Appia Energy has a dual focus; high grade critical rare earths and uranium
Alces Lake REE Property – Amongst Highest REE Grades in the World – www.appiaenergy.ca/projects/athabasca-basin-properties/alces-lake
“Grade Is King” is a much touted phrase in the mineral exploration and mining communities. Appia’s Alces Lake project is no exception with quite possibly the highest Total and Critical rare earth element (“REE”) grades discovered in Canada, and rank amongst the highest REE grades in the world.
Appia’s current focus is the Alces Lake rare earth land package which is 100% owned and operated by Appia, and consists of 14,334 hectares (35,420 acres). Numerous surface grab and channel samples were collected from boulders and outcrops on the property between 2010 and 2017, resulting in the identification of 10 REE-rich surface discoveries. The grades returned from these programs range from an average of 2.0 to 47.2 weight% total rare earth oxide (“TREO”), including best results from an outcrop channel sample at the Ivan zone returning 45.92 wt% TREO over 1.85
www.appiaenergy.ca/_resources/news/nr_20171031.pdf
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Figure: Part of high-grade REE Ivan zone outcrop exposed during the 2017 exploration program
The Alces Lake rocks are particularly enriched with a uniform distribution of critical REEs (i.e. Nd, Pr, and Dy) for use in the permanent magnet industry, but also possibly rank as the highest critical REO grades amongst Global REE peers.
Appia has also completed mineral identification studies, investigating the source of the REEs. The studies have conclusively shown that the REEs are solely hosted within a mineral called monazite. It’s very simple mineralogy. The monazites are also coarse-grained, which further helps with processing and extraction, both of which the methodologies are well-documented, proven and easy to complete.
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Figure: Coarse-grained monazite (red mineral) at the Dante zone, tweezers for scale
The Company embarked on a detailed exploration program between June and September, 2018, that consisted of i) overburden stripping that delineated seven surface zones (Figure 1; Bell, Charles, Dante, Dylan, Ivan, Wilson and Wilson South-Central), ii) the collection of 844 systematic channel samples taken from all seven exposed zones, iii) the collection of 6 heavy mineral black beach sand samples exploring for sediment-hosted monazite and rare earth elements (“REEs”) at surface, and iv) the completion of the properties’ first ever drill program with 15 drill holes into 3 of the zones (Charles, Ivan and Wilson) – www.appiaenergy.ca/_resources/news/nr_20181010.pdf.
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Figure: airborne view of Alces Lake REE zones at surface exposed to date. No scale available.
Geochemical results are still pending for over 75% of the samples submitted to the lab for analysis. The results that have been received have confirmed the presence and continuity of high-grade REEs at surface of the Charles zone, where the best results returned from that zone were 14.90 wt% TREO over 5.1 m – www.appiaenergy.ca/_resources/Alces_Lake_Charles_Zone_-_Geochemical_Line_Results_2018-09-18.pdf
In terms of gold (at today’s REO and gold prices), this equates to an in-situ gold equivalency of >2 oz/t gold!! At surface!! Does it get better than that? Yes. Taking the results from the Ivan zone mentioned above (45.92 wt% TREO over 1.85 m), this equates to an in-situ gold equivalency of >7 oz/t gold!!!! What gold company would ever walk away from such a gold-equivalent find?
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Figure: Drill set up on Ivan zone, drill hole IV-18-01
In particular, the drilling phase of the Program has successfully shown that semi-massive to massive concentrations of monazite mineralization exposed at surface are continuing to within 5 to 10 m of surface and still open at depth. Additionally, three new monazite occurrences were discovered between 8 m and 15 m below surface at the Charles and Ivan zones. These new discoveries prove the sub-surface of the property remains highly prospective for more concentrated REE zones similar to those discovered to date. The surface stripping, channel sampling and diamond drilling have provided valuable geological insights that will help the Company target areas of potential mineralization beneath the surface.
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Figure: massive monazite mineralization, drill hole CH-18-006 at 11.5 m drill hole depth
As for exploration potential on the property, the sub-surface is wide open for exploration with discoveries having already been made during the maiden Summer drill program. At least 3 surface showings (Hinge, NW Wilson, Danny) still require detailed surface work, excavating the overburden in those areas and fully exposing mineralization at surface.
With recent land staking additions to the property, Appia has also acquired 2 regions with historic monazite occurrences discovered in the 1950’s and exposed at surface; Forget Lake and Oldman River. In particular, the Oldman River occurrences share many geological similarities with the Alces Lake monazite zones; up to 20% visible monazite at surface, high concentration of thorium (up to 5 wt%, never historically assayed for REEs), coarse-grained monazite crystals, monazite all hosted by bands of massive, coarse-grained biotite and pegmatite. Visible monazite mineralization occurs as localized clusters traced over a strike length of between 400 and 500 m.
