Fission Uranium Corp T.FCU

Dundee Capital Markets comments on Fission Uranium Corp.

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According to Dundee Capital Markets:

https://personal.crocodoc.com/MFK7TsX

Fission Uranium Corp.

(FCU-T: C$1.20) intraday

February 10, 2015

BUY, Speculative Risk, Top Pick

Dundee target: C$2.40

Becoming Accustomed to Incremental Additions to Triple R Footprint

We recommend Fission as our Top Pick with a BUY and C$2.40 Target Price. Scintillometer results from an additional nine step-out angled holes at Triple R Uranium Deposit, PLS Project were announced this morning, assays are pending. All nine holes hit shallow uranium mineralization, with seven expanding R780E Zone vertically, laterally and along strike: 1) R780E was expanded to the north by 10-40m on five separate lines; 2) expanded by 35m and 50m vertically on two lines; 3) Extended 30m to the East along strike. R780E is the largest of the Triple R zones, representing 88 MM lbs. It remains open in several directions, and as systematic drilling continues, we expect similar results throughout the Winter.

Recent drill results (scint results in particular) from Triple R aren't necessarily impacting the stock as investors have become used to 100% hit rates, and single hole materiality diminishes overall with a large resource in place. But a uranium discovery on one of its exploratory conductors elsewhere on the property, however, would be a strong catalyst for share price appreciation. Fission is spending 40% of its $10 MM winter budget on parallel conductors. Geological considerations notwithstanding, Fission has crudely added an average of 0.4 MM lbs U3O8 per successful drill hole, based on the ~276+ holes drilled into the deposit since discovery. To suggest that today's results might net over 3.5 MM lbs addition to our mineral inventory isn't necessarily a stretch, but at this stage we don't expect Fission to see all of that benefit in share price appreciation. What we do look forward to this year are 1) potential brownfields exploration success on parallel conductors; 2) above average drill intercepts as HG zones are extended; 3) a PEA anticipated during the summer; 4) Potential take-over or other strategic investment that could help value the stock. This probably won’t happen prior to the NI-43-101 resource report filing but numerous CA’s are signed.

• Expanded to the north. Hole -312 (L1020E) hit 73.5m of mineralization including 2.4m off-scale (>10,000 cps), at 149m depth. This step-out extended the zone north by 10m (Figure 1). Hole -324 on L1050E hit 46.5m of mineralization including 1.6m off-scale at 155m depth. Hole -311 on L480E hit 49.9m at 61m depth, 1.06m off-scale, extended the zone north by 10m.

• Strike expansion. Hole -304 on line 1155E is now the most easterly hole at R780E, extending strike by 30m to 900m. Mineralization here is weak, only 5.5m up to 1,100 cps over a 148.5m section, starting at 142.5m depth. This is further evidence that the gap between the R00E and R780E zones is real.

Valuation: FCU is trading at US$3.22/lb, just below the world average U3O8 takeover price, and 50% of the level for recent and similar Athabasca acquisitions. We value FCU on an in-situ resource basis, using blended average of Roughrider-J-Zone-Millennium acquisition price of US$9.35/lb to obtain our C$2.40/sh target.