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| Boulder Creek |
(35% Full Metal / 65% Silver Quest)
This 2500 hectare property consists of the Boulder Creek deposit and McCarthy Marsh and Fireweed prospects. The Boulder Creek deposit is Alaska's largest known uranium deposit, with a resource estimate completed in 1981 outlining 1 million pounds of U3O8 at an average grade of 0.27%. This resource was completed prior to NI-43-101 standards and has not been independently audited and should therefore not be relied upon.
Boulder Creek is classified as a sandstone type 'roll-front' deposit. This means it was formed as uranium-bearing groundwater flowed through sandstone aquifers. The uranium precipitated off the groundwater when the fluid passed from an oxidizing to a reducing environment in the sandstone.
The McCarthy Marsh prospect represents a prospective untested uranium roll-front target just 15 km southwest of Boulder Creek. Fireweed is a newly discovered occurrence, as a result of exploration during the 2007 season (see FMM 2007 News Release #27)
The deposit is located in the southeastern Seward Peninsula, 160 km northeast of Nome and 16 km north of the village of Elim, which is at tidewater. A base camp with a natural airstrip adequate for bush aircraft is located just 5 km east of the project. A 4-wheeler trail leads from the camp to the deposit. A 4,000 foot paved airstrip is available at Moses Point, 50km south of the deposit.
Delineation and in-fill drilling (started in 2006 at the Boulder Creek deposit) was completed. Also, a first pass drill test consisting of five holes was done at Fireweed following completion of the main program. Geochemical results from the five core samples are pending. See FMM 2007 News Release #27 for more details.
Silver Quest can earn an initial 65% interest in the property by an initial cash payment to Full Metal of US$75,000, completing US$1,500,000 in exploration expenditures over four years (ending April 1, 2009), and the issuance of 50,000 shares to Full Metal during each year of the Option Agreement to a maximum of 200,000 shares. Silver Quest will have the right to acquire an additional 15% interest in the property by issuing an additional 300,000 shares to Full Metal and incurring an additional US$1,000,000 in expenditures on or before April 1, 2010. Upon completion of the earn-in requirements, an 80:20 joint venture agreement will be formed with Silver Quest as the operator.
Silver Quest also holds another option with Full Metal for the 2,700 hectare McCarthy Marsh uranium property situated just 15 km southwest of the Boulder Creek deposit. In a similar agreement, Silver Quest must spend US$1 million over a four-year period to earn a 65% interest in the property.
On March 21st 2005, Full Metal signed a letter of intent with David Hedderly-Smith to acquire a 100% interest in the Boulder Creek Property in Alaska. The Property is subject to a 2.5% net smelter royalty on all precious and base metal production from the claims payable to David Hedderly-Smith. In addition, the Property is subject to a Claim Rental Fee of $50,000 per annum on March 31, 2005, and $50,000 on April 1 2006, 2007 and 2008. Until commencement of commercial production, Advanced Royalty fees payable on April 1, 2009 and subsequent anniversaries are required in favour of David Hedderly-Smith. $1,500,000 in exploration expenditures are required by Full Metal over a 4 year period ending April 1, 2009 in order to earn-in under the option.
The Boulder Creek Deposit (historically called Death Valley) was discovered by means of airborne radiometric data. In the late 1970's and early 1980's, Houston Oil and Minerals completed 3,300 meter of core drilling in 52 holes and about 60 meters of near-surface split tube sampling in 21 holes. The drilling focused on the Discovery Zone area.
Surface grab samples reported by previous operators returned up to 34% U3O8, with intercepts up to 3.3 meters averaging 0.58% U3O8.
A resource estimate completed in 1981 by Houston Oil and Minerals outlined a resource of 1 million pounds of U3O8 in zones with an average grade of 0.27% U3O8 and an average thickness of 3 meters, using a grade times thickness contour method. This resource was completed prior to NI 43-101, has not been independently audited and should therefore not be relied upon.
The historic resource occurs within a 1,000 by 100m area, with depths ranging from the surface to 120 meters within a northwest trending mineralized zone. About 600 meters north of the resource area, drilling intercepted 4 meters averaging 0.041% U3O8, without follow-up.
At Boulder Creek, the Uranium was leached from Late Cretaceous-aged alkalic quartz monzonite intrusions and deposited in roll fronts within a reducing environment of Paleocene-aged, arkosic, carbonaceous conglomerates and sandstones of the Boulder Creek Basin.
The McCarthy Marsh Property, located 15km southwest of Boulder Creek, covers a prospective conceptual target of unconsolidated, reducing basin rocks adjacent to Late Cretaceous-aged Granites.
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