PLS: Athabasca's Shallow Depth, Highly Awarded Uranium Project - TSX:FCU OTCQX:FCUUF FissionUranium.com
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Exploration Project of the Year PLS: Athabasca’s Shallow Depth, Highly Awarded Uranium Project June 2019 TSX:FCU OTCQX:FCUUF FissionUranium.com
Disclaimer & Technical Information Disclaimer The following information may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The technical information in this corporate presentation has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43- 101 and reviewed on behalf of the company by Ross McElroy, P.Geol. President and COO for Fission Uranium Corp., a qualified person. The updated Mineral Resources as reported April 15, 2019 are as reported from data up to and including 2018 drill programs and are reported within an open pit design at a cut-off grade of 0.15% U3O8 and 0.25% U3O8 for resources outside the pit that are potentially mined by underground methods. The R1620E, R840W and R1515W zones are evaluated as underground at this time. Technical Information Certain of the technical information contained herein is derived from the April 15, 2019 news release entitled “Fission's PFS shows Low OPEX of US$6.77/lbs U3O8, High IRR and Clear Growth,” describing results of a PFS completed on the project – a copy of which is filed on the Company’s profile on SEDAR at www.sedar.com. The PFS considers the PLS project as a stand-alone mine and mill operation, which includes development and extraction of the R00E and R780E zones (Triple R deposit), based on a number of inputs, estimates, and results including the following (all values in C$ unless otherwise noted): Mineral Resources and Mineral Reserves are reported within the open pit design at a pit discard cut-off grade of 0.15% U3O8 and outside the design at an underground cut-off grade of 0.25% U3O8 based on a long-term price of US$50 per lb U3O8 and PFS cost estimates. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Physicals: Revenue: • Four years of pre-production and 8 years of mine life, processing • Long term uranium price of US$50 / lb U3O8 nominally 1,000 tonnes per day (350,000 tonnes per year) • Exchange rate of 0.75 US$ / C$1.00 • Total Tonnes Processed: 2.89 million tonnes at 1.42% U3O8 average grade; • Gross revenue of C$5.84 billion, less Saskatchewan gross revenue royalties open pit mining of 2.30 million tonnes at 1.62% U3O8 of $423 million • Underground mining of 0.59 million tonnes at 0.63% U3O8 • Net revenue of C$5.41 billion • Process recovery of 96.7%, supported by metallurgical testwork • Production of 90.5 million lbs U3O8; an average of almost 15 million lbs U3O8 per year for 5 years, followed by a lower-production tail Operating Costs: Capital Costs: • Average OPEX of C$9.03/lb (US$6.77/lb) U3O8 over the life of mine • Pre-Production capital costs of $1.498 billion • Unit Operating Costs of C$274 per tonne processed. • Dyke and Slurry Wall - C$371 million • Combined Mining C$89 per tonne processed • Open pit mining - C$44 million • Processing: C$115 per tonne processed • Process plant - C$241 million • Surface and G&A: C$71 per tonne processed • Tailings Facility - C$101 million • Operating cash flow of C$4.62 billion • Infrastructure - C$114 million • Indirects & Owner’s Costs - C$376 million • Contingency - C$250 million • Sustaining capital costs of C$137 million (includes all underground mine capital costs, and tailings dam lifts) • Reclamation and closure cost of C$77 million • Cash flow from operations of C$2.91 billion TSX: FCU OTCQX: FCUUF 2
