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Until we have fusion, there is Fission 3.0 for new uranium supply opportunities

Geopolitics are currently front and center in the news stream. I won’t even pretend to know what the true end game would be for Russia. It could be to annex more of Ukraine or perhaps even fully occupy the country. Putin is a very savvy and aggressive statesman, and I suspect there may well be a game within a game within a game. We may never be made aware of what the final strategic outcome is, we will only ever hear what we are either allowed to or intended to hear from the various spin doctors on all sides. Whatever the outcome of this, and many other simmering political events, security of resource supply has to be a front and center part of your decision making as an investor.

This week we are going to talk about the uranium supply. Granted Russia only mines approximately 6% of global supply and Ukraine only produces a little over 1% of global supply, the implications for the uranium market could be a little more dynamic than the simple supply picture. If you recall a few weeks back there was plenty of political unrest in Kazakhstan, the largest global supplier of uranium at roughly 40%, and who was there to send in troops to help quell the protests and support the government – Russia. It’s not a huge leap (at least in my opinion) to envision a scenario where Russia puts it’s 100,000+ troops and the supplies it’s been building up for over a year on the Ukraine border to use in some way. In turn that would likely lead to sanctions of various shapes and sizes that could very easily cause another level of back-and-forth brinksmanship, whereby Russia calls on its ally Kazakhstan to return a favor and make life difficult for the world’s largest consumer of uranium – the United States.

Perhaps I have too much time on my hands to think about these kinds of things, or maybe I read too many novels with sensational plots. Nevertheless, one has to think that the largest consumer of uranium might be working on things in the background to secure supplies of this commodity from slightly more friendly allies. Especially given, according to the EIA, that in 2020 the U.S. purchased 22% of its uranium from Kazakhstan and 16% from Russia. So where better to support development and supply than your friendly neighbor to the North that just happens to host the world’s richest uranium play – the Athabasca Basin. I guess your own backyard would be another logical place but I’ll save that for later in the week.

As an investor, it’s likely the first place you’d look is the existing Athabasca producers like Cameco Corp. (TSX: CCO | NYSE: CCJ) and Denison Mines Corp. (TSX: DML | AMEX: DNN). But if you want real leverage to my potential escalation scenario, it’s the junior names that could give you the big moves. At the top of my list for junior explorers in the Athabasca Basin is Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF) a uranium project generator and exploration company that currently has 16 projects in the Athabasca Basin. This is the third generation Fission run by one of Canada’s leading uranium exploration teams, which has already had success in the region including an asset sale to a major producer. The Company’s management, headed up by Dev Randhawa as CEO & Chairman, is part of the team that founded Fission Energy Corp., which made the J-Zone high-grade discovery in the Athabasca Basin and built Fission into a TSX Venture 50 Company, which sold the majority of its assets to Denison Mines in April 2013. Fission Uranium Corp. (TSXV: FCU | OTCQX: FCUUF) was founded by the same team, including uranium expert Ross McElroy, which made the Patterson Lake South high-grade discovery. Mr. McElroy elected to stay with FCU to focus on the development of the Triple R deposit at Patterson Lake South but remains on Fission 3.0’s Board of Directors and remains as the Company’s QP.

Several of Fission 3.0’s projects are near large uranium discoveries, including the Arrow, Triple R and Hurricane deposits. At the end of December Fission 3.0 completed an C$8.6 million financing with an additional C$690,500 raised from the exercise of warrants to go along with the C$9.3 million the Company finished Q3/21 with. This leaves the Company well-funded at year end to continue its aggressive winter exploration/drill program on its Patterson Lake North project, which mobilized January 10th. Plans include a 4,000m seven-hole winter drill program focused on the previously untested Broach Lake and N Conductor targets.

Fission 3.0 has lots of cash in the bank and plenty of targets to drill, which should make for an exciting few months regardless of what happens in the rest of the world. With a market cap of approximately C$41 million, there is still plenty of upside to be had if this successful team can find yet another world class uranium resource.




