Fission team talks Triple R resource and next steps at PLS

VANCOUVER — It’s been an exciting journey for Fission Uranium (TSX: FCU; US-OTC: FCUUF) at its wholly owned Patterson Lake South (PLS) discovery, which has effectively changed the way explorers look at Saskatchewan’s Athabasca basin uranium camp.

And in early January Fission’s team was rewarded for two years of hard work with a maiden resource at PLS’ newly minted Triple R deposit, which emerges as the largest undeveloped deposit in the Athabasca region and third-largest in terms of size behind only Cameco’s (TSX: CCO; NYSE: CCJ) McArthur River and Cigar Lake mines.

PLS is a basement-hosted unconformity uranium deposit, characterized by shallow, high-grade mineralization in four zones that trend 2.2 km long. From west to east, these “R” zones are: R600W, R00E, R780E and R1620E. Fission’s inaugural resource includes the massive R780E zone, which runs for nearly 1 km, and the smaller R00E zone.

R780E hosts high-grade mineralization over notably wide thicknesses, and remains open along strike and laterally north–south, as well as at depth. Up to and including drilling from Fission’s mid-2014 program, 224 delineation holes have defined mineralization over a combined strike length of 1.1 km in the R00E and R780E zones, with 218 holes intersecting mineralization for a 97.3% success ratio.

“It’s really quite a unique deposit for a couple of reasons. It’s a basement-hosted deposit and those tend to be smaller in scale in terms of strike. The length we have at Triple R, when combined with the continuity of the deposit, is spectacular by any measure,” president and chief operating officer Ross McElroy explains during an interview.

“In terms of the high-grade zone it isn’t really just sitting in one little pocket. Usually when you see those types of grades in these deposits, it’s in one portion that people tend to ‘stretch out.’ What we’re seeing is well-behaved down the entire strike length. The continuity from section to section really speaks to the orebody shape, and that’s only going to benefit us in the long run,” he adds.

Triple R’s other unique aspect is that the mineralization occurs at relatively shallow depths, which opens up the door for open-pit mining scenarios. The majority of the deposit is from 60 metres to 250 metres deep.

Intense drilling has also helped Fission table an inaugural estimate with a relatively high level of confidence. Triple R hosts 2.3 million indicated tonnes grading 1.6% uranium oxide (U3O8) for nearly 80 million contained lb. Inferred resources add another 901,000 tonnes of 1.3% U3O8 for 25.9 million contained lb.

As McElroy notes, Fission also outlined a consistent core at Triple R that runs at higher grades along much of the deposit’s strike length. The High Grade zone consists of several lenses within the Main zone, the largest continuous section within the R780E area.

These lenses jointly host 110,000 indicated tonnes averaging 18.21% U3O8 for 44.3 million contained lb. Inferred resources total 24,000 tonnes of 26.35% U3O8 for 13.9 million contained lb.

“There were a few things that surprised us on the positive side. Number one was the pure size, and just how much of it is in the indicated category. If you compared it to similar discoveries in the Athabasca, like Hathor Exploration’s Roughrider deposit for example, most of those maiden resource numbers were inferred,” chairman and CEO Dev Randhawa says.

“Number two, we were quite surprised with how nicely the mineralization and grade are spread out over the deposit,” he says. “It should work really great from a mining perspective.”

And though the quality and size of the deposit naturally fuels takeover speculation, Fission hopes it will have the luxury of another drill season there. 

Randhawa describes Triple R as a “validation of the confidence” the company has in its team, and notes that resources of such scale tend to succeed regardless of market conditions.

Fission is planning two large drill programs this year, including a US$10-million, 63-hole winter program expected to run 20,230 metres that the company started in January.

McElroy speculates that there’s a lot of room for growth at R780E, especially to the east where the company has already encountered uranium mineralization during scout drilling. Fission will follow up on mid-year drilling that highlighted the potential for parallel lenses.

“R00E also has a lot of room to grow, and we can take the things we learned at R780E and go back and take another look at it,” McElroy adds. “It’s really identical in terms of geological controls and it is on the same system right on trend. It’s just right now that it’s a smaller pod.”

Though half of Fission’s 2015 drilling is expected to focus on resource expansion via stepout drilling, having wrapped up the maiden resource estimate also helps the company get back to what it does best: exploration.

McElroy says that this year Fission will ramp up exploration on the greater PLS property package, which is something he’s been looking forward to over the past year. He points out that Triple R occurs on a single conductor, while the company has identified over one hundred similar trends on its property.

Most exploration will focus on the Forest Lake targets due to a promising combination of results from ground geophysics and radon surveys. The Forest Lake conductive corridor is situated in the middle of the property and features geophysical and radon signatures similar to the Patterson Lake conductive corridor, which hosts Triple R.

“We’ll put in about ten holes or so at the Forest Lake conductive trend. There are multiple conductors at the target, and we’ve never put a hole in there,” McElroy elaborates.

“We’ve drilled on the land portion up-strike and it looks promising because there’s good alteration in the rock. The more promising signs for us, however, are under the lake itself, and we needed to wait for the right conditions there to drill effectively. It’s something we’ve been wanting to get to for the past nine months,” he adds.

Meanwhile, Fission is looking to produce a preliminary economic assessment of Triple R by mid-year. 

Randhawa adds that the company is already looking at “creative, non-dilutive” sources of capital, including a gold stream.

Gold mineralization is associated with the uranium at Triple R, with indicated resources totalling 2.4 million tonnes of 0.51 gram gold per tonne for 38,000 contained oz. Inferred resources add 901,000 tonnes of 0.56 gram gold for 16,000 contained oz.

The company will also continue to advance its social license and environmental studies. 

McElroy describes permitting as “an area where the province of Saskatchewan really shines above every other jurisdiction,” because it’s been a prolific uranium district for half a century.

“It’s a progressive environment, and we see value in de-risking the permitting scenarios,” he adds.

Shares of Fission have jumped 27%, or 24¢ over the first three weeks of 2015, en route to a $1.14 close at press time. The company reported US$22 million in working capital at the end of the third quarter, and it has 366 million shares outstanding for a $417-million market capitalization.

“We don’t want to give this thing up without a fight b
ecause it really is one of the largest and richest undeveloped commodity assets in the world,” Randhawa says. “I believe we’ve earned the right to drill even further, but in the end it’s up to our shareholders. I will say the response has really been fantastic. The markets have really been so negative recently, so when suddenly you can crank out such positive news, it’s a pleasant surprise for everybody.”