Reasons to Invest Large, shallow Maiden reserve estimate of Award winning (~50 m from 90.5M lbs U3O8 at 1.42% U3O8 project and surface), high- management grade Triple R 3.2 km mineralized trend – team largest in the Athabasca Basin deposit Potential to Production: 15M lbs/yr U3O8 become 31,039 ha property over first 5 years amongst the in a world class top 3 largest Cash costs: US$6.77/lb U3O8 and lowest uranium district over LOM (Athabasca Basin) cost uranium mines Near-term catalysts • Future drill program to Flexible OP/UG case: after-tax NPV8% of upgrade/expand resource Excellent potential mining C$693M and IRR of 21% • PFS on UG scenario Summer 2019 to expand resource approach with strong project UG case: after-tax NPV8% of and extend mine life • Feasibility study within ~2 yrs economics C$696M and IRR of 26% TSX: FCU OTCQX: FCUUF 3
Corporate Information Capital Structure Share Ownership Tickers TSX: FCU OTCQX: FCUUF Institutions Management & Board 1.6% Frankfurt: 2FU 12.1% China General Share Price (as of June 7, 2019) C$0.48 Nuc lear Power 19.9% 52 Week Low / High C$0.47 / C$0.78 Basic Shares Outstanding 486.0M Options (weighted avg. strike price of C$0.89) 30.3M Retail & Other 66.3% Fully Diluted Shares Outstanding 516.3M Market Capitalization (Basic) C$233.3M Cash & ST Investments (as of May 31, 2019) C$9.5M Investment in Fission 3.0 Corp. C$1.1M Enterprise Value (Basic) C$247.4M Share Price Performance (Last 12 Months) Research Coverage $0.80 4.0 Institution Analyst City $0.70 3.5 BMO Capital Markets Alex Pierce London $0.60 3.0 Share Price (C$) Tyron $0.50 2.5 Volume (M) Cormark Securities Toronto Breytenbach $0.40 2.0 Eight Capital David Talbot Toronto $0.30 1.5 $0.20 1.0 Haywood Securities Colin Healey Vancouver $0.10 0.5 H.C. Wainwright & Co. Heiko Ihle New York $0.00 0.0 Derek Jul-18 Dec-18 Jun-18 Sep-18 Nov-18 Apr-19 Red Cloud Klondike Strike Toronto Feb-19 Mar-19 Jan-19 May-18 May-19 Aug-18 Oct-18 Macpherson TSX: FCU OTCQX: FCUUF 4
Award Winning Project and Team Management Management cont’ Devinder Randhawa, Chairman & CEO Ray Ashley, VP Exploration • Fission Energy founding CEO and chairman from 2007 to 2013 leading company to Tier One status Paul Charlish, CFO & Corporate • Finance Monthly ‘Dealmaker of the Year 2013’, Secretary Northern Miner ‘Person of the Year 2013’ • Founder of Pacific Asia China Energy, sold for $34M Directors William Marsh, Lead Director Ross McElroy, President & COO, Director • Formerly with Cameco, Areva, BHP Billiton Frank Estergaard, Director • PDAC 2014 ‘Bill Dennis Award for Exploration Success’, Northern Miner ‘Person of the Year Robby Chang, Director 2013’ • Significant role in 4 major uranium discoveries in Darian Yip, Director Athabasca Basin, incl. Fission’s Waterbury Lake & PLS Deshao Chen, Director • Professional geologist of 30+ years experience Shiming Ma, Director TSX: FCU OTCQX: FCUUF 5
Building Shareholder Value Since 1996 2013 Fission Uranium Corp. • Takeover of Alpha Minerals 2007 • Triple R Deposit: discovered Fission Energy Corp. (2012) • JV KEPCO (Korea) (C$15M) • Completed maiden reserve 1996 • J-Zone discovery & sale to estimate and PFS in April 2019 Denison Mines • Chinese Utility (CGN Mining) Strathmore Minerals Corp. buys 19.9% for C$82M • U3O8 spot price at US$7/lb • C$2M market cap to peak valuation of C$457M in 2007 • JV Sumitomo (Japan) (C$50M) Fission 3.0 Corp. (2013) • Project Generator with several high-potential projects: drilling- Energy Fuels Takeout (2013) boulders-geochem-geophysics- showings in Athabasca • Rhyolite to spend C$22M to earn-in 80% of Macusani Assets, Peru TSX: FCU OTCQX: FCUUF 6
