Combined annual report for the period ending 12 November 2010 EL 22359, EL 23063, EL 23065, EL 23992 and EL 26822

Abstract

Exploration Licences 22359, 23063, 23065, 23992 and 26822 were granted to Messrs Hosking, LeBrun and Allender on the 13 November 2008 with whom Sipa Exploration NL had signed a Farm-In Agreement for these licences on the 15 December 2005. Together with EL Applications 26823 and 26824 they form Sipa's West Warrego Project. Sipa negotiated another Joint Venture ? Farm In agreement with Image and Meteoric Resources for Exploration Licences 23764 and 24138 and Exploration Licence Applications 24363, 24255 and 24257. Sipa then integrated both tenement packages into a single Tennant Creek Project. Copper, gold bismuth are the main commodities explored for. The activity in the current reporting period focused on termite mound sampling and RC drilling of three 'bulls-eye' geophysical anomalies which had been derived by ground magnetic and gravity surveys in the previous reporting period. This exploration strategy was adopted in the largely unexplored tenement package because of it's success in the Tennant Creek field. The results of the work carried out in this reporting period on the tenements confirmed the validity of the exploration approach. The tenements have not been effectively explored since the 1970's due to an exploration moratorium. The only evidence of previous work was found in three drill sumps which, when resampled, produced Au and Cu anomalous sludge indicating that the drill holes intersected anomalous ironstones, possibly hosting economic mineralization. There is no record for these drill holes in the NTGS. Geochemical assays of 194 termite mound samples form reasonably coherent anomalies for Cu and Au. The anomalies are not necessarily centred on gravity anomalies which indicates that this method has the potential to add value beyond the gravity and magnetic information. Three ground magnetic 'bulls-eye' targets were tested with three RC drill holes for 861m and 329 samples. The drilling confirmed the geophysical approach by intersection ironstones in all holes. The ironstones were anomalous for Au and Cu, Bi, Mo and W. Whilst the current drilling campaign did not produce any ore grade intersections, it is viewed as strongly encouraging for the validity of the exploration approach to directly lead to ironstones which have recorded mineralized fluids. Given the small size (but high grade) of the known ore bodies in the Tennant Creek field, it cannot be expected that the first drill hole intersects ore grade mineralization in an ironstone. Given these results, it is highly recommended to continue exploration in these tenements.