Fission’s Roughrider area play has shareholders glowing green

With the power play for Hathor Exploration‘s (HAT-T) promising Roughrider uranium deposit now in its fourth (but perhaps not final) act, Saskatchewan’s Athabasca basin is taking centre stage in the battle for the world’s next best uranium deposits.

The strong displays of interest by Cameco (CCO-T, CCJ-N) and Rio Tinto (RIO-N, RIO-L, RIO-A) in Hathor’s Roughrider discovery, in which Rio Tinto is vying for a foothold in the world’s pre-eminent high-grade uranium district, have led investors to take a closer look at other prospective deposits in the basin.

Fission Energy (FIS-V) and its advanced-stage Waterbury uranium project adjoining Roughrider’s western border have made the company one of the most traded juniors on the TSX Venture Exchange in recent weeks. It averaged close to 3 million shares traded daily between Nov. 14 and 18. The company’s shares have risen as high as 99¢ on Nov. 18 from 50¢ on Aug. 25, the day before Cameco launched its hostile takeover bid for Hathor.

Fission’s 402.6-sq.-km Waterbury property, jointly owned by Korea Electric Power Corporation (Kepco), lists several major uranium players as neighbours. Besides Hathor’s Roughrider deposit – which Fission says is “sandwiched” between two of its claims – Fission’s Waterbury property is 10 km and 20 km west, respectively, from Cameco’s Tamarack deposit and its Rabbit Lake operation; only a few kilometres north of the Midwest uranium project co-owned by Denison Mines (DML-T, DNN-X), French nuclear giant Areva and Ourd Canada, a subsidiary of Japan’s Overseas Uranium Resources Development; and a dozen kilometres west of the operating McLean Lake mill complex, similarly owned by the trio of Denison, Areva and Ourd. 

Kepco has earned a 50% interest in the Waterbury project under an agreement signed in January 2008 whereby it agreed to spend $14 million on exploration over three years. Fission retains a back-in option, however, to reacquire a 10% interest in the property for $6 million. The companies also signed a definitive agreement that accelerates exploration and development expenditures to $30 million over the next three years. Kepco holds an approximate 15% stake in Denison.

The joint-venture partners have planned a $7.3-million exploration program at Waterbury scheduled to begin in early January 2012 with three drill rigs. The program will include 69 drill holes estimating 25,000 metres, with three-quarters of the drilling occurring at the high-grade J zone discovery, and a secondary target 1 km west called the Summit zone. The rest of the drilling will take place at other regional targets, including Oban, Oban North, Murphy Lake and the new Chivas target.

Fission first explored for uranium on the Waterbury property in 2008, after Hathor announced a major discovery at Roughrider with 12 metres grading 5.29% uranium oxide (U₃0₈). A first-pass drill program by Fission identified a basement-hosted anomaly on a structural trend that straddles the Roughrider zone and extends for another 3 km to the west and southwest on the Waterbury property. This structural trend was named the Discovery Bay East-West Corridor, after drilling in 2009 and 2010 returned 11 metres grading 1.91% U₃0₈ from 226 metres downhole, including a high-grade section of 1 metre of 13.87% U₃0₈.

In early 2010, three step-out holes near Fission’s discovery hole resulted in the delineation of the J zone. 

Further drilling there this year extended the east-west strike length of the zone to 578 metres by intersecting unconformity and basement mineralization, and connected the J zone to the PKB zone. 

Fission says mineralization remains open along strike – horizontal at unconformity and vertically by sandstone and basement.

Final assay results from mid-year drilling at the J zone revealed uranium grades are not nearly as rich as Hathor’s Roughrider find. Hole 11-198C intersected 10 metres at the unconformity at 224 metres grading 0.48% U₃0₈, while hole 11-200 intersected 12 metres grading 0.32% U₃0₈. 

Another hole returned slightly higher grades with 6 metres at the unconformity at 209 metres  grading 0.87% U₃0₈, including a 2-metre section grading 2% U₃0₈. 

In comparison, the West zone at Roughrider has an indicated resource of 394,200 tonnes grading 1.98% U₃0₈ for 17.21 million lbs. uranium oxide, and an inferred resource of 43,600 tonnes at 11.03% U₃0₈ for 10.60 million lbs. uranium oxide. The East zone has an inferred resource of 118,000 tonnes at 11.58% U₃0₈ for 30.13 million lbs. uranium oxide.

The primary focus of Fission’s 2012 winter exploration program will be to continue delineating the J zone’s unconformity mineralization and look for more high-grade mineralization in step-out and regional exploration holes.

Fission began a 1,000-metre, first-pass drill program at its Patterson Lake South (PLS) uranium prospect, also in the Athabasca basin but much farther to the southwest. Fission discovered 123 radioactive boulders at PLS in the mid-year field season, with assays grading as high as 36.6% U₃0₈. 

It plans to complete 10 holes at the property by the end of the year in an attempt to find the boulders’ source with 50% joint-venture partner Eso Uranium (ESO-V).

Fission had a $101 million market cap on Nov. 18 and 102 million shares outstanding, with a 52-week share price range of 48¢-$1.50.