Archives For dev-randhawa

There’s a lot of excitement at Fission right now as we prepare to drill the first holes of a $12M, 63 hole summer program at PLS. If you haven’t seen it yet, it’s worth checking out the press release. We’ve divided our focus into 70% expansion and 30% exploration. Here’s why:

We’re aiming to have a NI43-101 compliant resource estimate towards the end of this year. We currently have 158 holes that have intersected mineralization and there are plenty of analyst models and reports out there seeking to gage how much uranium we’ve found so far. However, for the official numbers we need to put more holes in the ground and commission a third party technical report and estimate.

We’ll be using Roscoe Postle Associates Inc. (RPA), of Toronto, Ontario, to complete the Mineral Resource estimate and supporting NI 43-101 Technical Report for PLS. This is the same company that handled the NI 43-101 technical report and Mineral Resource estimate for Phoenix A and B deposits for Denison Mines.

With a view to specific timelines, our belief is that once the summer program’s expansion drilling and assays are finished, we should be in a position to complete the initial mineral resource estimate for the R00E and R780E Zones. Both of these zones have seen superb growth. In the case of R780E, the zone has grown so much and so quickly that it has merged with three other mineralized zones to create a single, very large zone of high-grade mineralization.

However, as I’m sure you’ll agree, PLS is a project with simply remarkable potential that goes beyond the mineralization we’ve identified thus far. We are talking about a property with over 100 conductors and, with the results of geophysics and radon surveys earlier this year, we have a strong list of highly prospective regional targets that we will be testing.

I’ve pasted below the key technical information announced in the release along with a summary of the mineralized trend so far. I also recommend you check out the project pages and maps to get a good feel for the discovery as it stands before this new, aggressive drill program.

20,330m of drilling utilizing up to 4 diamond drill core rigs.
70% of the drilling will be expansion/delineation-style: 43 multiple close-spaced drill holes testing outwards from the known locations of mineralization to establish the width and strike of the main R780E zone. This drilling will be conducted using barges.
30% of the drilling will be exploration-style, testing high priority electromagnetic (EM) conductors. These conductor targets will be prioritized based on ground geophysics interpretation and results of the radon survey (see news release April 28, 2014).
PLS Mineralized Trend Summary

Uranium mineralization at PLS has been traced by core drilling over 2.24km of east-west strike length in five separate mineralized “zones” from line 615W (PLS13-124) to line 1620E (PLS14-196). From west to east, these zones are; R600W, R00E, R780E, R1155E and R1620E. The former R390E, R585 and R945E zones have been merged into the R780E zone by successful winter drilling. Mineralization remains open along strike both to the western and eastern extents. Mineralization is both located within and associated with a metasedimentary lithologic corridor, bounded to the south by the PL-3B basement Electro-Magnetic (EM) Conductor.

Please get in touch with any questions and be sure to connect with us on Twitter and LinkedIn.

Ross McElroy, President, COO and Chief Geologist

Cameco’s Millennium Mine project is on hold and with it, 50m lbs of uranium. Specifically, the uranium industry’s largest producer has withdrawn its application to build and operate the new underground uranium mine in northern Saskatchewan. The company can (and no doubt will) ask the Canadian Nuclear Safety Commission to consider its license application at a later date but for now the mine will not be moving forward.

Any delay in future production is good for Fission. This is particularly so when the delay relates to underground mines which are expensive to build and expensive to run. In comparison, PLS has the type of depths normally associated with an open pit mine. Measured against underground mining, open pit operations are quick to build, cost-effective to operate and have the ability to turn production up and down as needed. In other words, when it comes time to increase production capability, open pit mines are going to be very attractive to producers.

It’s also worth noting that Cameco’s profit is up for Q1, 2014. That’s not a coincidence. Putting a costly future mine on hold is about positioning themselves for when the fundamentals of the nuclear sector push the uranium market upwards. I’ll be blogging more on this subject shortly but for now let me reiterate two points: Japan is taking longer to restart their reactors than many expected but restart they will. Also, the number of reactors under construction and the even larger number currently going through the planning and proposal stages means we are ultimately looking at a net growth in reactors over the long term.

