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Fission Uranium (TSX: FCU) President Ross McElroy on Hitting More High-Grade Uranium and Moving the Triple R Deposit Towards Pre-Feasibility

October 11, 2017

Gerardo Del Real: This is 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, how are you this morning?

Ross McElroy: Doing well, Gerardo. Thank you very much. Great to be with you today.

Gerardo Del Real: Well thank you for taking he time. You had some news yesterday, “Fission hits more high-grade mineralization 2.3 kilometers west of the R780E Zone.” I thought it was a great opportunity to summarize the success of the summer drill program now that it's wound up. And first off, congratulations. You did a heck of a job, and I think you were very conscientious of the tough uranium market that we're in and I got to say that shareholders have to be happy with the success rate and the efficiency with which you carried out the program. So congrats to you and the team.

Ross McElroy: Well thank you very much. I'm glad that you mentioned that. I mean it's something that we've been very mindful of and particularly this year, 2017. We even started watching very closely how we were spending money last year, 2016. I mean we've been in a prolonged downturn in the uranium sector. We expect it will increase significantly so in the hopefully near term, but for now we're mindful of the money that we have and we're trying to accomplish a number of objectives using money as smart as we can. Your comments are very much appreciated. It's certainly how we're trying to approach our programs, continue to advance the project, make new discoveries, move the whole project towards pre-feasibility and ultimately the longer term goal of having a project that looks like it can be into production and yet being very careful in this commodity sector in the cycle that we're in right now just how quickly we spend money to get there.

Gerardo Del Real: Absolutely. Now I got to say, you got to be happy with the results thus far. And if you could just provide a quick summary of the results of the summer program, but you have to be happy with the similarities that the 1515 Zone is showing to the 780 Zone, and of course we're seeing the width. You hit 95 meters of total composite mineralization at 1515 in this news release. Can you speak to that a bit, and I know it's early stage with 1515, but it's got to be encouraging?

Ross McElroy: It really is encouraging. We're quite happy with our 1515 West Zone, we just found it this past winter. We were following up some geochemical anomalies from the previous season, but when we finally hit high-grade in that zone this winter, I think we've had pretty good success in continuing to develop a meaningful zone. What we put out in our news release yesterday was the final three assays, three holes that were assays from the summer program. Exactly as you pointed out, we're seeing some terrific widths of mineralization. Total composite widths in one of the holes was 95 meters. And in the previous news release on the same zone, we had over 105 meters of total composite mineralization, so I mean it's pretty impressive. We like what we're seeing.

We see similarities in the style of mineralization on the 1515 West Zone overall where we see comparisons to the main R780 zone that holds the bulk of the Triple R resource. The similarities I would say are seeing stacked multiple lenses. You sort of have an en echelon pattern of lenses that really provide a lot of bulk of material out laterally, widths. We're seeing widths on particular lines up to 80 meters across, and we're seeing vertical extents that go well over 100 meters. This is the sort of thing that if we can continue to drill and expand on the 1515, we think that we'll be able to add some significant pounds to the overall resource with that type of success.

This summer, I think pretty good testament to the drilling, six holes out of the seven were mineralized, and some of them very well mineralized, including the widest mineralization that we've seen outside of the Triple R deposit. And again, as similar to the other zones, it's all shallow, so they're all within at least 150 meters of surface. Again, that's the kind of depth that we see as open-pittable, which ultimately means inexpensive mining operations down the road.

Gerardo Del Real: Absolutely. No absolutely, Ross. I couldn't agree more. What are the next steps? I have to imagine that you and the team are sitting down and thinking about the winter drill program. What do the next six months look like for Fission, Ross?

Ross McElroy: You're right, Gerardo. We are in the process right now of designing a winter program, conceptualizing what it will look like. I think it'll be sort of similar to what we're seeing in the summer 2017 program, where once again we're very mindful of how much we're spending, and yet still trying to accomplish the main goals, and that will be to move the main Triple R deposit towards pre-feasibility. Our timelines are still, as we've mentioned before, which is the end of 2018.

So we want to move that forward, which will include some more geotechnical drilling, possibly some high impact drilling within the zone that we can convert some inferred into indicated, maybe even grow the zone. We know that the high-grade zone on the eastern side of the deposit continues to plunge to depth, so we may be trying to chase that, grow things. But I think really it's trying to get the main Triple R deposit towards PFS. And at the same time, continue doing what we've done all the way along, which is continue to search for new, significant high-impact mineralizations such as we found in the R840 West Zone and more recently in the R1515 West Zone that we drilled this summer. We're going to continue to do that, look for new growth, and continue to move the project towards pre-feasibility.

