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Microsoft Word - PIO Raleigh Acquisition_FINALV3.docx
Second High-Grade Lithium Project Acquired in Ontario, Canada
Raleigh Lithium (Spodumene) Project located nearby to the Mavis Lithium Project
Perth Western Australia, 13 July 2016: Pioneer Resources Limited ("Company" or "Pioneer") (ASX: PIO) and International Lithium Corp ("ILC") (TSX.V:ILC) are pleased to advise of a second Option Agreement ("Agreement") between the companies enabling Pioneer to initially earn a 51% interest and, subject to ILC's participation, up an 80% interest, in the Raleigh Lithium Project. The Raleigh Project, currently owned 100% by ILC, is located 60km southeast of the Mavis Lake Lithium Project in Ontario (see Figure 1). The acquisition of the Mavis Lake lithium project was announced to the market on 15 March 2016.
The Agreement will provide Pioneer with its second Canadian lithium (spodumene) pegmatite field, along with the Mavis Lithium Project. Establishing advanced lithium projects in close proximity increases the likelihood of a future single infrastructure lithium production hub.
Table 1: 2010 Highlight Drilling Intersections from Pegmatite #1.*
RL10-1: 2.7m at 2.02% Li2O from 29.3m; and
RL10-1: 7.8m at 1.49% Li2O from153.2m
RL10-2: 8.5m at 2.38% Li2O from84m,
Includes 2.5m at 3.99% Li2O from87.5m
RL10-3: 5.95m at 1.64% Li2O from103.05m
Includes 5m at 0.032% Ta2O5 from104m
RL10-5: 5m at 1.31% Li2O from26m
Includes 5m at 0.022% Ta2O5 from27m
RL10-6: 14.2m at 1.07% Li2O from114m
* Drill core intersections reported have not been converted into true width. Appropriate rounding of Li2O and Ta2O5 valuesapplied.
The Raleigh lithium Project Agreement is consistent Pioneer's strategy of acquiring and advancing key demand- driven commodities both in Canada and Western Australia.
The Raleigh Project covers an area of 440 hectares (see Figure 2). Historically the Project has been targeted for its tantalum potential, however 2010 drilling demonstrated the Project's prospectivity for lithium. At least 6 pegmatites have spodumene identified in outcrop and a number of lithium litho-geochemical anomalies have been identified to be evaluated with drilling expected during the September and December quarters of 2016.
Pioneer plans to commit to additional exploration programs in 2016 at both the Raleigh and Mavis Lake Lithium Projects, completing exploration concurrently utilising ILC's existing Canadian-based technical team.
Key terms of the transaction are provided in this announcement.
About the Raleigh Lithium Project
The Raleigh Lithium Project is located 75 km southeast of Dryden, and 60 kilometres southeast the Company's Mavis Lithium Project. Dryden provides an airport, general labour force, general goods, accommodation and modern services. Both projects are located less than eight kilometres from the Trans-Canada highway and railway (Figure 1). Skilled labour, mining and specialized exploration services and equipment is available from larger cities such as Thunder Bay, Ontario, and Winnipeg, Manitoba, which are located respectively 280 km southeast and 320 km west of Dryden.
A spodumene-bearing pegmatite, which bears his name, was first discovered in the area by prospector Stan Johnson in 1966. Subsequently Fred Breaks identified numerous occurrences of rare-element mineralisation in pegmatites within a south-south-westerly zone, approximately 1.5km wide and 4km in length. More recent lithium geochemistry surveys have highlighted additional areas to advance through mapping and drilling.
The largest pegmatite body recognised to date, Pegmatite #1, has been intersected in drilling over a strike length of 400 metres, and exhibits good down-dip continuity as evidenced by the intersections listed in Table 1.
The Johnson Pegmatite has been tested by a single drill hole to date (RL01-06), which returned strongly anomalous tantalum values. The identification of spodumene in a nearby outcrop however confirms its potential to host significant lithium mineralisation.
Lithium has been classed as a 'critical metal' meaning it has a number of important uses across various parts of the modern, globalised economy including communication, electronic, digital, mobile and battery technologies; and transportation, particularly aerospace and automotive emissions reduction. Recent technological advancements have led to an increase in demand for lithium. The successful commercialisation of larger scale, lithium-based batteries by the automotive industry and in home electricity storage units will drive demand growth for the foreseeable future.
