viewPioneer Resources Ltd

Pioneer Resources restarts drilling at Acra gold project, near Kalgoorlie Superpit


Pioneer Resources (ASX: PIO) has resumed drilling at its Acra gold project, which lies about 60 kilometres from the giant Kalgoorlie Superpit in Western Australia.

The Superpit is the biggest open pit gold mine in Australia, producing 850,000 ounces of gold each year, and is co-owned by heavyweights Barrick and Newmont.

Down the road at Acra, Pioneer is drill testing 200 metre structure at the Kalpini South prospect, designed to extend strong gold results that were returned last year.

These results included 10 metres at 6.38g/t gold, 15 metres at 2.93g/t and 9 metres at 5.31g/t.

“The company continues to maintain a sound financial position with current cash reserves of approximately $2.3 million, plus the final instalment, being $1.1 million from the sale of the Mt Jewell project, due on 6 March 2015,” managing director David Crook said.

“This has enabled us to plan a series of targeted exploration programs throughout the 2014 field season commencing at Kalpini South, and we look forward to providing details on the progress of these programs in due course.”


Importantly, mineralisation at Acra remains open in all directions, which bodes well for future exploration and resource definition.

And the high grade gold intersections to date have been found at a range of depths at Acra, which could yield a number of gold deposits.

Being just 60 kilometres from the Kalgoorlie Superpit, Acra is obviously very close to gold-mining specific infrastructure, which will reduce production costs and offers potential for early cash flows.

Adding to Pioneer's value proposition is its 222,710 tonne resource grading 2.92% nickel at the closed Blair Nickel Mine within its nearby Golden Ridge project.

This project even has a nickel offtake agreement in place with BHP, and again is serviced by ample existing infrastructure.

With a little more market awareness, which would come with an announcement to bring the mine back into production, and further increases in the nickel price, Blair's inherent value should be more evident.

The flagship Acra gold project also boasts an ore offtake agreement with Saracen Mineral Holdings (ASX: SAR) and the Saracen haul road runs directly through Pioneer tenements.

Taking into account Pioneer's modest market cap of $6.6 million and strong bank balance, PIO shares are exceptionally well leveraged to benefit from broad, high grade intersections that may be delivered from Acra.


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