In late 2012 Pioneer acquired an entry point into the Albany-Fraser Orogenic Zone, an area of increasing mineral importance in Australia. The Fairwater Project’s nickel targets are located in interpreted Proterozoic aged rocks between 100 and 130 km south west of Sirius Resources’ (ASX: SIR) Nova and Bollinger nickel discoveries, in the Albany-Fraser Orogen in south east Western Australia.

Fraser Range nickel sulphide deposits are classed as ‘mafic intrusive hosted’, a class of deposit that includes Voysey’s Bay in Canada and Radio Hill in Western Australia amongst others. This style of deposit occurs within areas where tectonic events have resulted in zones of crustal thinning, often adjacent to major crustal sutures. Within the Fairwater Project, soil geochemistry generated a cluster of nickel anomalies within an apparent mafic or ultramafic rock unit.

Work Completed December 2015 and Ongoing

  • 3 diamond core drill holes completed for 460m; and
  • 3.1 km², 651 station gravity survey.

Diamond Drilling

Three diamond core holes were drilled and each intersected the targeted mafic-ultramafic sill-dyke system. This environment is considered highly prospective for nickel sulphide mineralisation.

Using major-element rock geochemistry the program has provided a compelling mineralisation vector that indicates strengthening fertility towards the interpreted centre of the mafic-ultramafic system.

Key outcomes of the Geochemical Interpretation of Drilling Results

  • Voluminous ultramafic rocks intersected in all three drill holes: Highly magnesian (MgO) ultramafic rocks (such as peridotites with 28%-36% MgO) are a favourable host for nickel sulphide mineralisation;
  • Enriched nickel chemistry: When normalised to MgO content, Fairwater peridotites show nickel-enrichment compared to global equivalents. This is greatest in FWDD003;
  • Igneous differentiation and replenishment indicated: Considered a fundamental requirement for nickel sulphide generation; and
  • Localised enrichment in nickel, copper and PGEs: Samples from FWDD003 show a spike in Ni relative to MgO content, a sign that nickel is concentrated at this horizon. This is exemplified in FWDD003 from 114.75 to 115.5m which contained elevated nickel, and anomalous copper (168ppm) platinum + palladium (119ppb) and sulphur (3, 894ppm).

Gravity Survey

The gravity survey provided blanket coverage of the Fairwater ultramafic intrusion, with 651 stations surveyed at a station spacing of 100 x 50m. The survey was designed to provide an understanding of the underlying geology which may lead to the discovery of a chonolith (see Glossary for definition) at depth. Three gravity peaks (G1-G3) are highlighted for further exploration work.

Geophysical consultants, Newexco Mining and Exploration Services, has completed an initial interpretation including an inversion model of these data.

Preliminary Observations of the Gravity Survey Results

  • When reviewed along with drill hole geology and aeromagnetic imagery, the G1 peak is located towards the centre of the Fairwater Ultramafic Intrusion. It is overlain by a nickel-chromium soil geochemistry anomaly, and the peak copper-platinum-palladium (nickel pathfinder) soil geochemistry responses are also coincident with the G1 gravity peak. Geochemistry from diamond drill holes FWDD001-003 provided a mineralisation vector towards the centre of the Fairwater Ultramafic Intrusion.
  • G2 is adjacent to an interpreted fault structure towards the eastern margin of the Fairwater Ultramafic Intrusion, and potentially represents a thickening of the unit with depth. The proposed westerly dip is consistent with that observed in the diamond drilling, shown in Figure 6.
  • G3 is located at the southern end of the Fairwater Ultramafic Intrusion and may represent the depth extension of the ultramafic sill intersected in aircore holes FWAC068, 069 and 073.

Background Work

Exploration targets have been developed using geophysical remote sensing, existing geochemistry and geo-chronological information, with priority targets characterised by:

  • Magnetic highs which may represent mafic or ultramafic rock units;
  • Coincidental anomalous nickel (supported by chrome and copper) geochemistry as both confirmatory indicators of mafic or ultramafic rocks and potential for nickel mineralisation; and
  • Proterozoic aged stratigraphy.

