Fission Uranium (TSX: FCU) President Ross McElroy on PLS Summer Drill Program Results that set the Stage for a PFS Later this Year

September 26, 2018

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Gerardo Del Real: This is Gerardo Del Real with Resource Stock Digest. Joining me today is the President, COO, and Chief Geologist for Fission Uranium (TSX: FCU)(OTC: FCUUF), Mr. Ross McElroy. Ross, how are you this afternoon?

Ross McElroy: Doing well, Gerardo. Thank you very much. It's a beautiful day here in Kelowna.

Gerardo Del Real: That's good to hear. That's good to hear. Listen, you had some good news this morning that I want to talk with you about. You hit on nine high-grade holes, and you're obviously moving towards that pre-feasibility study, which I understand will be out in Q4 of this year. It's a long-anticipated study. You're doing a great job of working toward getting a lot of those inferred pounds into the indicated category. Let's talk about the results today, Ross.

Ross McElroy: You bet. We are very pleased with the results. These were the nine holes that we drilled this summer program. We had all holes focusing on the R780 zone. That's the main part of the Triple R deposit, where earlier resource estimates had close to about 110 million pounds of U308 in there, primarily in the indicated category. But there were some portions of the 780 in the key part of the high-grade domain that were previously classified as inferred, and so they were the target for what we were drilling this summer.

Essentially, the plan is to be able to convert those inferred areas in that high-grade domain into indicated. In other words, we needed some more drill density, so that's what those nine holes did. We've still got to go through the process to get the resource estimate and see exactly how that's impacted, but I suspect it should be positive.

Everything we had with the drill results, as you saw in the release this morning, spectacular. We knew there was good mineralization in that area anyways, but in a lot of cases we even exceeded our own expectations, so really quite pleased with the results that we had. We do have, I believe, the drill density necessary to be able to convert those over, but we still go through the process to do a new resource update. Essentially, the purpose of that new resource update in the 780 zone is for the pre-feasibility study.

The resource itself that we can use in a pre-feasibility has to be indicated and higher classification, so that's the key. Inferred doesn't make it through the engineering model, the cash flow model on pre-feasibility. So that was really what the aim was. The fact that we hit in every single hole and we got mineralization where we expected and it exceeded, that was truly a good result for this summer program.

Gerardo Del Real: You're still expecting to release the pre-feasibility study in Q4 of this year. Is that accurate, Ross?

Ross McElroy: That is accurate. We've done all the field work necessary. Between what we did this past winter and then this summer as well, we've completed all the geotechnical work needed for mine design and pit wall design, and now we've upgraded the resource – hopefully, we've upgraded the resource – with the drilling this summer. The metallurgical work's all done. All the boxes had been ticked, and it's really just a matter of compiling all the results into a comprehensive report, and we're on target to be able to deliver that by Q4 of this calendar year.

Gerardo Del Real: Ross, before I let you go I've got to get your take on the overall sentiment in the uranium space. The spot price is now up, I believe, something along the lines of 33 to 35% from the 2018 lows. I've got to imagine that you're getting more calls. You also have a very important strategic partner that I know has their finger on the pulse. How are things looking from your end?

Ross McElroy: They're looking good. I think it's obvious we're starting to see a pattern now set into the uranium market that it's much better sentiment all around. I wouldn't say it's bullish at this point, but it's certainly a vast improvement from where it's been.

I think what's key for us here is to be able to hold those prices higher. The price of the commodity seems to be ticking up on a regular basis. We didn't want to see a short-lived phenomenon, where we had a little bit of pop in the price and then it just falls down, as we've had a few of those false starts in last couple of years. This seems much more sustained. We think that there's a lot more room to grow. $27 and change, which it is now in the spot market, there's still a long way to go. To put any new meaningful production online, even globally, we're going to have to see prices north of $40, $50, $60, in that realm. And I think that those days are coming. Hopefully, we're on the path towards that right now.

And you're right that our strategic partner, CGN – one of the large state-owned utilities of China, that have a 20% investment in our company – they're very bullish obviously on the overall sector, which is why they have made their significant investment that they did have. They told us before mid-2018 we would start to see a tick upwards in the price of the commodity, and we're seeing that.

I suppose their vision is as good as anybody's, but we're just really pleased to see what I think is really a fundamental turnaround in the whole sector. I think uranium's starting to be a place where investors are starting to want to pay attention, and with the results that we're delivering at PLS, hopefully our timing is perfect for where we are in the sector.

Gerardo Del Real: Good stuff, Ross. Thank you so much for taking time today. I look forward to getting you back on as soon as we start getting some of those results. I think it's going to surprise to the upside. I think the timing couldn't be better.

Ross McElroy: Well, we very much look forward to talking to you later and updating your listeners. Thank you very much.

Gerardo Del Real: Thanks again, Ross.

Ross McElroy: Great talking to you, Gerardo.

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