Interview with Award Winning Ross McElroy, COO of Fission Uranium (TSX: FCU, OTCQX: FCUUF, FRANKFURT: 2FU) in the Athabasca Basin, High-Grade, Over 100 Million Pounds Deposit and Only 50 Meters below Surface
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By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
on 9/3/2016
Fission Uranium (TSX: FCU, OTCQX: FCUUF, FRANKFURT: 2FU) is a premier Uranium explorer operating in Canada's Athabasca Basin, home to the world's richest source of high-grade uranium. The company's flagship project, PLS, hosts the Athabasca Basin’s most significant high-grade, near-surface deposit (the Triple R) as well as the region’s largest mineralized trend.
We learned from Ross McElroy, COO of Fission Uranium, that one of the things that really differentiate this project from any other uranium project worldwide, including anything else in the Athabasca Basin, is not only the high grade and the size, which is over 100 million pounds, but the fact that it starts at 50 meters below the surface. Nobody else has this kind of high-grade deposit that's this shallow. The 2015 PEA showed that this could be a very low cost producer on par with some of the lowest cost producers in uranium assets anywhere in the world.
According to Mr. McElroy, Fission Uranium has the best exploration team in this business and a diverse board with a lot of experience, with the two newest members of the board from the Chinese utility company, CGN, that had bought 19.99% of Fission earlier this year for $82 million. In 2016 Fission Uranium is focusing on growing its resource, as well as making new discoveries on the property, and Mr. McElroy invites everyone to have a look at a company called CoreBox (https://www.corebox.net/) to see the progress of the summer drill program at PLS.
Dr. Allen Alper: This is Dr. Allen Alper interviewing Ross McElroy, who is President, COO and chief geologist of Fission Uranium. Could you tell me a bit about your company and what differentiates it from other uranium companies?
Ross McElroy: Sure. I would say that Fission Uranium Corp is really a premier Uranium explorer. Our team has focused not entirely, but a great deal on the Athabasca Basin, where we've had a number of successful projects. We've made two important discoveries since 2010. One on the east side of the basin that we sold to Denison Mines back in 2013. That was our Waterbury Lake project. Also a much bigger, more significant discovery that we made in the fall of 2012 on our PLS project, which is on the western side of the Athabasca Basin. What it is, it's a basement hosted deposit that's located just outside of the Athabasca Basin itself.
One of the things that really differentiates this project from any other uranium project worldwide, including anything else in the Athabasca Basin, is not only the high grade, which is a hallmark of Athabasca Basin projects, it's size which is over 100 million pounds, but it's also very shallow. Nobody else has this kind of deposit that's this shallow. It starts at 50 meters below the surface.
Dr. Allen Alper: That sounds great. Could you give me a little more information on the nature of the deposit?
Ross McElroy: Sure can. In 2015 we did our first maiden resource estimate, back in January at the beginning of the year. That resource estimate had us at around 105 million pounds of U3O8 and that was predominately in the indicated category so 75% of the deposit in indicated, which is a very high level of confidence. The next lower category would be inferred, which is a little less confidence in that number. The major part of the resource is indicated and that allowed us to move the project to a PEA, a Preliminary Economic Assessment study that we completed in the fall of 2015. Basically, if you have indicated and higher you can do true economic studies and have an idea as to the viability of the project, it's potential to move towards production decision down the line. That's something that we did last year.
When we did the PEA number, the resource grew slightly, because we had a summer exploration program under our belts as well, but wasn't included in the resource update. The important thing the PEA showed, is that this could be a very low cost producer on par with some of the lowest cost produced in uranium assets anywhere in the world. The gain, that's a function of the size, the high grade and the nearness to surface, starting as I said about 50 to 60 meters below. That's what we had in 2015.
Since then, we've expanded the mineralized trend that this deposit’s on. We've continued to find more high grade mineralization on trend both to the east and to the west. That's what we're focusing on in 2016, growing this resource estimate, or our future resource estimate, by adding new zones to the overall deposit. That's what we hope to do and maybe have a new number in 2017. A new resource estimate.
Dr. Allen Alper: Well that sounds excellent. You have a remarkable resource and property. It's great to be in a position to have one of the lowest cost projects.
Could you tell me a bit more about yourself, the management team and the board?
Ross McElroy: I sure can. Starting with myself, I'm a professional geologist. I've been working in the industry for 30 years now. I got my career started in the uranium business back in the mid 1980's. I was hired out of school by, what's now Cameco Corporation, the world's largest uranium producer. I was working in the Athabasca for Cameco. I then left a few years later, after we made the discovery of McArthur River. I was looking for some new opportunities and went to work for the French Areva Uranium Conglomerate. Then spent 14 years with BHP Minerals in both gold exploration, development and also the diamond mines up in Ekati as a production geologist. I've got quite a varied experience from exploration through to mining, but the real focus of my career has been on uranium. I've been involved in a number of successful projects that have gone from concept to discovery, like McArthur River, which is actually a full production mine, in fact the highest grade uranium mine in the world.
Our team is led by our CEO, Dev Randhawa. This is a third iteration of Fission Uranium, since Dev incepted the company back in 1997 as Strathmore Minerals. We've been able to grow, add projects, sell certain parts of it, start a new company, and so Fission Uranium is actually the third version from the original Strathmore. Dev's been at the helm ever since and I partnered with Dev back in 2006, when Fission Energy first came into being, split from Strathmore.
