Lithium spin-offs soaring
TIM BOREHAM
The Australian12:00AM
November 28, 2017
Pioneer Resources (PIO) 3.1c
The Perth-based stalwart’s main prize remains electric car-focused lithium, but its shorter term revenues lie with an industrial metal few outside of the oil and gas industry have heard of: caesium.
Most of the world’s caesium is turned into a derivative called caesium formate, used to lubricate high-pressure oil wells (mainly in the North Sea).
In radioactive form caesium is a by-product of nuclear power production, but we’re assured the mineral version wouldn’t hurt a gnat.
About 75 per cent of output is used in drilling and the remaining 25 per cent for caesium chemicals.
The material is so rare that about 85 per cent of caesium formate used is recovered for re-use.
So much so that the near-monopoly supplier, the Canadian miner Cabot, leases the stuff rather than selling it outright.
“Cabot’s business model is so unusual that academics have written whole economic papers on it,” says Pioneer chief David Crook. “In the meantime, 99.9 per cent of people haven’t even heard of caesium.”
Currently, there are only two commercial caesium mines globally: Cabot’s Tanco (in Canada) and Bikita in Robert Mugabe’s former fiefdom of Zimbabwe.
In a case of caesium-ing the day, Pioneer plans to develop the third at its Pioneer Dome deposit between Kalgoorlie and Geraldton in WA. Envisaged as a short-life, low-cost, open cut operation, the mine would be done and dusted within six months.
The company received a mining permit last month and hopes to start extracting by the first quarter of 2018.
While that makes for a handy return that mine is hardly a company maker: the funds will be ploughed into drilling for spodumene-based lithium targets at the project.
Pioneer also has a cobalt project near Kalgoorlie (Blair Dome, which it has just started drilling)) and an option to earn an 80 per cent interest in two Canadian projects.
And did we mention the company has acquired some Pilbara gold tenements? No watermelon seed nuggets have been found as yet, but a team of geologists is leaving no rock unturned.
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