Otish Uranium

Otish Mountains Uranium

40% Pacific Bay, 60% Strateco

The Otish Mountains Property, comprising an area of 14,576.33 hectares (145.76 km2), is located in northern Quebec and adjoins the Matoush Uranium property owned by Strateco Resources Inc of Montreal.

Pacific Bay acquired the property mainly by staking in 2006 because of the highly prospective geology of the Otish region, the rising price of uranium, and the proximity to Strateco’s Matoush high grade uranium deposit.

The Matoush Deposit hosts a National Instrument 43-101 compliant indicated resource of 586,000 tonnes with an average grade of 0.95 % U3O8 containing 12.33 million pounds of U3O8 and an inferred mineral resource of 1.69 million tonnes at an average grade of 0.44% U3O8 containing 16.44 million pounds of U3O8.

The Property is located approximately 275 kilometres north of the town of Chibougamau and is accessible year round by air, and in winter by the Eastmain winter road, which runs about seven kilometres to the west of the property. Strateco built a 1.3 km landing strip that is used for the transportation of the manpower and equipment required for the project.

On January 14, 2008, the Pacific Bay Minerals Ltd. optioned the Otish Mountains Property to Strateco. The option agreement called for Strateco to: (i) to pay to Pacific Bay a total of $500,000; (ii) to issue 200,000 common shares of the Company over 4 years and (iii) to incur $3 million in exploration expenditures over 4 years, including a minimum of 10,000 metres of drilling. As part of the transaction, the Strateco acquired one (1) million units of Pacific Bay at a price of $0.30 per unit.

Otish Mountains Property Map

Otish Mountains Property Map

In 2012 Strateco completed all its obligations under the option agreement and a joint venture was formed whereby Pacific Bay and Strateco participate on a 40/60 pro-rata basis.

Current Otish Mountains Property Status

Pacific Bay’s JV partner has for several years been seeking Provincial and Federal approval to conduct underground exploration work on its Matoush Uranium Deposit. Notwithstanding the approval of the Canadian Nuclear Safety Commission granted in 2012, the Province of Quebec has not render a decision on the project as of the date of writing. In the first quarter of 2013, the Province of Quebec declared an effective moratorium on uranium exploration and development in the Province pending further study. The moratorium has prevented Pacific Bay and its JV partner Strateco from exploring the Property.

In mid-2014, Quebec commenced a Province-wide community consultation process to seek public input regarding the social and environmental acceptability of uranium mining in Quebec. This process is expected to continue throughout 2014.

Pacific Bay strongly believes that uranium mining is safe and environmentally sound when carried out responsibly. Pacific Bay believes Strateco is a responsible and professional firm that has complied with all regulations conducted wide consultation in the local communities.

Past Exploration Activities

2007

Four holes were drilled with the help of a Versadrill helicopter-borne drill (Major Drilling) between October 31 and November 25, 2007 for a total of 1,061 metres. These holes are all located in the southern block of the Rabbit Ears claims about 10 km north-east of the Matoush property camp. These holes were drilled in an area of the property with favourable geophysical anomalies such as magnetic lineaments and airborne radiometric anomalies, as well as VLF/EM conductors. Uranium-bearing boulders have also been discovered in the area during prospecting in the summer of 2007.

Drilling on the Rabbit Ears south block intersected the two same types of sedimentary facies seen in the Matoush sector. These correspond to the active channel facies (ACF) an arkosic to subarkosic conglomeritic coarse sandstone, and the channel-bar facies (CBF), a finely laminated subarkosic fine-to-medium sandstone, of the Indicator Formation. The vertical hole, PB-07-01, confirmed a sub-horizontal bedding in this area of the basin. The best hole was PB-07-05 which intersected a 10 cm altered sandstone averaging 0.03% eU3O8.

2008

Seven holes totaling 1,510 metres were drilled on the Otish Mountains Property in 2008. The holes were drilled between August 8 and September 7, 2008 using a helicopter-transportable drill (Versa drill). The holes were drilled in the “Rabbit Ears South” sector. The targets were established for the purpose of identifying a Matoush-type uranium mineralized zone, based on the results of prospecting done in 2007 and 2008, geophysical surveys and the geomorphology study done by Poly-Géo Inc. in 2008.

