David Talbot of Dundee Securities says: Note – the email we sent you earlier with analyst comments on today’s Fission news was incorrectly attributed to Dundee Securities. Please note that the report was actually published by Cantor Fitzgerald. Below are the comments from David Talbot of Dundee Securities
R00E Zone - No Longer the Ugly Stepsister - Another Record Hole Fission announced impressive assay results from three holes from R00E Zone at its 50% owned PLS property this morning (Figure 1). R00E has definitely surprised us on the upside, surpassing our already bullish grade expectations of this zone, and demonstrating it could be just as spectacular as R390E. The footprint of the zone is still growing and now measures 120m long, with some of the best results lying on the fringes of the zone. We believe this bodes well for further expansion. With all the excitement surrounding the incredibly thick and high grade R390E zone to the east, it seemed many investors (and analysts) had either forgotten about R00E or downplayed its significance. This was, after all, the zone that started it all. With an expanded $6.95MM summer budget and a steady flow of results still expected, we believe the likelihood of further expanding strike remains high. With recently improved grades and thicknesses, we see improving potential for R00E to become something such as a starter pit due to its size, grades and room for an operation as it remains large, shallow, high grade and on land.
Best R00E hole yet. Hole -59 intersected an upper zone of 3.61% over 6.5m and 8.57% over 20.5m (including 17.78% over 9.5m). We estimate a Grade x Thickness (GT) of 175.6 for the upper zone and 23.0 for the lower zone, now making this the best hole drilled to date at R00E. By comparison PLS13-043 - released 16-May-13, had a GT of 105.6 (see note). Hole -59 remains somewhat wide open to the east where it appears as though the deposit may start trending to the south. Hole -49, located 70m to the west, is skinnier but grades are still improving towards the west as well. We still await further assays, namely hole -67 to the east. We expect grades to remain strong but the zone doesn't appear as thick in that hole. However as the zone appears to be trending to the south, perhaps this hole has yet to intersect the heart of the section.
R00E zone improves significantly. Zone average grade improves by 36% to 1.80% from 1.33%, and average thickness increases 4% to 17.4m from 16.7m using a 0.1% cut-off. At a 1% cut-off, grades increase 39% to 3.50% from 2.52%, and thickness remains relatively unchanged at 19.6m versus 19.4m. GT of the zone is estimated at 31.37, up 42% from 22.17 using a 0.1% cut-off. At a 1% cut-off the GT increases 40% to 68.35 from 48.74.
Growing critical mass. R00E is still robust and open to the north and along strike, with proven high grade uranium mineralization along its 120m strike length and 50m width. Of note, we now have high grade intersections on both western and eastern area of the zone, and these holes remain open. It's possible the high grade boulder source could be to the west, rather than under the lake as we had initially suggested. With the improved size, grade and thickness of the R00E zone, we now estimate that PLS may have surpassed 30 MM lbs U3O8 in mineral inventory. Today's results could potentially add 3.1 MM lbs to R00E bringing it to 10.7 MM lbs. The higher grade and more robust R390E zone contributes ~20 MM lbs.
Gold potential. Conversations with management suggest there could also be significant gold mineralization at PLS, much like other past uranium producers in the Western Athabasca (ex. Cluff Lake). We expect assays to be announced sometime in the coming months.