“This One is Special.” (Peter Koven, National Post)
“Truly Phenomenal” (David Talbot, Dundee Capital Markets)
For the uranium sector, the last months of 2014 saw the beginning of an upturn. The spot price surged up from its four year low of just $28 per lb up to the mid $40’s; utilities started purchasing uranium in substantial quantities and Japan’s nuclear regulator, the NRA, announced that the first two reactors had passed their final safety checks . At time of writing, prices have seen a modest pullback into the high $30’s but it seems clear to most observers that the market has most likely found its bottom and is on the way up.
Fortuitous timing then, for Canada’s award-winning uranium exploration company to release the largest pre-development uranium resource estimate in Canada’s Athabasca Basin (Saskatchewan) – the top mining district for high-grade uranium. 79.6m lbs Indicated and 25.9m lbs Inferred. Welcome to Fission Uranium’s Triple R Deposit at Patterson Lake South (PLS).
If you’ve been investing in mining for a while, you may recall the battle in 2011 between Cameco and Rio Tinto to takeover Hathor Exploration. Rio Tinto won out and, for $654 million, secured a major league, high-grade deposit in the Athabasca Basin.
That battle, which started as a hostile takeover bid by Cameco, took place after Fukushima had already occurred but such is the value of discoveries in the Basin. Now for a fun fact: Fission’s maiden resource estimate, follows CIM Definition Standards and not only dwarfs Hathor’s initial resource estimate, it’s far bigger than the resource estimate Hathor released two years and multiple drill programs later when they were taken out by Rio. Another fun fact? Fission’s resource is bigger than the maiden resource estimate that Denison released for their Phoenix deposit, also in the Basin.
The National Post’s Peter Koven referred to the Triple R as a “Monster Resource” and Dundee analyst, David Talbot, called the numbers “truly phenomenal”. If you’ve read any other expert reports you’ll understand why Fission’s management team was so happy when we spoke to them.
Okay, so we’re impressed with the size of the deposit. You, on the other hand, might be inclined to respond with something like: size isn’t everything! Well you’re quite right and that’s why the Triple R is so exciting. This is not just a giant resource. We’re talking about remarkable quantities of high-grade uranium: 44.3M lbs Indicated @ 18.21% U3O8 and 13.9M lbs Inferred @ 26.35% U3O8 (indicated and inferred mineral resources are stated using a cut-off grade of 0.1% U3O8) and very shallow depths (most of the mineralization is between 60m and 200m. High-grade, shallow and big… the definition of world-class. Just as good, this deposit is sitting in basement rock which, when it comes to the Athabasca Basin, tends to be the geology that mining engineers prefer to work with.
With such a monster of a deposit entering the world stage, it seemed only right that we meet up with the Management and Technical team experts behind it all, to get their perspective on the news and what’s in store for the company.
If you’re not familiar with Fission’s team, I can tell you now that they do not disappoint. Dev Randhawa, CEO and Chairman, and Ross McElroy, President, COO and Chief Geologist, have made a name for themselves in the uranium sector for making discoveries and growing shareholder wealth. In 2013, they were both named Mining Person of the Year by The Northern Miner magazine and in 2014, became EY ‘Entrepreneur of the Year’ finalists.
Mr. McElroy went on to win the most prestigious award in the mining sector – PDAC’s Bill Dennis award for exploration success. He has over 30 years as a professional geologist under his belt and has worked for uranium majors such as Cameco, Areva and BHP. While Randhawa used his expertise as a CEO in the public markets to the company was always well-funded, McElroy put together one of the most successful uranium exploration teams in the industry and lead that team to not just one but two major discoveries in three years.
“To be honest, we’re thrilled.” Randhawa says. “We knew this was going to be big and now we have the numbers to prove it. What’s more, the timing is ideal. It seems clear that Japan will begin restarting reactors this year, which means more and more utilities will come back into the market to secure their long term supply of reactor fuel. Over time that will place even more upwards pressure on the price of uranium. We’re already seeing it. Demand is strong and growing and ultimately that’s good for a company with an asset like ours.
“PLS really is unique.” McElroy explains. “In two years of drilling, two years of the most aggressive exploration the Basin has seen since the 1970’s, and we barely missed a drill hole. Almost every hole has been mineralized and a big percentage of those holes were high-grade. So, we knew we had something remarkable on our hands and that’s why we chose one of the most respected technical companies in the industry, Roscoe Postle Associates, to analyze and corroborate our results and provide a 43-101 compliant resource estimate and technical report.”
McElroy continues, “It has size, grade, shallow depth, favourable geology and it’s still open in several directions. In 30 years this ranks up there with some of the best deposits I have been involved with. Even more incredible is that the potential at PLS isn’t just with the Triple R deposit. We have over 100 EM conductors at PLS. EM conductors are generally associated with high-grade uranium. Not all EM conductors have uranium associated with them, but they are a vital part of the story. Most projects are lucky if they have a few prospective conductors and we have several”
We asked McElroy if any work has been done to explore other areas of the property and he nods. “Yes. During the last drill program we drilled tested a few of our highest priority regional targets and hit anomalous radioactivity at shallow depth on three other conductors, one of which is near the PLS claim border with Fission 3.0’s Clearwater West project.”
So, what’s next for Fission Uranium? “We’re exploration specialists.” Randhawa explains. “Our business model is to use our technical expertise to make discoveries, grow them, de-risk them and finally monetize them for our shareholders by selling the project to a mid-tier or major mining company. Our team has been doing this successfully for years and we’ll continue to do so.”
“This year you’ll see more drilling.” McElroy adds. “In fact, we recently started a 63 hole program to grow the resource and to explore other areas of PLS. At some point later this year we plan to commission a Preliminary Economic Assessment.”
Randhawa wraps up the conversation, “When the time is right and the right offer comes in we’ll look to sell the project. We’ve already had a variety of companies visit the property but you can’t choose when someone will try to buy you. What you can choose is how you increase the asset value for shareholders and that’s what our focus is.”
Fission Uranium is listed on the TSX under the symbol FCU and on the OTCQX under the symbol FCUUF. Further information on the company can be found at www.FissionUranium.com
The company paid consideration to SNN or its affiliates for this article.
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