Patterson Lake South (PLS) Project Overview Ownership • 100% owned by Fission Uranium PLS Project Location • 31,039 ha property located in the southwest margin of the Athabasca Basin in northern Saskatchewan • Accessible by all-weather Highway 955 • Strong government support at all levels • Straight-forward permitting process Triple R • Structurally controlled, east-west trending, sub- Deposit vertical high-grade uranium deposit • 5 mineralized zones over a 3.2 km strike • High grade mineralization starting at ~50 m Reserve and Resource Estimate (April 2019) depth Category Ore Grade Contained Metal • Zones are open in several directions 000 tonnes % U3O8 g/t Au 000 lbs U3O8 000 oz Au April 2019 • 6-year open pit mine followed by 2 years of Probable Reserves PFS (OP/UG) underground mining (both at 1,000 tpd) Open pit 2,296 1.62 82,262 • Based exclusively on R780E and R00E zones Underground 592 0.63 8,236 Total Probable 2,888 1.42 90,500 • 97.7% recovery rate Indicated Resources • LOM avg. production of 11M lbs/year U3O8 Open pit 1,609 2.33 0.58 82,753 30.1 ‒ 14.4M lbs/year U3O8 over first 5 years Underground 931 1.02 0.48 21,015 14.3 • Cash costs of US$6.77/lb U3O8 Total Indicated 2,540 1.85 0.49 103,768 44.4 • 4-year construction period with initial capex of Inferred Resources C$1.5B Open pit 40 0.62 0.24 551 0.3 • NPV8% (pre-tax) of C$1.32B and IRR (pre-tax) of Underground 1,198 1.23 0.50 32,334 19.3 29% at US$50/lb U3O8 and US$1:C$0.75 Total Inferred 1,238 1.20 0.49 32,886 19.6 TSX: FCU OTCQX: FCUUF 7
Athabasca: The Premier High-Grade Uranium District Average Grade (% U3O8) ENVIRONMENT • Political stability • Pro-mining • Permitting INFRASTRUCTURE • Mills nearby • Power grid • Highways & airplane access EXPERIENCE • 60+ years of mining • Supplies 22% of the world’s uranium • Saskatchewan was ranked as #3 jurisdiction in the world for mining investment in 2018 by the Fraser Institute TSX: FCU OTCQX: FCUUF 9
Triple R Deposit 3.18 km east-west strike length • Structurally controlled, east-west trending, sub-vertical, high-grade uranium deposit • ~50 m starting depth of high-grade deposits ‒ Overlain by 50 m to 60 m of sandy overburden, with high grade mineralization located near the bedrock-overburden contact • Five separate mineralized zones (R1515W, R840W, R00E, R780E and R1620E) over a 3.2 km strike (drill defined) mineralized system ‒ Western Zones: R1515W, R840W and R00E are on land with 55 m to 100 m of overburden ‒ Eastern Zones: R780E and R1620E zones are beneath Patterson Lake at generally
Low Hanging Fruit Picked First Depleted Fission Triple R Cameco Orano Midwest Denison McArthur NexGen Producing Orano Phoenix River Arrow Orano Cameco Cameco Orano Cluff Key McClean Rio Tinto Cameco Cigar Shea Advanced Lake Lake Lake Roughrider Millennium Lake Creek Unconformity Deposits Basement 100 Deposits 200 300 400 500 Exploration 600 “Sweet-Spot” 700 800 900 * Based on company information TSX: FCU OTCQX: FCUUF 11
PLS Project April 2019 PFS (OP/UG) and April 2019 PEA (UG Only) OP/UG UG Only • April 2019 PFS (OP/UG) cash costs of C$9.03/lb Units (PFS Case) (PEA Case) is 45% lower than the 2015 PEA (C$16.50/lb) Mine Type 6 years OP 7.3 years UG 2 years UG • Indicated resources grew 18% from previous Mine Life Years 8.2 7.3 estimate (February 2018) Construction Period Years 4 years 3 years • Initial reserve estimate of 90.5M lbs U3O8 at Ore Mined M tonnes 2.89 2.55 LOM Avg. Head Grade % U3O8 1.42 1.64 1.42% from R00E and R780E Zones LOM Production M lbs U3O8 90.5 81.4 • April 2019 PFS demonstrates the flexibility