A Unique Uranium Project and One-of-a-Kind Business Model

In Part 1 of our 3-part series, we examined the history and overview of a company making waves in the global uranium sector and how sentiment has pivoted driven by changes in the market and government. Because of changing sentiment in the green efficacy of nuclear power (i.e. zero CO2 emissions), in 4 to 5 years, new sources of uranium will be needed en masse. This, despite some of the big producers stating that they will not restart production until prices are higher.

This is where smaller but more efficient companies like BC-based Fission Uranium Corp. (FCU) (TSX.FCU, OTCMKTS: FCUUF, Forum) are filling the void. And for investors – both retail, institutional, and private equity – the sky’s the limit for this renewable energy resource.


As previously reported, the company owns a 100% interest in the high-grade and near-surface Triple R uranium deposit, located on the southwestern edge of Canada’s uranium mining-renowned Athabasca Basin – home to the world’s richest uranium mines. Fission’s PLS Project hosts the region’s largest undeveloped high-grade deposit at shallow depth. The project’s large, untapped potential includes approximately 80% of the property which has yet to be explored.

Accessible via all-weather Highway 955, which continues north through the area of the UEX-AREVA Shea Creek deposits to the past producing Cluff Lake uranium mine, the company has published a robust pre-feasibility study outlining the potential for the Triple R to become one of the lowest cost uranium mines in the world. Fission is now focused on advancing the project to Feasibility and on towards a construction decision.


Drilling Program Update

On February 1st, Fission announced that core drilling has now commenced at its Patterson Lake South (PLS) project, which is host to the large, high-grade, and near-surface Triple R deposit. The fully funded, 43-hole program will focus on increasing the Indicated classified resource of the Triple R deposit's R780E zone, and also upgrading to Indicated the large R840W zone, approximately 500 metres west of the deposit.

The R840W zone is at present substantially drilled to Inferred classification, and thus not currently included in the resource used in the prefeasibility study. Success of the planned drill program has the potential to increase the resource used in the upcoming feasibility study.

In a recent news release, Fission’s CEO Ross McElroy commented:

“One of our key goals is to maximise the size and quality of the Triple R deposit…while also further de-risking the project as a whole. This (drill) program has the potential to allow for the inclusion of the R840W zone in the feasibility resource and mine plan.”


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The Uranium Market

According to the Uranium Participation Corporation, “the only significant commercial use for uranium (U3O8) is as a fuel for nuclear power plants for the generation of electricity.” Nuclear fission releases significant amounts of energy, creating heat to generate steam to spin a turbine, and is the basis of power generation in the nuclear industry.

Uranium does have other commercial uses in fields such as medical diagnosis and other industries, but these markets are very small in terms of volume. For example, uranium is used as a feedstock in Small Modular Reactors, which are operated for research purposes and for the production of isotopes for medical and industrial end uses, but are now moving rapidly towards use in power grids. We will discuss this in detail in Part 3 of our series.

In short, it’s all about energy…green energy, in particular, which will be one of the major drivers of the global economy moving forward into the 21st century.


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High-Quality Investment Opportunity

The spot price of uranium has held firmly in the USD$29 to $30 per pound range since September 2020, solidifying its well above-average performance in a year with widespread global disruptions and production issues.

Despite being USD$21 short of the USD$50 threshold, often cited as the level that is deemed to incentivize projects, the U3O8 spot price has added 21% to its value year-to-date, and 37% from its January 2020 low to its May 2020 high.

According to an Organisation for Economic Co-operation and Development (OECD) report, as of 2015, total identified uranium resources were sufficient for more than a century of supply based on current requirements.

In fact, uranium was one of the best-performing commodities in 2020, along with gold, and one of the few commodities that was up on the year.


From the CEO: “The Fission Mission”

In conversation with Stockhouse Editorial, company President and CEO Ross McElroy discussed the current drilling program at the PLS property, and his vision for the company moving forward.

Mr. McElroy is a professional geologist with nearly 30 years of experience in the mining industry. He is the winner of the PDAC 2014 Bill Dennis award for exploration success and the Northern Miner 'Mining Person of the Year 2013'. He has comprehensive experience working with and managing many types of mineral projects from grass roots exploration to feasibility and production.

“Looking where other people hadn’t.” That’s what the CEO envisioned when he and his team discovered and the took on developing the Triple R uranium deposit.

He also believes it is in the West – Saskatchewan and the Athabasca Basin to be precise – where “the next biggest, best deposits” will be discovered and turned into operating mines. And Fission’s deposit being “so close to surface is a big bonus.”

“While the price currently remains low – lower indeed than the productions costs for some producers - nuclear is a growth sector. Baseload energy capacity always plays a key part for electrical. You want clean energy all the way across.”

As for value, the overall quality of the project, and being cashed up, the CEO had this to say:

“We’re well financed for next 12 to 18 months. 30 million in the treasury that will take us though 2021 into 2022. Although our project is so shallow it could be an open pit, we looked at it as a smaller environmental footprint. There are all kinds of advantages to going underground. We remain a lot less capex intensive than other projects. And less environmental impact, which has been very well received by the local community. And we'll be accessing this by a decline which means driving right from surface down a decline. If we were deeper, the decline probably wouldn’t work, and we’d be building a production shaft but we’re fortunate and that will save on CAPEX and OPEX.

And finally, on the importance of the team he has carefully assembled:

“We have built a top-notch team, with expertise in mine development, permitting and regulatory issues. Now we have money, and we've got an exceptional project. And I think we're going to continue to get the attention of the market that we need. And I think you're going to start seeing us close that gap between the (other) companies, as we continue to advance our project and prove to shareholders and stakeholders what we can do.”


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For more information, visit fissionuranium.com


FULL DISCLOSURE: This is a paid article of Stockhouse Publishing.