Fission Uranium Corp T.FCU

Let's discuss the attractive speculative trade being offered

[mangoe]

John Quakes

@quakes99 -

Let's discuss the attractive speculative trade being offered by Fission #Uranium $FCU $FCUUF. The Paladin offer today sits at C$1.17 per share (0.1076 x $PDN share price of A$11.74) while $FCU is trading today at a -16% discount to the offer at around C$1.01, which is far below NAV with over 100% upside to the average Price Target of $2.10/share. Essentially, the exit of cautious traders has driven down the share price to the point where it only has one way to go... UP.

If the Paladin deal gets approved in the coming days then buying $FCU shares today at the deep discount to the offer price will likely realize an immediate 15+% profit as the shares rally on that news. Even if CGN Mining is successful in blocking the deal, $FCU shares are already discounting that outcome in today's share price so downside is limited and upside to actual NAV is huge to catch up with the valuations of peers that are heading higher with rising Uranium prices.

What are the chances of CGN blocking the deal? Personally, I don't see how the BC Supreme Court can give any standing to a Chinese company with an 11.26% stake. All the deal's boxes required by securities regulators are ticked. CGN failed to maintain its original 20% stake level in spite of there being a "Participation Rights" provision in their Subscription and Offtake Agreement that gave them priority participation rights in all equity raises. The fact that they may be arguing that they get diluted by the Paladin deal appears to be entirely their own fault for not exercising their option to keep on buying shares in the public market or thru private placements in order to maintain that 20% stake. I have no idea what arguments they've presented to the court, but, in my own personal view, it seems unlikely that the court will rule in their favour. You may see it differently. No one knows the outcome with any certainty.

My own approach has been to add to a trading position whenever $FCU shares dip below a buck, as the upside potential is large just to get to the $PDN offer price, and huge to get to the $2.10 average target price. Downside risk is very low, in my opinion, especially given Fission shares are held in ALL the Uranium sector ETF's so will see tremendous flywheel buying by those ETF's as the sector rallies, regardless of the outcome of the Paladin deal.

That's the way I am seeing it. U may see it differently. That's what makes a market. It's your money so invest it wisely according to your own personal financial goals and conviction in this unfolding Uranium bull market. Good luck!