Less than 1% of the surface is actually exposed. Most of the surface, including the outcrops, is covered with quaternary sediments deposited by glacial activities and erosion, and subsequently covered with vegetation (trees, bushes, mosses and lichens).
In addition to the REE zones, the Alces Lake property is also host to the Hawker Lake near surface, high-grade uranium zones.
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Figure: Alces Lake property; prior to August 2018 and after August 2018.
The property size was increased to follow the geological corridor hosting the Alces Lake monazite and high-grade critical REE outcrops. The new property encompasses two historic surface monazite showing areas, and six historic surface uranium zones at Hawker Lake.
Rare Earth Elements
Known as REEs, for short, they are a suite of 15 elements. REEs have been called the “Seeds of Technology” as their use is critical in modern day applications such as electric vehicles, wind turbines, computers, robotics and automation, home appliances, lights, medical technologies, automotive catalysts, ceramics and glass, nuclear industry, national defense, and metal alloys, to name but a few. Many countries, most notably the USA, have included REEs as strategic and critical materials that are important to clean energy applications and modern technologies, but face a high supply risk in near- and short-term.
REEs, in particular neodymium (“Nd”), praseodymium (“Pr”) and dysprosium (“Dy”), are critical for use in permanent magnets. REE-bearing permanent magnets (NdFeB) are the smallest and strongest magnets commercially available to date, with no signs of replacement, recycling or re-invention possible within the next 10 years. These are the magnets we are seeing today in the applications mentioned above.
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Figure: two of the largest green energy uses requiring REEs in permanent magnets; wind turbines and electric vehicles.
Most analysts forecast the permanent magnet industry to exceed between $20 to $40 billion in value by 2025, growing at an annual rate between 5% to 10%. However, with Chinese production supplying ~80% of the global supply of REEs (and Asia supplying >90% for permanent magnets), this does not leave much room for growth outside of China.
A New Focus in Northern Saskatchewan; Rare Earth Elements For the past 60+ years, the story of exploration and development in northern Saskatchewan has predominantly focused on uranium. And why not? Especially considering the grades and value of ores that have been discovered and extracted.
Northern Saskatchewan, Canada!! Home of the Athabasca Basin, which yields the highest uranium grades in the World. Athabasca uranium grades are typically at least 10x to 100x higher than the average Global uranium grades. Some of the world’s most valuable ore of any commodity is found in the Athabasca Basin at Cameco’s McArthur River and Cigar Lake high-grade uranium mines – www.mining.com/top-10-mines-digging-out-most-expensive-ores.
It’s also interesting to note that for the past two years, Saskatchewan has been ranked #1 (2017) and #2 (2018) “Most Attractive Mining Investment Destination in the World” by the Fraser Institute, an independent non-partisan research and educational organization based in Canada – www.fraserinstitute.org/studies/annual-survey-of-mining-companies-2017.
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Figure: Midnight during the summer solstice, view from camp on Alces Lake, northern Saskatchewan
Why Uranium? The number one reason that some of the wealthiest investors are so heavily invested in uranium is because they have made so much money on it in the past!
When you ask any of the leading speculators about uranium, like clockwork, they will regale you with uranium war stories that include making a 1,225% return on International Uranium or seeing over a 10,000% return on Paladin Energy!
The reason why so many of the greatest mining investors love uranium is because they can attribute the majority of their wealth to it.
Since November of 2016, the spot price of uranium is up over 50%. Uranium is the contrarian bet for many elite and high net-worth investors, such as Rick Rule and Robert Friedland.
Enter… Appia Energy Corp. Appia has taken a different approach to conventional exploration in the Athabasca Basin area. Rather than exploring within the sandstone Basin itself, which is an engineering nightmare (look at the problems encountered at McArthur River and Cigar Lake), Appia is exploring for near-surface, basement-hosted, high-grade uranium and REE deposits within range of pre-established infrastructure. The Company sees this exploration strategy benefitting shareholders as it means exploration and development costs will be lower than peers, and any discovery made near surface could be economically viable at low commodity prices.
Athabasca Uranium Properties. Appia holds 4 attractive uranium assets (Loranger, Eastside, North Wollaston, and the Hawker Lake part of the Alces Lake property), exploring for near surface uranium in competent basement rocks, each with great potential to make a near surface high-grade uranium discovery. Each property is 100% owned and operated by Appia. These properties alone should do well when the uranium market finally kicks back into high gear.
Each of the Athabasca uranium properties share commonalities which include;
- numerous historic surface or near surface uranium showings,
- similar geological and geophysical features, structures and rock types with other known high-grade uranium deposits,
- proximity to infrastructure (road, powerline, airstrip, community, and uranium mills),
- shallow drill targets = more drill holes/m/$$,
- low operating and development costs vs. peers, and
- the potential to yield a viable mineable uranium deposit even at low uranium prices.