Back to the Future of Sourcing Uranium for Reliable Energy with Fission 3.0

It’s hard to envision the world getting all its electricity from renewable assets (solar, wind, geothermal, possibly hydro depending on how you classify it) any time soon. Sure Swanson’s Law and Moore’s Law would suggest that the cost-effectiveness and technology behind solar cells is improving at a very rapid pace but the reality is, we aren’t getting even close to our climate targets and reducing or possibly even eliminating the burning of fossil fuels for electricity unless we include nuclear power in the mix. There certainly seems to be ebb and flow around the perception of nuclear power as a green alternative. Nevertheless, it is a very efficient source of electricity that has a very low carbon footprint. In fact, it produces zero carbon emissions in the electricity generation process, but mining and refining uranium ore and making reactor fuel all require energy.

I’m a firm believer that nuclear power should be part of the asset mix going forward and I’m not alone. At present, about 10% of the world’s electricity is generated from uranium in nuclear reactors. This amounts to over 2,550 TWh each year, coming from over 440 nuclear reactors operating in 30 countries. About 50 more reactors are under construction and over 100 are planned. Belgium, Bulgaria, Czech Republic, Finland, Hungary, Slovakia, Slovenia, Sweden, Switzerland and Ukraine all get 30% or more of their electricity from nuclear reactors while France is over 70%. You also may be surprised to learn that the USA has just under 100 reactors operating, supplying 20% of its electricity.

This may sound pretty bullish for uranium but the reality is, post Fukushima (March 2011) there was a pretty noticeable (and negative) response on the demand side and it’s only been in the last couple of years that the overall supply/demand balance for uranium has come back into balance. In fact, it is slowly but surely creeping towards a reasonable supply deficit. You can almost see it happening on the spot uranium price chart below.

Source: TradingEconomics.com

So where am I going with all of this? I hope you’re thinking of uranium as an investment opportunity or I’m not doing a very good job. And where better to look for a uranium opportunity than a team that has already succeeded twice in finding uranium in one of the most prolific uranium districts in the world, the Athabasca Basin in Saskatchewan. Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF) is the third generation Fission run by one of Canada’s leading uranium exploration teams. The Company’s management, headed up by Dev Randhawa as CEO & Chairman and Ross McElroy, is the team that founded Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF) and made the Patterson Lake South high-grade discovery. The same team also founded Fission Energy Corp., making the J-Zone high-grade discovery in the Athabasca Basin and building Fission into a TSX Venture 50 Company that sold the majority of its assets to Denison Mines in April 2013.

Granted Ross McElroy stepped down as COO of the Company in February to focus on the development of the Triple R deposit at Patterson Lake South owned by Fission Uranium. Mr. McElroy will remain on Fission 3.0’s Board of Directors, remain as the Company’s qualified person and he was still part of the technical team that built Fission 3.0’s portfolio of properties in Canada’s Athabasca Basin. And Fission 3.0 has plenty of them, 14 in total including 3 properties that basically surround the Triple R deposit.

Source: Fission 3.0 Corporate Presentation

Fission 3.0 used staking strategies and historic uranium discoveries in identifying claims in the Athabasca Basin. The Company has large tracts of land in close proximity to other major uranium discoveries. These properties were staked based on the innovative airborne technology that was used in discovering the uranium boulder field which lead to the PLS Triple R deposit.

Fission 3.0 engages in early-stage land acquisitions and is a “Project Generator”. The Company’s primary objective is to locate, evaluate and acquire properties with the potential to host high-grade uranium and to finance exploration and potential development by way of equity financing, joint ventures, option agreements or other means. In June Fission 3.0 raised $1.2 million for future exploration work, or elephant hunting if you will. With a market cap of just under $23 million there is a lot of leverage to the upside if this team is able to unearth another Triple R type of project (Fission Uranium has a current market cap of almost $395 million). Time will tell if their innovative airborne technology is the secret sauce for attracting those elephants.




