Combined annual report for period ending 12 November 2009 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 15.12.2005. Together with EL Applications 26823 and 26824 they form Sipa's West Warrego Project. Copper, gold bismuth are the main commodities explored for. The activity in the current reporting period focused on assessing previous work, ground-based gravity and magnetic and diamond drilling of three 'bulls-eye' geophysical anomalies. This exploration strategy was adopted in the largely unexplored tenement package because of it?s success in the Tennant Creek field. Following a 2007 Agreement between Sipa and the Karlantijpa Traditional Owners and the Central Land Council a successful Sacred Site Survey was carried out in March 2009. Exploration initially focussed on the strongest geophysical anomalies in regional geophysical data sets. A total of 81.4 line kilometers of ground-magnetics (8% EL 22359, 67% EL 23992, 25% EL 26822) and 81.1 line kilometers ground-gravity data were collected (8% EL 22359, 60% EL 23992, 32% EL 26822). Four diamond holes were drilled for 1091.8 m and 634 samples (EL 23992). The results of the work carried out in the first 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. The ground gravity and magnetic resulted in a number of 'bulls-eye' targets, three of which have been tested with diamond drill holes. The drilling confirmed the geophysical approach by intersection ironstones in all holes. The ironstones were anomalous for Au and Cu especially at the edges of the ironstone body. Whilst the current drilling campaign did not produce any ore grade intersections, it is viewed as strongly encouraging for the validty 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.