Strateco Resources | Apple Property
Location and Access
The property is located at 80 km southeast of Radisson, in the James Bay area in the Province of Quebec in Canada (map of our properties). The property is accessible by a 40-km winter road from Km 510 on the paved James Bay road. In summer, the property can be accessed by boat from the Trans-Taïga road. Float planes and helicopters are readily available in the city of Radisson.
Ownership
The Apple property consists of 194 mining claims covering 9,928.13 hectares recorded in the name of the Company.
The Company acquired 100% the Apple uranium property from Virginia Mines Inc. (“Virginia”) on August 28, 2007, in consideration of 3,250,000 common shares. The purchase agreement also provided for a 2% NSR royalty payable to Virginia on production, half of which can be bought back by the Company for $1.0 million. The transaction closed on September 6, 2007.
Location of the Apple property claims
Uranium Potential
The project covers a portion of the Apple Formation, which came to light in the early 1970s with the discovery of several extensive uranium-pyrite-matrix quartz-pebble-conglomerate zones.
The Apple uranium deposit was in fact discovered in 1971 during an airborne survey. The International Nickel Company of Canada Limited (“INCO”) and James Bay Development Corporation subsequently conducted an extensive joint exploration program from 1972 to 1975, with INCO as the operator. A total of 65 holes were drilled for a total of 14,000 metres, and the uranium conglomerates were traced over a distance of eight kilometres along an east-west axis.
Exploration Activities
From 1972 to 1975, INCO drilled 66 holes for a total of 14,445 metres on the Apple property to evaluate its uranium potential. In late 1974, INCO estimated the resources in all categories (predating NI 43-101) at 9,365,000 tons grading 0.054% U3O8. Their resource estimate was only prepared for a strike length of approximately 1,000 m and to a depth of approximately 300 m, with the mineralized horizon remaining open at depth.
Cautionary Note: No qualified person has done sufficient work to classify this historical estimate as current mineral resources or mineral reserves. The Company does not consider the resources or reserves forming part of a historical estimate to be mineral resources or mineral reserves, as defined by sections 1.2 and 1.3 of National Instrument 43-101, as updated. Investors and readers should not rely on this historical estimate.
In 2006, Virginia completed a helicopter-borne, combined magnetic and radiometric orientation survey over most of the current property. The strongest radiometric anomalies were found to correspond directly to the area drilled by INCO from 1972 to 1975.
A field visit took place on August 23, 2007, during which two outcrops 2.9 km apart belonging to the Apple Formation were seen, and the strength and size of the system were witnessed. In the fall of 2007, the Company conducted a helicopter-borne radiometry survey covering the entire property. This survey led to the identification of new radiometry anomalies and confirmed those identified by earlier surveys.
In early January 2008, the Company began construction of a 14-person camp. A 4,000-metre drilling campaign began as soon as construction was completed in mid-February. The 2008 property budget was $2.3 million.
A total of thirteen holes were drilled, including four (AP-08-01 to 04) that twinned some of the holes drilled previously by INCO. The main geological units intersected by these twin holes were the same and in virtually the same position as those shown on INCO’s drill sections (GM57894).
Five holes totalling 1,263 metres were drilled to test the lateral extensions of the mineralized zones in the INCO resource estimate, covering the area between Sections 4,400 W and 1,100 W.
Only one of the five holes failed to intersect uranium mineralization. The best results were obtained in Hole AP-08-05, centered on an important radiometric anomaly, which returned an intersection of three mineralized zones measuring from 3.7 metres to 7.1 metres in length with an average grade of 0.03% U3O8.
Holes AP-08-11 and AP-08-12 each intersected two mineralized zones averaging 3.5 metres thick with grades of between 0.02 and 0.06% U3O8. The best intersection was 0.06% U3O8 over 4.0 metres in Hole AP-08-12.
Hole AP-08-13 drilled on the 4,400 West section intersected mineralization over a thickness of 2.5 and 3.6 metres with an average grade of 0.04% U308.
The four other holes totalling 710 metres, drilled to investigate certain radiometric anomalies identified by the 2007 airborne survey in the southern portion of the property, did not intersect any significant mineralization.
The results of the first four holes provided the basis for a 43-101a report dated June 2, 2008, entitled Technical Report on the Apple Project, James Bay Area, Northwestern Québec, Canada by R. Barry Cook, M.Sc., P.Eng. and Paul Chamois, M.Sc., P.Geo. of Scott Wison Roscoe Postle Associates Inc. (Scott Wilson RPA).
Scott Wilson RPA was of the opinion that the Apple project merited considerably more uranium exploration, and a substantial work program was recommended, beginning as soon as practical in early summer 2008 and continuing through winter 2009.
Following the Scott Wilson RPA report, summer 2008 exploration work on the Apple property consisted primarily of prospecting, channel sampling and geological reconnaissance carried out on the basis of the results of an airborne radiometry survey conducted in the fall of 2007.
The geological reconnaissance revealed five main outcrops, each with different anomalous bands generally corresponding to the uranium-bearing quartz pebble/pyrite matrix conglomerate. Subsequent, tighter prospecting of each of the outcropping areas allowed the uranium zones to be precisely traced to determine their morphology, which is primarily controlled by ductile/fragile deformation. Systematic GR-135 spectrometer readings were taken to characterize the various anomalous bands and determine their uranium content.
The Apple uranium-bearing conglomerates were also traced over a distance of nearly 8 km along the northern contact with the Yasinski volcano-sedimentary formation. Many readings were obtained for each outcrop, ranging from a few thousand to up to 10,000 counts per second (“cps”). Four of the five outcrops returned values of 5,000 to 13,000 cps. Some anomalous bands also returned values of up to 20,000 cps. The uranium content of the main Apple band therefore ranges from 0.082% to 0.330% eU3O8 in the richest zones. The average uranium/thorium ratio is about 0.75.
In addition to having better outlined the Apple formation, the exploration work in this 2008 program revealed fold zones in the conglomerate horizons that do not seem to have been identified by earlier work. The presence of these folds could entail the repetition of the uranium bands to the south of and parallel to the main band.
Given the extent of the pyrite-matrix uranium-bearing conglomerates as well as their degree of deformation, a 42 line/km induced polarization survey was performed in mid-August 2008 following the geological prospecting program to locate the anomalous conglomerates at depth and identify new drill targets south of the 8-km-long Apple formation.
The Company has not conducted exploration on the Apple property since the winter of 2009, when it began focusing all its efforts on exploring the Matoush project.
Cautionary Notes
Note to U.S. investors concerning estimates of Measured and Indicated Resources. This section uses the terms “measured resources” and “indicated resources”. The Company cautions U.S. investors that while those terms are recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize them. U.S. investors are cautioned not to assume that any part or all of mineral deposits in these categories will ever be converted into reserves.
Note to U.S. investors concerning estimates of Inferred Resources. This section uses the term “inferred resources”. The Company cautions U.S. investors that while this term is recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize it. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or pre‑feasibility studies except for some exceptions. U.S. investors are cautioned not to assume that part or all of an inferred resource exists, or is economically or legally minable.