Gerardo Del Real: Wonderful. Now, Ross, the last time we spoke, I believe it was the last time we talked about Fission's approach in using Corebox. I encourage everybody to go to the website. I find it very useful. That site is Just looking at it right now, how important is the continuity that you're seeing in the newer zone, and again I know that it's early, but you have to be again encouraged of the continuity that you're seeing at the 1515 Zone.

Ross McElroy: Very much so, and that's where these visualization softwares such as Corebox, I think is very important for investors to look at. They can see where the mineralization happens in 3D from hole to hole to hole, and so you can look at this thing, spin the deposit around, spin the zones around, and just see how they connect one to the other. And we're not looking at a bunch of blank holes sitting right in the middle and trying to imagine some weird connections that don't exist. It actually is very straightforward and this is what I like about that tool. It's something I use quite a bit to help us visualize what's happening with the project, but it's a straightforward and easy enough 3D visualization that any investor can go there and look and just see how continuous the mineralization is at different grade cutoffs, which is very important. You want to compare that, what we see on PLS with any other deposit, and you'll really see why this stands out to be such an important project, and I think one of the important reasons why we like to use software such as Corebox for visualizations.

Gerardo Del Real: Excellent. Now you have some very supportive shareholders that take a long-term view. I happen to think that 2018 is going to be a game changer in the uranium space. What does the treasury look like and what are your long-term shareholders saying to you behind the scenes, Ross?

Ross McElroy: Well first of all on the treasury, I think we're still entering 2018 with around $40 to $45 million dollars in the treasury. Our goal has been to see how we can use the funds that we have and take us forward over the next say two and a half years or so looking forward, and still accomplish the major goals that we already discussed. I think that that's a key part of where we're going with the treasury. And sorry, your other question?

Gerardo Del Real: You had obviously an agreement with CGN. I believe that they are in at $0.85 as of the latest financing. I believe that the last bit of cash that you raised was approximately $82 or $83 million if I'm not mistaken. How supportive have they been, despite the downturn? I know they take a long-term approach. I know they understand the cyclicality of the business. I mentioned that I think 2018 is going to be a game changer for the uranium space, but are you in touch with them or do they continue to be supportive?

Ross McElroy: CGN has been a great partner. In fact, we'll be meeting with them in Beijing in just a couple of weeks from now. They've been a very good partner. They understand the whole uranium sector better than anybody else. They're very supportive of us. I think that shows up in just how much they support this company, this project, all the work that we're doing going forward. They've just been an excellent partner to have. We appreciate their vision of the uranium sector. I think everybody knows it is bound to change and be a much more positive sector to be in, hopefully within the next short term, and I'm in the camp that you are. I think 2018 will be an important year where we start to see some significant changes, hopefully an increase in the price of uranium.

In fact, I'll just make a quick point that I was at the WNA Conference in London about a month ago, and I think we heard a bit more of an upbeat feeling to the sector than we've certainly had over the last couple of years. You start seeing people recognizing the fact that we are very likely off the bottom of the sector and that there's going to be utilities coming back in a more meaningful way hopefully soon, the reactor builds are real, China is such an important player in that part of the sector, and CGN, one of the two state owned utilities, in fact maybe the bigger one of the two, is a huge backer of our project and they want us to move forward with it.

I'd say that we're really encouraged by what we're seeing and hearing from our partners and our other major shareholders. I think that uranium is going to be the commodity to be involved in in the very near term future. Let's hope 2018 is the timeframe.

Gerardo Del Real: Well I know a lot of the so called smart money and some of the more contrarian visionaries in our space, in our business, have begun to position themselves very aggressively during the fall time, and I expect that will continue going into 2018. Well we'll see how that works out. Ross, thank you again for your time. Is there anything else that you'd like to add?

Ross McElroy: No that's great. I'm glad that we're able to touch on so many issues, so many important issues for our shareholders, and they could hear where we're at on the project and what our main milestones are in the near future. So thank you very much, Gerardo, for taking the time to talk to us.

Gerardo Del Real: I appreciate your insight, Ross. Again, thank you and congratulations again on a very efficient and successful summer program. Looking forward to the details of the winter program once you finalize those.

Ross McElroy: Very good. Thank you very much.

Gerardo Del Real: Thank you.

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