Sprott Research - Target $0.60 Ticker: FUU CN Cash: C$42.7m Project: PLN (JR Zone)
Market cap: C$232m Price: C$0.49/sh Country: Canada (Saskatchewan)
REC. (unc): BUY TARGET (unc): C$0.60/sh RISK RATING (unc): VENTURE
Today’s infill drilling includes 3.5m @ 4.2% U3O8 (incl. 0.5m @ 20.0%) on line 060S, and the headline 0.5m @ 66.8% U3O8 on line 015S– the highest grade interval intercepted to date at PLN. These results continue to add confidence (and necessary pierce points for future MRE) to our SCPe ~25-30Mlbs drill de-risked estimate at JR Zone alone, with potential for further additions up and down dip or at the unconformity. Exploration drilling at the B1 area continues to return anomalous boron and uranium intercepts (indicative of strong alteration) and basement uranium grades, indicating promising structure and anomalism but not yet high-grade mineralization, with the area remaining ripe for further exploration and potential new discovery. Stepping back, we like F3’s potential as (i) it is one of the very few drill-bit active explorers with prospective licenses on the basin’s margins with good access, (ii) the team has a successful track record on uranium exploration and (iii) it is well funded with >C$40m of cash to continue aggressively ground-testing the priority targets this year. We reiterate our BUY rating and our C$0.60/sh based on US$3/lb on a conceptual MRE target of 75Mlbs (equivalent to 0.5x NAV on a typical peer multiple of US$6/lb). With drilling underway in JR Zone and B1 Area, and with a drill-rewarding uranium market now, we think F3 investors are holding a lottery ticket with a discovery at B1 Area a potential step-change.
PLN drilling hits 0.5m @ 66.8% U3O8; B1 hits structure/alteration, promising for follow up drilling
F3 reported final results from last year’s fall program from 15 holes. JR Zone infill drilling returned highlight hits of 0.5m @ 66.8% U3O8 and 11.5m @ 0.4% (incl. 1.5m @ 2.6%) from line 015S and 8.0m @ 1.0% (incl. 0.5m @ 13.2%) and 3.5m @ 4.2% (incl. 0.5m @ 20.0%) from line 060S. Exploration drilling at the B1 area intercepted 0.5m @ 79ppm and 7.5m @ 48ppm, both hits in basement and on the 3450S line. Hole PLN23-111 from B1 Area (again on line 3450S) hit 3.5m @ 1,198ppm boron (incl. 0.5m @ 2,770ppm).
Why we like F3 Uranium
1.Prime ground in the Western Athabasca, which hosts 337Mlb Arrow (NXE) and 138Mlb PLS (FCU)
2.High grade core of 5% uranium drilled, 150m of strike indicates potential for a major new Athabasca discovery
3.Proven management team with multiple Athabasca uranium discoveries with bold approach to exploration and well-funded
Catalysts
- 2024: Winter drilling program, SCPe potential for the maiden resource mid-year
Research
Justin Chan (London) m +44 7554 784 688 jchan@scp-rf.com
Eleanor Magdzinski (Toronto) m +1 705 669 7456 emagdzinski@scp-rf.com
Konstantinos Kormpis (Toronto) m +1 778 957 3623 kkormpis@scp-rf.com
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