Balagundi Project

Introduction

The Balagundi Project is 100% owned by Pioneer Resources Limited and comprises a number of tenements covering up to 770km² of Archaean greenstone predominantly within the Gindalbie Terrane (Witt et el), Eastern Goldfields Province, Western Australia.

Regional mapping and geochemistry survey reports conclude that the Gindalbie Terrane contains bimodal felsic volcanics with, in parts, a flat rare earth geochemical signature. Based on the geochemistry of similar belts in the Abitibi Province, Canada, these may be fertile for VMS style mineralisation. The Gindalbie Terrane hosts the Jaguar and Teutonic Bore VMS mines located further to the north.

Pioneer's work to date has confirmed these observations. Work has included detailed regolith and geological interpretations (MacIntyre, 2008), field mapping (Maniw, 2009), auger (Pioneer, Brand, MacIntyre, 2008) and RAB/rock chip geochemical and PIMA analysis (Maniw, 2009; MacIntyre and Hally 2008). This work was designed to generate VMS Cu-Zn targets in particular, in a geological domain recognised by the CSIRO as having potential for this style of mineralisation.

Introduction

A number of geochemical targets and alteration zones have been identified, including the Western and Central Felsics, and also at locations thought to be stratigraphically higher.

Anomaly evaluation criteria include:

• Geological Environment:
  • High field strength element (“HFSE”) plots suggests that basaltic, felsic and sedimentary lithologies show a volcanic island arc calc-alkaline magmatic affinity.
• Flat chondrite-normalized rare earth and extended rare earth (“REE”) plots for rock samples:
  • The Western and Middle flows exhibit flat REE patterns and therefore are considered priority VMS targets.
• Anomalous conventional geochemistry:
  • Zn bearing gossans associated with Ag-Tl-Sb-bearing, paragonitic (sodic sericitic) alteration zones defined in historical drilling (Red Bluff Dam Prospect);
  • Cu-Pb-Ag-Bi-Mo-Sn-bearing surface auger geochemical anomalies with no historic drilling (Eastern felsics); and
  • 4m at 3.2% Cu returned in drilling, in albite-altered, probably distal alteration assemblages (Redback).
• Convection cell alteration patterns:
  • PIMA-defined sericite- and chlorite-bearing alteration zones, with paragonitic muscovite and Fe rich chlorite signatures consistent with proximal VMS alteration

Pioneer commenced exploring the Balagundi Project for base metal mineralisation during 2005. The study follows observations by a number of researchers regarding geological similarities between Archaean Canadian and Western Australian greenstones however contrasting the respective endowment of VMS deposits, or lack there-of in Western Australia's case.

Pioneer's study is predicated by theories and observations which seek to contrast well mineralised areas in Canada with sparsely mineralised areas of Western Australia:

• There are attractive geological similarities between the Gindalbie and Murchison Terranes of the Western Australian Yilgarn and the Canadian Superior and Slave Provinces;
  • Within the project area areas, volcanic sequences are bimodal with basaltic and more rhyolitic volcanics present;
  • Geochemical rare earth and trace element signatures are reported as similar to some Canadian volcanic sequences which host VMS deposits (Witt, et al 1996; Messenger, 2000)
• The Yilgarn was extensively explored during the 1970s, resulting in several discoveries, however nowhere near the number made in Canada. This could be due to:
  • A general lack of endowment in the West Australian Archaean; or
  • Other factors which may not have been addressed when exploring for VMS deposits including: paucity of outcrop, deep weathering and oxidation, and the effect of rocks (and therefore ore bodies) which have been metamorphosed (McConachy, et al 2004).
• Gossan searches were the main exploration tool for VMS discoveries; however questions have been raised as to its effectiveness in depositional and relict regimes with intact lateritic profiles (where the gossan could well have been buried). In addition, gossans are rare in humid environs similar to those which prevailed in Western Australia (Butt, 1995);
• Geochemistry is severely limited by complex regolith patterns, particularly in depositional regimes; and near-surface depletion zones where mobile elements such as Cu and Zn may have dissipated. Today's explorer has the benefit of lower detection limits for a wider suite of elements, including resistive pathfinder elements;
• Alteration mapping may also provide a vector towards mineralisation. Old drill spoil may provide material which can be analysed for alteration assemblages using spectral systems such as PIMA.

Having demonstrated the prospectivity of the tenement package, Pioneer is seeking a financial partner to further explore the economic potential of the project.

The next stage of exploration is aimed at defining mineralised positions, i.e., possible hydrothermal discharge zones within the larger alteration cells indicated to date. Note that these sites may be developed along the volcaniclastic horizon at depth, and not just along strike.

A three stage program is proposed to achieve this:

1. Detailed sampling of the Western and Middle Felsics. This would include drill sections to confirm prospectivity through geochemistry and alteration patterns, and would include areas under cover. The aim is to define either immediate RC/DDH targets with strong Cu-Zn and pathfinder geochemistry, or define alteration vectors (donation towards muscovite or paragonite sericite and Fe-rich chlorite alteration, strong pathfinder geochemistry) to potential discharge zones for follow-up with detailed TEM/IP, prior to drilling.
2. RAB/AC testing of the covered strike extensions of the Red Bluff Gully target area, and three other geochemical anomalies. The three key geochemical targets warrant some RAB drilling, initially 400x200m grid based patterns aiming to delineate, by ME/ SWIR lithogeochemical sampling, the core zones of [possible VMS related] alteration systems. The areas along strike of Red Bluff Gully warrant 800x200m spaced RAB drilling for the same aims.
3. Ground TEM coverage of the best parts of the alteration systems defined in the Red Bluff Gully area and strike extensions, and the geochemical targets; and
4. RC/DDH testing of the best geochemistry and/or geophysical targets defined within the VMS alteration zones.