of Avg. LOM Annual Production M lbs U3O8 11.0 11.2 Operating Costs C$/tonne $274 $335 future development of the Triple R deposit C$/lb U3O8 $9.03 $9.57 ‒ Potential to develop mine as combination open pit/ Initial Capital Cost C$M $1,498 $1,194 underground or underground only LOM Sustaining Capital Cost C$M $137 $258 ‒ OP includes construction of a sand dyke and Project Economics at US$50/lb U3O8 and C$1.00:US$0.75 plasticized cement slurry cut-off wall into Patterson Pre-Tax Cash Flow C$M $2,910 $2,587 After-Tax Cash Flow C$M $1,759 $1,533 Lake After-Tax NPV8% C$M $693 $696 ‒ UG involves sinking shafts on land and developing After-Tax IRR 21% 26% underground workings below Patterson Lake • April 2019 PFS based exclusively on indicated resources from R00E and R780E zones TSX: FCU OTCQX: FCUUF 12
PLS Project Trade-Off Between Hybrid (OP/UG) and UG Development Options • Both scenarios results in bottom quartile cash costs. Base Case scenario 15M lbs U3O8 of annual production over first 5 years, and a high IRR at a US$50/lb uranium price April 2019 PFS – Hybrid (OP/UG) April 2019 PEA - UG Only Capital Cost • Does not require construction of a sand dyke and plasticized cement slurry cut-off wall • ~C$400M (20%) lower initial capex • Eliminates pre-stripping • Shorter construction period LOM Production • Access additional 9.1M lbs of reserves • 11% increase in LOM U3O8 production • Extends mine life by ~1 year Operating Costs • Modestly lower cash costs over LOM (~6%) Permitting • Reduces permitting time and costs • Potentially lower environmental impact and reclamation costs Project Economics • 15% higher LOM free cash flow (after-tax) • Higher IRR (26% vs. 21%) TSX: FCU OTCQX: FCUUF 13
PLS Project Project Enhancement Opportunities and Next Steps Excellent opportunity to upgrade resource base Next Steps and extend mine life • UG only scenario to PFS level (by Summer • Addition of Zones to Mine Plan: three other 2019) mineralized zones (R1515W, R840W and R1620E) • Advance towards Feasibility Study (toward end along strike requiring drilling to upgrade inferred to of 2020) indicated ‒ Conversion to indicated from R780E, R00E (20 holes) • Zone Expansion: R780E Zone is open at depth and and zones outside of PFS resource (40 holes in-fill) ‒ Feasibility level mine design, scheduling and cost along plunge to east with opportunity to extend UG estimation mine life ‒ Permitting • Mineralization Upgrade: excludes [ ] of existing inferred resources from R780E and R00E zones R00E R780E TSX: FCU OTCQX: FCUUF 14
PLS Project Well Positioned Amongst the Largest Uranium Mines in the World Largest Uranium Mines by 2016 Production • Under the PFS Base Case, the Mining 2016 Production Percent of Rank Mine/Project Location Method (M lbs U3O8) Total PLS Project is forecast to 1 McArthur River Canada UG 18.0 11% produce 15 million lbs of 2 Cigar Lake Canada UG 17.3 11% PLS 3 Katco Kazakhstan ISR 10.4 7% Project annual U3O8 production over the 4 Olympic Dam Australia UG 9.6 6% first five years 5 Central Mining District Uzbekistan ISR 6.2 4% • PLS Project is positioned to be 6 Inkai Kazakhstan ISR 5.7 4% 7 Somair Niger OP 5.6 4% one of largest uranium mines as 8 Karatau Kazakhstan ISR 5.4 3% well as the largest open pit mine 9 Ranger Australia OP 5.2 3% 10 South Inkai Kazakhstan ISR 5.1 3% in the world - Remaining - - 69.2 44% • Under the PFS Base Case, LOM Total 157.7 100% Source: S&P Global Market Intelligence avg. cash costs of US$6.77/lb, 2016 Uranium Industry Cash Cost Curve which would be near the bottom $50 First Quartile Second Quartile Third Quartile Fourth Quartile of the global industry cash cost Total Cash Cost (US$/lb) $40 curve and amongst the lowest of PLS Project • 15M lbs/yr U308 (first 5 all major uranium mines $30 years) • US$6.77/lb LOM cash $20 costs $10 $0 0 20 40 60 80 100 120 U308 Production (M lbs) Source: S&P Global Market Intelligence TSX: FCU OTCQX: FCUUF 15
