Fission Uranium Corp T.FCU

New Zone Discovery Signals Huge Eastern Extension Potential

[ppprecies]

New Zone Discovery Signals Huge Eastern Extension Potential

Recommendation
Following close of the C$29 mln bought deal financing and further excellent exploration results – including discovery of new zone ‘. Not only is Patterson Lake South the last known, high-grade open-pittable uranium asset left unmined globally, but it boasts superb exploration upside in our view. Fission has sufficient cash to continue aggressive drilling well into 2015E.

Analysis
w New Zone. Fission released results from six holes, including 196, which cut 30.5 m of radioactivity (starting at 99 m depth), 465 m E of previous drilling. This big step-out represents a new discovery (“R1620E Zone”) that extends PLS’ strike to 2.2 km and is the first confirmation that PL-3C conductor is mineralized (PL-3B, ~200 m W of PL-3C, hosts all previous PLS mineralization). PL-3C measures ~1.3 km in E-W strike and opens the door to a further 1.1 km in eastward extension potential.

Gaps Closing Between Zones. Other recent results (17 holes, released March 17 and March 24) bolster the width and strike of the core of the mineralized trend between section lines 255E and 1005E, but more importantly, merged three zones (R390E, R585E, and R780E) into one (R780E). Beyond greater contained metal, two positives emerge: areas showing low radon values are capable of yielding spectacularly high-grade holes (e.g., hole 187 on line 660E cut 53.5 m off-scale – the most in one hole to date at PLS) and E-W lateral grade continuity, a key factor in mine viability, is strong.

Disconnect Between Size Potential and Market-implied Metal Content. Of 63 holes completed this winter, we are awaiting assay results on 62. Accordingly, our contained metal estimate (based solely on assays) is hardly reflective of what drilling has demonstrated thus far. And given the upside demonstrated to the east (per R1620E and NexGen’s continued positive results on-strike, ~6 km NE); remaining gaps between the zones; potential extensions to the N and S (average width is only 20 m due to a lack of drilling, but up to 95 m has been defined locally) and numerous untested conductors.

Potential Catalysts. We expect the C$12 mln, 30,000 m winter drill program to wrap-up by mid-April. A summer program is slated to commence in early July. Newsflow will remain steady, however, with most assays outstanding and an expansive radon due by end of April. A maiden 43-101 resource estimate is expected late-2014E or early- 2015E. Following close of the financing, we estimate a cash position of ~C$36 mln.