Dev Randhawa on Fission 3.0 and why ESG Investors are looking at Uranium

In a recent InvestorIntel interview, Peter Clausi speaks with Dev Randhawa, Chairman and CEO of Fission 3.0 Corp. (TSXV: FUU | OTCQB: FISOF) about the rising market interest in uranium and exploring for uranium in Canada’s Athabasca Basin, the world’s leading source of high-grade uranium.

In this InvestorIntel interview, which may also be viewed on YouTube (click here to subscribe to the InvestorIntel Channel), Dev went on to say how Fission 3.0 has been able to stake a portfolio of near-surface high-grade uranium assets in close proximity to other major uranium discoveries. Led by the team that founded Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF) and made the Patterson Lake South (PLS) high-grade uranium discovery, Dev said that Fission 3.0 has significant insider ownership which aligns the management’s interest with that of the shareholders. Dev also highlighted the uranium supply deficit and the rising interest in the sector. He added, “…it is the only energy that is carbon-free, has no footprint yet can provide baseload power.”

To watch the full interview, click here

About Fission 3.0 Corp.

Fission 3.0 Corp. is a Canadian based resource company specializing in the strategic acquisition, exploration and development of uranium properties and is headquartered in Kelowna, British Columbia. Common Shares are listed on the TSX Venture Exchange under the symbol “FUU”.

To learn more about Fission 3.0 Corp., click here

Disclaimer: Fission 3.0 Corp. is an advertorial member of InvestorIntel Corp.

This interview, which was produced by InvestorIntel Corp. (IIC) does not contain, nor does it purport to contain, a summary of all the material information concerning the “Company” being interviewed. IIC offers no representations or warranties that any of the information contained in this interview is accurate or complete.

This presentation may contain“forward-looking statements” within the meaning of applicable Canadian securities legislation. Forward-looking statements are based on the opinions and assumptions of management of the Company as of the date made. They are inherently susceptible to uncertainty and other factors that could cause actual events/results to differ materially from these forward-looking statements. Additional risks and uncertainties, including those that the Company does not know about now or that it currently deems immaterial, may also adversely affect the Company’s business or any investment therein.

Any projections given are principally intended for use as objectives and are not intended, and should not be taken,  as assurances that the projected results will be obtained by the Company. The assumptions used may not prove to be accurate and a potential decline in the Company’s financial condition or results of operations may negatively impact the value of its securities. Prospective investors are urged to review the Company’s profile on Sedar.com and to carry out independent investigations in order to determine their interest in investing in the Company.

If you have any questions surrounding the content of this interview, please email [email protected].




Uranium market heats up with Biden win, and Ross McElroy takes the Triple R Project reins

Yesterday the US uranium industry received some exciting news. The U.S. Senate Committee on Appropriations released drafts of FY 2021 funding measures and subcommittee allocations which included $150M for the U.S. Uranium Reserve. If passed, this will enable the Department of Energy to begin the funding required to stimulate growth in the US domestic uranium mining industry. This has been long expected but looks to be finally happening. If passed, it will give a boost to the US uranium producers and lift sentiment generally across the uranium sector.

Meanwhile President elect Joe Biden plans regarding nuclear include developing small modular nuclear reactors; that are smaller, safer, and cost about half the construction cost of current reactors. It looks like safer and smaller nuclear is part of the future and for that we will continue to need uranium.

As the uranium price hovers around US$30/lb, one company continues to advance their high grade uranium project in North America with a goal of reaching production. That company is Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF) (‘Fission’). Fission is a resource company specializing in the strategic exploration and development of the Patterson Lake South (PLS) uranium property, located in Canada’s Athabasca Basin, home to the world’s richest uranium mines known for uranium grades 10-20 times the global average. The Project is currently in the stage of working on environmental permitting, overseen by Fission’s Special Adviser Mark Wittrup.

Fission also has a new CEO, Ross McElroy, to take the Company to the next stage of development. Mr. McElroy is a professional geologist with over 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 with managing and advancing many types of mineral projects from grass roots exploration to feasibility and production.

