gossans enriched in Platinum Group Elements (PGE) with anomalous
    nickel-copper geochemistry are likely to represent oxidised high
    grade massive nickel-copper sulphides hosting the PGE's at depth.

    Several of these unusually high grade PGE (and nickel-copper
    sulphide) occurrences have not all been drilled and the Project has
    not been systematically explored for high grade, selective-mineable
    orebodies, or for bulk-mineable disseminated bodies.

    The Project may contain in excess of 25 km of strike of the
    poorly-exposed ultramafic belt, which may represent a "feeder" to
    now-eroded overlying mafic-ultramafic rocks as shown on Figure 3,
    which illustrates a conceptual model for the mineralisation. This
    feeder may be capable of hosting the styles of massive and
    disseminated mineralisation described above.

    The Broken Hill Project also hosts a number of mineralised ironstone
    outcrops, including Yellowstone, Iron Blow and Razorback (Figure 1),
    with copper-gold potential similar to Selwyn or Ernest Henry.
    Significant portions of the property are concealed by shallow cover,
    which may hide further mineralisation including Broken Hill-style
    orebodies as these rock units may be interpreted to be hidden beneath
    that cover.

    Sipa plans to conduct detailed geological mapping prior to
    drill-testing of the known PGE-enriched gossans as well as systematic
    geological, geochemical and geophysical surveys of the property to
    locate other occurrences. Fieldwork will start during the June

    The agreement is consistent with GCR's objective of entering into
    significant farm-in arrangements in order to add value to its
    portfolio of properties. The farm-in will ensure intensive
    exploration activity on the property in the near future, while
    allowing GCR to concentrate its attention on other 100%-owned
    properties, such as Adelong and Kempfield.

    The Figures referred to above and maps showing mineralisation on
    GCR's Broken Hill property are available at

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