F3 Uranium Corp V.FUU

Sprott Research on today's F3 Drilling News

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Here is Sprott's latest report based on today's drilling news from F3.

Ticker: FUU CN                Cash: C$21m                    Project: PLN (JR Zone)
Market cap: C$136m     Price: C$0.37/sh              Country: Canada (Saskatchewan)
REC. (unc): BUY                          TARGET (unc): C$0.60/sh         RISK RATING (unc): VENTURE
 
We think today’s new PLN drilling at the JR Zone is step change thanks to 1) 51m step out to increase strike length to 156m and 2) hitting 22m up-dip towards the unconformity which significantly increases lbs per metre of strike if continuity holds (to be confirmed with future drilling). With the caveats that we don’t have assays from today’s drilling and our understanding of deposit style and dimensions is still rapidly evolving, today takes our too-early drilled inventory from 15Mlbs to ~30-40Mlbs depending on grade and continuity along the current strike length. While it’s premature to treat this like a QP-signed off MRE, but indicatively today significantly increases JR Zone’s endowment.
Big picture, we still see several pathways to our 50-100Mlbs conceptual target including 1) up and down-dip extension over the current strike length; 2) strike length extension (today delivered good continuity to the south stepping out on lines 105S and 135S); 3) potential for unconformity hosted mineralization (thus far mineralization has been shear-hosted but within 40m of the unconformity); and 4) multiple zones along strike or parallel shears. The key at this stage is for drilling to a) keep expanding the footprint of the zone and b) continue intercepting high grades; we are pleased to see F3 achieve both today. Given F3’s proximity to two world class discoveries (Triple-R and Arrow) made since 2012, and continued exploration success since maiden 15m @ 6.97% U₃O₈ discovery hole in November 2022, we think F3 is a name to own in this exciting phase. Today we maintain our BUY rating and C$0.60/sh PT based on US$3/lb on a conceptual MRE target of 75Mlbs. The key catalyst is drilling, with 2 rigs / 12,000m planned for Summer 2023 targeting JR Zone expansion and testing new targets along the A1 shear zone.
Figure 1. Plan view of todays drilling and sections from lines 060S and 135S

Source: F3 Uranium
New JR Zone drilling delivers step change; strike +51m to 156m and +22m up-dip expansion
F3 announced scintillometer results from the first eight holes from this summer’s 30-hole drilling program at PLN. Hole-068 (line 060S) which hit 19m of mineralization from 228-247m DH including 8.1m > 10,000cps including 6m @ >65,535cps which was located 22m up-dip (towards the unconformity) from hole -060 (14.5m @ 9.4 U₃O₈ from 238.5m DH). Step out expansion hits, noting the prior limit of mineralization was line 90S, included holes -064 and -066 (both line 105S) which hit 17.5m (from 233-250.5m DH) and 16.5m (from 219-260.5m DH), respectively, both peaking >10,000 cps.  Hole -070 (line 135S) hit 6m of mineralization from 232-244.5m DH reading up to 6,300cps). Hole -066 which hit 16.5m of total mineralization from 219-260.5m DH including peak 35,500cps. A second sonic drill and second diamond drill are guided to mobilize later this month to continue JR Zone expansion and to test new targets along the A1 shear zone which hosts the JR Zone.
Our view: Strike length extension and up-dip expansion are step change to inventory
We see three key takeaways from today’s drilling. 
First, drilling extended the strike length by 51m to line 135S (from prior extent line 90S), for a total strike length of 156m. Drilling on line 135s hit 16m of mineralization with good scintillometer readings of up to 6,300cps (pre-assays), which is enough to indicate continuity at decent grades (up to ~3% would be a too-early guesstimate) in our view.
Second, hole-66 intersected mineralization 22m up-dip on line 60S (prior hit 14.5m @ 9.4% U₃O₈) with 8.1m >10,000cps including 6m >65,535cps. Based on prior scintillometer readings we do have assays for (eg. discovery hole -035 delivered 5.6m > 10,000cps which assayed 5.5m @ 18.6% U3O8), this indicates very high-grade continuity up dip over at least part of the strike length, which we expect future drilling to follow up. Prior to today, drilling had intercepted mineralization over ~20m up and down dip, so today’s 22m up-dip hit is step change in our view.
Third, drilling on lines 105S and 135S showed indication of good grades (>10,000cps), which also indicate the system doesn’t peter out to the south, leaving the possibility for further strike extensions. Moreover, precise orientation is difficult so early into the program so we wouldn’t be surprised to see grades upgraded on further infill or up-dip drilling. 
Looking ahead, it appears up-dip expansions and strike extension are the immediate source of resource growth, as they are easier to target and require shallower holes than down-dip targets. Mineralization hosted at the unconformity is also a possibility, especially if JR is a hybrid deposit (i.e. hosted at the unconformity and upper portion of the intersecting shear zone), although this is yet to be determined and testing the unconformity is not the immediate focus. We still see multiple pathways to a 50-100Mlb resource and are pleased to see continued growth both in terms of strike length and up-dip / down-dip extent.
Why we like F3 Uranium

1. Prime ground in the Western Athabasca, which hosts 337Mlb Arrow (NXE) and 138Mlb PLS (FCU)
2. Average of 6% uranium drilled over 105m of strike indicates potential for a world class discovery
3. Proven management team with multiple Athabasca uranium discoveries with bold approach to exploration

Catalysts

• Summer 2023: SCPe 30-hole (~12,000m) summer drilling program, we except similar in Fall/Winter
• 2024: SCPe Maiden resource, likely after Winter 2023-2024 drilling season

Research
Justin Chan (London) m [phone] [e-mail]
Eleanor Magdzinski (Toronto) m [phone] [e-mail]
Konstantinos Kormpis (Toronto) m [phone] [e-mail]
 

 
 
 

Research Department

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