Fission CEO, Ross McElroy stated: We are excited to further progress the world-class Triple R uranium project towards production. We are committed to the efficient and effective development of this one-of-a-kind deposit so that it may help ease the upcoming global uranium supply deficit.”

Patterson Lake South Property (PLS) which includes the Triple R uranium deposit

Source

The 31,039 hectare Patterson Lake South Property (PLS) project is 100% owned and operated by Fission. It is accessible by road with primary access from all-weather Highway 955. Within the PLS Project sits the high-grade, and near-surface Triple R uranium deposit.

In 2019, the Company released results of two PFS studies. The underground option is looking more favorable than the hybrid open pit/underground option due to a lower CapEx (C$320M less), 25% quicker construction time, 90% reduced surface footprint (potentially helps lessen the environmental impact), favored by locals, and has a lower OpEx and higher IRR.

The PFS was based on an Indicated Resource of 2.2 million pounds of contained uranium with an average grade of 2.2%.

The underground-only mine PFS resulted in a post-tax NPV8% of C$702M, post-tax IRR of 25%, initial CapEx of C$1,177M. Operating costs were estimated at C$9.57/lb (US$7.18) U3O8 over a 7 year mine life. Usually a post-tax IRR of over 20% is seen as favorable.

The Triple R Deposit, plus the underground only PFS Indicated and Inferred Resources

Source

In recent news, Fission announced a C$15M bought deal offering which is backed by the underwriters. The Offering is expected to close on or about November 17, 2020. Fission state that “the net proceeds of the Offering will be used to fund the further development of the Triple R deposit in Saskatchewan, to repay certain amounts owing under the credit facility among the Company, Sprott Resources Lending Corp. and Sprott Private Resource Lending II (Collector), LP, and for working capital and general corporate purposes.”

Fission’s timeline and catalysts summary

Source

Closing remarks

The US Uranium Reserve appropriations bill (if passed) and a US/Biden strategy of developing small modular nuclear reactors for base load power is a positive for the uranium sector.

Fission Uranium continues to advance their high grade Triple R Project in Canada. A recent C$15M raise will help the Company to progress to the next stage of development including starting work on environmental permitting and the Feasibility Study.

The current market cap of Fission Uranium is C$129M.

Further viewing




Fission Uranium’s President on why the uranium bull market starts now

“Demand continues to grow as supply constricts”

Uranium prices continue to recover in 2020 leading to renewed hope for the uranium sector after some very tough years. The US appears to be close to finalizing a US uranium reserve and the associated $150m a year funding as well as perhaps taking a tougher stance on overseas subsidized uranium from Russia and Kazakhstan. Should these trends continue, many are wondering are we in the start of a uranium bull market.

In an exclusive interview with InvestorIntel, Fission Uranium President & COO Ross McElroy said, “I think we are in the start of a bull market right now. That’s happened because there’s been so many production shutdowns globally. All the major mines, even all the production in Canada has been shutdown. So, we know the demand is there and it continues to grow, supply is constricting and these are the things that are making the bottom of the bull market happen.”

Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF)

Fission Uranium Corp. (“Fission”) is 100% owner of the Patterson Lake South (PLS) property, located in Canada’s Athabasca Basin, home to the world’s richest uranium mines. The PLS Property comprises 17 mineral claims totaling 31,039 ha located on the southwest margin of the Athabasca Basin. The Project is host to the award winning Triple R deposit – the most significant high-grade, near-surface project in the region. Fission has also discovered two other major, high-grade zones and has outlined the largest mineralized trend in the region.

The Triple R Deposit has 102,360,000 lbs. U3O8 Indicated Mineral Resource @2.10% U3O8 and 32,810,000 lbs. U3O8 Inferred Mineral Resource @1.22% U3O8.

The Triple R deposit longitudinal cross section showing the resource starting 50m underground

 

Source: Company presentation

The Triple R deposit remains open, and the PLS property has excellent exploration potential as ~80% of the property has yet to be explored. The deposit has substantial high-grade mineralization starting just 50m from surface.

