Going Over the Details of Fission Uranium's (TSX: FCU) PFS for Patterson Lake South

April 18, 2019

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Gerardo Del Real: This is Gerardo Del Real, with Resource Stock Digest. Joining me today is the President, COO and Chief Geologist for Fission Uranium, Mr. Ross McElroy. Ross, how are you this afternoon?

Ross McElroy: I'm doing very well, Gerardo. Very pleased to talk to you this afternoon.

Gerardo DelReal: Well, thank you for taking the time as always. The last time we spoke, we mentioned that the market and specifically people that have their finger on the pulse of the uranium space have been excited to get the PFS results out. There was some skepticism and nervousness from people as to why it frankly took a little bit longer than we hoped.

You said all along that you wanted to get it out as quickly as everybody wanted to see it. It's out now, and I've got to say, it's gotten a good reception from people that are paying attention. A lot of points to touch on and I want you to provide a good overview of your thoughts and the path forward, but before that, I just want to read somebody's comment that I read online.

Somebody said, "It's pure genius for Fission to cover both paths to permitting in order to deliver on production in the most economic and environmentally acceptable way possible. Brilliant to provide investors with multiple pathways to production."

So I think that's obviously in reference to you being able to outline both an open pit, an underground scenario, and a combination thereof. Not a lot of projects out there that have that kind of versatility, so with that being said, Ross, let's touch on the numbers here.

Ross McElroy: Okay. Yeah, I mean, I absolutely agree. I think it's pretty wonderful that we have a project that does have this optionality. That's very, very rare to see in this business. Something that you can either attack open pit or you can address 100% underground and still have a very viable economically robust project. That's we have at PLS.

I think one of the key metrics that we saw that we were very pleased with was the low operating cost. With the combination open pit underground, which was the baseline model, we had US cap costs of $6.77 a pound. That is some of the lowest anywhere in the world. I mean, it's very low. Very, very competitive.

When we see this as operating mine, to be right up there with the lowest cost operators really put you in at a whole another level. We saw the PEA a few years ago. The operating cost was still low then, but we're about half almost of what we were at that time. So, it's remarkable. It's better.

We know we have higher cap X. That's true. We think we can offset that by being able to grow the resources well. You saw the Indicated resource increase by 18%, so that was a big change.

That was a positive change because as most of your readers would probably know, that when you get into these economic settings, the pre-feasibility, feasibility, you can really only use indicated and higher categories of mineralization, so it's important for us to do that conversion.

We successfully converted a lot of our inferred pounds into indicated, so by that metric, that was very positive. There's a lot of room for growth there.

Gerardo Del Real: What are the next steps, Ross? Everybody, of course, as I mentioned off top, everybody was eager and anticipating it. Then, once you deliver, the next question always is, "What's next?"

Ross McElroy: Well, what's next for us is we outlined we have the optionality to look at an underground only scenario. Now that's currently at a PEA level right now. We want to get the underground only scenario up to the same PFS standards. That can happen in a very short time.

We're looking at a matter of just a few short months and we'll be able to be able to look at the underground. I don't believe there's really any fieldwork involved in that. It's more engineering, stoke design, optimization from the underground perspective, just to get it up to the levels required for the pre-feasibility.

So, that's something we should be able to deliver by early, early to mid-summer. Then, we'll be able to really compare the open pit underground with the underground only and see which direction to go. They both have benefits and gives us a real advantage to be able to pick which way we want to go forward on the project with.

That's what's happening in the near term. There will still be a summer program as I mentioned just a couple of minutes ago. We want to be able to convert more of those inferred pounds in the on-strike zones, the high grade zones, to the west. The 1515 and the 840. We want to be able to convert those into indicated, to bring them into the mine plan, and likewise with the 1620 east zone, to the east of the main ore body.

The goal is to basically continue to convert, continue to grow the economic resource, and do a new study on the underground only and continue with the baseline. There's lots of really positive steps to move forward in 2019.

Gerardo Del Real: Ross, we all know what the end game is with Fission. It's a world class asset that will either bring in a partner, maybe one that already exists that will fund this thing and build it or it's going to get bought out in its entirety.

You have to be happy with the fact that regardless of which scenario you move forward with, it looks like the payback is going to be 1.9, two years or so, which is when you have an asset with this kind of scale, is pretty impressive.

Ross McElroy: Yeah. I mean, that's one of the key points that anybody looking to acquire, would want to look at. It's just how quickly is that payback possible? With this project, it's very quick. That's because we have a lot of hydrated materials that's close to the surface.

So, you had substantial capital requirements to build the mine, but the payback is very quick indeed. The thing that I think we open ourselves to is when we're looking at potential companies that are interested in acquiring or be partners, moving forward, we can attract open pit miners, the big open pit miners.

We can attract companies that specialize with underground. I mean, it really broadens our horizon on who is able to really look at this project to partner with. I think that that gives us an edge that very, very few projects have. That's something we're very happy.

Gerardo Del Real: Excellent. Ross, anything else you'd like to add?

Ross McElroy: I think those are the key points. We were happy to be able to deliver finally on the pre-feasibility. We know we've got a clear path forward. We'll continue to do so. Look for a lot of news coming out of this company in the next several months, a busy summer program. We'll be able to update shareholders on which path we think is the preferential way to go forward with.

I mean, we're also waiting on the continued improvement in the uranium sector in general. It's something out of our control, but we also know that it does impact the sentiments in the uranium sector overall to have an improved market. We think that ...

I suppose with the section 232 issue in the US, getting close to some clarity. We think that ultimately will get resolved and that should bring lot more stability back to the sector too, once people understand what that's going to all be about. I think you're looking at something in the order of up to three months away from now that we'll have an understanding of that.

On a project level, I think we were really, really pleased with the results and we've happy to be able to go forward and share that with our shareholders.

Gerardo Del Real: Fantastic. Good work and congrats. Of course, as always, I'm looking forward to having you back on as the news flow continues.

Ross McElroy: Good. Well, thank you very much. I appreciate your coverage on the story.

Gerardo Del Real: Absolutely. Thank you, Ross.

Ross McElroy: Good, thank you.

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