Fission 3.0 (TSX-V: FUU) Chief Geologist Ross McElroy with a Thorough Company Update: Earn-In Agreement with Rhyolite in Peru & Drill Programs at PLN and Key Lake South in Canada
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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the COO and Chief Geologist for Fission 3.0 (TSX-V: FUU)(OTC: FISOF), Mr. Ross McElroy. Ross, how are you?
Ross McElroy: I'm doing well, Gerardo. Thank you very much. Great to talk to you.
Gerardo Del Real: Thanks for coming on. Fission 3.0 has been busy. You hit some strong alteration, some smoke at PLN. As of February, you were preparing a 9-hole drill program, I believe, at Key Lake South that was supposed to commence at the end of February. And just yesterday you had news that you had completed the binding earn-in agreement for up to $22 million. A lot going on. Can you provide on each of those, Ross?
Ross McElroy: I sure can. We're very pleased with the way things are going in the company. There's some great news flow happening right now. We're busy exploring in Canada in the Athabasca. We now have a plan to go forward, too, down in our Macusani project. So, I think what I'll start with first is looking at yesterday's news event with the agreement with Rhyolite for our Macusani project down in Peru. I think that's a good place to start.
Gerardo Del Real: And just to provide some context here, Rhyolite can earn up to 80% into the mining concessions located in Peru by spending up to $22 million Canadian over a 5-year period. It's a great place to start. Give me the details, Ross.
Ross McElroy: Sure, and that's exactly it. It's a two-stage earn-in approach. To earn 50% interest in our Macusani project, they would spend $5.6 million over 2 years, and then you would have the remaining $16 million or so to be spent over the next 3 years. So in total, you're looking at $22 million over 5 years.
And just to put some context into the project and why this is significant, our Macusani concessions have been the longest held ground that we've actually had in the Fission companies. In fact, it predates back to the early Strathmore days. I think it was the first uranium project in the company to start with, and so we've been long-term holders of it.
There's been a lot of activity in that area. We've focused on the Athabasca, as you know, but there has been a lot of significant work over the years in the Macusani Plateau. It's an emerging uranium district. Plateau Energy's consolidated quite a large land package around there. They have a number of near-surface deposits, uranium deposits that measure over about 100 million pounds of uranium in both inferred and indicated categories. And very significantly, they made a discovery a couple years ago of a lithium deposit.
Now, that lithium deposit, the Falchani, is located around 5 kilometers to the south of our concessions in Macusani. Their deposit so far has been outlined. It’s one of the largest hard rock lithium deposits in the world, so they have made some great advances down there. That's caught the interest of other people that were also looking in both the lithium and the uranium sector, and this is how we got together with Rhyolite. They're looking for a key land package that has potential to host both the lithium and the uranium options.
Now we've got a great path forward. Fission will be the operator during the Stage One earn-in interest down there. We're going to be pretty busy spending $5.6 million over 2 years there. We'll be looking for both uranium and lithium resources there. So we're really, really pleased to be able to move that project forward.
Gerardo Del Real: I got to commend you on the way the deal was structured. It's very Fission 3.0 shareholder friendly. This is what I mean by that, the way I understand it is if Rhyolite does not complete Stage One, Rhyolite doesn't retain any interest in the Peruvian assets. Is that correct, Ross?
Ross McElroy: That is correct. Yes, they have to spend that threshold of the $5.6 million in order to earn any interest. 50% is the first threshold, and that's met by meeting those terms, so you're right. Without meeting that, they wouldn't have an interest in it. But I think, significantly, we also have a piece of the Rhyolite vehicle. That was also part of the terms of the agreement. It gives us upside, gives shareholders upside as well in the new vehicle.
It puts other people's money to work on our property, which has been a part of our project generator model that we've had for years, and we've been very successful with it. Yeah, it's a deal that I think benefits Fission 3 shareholders quite well and, importantly, advances work down in a really exciting new uranium and lithium district in Peru.
Gerardo Del Real: Now, when you say you have a piece of Rhyolite, I'm assuming that you're referring to the 19.9% of issued and outstanding shares. Correct?
Ross McElroy: That is correct.
Gerardo Del Real: Excellent, excellent. Let's talk PLN and Key Lake South. You hit some smoke at PLN, and last I heard you were at Key Lake South busy. Updates there, Ross?
Ross McElroy: Sure. You're right, we did drill on our PLN properties. So now we're back up into the Athabasca. PLN is immediately north of Fission Uranium's PLS project, hence the name the North versus the South projects. Right immediately to the north, there's some pretty exciting conductors. There's structural activity on that property. You're on the same trend that if you carried it up further, you'd be almost in the Shea Creek deposit up to the north. So that's the same major north-south trend of conductors, and this is where we're targeting our winter program on.
We had a corridor that we had drilled last in 2014 that was looking encouraging to us. We saw elevated radioactivity. We had geochemistry that was giving us a good signature that this was the type of corridor that could host high-grade mineralization. That was what we were following up on in the winter program.
We were able to continue to extend that corridor. I'd say that the results were at least as good as what we saw in 2014, that we have a better understanding of that corridor. We're still quite happy with it. The hunt is still on there, obviously, to find high-grade uranium mineralization, but our results were quite promising down there. It's not the only target on the property. We have other conductive trends and fault zones and good geophysics targets, and we'll be back up there probably in the summertime on PLN, also evaluating those targets.
So, there's still lots of work yet to be done at PLN. As we know, this is a truly exciting emerging uranium district with Fission Uranium's Triple R, and NexGen's Arrow deposit, and the Spitfire zone with Cameco, AREVA – sorry, Orano they're called now. They're finding a lot on that trend. So there's a lot of exciting opportunities up in that area, and we've got an excellent land package and we want to evaluate that as well. So, that's what's happening at PLN.
Gerardo Del Real: Excellent. Key Lake South. I know I've had a lot of questions regarding Key Lake South and the progress there. I believe that the drill program was supposed to commence in mid-February. Has that concluded? Is that still ongoing?
Ross McElroy: Yep. We're underway still in that program right now. The Key Lake project is on the other side of the basin. It's on the eastern side, the southeast side. The reason it's called the Key Lake area, because you're right south of the Key Lake Mill and, of course, the historic Key Lake deposit, which was one of the big, most successful uranium mining operations in the Athabasca back in the day at Key Lake. That was a near-surface deposit with around 200 million pounds close to a grade of 2%, really one of the better deposits in the basin that was mined out. You're right in an infrastructure-rich area there with the operating Key Lake Mill. You've got road structures in there. You have power lines, everything that's required to bring a project forward.
And, I think, importantly for us, we have exciting geology there. We're on the same shear zone which hosts the old historic Key Lake deposit. We're on that same shear zone, so if we're fortunate and can target in the right place, we think that there's more opportunities to find near-surface, high-grade uranium in that district. So, we're going to continue our effort looking around there, and we are currently drilling on that project as we speak.
Gerardo Del Real: Fantastic. Well, Ross, that's a thorough, thorough update. I appreciate it. I'm looking forward for drill results from Key Lake and progress as you move forward here in what I think everybody agrees is an important 2019 for the uranium sector. Is there anything else that you'd like to add?
Ross McElroy: No, I think we've covered quite a bit of territory on this interview. I'm just happy that we have so much news that we're able to share with investors right now. My message is always for people that are looking to invest in the uranium sector, I think the timing is getting better and better right now to do so.
Gerardo Del Real: Fantastic. Ross, thanks again. It's appreciated.
Ross McElroy: Good. Thank you very much, Gerardo. You take care.
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