Pioneer Resources 06/07/2016 FAT-MIN-528

PIO AUD $0.033 Spec. HIGH

Take-up SPP

Pioneer Resources is offering shareholders the opportunity to be involved in the ongoing development of the company through a Share Purchase Plan (SPP). The shareholder offering comes at a time when the company is to commence active exploration of its recently acquired Mavis lithium project in Canada. The following figure shows the locations of the company's assets (Li - lithium, Ni - nickel and Au - gold):

Source: Pioneer Resources

The SPP will raise approximately A$2.5 million and is not underwritten. The company retains the right to scale-back applications in the event the SPP is over subscribed. The funds will be used to

accelerate exploration activities at the company's new Mavis lithium project and provide general working capital.

To be eligible to participate in the SPP offering, Members had to own Pioneer Resources shares on 24 June 2016. Other matters pertaining to eligibility are contained in the Share Purchase Plan Offer document. The company forwarded the SPP offer document to eligible shareholders on or about 29 June 2016.

Under the SPP the company plans to issue approximately 69.4 million shares. The issue price has been set at A3.6 cents per share. At the time of writing, Azure Minerals share price was trading at A3.8 cents. Under the SPP, eligible shareholders may purchase a maximum of A$15,000 in shares.

The SPP allows eligible shareholders to purchase shares at predetermined dollar values, commencing at A$900 and ranging up to A$15,000. Including the floor and ceiling participation levels, shareholders can select from eight predetermined dollar value levels within the prescribed range. The following table shows the different subscription levels available:

Source: Pioneer Resources

Eligible shareholders may select only one of the above predetermined dollar values. The SPP is currently open for shareholders to lodge applications and will close on 13 July 2016. The allotment of SPP shares is expected to occur on 20 July 2016 and holding statements updated on the same day.

We recommend Members who are eligible participate in the SPP and take up shares. Member participation should be to the maximum capacity appropriate to the value of Pioneer Resources in their portfolio. Members should complete the required form and forward it to the company prior to the close date of 13 July 2016. We are pleased that the company is providing an opportunity for existing shareholders to participate in its ongoing development.

The company also successfully raised A$3.2 million through a placement of 89.3 million shares at A3.6 cents per share to institutional and sophisticated investors. The placement shares carried the right to one free option for every three placement shares subscribed for. The option is exercisable at A6 cents and will expire on 31 July 2018. The funds raised from the placement will also be used to accelerate exploration of the Mavis project.

On the daily chart, the share price is in flirtation-mode with the 50-day moving average of $0.03. Should prices lift from current levels, then resistance is expected at the $0.05 level being the 14th June high. A definitive break above this level would give rise to a broader term ascent towards the May high of $0.10.

We believe the ownership dilution factor is warranted, given the potential value that could be unlocked with exploration success at the company's Mavis project. The company is now well funded to undertake a serious exploration programme across its Mavis project. The following figure shows the regional location of the Mavis project:

Source: Pioneer Resources

In FAT-MIN-517, we reviewed the farm-in consideration and work schedule required by the company to reach the maximum 81% interest in the Mavis project, and considered the terms to be fair and reasonable. Moreover, a common director of the two companies, with experience on the ground in Canada, was a valuable asset in the negotiations.

The company has, we believe, with the completion of the current fund raising initiatives the opportunity to turn Mavis into a real company changer.

The Mavis project hosts a number of spodumene in lithium-cesium-tantalum (LCT) pegmatite targets that will be the focus of the company's exploration efforts. The following figure shows the Mavis project site with the exploration targets highlighted: