Pioneer takes up big Canadian lithium project option
THE INSIDE STORY: A $5.7 million raising fast tracks Pioneer Resources’ exploration push into its recently acquired lithium projects as it exercises the earn-in option on its exciting Canadian lithium project. By Mark Mentiplay
Now cashed-up, Pioneer Resources (ASX: PIO) is moving quickly to capitalise on its recent rapid move into the burgeoning lithium (spodumene) market.
Explorers around the world are now in a highly competitive race to be among the first of a new crop of companies rushing to production of the light metal critical to emerging alternative energy sources.
In March this year, Pioneer signalled an option to earn into Canadian explorer, International Lithium Corp’s (TSXV: ILC), 2,624 hectare, drill ready, lithium-in-spodumene project, that is the Mavis Lithium Project in north-western Ontario, Canada.
After completing due diligence investigations in late June, Pioneer opted to exercise that option.
In the same short time space, Pioneer acquired its namesake Pioneer Dome lithium pegmatite prospect, where a 4,000 sample soil geochemistry program has produced promising results, along with its Phillips River and Donnelly lithium projects all in WA.
These bold moves have been underpinned by the recent completion of a $3.216 million share placement taken by Sanlam Private Wealth and a share purchase plan to raise another up to $2.5 million.
“We recognised early this year we had to move quickly into lithium, from our existing gold and nickel projects in WA, especially now the metal is recognised as critical to rapidly emerging alternative energy storage sources,” Pioneer Resources managing director David Crook told The Resources Roadhouse.
“We are seeing that now in lithium battery technology.
“That’s why we have made sure we are near the front of the pack in terms of those exploration companies rushing to capture the interest in lithium.”
Pioneer’s interest was spurred by forecasts from Dudley Kingsnorth, a professor at the Curtin School of Business in WA and well-regarded local authority on the lithium market, who believes lithium demand this year will reach 160,000 tonnes from 5,000 tonnes in 1990, with the potential for 2020 demand to reach 600,000 tonnes as new lithium battery factories come on line, Tesla power walls are commercialised and an increasing number of electric cars and other transport-related products start rolling off assembly lines.
“That would be a nearly four-fold increase in demand from now,” Crook said.
Pioneer’s current focus is on the Mavis project, where it may earn an initial 51 per cent by spending $1.5 million on exploration over three years, with the ability to go to 80 per cent with further expenditure.
Field crews, drawn from ILC’s existing Canadian-based technical team, are presently carrying out new field programs, including a comprehensive geophysical survey, litho and soil geochemistry surveys and ground magnetics to highlight prospective pegmatite targets. This work is scheduled for completion in July with diamond core drilling targeted for September this year.
Crook says the 250 line kilometres magnetometer survey, taking continuous readings along lines 50m apart, will provide Mavis’ first comprehensive property-wide magnetic susceptibility modelling.
The litho-geochemical survey involves sampling outcropping rocks to identify the presence of specific geochemical and mineralogical signatures, which form a close-proximity halo in basaltic host rocks, often within several metres of rare metal pegmatites.
Experience at Mavis shows these rare metal halos can be very well developed in areas where pegmatites are known, but more importantly, may indicate areas in close proximity to pegmatites that are buried under soil cover, or do not outcrop.
Soil geochemistry surveys will be used to identify rare metal dispersion halos in soils where there is limited outcrop to perform a litho-geochemical survey.
These surveys, when combined with prospecting and mapping, are intended to identify high priority targets for a subsequent drill program.
Already this year, field reconnaissance at the Pegmatite-18 prospect confirmed an untested spodumene-bearing pegmatite with a surface outcropping strike length in excess of 200m.
1,500m of orientated diamond drilling planned for September will test key spodumene intersections from earlier drilling and channel samples, including those obtained in 2011 and 2012 at both the Fairservice and Mavis Lake sites.
These earlier programs identified high-grade, well-evolved, lithium bearing pegmatites, including:
3m at 2.15 per cent lithium oxide (Li2O) from 24m, 7m at 1.83 per cent from 4m, 7.8m at 1.86 per cent from 18.85m, 16.4m at 1.86 per cent from 161.9m, 16m at 1.53 per cent from 125m, 26.25m at 1.55 per cent from 152m and 5m at 1.44 per cent from 19m, all from different holes.
Twenty significant pegmatites have been identified to date in outcrop at the Mavis project, within a supporting lithium soil geochemistry anomaly.
Individual outcrops vary in strike length from 11m to more than 240m and range in thickness of up to 12m.
Three generations of drilling since the 1960s have systematically demonstrated pegmatites at the Fairservice prospect are strongly mineralised, and the first drill holes into the Mavis Lake prospect in 2011 also intersected spodumene.
The addition of lithium to Pioneer’s three advanced gold and nickel assets came through Wayne Spilsbury, a director of both Pioneer and Toronto-listed ILC, who saw the early 2016 rise of the lithium sector as an opportunity for a strategic alliance between the two companies on the Mavis Lake project.
“The deal sparked a hefty market re-rating for Pioneer, and a $1.6 million raising,” Crook said.
“Based on that response, we thought we’d better see what else was available from a lithium point of view.”
The latest $5.7 million raising from the share placement/share purchase plan will be spread over the Mavis project, along with field surveys and drilling of lithium targets at the Pioneer Dome project near Norseman, widespread aircore drilling and follow-up reverse circulation drilling at the Acra gold project in the Eastern Goldfields, and diamond core drilling at the Blair nickel project, also in the Eastern Goldfields.
After its March entry into the Canadian lithium sector, Pioneer acquired the Phillips River and Donnelly lithium projects the following month and Pioneer Dome in May.
Crook rates the new pegmatite field at Pioneer Dome highly, but there is also plenty to like at the two less advanced prospects at Donnelly and Phillips River.
The latter was pegged by Pioneer about 100km east of the Mt Cattlin lithium mine in southern WA and is considered prospective for lithium spodumene-bearing pegmatites.
Geochemistry and roadside sampling by an earlier explorer indicated two standout geochemical anomalies, with a number of others warranting further investigation.
Donnelly, also prospective for lithium pegmatites, extends between 12km and 60km from the world-class Greenbushes lithium mine, with tenements covering about 220 square-kilometres.
Pioneer is currently negotiating with WA authorities on ‘non-ground disturbing’ access and a conservation management plan, but expects to use existing forestry tracks to collect samples from the laterite cover.
Gold is also high on Pioneer’s agenda.
“We have a very good gold project in Acra which, up until the lithium move, was our flagship,” Crook explained.
The Blair Dome nickel project and Fairwater in the Fraser Range, the remote region hosting the Nova nickel-copper project, are also on the agenda.
Fairwater was last drilled in November 2015 and likely to re-start later this year.
Pioneer Resources Ltd. (ASX: PIO)
… The Short Story
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21 Ord Street
West Perth WA 6005
Ph: (08) 9322 6974
Email: pioneer@pioresources.com.au
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Craig McGown, David Crook, Wayne Spilsbury, Allan Trench
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