Fission Uranium (TSX: FCU) President Ross McElroy on Latest High-Grade Assays at the Triple R Deposit, Moving Towards Pre-Feasibility, & Improving Sentiment in Uranium Market
Gerardo Del Real: This Gerardo Del Real with Resource Stock Digest. Joining me today is President, COO and Chief Geologist for Fission Uranium (TSX: FCU)(OTC: FCUUF), Mr. Ross McElroy. Ross, it's been a little bit. How are you?
Ross McElroy: Gerardo, how are you?
Gerardo Del Real: I'm doing excellent. Thank you so much for asking. I mentioned off the top here that it's been a bit. You've been busy. You continue to demonstrate why PLS is a world-class asset with more high-grade hits. You've added to your board of directors. I want to talk about that, there's been some changes there. But first and foremost, because it's been it's been a month or two, I know that you've been out on the road at conferences doing road shows, I'd love to get your take on what the sentiment looks like out there.
Ross McElroy: You bet. There's a lot of news. Corporately there's things happening, also sector wise and on the project. Just to touch on what you mentioned yeah, we were just over in London meeting with investors and we were really quite busy. The sense that I had in our last conferences last week was that there's a lot more buzz in the uranium sector right now. You're getting interest from people that are already current shareholders and fund managers, but also some of the generalist funds are starting to look at uranium and their perception is that maybe uranium's next. So there's a lot more buzz, a lot more interest in the sector and there's good reasons to think why uranium will be exciting in the near future. But it was just really quite refreshing to see that level of interest at much greater levels than we've seen even just few months ago.
Gerardo Del Real: You know you and I have seen how violent to the upside past uranium bull cycles have been and I always try to preach to newer subscribers and listeners that it's much better to be a year or two early even than a year or two late. Can you explain for those that are new to space, the uranium space, just how violent these bull markets are when they happen? We talked off air, I think you framed it perfectly. You said, "These things happen overnight." Can you give a little context there, Ross?
Ross McElroy: I sure can. They do happen overnight. You want to be positioned in the uranium sector before it changes, otherwise you're chasing it. As I mentioned to you I think you're losing at least 50 to 75% of the profits if you just wait and try and chase the stocks. You need to be sitting in them before the sentiment changes and the stocks start to have a run.
We saw just a clear example of how quickly things can change. Look at Cameco, which is the major bellwether in our sector. Just two months ago they were trading around $10 a share and then within a very, very short timeframe, they're up over $14, pressing $15. That's a 40 to 50% increase almost, in a very, very short time. And that's a bellwether major mining stock.
Juniors react much quicker as well. When things change and we're starting to maybe get the sense that that's not too far away, these things do change. The stocks will appreciate. The whole sector wide tends to change very, very quickly. And we've seen that pattern before. I think we'll see it again.
Gerardo Del Real: Let's talk the asset, let's talk Fission and how you're positioned. You've been busy. On May the 10th you expanded the R1515W zone. You had six high-grade holes. Let's start there and then we can follow that up with your most recent release at R780 East with, again, another six high-grade holes that included 25.5 meters at 6.36% uranium. Let's start with R1515.
Ross McElroy: Sure. These are results that we had from our winter drilling where we put eight holes into the R1515 West zone. All eight holes were mineralized, some of them spectacularly so. So we were really quite pleased with our 100% hit ratio out on the 1515 West zone. It really does demonstrate the ability for these zones to grow quickly. What we saw when we did the resource update earlier this year is that the grade on all of these pods, not the just the main 780 zone but all the other ones including the 1515, are all similar high-grade, near surface pods. They'll all have an additive component to the overall resource and, we think, the overall mine development as we go forwards. We’re really quite pleased with what we saw with the 1515 zone. Don't forget that's on the same mineralized trend and about one and a half kilometers further to the west than the main R780 zone. So with the new resource update that we announced back in February, the 1515 along with the other zones are all now part of the Triple R deposit. So great growth, great results we saw this winter.
Gerardo Del Real: The latest set of assays at 1515, those were shallow as well. I think that's important, Ross. Can you talk about that?