Exploration Potential • 31,039 ha property in the Athabasca Basin district, with only a small portion explored to date • Triple R deposit is open in multiple directions, particularly westwards, towards the high-grade boulder field • Triple R deposit (3.2 km strike) is part of a huge mineralized trend, with over 100 EM conductors and multiple exploration hotspots • Most awarded uranium exploration company with industry-leading, multi-discipline technical team TSX: FCU OTCQX: FCUUF 16
Comparable Company Analysis • Fission Uranium trades at a P/NAV of 0.26x¹, which is ~19% below the average P/NAV multiple uranium exploration and development companies • Fission Uranium should warrant a premium valuation given the size, high-grade and expansion potential of the PLS Project and land position in the prolific Athabasca Basin • Substantial re-rating opportunity as the company continues to advance, de-risk and grow the PLS Project P/NAV Multiples of Uranium Producers and Development Companies1 Uranium Producers Uranium Exploration and Development Companies 0.90x 0.73x 0.66x Average: 0.63x 0.59x 0.49x 0.49x 0.47x 0.43x 0.42x 0.30x 0.30x Average: 0.32x 0.26x 0.21x 0.21x 0.14x Cameco Energy Energy Paladin Peninsula Uranium Laramide Denison NexGen UEX Azarga Fission Vimy Berkeley Plateau 2 Resources Fuels Energy Energy Uranium Note: as at May 1, 2019 1. NAVPS for all other companies are consensus research 2. Consensus NAVPS for Fission Uranium is based on estimates from Eight Capital and H.C. Wainwright Source: Capital IQ and Thomson TSX: FCU OTCQX: FCUUF 17
Why Fission? Award winning project World class Large, shallow, high and management team uranium district grade Triple R Deposit Discovered two world-class Triple R on a 3.2 km Maiden reserve estimate of uranium deposits since 2010 mineralized trend - largest 90.5M lbs U3O8 at 1.42% U3O8 lateral footprint in the Athabasca Basin One of the world’s largest and Near-term resource Untapped exploration lowest cost uranium projects growth potential April 2019 PFS outlines OP/UG mine Future 2019 drill program Majority of 31,039 ha property producing 15M lbs/yr U3O8 and LOM Triple R deposit is open in remains unexplored avg. cash costs of US$6.77/lb multiple directions 100s of potential drill targets TSX: FCU OTCQX: FCUUF 18
Reactor Builds at 25 year high Appendix: Uranium Market
Electricity Demand +150% by 2035 Reactor Builds at 447 Current Reactors Operation 56 Under Construction 111 Planned 328 Proposed 25 year high RUSSIA: +52 CHINA: +226 EUROPE: +13 USA: +25 SAUDI ARABIA: +16 E. ASIA: +17 UAE: +4 INDIA: +49 (+ indicates reactors under construction, planned & proposed) More reactors operating in 2018 More Japanese reactors coming online Middle East (home of Big Oil) aggressively than in any other time in history due to strong regulator support securing nuclear energy supply TSX: FCU OTCQX: FCUUF 20
