With the Sinclair Zone Caesium Project rapidly advancing towards production and exploration success on multiple fronts, Pioneer Resources’ (ASX: PIO) diversified project development strategy is poised to bear fruit.
Pioneer Resources has always taken a diversified approach to delivering value to shareholders.
Knowing that pinning a company’s hopes – and funds – on the success of a single project is an extremely high-risk, albeit, high-return strategy, Pioneer has adopted a ‘portfolio approach’ to its exploration strategy.
“As a company, we have always sort to maintain and develop a portfolio of projects and prioritise the allocation of funding and resources to them based on our assessment of their potential to deliver shareholder returns,” Pioneer Resources managing director Crook told The Resources Roadhouse.
“It requires both a technical and commercial approach to help ensure that we are pursuing the right projects and over time we have refined our targeting and identification processes, and it helps that we have a board with a strong mix of technical and corporate knowhow.
“Pioneer has assessed and explored a number of projects and have and added and subtracted to our project portfolio accordingly, but we feel extremely pleased with the current projects within the company – to the point where we believe the Pioneer project portfolio has never been stronger, nor has the company been in a better position to realise value for shareholders.”
That optimism is based on a portfolio of projects in key, global demand-driven commodities, all strategically located relative to requisite infrastructure in jurisdictions with low sovereign and geo-political risk.
Pioneer’s most advanced project, and current core focus, is the Sinclair Zone caesium project, located within the company’s 100 per cent-owned Pioneer Dome lithium-caesium-tantalum (LCT) roject in the Eastern Goldfields of Western Australia.
The company continues to advance the project towards production – with mining activities scheduled to commence in the following quarter.
Pioneer made its world class caesium discovery at the Sinclair Zone, as part of its LCT focused drilling programs at Pioneer Dome, in October 2016.
The caesium at the Sinclair Zone presents as the mineral pollucite, a rare caesium mineral found in extremely differentiated LCT pegmatite systems.
The Sinclair Zone project has a JORC 2012 pollucite Mineral Resource Estimate of 10,500 tonnes of pollucite at 17.1 per cent caesium oxide (Cs2O) in the Measured category, which makes it the world’s third largest known pollucite deposit.
Pollucite is a high-demand niche commodity with a lack of ready substitutes.
It is primarily used in the manufacture of caesium formate brine, a high-density fluid used in high temperature-high pressure oil and gas drilling.
It acts as a lubricant and helps deliver higher production rates, and is non-corrosive on drilling equipment and can enhance hydrocarbon recovery, plus it is largely non-detrimental to the environment.
The world’s supply of pollucite is highly constrained and the Sinclair Zone project has the potential to be a high margin operation for Pioneer and contribute significantly to global pollucite supply.
With this is mind, Pioneer is committed to the project’s rapid development, which continues apace.
Key agreements required to facilitate the commencement of mining are in place.
A Mining Lease (and Miscellaneous Licence) has been granted, and a Heritage Protection Agreement and a Mining Agreement with the traditional owners, the Ngadju Native Ti Ngadju Native Title Aboriginal Corporation, have been reached.
In addition, archaeological and anthropological heritage surveys have been completed and no objections have been raised for the Sinclair Zone project to proceed to mining.
Mine planning and permitting is ongoing with Flora and Fauna surveys concluded and a Clearing Permit lodged, a Project Management Plan has been submitted to the WA government and a detailed Mine Plan is progressing.
Discussions with potential off-takers continue to advance.
Drilling is currently underway, to further define the pollucite deposit.
Due to the high value of pollucite, Pioneer has reduced drill spacing to a nominal 10m by 5m pattern and results, which are due in March, will be used to help finalise the pit design and mine schedule.
In addition to the project’s pollucite, the Sinclair Zone hosts other minerals that may potentially also be commercially extracted and have a significant positive economic impact on the project.
These include lepidolite and microcline (potassium feldspar) and the company is in ongoing discussions with interested third parties.
Pioneer’s exploration projects have also delivered exceptional results, validating its diversified project portfolio approach.
The company recently completed highly successful cobalt and nickel sulphide drilling programs at its Golden Ridge project and has also commenced its next phase of drilling at its Mavis Lake lithium project in Canada, plus further LCT-focused exploration drilling at Pioneer Dome.
The Golden Ridge project is located south east of Kalgoorlie in WA and hosts substantial areas prospective for lateritic cobalt as well as nickel sulphides.
Pioneer recently completed a 31 hole – 3,084 metre reverse circulation drill program over four cobalt targets (Rocket, Leo’s Dam, Anomaly 13 and Anomaly 14 Prospects) at Golden Ridge.
The results were highly positive with 16 holes intersecting cobalt mineralisation; with a highest grade of 1.6 per cent cobalt, and a thickest intersection of 31m at 0.15 per cent cobalt from a depth of 43m.
Pioneer’s nickel sulphide focused drilling at Golden Ridge was also successful, intersecting nickel sulphide mineralisation of 22m at 1.02 per cent nickel and 475ppm copper from 202m.
“This discovery of a broad zone of disseminated nickel sulphides is highly significant,” Crook said.
“It validates and strengthens Pioneer’s nickel sulphide geological model for the project as being analogous to other major nickel sulphide mining camps in the region, such as Kambalda and Widgiemooltha.
“And, based on the success of these programs, planning for the next phase of field work at Golden Ridge to further unlock the project’s lateritic cobalt and nickel potential has already commenced.”
The Mavis Lake project provides another potentially valuable string to Pioneer’s bow.
Pioneer has an Option Agreement and Strategic Alliance with International Lithium Corp (TSX.V: ILC) to earn up to an 80 per cent interest in the Mavis Lake, and Raleigh, lithium projects, in the province of Ontario.
Drilling at Mavis Lake has consistently intersected spodumene-bearing pegmatite mineralisation and the current phase of drilling – an initial 1,200m diamond drilling program commenced in January – is no exception.
This drilling is targeting extensions to spodumene-bearing pegmatites intersected at the Fairservice prospect in the previous round of drilling.
The first hole in the current program intersected three spodumene-bearing pegmatites, including one with a down-hole thickness of 20m (from a depth of 82m).
Drilling is ongoing and is expected to be completed and all results available by the end of March.
It is worth noting the strong focus within Pioneer’s project portfolio on lithium and cobalt.
Both are acknowledged as core components in next generation battery and energy storage technologies, and with global demand for these ‘technology metals’ expected to surge over coming years as mainstream commercial adoption comes online, Pioneer will continue to pursue the development of its projects as a core priority.
With the Sinclair Zone project on schedule for production in the near-term and continued strong results from its exploration activities, 2018 is shaping as a year of value delivery for Pioneer and its shareholders.
Pioneer Resources Ltd. (ASX: PIO)
… The Short Story
21 Ord Street
West Perth WA 6005
Ph: (08) 9322 6974
Craig McGown, David Crook, Wayne Spilsbury, Allan Trench