In the meantime, Fission’s technical team is continuing to prep for the upcoming summer drill program. We also still have a lot of assays to come from our highly successful winter program, which connected five zones and extended the strike length to 2.24km, so keep a sharp eye out for news as the results come back from the lab.

Dev Randhawa, CEO of Fission Uranium

It’s what almost every European industry insider is talking about but almost none of the analysts are writing about. I’m talking about what will happen if the international community hits Russia with sanctions and if those sanctions include uranium.

According to the Euratom Supply Agency (http://ec.europa.eu/euratom/index.html), Russia supplies as much as 40% of Europe’s enriched fuel because there is very little natural uranium in Europe. The French are big customers of Russia and not only does France rely on nuclear for most of their energy requirements but they also export energy to Germany.

We’ve not seen uranium on the list of sanctions yet but I know that utilities are seriously concerned. It’s hard to say what’s ultimately going to happen but it’s a scary situation for European utilities that have uranium sitting in Russia with converters. It’s also a sharp reminder of how quickly things can happen. Just look at the damage to Japan’s economy because they took their fleet of reactors offline. Imagine that happening to France and the UK.

The uranium sector has relied on secondary uranium supply for many years because mining production has not been able to keep up with demand. When it comes to re-enriching tails and underfeeding – two big secondary sources – Russia is a major player. If sanctions put a halt on secondary sources, there will be huge disruption in the global supply chain and even greater upwards pressure on the price of uranium.

When it comes to security of supply issues, the uranium sector is vulnerable and recent events mean a lot of people in the industry are starting to pay close attention to where their supply is coming from.

Anthony Milewski, Fission Uranium, Advisor to the Board

The spot price makes uranium an emotional commodity. It shouldn’t but it does. When I first entered the uranium sector the spot price was $7 per pound. A few years later, a string of reactor lifetime extensions and low uranium inventories pushed the spot price up to $140 per pound. In both cases, investor perception was heavily involved. However, the spot price has very little to do with how most uranium is bought and sold. For that, you need to look at the long-term contract price. That price is not only higher but is influenced by the market fundamentals.

China, Russia, India, the US, South Korea, Argentina, Brazil, France, Finland… they are all building reactors. Even UAE, the home of big oil, is building nuclear reactors. In fact, there are more reactors being built than before Fukushima. Demand is growing and will continue to grow. Fact.

At the same time, supply has been impacted by high-profile delays to international production and the end of the HEU contract. Fact.

Now let’s look at the fundamentals of our asset at PLS. High-grade, shallow depth, the most stable pro-uranium mining district in the world. We have the most exciting uranium discovery out there and it will continue to grow. Fact.

I’ve been in the uranium sector since 1996. Fluctuations in the spot price mean Uranium will remain an emotional commodity but it will also remain one with strong underlying market fundamentals. As we complete our remaining analysis of a drill program that has extended our strike length to 2.24km, connected four high-grade zones and discovery a new zone with a 465m step out, it’s worth remembering the market and company fundamentals we are operating in.

Dev Randhawa, CEO of Fission Uranium

Japan has announced its new Basic Energy Plan. It’s something they revise every three years and is used to set energy policy for the next twenty years. Here’s what the lead article of The Japan Times had to say:

“The Cabinet of Prime Minister Shinzo Abe on Friday officially abandoned the zero-nuclear goal of the previous administration by adopting a new basic energy policy that pledges to push for restarting the reactors idled in the wake of the 2011 Fukushima meltdowns.”

