By Dr. Allen Alper, PhD Economic Geology and Petrology, Columbia University, NYC, USA
Ross McElroy, President, COO, and Chief Geologist of Fission Uranium Corp. (TSX: FCU, OTCQX: FCUUF, FRANKFURT:2FU): One of the Most Successful Exploration Companies in the Uranium Sector (PDAC 2017 Booth # 2641)
Fission Uranium Corp. (TSX: FCU, OTCQX:FCUUF, FRANKFURT:2FU) is one of the most successful exploration companies in
the uranium sector focused on the strategic exploration and development of its 100% owned Patterson Lake South uranium
property - host to the class-leading near-surface, high-grade Triple R uranium deposit. PLS is located in Saskatchewan's
Athabasca Basin region. We learned from Ross McElroy, President, COO, and chief geologist of Fission Uranium, that the
Athabasca Basin is well known for its high-grade deposits, however all of them are much deeper than the Triple R at PLS.
The project is now very advanced with a resource estimate and a PEA that shows it can be an open-pittable, very low cost
operation. The company is about to embark on their winter drill program of over 10,000 meters of drilling, largely
focusing on growing two new high-grade zones and following up regional exploration hot spots.
Dr. Allen Alper: This is Dr. Allen Alper, Editor-in-chief of Metals News, interviewing Ross McElroy, who is
President, COO, and Chief geologist of Fission Uranium. Ross, could you tell us what's happening with Fission Uranium,
and what differentiates Fission Uranium from other uranium mining and exploration companies?
Ross McElroy: Sure. We have one project in Fission Uranium, and that is the PLS project located in
Saskatchewan's Athabasca Basin region. We're on the west side of the basin and just outside of the basin margin. The
project hosts the Triple R deposit, which is a very large, high-grade, and shallow uranium deposit. The Athabasca Basin's
well known for its high-grade deposits, but most of them are much deeper than this. This is the only one that's very near
to the surface. We're into the fourth year now since the discovery, and a very advanced project. That's what we have.
What distinguishes it of course from the others is the fact that it is very shallow. It's something that we already have
a resource estimate on, but also a preliminary economic assessment report that outlines the economic potential of this
project. It shows that it would be an open pittable, very low cost operation.
What we're doing right now, Allen, is we're preparing a winter program, predominantly a drill-related program.
There's a little bit of geophysics going on as well, but it's really a winter program that has two prongs. We can talk
about that in a minute, but basically growing our mineralized trend and also searching for new occurrences of high-grade
uranium on the project.
Dr. Allen Alper: That sounds great. What are your plans like for 2017?
Ross McElroy: We're about to embark on our winter drill program, which altogether will be over 10,000 meters of
drilling. 8000 meters of that will be core drilling, where we're focusing on growing our two new high-grade discoveries
that are on strike both to the west and the east side of our Triple R deposit.
We'll be putting some holes into what we call the R840W zone, which is west of the Triple R at the moment. It's high-
grade. It's an on-land target, so we don't have the Patterson Lake below us in this target. That's pretty exciting. We
made that discovery last year, 2016. What we want to do is put enough holes into it, probably over the course of this
winter and even with a summer program. At that point we'll be able to add it into the already existing resource estimate
of the Triple R.
Likewise, we'll be testing a zone just at the east of the Triple R. That's what we refer to as the R1620E zone.
That zone is very similar to the others. It's shallow. It's high-grade. It's a new discovery from 2016 as well. It's
something that looks like it should be substantial for the overall resource estimate. Put both of those two zones
together in 2017, come up with a new resource estimate. That should grow the already existing Triple R deposit and be
able to move us another step closer towards the pre-feasibility study that we see on the fairly near horizon.
In conjunction with that, we'll also have a strong emphasis on testing regional exploration targets. We have a number of
holes outlined on parallel conductors, on strike of the existing conductors, several kilometers out to the west, close to
our boulder field that actually led to the overall discovery of the Triple R mineralized trend. We'll be drilling out
there, but we'll also be drilling to the south on numerous conductors, targets that we have to the south. We think that
they're pretty exciting as well. That's what we refer to as the Forest Lake conductor trend. We'll be testing that as
well. We think there's a lot more uranium yet to be found on the PLS project, and so that's what the regional exploration
targeting is meant to do.
Just again to summarize, focusing on growing and expanding the Triple R deposit by the inclusion of the two new
hydrate zones, and also looking for new hydrate discoveries with our regional exploration plan.
Dr. Allen Alper: That sounds great. I know Fission Uranium and the team has been recognized and received all sorts
of recognition and awards. Could you elaborate on some of that?
Ross McElroy: I sure can. A company and a project's really nothing without the people behind it. We've spent
probably 10 years together now, since the inception of Fission, the original Fission Energy, which we sold. Those assets
became Fission Uranium, but we've basically kept the team together throughout the last 10 years. We've been building and
keeping it together. That team covers a lot. That's part of the technical team. It's the marketing team. It's the
corporate development team, the administrative team, every spoke in the wheel that's necessary to create a company that's
as successful as Fission Uranium is.