Reconnaissance soil geochemistry sampling was completed at 4 nickel and 6 gold targets. Approximately 4,400 soil samples were taken, including 370 from the priority FWNi003 target. The program was designed to follow-up 4 nickel and 6 gold targets - defined using aeromagnetic imagery and existing low-density auger geochemistry.

Pioneer’s recent (March/June 2015) aircore drilling at the FWNi003 Prospect has generated nickel targets for followup RC drilling planned for September 2015. Proof of concept aircore drilling confirmed the presence of ultramafic and mafic rocks, likely including pyroxenite and peridotite, with a footwall of quartzite gneiss. Importantly, in one hole, nickel-bearing supergene sulphide mineral(s) millerite-violarite were identified. Evaluation of drilling data has confirmed the presence of structurally modified ultramafic bodies that have a series of nickel targets located generally along the eastern margin.

From the Aircore drill holes FWAC001-099 (99 holes for 3,616m) at the FWNi003 Prospect, selected samples were progressively analysed by a commercial laboratory to confirm pXRF analyses and provide additional information.

This included:

From FWAC051, strongly anomalous nickel geochemistry and nickel sulphides intersected:

  • 0.51% Ni at 33 to 34m; and 0.61% Ni at 44 to 45m (45m is the end of the drill hole).
  • Samples between 33m and 45m anomalous in Cu (max 244ppm), PGE (Pt+Pd max 61ppb);
  • Petrography identifies nickel-bearing supergene sulphide mineral(s) millerite-violarite identified by thin section appraisal of the 44 to 45m interval (view photo).

From FWAC069, anomalous nickel geochemistry which extends the nickel target to 200m in length:

  • 8m at 0.33% Ni and 109ppm Cu from 30m (Max 0.39% Ni, 336ppm Cu, MgO 19%, Ni:Cr 2.3) This hole is 200m south along strike of FWAC051.

Other anomalous intervals:

  • FWAC004: 12m at 0.36% Ni and 80ppm Cu from 13m
  • FWAC059: 1m at 0.50% Ni and 53ppm Cu from 33m
  • FWAC068: 1m at 0.42% Ni and 124ppm Cu from 41m
  • FWAC076: 12m at 0.35% Ni and 69ppm Cu from 32m
  • FWAC080: 6m at 0.35% Ni and 121ppm Cu from 18m
  • FWAC095: 2m at 0.51% Ni and 7ppm Cu from 24m
  • FWAC096: 11 m at 0.41% Ni and 41ppm Cu from 17m depth (with a maximum of 0.56% Ni)

Geological logging identified that the aeromagnetic high represents a suite of ultramafic and mafic rocks, and using Ni-Cu-Cr-Mg data, a series of nickel targets are evident, located generally along the eastern margin.

Geochemical modelling has also indicated the location of zones with characteristics of dynamic magma flow and the hottest portion of the ultramafic intrusive system. These are considered to be vectors to the environment where nickel sulphides may be deposited.

EIS Funding

The Company was successful with an application for funding under the Royalties for Regions Co-funded Government-Industry Drilling Program, for 2015-2016 (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 undertake drilling at the Fairwater Project. Under the EIS, funds committed by the Company towards the approved drill program will be matched by funds from the State Government’s program – thereby halving the drilling component cost of that program to Pioneer.

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Gold Target

The gold anomaly lies adjacent to the interpreted NW-SE Munglinup-Dalyup Gneiss terrain boundary, sub-parallel and approximately 6 km west of the Proterozoic-Achaean terrain boundary. Such deep-seated structures are considered excellent conduits for gold-bearing fluids. FWA001 extends for over 4 km above a lower threshold of 8 ppb Au to a maximum of 18 ppb Au. It is worth noting that the Au response in the Albany-Fraser terrain is known to be subdued with a threshold of 3 ppb Au typically considered significant (e.g. Tropicana).

Outlook

While the gravity data is continuing to be processed and integrated with other datasets, the next exploration program is being considered. This is likely to include reverse circulation drilling, which will provide a platform for high power down-hole EM surveys. This should provide an effective test, to a depth of 600m below surface, for conductive rock units which might include nickel sulphide mineralisation. The Company holds regulatory approval to undertake this work during the first half of 2016.

Additional pre-collared diamond core drilling may follow if warranted, directly targeting any EM conductors.

February 2016