10 November 2015

Fairwater Nickel Sulphide Target

Diamond Core Drilling Intersects Mafic-Ultramafic System

Pioneer Resources Limited ('Company' or 'Pioneer') (ASX: PIO) advises that the first phase of the Diamond core drilling program at the Fairwater Nickel Project, located within the Albany Fraser Orogen in South Western Australia, has finished.

The Company has concluded that a mafic-ultramafic conduit sill-dyke system has been intersected, an interpretation based on geological observations and qualitative analyses by pXRF of drill core samples.

Pioneer is now planning a gravity survey to cover the mafic-ultramafic system. This type of survey is used to locate zones of greatest rock density, which might represent the feeder zone (or chonolith) of the intrusive mafic-ultramafic system, and is where nickel sulphide trap sites are likely to occur (Refer to Figures 1 and 2).

When completed, selected gravity targets will be tested by reverse circulation drilling initially, with follow-up Diamond core drilling, to directly test for a mineralised chonolith.

Key observations from the Diamond core drilling program.

• To date, three holes totalling 370m have been drilled. Each hole intersected mafic-ultramafic rocks;

• The mafic-ultramafic rocks intrude into quartz-biotite gneiss 'country rock';

• The mafic-ultramafic rocks intersected are interpreted as being part of a conduit sill-dyke system, thickening towards the centre of the FWNi003 aeromagnetic anomaly;

• The mafic-ultramafic system includes high MgO serpentinites (after peridotite), a key component of a mineralised sill-dyke system;

• Sulphur and nickel content, by pXRF analysis, is observed to increase in ultramafic rocks towards the centre of the targeted aeromagnetic anomaly, and also with depth as the mafic-ultramafic unit apparently thickens. Traces of blebby iron sulphides require petrology to determine whether they are magmatic or metamorphic.

  Intervals of cored ultramafic rock are being cut and assayed by a commercial laboratory, providing nickel and other trace element geochemistry as well as samples for petrography. Specific gravity determinations will be used to calibrate gravity survey data.

  
  

  Timetable

• Core marking, cutting and sampling is in progress. Final laboratory assays are expected towards the end of November 2015.

• The planned gravity survey will cover much of the area shown in Figure 1. Timing will be determined by the availability of a satisfactory contractor, but is expected to be before the end of the year.

• Drilling is expected to resume during the first quarter of 2016.

Figure 1: Fairwater Nickel Project: FWNi003 Prospect summary plan showing completed aircore drill hole locations (black dots) and the locations of the completed Diamond core holes from this program. The underlying image is of aeromagnetic data which indicates the location of more-magnetic ultramafic rocks as warmer colours.

A-A' shows the extent of the interpretive and schematic cross section in Figure 2.

A A'

Figure 2: Interpretive and schematic illustration through FWNi003 at approximately 6,390,500mN and components of a mafic-ultramafic conduit sill-dyke nickel sulphide style setting.

Background to the FAIRWATER Nickel Project

The Fairwater Project's nickel targets are located in interpreted Proterozoic-aged rocks between 100 and 130km south west of Independence Group NL (ASX: IGO) Nova and Bollinger nickel deposits, in the Albany- Fraser Orogen in south east Western Australia (see Figure 3).

Proof of concept aircore drilling, and now Diamond core drilling has successfully confirmed the presence of ultramafic and mafic rocks, which are interpreted as a mafic-ultramafic conduit sill-dyke system. Ultramafic rock is identified by chemical composition, mineralogy and colour - principally its iron, magnesium, chromium and nickel content, and is a common host rock for nickel deposits world-wide.

The Fairwater Nickel Project is one of the Company's three key exploration assets. The other two are the Acra Gold Project near Kalgoorlie; and the Blair Nickel Mine near Kambalda. All are within Western Australia.

FAIRWATER Nickel Project awarded EIS Funding

This Diamond core drilling program is joint-funded under the Royalties for Regions Co-funded Government- Industry Drilling Program, for 2015-2016, referred to as the Exploration Incentive Scheme ('EIS').

Pioneer was advised by the Department of Mines and Petroleum that it is eligible for up to $129,500 in EIS co-funding to complete follow-up drilling at the Fairwater FWNi003 Prospect.

Under the EIS, funds committed by Pioneer towards the approved drill program will be matched by funds from the State Government's program - halving the drilling component cost to Pioneer.

Figure 3: Pioneer's Fairwater Project tenements showing the location of the FWNi003 Prospect, and other nickel prospects.

Figure 4. Aeromagnetic Imagery of the FWNi003 Prospect.