Ongoing Work Programs
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Existing ground magnetic survey data is being reprocessed using up-to-date techniques. Orientation work elsewhere, and reprocessed historical data, indicates pegmatite zones are represented as magnetic lows, and modern magnetic data may better identify blind, but near surface, pegmatite mineralisation.
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Rock geochemistry has identified lithium-bearing rocks, with mineral assemblages that indicate proximity to rare-metal pegmatites. Further rare-metal geochemistry (Li, Cs, and Ta) coupled with geological, structural and the new geophysical interpretation will be the key to new-target generation.
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Drilling to identify new, and further define known, spodumene occurrences. This includes testing whether pegmatite bodies have displaced by faults, as appears to be evident in ground magnetic data and surface rock-chip geochemistry.
Key Components of the Transaction
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On electing to proceed, Pioneer may earn a 51% interest in the Project by expending C$1.25 million on exploration activities within a period of 3 years ("First Earn In"); and paying to ILC a total amount C$250,000 in an approximate 50/50 proportion of cash and shares over three years. Pioneer has indicated that it plans to adopt a minimum C$500,000 budget for the Project, for the next 12 months.
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Following the First Earn In, ILC will accrue a 1.5% Net Smelter Return royalty. Pioneer may buy back this royalty for C$1.5 million.
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ILC and Pioneer will either form a Joint Venture with further development expenditure met on a pro-rata basis, or Pioneer may earn an additional 29% (to earn a total interest of 80%) through completing a pre- feasibility study, as defined by the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) standards, within 7 years. Thereafter the Joint Venturers will contribute on a pro-rata basis. If either party dilutes to 15% project equity, it will retire from the joint venture and revert to a 1.5% royalty.
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Pioneer may participate in the acquisition of other lithium project opportunities identified by ILC. Pioneer Managing Director Mr David Crook said:
"The benefits of the Strategic Alliance with ILC are becoming evident with Pioneer securing an option to acquire a majority interest in of the Raleigh Lithium Project. The objective of the Strategic Alliance is to develop an operational hub for spodumene concentrate at a location with advanced infrastructure, and adding the nearby Raleigh Project to the Mavis Lake Lithium Project greatly enhances the Dryden district as a preferred location. Field work has commenced at the Mavis Project, and drilling is expected to commence in September 2016 with programmes planned for both Raleigh and Mavis Lake Lithium Projects. We look forward to informing the market as further progress is made."
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For further information about drill intersections noted in the text and on Figures refer to the following announcements: by International Lithium Corporation at www. Internationallithium.com including:
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Significant Tantalum Mineralization discovered in new Raleigh Lake Pegmatite Field near Ignace, Ontario, August 30, 1999 (www.avalonadvancedmaterials.com).
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Drilling Confirms Depth Continuity of Tantalum-Bearing Pegmatites at Raleigh Lake, October 1, 1999 (www.avalonadvancedmaterials.com).
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High Grade Cesium Discovered at Lilypad Lakes / Significant Tantalum Values Intersected at Raleigh Lake, October 20, 1999 (www.avalonadvancedmaterials.com).
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Exploration Update, December 28, 2001 (www.avalonadvancedmaterials.com).
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Phase One Drill Program Completed on Raleigh Lake Lithium Project, March 9, 2010 (www.abenresources.com).
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Consolidated Abaddon Drills 9 Metres 1.3% Lithium at Raleigh Lake Lithium and Rare Earth Project, April 14, 2010 (www.abenresources.com).
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International Lithium Corp. Acquires High Grade Raleigh Lithium Project Near Mavis; Creates Upper Canada Lithium Pool - a New Multiproject Initiative, March 23, 2016 (www.internationallithium.com).
Provided by Pioneer:
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High Grade Lithium Project Joint Venture. Strategic Alliance with International Lithium Corporation, 15 March 2016
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Pioneer Resources to Proceed with the Mavis Lithium Project Acquisition and Strategic Alliance, 22 June 2016.
Breaks, F. W., 1993: Granite-Related Mineralization in Northwestern Ontario: Raleigh Lake and Separation Rapids (English River) Rare-Element Pegmatite Fields. Project Unit 93-11.
Breaks, F. W., Selway, J.B., and Tindle, A.G., 2003: Fertile peraluminous granites and related rare-element mineralization in pegmatites, Superior Province, Northwest and Northeast Ontario: Operation Treasure Hunt; Ontario Geological Survey, Open File Report 6099, 179p.
