wow - I now have zero respect for Talbot (down from what little I had before reading his latest garbage) - what a biased piece of $hit that report was. We know for sure whose payroll he is on. So much corruption it is sickening. And for FCU management to continue with their games makes it more and more clear that they need to go!!!! I was hopeful FCU management would have capitulated and said "Ok OK take two board seats and lets all make up and move together topwards a common goal" but it is clear Dev will fight to the death and by Talbot's remarks it seems Dev still has the DML merger on his mind. We simply cannot take this chance and replace the BOD.
Banner60 wrote:Fission Uranium Corp.
(FCU-T)
Buy, Spec. Risk, C$2.40 target
Last – C$0.61
Mkt. Cap – C$236 MM
Event: Fission Uranium announces mailing of its Management Information Circular/slate of directors proposed by dissident shareholder
Impact: Neutral – normal course of business, proposed directors fail to impress.
While mailing of the Management Information Circular for its 15-Dec-15 AGM is normal course of business and not typically worth noting in research comments, Fission has listed the proposed slate of directors by dissident shareholder James Gifford.
Nominees include Ben Ainsworth, age 75, BC; John Bell, 77, BC; Jean-Jacques Gautrot, 72, France; Blair Lockhart, 52, BC; and Olga Wills, 43, UK. Most of these nominees do not own any shares of Fission, and we cannot see how this proposed slate of directors by FCU Oversight is anywhere near aligned with shareholders…60% have zero interest in FCU. Only one, a former Alpha Minerals exec (former JV partner to Fission before FCU obtained 100% interest in the project), has more than $5,000 invested at current market prices. When combined with the dissident shareholder James Gifford’s meager 126,099 shares, only 0.02% (0.76 MM shares or $471,000 worth) of Fission Uranium’s 386.72 MM shares and C$236 MM market cap would be held by these board members. By comparison, FCU’s current board owns 6.483 MM shares or 1.7% according to Factset. This includes Dev Randhawa at 3.822 MM; Ross McElroy at 1.79 MM; and Frank Estergaard at 0.681 MM shares.
It is ironic that FCU Oversight is worried about corporate governance, yet feels that a proxy battle which may cost more in cash than his or his board nominees current holdings in FCU, is in the best interest of an exploration company whose money is best spent in the ground.
Proposed directors fail to impress. One or two of these names do peak curiosity due to their pedigree; however, we would warn that getting the Russian Government involved at the director level of Fission Uranium at this stage, with no initial benefit to Fission Uranium (such as strategic investment), would not likely be an advantage when it comes time to find such strategic partners. For example - when Fission Energy brought in the Korean’s as JV partners at Waterbury, it cost KEPCO C$14 MM to obtain 50% of a grassroots project with no uranium discoveries (pre-J-Zone). It makes no sense to give Rosatom, one of the most uranium hungry companies in the world, a foot in the door on 106 MM lbs of high grade uranium in the best jurisdiction in the world at no cost.
· Ben Ainsworth – geologist, formerly with JV partner Alpha Minerals – already sold PLS project well before its value was realized
· John Bell – Director of Goldcorp and former Canadian Ambassador to Ivory Coast and Brazil
· Jean-Jacques Gautrot, World Nuclear Association Chair, Senior Advisor & former CEO Areva UK
· Blair Lockhart - legal counsel with experience in securities, corporate and mining law for 15 years; previously a Crown Prosecutor and geologist
· Olga Wills, Advisor to the President, Rusatom Overseas – promotes Russian construction of nuclear power plants for Rosatom
We noted earlier this morning that FCU Oversight Canada reported that it provided notice to Fission, of its intent to nominate directors for election at the 15-Dec-15 AGM (
see Dundee’s informal comment). Our comments from this morning still stand:
· We aren’t overly concerned about a complete board overhaul
· While the merger with Denison Mines (DML-T, BUY, C$2.20 target) did not garner the 2/3 required votes to pass, there still was a majority vote in favour.
· Fission Uranium has the right people in place in our opinion.
o Ross McElroy (President and COO) has demonstrated the ability to discover multiple uranium deposits in the Athabasca Basin. He has now been involved in the discoveries of McArthur River Mine, J-Zone and Triple R – the latter for which he was named PDAC’s 2014 Bill Dennis Award recipient for outstanding Canadian exploration success.
o Dev Randhawa (Chairman and CEO) has also not once, but twice, spun grassroots projects into a new public vehicle; creating value from near nothing. Strathmore’s Canadian projects were spun into Fission Energy which discovered the J-Zone deposit in 2010, and was acquired by Denison Mines in a deal worth C$72 MM at announcement in 2013. However, from that same deal, management was able to spin its new PLS JV discovery, grassroots projects, and C$18 MM in cash into Fission Uranium. Fission is currently worth $236 MM.
David A. Talbot l Vice President, Senior Mining Analyst
DUNDEECAPITAL MARKETS
1 Adelaide Street East, Suite 2100, Toronto, Ontario M5C 2V9 l 416.350.3082
t
dtalbot@dundeecapitalmarkets.com
dundeecapitalmarkets.com