The 2019 PFS had two scenarios. For the underground-only mine PFS scenario, the post-tax NPV8% was C$702m, post-tax IRR was 25%, and the initial CapEx was C$1,177m. Operating costs were estimated at a very low C$9.57/lb U3O8 (US$7.18) over a 7 year mine life.

Given the current uranium price of US$32.25 that would make the Triple R Project very profitable once established. Of course, further drilling will be required to build up the level of uranium reserves and extend the mine life. Given the success to date and the 80% yet unexplored, the odds favour of Fission achieving this over time. A higher uranium price and longer mine life could certainly help boost the Project’s NPV.

Fission Uranium’s Triple R Project PFS summary shows very low uranium costs of production in both scenarios

Source: Company presentation

Fission Uranium is now working on permitting, EIS, and a Feasibility Study. The company is well funded to achieve the above next steps after a recent raise.

Fission Uranium is backed by China’s CGN Mining, which has invested over $82m in Fission to date. More recently legendary mining investor Eric Sprott provided Fission with a US$10 million senior secured Credit Facility at 10% pa for 4 years. This shows that Sprott has confidence in the value of the resource and/or the Company’s ability to service and pay back the Facility. In connection with the Facility, Fission has agreed to issue 20,666,667 common share purchase warrants to Sprott and its affiliates.

Closing remarks

With a uranium bull market possibly in the early stages, Fission Uranium looks well placed to continue to attract funding and grow their resource, thereby boosting their NPV in subsequent Feasibility Studies. The high CapEx remains a challenge to be funded but given the pedigree of past funding, and the very high quality resource, it should ultimately be achievable. Certainly the Western world is now looking much closer to home to secure their supply chains of critical materials such as uranium.

Fission Uranium is currently trading on a market cap of C$190m. Investors will need some patience but should benefit from a tailwind or positive news flow in the uranium sector led by US developments that are expected to unfold in the near term.




Fission Uranium’s Ross McElroy on the start of a uranium bull market

“We are at the start of a bull market right now. That has happened because there is so much production shutdowns globally. All the major mines, even all the production in Canada has been shutdown. We know the demand is there and it continues to grow, supply is constricting and these are the things that are making the bottom of the bull market happen. I think we are actually in it. It hasn’t been reflected yet in the price of the commodity, but it is coming and we think our share price will follow the price of the commodity upwards.” States Ross McElroy, President, COO and Chief Geologist of Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF), in an interview with InvestorIntel’s Tracy Weslosky.

Ross went on to say that Fission Uranium is well financed and stated that 2020-2021 will be significant years for the company as it advances its uranium project. Ross also commented on Fission’s strong management team which has a great success record. The team has made two major discoveries, the most significant of which is the Triple R deposit on the company’s PLS property in Canada’s Athabasca Basin. The Triple R deposit is a word leading high-grade uranium deposit.

To access the complete interview, click here

Disclaimer: Fission Uranium Corp. is an advertorial member of InvestorIntel Corp.




Fission Uranium stock climbs 78% as uranium prices skyrocket the past 3 weeks

With all the media attention focused on COVID-19 (coronavirus), it is easy to have missed what has happened to uranium. The uranium price has skyrocketed the past 3 weeks up about 20% from the mid-March lows, Dev Randhawa commented that perhaps we may credit the interest to the fact that 54% of the U.S. monthly uranium supply has gone off line due to the COVID-19 crisis.

Uranium prices have skyrocketed higher the past 3 weeks – Uranium – US$ 28.70/lb

Source

One uranium miner that has spiked ~78% higher the past two weeks is Fission Uranium Corp. (TSX: FCU | OTCQX: FCUUF). Fission is a Canadian company with an exciting uranium project in the Athabasca Basin of Saskatchewan, Canada.

The Athabasca Basin is a region in the Canadian Shield of northern Saskatchewan and Alberta Canada. It is best known as the world’s leading source of high-grade uranium and currently supplies about 20% of the world’s uranium.

Fission Uranium Corp.

