SIPA Resources International has entered into an exclusive agreement to gain access to Rio Tinto Exploration’s Australian geochemical and mineralogical databases.
Sipa managing director Michael Doepel said the agreement gave Sipa a unique opportunity to explore for world-class base and precious metals deposits in Australia.
Along with the Rio Tinto, Sipa has linked with Alfred Eggo, an expert in the collation, processing and interpretation of large geoscientific databases.
Mr Eggo worked for Rio Tinto for seventeen years before forming his own company, El Gaia.
El Gaia will contribute its expertise along with its own considerable geoscientific database and state-of-the-art computing capabilities to the venture.
Sipa will contribute its exploration abilities and cashflow of at least $10 million over the next eighteen months to the venture.
The cash is from Sipa’s 65 per cent-owned Mount Olympus gold mine near Paraburdoo.
All exploration will be conducted through the company Sipa-Gaia – 100 per cent owned by Sipa with El Gaia holding an option over 1 per cent of the company.
Rio Tinto has been given 3.26 million Sipa shares for the data licencing agreement and comes onto Sipa’s share register in the top fifteen shareholdings.
If a resource is identified with an in-ground value of more than US$500 million, Rio Tinto has the right to buy back up to 70 per cent of the relevant properties by reimbursing Sipa-Gaia three times its expenditure for the percentage being acquired.
Alternatively it may accept a royalty equal to 3 per cent of the net smelter return.
For resources with an in-ground value of less than US$500 million, Rio Tinto will have the right to accept the 3 per cent royalty.
