Fission Uranium (TSX: FCU) President Ross McElroy on Increased Resource Estimate at Triple R Deposit & Strategy Moving Towards Pre-Feasibiity
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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, good to have you back on again. How are you?
Ross McElroy: I'm doing well, Gerardo. We had good news today, another milestone in the pathway for PLS. We're very happy with the results we put out this morning.
Gerardo Del Real: Well, congratulations are definitely due. Let me read the headline, then I'd love for you to go over the details with me. You increased the indicated resource and you doubled the inferred resource. I'll tell you just a quick scan, my perspective is that you really were focused on the PFS later this year and you wanted this resource update to reflect quality pounds. The economics seemed to be a focal point on this resource estimate. I know that the cut-off grade was increased in certain places and I'd love for you to touch on that, but let's talk about the resource and I'll let you fill in the details here Ross.
Ross McElroy: Sure,. I'd say you're right, your perspective that we were looking to add quality pounds to the resource. Some of the holes and some of the growth that we did have in the resource did come from the main 780 East zone, that's the bulk of the Triple R deposit. We're able to add some more indicated pounds overall to that resource. So it grew, the 780 grew.
Another large portion of the new resource came from the zones that were drilled on strike. We have three new zones that were never a part of any previous resource estimate. They were essentially discovered over the last two years of drilling, and that's the 1620 East zone, 200 meters to the east of the 780, and then we have the on land new discoveries, the 840 West and the 1515 West. So those also were added into the resource estimate. Those would be inferred pounds primarily because our drill spacing was intentionally larger. We were in the early stage evaluation of these new zones to see how they impact.
I think there's a little bit of everything in this resource estimate. But for me, the key is that the Triple R deposit continues to show tremendous growth and it's just a snapshot in time. We continue to drill and grow this resource, but it certainly sets the Triple R as one of the elite Athabasca deposits.
Gerardo Del Real: Well, you got to be happy, Ross. I mean, the resource grew by 30 to 35%, despite the fact that the cut-off grade was increased in certain areas. Can you talk about that?
Ross McElroy: Yeah. The cut-off grade in the open pit area – which is the majority of the resource, about 75% of the resource is in the open pit – so the cut-off grade was increased, and that's the engineer's approach. They understood that a higher cut-off was required for economic ore. So we used 0.3 as opposed to 0.25% in the previous PEA estimate. When you do move up the cut-off criteria, you will lose certain pounds, the lower-grade pounds. You will always lose a little bit of material when you move up yourself and the cut-off grade, but it is a more realistic grade. 0.3 as a cut-off the engineers feel is a realistic grade for this open pit resource.
Gerardo Del Real: I mentioned the resource growing by 30 to 35%. You did that despite the fact that spending has actually decreased in the past couple of years. Is that accurate, Ross?
Ross McElroy: It is accurate. We've been very mindful of the uranium sector that we've been in, the depressed uranium prices over the last several years. We dialed back our spending considerably over the last two, two and a half years and which we continue to do going forward until we see some vast improvements in the sector. And yes, despite all of that, in the last two years of drilling, we were able to increase the resource, as you mentioned, by a significant amount. Spending has been cut probably in half, and yet we've been able to solidly deliver on results. The key for us is to continue to move this project towards Pre-Feasibility. We're well underway on track to deliver a PFS by the end of 2018 is what we're projecting that we'll be able to do.
Gerardo Del Real: Speaking of the PFS, I see you noted in the news release, the increased size of the gold resource. Can you touch on that?
Ross McElroy: I sure can. It is one of the interesting parts of the Triple R deposit, is that it does have gold associated with the uranium or around it. To me, it's like a free credit, having gold in this deposit is something free. We've done a little bit of research on that to see how well the gold would come out. It's an interesting enhancement to the overall project. This is a uranium deposit, but having gold in the system, if it's recoverable and it appears that it is, could be essentially almost a free credit. We were able to increase the gold resource that went along with the increase of the uranium resource. The two kind of sit side by side. To me, it's another nice enhancement on the project that a lot of other deposits don't have.
Gerardo Del Real: Excellent, now you mentioned this being a snapshot in time. And of course, you're already drilling from what I understand at the 1515 West deposit. I know that's a big, big priority for you. How's things coming along on that front?
Ross McElroy: It's an important priority for this winter program. We liked what we saw in the 1515 West zone from last year. Remember, it was discovered in the winter program in 2017. We followed up with the summer drilling and it looked very encouraging. We decided this winter we are going to put another 8 holes into that zone and then just see if we can continue to expand it.
It's an interesting zone. It wasn't a huge part of the overall resource, but it's still made up about 7 million pounds of new addition. But if we can continue to grow that, then that will continue to be an interesting resource. Together with the 840 and the 1515, they're our on land targets west of the main R780 zone. I think that if we continue to grow those, those will have significant impact on the overall economics of the project down the road.
Gerardo Del Real: Excellent. Well, Ross, again, I want to thank you for taking the time and going over the updated number here. Is there anything else that you'd like to add?
Ross McElroy: I think we're continuing to march along the pathway that we've set out for ourselves. I think we're very pleased to continue to see this growth in the deposit. I think there's still more to come. But again, we're being very careful with shareholder money, even as we move towards Pre-Feasibility. We understand that our shareholders want us to be very prudent in how we spend. We go forward and when the times are better in the uranium sector – and they will be – we're going to be in a great position to take advantage of that. There's still a lot of news coming out of the project. We're busy right now, so we'll continue to have updates as we go along and we thank you very much for your interest in the project.
Gerardo Del Real: Well I have to believe that in a better uranium environment, Ross, your focus on quality pounds and these shallow pounds definitely merits a premium. And I'm sure that Fission and Fission shareholders are going to see that once we get in a better uranium market, which we all believe is coming, right? It's a matter of when, not a matter of if.
Ross McElroy: Exactly, it's a matter of when, not if.
Gerardo Del Real: Ross, thanks again. Congratulations, look forward to catching up again soon.
Ross McElroy: Very good, Gerardo. Thank you very much, we appreciate the opportunity to give the update.
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