Most of Canada’s uranium production has historically been concentrated in the eastern Athabasca Basin of Saskatchewan. However, with Fission Uranium’s PLS project and NexGen’s Rook 1 project both at an advanced stage of development, it’s clear that the western Basin is on the path back to production and poised to be the new area of production dominance in the Athabasca Basin. With that in mind, I want to share my thoughts on what is still required to make our emerging district the nucleus of uranium production in Canada and address some key issues that will define the western Basin’s trajectory.
History of Production in the Western Basin
Newcomers to uranium may not know this but the western Athabasca Basin was previously a producing district. It’s a story that dates back to the 1980s when the Cluff Lake Uranium Mine first entered production. Nestled just 80 kilometers north of the Fission and NexGen flagship projects along provincial highway 955, that runs within 2km of Fission’s Triple R deposit, Cluff Lake was once a cornerstone of uranium extraction in Canada. It produced yellowcake profitably for over two decades and, although the mine was decommissioned in the early 2000’s, Cluff Lake is the reason there’s a highway running right past Fission’s project.
Today, the southwestern Athabasca Basin boasts not one but two of the world’s best uranium projects – both on the cusp of production.
Fission Uranium’s PLS project and NexGen’s Rook 1 project, with our deposits a mere 3 kilometers from each other, collectively house approximately 500 million pounds of economically viable uranium. Our joint success to date, and the existence of other recent discoveries on trend and nearby to the north, marks the start of a transformative era, challenging previous perceptions and positioning the Western District as the future source of much needed additional uranium production within Canada. A lot of investors recognize the importance of our emerging district, and the nature of the questions we’re being asked has evolved. With Fission’s expanded mine development team in place, and our rapid progress through the permitting, environmental, socio-economic and front end engineering design phases, I wanted to take the opportunity to share three important questions as well as my answers.
Question #1
Once Permitting is complete, what is the Process of Transitioning from a Deposit to a Functioning Mine?
In the simplest terms, the construction process includes building the mine, building the mill to process the mined ore, and building the supporting infrastructure such as the tailings management facility, camp, offices, water treatment, etc.
However, before any of that can occur, the company needs the right team in place and must secure financing. Let’s talk about that.
- The Team
I’m starting with the team because without the right people, regardless of your project quality you will struggle to secure construction finance. Fortunately, Fission has done nothing short of an outstanding job in attracting the right people.
Following our recent announcement of new hires, I can confidently say that every member of Fission’s operational team is a genuine expert and leader in their respective disciplines. These are professionals who have designed, permitted, built, and safely operated uranium mines and mills for uranium powerhouses such as Cameco and Orano.
Having the right development team is the single biggest factor in taking a project from Feasibility through to production on time and on budget. I cannot stress this enough. Even for a near-surface deposit like ours, and in a supportive jurisdiction like Saskatchewan, you need the best people in the business to maximize benefits for investors, rights holders, and local communities, and secure financing.
- The Financing
Let’s start with some basic facts about Fission Uranium and the PLS project that are directly relevant to financing.
Our deposit is a shallow, high-grade ore body, and its geology supports a fast construction time as well as straightforward mining techniques. It’s important to understand this because, unlike the famously deep locations of most Athabasca Basin deposits, we have the potential for speed, simplicity, and predictability.
These advantages are crucial to bringing a mine to production on time and on budget, and they are crucial to attracting the right financial partner.
For any development-stage company, financing options vary in both suitability and availability depending on the project in question. In our case, we have one of the few elite uranium projects advanced enough to enter production this cycle, we are in the right jurisdiction, we maintain a tight rein on our G&A, and we have the team. Also, the timing couldn’t be better as far as uranium supply and demand is concerned.
In other words, we are seeing an intense level of interest in our project, and it is clear from discussions to date, that there are several options open to us.
At this stage, speaking purely in the spirit of speculation, I can point to options (both individually and in combination) such as a strategic partnership, royalties and streaming, and debt financing. While no option is off the table, any equity raise related to construction would be considered a supporting option rather than a primary route.
What sort of figures are we talking about?
Per our recent (2023) feasibility study, the CAPEX to bring PLS project into production as a standalone mine and mill combo will be $1.16B CAD. Now, while it is well within our capabilities to develop PLS as a standalone combo, there is also the potential for a collaborative effort with our neighbor, NexGen, regarding mill and additional infrastructure. Let me explain by answering the next question.
- The Ore Body
Most people understand that having a near surface ore body like ours has significant advantages over deeper deposits. Where we typically get questions is with the lake. Part of our deposit lies underneath Patterson Lake – one of many shallow bodies of water in the region. However, from a mining perspective, the lake is nothing out of the ordinary for Athabasca Basin deposits.
