Fission - Uranium Price Fission's PEA numbers vs. the uranium price
As mentioned, the PEA points to operating costs of US$14.02 per pound over the life of mine, which would make Triple R potentially one of the lowest-cost uranium operations in the world. However, the study is based on a uranium price of US$65, which is quite a bit higher than the current spot price of around US$39.75.
Still, David Talbot of Dundee Capital Markets said that production at PLS is likely seven or eight years down the road. That leaves a lot of time for the uranium price to make a rebound. Many
analysts are expecting that to happen by 2020, and while nobody can predict exactly how high the uranium price will get, Cantor Fitzgerald's Rob Chang said in June that he expects an increase similar to the one seen in the mid-2000s.
"We are going to see it jump $5 to $10 every week, like we saw before, because it just has to happen that way. I'm not sure exactly when this will happen, but there frankly is just not enough supply. It's a very thin market, and once you get two, three, four utilities trying to buy at the same time, you are going to see large jumps," he said.
Overall, Cantor's uranium spot price predictions for the next three years are quite optimistic. The firm said in July that it expects a price of US$50 in 2016, US$60 in 2017 and US$70 in 2018.
If Cantor Fitzgerald's predictions for the coming years ring true, Fission should be in a great spot once it begins producing at PLS. What's more, the company plans to continue definition drilling within the R600W zone, where
high-grade mineralization was recently discovered, and its addition will likely bring further upside.
"It's also important to note that the recently discovered, high-grade R600W zone, which was not included in the PEA, has the potential to add a great deal to the bottom line as the Triple R continues to grow," McElroy said. "Additionally, a mill at PLS has the potential to become a key centerpiece for the Western Athabasca Basin --- with the potential to process ore from other high-grade projects in the region as they are taken into production."
By 1:00 p.m. EST Fission's share price was at $0.76, down 2.56 percent. Year-to-date the company's share is down 11.63 percent.
Securities Disclosure: I, Kristen Moran, hold no direct investment interest in any company mentioned in this article.