EXPLORATION STRATEGY

Sipa’s aim is to find major ore deposits in Australia by utilising our demonstrated skills of project generation, high quality field-based exploration and advanced data management. Success over the past 17 years has already been demonstrated by the discovery of two new Mineral Provinces - namely the Ashburton Gold Province and the Panorama VMS Copper-Zinc Province, both in the Pilbara.

• Our major effort is aimed towards discovering mineral deposits that can be found and profitably developed by a Sipa-sized company. Those are:

– Moderate to high grade gold deposits like those we have already proven we can find and exploit at Paraburdoo

– High grade nickel-copper-PGM sulphide deposits that a number of small Western Australian companies have proven are able to be found by modern exploration and be subsequently profitably developed

• Our secondary efforts are directed towards discovering very large base metal deposits of the following classes:

– Volcanogenic Massive Sulphide (VMS) deposits (for example, Kidd Creek in Canada and Mt Lyell in Tasmania)

– Broken Hill-Style silver-lead-zinc deposits (for example, Broken Hill in NSW)

– Sediment-hosted deposits including the giant Mt Isa-Century styles in Queensland or the carbonate-hosted styles like the Navan deposit in Ireland

These types of mineral deposits would almost certainly require the eventual introduction of a partner in the form of a major, vertically integrated mining-smelting-refining company.

To support this exploration effort Sipa has developed skills and information systems that provide us with a strategic advantage over our competitors. This support includes:

• Our strong exploration culture, centred around a belief that ore deposits are found by a ”Boots-in-the-Field” approach.

• A proven ability to address and resolve with Native Title and Heritage issues.
  
  
• Creation of most extensive and instantly accessible geoscientific databases in Australia.
  
  

EXPLANATION OF TYPES OF OREBODIES SOUGHT

GOLD

Schematic Geological Settings of Large Gold Deposits

Gold deposits of the types we are looking for span a broad spectrum of styles, some of which are illustrated in the accompanying figure, ranging for example from:

• Giant deposits in world class Camps like the Carlin Trend in Nevada (110 Moz of past production and present reserves) and the Telfer Deposits in Western Australia (34 Moz of past production and present reserves), through;
  
  
• Modest sized disseminated deposits like Wiluna in Western Australia (5 Moz grading 5 g/t), to;
  
  
• Narrow, high grade veins like Hishikari in Japan (9 Moz of past production and present reserves at the very high grade of about 60 g/t) and Vera Nancy in Queensland (7 million tonnes [mt] @ 14 g/t for 2.8 Moz).

The deposits range vastly in age and their geological settings from;

• Carlin at 25 million to 40 million years old and Telfer at 680 million years old, both of which are hosted by sedimentary rocks, through;
  
  
• Wiluna which is 2,700 million years old and hosted by altered volcanic rocks, to;
  
  
• Hishikari which is hosted by a very recent volcanic terrain.

Sipa boasts Projects covering ground prospective for each type of deposit described above.

BASEMETALS

Schematic Geological Settings of Large Basemetals Deposits

World-class basemetal deposits have formed the basis for the creation and growth of some of the world’s largest mining companies (for example; BHP at Broken Hill and Texas Gulf Sulphur at Kidd Creek). Examples of these types of ore bodies and their diverse geological setting and age are provided below;

• The 1,700 million years old Broken Hill Deposits in NSW (200 mt of 8% Pb, 5% Zn and 40 g/t Ag) is hosted by metamorphosed sedimentary and volcanic rocks.
  
  
• Navan in Ireland (80 mt of 10% Zn and 3%Pb) is hosted by limestone and is 350 million years old.

• Kidd Creek in Canada (150 mt of 2.5% Cu and 4.5% Zn) is 2,700 million years old and is hosted by volcanic rocks.

Whilst considerable variation exists, certain features are common to all significant deposits, reflecting variations on a theme of leaching of low concentrations of metals from parent rock, transport of those metals in fluids and finally deposition and upgrading to ore concentrations in favourable trap sites as shown below.

NICKEL – COPPER – PLATINUM GROUP METALS (PGM’s)

Schematic Cross-section through typical Kambalda-Eastern Goldfields Nickel Sulphide Deposits

Nickel and Copper sulphides, with or without significant PGM’s (platinum, palladium, rhodium, iridium and ruthenium) tend to occur worldwide in association with certain dark and dense rocks – called mafic and ultramafic rocks.

• The most impressive accumulation of Ni-Cu-PGM’s occurs in the giant Noril’sk group of deposits in northeast Russia (1,500 mt grading about 2% Ni, 4% Cu and 12g/t Pt-Pd) which are some 250 million years old.
  
  
• Locally, Western Australia’s Yilgarn Block hosts the world-class 2,700 million year old Kambalda Nickel Camp, where some 30 million tonnes of ore grading 3% Ni has been mined from numerous separate bodies since its discovery in 1964. A cross-section through a typical Kambalda ore shoot is shown above.
  
  
• Both Noril’sk and Kambalda also contain some individual ore bodies with very high grades:

– At Noril’sk these grades can be in excess of 4% Ni, 5% Cu and 20 g/t PGM’s.

– Whilst at Kambalda individual deposits have had grades mined in excess of 5% Ni.

• It is worth noting that at current Australian metal prices 3% Nickel is equivalent to about 25 g/t Gold.
  
  

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