This technical team is very special. I think they're very hungry for discoveries. There's a lot of expertise on
the ground. We have a very well-integrated group of geoscientists starting with geophysicists, geochemists, structural
geologists. Everybody working together, in a very meaningful way, is what's led us to have the success rate that we've
had, which is I think the envy of the industry, when people see what Fission has been able to accomplish in just a few
short years. This is our second major discovery in the Athabasca Basin on the PLS project. Our original one was on
Waterbury on the eastern side of the basin, an asset that we eventually sold to Denison Mines. Our new discovery at PLS,
is a testament to the same team that made the original discovery. PLS is recognized as being a very unique and important
and special deposit, and that's why it's garnered a lot of awards, so a great team, a great project, a lot of success.
Dr. Allen Alper: That sounds great. Could you tell me a little bit about your finances and your share and capital
structure, any interesting investors, etc.?
Ross McElroy: We're in very good shape financially. Fission has about $65 million in the treasury, and early
2016, we added an investment by the Chinese utility CGN. They put about $85 million into the company for a 19.9% equity
stake of the company. Of course, that built up our treasury to be very strong and healthy, and of course we have a great
partner with CGN, so I think we're in better shape than most companies.
We've been able to ride out the long downturn in the uranium sector. We've been successful throughout that
period. Having partners like this has allowed us to be aggressive in making discoveries and development even in the
relatively poor uranium markets. I think we're seeing a little breath of life right now, fundamental improvements in the
overall uranium sector, so we're entering into 2017 in better market conditions than we've had, a very strong treasury, a
well thought-out program that we're about to embark on to start drilling in a couple of weeks, so I think that Fission
shareholders should be prepared for continuous news throughout the winter program. If we're as successful as we have been
on all of our other campaigns, you'll see some good results come out of the drill. We do like to keep the news flow
going, keep our shareholders up to date, so I would expect a lot of news over the next several months, while we embark on
Dr. Allen Alper: That sounds very good. What are the primary reasons our high-net-worth readers/investors should
consider investing in your company?
Ross McElroy: I think first of all uranium is in the beginning of an upturn, a significant and real and
hopefully sustained upturn in the markets, so I think if you're a wise investor, you're going to want to look closely at
the uranium sector. If you're going to invest in the uranium sector, now you have to look at all your different options
of companies. The first thing I always look at, as an investor myself, is who's running the company. Who's the
management? Do they have a track record? Have they made discoveries? Have they made shareholders money over the years?
The answer is a resounding yes at Fission.
Ross McElroy: Yeah, so I think if you look at the strong management, the group that we've put together, the
fact that uranium's actually starting to take an upswing, you look at the project, the PLS project, and you recognize it
for what it is, which is a unique high-grade shallow deposit in the best uranium jurisdiction in the world, and that's in
Saskatchewan, where the government actually supports this industry, encourages investment. I think the shareholders are
going to benefit greatly by maintaining loyalty to Fission. We appreciate that, our loyal shareholders, encourage more
investors, and I think we'll be able to deliver solid results in 2017 as we move our PLS project closer to an advanced
stage. We see a pre-feasibility study possible over the short-term horizon, so I think the overall sector's looking
better and this project stands out among all the rest.
Dr. Allen Alper: That sounds great, very strong reasons for our high-net-worth investors to consider investing in
your company. Could you take a moment and elaborate on why there's optimism about uranium and what's driving it, and what
the supply demand situation is?
Ross McElroy: Yeah. I think we are seeing good improvement in the overall spot price of uranium over the last
six or seven weeks now. Towards the end of 2016, we started seeing calls for cuts in production, and this is because of
the low cost of the commodity itself. It's been in a down cycle for a number of years, probably starting since the
Fukushima event several years ago, but it's been in a general overall, sluggish, down-trending direction. Because you
have low prices of the commodity, you're starting to get some shutting down of production.
Cameco announced later in 2016 that they were curbing production. They're shutting some operations, such as the Rabbit
Lake operation in Saskatchewan. They announced that they were going to curb production at MacArthur River and Cigar Lake
by around 10%.
I think even more importantly, recently in the last 10 days or so, the Kazakhs have announced a reduction in
their uranium that they're producing as well. They've announced a 10% reduction in their overall estimated uranium that
they'll be producing in 2017. Kazakhstan is currently the number one country in the production of uranium, so seeing them
cut back on production is hugely significant. They're the lowest-cost producers out there.
The fact that they're cutting production means that I think we've seen a bottom in the price of the uranium
itself. With these majors, Cameco, the Kazakhs announcing production cuts, the spot price of course is starting to rise
accordingly, and that's because the demand is certainly there. We know the demand exists, and now the supply is starting
to be curbed and contained, so I think that all these factors represent at least the bottom in the uranium sector, and a
strong signal that the price of the commodity has actually turned and looking favorable. 2017 may be an exciting year for
holders of uranium stock as the price of the commodity increases. Again, I would give another plug. When we have the best
uranium project out there, that really makes Fission a shining star in the uranium sector.
Dr. Allen Alper: That sounds very exciting! Ross, do you have anything else you'd like to add?
Ross McElroy: I think we've covered it, touched a little bit on production and where I think the price is
going, so from my perspective, I think we've covered a pretty good range.
Dr. Allen Alper: Thank you very much. That was a very informative interview.
Toll free: 1-877-868-8140
Fission Uranium Corp.
700 – 1620 Dickson Avenue
Kelowna, British Columbia
Canada, V1Y 9Y2