Managing Director
Pioneer Resources Limited
For further information please contact:
David Crook James Moses
Managing Director Media and Investor Relations
Pioneer Resources Limited Mandate Corporate
T: +61 8 9322 6974 M: +61 420 991 574
E: [email protected] E: [email protected]
The Company is not aware of any new information or data that materially affects the information included in this announcement.
About Pioneer Resources Limited
Pioneer is an active junior exploration company focused on key global demand-driven commodities. This includes a portfolio of strategically located, quality lithium assets in Northwest Ontario, Canada and Western Australia as well as gold, nickel and other commodity projects in sought after mining regions in Western Australia.
The Company is focused on delivering shareholder value by actively strengthening its project portfolio through acquiring, pegging and reviewing new opportunities, and targeted exploration programs to facilitate the discovery and commercialisation of high value mineral resources.
The Mavis and Raleigh Lithium Projects together provide exposure to one the most prominent demand- driven commodities at present, being lithium in spodumene.
Lithium has been classed as a 'critical metal' meaning it has a number of important uses across various parts of the modern, globalised economy including communication, electronic, digital, mobile and battery technologies; and transportation, particularly aerospace and automotive emissions reduction. Critical metals seem likely to play an important role in the nascent green economy, particularly solar and wind power; hybrid car and rechargeable batteries; and energy-efficient lighting.
The Company's commitment to other projects, including its 100%-held Acra Gold Project, and 100%-held Blair Dome Nickel Sulphide Project, remains unchanged and it will provide details of the next phase of planned exploration initiatives in due course.
Please note that Pioneer Non-Executive Director, Mr Wayne Spilsbury, is also a non-executive director of ILC, and introduced the initial Mavis Lithium Project to Pioneer, however did not participate in negotiations nor the decision-making process in assessing the merits of these acquisitions for the Company.
About International Lithium Corporation
ILC's primary focus is the Mariana lithium-potash brine project, within the South American "Lithium Belt" that is the host to the vast majority of global salt lake lithium resources, reserves and production.
Complementing this are the Mavis and Raleigh Lithium Projects in Canada and the Avalonia Project in Ireland, both with pegmatite hosts.
In addition to Pioneer as its joint venture partner at the Mavis and Raleigh Lithium Projects, ILC has joint ventures with its second largest shareholder, Jiangxi Ganfeng Lithium Co Ltd, of China for Avalonia Project and Mariana Projects and is now capitalised at approximately C$24 million.
Glossary
"Li2O"means Lithia, or Lithium Oxide, and is the elemental metal quantity converted to its oxide (in percent (%)), which is a form of reporting used for lithium in scientific literature. The conversion factor for Li to Li2Ois 2.152.
"Spodumene" is a lithium aluminosilicate (pyroxene) found in certain rare-element pegmatites, with the formula LiAlSi2O6. Spodumene is the principal lithium mineral sourced from pegmatites and is the preferred source for high purity lithium products.
"Be" means beryllium, "Cs" caesium, "Li" Lithium, "Nb" niobium, "Rb" rubidium, "Sb" antimony, "Sn" tin, "Ta" tantalum.
"Pegmatite" is a common plutonic rock of variable texture and coarseness that is composed of interlocking crystals of widely different sizes. They are formed by fractional crystallization of an incompatible element-enriched granitic melt. Several factors control whether or not barren granite will fractionate to produce a fertile granite melt (Černý 1991; Breaks 2003):
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presence of trapped volatiles: fertile granites crystallize from a volatile-rich melt.
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composition of melt: fertile granites are derived from an aluminium-rich melt.
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source of magma: barren granites are usually derived from the partial melting of an igneous source (I- type), whereas fertile granites are derived from partial melting of a peraluminous sedimentary source (S- type).
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degree of partial melting: fertile granites require a high degree of partial melting of the source rock that produced the magma.
Initially, fractional crystallization of a granitic melt will form barren granite consisting of common rock forming minerals such as quartz, potassium feldspar, plagioclase and mica. Because incompatible rare elements, such as Be, Li, Nb, Ta, Cs, B, which do not easily fit into the crystal of these common rock-forming minerals, become increasingly concentrated in the granitic melt as common rock forming minerals continue to crystallize and separate from the melt.
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