Fission Energy Corporation: Nearing A Discovery at Another Project?

Fission Energy Corporation

(FIS-T: C$0.62)


buy, Venture Risk*

12-month target price: N/A

July 5, 2011

David A. Talbot / (416) 350-3082

Mansur Khan / (416) 350-3314

Nearing A Discovery at Another Project?


Source: See Note 1

Conclusion: We maintain our BUY recommendation for Fission Energy with a Venture Risk and no target price.

Another Project, Another Discovery? Fission's latest exploration success isn't at the J-Zone on its Waterbury JV near Hathor Exploration's (HAT-T: C$2.74, BUY, C$5.60 target) world class Roughrider deposit in the Eastern Athabasca. No, this time it is focused on the southern boundary of the southwestern Athabasca Basin, relatively close to AREVA's Cluff Lake Mine (past production of 60 million pounds U3O8). It is also relatively close to the 88 million pound U3O8 Shea Creek deposits of UEX Corporation (UEX-T: C$1.05, BUY, C$3.00 target), the largest undeveloped uranium project in the Athabasca after Cigar Lake. This is Fission's and ESO Uranium Corp.'s (ESO-V: C$0.0.75, Not Rated) Patterson Lake South 50:50 JV. ESO is currently the operator. We view this news as very positive for both companies involved…it should increase the likelihood of another basement hosted uranium discovery in the Athabasca Basin.

·         Excellent summer prospecting results. While only surface mapping, radon surveying, soil sampling and boulder prospecting took place this summer, results are spectacular. Radioactive boulders were found on the first day of follow up of airborne radiometric anomalies flown in 2009. Following this year's now completed boulder sampling program, a total of 74 boulders outline a distinct 4km long, 900m wide, north-south trending boulder train (Figure 1). A full 57% of these produce off-scale (>9,999 cps) scintillometer readings that measure radioactivity. Assays are pending.

·         Boulder train might be pinpointing a new uranium discovery. The boulder train appears to be pointing back at a series of east-northeast trending geophysical conductors in the up ice direction following the last glaciation (Figure 1). Fission suggests that the northern end of the boulder train might lie close to the source of the high grade boulders, but more ground work is required to fully target the source area for drilling. The size of this mineralized boulder field is very encouraging, if not impressive. The boulder train that led to the discovery of Cluff Lake was estimated at about 2km long, or half the size of this Patterson Lake South boulder trend. That bould train turned into the discovery of a 60 million pound series of orebodies for AREVA.

·         Basement mineralization apparent. The project lies at the south margin of the Athabasca Basin (Figure 1) and likely doesn't have overlying sandstone. This could be positive for depth to mineralization, and eliminate many of the technical challenges found at some Athabasca deposits. Historical drill holes suggest up to 100m of soil and glacial till cover in the area. Mineralization appears to occur within basement schist and similar rocks. Many samples are dense, heavy and have massive to semi-massive pitchblende uranium mineralization - the cause of the off-scale scintillometer readings. 

·         Project re-prioritized upwards. JV partners carried out a small program (~$60,000) on what was just another property in the Athabasca Basin. However the discovery of potentially high grade boulders has re-prioritized this project upwards. The JV might now spend about $0.2 MM on detailed ground geophysics in the fall and then drill in the winter. The JV has enlisted help from a couple of structural experts to help pinpoint targets. The success also induced the partners to stake four more claims around this potential discovery to bring its property holdings to 12 claims totaling 25,450 hectares.

FIS-V: Price/Volume Chart

Source: Thomson ONE

Company Description

Fission Energy is a Canadian based uranium exploration and development company with properties in the Athabasca Basin of Saskatchewan, Quebec and the Macusani District in Peru. Its high grade Waterbury JV discovery located 140m west of the Roughrider Deposit in the Athabasca has quickly become the focus for the company.






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