THE INSIDE STORY: Much of the optimism that has pervaded the boards of the Australian Securities Exchange in 2016, could pretty much be attributed to two commodities; gold and lithium.
Before lithium had burst its way into the commodity psyche, Pioneer Resources (ASX: PIO) had already established itself as a well-credentialed gold exploration play with a number of projects in the traditional gold heartland of Western Australia.
The company’s 100 per cent-owned (all commodities excluding nickel) Acra gold project covers an area of 370 square kilometres just 60km north east of Kalgoorlie.
Pioneer Resources recently announced it had struck a Joint Venture (JV) with one of the gold sector’s current big players in Northern Star Resources (ASX: NST), which it declared would fast track exploration at the Acra project.
Northern Star is set to pay Pioneer $500,000 cash to acquire an initial 20 per cent interest in the project plus the right to earn a further 55 per cent interest (total 75% interest) by sole funding $3 million of exploration expenditure within three years.
“You would have had to have been living under a rock in recent times to not now about the success Northern Star has enjoyed, thanks in no small part to the company’s very good discovery record in the Kalgoorlie District,” Pioneer Resources managing director David Crook told The Resources Roadhouse.
“Striking a JV with a company with such a recent track record, which will bring its organisational technical expertise and financial capacity to rapidly advance the Acra gold project without further financial impost to Pioneer until a Mining Proposal is approved, is a boon for the company and our shareholders.”
Under the terms of the JV, Pioneer will continue to be free carried up until the JV secures a Departmental approval for a future Mining Proposal, at which time Pioneer may either contribute pro-rata to future JV expenditure or sell its 25 per cent interest at fair market value to Northern Star for cash or NST shares at Pioneer’s election.
The agreement also removes the funding responsibilities for future exploration programs at Acra from Pioneer, as they will be funded and advanced by NST.
It also opens strategic possibilities for future mining operations, such as an established ore treatment route, with the Acra gold project located just 40km east of NST’s Kanowna Belle gold mill.
When the lithium bug bit the market in 2015, Pioneer Resources was one company to quickly recognize the commodity was more than a fashion statement and had potential to re-energise the exploration sector.
Pioneer soon established a portfolio of quality lithium projects in Western Australia, which includes:
The Phillips River lithium project, located approximately 100km east of the Mt Cattlin lithium mine near Ravensthorpe in the Great Southern region of WA.
Phillips River consists two exploration licences pegged over an area of around 292 square kilometres considered prospective for lithium.
Pioneer has an Option Agreement to acquire a 90 per cent interest in the Donnelly lithium project located in the world class Greenbushes Minerals District in WA, sitting 12km to 60km from the world class Greenbushes lithium mine.
The Greenbushes Mineral Field hosts the world’s largest pegmatite hosted lithium resource.
Lithium mineralisation was identified at the Pioneer Dome lithium project Eastern Goldfields, where Pioneer Resources holds an area of around 300sqkm covering 13 outcropping pegmatite clusters over a 20km strike length, in rock chip samples, confirming the presence of LCT pegmatites.
Recent drilling undertaken at the 100 per cent-owned Pioneer Dome project encountered encouraging lithium intersections.
On receiving the results, Pioneer declared them to be of some importance and will be subjected to additional drilling as they also encountered an intersection of high-grade pollucite, an ore mineral of caesium.
Drilling results included:
3 metres at 1.11 per cent lithium dioxide (Li2O) from 44m
12m at 1.37 per cent Li2O from 54m and 10m at 408ppm tantalum pentoxide (Ta2O5) from 54m;
6m at 1.79 per cent Li2O from 48m;
12m at 1.41 per cent Li2O from 60m;
5m at 2.08 per cent Li2O from 37m.
Pioneer declared the drilling had “confirmed unequivocally” the project hosts a rare-metal lithium caesium tantalum (LCT) Pegmatite system where highly fractionated pegmatite zonation is evident, including ore grade mineralogical phases.
The largest use of caesium is in the manufacture of very high value caesium formate brines, used for high-pressure/high-temperature oil and gas drilling and exploration.
“These were exceptional results for a first round of drilling,” Crook said.
“The discovery of a mineralised LCT pegmatite system is exciting enough, but add to that encouraging intersections of lithium and an extremely unusual, geologically rare, but potentially very significant occurrence of high grade caesium, and they become exceptional.
“We are currently compiling assay, geology and petrography results, as we look forward to the next phase of drilling.”
In June 2016, Pioneer advanced its lithium project collection by earning into the Mavis lithium project, situated in the Canadian province of Ontario, under a strategic alliance with Toronto-listed International Lithium Corp. (TSX.V: ILC).
This was followed by a second Option Agreement between the companies in July, whereby Pioneer can earn a 51 per cent interest and, subject to ILC’s participation, up an 80 per cent interest, in the Raleigh lithium project, located 60km southeast of the Mavis Lake project.
Pioneer has been busy at Mavis Lake, completing a 58 line kilometre ground magnetic survey.
The imagery received from the survey, along with historic assays from 100 litho-geochemical samples has provided a number of new targets for spodumene mineralisation.
A further 400 litho-geochemical samples are to be taken in priority areas from Mavis Lake, including extensions to the spodumene pegmatite targets in a new that has been subsequently acquired known as the Mavis West Area.
The inclusion of the Mavis West Area increases the Mavis Lake project area by 640 hectares and is prospective for extensions to the western-most spodumene-bearing pegmatites of the Mavis Lake project.
The highest lithium values recorded to date on the Mavis Lake property occured in albite-spodumene-type pegmatites, where grab samples graded up to 3.14 per cent Li₂O, with one composite channel sample grading 1.22 per cent Li₂O 2 over 5.3m.
Pioneer’s Canadian activity hasn’t been confined to Mavis with field work underway at the Raleigh project resulting in the pegging of a further claim taking the total project area to 936ha.
Extensional drilling of known spodumene-bearing pegmatites is scheduled for early 2017 after a 500 litho-geochemical sample program with accompanying mapping is completed this year to infill large lithium litho-geochemical anomalies.
A comprehensive airborne magnetic survey will be flown across the entire project to delineate pegmatites and enable drill hole placement.
“A budget of one million has been allocated across the Mavis and Raleigh lithium pegmatite projects,” Crook said.
“Since the formation of the JV exploration activities have primarily been centred at the Mavis Lake project.
“Following completion of the exploration program at the Mavis Lake project the field crews will move to the Raleigh project.”
Pioneer Resources is living up to its mantra of being an active junior exploration company focused on the exploration for global demand-driven commodities.
The company is determined to continue to strengthen its project portfolio through acquiring, pegging and reviewing new opportunities, and targeted exploration programs.
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