Ross McElroy: I sure can. And it's the nature of the all of the mineralized lenses that we see in the Triple R deposit. They tend to start right at the top, at bedrock, so right when we punch through the overburden there's a high-grade mineralization. All five of our zones along this mineralized trend show exactly that. They're all near surface. If you can build the pounds up and show that they're economic then they're likely an open pittable scenario and know that open pit mining tends to be much easier and much cheaper than more expensive and technically challenging underground mining. The more that we can see near surface, the better for us and that's what we're seeing in all the zones. The 1515 is very similar to the other ones in that characteristic.
Gerardo Del Real: Let's talk about the 780 zone. I know that you're moving towards pre-feasibility. I know that a big, big part of the program is to upgrade the inferred category resources to indicated category, which of course de-risks the project further. Can you talk about the latest set of assays there?
Ross McElroy: Yeah, I sure can. Part of the winter program was that we drilled six holes into the R780 East zone. And the 780 and 00 are part of our pre-feasibility that we have scheduled to be completed by the end of 2018. As people may know, pre-feasibility, and higher levels like feasibility, they require indicated and above level categories. So the material that we have that's classified as inferred doesn't actually get calculated into the pre-feasibility. It's important for us to convert as much of the high potential zones that we see with the high grade in the 780, anything that's still classified as inferred, we want to move that over into indicated. And that's what those six holes worked on. We still have 27 million pounds of inferred, high-grade mineralization on the 780. I think that those six holes go quite a ways towards converting some of that 27 million pounds into indicated, so that we can use that for pre-feasibility. And perhaps we'll drill a few more this summer in order to increase that even more. But those plans are still being hashed out.
Gerardo Del Real: Excellent. You mentioned the corporate activity. You've added an award-winning analyst to the board. You also added an environmental and regulatory expert as a special advisor to the board. So there's been some changes there. Can you touch on that a bit, Ross?
Ross McElroy: I sure can. Those are two very significant changes, additions for us. I think what we're always trying to do is strengthen the company corporately as we move forward and to build up on our technical team as well. Now bringing Rob Chang, who is probably one of the most recognized uranium analysts out there, he used to work for Cantor Fitzgerald, bringing him onto the board I think gives us a real champion in the uranium sector. Rob Chang has always made it a point to get out there ahead. He knows all the contacts. The investors are very familiar with him. He's been a real bull on the sector. I think he's been one of the best go to guys out there for understanding what's happening in the sector and bringing him onto our board I think brings that skill level there. I think when you look at the Fission share price it increased when we brought Rob on. I think that the market recognized the fact that we brought in truly an “A” team name to our board.
And on the advisory board we've brought in a fellow named Mark Wittrup. Mark is recognized as one of the foremost experts in the permitting and development phase. He had a huge career with Cameco. He was, I think, one of the guys most responsible for bringing the McArthur River deposit into production and also had a significant role with the Saskatchewan government as well on the environmental side. Mark knows what he's doing. He understands the landscape out there. What's required to bring projects such as ours, advanced stage projects, further along the development stage to hopefully eventual production.
So I think that we've really bolstered up our team on the board and the advisory board and we're seeing positive changes in the market, good results in the projects. I don't think 2018 could have been any better for us so far.
Gerardo Del Real: Excellent. What do we have to look forward to as shareholders, Ross?
Ross McElroy: Well as I mentioned earlier, we're moving towards pre-feasibility. We have a summer program that will probably start in July and it'll run for at least two to three months, where a lot of that work will be focused on doing the final work necessary to gather some more field information for the pre-feasibility. Then the engineers have to roll up their sleeves and get to seeing what all the numbers mean. The last half of 2018 for us is really going to be focused towards getting that study. But I think the summer program, well we'll see what happens because we're still in the planning stages, but you know that we have an awful lot of great exploration potential on PLS.
We can continue to grow and expand I think on the R1515 West zone that we had such great success with this winter. And there's a number of other targets out there that we suspect have a good potential to host mineralization as well. These would be conductors that are further to the south on the Patterson Lake trends. We'll see what happens, but I'd expect a pretty good summer program for us and that all leads into what we think is a better sentiment in the uranium sector overall. So really looking forward to what the rest of the year has for us.
Gerardo Del Real: Sounds good. Ross, thank you so much for your time today, appreciate it.
Ross McElroy: It's great to be able to update you. Thanks very much for taking the time.
Gerardo Del Real: Anytime, Ross.