30 October 2012 Sipa Resources Limited ABN 26 009 448 980 September Quarter 2012 Quarterly ASX Report HIGHLIGHTS The September Quarter, and through October, has seen a very high level of drilling and geophysical activity at our Thaduna Copper Project, as well as advancing new project targeting in the Sipa-Antofagasta Copper Alliance. At Thaduna: 2,293 metres of RC precollar and diamond core was drilled in five holes into four partially coincident IP Chargeability and EM Conductor Anomalies at Enigma. Whilst we did not get the quick fix of finding the primary sulphide source of the very extensive Enigma Secondary Copper Blanket (at least 5 kilometres by 1.5 kilometres in extent), very valuable geological-geochemical-geophysical information was gained. Since September, 5,390 metres of Aircore drilling in 74 holes has been drilled, mainly into Enigma, attempting to outline a secondary copper resource and to find vectors to help find the primary sulphide source. Of particular interest are 25 holes in the north-eastern portion of Enigma that have intersected secondary copper and/or partially oxidised iron and copper sulphide mineralisation. These holes define a steep dipping, north east striking structure over at least 700 metres of strike, which remains open northeastsouthwest. This mineralised structure sits within the Secondary Copper Blanket and presents deeper RC drill targets. Aircore drilling is continuing to define additional structural targets. An RC drill rig is currently on-site and deeper testing of the mineralised structure described above, and some other high priority targets, is due to commence this week. In the Sipa-Antofagasta Copper Exploration Alliance: Work continued into identifying new grassroots, and more advanced, copper exploration opportunities. This has included extensive geophysical-geologicalgeochemical compilations and interpretations over selected terranes and approaches to third party tenement holders.
2 Figure 1 Sipa Project Locations PROJECT DESCRIPTIONS THADUNA COPPER PROJECT (Sipa 100% of 936 square kilometres) Exploration at Thaduna in the September Quarter, and in October to the time of writing, has comprised Diamond Core, RC and Aircore drilling along with geophysical Electromagnetic (EM) surveying. We commenced RC drilling in July with a very large capacity rig to test at depths greater than 350 metres, five geophysical targets defined in the previous Quarter. Three of these were largely coincident, very strong, IP Chargeability highs and equally strong EM conductors.
The combined geophysical and geological interpretation was that these targets may have provided us with a shortcut to discovering the primary sulphide source of the very extensive Enigma Secondary Copper Blanket. The RC drilling however encountered very high volumes of water and the first holes could not get to target depth. We were fortunate to secure a diamond core rig from our preferred contractor and then used the RC rig to drill precollars. In keeping with the previous diamond core programme, conditions remained very challenging, due to the very deep weathering profile that we interpret as being caused by the intense Enigma mineral alteration system. In all, 2,293 metres of precollars and core in five holes were completed (THD005 to THD010, Fig. 2). THD009 failed due to challenging ground conditions. The holes did not intersect the large copper sulphide body, or bodies, we were hoping for and the present interpretation is that the geophysical anomalies were at least in part caused by pyritic, carbonaceous black shales. These shales were known to be present, but it was thought that the discrete nature of the anomalies may have been caused by large bodies of copper-rich sulphide. This interpretation may very well be correct, but the geophysical response is masked by the intense response of the black shale. Having not got the quick fix we were searching for, we have gone back to shallower Aircore drilling in an attempt to define a shallow oxide copper resource, and hopefully find vectors towards the primary copper deposit. We restarted Aircore drilling in early October and to the time of writing have completed 58 holes at Enigma for 3,953 metres. We initially concentrated around earlier Aircore hole THR3187 that had returned 1.8% copper over 11 metres from 48 metres depth. To date 25 of the step-out holes from THR3187 have intersected mineralisation comprising copper carbonates (malachite and some azurite) and, mainly partially oxidised, disseminated to semi-massive pyrite associated with quartz and iron oxides (see Figure 3). Minor chalcopyrite and lesser bornite have been recognised and confirmed by XRF analysis. This oxidised mineralisation has