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.
WAUGH GOLD DEPOSIT ORE RESERVES
CATEGORY OWNERSHIP TONNES GRADE OUNCES
(G/T) (,000S)
Proved Sipa 303,500 8.28 80.8
Limerick Hill JV 14,500 6.71 3.1
Probable Sipa 95,500 6.30 19.3
Limerick Hill JV 1,500 2.36 0.1
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:
WAC 315 - 13 metres @ 4.9 g/t from 116 metres downhole
WAC 319 - 4 metres @ 1.7 g/t from 229 metres downhole
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.
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