THE BOURSE WHISPERER: Pioneer Resources (ASX: PIO) has entered into an Option Agreement and Strategic Alliance with TSX-listed company International Lithium Corp. (ILC) to earn up to an 80 per cent interest in the Mavis lithium project, located in the Canadian Province of Ontario.
Pioneer suggested the deal was encouraged by the recent interest in lithium, which it described as having the fastest consumption growth-trajectory of all strategic metals due to its use in the clean, hybrid-fuel automotive industry and the home power storage industry.
The agreement gives Pioneer immediate, direct exposure to the lithium sector through equity in the Mavis lithium project, as well as the ability to increase its lithium portfolio through further acquisitions and an offtake strategy through ILC.
The deal is subject to a three month due diligence period, after which Pioneer intends conducting a drill targeting program at the project, which will include ground magnetic surveys and soil geochemistry prior to a diamond drilling program this year.
The agreement expands Pioneer’s asset portfolio into another key demand-driven commodity – adding to its high-grade gold assets and nickel properties in Western Australia, which the company said it remains committed to.
Pioneer has also received firm commitments for a Placement at an issue price of one cent per share to raise $1.58 million to fund exploration in Canada and Australia.
“We are excited by the opportunity that our Joint Venture with International Lithium Corporation provides,” Pioneer Resources managing director David Crook said in the company’s announcement to the Australian Securities Exchange.
“The option to acquire up to an 80 per cent interest in these highly prospective lithium prospects in an established lithium province with an experienced technical team to drive exploration and development is a significant achievement especially, coming as it does, when the demand for lithium related products is so strong.
“We are also delighted with the response to our latest capital raising, the proceeds of which will be used to advance the lithium assets and also for the next phase of a drilling program at the Acra gold project, which remains a centre-piece of our project portfolio.”
The Mavis lithium project is located in north western Ontario, Canada, and covers an area of 2624 hectares.
Pioneer will manage exploration at the project utilising ILC’s existing Canadian-based technical team.
Diamond drilling has intersected high-grade lithium in spodumene-pegmatites over a strike length of 800m at the Fairservice prospect and has confirmed lithium endowment at the Mavis Lake prospect.
Outcrops vary in strike length from 11m to more than 240m and range in thickness up to 12m, within an initial 4.8km long target zone.
The project is well located relevant to key infrastructure requirements.