Moving Forward Growing Electrical Demands and Nuclear Solutions • Electricity demand growing at rapid pace and increasingly integrated into daily life • As demand for electricity increases, demand for clean energy is paramount • EV’s entering the marketplace by major automobile manufactures • Bitcoin POW mechanism annual electric consumption same as Switzerland • Small Modular Reactors (SMR’s) – implementation is a game changer Small Modular Reactors (SMR’s) - Game Changing Technology • Assembly line construction will standardize build and reduce construction risk and decrease cost (analogous to Ford’s Model T) • Shorter construction time (3 years vs. 10 years) • Transport modular components reduces major transport requirements • Small footprint allows smaller safety zones around reactors • Incremental power thus suitable for more countries, more locations 21 Source: World Nuclear News TSX: FCU OTCQX: FCUUF 21
Plans for New Reactors Worldwide Source: https://pris.iaea.org/pris/ Reactors: Uranium Requirements & Future Nuclear Power Source: WNA May 2019 447 Nuclear power reactors in 111 Nuclear power reactors operation planned 56 Nuclear power reactors under 328 Nuclear power reactors construction proposed TSX: FCU OTCQX: FCUUF 22
China’s Strong Nuclear Buildout China’s Reactor Construction Boom 2030 Estimate • 150 reactors in operation* 240 • 50 under construction* 33 CGN, Fission’s Strategic Partner • 19 operating reactors* • Important domestic and global builder of reactors (23 new reactors under construction world wide)* • Owns 19.9% of Fission • Offtake agreement - 20% of annual uranium production from PLS; option to purchase additional 15% * CGN Personal communication Beijing, China: Air Quality Red Alert TSX: FCU OTCQX: FCUUF 23
Japanese Recovery Continuing 2010 2016 2030 Nuclear 25% 2% 20-22% “Our resource-poor country cannot do without nuclear power to secure the stability of energy supply while considering what makes economic sense and the issue of climate change.” Shinzo Abe, re-elected Prime Minister of Japan Oct. 2107 • 9 reactors have currently • 2 reactors under restarted construction • 17 reactors currently in the • 8 new reactors planned and process of restart approval proposed Source: World Nuclear Association (February 2019) TSX: FCU OTCQX: FCUUF 24
Supply Side Vulnerable to Geopolitical Instabilities • Nearly 60% of primary supply comes from politically unstable countries • Saskatchewan, Canada: ‒ Ranked #3 mining investment jurisdiction in 2018 by Fraser Institute ‒ Increased share of global production from 17% to 22% in 2016 Other Countries Australia 14.1% Kazakhstan 10.2% (to reduce planned 39% uranium production by 20%) 22% Politically unstable Canada 13.8% Permitting issues (indefinite 7.9% Stable & supportive suspensions at McArthur River) Africa Russia & E. Europe All figures from Uranium Investing News (based on World Nuclear Association country reports) TSX: FCU OTCQX: FCUUF 25
1B lbs U3O8 Uncovered in Next 8 Years and Supply Still Being Cut Low U3O8 price impacts low cost producers: • Kazakhstan production cut by 20% over three years starting in 2018 • Production indefinitely suspended at McArthur River • Canadian operations shut down at Rabbit Lake and Eagle Point • Production cuts at Cigar Lake U3O8 Mlbs 250 Utilities are increasingly uncovered 200 150 100 50 0 2019 2020 2021 2022 2023 2024 2025 Uncovered US Utilities Uncovered Non-Us Utilities Covered Source: UxC TSX: FCU OTCQX: FCUUF 26
Pressure is Growing for Return to Contracting • Utilities buy high and sell low • Lack of long-term contracting leaves utilities exposed • For contracting to return, prices will have to rise • The longer the wait, the stronger the upwards pressure on pricing TSX: FCU OTCQX: FCUUF 27
Fission Uranium Corp. Phone: +1 250 868 8140 Toll Free: +1 877 868 8140 (North America) Website: www.fissionuranium.com Investor Relations: Email: ir@fissionuranium.com
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