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Fission Uranium (TSX: FCU) President Ross McElroy on Goals of PLS Summer Program: Expand New High-Grade Zone and Accelerate PFS Work

July 10, 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 evening?

Ross McElroy: I'm doing well, Gerardo. Nice to speak to you today.

Gerardo Del Real: Nice speaking to you as well, Ross. I wanted to catch up, you had some news here this week. I'll read the headline. The headline reads, "Fission Accelerates Pre-Feasibility Work; Targets New Western Mineralization." Can you lead me along here and give me an idea of what the thinking is? It's a two part program that you're going to be launching, can you share the details Ross?

Ross McElroy: I sure can. We're about to embark on our summer 2017 program up at PLS. In fact, I'd say that we'll be going full throttle by around mid-July. We're going to start moving the crews in almost right away and the activity is going to start. To get to your point, what is our objective this summer? Mostly we're focusing on moving the project towards pre-feasibility. As we've been informing shareholders and listeners for the last several months, our goal is to reach pre-feasibility by the end of calendar 2018. We can do it. We know what work has to be done.

This summer really a lot of that work is geared towards that. We'll be doing some engineering, geotechnical holes that we'll be testing around the pit perimeter walls which we've identified in the PEA. We're also doing some advanced metallurgical work within the main zone itself. We're drilling three large diameter holes in order to collect the proper samples that we want to do metallurgical testing on to understand to a much greater degree how well the ore is going to process. Things that are important down the line as this project continues to move and advance towards what we see as ultimate production at some point in the future.

That's one of the goals that we're doing but as we've always mentioned over and over, this is a very large project with some great targets. There's a great deal of upside from what we already know on the mineralized trend. This past winter we made the discovery of the shallow R1515 west zone. It's a new high-grade zone, it's on land, it's another 400 meters or so away from the known mineralization we had on the trend. We were able to get eight holes into the 1515 west zone this past winter. We now have a good understanding of where it is located and the geometry. Seven holes, we'll be targeting that new zone for this summer because we think that's something that could potentially grow into a very significant zone. Right now it's interesting, we think we can turn this into something that could maybe even add pounds down the road to the overall resource. Those are really the two main focuses we're about to embark on starting next week.

Gerardo Del Real: Excellent. The pre-feasibility work, tell me a bit about the engineering and project development consultants that are coming in, because I understand it's a couple of different very highly regarded groups. What can you share as far as their background?

Ross McElroy: I certainly can. There's some great names that we've been working with over the last couple of years. On the metallurgical side, we're using a company, a consulting group called Melis Engineering. Melis has done the majority of the work in the Athabasca Basin and the processing stream for these deposits. They've done work on pretty much a lot of Cameco's projects and mines, and the same with Areva. They really are the go-to name in the processing and metallurgical side. They've designed a program for us. They'll be basically doing all the analytical work once we collect the sample in the large scale diameter holes. We'll get a much better understanding, a true understanding that will go into much more advance engineering level study than we have, and that's the pre-feasibility.

We're also working with another engineering group called BGC Engineering. They're experts in the geotechnical side. Because we're talking about this project as an open-pittable operation, we need to have a good understanding of what the pit walls will look like, all the various characteristics that go into developing a mine, not just taking the ore out but to develop the surrounding country rock around the deposit itself so you can actually build yourself a good platform in which to mine from. This is really where these guys have a great depth of experience.

They were also part of the groups that did some of the work up a Diavik diamond property up in the northwest territories in which they built a dyke-berm wall in order to isolate off the main lake from the diamond open-pit operation there too. Their experience is very, very relevant to the type of deposit that we do have at PLS, which is near surface, open-pittable. We have the lake so we have to put a berm wall around the pit perimeter.

Gerardo Del Real: Excellent, excellent. With the pre-feasibility work, you're obvious positioning the company for a better uranium market. A lot of people, including myself, believe we're pretty much at the bottom of a uranium market. What are you doing to be cautious with the cash position? Where does that cash position right now stand at, Ross?

Ross McElroy: The first point I would echo, I think that we've been telling people, all our investors, too. Everybody realizes that we are in a soft uranium market right now. The prices are low. There's nobody out there that understands this industry that thinks it will be prolonged for too much longer. But nobody knows when it turns, but across the board everybody believes that it will turn. The reactors are being built in China, they're being built in the Middle East, they're being built all over the place. The demand is growing, the uranium supply is shrinking, so eventually these things will make for a stronger market.

What we can do in the meantime is we can continue to move the PLS project forward. Even in an optimistic sense we're looking at the project being available for development, ultimate production by 2025, 2026, somewhere in that time frame. These are necessary steps that we have to take along the way and we certainly believe the uranium market will be much, much stronger prior to that. We'll be well positioned with a very advanced project by the time the cycle turns hopefully. That's the plan, that's the game plan. We believe that to be the case. I would say that most people that follow this industry would probably agree with that timing, that things will turn within two to three years we'll say. We'll be in a position be able to go forward on this project.

Gerardo Del Real: Agreed, Ross, agreed. Anybody that has seen these uranium cycles trend in a positive fashion know that when it happens it tends to happen all of a sudden. Obviously Fission has a world-class deposit and a world-class property, but you also have world-class exploration potential. I think that bodes well for the future here. Ross, is there anything else that you'd like to add?

Ross McElroy: Yes, I would. Not only do we have all that but we also have a world-class partner with us and that's CGN, the Chinese utility. I think CGN is one of the largest utilities and certainly they're growing. They are ultimately the end-users of this product. The fact that they continue to support and will continue to support the PLS project I think is a real validation of how much they think this is such a good project. They believe in it.

We're happy and very fortunate to have them involved in the project as well because when the cycle does change, when it turns and it's on the upside, these are the utilities, such as CGN, that will be looking for uranium in order to feed those reactors. We already have them involved at the project level. They are a mining company, they do understand how to develop mines, so it's a win-win scenario for us.

Gerardo Del Real: Excellent, excellent. Ross, thank you very much. I encourage everybody to go to Fission's website, which is fissionuranium.com. There's an updated map and obviously a great description of the project, both as it stands now and the potential upside. Ross McElroy, Fission Uranium. Thanks again, Ross.

Ross McElroy: Very good. Thank you very much, Gerardo.

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