Sipa Resources’ (SRI) late call-up to the speaker’s podium at this week’s Diggers and Dealers mining forum in Kalgoorlie couldn’t have come at a more fortuitous time for the base metals explorer.
On Monday, Sipa announced the start of an eagerly anticipated drilling campaign at its Paterson North project in WA which could well mark a defining moment in its 30-year history as an ASX-listed company.
And Sipa MD Lynda Burnett used the Diggers platform to remind delegates both of the importance of greenfields exploration and the mind-boggling investment returns that can flow from major discoveries such as Sirius Resources’ famed Nova discovery and Sandfire’s DeGrussa find.
Sipa’s drill rig should start turning sometime in the next few days, targeting a large 4km by 2km primary copper-gold anomaly, known as the Obelisk prospect, where it is hunting for a large copper-gold orebody hidden beneath thick transported cover.
Burnett illustrated the point by tipping a jug full of “sand” (actually polenta) over a jar containing a model of an elephant (to symbolise a world-class discovery) in front of the afternoon crowd on Day Two of the forum.
She has every reason to be enthusiastic about the target.
For one, it sits immediately adjacent to some hot new geophysical anomalies announced recently by Antipa Minerals’ (ASX: AZY) at their Citadel Project (subject to a $60 million farm-in deal with Rio Tinto).
For another, it sits on the southern margin of a granite intrusion – the perfect setting for some of the really big deposits of the Paterson Province like Telfer (where Burnett started out her career as a young mine geologist).
Sipa secured its ground earlier this year through a $3 million farm-in deal with private company Ming Gold Pty Ltd. Ming found plenty of smoke in early-stage exploration over the area, reporting highly anomalous copper values from aircore drilling.
With action aplenty on the drilling front, Sipa is now beginning to attract a growing band of enthusiastic followers amongst the analyst community.
Veteran resource analyst Gavin Wendt this week added the stock to his widely followed “Minelife” investment portfolio, saying it had attracted his attention because of its exploration activity in the Paterson Province – one of the current “hot spots” for exploration in Australia.
“Our coverage initiation of Sipa is occurring at what I believe is a very fortuitous time,” Wendt wrote.
“Firstly its share price looks to have bottomed back in March around 1.4c and since then strong trading volumes have coincided with an appreciating share price.
“Secondly, Sipa is set to commence maiden drilling at its Obelisk prospect, which represents an extensive primary copper-gold anomaly that lies immediately to the north of fellow portfolio stock Antipa Minerals’ Magnum and Citadel copper-gold projects.
“These projects have garnered strong market interest and both companies’ drilling will be closely watched.”
Wendt, whose coverage was initiated at a price of 2.5c, says the company is in an “encouraging position”.
“From a market capitalisation perspective alone, Sipa is priced at $18 million, compared with Antipa at $38 million, so potentially offers even greater leverage to exploration success.”
Meanwhile, in a detailed initiation report, analyst Mark Gordon from Independent Investment Research said Sipa’s key strengths were having a team of exploration specialists with a strong track record, highly prospective ground holdings and “money in the ground”.
“With a market capitalisation of just over $16 million, Sipa is well leveraged to exploration success,” Gordon said.
“Notable examples over the past few years include Sirius Resources, whose share price went from $0.05 to a peak of $5.00 following the 2012 Nova-Bollinger discovery….and Sandfire’s Doolgunna copper-gold discovery, which took the share price from 5c to $4.08 on the initial run, with subsequent movements to over $5.00 a share.”
------------------------
Please DYOR as always.... Cheers tela