Two sectors were tested. Five holes were drilled on Sector 1 to trace a potentially-mineralized north-south fault similar to Matoush. The holes covered an east-west lateral distance of 630 m to a vertical depth of about 300 m. Sector 2, where two holes were drilled for a total of 596 metres, lies about 700 metres directly south of Sector 1. The goal was to test for the presence of a geophysical lineament interpreted as having a similar slip to that of the Matoush fault. No significant mineralization was intersected during this drilling program.

2009

In the first quarter of 2009, five holes were drilled to test for a major structure like the Matoush fault in the “Rabbit Ears South” area. A barren but major clay-rich breccia structure was intersected.

Following the completion of drilling on the Mistassini property in late June 2009, the Company took advantage of the availability of the helicopter-borne drill to drill a 200-metre hole on a section of the Otish Mountains Property, which consists of four mining claims in the possible extension of the Matoush fault, 3 km south of the Eclat property. The Matoush fault was not intersected.

In the third quarter of 2009, seven holes were drilled on the Otish Mountains Property. Four holes were drilled to trace the Matoush fault, which becomes diffuse north of the Eclat Nord property. No remarkable structures were identified. Three holes were drilled to test a linear geophysical anomaly on the “Rabbit Ears” area, about 5 km east of the AM-15 lens, but failed to locate any structures of note. Work ended on the property in September 2009.

2010

In 2010, on the Otish Mountains Property, prospecting work was done in the second quarter on the north-south belt to the west of the Eclat South area. This led to the discovery of a 3.0 metre anomalous sub-outcropping boulder measuring up to 1,800 counts per second approximately four kilometres west of the Matoush fault.

This new, previously unexplored area was suddenly of particular interest because the geophysical survey data processing discussed earlier revealed the presence of a north-south lineament about four kilometres long containing two clearly identified targets for fourth quarter drilling.

The three holes totaling 2,010 metres drilled early in the fourth quarter of 2010 to test this structure were highly successful. A Matoush-type fault called the Alfred fault, with identical alterations to those of the Matoush fault, was intersected over 365 metres. The geophysical anomaly indicates that the Alfred fault extends to the north and south. This is an important discoverie on the Matoush project outside the Matoush fault corridor. These holes, which returned weak uranium grades, show that other Matoush-type structures (faults) exist throughout the Matoush project.

2011

Five holes totaling 2,931 metres were drilled in the first quarter of 2011 on the Pacific Bay-Matoush property, where Strateco exercised its right to earn a 60% interest. Starteco acquired its 60% undivided interest on October 29, 2011.

It should be recalled that in October 2010, three holes drilled to test a north-south-striking structure similar to the Matoush fault, located 4.0 km away, returned positive results. A Matoush-type fault called the Alfred fault, with identical alterations to those of the Matoush fault, was intersected over 365 metres, and a series of holes was planned to test its continuity.

Five holes were therefore drilled in this area in the first quarter, including three to test the northern extension of the Alfred fault over a 270-metre strike length. Another hole was drilled midway between the two holes drilled 365 metres apart in the fall of 2010, and the last hole tested the vertical extension of the fault at a depth of -500 metres.

The five holes confirmed the continuity of the Alfred fault toward the north and at depth, with the presence of alteration typical of the Matoush fault. However, no significant mineralization was encountered.

Five more holes were drilled on the Alfred fault in the second quarter of 2011 for a total of 2,580 metres. These holes outlined the extension of the Alfred fault to the south, thus tracing its continuity over almost two kilometres. The similarities with the Matoush fault remain interesting, as do the conditions for mineralization of the Alfred fault, despite the absence of significant uranium anomalies. The holes drilled to date have confirmed that certain mineralizing properties associated with the lenses on the Matoush fault are also found elsewhere on the property.

Strateco did not conduct exploration on the property during the third and fourth quarters of 2011.

In 2011, 10 holes totaling 5,511 metres were drilled on the Pacific Bay-Matoush property.

2012 – 2014

No exploration work on the Property in the last few years due to market volatility and the above noted moratorium.