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Figure: Appia Energy Corp.’s exploration properties in the Athabasca Basin area, northern Saskatchewan.
Loranger
www.appiaenergy.ca/projects/athabasca-basin-properties/loranger
The Loranger property was originally explored between 1968 to 1979. Historic exploration efforts highlighted; 4 discrete northeast-southwest oriented conductive structural corridors for 84 km combined strike length, radioactive outcrops exposed at surface (especially Royal Canadian Ventures (“RCV”) Grid No. 2 area), anomalous radon-in-water values (60,000 pCi/L) also in RCV Grid No. 2 area, and 17 diamond drill holes for 2,090 m with the best intercept of 0.034 wt% U3O8 over 5.9 m drill length at 59.0 m vertical depth from surface in RCV area. Ten of 13 drill holes into the RCV area intersected low-grade uranium mineralization hosted in pegmatite and graphitic gneiss.
Appia’s exploration efforts between 2016 and 2017 included;
- an airborne VTEM and magnetic survey that identified 68 km of conductive zones along 94 km of structural corridors,
- a gravity survey which identified 6 primary and 16 secondary gravity low targets of interest that are associated with jogs and/or bends along the conductive portions of the structural corridors, and
- a total of 7 drill holes completed for 1,462.1 m. Six of the 7 drill holes successfully intersected uranium mineralization. The best results from the RCV area in drill hole LOR-17-004 returned 72.9 m grading 0.012 wt% U3O8 starting at 18.92 m vertical depth. A structurally-controlled redox front in LOR-17-003 intersected 1.3 m grading 0.010 wt% U3O8 starting at 85.39 m vertical depth in clay altered semipelitic gneiss.
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Figure: Geophysical surveys completed over Loranger, and the importance of the gravity lows
Both historic and recent drilling by Appia has shown uranium mineralization at the RCV area is continuous over 2.2 km along strike, and remains open in both directions along strike and down dip.
Appia remains excited about the prospectivity of the Loranger property and plans to return to explore additional targets when the uranium market proves favourable.
Eastside
www.appiaenergy.ca/projects/athabasca-basin-properties/eastside
The Eastside property was staked in 2017 and is located 50 km east of the Loranger property. Historic exploration conducted between 1968 and 1980 identified a 4-km wide airborne radiometric anomaly, where follow-up ground prospecting programs located outcrops and boulders returning a range of 2 to 7,575 ppm uranium, producing an average grade of 360 ppm uranium.
Appia plans to follow-up with ground prospecting on the property during the Summer of 2019.
North Wollaston
www.appiaenergy.ca/projects/athabasca-basin-properties/north-wollaston
The uranium prospective ground was staked 30 km northeast and on geological trend with Cameco’s Rabbit Lake, Collins Bay and Eagle Point uranium mining and milling operations, which have produced over 200 M lbs. U3O8 since production began in 1975.
Historic exploration completed between 1968 and 1984 identified four uranium-bearing zones consisting of boulder fields and outcrops at surface with uranium grades ranging from 10 ppm to 0.495 wt% U3O8, producing an average of 700 ppm U3O8.
Appia plans to follow-up the historic exploration efforts by flying a detailed airborne radiometric, EM and magnetic survey during the Summer of 2019.
Hawker Lake
The Hawker Lake uranium zones were acquired as part of recent additional staking surrounding the Alces Lake property. The area consists of 7 zones of surface and near-surface radioactivity that were explored in 1955 and 1966.
In 1955, only two of the seven zones were explored with diamond drilling; zones 3 and 6. The best result from zone 3 includes 1.1 m of 0.40 wt% U3O8 at 23 m drill hole depth, and zone 6 returned 0.9 m of 0.43 wt% U3O8 at 14.2 m drill hole depth. A total of 28 diamond drill holes were completed in zones 3 and 6, with 12 of the drill holes showing uranium mineralization at depths varying from 5.5 to 46.0 m below surface.
In 1966, a total of 111 channel samples were collected from 10 old trenches at surface within zone 3. The assays ranged from 0.01wt% to 0.25 wt% U3O8 with one sample returning 11.82 wt% U3O8.
The zones are all governed by sets of bifurcating faults, and uranium mineralization occurs as small uraninite veinlets. Appia sees the potential of the zones being the upper splays of a larger system at depth.
Appia plans to investigate the Hawker Lake uranium zones during the Summer of 2019.
Elliot Lake – Uranium and REEs in a +350 M lbs. uranium past-producing jurisdiction
www.appiaenergy.ca/projects/elliot-lake-property/overview
As an anchor, the company owns 100% of the Elliot Lake uranium project, a potential 200 million lbs.* low-grade uranium and REE deposit in the historically producing uranium town of Elliot Lake, Ontario, Canada. The Elliot Lake historic mining camp produced a total of 362 million lbs. U3O8 from approximately 177 million tons of ore having an average grade of 0.106 wt% U3O8 from 13 underground mines in the area from 1955 to 1996.
