Seeking Alpha: Fission - Still Undervalued 50%-125% UpsideFission Uranium - Still Undervalued With 50%-125% Upside
Editor's notes: FCU.V could be in line for a takeover based on its unique portfolio of projects. Impressive early results and ready low-cost access to infrastructure should lead to a premium valuation.
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(Editors' Note: Fission Uranium trades under the symbol FCU.V on the TSXV with average daily volume of ~$1.4 million CAD)
https://seekingalpha.com/article/2014421-fission-uranium-still-undervalued-with-50-percentminus-125-percent-upside?source=yahoo
In early December 2013, Fission Uranium Corp. (OTCQX:FCUUF) completed its friendly takeover of Alpha Minerals Inc., making it the sole owner of the Patterson Lake South (PLS) uranium project in the Athabasca Basin region of Saskatchewan. With the PLS project now consolidated into one entity, Fission is more attractive than ever and represents a very favorable risk-reward situation at its current valuation. It appears that the market is pricing in only the resource discovered to date (and a conservative estimate of the resource at that), while assigning little to no value to the upside exploration potential. For an introduction to the project and its progress so far, I strongly recommend reading Malcolm Shaw's fantastic series of articles chronicling the development of the PLS discovery to date. In short, over the past year since the initial discovery, we have seen PLS transform from an unlikely parcel of land on the underexplored western side of the Athabasca Basin to what is quite probably the only known large, high-grade, open-pittable uranium deposit that remains unmined anywhere on the planet.
Company Overview
Following the completion of the Alpha arrangement, Fission is the 100% owner of the PLS project, its sole asset. Fission now has ~313,000,000 shares outstanding, as well as warrants and options representing approximately 43,000,000 shares bring the fully diluted total to ~356,000,000. At the current price of $1.06, the market is valuing Fission at under $377 million (USD). With the exercise of all in-the-money warrants and options, the company will have upwards of $50 million in cash less the costs of the winter drill program (it currently has ~$25 million). This is more than sufficient to advance the project through the upcoming winter and summer drill programs and attain an NI 43-101-compliant resource with cash leftover. The recently-commenced winter drill program is more than double the size of 2013's winter and summer programs. Fission will drill at least 30,000 meters (90 holes) for resource development and an additional 14 holes to explore other high-priority targets determined using radon anomalies and other conductors on the property, a strategy used with much success to date. Despite the large scale of this drill program, it will cost only about $12 million thanks to the favorable shallow nature of the deposit.
Fission has a top-quality management team with a proven track record of making, advancing and monetizing discoveries. Already in 2013, Fission Energy (the pre-spinout company) sold its Waterbury Lake discovery to Denison Mines Ltd. (DNN) and spun out PLS and its other properties, which now make up Fission Uranium and another new spinco (due to the Alpha Minerals takeover), Fission 3.0 (OTC:FISOF). Shareholders have already seen triple-digit returns this past year in the face of a weak market for junior resource companies and a low and falling uranium price.