Pioneer Resources prepares for first shipment from Sinclair pollucite mine

Pioneer Resources ASX PIO Sinclair Mine caesium shipment pollucite
Pioneer has mined and crushed around 19,000t of pollucite-bearing rock with an average grade of 9.1% caesium.

Perth-based Pioneer Resources (ASX: PIO) is preparing to export its first shipment of the rare mineral pollucite following the completion of stage one mining at its Sinclair caesium mine, in Western Australia’s eastern goldfields.

Located within the company’s wholly-owned Pioneer Dome project, Sinclair has produced approximately 19,000 tonnes of pollucite-bearing rock since operations commenced in late 2018, with an average grade of 9.1% caesium oxide.

The ore has since been been mined and crushed for approximately 1,640t of contained caesium – an increase of 593t or 57% on the expected start-up measured resource estimate – and will be exported to Cabot Corporation under an offtake and loan arrangement reached in June.

The increase will maximise the metal content for Cabot and is expected to greatly improve Pioneer’s revenue, as the sale price under the terms of the offtake agreement is based on contained caesium above a minimum grade for each consignment.

Pioneer said the first shipment has been containerised and is awaiting export from Esperance this week.

Shipments are expected to continue to year end and will be determined by schedules and quantities per shipment.

Offtake agreement

Pioneer’s offtake agreement with Cabot’s specialty fluids division is for the supply of 100% of direct shipping pollucite ore mined from Sinclair over a two-year period, subject to a minimum grade restriction.

Pricing during the two-year supply term has been fixed on a sliding grade scale, with no penalties or credits applying for any other elements or compounds present in each shipment.

Pioneer retains the rights to all other commodities present at Sinclair, including feldspar, petalite and lepidolite.

The offtake agreement also included a US$4.8 million loan facility to fully-fund development of the mining operation, and will be offset by Pioneer through the delivery of direct shipping ore pollucite or by cash settlement, subject to conditions.

Stage one mining

The Sinclair mine is the result of a business strategy which saw Pioneer acquire and test lithium-caesium-tantalum (LCT) pegmatite systems throughout Canada and WA, and led to Australia’s first significant caesium discovery in late 2016.

The mine hosts a complex LCT pegmatite characterised by a suite of mono-mineralic phases of pollucite (caesium), petalite and lepidolite (lithium), feldspar (potassium) and silica (silicon) in the pegmatite’s highly-fractionated inner core zone.

Stage one was designed to extract pollucite from within this zone, located approximately 40m below the open pit’s surface.

Pollucite market

Pollucite is a high-value, rare mineral primarily used in in caesium formate brine to ensure faster hole completion times during high temperature, high pressure oil and gas drilling.

Global supply is very constrained, with only three commercial-sized pollucite operations worldwide – the Tanco mine in Canada (owned by Cabot); Bikita in Zimbabwe (owned by Bikita Minerals); and Sinclair.

At midday, shares in Pioneer Resources were 5.88% higher at $0.018.

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