What follows is an excerpt from Canaccord Genuity’s Morning Coffee report.
Fission Uranium Corp. (
TSX: V.FCU,
Stock Forum) announced encouraging results from the North Shore prospect located along the northwest margin of the Athabasca Basin in Alberta; however the prospect is still in the early stage of exploration.
Fission reported the discovery of two zones of anomalous radioactivity (potential sources for uranium) at its North Shore prospect, [which is located about 10 kilometres southwest of
Cameco Corp.’s (
TSX: T.CCO,
Stock Forum) Maurice Bay uranium deposit].
Results suggest that the larger anomalies are related to outcropping alteration rather than boulders due to widths. After the data is compiled, a follow-up field program (mapping and prospecting) to ground truth the anomalies by mapping and prospecting is planned.
Commenting on the results, Fission’s President, COO and chief geologist, Ross McElroy, stated, “We are very encouraged by this strongly radioactive discovery, particularly as we used the same technology to locate the boulder field at Patterson Lake South (PLS) [in Saskatchewan].
While the expansion of our PLS discovery is our main task, following up these new results at our North Shore property is also a priority.”
Canaccord Genuity Mining analyst Joe Mazumdar also notes that Fission is currently in the midst of a potential hostile takeover of
Alpha Minerals Inc. (
TSX: V.AMW,
Stock Forum) for its share (50%) of the Patterson Lake South joint venture.
Combined management structure of the merged entity is, in Mazumdar’s opinion, an obstacle, as is the upcoming change of operatorship in April 2014.
Mazumdar is referring to Fission’s August 23 proposal to acquire all the issued and outstanding share of Alpha. According to the Fission press release, the proposal expired at 5:00 p.m. (Toronto time) on August 25, and if Alpha continued to refuse to engage with Fission on the proposal.
As part of the proposed transaction, an Alpha shareholder would receive in exchange for each of their Alpha shares, 5.3 common shares of Fission, representing a price of $7.26 per Alpha share, based on Fission’s closing price on the TSX Venture Exchange on August 23, 2013.
Alpha has subsequently requested additional time to consider the proposal after engaging Raymond James as its financial advisor and forming a special committee comprised of (3) independent directors.
Alpha rose 1% Friday to $6.91, leaving the company with a market cap of $167.1 million, based on 24.2 million shares outstanding. The 52-week range is $7.47 and 40 cents.