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Figure: Geological map of Appia’s Elliot Lake property (red property) showing NI 43-101 compliant mineral resources at Teasdale Lake and Banana Lake, and non-compliant historic mineral resources.
Currently, Appia has NI 43-101 compliant mineral resources of 47.7 million lbs TREE and 8.0 million lbs U3O8 Indicated and 133.2 million lbs. TREE and 20.1 million lbs. U3O8 Inferred in the Teasdale Zone**, and 27.6 million lbs. U3O8 Inferred in the Banana Lake Zone**. The resources have not been fully drilled off, and are largely unconstrained along strike and down dip, indicating potential to increase the size of known resources, but also the ability to convert historic resources into NI 43-101 compliant mineral resources.
The confirmation drilling at Teasdale Lake resulted in a change in the mine plan from the historic resource calculation. The ore zone was expanded to 9.7 m thickness in order to include REEs with a greater value than U3O8 in the zone.
Past exploration work completed on the property by Appia and other companies exceeds $50 million. All of the necessary infrastructure is in-place, and the Province of Ontario is a mining-friendly jurisdiction.
Elliot Lake remains one of the world’s largest developed uranium districts. The size is massive, and in a rising price market for uranium and REEs, there is a strong upside possibility.
Conclusion
With an approximately $10 million market cap, and still under the radar of most investors, Appia has the potential to have a substantial upside. The Alces Lake project is shaping up to be one of the best REE projects in the world with world-class grades enriched with critical REEs necessary for a growing permanent magnet industry. In addition, the Saskatchewan uranium projects have at or near-surface discovery potential for high-grade uranium. Add to that the massive uranium and REE Elliot Lake project, the Company is certainly poised to accelerate forward especially on rising uranium and REE demand and prices.
The Company has a strong and experienced management team with over 200 years combined industry experiences. Exploration is headed by Mr. James Sykes, Vice President of Exploration and Development.
The Athabasca Uranium Rock Star Mr. Sykes has had an illustrious and prestigious 12 year career exploring for uranium in the Athabasca Basin. He was the driving force behind NexGen Energy Ltd.’s Arrow discovery in 2014, currently being touted as the World’s largest undeveloped high-grade uranium deposit. Prior to joining NexGen, James worked with Hathor Exploration Ltd. and Rio Tinto on the Roughrider uranium deposit, creating geological models that predicted and led exploration team(s) to three new discoveries along the Roughrider trend (Roughrider East, Roughrider Far East, and Denison Mines’ J-Zone). His first role was with Denison Mines Corp. working on the Wheeler River property between 2006 and 2007. He was part of the team that identified the exploration targets that are now known as the Phoenix and Gryphon deposits. In short, Mr. Sykes has been directly and indirectly involved with the discovery of over 450 M lbs. U3O8 in the Athabasca Basin, and is currently regarded by some as the preeminent Athabasca uranium geologist of the 21st Century.
Appia owns 100% of its properties, and the experienced team is focused on delivering near- and long-term investor returns through the successful exploration and development of its uranium and REE projects.
For more information, please contact Appia via www.appiaenergy.ca or email at [email protected].
*
200 million lbs. uranium is based on a historical resource as per Watts, Griffis and McOuat Limited, May 2007 Technical Report. Although viewed as reliable and relevant based on the information and methods used at the time, they do not satisfy the requirements set out by NI 43-101. Drill core was not assayed for REEs at that time and the upper reef was not always included in calculating the Historic Resource estimate. Appia has not done sufficient work to classify the Historical estimate as a current mineral resource and is not treating the Historical estimate as a current mineral resource. The Historical Resource should not be relied upon.
**
1. Mineral Resources effective 30 July, 2013 (Teasdale Lake) and Mineral Resources effective 1 April, 2011 (Banana Lake)
2. Mineral Resources are estimated at a cut-off value of $100 per tonne, using a uranium price of US$70/lb U3O8, a TREE price of $78/kg, and a C$:US$ exchange rate of 1:0.9. TREE includes all the REE elements from lanthanum to lutetium plus yttrium (Teasdale Lake). A cut-off grade of 0.6 lb. U3O8 was used for Banana Lake.
3. Mineral Resources which are not Mineral Reserves do not have demonstrated economic viability. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues. There are no known specific problems at this date.
4. The quantity and grade of reported Inferred Resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred Resources as an Indicated or Measured Mineral Resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured Mineral Resource category.
5. The Mineral Resources were estimated using the Canadian Institute of Mining, Metallurgy and Petroleum standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions and adopted by CIM Council December 11, 2005.
6. Specific Gravity of 2.85 tonnes/m3 (or 3.14 tons/m3) was used.
7. Indicated amounts may not precisely sum due to rounding.