The PEA considers an open-pit mine protected by a dyke and slurry wall. The mineral resource on which the PEA is based is located predominantly underneath Patterson Lake. We shall revisit these risk factors in the following, and assess the progress made during the five months since we last wrote about Fission Uranium.
In the same article, we also explained several underlying risk factors which we expected to be alleviated at least in part due to ongoing exploration and development activities. In our last article, we discussed this PEA in detail, and explained how this project was able to display an IRR of 34.2% after taxes on the strength of bonanza resource grades. We are of course referring to the PEA, which Fission released in September last year, and which outlined a challenging, yet profitable project with a mine life of 14 years. It not only hosts one of the highest-grade resources in the world, but it also hosts the only resource that has been shown by a NI 43-101 compliant study to be amenable to open-pit mining in the Athabasca Basin. Fission's flagship Triple R project is the notable exception. Several shallow high-grade deposits have been mined in the Athabasca Basin in the past, but currently operating mines and most projects target uranium deposits at depths only accessible via underground mining methods.
Fission uranium drill results update#
And in conjunction with an update of our investment thesis for Fission Uranium, we would also like to zoom out a bit and provide some greater context for Fission's Triple R project and explain how the company could fit into a scheme large enough to whet any major's appetite. Fission Uranium ( OTCQX:FCUUF) controls one of these strategic projects in the South-West Athabasca Basin, and in the present article, we would like to revisit a bullish call we made on this company earlier this year.
The market seems to agree judging from the continued share price strength for the juniors controlling the few strategic assets in the Athabasca Basin at a time when the sector as a whole has been under pressure. It is these M&A opportunities that we believe offer a profitable way to play uranium, even if the uranium bear stays put. There has been very little corporate activity in the Athabasca Basin ever since Rio Tinto ( RIO) outbid Cameco on the Roughrider deposit in 2011, and we strongly believe that the renewed Athabasca focus by CCJ will crystallize some pent-up opportunities with regards to the few strategic projects large enough to move the needle for Cameco, or its ubiquitous rivals Areva ( OTC:ARVCF ) and Rio Tinto. Increased exploration and development activities in the Athabasca Basin will be a logical consequence of this focus, including Brownfield activities at the existing mines, but perhaps more importantly for investors uptick in M&A activities to shore up development pipelines.
Fission uranium drill results full#
Ramping Cigar Lake up to full production will not be sufficient to offset mine suspensions at the company's US operations and Rabbit Lake, but it underpins the stated focus on high-grade and low-cost uranium production in the Athabasca Basin. A capacity increase at the McClean Lake mill has recently been granted, paving the way for full production at Cigar Lake in 2017. The major operates two large and profitable mines here (McArthur River and Cigar Lake), and the company is already walking its talk with regards to its Canadian asset base.
Gitzel says Canada, he really refers to the Athabasca Basin. That's why we are focused on Canada and Kazakhstan where our lowest-cost production is located." "We want to be ready if the market is lower for longer and we will be profitable even if the price stays low. Take Cameco ( CCJ) for example and consider this largest listed uranium miner's bear market strategy, elaborated in this very instructive interview with CEO Mr. And it is here that we see opportunity in this space. Uranium perma bulls will be right one day, but meanwhile, industry insiders acknowledge a weak outlook, and uranium producers are positioning their businesses accordingly. The uranium bear market has continued unabated year-to-date and prices for the metal are presently printing decade lows.
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