Sitting back here, I have been resisting the temptation to chime in, and simply watching the market response, but a few relevant comments do spring to mind:
1. There is a lot to like about this announcement, the least of which is the headlined sulphide intersection of 63m at 1.01% Cu, which is very good in itself.
2. I think the market has largely focussed on that and gone: "1% copper? So what!" and left it at that, being unable to digest the other implications.
3. The maps on page 2 showing copper, cobalt and nickel distribution are very encouraging indeed. They clearly demonstrate that the extraordinary extent of the Enigma copper oxide blanket is not just a weathering phenomenon developed over a far more localised primary source, but that the primary source itself is equally widespread.
4. The geological description of THD013, which cored through the previous THD012 RC pre-collar intersection, which would have only been drill chips and dust, clearly shows that at least some of the primary mineralisation is sediment-hosted (in sandstones) rather than just being a cross-cutting vein deposit like Thaduna. This is important, as this style of mineralisation has far greater tonnage potential than the Thaduna vein deposit.
5. The fact that THD014 is now drilling under the next area of mineralisation, in the core of the Enigma fold, 1.5km to the south, with a hole designed to cut the stratigraphic dip, confirms that that Sipa also believe that the mineralisation is indeed at least partly sediment-hosted (though also partly fault controlled as evidenced by the vein quartz and breccia in some intersections)
6. The presence of cobalt and nickel, plus other metals, and the mineralisation of porous sandstones and fractured dolomites is further evidence of what both Sipa and Antofagasta suspect and would very much like to like to confirm, which is that Enigma may be a classic Zambian Copper Belt style sediment-hosted copper deposit.
These are potentially immense, world class copper deposits, and it would be an incredible achievement by Sipa to have found one here in Western Australia, to have secured all the ground for 1,000 square kilometres around it, and to have retained it 100% for themselves to this stage.
If it does turn out to be the real thing, a lot of other companies will want a part of it, including Antofagasta, and the only way that they will get that will be to buy Sipa shares on market. Very nicely played indeed.
7. Tempting as it may be to think that the nickel at Enigma has some direct connection with Dampier and Riedel's (and peripherally also Lodestar's) Baumgarten ground to the east, that is actually a bit of a furfy.
The Baumgarten Archaean greenstones are a thousand million years older than the Proterozoic Yerrida basin sediments that host Enigma. They too have copper and nickel mineralisation, being similar in age and type to the Yilgarn greenstones that run all the way from Wiluna to Leinster, Kalgoorlie, Kambalda, Norseman and Widgiemooltha. But these are early volcanic crustal rocks from 2-3 billion years ago, and the mineralisation within them is also of a similar age.
The Thaduna/Enigma host rocks and mineralisation are at least a billon years younger and, crucially, you can see from the photomicrograph of a millerite grain (nickel mineral) included within a chalcopyrite grain (copper mineral) in the fresh sulphides at Enigma that nickel and copper there are intimately associated, and are therefore part of the same phase of mineralisation.
It is possible that there are also Archaean greenstones at great depth, in the basement rocks beneath Enigma, and that some metals have been scavenged from these as well as from the deep Proterozoic sediments of the Yerrida basin, but that is as far as it would go.
In fact there are probably several kilometres of Proterozoic sediments overlying the deep Archaean basement beneath Enigma itself, and we already know that DHD01, the thousand metre vertical diamond drill hole that Sipa put down just to the northwest of Enigma a couple of years ago, was still in Proterozic sediments when it finished at a kilometre depth.
So where to from here?
Well, THD014 will certainly be an interesting hole, drilling as it is under that 34m at 2.8% Cu including 11m at 7.6% Cu. (That's 11m at $550 a ton! Think 10g/t gold equivalent!).
There's no guarantee that they have got the structure right yet, and it may need a couple more holes in that area to pin it down, but I would be very surprised it there is not a decent pod of primary mineralisation with appreciable copper grades under there.
Apart from which, Sipa's closer-spaced air core drilling is now doing exactly what they said it would at the start of this programme: blocking out coherent areas of higher grade copper oxide mineralisation, with clear resource potential.
They just need one coherent body of oxide or sulphide mineralisation that they can pin a resource on and the company will be off and running.
Meanwhile, on the broader scale, Thaduna is indeed looking very like a Copper Belt type mineral province, with potential for several more Enigma-style areas of mineralisation within Sipa's tenements.
The Enigma copper oxide blanket remains open in several directions. It now has associated base and precious metal geochemistry (Co, Ni, Ag, etc.) that suggests it is underlain by a similarly large primary sulphide system. It clearly has several areas of underlying copper sulphides, and there is potential for several more.
The market has never really understood the full implications of what Sipa have been doing at Enigma, and it has never appreciated the significance of the intense interest of a global copper producer like Antofagasta, but with a bit of luck this may all become much clearer to it in the near future.
But for now, back into my rabbit hole!
Fingers crossed, eh?
(And do not act on anything I say. My posts are for interest's sake. I am not a financial adviser and this is not financial advice)
SRI Price at posting:
8.9¢ Sentiment: None Disclosure: Held
