TORONTO (miningweekly.com) – Just over one year ago, one of the darlings of the Prospectors and Developers Association of Canada conference 2014 was Fission Uranium, with its president and COO Ross McElroy also awarded the Bill Dennis Award for a Canadian discovery or prospecting success. The company had achieved a great deal in the preceding 12 months, further delineating several mineralised zones beneath Patterson Lake South, in the south-west of Saskatchewan’s uranium-prolific Athabasca basin. 

Over full-year 2013, 99 holes had been drilled for just over 26 500 m. Exploration was then ramped up across 2014, with 174 holes drilled for just more than 63 700 m. “In 2013, it was about showing how long and how large the strike zone was. Last year was about showing that it was connected – that it wasn’t a bunch of deposits,” Fission CEO and chairperson Dev Randhawa told Mining Weekly Online in a recent interview.

Another goal for 2014 was to build up the necessary data for unveiling a National Instrument 43-101-compliant maiden resource. This was achieved at the start of this year, with Fission announcing that Triple R comprised just over 79.6-million pounds of uranium oxide (U₃O₈) indicated, based on just over 2.29-million tonnes at 1.58% U₃O₈. Within this, the high-grade zone stands at almost 44.3-million pounds U₃O₈, based on 110 000 t at 18.21% U₃O₈.

Inferred, Triple R has almost 25.9-million pounds of U₃O₈ for 901 000 t at 1.30% U₃O₈. This includes a high-grade zone of almost 13.9-million pounds of U₃O₈, based on 24 000 t at 26.35% U₃O₈.

“It’s been hugely important that we were over 105-million pounds and it matters that the deposit is continuous at more than 900 m strike length. That’s unusual for these types of deposits,” McElroy told Mining Weekly Online.

With the initial resource outlined, the company has continued exploratory work on Triple R, now bringing its winter drilling programme to a close and preparing for a summer campaign. Results tied to winter work have been encouraging. For example, on April 6, the company announced assay results of 16 holes drilled at Triple R’s R780E zone, with step-out holes PLS15-299, PLS15-325 and PLS15-303 of particular significance. For example, PLS15-299 returned 1.91% U₃O₈ from 60.5 m to 94 m.

“We’ve been successful in continuing to expand the zone’s footprint, hitting high-grade mineralisation there,” McElroy added.

NEW OPPORTUNITY
Another fillip came from the R600W zone, located just over 500 m west of Triple R. The zone was land based and was already known to the company after five preliminary holes had been drilled on it in 2012. “These were interesting but only showed mineralisation at a lower grade,” McElroy explained. “But now we have hole 343.”

He was referring to PLS15-343, which returned 65.5 m of continuous radioactive mineralisation between 105.5 m and 171 m. This included 9.31 m total composite mineralisation of more than 10 000 counts a second radioactivity recorded by a hand-held scintillometer.

Further encouraging results from the zone were released on March 31. Related assay returns had yet to be published at the time of writing.

“The results [so far] have been striking, while the deposit is also shallow and part of the same mineralised system. Hopefully it is connected [with Triple R] and we will determine that through future drilling,” McElroy said, adding that R600W was impressive in its own right.

Unsurprisingly, the company wanted to examine R600W in greater detail, which had been reflected in its summer exploration plans. “The size and grade is there. It’s also shallow enough and has all the merits of a world-class deposit,” he noted.

In addition, the company was hoping to embark on a preliminary economic assessment this year, the first step in economic modelling for the project. 

With the industry still struggling to garner financing, the issue of liquidity was always a central concern. Fission was confident in this regard and Randhawa noted that the company’s treasury was robust, with enough money to fulfil its exploration goals. “We are comfortable that we will continue to raise money,” he pointed out, noting that people tended to give money to those who performed.

On April 1, Fission announced a letter of agreement with a syndicate of underwriters, who will secure ten-million flow-through common shares at $1.50 a flow-through share. Total gross proceeds would stand at $15-million. This was updated on the same day, with the underwriters seeking 11.6-million flow-through common shares for total gross proceeds of $17.4-million, which would be spent on exploration.

WIDER MARKET
Looking at the macro view, the uranium sector remained in the doldrums. The U₃O₈ price stood at $39.25/lb on April 6, according to infomine.com. Hopes remained that Japan would speed up the reactivation of its nuclear reactor fleet, although the sector had so far been frustrated in this.

For Randhawa, the Japanese restart was psychologically vital. “If Japan suddenly turned its reactors on tomorrow morning, well they’re not going to go out and buy a bunch of uranium. But psychologically it’s a message that says uranium is okay and that nuclear power is what we need,” he commented.

The shot in the arm from a Japanese restart might push the spot price past the $50/lb level, adding forward momentum to sector revival, Randhawa noted.

Another factor that would eventually percolate into prices was the drive by China to boost its reactor fleet, spurred on by its bid to reduce fossil-fuel emissions and improve air quality. Randhawa said the country’s goal was to have 15% of energy sourced by nuclear and renewables, which currently accounted for 1.5%.

“Today, they have 23 reactors but to help reach that 15% figure they’ll need around 180 reactors,” he explained. “That alone will move the needle way past where it needs to be, which is between $65/lb and $75/lb for uranium mines to start achieving returns on the cost of original development.”

Therefore, higher prices were needed and Randhawa expected them. "I suspect that this will be uranium’s year as Japan turns the reactors on and China’s drive forward starts to become increasingly apparent.”