This one will have slipped under the radar due to the market cap of RIO relative to the scale of this investment by them, but it is one to watch for the coming field season:
The junior partner, Sipa Resources, have picked up and been diligently exploring what is equivalent to a significant chunk of the Fraser Range nickel province.
RIO have now signed an earn-in Joint Venture with Sipa to spend $A75M on the project to earn 75%
The project covers the the Kitgum-Pader belt in Uganda (a similar-aged Proterozoic mobile belt on the edge of the Archaean Congo craton rather than the Archaean Yilgarn Craton), where Sipa have identified no less than 14 Nova-style mafic/ultramafic intrusive centres.
The first mafic/ultramafic that Sipa have drilled, initially only to very shallow depth, is 'Aklelikongo', which has been shown to contain large thicknesses of disseminated nickel sulphides, and to have high grade massive nickel-copper sulphides deposited along the basal contact.
Akelikongo is exactly the same geological beast as Nova, and what it now needs (and is now going to get thanks to the deep pockets or RIO) is deep diamond drilling to locate a major deposit of nickel sulphides down plunge of the massive sulphides that Sipa have already intersected.
Geological mapping and geochemical sampling have shown that the other 13 mafic/untramafic intrusive bodies that Sipa have found in the Kitgum-Pader belt are also of the same nickel-fertile geological type as Akelikongo/Nova.
These include the large, pipe-like intrusive body at 'Mt Goma', which has strong, coherent copper and nickel geochemical anomalies over it, with up to 2% nickel in the overlying soils,. This incredibly compelling drill target was only recently identified by Sipa and has yet to have a single drill hole into it. Not for long though now that the big money is in the driving seat.
It is Rio Tinto plc, the London-listed global parent company of the Aussie RIO, that have committed up to $A75M to earn 75% of Sipa's Akelikongo Nickel Project, which is currently 100% SRI.
This commitment speaks volumes about:
a) Rio's positive view on nickel - one of the few metal commodities in which they do not yet have a major presence
b) Rio's view of the nickel potential of the Kitgum-Pader nickel province
c) Rio's high opinion of and support for the management of Sipa Resources, and the value which they place on Sipa's work to date at Kitgum-Pader.
Obviously a major nickel discovery in the Kitgum Pader belt would be highly significant for Sipa Resources, but it would also be rather significant for Rio. It would be the start of a Rio move into nickel sulphide mining, which, as their global competitor BHP has already realised, and has recently telegraphed at conferences and presentations, is the feedstock for cathode-grade nickel sulphate. Because of this, nickel sulphide is shaping up to be one of the key commodities of the coming electric vehicle revolution. The wo others being the accompanying metals that Sipa has found at Akelikongo: copper and cobalt.
As both a Rio and Sipa shareholder, I think this is a fantastic move and I will be watching the coming season's work with great interest.
RIO Price at posting:
$84.50 Sentiment: Hold Disclosure: Held
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