also been confirmed as copper bearing, with often multiple sections in holes between 5 and 15 metres thick analysing (XRF) between 0.25% and 1% copper, generally 60 to 80 metres beneath surface. Multi-element laboratory results, including precious metals, are awaited. The overall host rocks are dolomites and limestones, but in detail, the mineralisation is generally hosted by sandstones, siltstones and black shales within the carbonates. Given the nature of this mineralisation, it may be depleted in copper relative to the primary, unweathered zone. This mineralisation is interpreted to sit within a northeast-southwest trending structure at least 700 metres long and at least 30 to 50 metres thick (see Figure 3). It remains open in both directions along strike and down-dip and presents an excellent target for deeper RC drilling to intersect it in the primary zone, which is scheduled to commence later this week. Aircore drilling to attempt to extend the strike also continues. 3
Sipa Resources Limited September Quarter 2012 4 Figure 2 Enigma Prospect Geology and Drill Hole Location
5 Figure 3 Detail of Northeast Enigma drill hole location
In addition, at the start of this programme 16 Aircore holes for 1,437 metres were drilled into three copper anomalies from earlier shallow RAB drilling about 24 kilometres southwest of Enigma. Two zones of strongly anomalous copper (to 20 metres at 0.32%) were intersected and provide targets for later RC drilling, though they presently do not share the higher priority of Enigma. Two RC holes were also drilled in July at the Rooney Copper Prospect where earlier shallow drilling had returned grades of 2.5% to 4% copper over widths of 10 to 15 metres. There was also one deeper hole, THC004 that intersected the lode about 200 metres down dip of the shallower holes. This had returned 19 metres of 0.4% copper from 224 metres (including 5 metres at 1.3% copper from 225 metres) at the hangingwall contact of the lode, which thickened to about 80 metres at this depth. Of the recent holes, one was drilled to intersect the lode about 40 metres down dip of the previous hole and one was drilled to intersect the lode about 80 metres above it. These holes returned 4 metres at 0.44% copper and 8 metres at 3.52% respectively. Whilst the strong, shallow mineralisation at Rooney occurs over only about 120 metres of strike, the deeper and considerably thicker lode encountered at depth requires holes of similar depth along strike east and west. Geophysical programmes included down-hole electromagnetic (DHEM) surveying of the diamond drillholes and moving loop electromagnetic surveying (MLEM) at two closely related strong airborne electromagnetic (VTEM) anomalies about 11 kilometres northeast of Enigma. The MLEM better defined the VTEM anomalies for drill targeting. The RC programme about to start will also test the two VTEM/MLEM targets. 6 SIPA-ANTOFAGASTA STRATEGIC COPPER EXPLORATION ALLIANCE Work continued on generating new grassroots targets, and identifying more advanced, copper exploration opportunities in Western Australia. In particular, geological, geochemical and geophysical compilations, geophysical reprocessing and integration and interpretation of certain terrains in the extensive Proterozoic Capricorn Orogen continued. Several target areas identified were also field checked and preparations for fieldwork at Lilly Tank in the Kimberley continue. In addition, discussions were held with third party tenement holders. WOODLINE GOLD PROJECT (Sipa holds 100% of 485 square kilometres and 70% of 248 square kilometres with Comet Resources NL) No fieldwork was conducted at Woodline, though discussions are being held with several third parties relating to possible Farm-in arrangements. Sharing exploration at Woodline would allow Sipa to fully concentrate on our copper exploration efforts. During the quarter, Sipa withdrew from the Image Resources-Woodline JV.
ILGARARI COPPER PROJECT (Sipa holds 100% of 900 square kilometres) Heritage surveys for future RAB drilling were completed. 7 TENNANT CREEK GOLD AND COPPER PROJECT Agreement has been reached in principle to return Sipa s 70% interest in the Project to the Hosking-Allender-LeBrun Syndicate. The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Mr M G Doepel who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Doepel is a full-time employee of Sipa Resources Limited. Mr Doepel has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Doepel consents to the inclusion in this report of the matters based on his information in the form and context in which they appear. For more information: Mike Doepel, Managing Director Sipa Resources +61 (0) 8 9481 6259 info@sipa.com.au www.sipa.com.au