Palisade Research - Thu, May 25, 2017

Update: (API:CNX; APAAF) Appia Energy Drills 72.9 Meters Of 0.012% U3O8 At Loranger

picture of a snow covered area being prepped for drilling


We apologize for the delay in this update.

This week Appia released a fairly long update on its drilling operation, and there are four major takeaways we would like to translate for the average investor.

Like any other investor, the length of mineralization immediately caught our eye. The low grade nature of the intercept was far less exciting. The market spoke with a big yawn.

In speaking with James Sykes, we believe that several positive takeaways should be taken from the results.

Firstly, Appia was able to hit uranium mineralization on 6 out of 7 drill holes, with two out of two exploration areas proving to host uranium mineralization. This is unheard of in the Athabasca Basin. To compare, IsoEnergy (TSXV:ISO) drilled 0.2 meters of 143 ppm U (0.017% U3O8) at 240 meters depth on its 27th drill hole on the property. ISO currently has a market cap of C$39.8 million!

Secondly, the cumulative widths of intersected uranium are a good sign that Appia is onto something. This is important because we believe its not grades that lead the way to large deposits, but the widths of intersections. We have seen many scenarios where companies have hit plus 1% U3O8 in less than one meter intersections that have lead to nowhere. And we have also seen 0.01% U3O8 over ten meters that lead to major discoveries.

Thirdly, the uranium mineralization occurs as uraninite (UO2) or as uranium in a mineral that is very easily and readily dissolved to release uranium in fluids. Compare this to uranium that is bound into a crystal lattice like the mineral monazite. This is an important detail because in order to release uranium from monazite, there needs to be very strong chemical fluids. Thus, a structure or alteration system will have a very difficult time releasing uranium from monazite.

If a major structure ripped through the RCV Trend, it would have no trouble remobilizing the uranium and concentrating it in a different location. These areas of concentration are what you see in high-grade uranium deposits.

In the end, there are a lot of positive takeaways from Appia's inaugural drill program. It has shown that there is a possibility of hydrothermal fluid alteration systems comparable to those hosting high-grade uranium deposits. The problem with the RCV Trend is not so much grade, but simply the fact that the right structure did not pass through the area.

Currently, a gravity survey only covers 5 kilometers of the RCV Trend in strike, the trend continues for another 23 kilometers to the south-western end of the property. This is enormous exploration potential. Appia also has other trends that yield equally as exciting potential.

The company still has C$1.2-1.4 million in the treasury and plans on drilling again in June or July. There are four other targets the company has its sights on, and all the smoke is there for something big.

We will continue to play the waiting game. As we said before, we believe James Sykes will find another uranium deposit.

Palisade Global Investments Limited holds shares of Appia Energy. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence. publishes interesting contributor articles in addition to its own content. We have not verified any of the above details.

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