Fission Uranium Corp. owns the award winning, high-grade, and near-surface Triple R uranium deposit on its 100% owned Patterson Lake South (PLS) property, located in Canada’s Athabasca Basin, home to the world’s richest uranium mines.

The Company has the strategic backing of China’s CGN Mining, which has invested over $82 million in Fission, at a substantial premium, in early 2016.

Patterson Lake South (PLS) property

The PLS property comprises 17 mineral claims totaling 31,039 ha located on the southwest margin of the Athabasca Basin. The property is accessible by all-weather Highway 955 which runs right through the middle of the property.

The Patterson Lake South (PLS) property is situated in the high uranium grade Athabasca Basin region in Canada

The Triple R Deposit (the main deposit so far discovered on the PLS property)

The Triple R deposit is the most significant high-grade, near-surface project in the region. Fission has also discovered two other major, high-grade zones and has outlined the largest mineralized trend in the region.

Actually the Triple R Deposit is made up of not 3, but 5, mineralized uranium deposits.

Fission Uranium’s Triple R Deposit and uranium Resource estimate

The Triple R Resource estimate

The Triple R Resource estimate is as follows:

  • 102,360,000 lbs. U3O8 Indicated Mineral Resource, based on 2,216,000 tonnes at an average grade of 2.10% U3O8.
  • 32,810,000 lbs. U3O8 Inferred Mineral Resource, based on 1,221,000 tonnes at an average grade of 1.22% U3O8.

The Triple R deposit remains open, and the PLS property has untapped exploration potential as ~80% of the property is yet to be explored.

The Company states:

“The Triple R deposit is the only high-grade deposit in the entire Athabasca Basin region with substantial high-grade mineralization starting just 50m from surface. The deposit, which is part of a 3.18km mineralized trend at PLS, remains open in several directions.”

The Triple R Deposit, underground mine plan

Source

The Triple R Pre-Feasibility Study (PFS) results

In 2019, the Company released results of two PFS studies. The results are highlighted below.

  • Hybrid approach (Open pit & underground) PFS – Post-tax NPV8% of C$693 million, post-tax IRR of 21%, initial CapEx of C$1,499 million. Operating costs were estimated at C$9.03/lb U3O8 over an 8.2 year mine life.
  • Underground-only mine PFS – Post-tax NPV8% of C$702 million, post-tax IRR of 25%, initial CapEx of C$1,177 million. Operating costs were estimated at C$9.57/lb U3O8 over a 7 year mine life.

The Company stated:

“Both studies presented strong results, including low OpEx, fast payback and strong IRR, which highlight the potential for highly economic production at PLS. While both options remain viable, the upcoming Feasibility Study will focus on the best option, most likely the underground only scenario.”

My view is that if the Company can successfully grow the resource further which appears highly likely; then the NPV can substantially improve as the mine life would be extended out towards 20 years plus. In that case, the large upfront CapEx will become less of an obstacle towards project funding.

Latest News

  • Fission announces the closing of a US$10 million credit facility with Sprott. Fission will use the proceeds from the Facility to fund development of the Patterson Lake South uranium project (the “Project”) and for general working capital purposes. In connection with the Facility, Fission has agreed to issue 20,666,667 common share purchase warrants (“Warrants”) to Sprott and its affiliates at an exercise price equivalent to C$0.17. The credit facility is US$10 million at 10% for 4 years.

Next steps

Fission will soon begin work on the Environmental Assessment (“EA”) phase for its’ PLS property, as well as a Feasibility Study as discussed above.

Closing remarks

Fission Uranium has a high grade, shallow, and large uranium resource at the Triple R deposit on its PLS property in Northern Canada. The Indicated Resource is 102,360,000 lbs. of U3O8 at 2.10% U3O8, plus 32,810,000 lbs. of U3O8 Inferred at 1.22% U3O8. This alone is impressive; however represents less than ~80% of the property which is yet to be explored. Meaning there is very significant exploration upside.

The 2019 PFS results were solid, but a higher NPV and a lower CapEx would make the project more appealing. Usually this is achieved as mining companies further grow their resource and progress towards funding.