To be honest, I don’t see this as a revelation for anyone watching the news coming out of Japan over the last few months. It’s clear that the country will begin restarting its fleet of reactors this year. However, for those who aren’t familiar with the fundamentals of Japan’s situation, here are some useful takeaways from the article:

Japan’s dependency on fossil fuels has increased to about 90 percent from the pre-(Fukushima) disaster level of 60 percent as far as electricity is concerned
The cost of imported fuel has increased by ¥3.6 trillion a year from pre-Fukushima levels.
The government emphasizes Japan’s heavy dependence on fossil fuels imported from the Middle East, arguing “securing stable energy is indispensable for national security.”
Anti-nuclear parties and candidates in Japan have performed poorly in recent major elections, including the 2012 Lower House election, the 2013 Upper House poll and the 2014 Tokyo gubernatorial race.
Of course, the question of ‘when’ the restarts will begin has not yet been answered, though over the last few weeks I’ve seen estimates ranging from May through to September. The Japan Times notes that Japan’s nuclear regulator (NRA) is conducting tests on two reactors at the Sendai Nuclear Power Plant and cites August as a possible restart date.

Japanese restarts will be good for the nuclear sector, and thus the uranium market, on several levels but for me, I actually think what’s going on with uranium supply is just as interesting. If you’ve not done so already, check out this guest blog post by Anthony Mileski – one of Fission Uranium’s Advisors. He’s well-connected with utilities and producers and has some interesting things to say on the vulnerability of worldwide uranium supply.

As ever, please don’t hesitate to get in touch and be sure to connect with us on Twitter and LinkedIn.

Dev Randhawa

On March 26, a local court in Kazakhstan invalidated the subsoil use contracts for Uranium One Inc´s two key joint ventures – Betpak Dala and Kyzylkum. Whatever the legal justification, the incident highlights how the volatile nature of the global uranium supply chain which relies on difficult jurisdictions for the majority of primary and secondary uranium supply.

If you weren´t already aware, Kazakhstan is the world´s largest source of uranium and when they decide to put the brakes on, it matters.

Let´s jump to Niger. After two years of negotiation, Areva has still been unable to renew their agreement with the government. 40% of Areva´s production comes from Niger and it´s said that one in three light bulbs in France is powered by uranium from Niger.

Now let´s look at some production delays: the Olympic Dam expansion is on hold – that´s 32M lbs per year, Imouraren – that´s another 11M lbs per year and then Trekkopje for 8M lbs. These three alone represent the majority of near-term production growth.

Uranium demand may be strong and growing but the opposite is true for the supply side. The fact is, uranium production is concentrated in a surprisingly small number of countries and, with over half of global supply coming from difficult jurisdictions, the potential for disruption to the world´s uranium supply chain is very real. Politics, civil unrest and even the weather can cause serious problems.

Admittedly, for a utility running a nuclear power station, uranium is actually a very small part of operational costs but it´s the most important. You cannot run a reactor without it and that´s why the bulk of uranium is bought and sold through long-term contracting. However, we are in a situation where approximately 40 percent of world production comes from two countries in Eastern Europe (Kazakhstan and Uzbekistan) and another eight percent from Nigeria. When it comes to secondary sources – Russia accounts for approximately 50% of supply.

Any time you are forced to rely on just a few sources for a crucial resource you are running serious risks to the security of supply. The bottom line is that upwards pressure on uranium prices is increasing as is the requirement for uranium supply to become more diversified and more stable.

That´s why China, with 29 reactors under construction and another 57 in the planning phase, is so keen to acquire a piece of uranium projects and mines in Canada – they are looking for ways to secure their supply. With a stable political infrastructure at local, provincial and national level, a 40 year history of uranium mining and the highest uranium grades in the world, Canada is the world´s second largest uranium producer for good reason.

Every pound of Canadian production comes from the Athabasca Basin, Saskatchewan, where of course Fission Uranium has its shallow-depth, high-grade discovery.

Based on recent events alone, uranium supply is unlikely to stabilize any time soon but that´s good news for Canadian explorers with serious pounds in the ground.

Anthony Milewski, Fission Uranium, Advisor to the Board

Fission Uranium: High grades at shallow depth… the PLS discovery from Fission Uranium on Vimeo.

We had a film crew up at PLS in late Jan 2014 and they caught the drilling of hole PLS14-129 on film. Scint results for the hole showed over 36m of total composite off-scale radioactivity – the highest ever recorded at PLS and, I suspect, in the Basin itself.

Ross McElroy, chief geologist for Fission 3.0, shares his thoughts on the company’s exploration plans for 2014.