SIPA RESOURCES INTERNATIONAL NL 2002-06-25 ASX-SIGNAL-G
HOMEX - Perth
+++++++++++++++++++++++++ We are pleased to announce:
1 the Ore Reserve for the Waugh Gold Deposit at Sipa's 100%-owned Paraburdoo Gold Project (PGP) and the schedule for bringing the Deposit into production
2 that five targets in the PGP within 5 kilometres of the Mount Olympus treatment plant, are now ready for Reverse Circulation and Rotary Air Blast drilling
3 current drilling targets on the Newcrest-operated Limerick Hill Joint Venture.
1. Mining Solutions Consultancy Pty Ltd of South Perth, Western Australia, have estimated the Reserve tabled below, which fits within an open pit design optimised at a gold price of A$560 and a cut-off grade of 0.9 g/t. Cash costs for Waugh production are estimated at A$250 per ounce - well within the lowest Cost Quartile of Australian producers.
Total Sipa 399.000 7.80 100.1 Limerick Hill JV 16,000 6.30 3.2 Total 415,000 7.75 103.3
Waugh is situated about three kilometres east of Sipa's PGP 600,000 tonne per annum Mount Olympus CIL gold treatment plant, within a 400 metre long Sole Risk Excision from the surrounding Limerick Hill Joint Venture. The excision is limited at depth to the 400 metre RL, which is about 100 metres down dip of the Waugh outcropping lode. Newcrest Operations Limited may earn a 70% interest from Sipa in Limerick Hill by spending $3.5 million on exploration.
Tender documents for the development and mining of Waugh are presently being evaluated by five mining contractors and it is anticipated that the Mining Contract should be awarded by late July and that mining should commence in mid August. The first ore should be delivered to the plant very shortly afterwards. Mining will take approximately twelve months.
High grade ore will be blended with Mount Olympus stockpiles, which currently stand at:
* Medium Grade about 290,000 tonnes grading 1.98 g/t; and
* Low Grade about 780,000 tonnes grading 1,21 g/t
to give a milling life of about 2 (1/2) years and gold production of about 150,000 ounces.
It is anticipated that, based on A$15/tonne operating costs, the Medium Grade Stockpile should produce gold at A$260/ounce and the Low Grade Stockpile at A$420/ounce.
2 Sipa has a clear aim at Paraburdoo of finding more ore to extend the life of the Project cash flow and to that end we are actively exploring the 20 square kilometres of Sipa's 100%-owned mining leases, which are Surrounded by the Limerick Hill Joint Venture, as shown on the map titled Geology, Gold Deposits and Prospects attached.
Four prospects are ready for Reverse Circulation drilling which should commence within two weeks:
* Diligence Dome South - an ironstone gossan (similar to the Waugh Deposit outcrops) on the southern limb of the Diligence Dome alteration zone, with surface values of up to 2 g/t gold.
* Dinosaur - a complex of several styles of mineralisation (including ironstone gossan and oxidised sulphidic, altered sedimentary rocks with surface values up to 10 g/t gold) within an 800 metre long gold-in-soil anomaly located in the structural corridor that hosts Zeus, Mount Olympus and Marcus to the west.
* Marcus - a 1.25 kilometre long series of small ridges, running west from the Mount Olympus - West Olympus orebodies, which are typified by oxidised sulphidic sandstones cut by oxidised sulphidic quartz veins, like the Zeus deposit. There is a consistent gold-in-soil anomaly along the ridge and surface values up to 59 g/t Au have been returned. Holes drilled by previous operators appear not to have fully tested the mineralised position.
* Dragonfly - three areas of outcropping oxidised sulphidic and quartz-veined sandstone similar in appearance to the Zeus deposit, which outcrop through shallow cover in a zone about one kilometre long with surface values up to 7 g/t gold.
In addition to the Reverse Circulation testing of the four prospects described above, an extensive Rotary Air Blast drilling programme, is planned for the projection of the mineralised corridor extending under thin sand cover to the west of Marcus. There is about two kilometres of that corridor (which hosts Dinosaur, Zeus, Mount Olympus, West Olympus and Marcus) between the west end of Marcus and the western boundary of the Paraburdoo Gold Project Mining Leases. It has not been drilled before.
Mapping, soil and rock sampling and drilling to 'sterilise' areas where the waste dumps from the Waugh Mine are proposed to be sited has just been completed:
Two significant intersections were returned from north of the proposed open pit:
Both intersections are below the 400metre RL and are within the Limerick Hill Joint Venture. The WAC 315 intersection was typical Waugh oxide mineralisation, whilst the WAC 319 intersection was the first sulphide zone mineralisation encountered at Waugh, and comprises massive pyrite with quartz. WAC 315 encountered the mineralisation at about 250metres down dip of surface near the 360metre RL, whilst the WAC 319 intersection was 200metres further down dip at about 245metre RL. The Waugh mineralised system thus appears to be totally oxidised to between 200metres to 220metres vertically below surface and to about 400metres down dip of surface.
Further gold mineralisation was discovered 500metres west of the Waugh gold deposit, at the Connie's Find Prospect within the Limerick Hill Joint Venture. Gossanous pebbly sandstone (the hanging wall to mineralisation at Waugh) with sheeted quartz and oxidised sulphide veining crops out over an area of 50m by 30m, Twelve rock ship samples returned 0.8 - 34 g/t gold (average 5g/t AU) and 1100 - 6400 ppm arsertic (average 2000 ppm As). The geology and geochemistry at Connie's Find are very similar to that at Mount Olympus, three kilometres to the southwest.
Three shallow drill holes sited about 50metres north of WAC 315 tested iron-rich veining which assayed to 4 g/t Au associated with laterally extensive hangingwall (to Waugh) alteration characterised by bleaching and sheeted quartz and oxidised sulphide veining. Anomalous intervals of up to 23metres @ 0.2 g/t Au were returned.
3 Newcrest are presently drilling Reverse Circulation holes in the Limerick Hill Joint Venture in the vicinity of Waugh:
* to test at depth for repetitions of the Waugh high grade shoot below the 400metre RL
* to test the, structure hosting Waugh for about one kilometre east to the Diligence Prospect where shallow holes have returned results up to 4metres @ 20.7 g/t from 5metres depth
* to test the Connie's Find Prospect
* in addition, holes are planned for the Diligence Nose North and South Prospects.
The potential for the definition of further significant gold mineralisation in the Waugh area is highlighted by the recent discovery of:
* potentially ore grade and width gold mineralisation at 100metres to 230metres depth in the recent drillholes WAC 315 and WAC 319
* further high grade surface gold mineralisation at Connie's Find
* extensive alteration in the hangingwall to the Waugh Gold Deposit
M Doepel M AusIMM MANAGING DIRECTOR
The information in this report is based on information compiled by a person (M Doepel) who is a Corporate Member of the Australasian Institute of Mining and Metallurgy and who has more than five years experience in the field of activity being reported on. This report accurately reflects the information compiled by that member.
Information on the Waugh Gold Deposit Reserve Statement conforms to the requirement of the Australasian Code for the Reporting of Mineral Resources and Ore Reserves (the JORC Code, 1999). The statement was prepared by Mr T Dincer of Mining Solutions consultancy Pty Ltd who is a Competent Person as defined by the JORC Code.
SRI Price at posting:
0.0¢ Sentiment: None Disclosure: Not Held
