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Overview

This One’s a Monster
David A. Talbot,
Dundee Capital Markets

Patterson Lake South (PLS) is located in Canada’s Athabasca Basin, home to the world’s richest uranium mines. The project is host to the 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.

Growth at the Triple R deposit, and exploration elsewhere on the PLS property, is driven by a highly skilled, award-winning technical team and successful entrepreneurial management. Fission Uranium has 100% ownership of the PLS Property, which 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 continues north through the area of the UEX-AREVA Shea Creek deposits to the past producing Cluff Lake uranium mine.

 

PLS hosts the most significant undeveloped high-grade, near-surface deposit in the Athabasca Basin region. From Discovery to initial Resource Estimate, the Triple R Deposit was achieved in just two years of drilling. The current resource estimate, as detailed in the resource estimate filed on February 20, 2018 is:

  • 87,760,000 pounds U3O8 Indicated Mineral Resource based on 2,186,000 tonnes at an average grade of 1.82% U3O8, including:
    • R780E high-grade zone of 48,246,000 pounds U3O8 based on 119,000 tonnes at a grade of 18.39% U3O8
  • 52,850,000 pounds U3O8 Inferred Mineral Resource based on 1,331,000 tonnes at an average grade of 1.80% U3O8, including:
    • R780E high-grade zone of 14,710,000 pounds U3O8 based on 32,000 tonnes at a grade of 20.85% U3O8

As showcased by the Triple R deposit, mineralization at the project is characterized by being high-grade and shallow. In fact, the Triple R deposit is the only high-grade deposit in the entre 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.
Zones within the deposit will be targeted for additional growth drilling and any successful results have the potential to be added to an updated resource estimate.

An independent Preliminary Economic Assessment (PEA) study carried out in 2015 has highlighted the potential for very strong economic analysis at PLS. It covers the initial Triple R deposit (R00E zone and R780E zone) and does not yet include the R840W, R600W or R1620E zones, which are part of the updated Triple R deposit.

  • Average OPEX of $16.50/lb (US$14.02/lb) U3O8 over the life of mine
  • Base case2 pre-tax Net Present Value ("NPV") of $1.81 billion, post-tax NPV of $1.02 billion (10% discount rate)
  • Base case2 pre-tax Internal Rate of Return ("IRR") of 46.7%, post-tax IRR of 34.2%
  • Pay back estimated at 1.4 years (pre-tax), pay back at 1.7 year (post-tax)
  • Production of 100.8 million lbs U3O8; an average of 13 million lbs U3O8 per year for 6 years, followed by an average of 3 million lbs U3O8 per year for 8 years
  • Mine life of 14 years
  • Process recovery of 95%, supported by metallurgical testwork
  • Base case2 pre-tax Net Cash Flow over the proposed mine life of $4.12 billion, post-tax Net Cash Flow of $2.53 billion
  • Estimated CAPEX of $1.1 billion

Fission Uranium has 100% ownership of the PLS Property, which 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 continues north through the area of the UEX-AREVA Shea Creek deposits to the past producing Cluff Lake uranium mine.

The province of Saskatchewan in Canada has a 60 year history of uranium mining and strong support exists at a local, regional and provincial level. Permitting is straight-forward and well-understood.

(1)  Mineral Resources are reported within a preliminary open pit design at a cut-off grade of 0.15% U3O8 and 0.3% for resources outside the pit that are potentially mined by underground methods. The R1620E, R840W and R1515W zones are evaluated as underground at this time.
(2) PEA Base case used US$65/lb and an exchange rate of US$0.85 :1Cdn$
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