We have a very skilled team. We were able to raise money in particularly terrible times in this industry. We've been able to raise a lot of money and put that money to use and that's where our discoveries have come. The other thing we've been able to do is monetize assets. I think that selling the Fission Energy back in 2013 is a really good example of how we've been successful. We made a discovery, built it up, and caught somebody's interest, Denison Mines. They bought it for around 80 million dollars in an all share purchase from us and then we split off our other, at the time non-core assets and that was the PLS project, where we made another discovery and grew.
We've been able to do that in spite of the very difficult uranium market. We still made incredible discoveries and, I think, most importantly, benefited our shareholders along the way. Our loyal shareholders have probably enjoyed the relationship they've had with Fission Uranium for many, many years.
Dr. Allen Alper: That sounds great. That was great work and a great team.
Ross McElroy: Thank you. There are a lot of other team members as well. On our technical team we have the best geo-scientists out there. These are very smart people that have had a career out of making discoveries and working on various projects. They're all very hungry. They're extremely savvy and that's what gives us the best exploration team in this business and that, again, is why we've been as successful as we have been.
Dr. Allen Alper: That sounds excellent. Could you tell me a bit more about your board?
Ross McElroy: Sure, the board is made up of 9 members. The two newest members on the board come from the Chinese utility company, CGN. CGN bought a 19.9% stake equity in the company in January of this year. With that 19.9, they have two board seats so we're very fortunate to have two high ranking members of CGN on board with Fission Uranium.
There's myself, President, COO and Director. Dev Randhawa, our CEO is a chairman as well. We have Frank Estergaard, Bill Marsh, Raffi Babikian and Anthony Milewski and Jeremy Ross. Nine members altogether of the board. Everybody with a slightly different background, but I think that's what really adds to the picture. We've got a diverse board with a lot of experience in anything from accounting to the technical side to the capital raising side to people that understand the markets more and this is what really makes us a very well-rounded board and a well-rounded company.
Dr. Allen Alper: It sounds like you have a very strong board. Could you tell me a bit more about your capital structure?
Ross McElroy: Sure. The shares outstanding right now are around 380 million shares. In the bank we have around 75 million dollars currently in the treasury and that is to a large degree based on the equity injection by CGN earlier this year. They put in around 82 million dollars.
We hope that money in the treasury will be able to see us through for the next 2 to 3, perhaps even 4 years, depending on how quickly and how aggressively we spend money on the project. It depends how we see the uranium market in general. If we think that things are starting to move, we're getting a little bit of traction in the markets again, we may up our spending. We're very careful, and I think that's another thing our shareholders can appreciate, the fact that we dial up and dial down depending on where we think we're at in the marketplace.
Canadian shareholders own probably about a third of the stock, European, Asian shareholders also own maybe around a third and then the US another third. Primarily, retail holders, there are some important institutional holders as well.
Dr. Allen Alper: That sounds excellent. Your team and yourself have done a great job. It's really very remarkable. Could you just summarize the prime reasons our high-net-worth investors should invest in your company?
Ross McElroy: I certainly can. I think that if you like the uranium sector and you believe that better days are coming and we firmly believe that, then you'll want to position yourself with a group that has not only a world class asset that will take advantage of a much improved uranium market, but a team behind that asset that knows how to progress it and how to monetize it. That's an important thing. We have a great track record. We've shown the ability to do this in the past. I think that our project is unparalleled. There's nobody else with a project like PLS and the Triple R deposit so that gives you a real leg up.
At the moment it takes a bit of a belief that the uranium market will turn around. But when we see demand coming from places like China, from India, from the Middle East. Really it's very early days in growth in the sector itself and also on the project. Although we have a world class asset that we've outlined starting from 2012 to present, a lot of the land that PLS deposit sits on is virtually untapped and unexplored. As we step outwards over the next few years, we're going to be testing different areas of the project out and hopefully make another discovery. Something else, I think would attract new shareholders or even continue to maintain the shareholders that we do have, is that Fission's track record is showing success every season that we've been operating we've been able to expand and grow and I think that eventually we should be seeing real dividends in the rest of the market.
Dr. Allen Alper: That sounds great, Ross. Is there anything else you'd like to add?
Ross McElroy: Sure, we’ve just finished our summer program right now up at PLS. Recently we accounted more successful holes, including a new mineralized area beneath the Triple R and stepping out from our Westernmost zone and I encourage your listeners and readers to go to the Fission website, follow us during the summer program and just see how we are continuing to grow and expand the deposit. We've put it out in the news release, we also provide maps, but I also encourage people to have a look at a company called CoreBox, because we put our data to CoreBox and it allows people to visually and easily see the deposit, be able to rotate it around and just see how it really holds together (https://www.corebox.net/). It's meant for the general person out there with maybe not a whole lot of technical background, but they can visually see how it all holds together and that's something that we're very proud of. Go to the CoreBox website, look for the PLS project there, if you want to visualize it and follow our results over the summer, as we continue to grow and expand this project. It's very early days at PLS.
Dr. Allen Alper: That sounds great. Very impressive.
http://www.fissionuranium.com/
Email: ir@fissionuranium.com
Telephone: 1-250-868-8140
Toll Free: 1-877-868-8140
Fission Uranium Corp.
700 – 1620 Dickson Avenue
Kelowna, British Columbia
Canada, V1Y 9Y2
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