Most uranium deposits located in the Athabasca Basin are situated beneath or partially beneath a lake: Key Lake, Rabbit Lake, Cluff Lake, and many more. More important is the ability to deal with groundwater – something that often affects mines around the world, including most Athabasca Basin deposits regardless of depth below a lake. For example, for Athabasca Basin unconformity deposits, ground water saturation associated with the contact between the overlying sandstone and the underlying crystalline basement rocks has been notoriously problematic at any depth – hence Cigar Lake 400m below surface had major flooding issues, and McArthur River at 600m below surface had to deal with flooding issues.
Fission is particularly fortunate because we don’t have an unconformity hosted deposit. Our Triple R deposit sits entirely within impermeable basement rock, which lies beneath the overlying overburden.
Question #2
What is the current state of infrastructure in the region?
The state of the infrastructure in the Western Athabasca Basin has a solid foundation but there are some key elements still to be built.
When it comes to transport and workers, both Triple R and Arrow are only 150 km north of the town of La Loche, connected by highway 955, which runs from the town up to and past our projects. This is a Provincial maintained, all-season highway, which means the all-important year-round access to Canada’s transportation network is in place – simplifying both construction and production.
What the western Basin doesn’t have yet is a mill to produce yellowcake concentrate from the mined uranium ore.
Having a mill on this side of the Basin will not just benefit Fission and NexGen. Other companies have made significant discoveries in the region, there is the potential that they may be in a position to reach production at some point in the future, thus opening up the potential for toll milling.
In our respective development documents submitted to the Province and Federal regulators, both Fission Uranium and NexGen have outlined stand-alone operations that include our own respective mills. So, does that mean there will be two mills or a central mill that will service both operations?
There are clear benefits to collaboration on a mill:
- Reduced capital expenditures for each company, as well as reduced maintenance costs.
- Lower operational risk and less exposure to market fluctuations.
- Economies of scale, producing higher volumes more efficiently which can lead to lower operating costs per unit of ore processed, resulting in improved profitability for both companies.
- Centralized waste management can process larger quantities of ore more efficiently. This means that fewer resources, such as water, energy, and raw materials, are consumed per unit of ore processed. This reduced resource consumption translates to a smaller environmental footprint.
- Shared infrastructure extends beyond just a mill. If there is willingness, companies can collaborate on transportation, power supply, and other logistical elements, further reducing costs and environmental impact, while improving efficiency.
I believe a shared mill makes strong financial sense for NexGen and Fission, however, it is important to note that it is fully within the capabilities and project economics for both companies to construct and operate our own respective mills. As per the project description submitted to the Saskatchewan Ministry of Environment, Fission’s proposed mill site has been chosen for easy access to the nearby highway and for its minimal environmental footprint. Also, at the risk of sounding repetitive, I can speak with great confidence in our mine and mill plan because of our team’s experience in permitting and regulatory compliance.
Question # 3
With or without collaboration, how do Fission’s and NexGen’s development schedules compare?
NexGen published its feasibility study in early 2021 and recently completed the Provincial Environmental Assessment (“EA”) technical review process and submitted the Provincial Environmental Impact Statement (“EIS”) to the Saskatchewan Ministry of Environment. According to their current timeline, they expect to complete their front end engineering design (“FEED”) at some point in 2023.
Fission Uranium’s feasibility study was published in early 2023. We are on track to complete the EA and EIS process in a similar time frame, and we expect to complete our FEED in Q2, 2024. In fact, we’ve already commenced some of the more detailed engineering design work.
Our projects have ore bodies that are broadly similar, but with some notable differences. Consequently, we have different construction timelines.
Fission’s deposit has a shallow plunging, laterally extensive morphology that starts a mere ~50 metres from surface and sits just 2 km east of the highway. As already mentioned, having the bulk of our mineralization so close to surface means much faster access to our deposit and the potential for significantly faster mine construction compared to a deeper deposit.
Ultimately, both companies have important steps still to take and one thing is certain, all eyes should be on the western Athabasca Basin.
Further Questions
I have several upcoming interviews, during which I will be happy to address further queries.
As you might have seen during previous interviews, I tackle any and all questions and concerns head-on. If you do have further queries that you would like answered, please feel free to reach out to us through email, phone, or by direct message on social media.
I also encourage you to follow our Twitter account for the latest updates, interview clips, and more.
Thank you for reading and good luck to all.
Ross McElroy,
President & CEO of Fission Uranium
