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Fission Uranium (TSX: FCU) President Ross McElroy on the Two-Pronged Approach of the Winter Program at PLS: Pre-Feasibility Work and Western Zone Expansion

January 16, 2018

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?

Ross McElroy: I'm doing good, Gerardo. Yourself?

Gerardo Del Real: I'm doing excellent. Thank you so much for asking. You are off to – what's going to be, I believe – a very exciting and obviously productive 2018. We all know that there's a pending resource estimate, which everybody is eagerly anticipating. But before that resource estimate, you had a news release this morning that I'd love for you to touch on. The overview of it is that preparations have begun for a $9.4 million winter work program at PLS. Can you fill in the details for us, Ross?

Ross McElroy: I sure can. I think the work is probably going to start towards the end of this month. In fact, we've already got people in the field right now getting the ice prepped, making sure it's thick enough that we can move the equipment out. So, I suspect drilling will begin up there towards the end of this month and into early February.

But the real details of the winter program, it's a two-pronged approach. We're obviously moving the Triple R deposit towards pre-feasibility, so a lot of the work this winter's going to be geared towards geotechnical testing of the overburden and the bedrock so that we can refine our mine plan into the pre-feasibility, which, as I've mentioned before, we expect to put out by the end of 2018.

The other part of the program that we're going forward to is continuing to advance and grow our recent R1515 West zone. This is the high-grade, shallow zone that's about 2 kilometers out to the west, on land west of the Triple R deposit, on the same trend, but just a nice step over to the west. We hit some really good holes in that one, including one from last summer that hit our widest mineralization outside of the main R780 zone in the Triple R deposit, so it has had some very substantial width demineralization, some good, high-grade results. That's something that we're going to continue expanding on this winter. That's in conjunction with the pre-feasibility work. You're right, it's a very busy and, I think, an exciting time for the company.

Gerardo Del Real: Wonderful. I'd really love to start by talking about the exploration drilling, because it appears to me, and we touched on this a little bit off air, that that high-grade, shallow mineralization really allows for aggressive exploration, but also responsible and very efficient exploration. How important is that near surface nature and land based nature of the mineralization, as far as, when it comes to allocating shareholder capital, but also having an exploration program that frankly has a lot of substance to it, and has the potential to yield some pretty spectacular numbers and pounds for the future resource estimates?

Ross McElroy: Sure. To start with, when you have something shallow, what that means is that it's less expensive to explore for, because you're using less drill meters to get through the other rock to get to the main zone. In other words, when we start drilling, when it's a shallow deposit, you're into the mineralization right away, so we save a lot of money just in drill meters alone, just by being shallow. The other thing is, we can drill a number of holes in a shorter period of time, because again, same rationale. You've got less meters per drill hole, so it's a much more cost effective way. It's less expensive to explore for something shallow than it is for something deep.

What sets the whole PLS project off completely, different than any of our other peers, is the fact that all of our high-grade mineralization that we've seen so far in this long, 3.2 kilometer trend, it's all similar in that it is all shallow based high-grade mineralization. Other projects in the Athabasca Basin, there's some very good ones, but they're much deeper mineralization. This is the only one that's this shallow. If we can build something up to a critical size that meets all the economic tests, then you would also have, ultimately, down the road, a far more efficient, lower cost production asset than, say, mining something much deeper, much more engineering challenging than a shallow open pit deposit.

This is what we have, and we continue to find mineralization stretched over this long trend. Right now, on the 1515 zone, it's really all about trying to build its size up and get enough drill holes in there that we can make a substantial zone.

Gerardo Del Real: Now, when I say that the R1515 zone has the potential to deliver some blockbuster numbers, that's not a pie in the sky, fingers crossed wish that I'm making. We have past results, and some of those, I’m going to just highlight them real quick. You had 7 meters of 6.90% of U308, and 14.5 meters of 3.39%. So the mineralization and the high-grade nature has been proven. I imagine that a part of these 8 holes, these 2,700 meters or so that are going to be drilled, is you want to establish continuity, and obviously you want to step out. Would that be accurate, Ross?

Ross McElroy: I think that is accurate. You're right. We've seen some really impressive numbers in the 1515 zone. As I mentioned earlier, it has had drill holes with the widest mineralization that we've seen outside of the main Triple R deposit, so we're pretty encouraged by those results.

I think the winter program is really stepping out from that which we know, and just expanding on the overall zone itself. You're right, I think part of that will be seeing what the continuity's like between holes. Hopefully we'll be able to continue to advance that zone to make it a much more meaningful future addition to the overall resource.

Gerardo Del Real: Excellent. Now, I can tell you that there is a lot of new attention being dedicated to the uranium sector. For people that are new to the Triple R deposit, and to the 1515 zone, can you provide a bit of context, Ross, as to where 1515 is in relation to the Triple R deposit?

Ross McElroy: Sure. All of these zones together, they all sit over top of a 3.2 kilometer mineralized trend. The 1515 zone is the westernmost of that high-grade mineralized trend, and it's a discovery that we made last winter. It's on land. It's beneath about 100 meters of overburden, and then we start seeing the mineralization in the bedrock.

Now, if you continue along this mineralized trend to the east, you start getting into the next zone, the 840, and then we're into the main part of the Triple R deposit, the 00 and 780 zone. So they're all connected, I'd say like pearls on a necklace. We're seeing a nice, linear trend over 3.2 kilometers with these high-grade pods that occur along this linear structure. So it's just the westernmost of the high-grade zone.

                                                      We think with further exploration, too, along this trend, hopefully we'll be able to find even more high-grade mineralization west of the 1515, but that's for future programs to explore.

Gerardo Del Real: How important are those stacked lenses that you're seeing?

Ross McElroy: The stacked lenses, basically they're parallel lenses. They're sitting right beside each other, so sort of like cards in a deck, if you will. What happens is, if I can get two lenses, then it's twice as thick as it is with one lens. If I can get three or four, then you start increasing in multiples the thickness of it. So, over a given area, we can get quite thick accumulations of mineralization.

That's what we want to see. We do see this stacked lens nature in the R1515 West zone. That's a feature that we see in the 780. From that perspective, we're seeing some pretty good comparables. I think what we really want to see out of the 1515, we know we have that part, we know we have grade, we know we have width, I'd like to see some more strike length on the zone. That's really where we're aiming to next. But, you're right. The stacked lenses are an important part of the overall mineralized nature of this thing.

Gerardo Del Real: Perfect. Now, pivoting a bit, the PFS work. You've retained RPA to serve as the lead consultant. Why RPA? Obviously they have a very, very impressive track record. Can you speak to that a bit?

Ross McElroy: I sure can. We've been working with RPA over the last several years. We had them do our initial resource estimate, the maiden resource assessment in 2015. They followed up with our Preliminary Economic Assessment report in September 2015. A highly skilled, very experienced group of engineers, with relevant experience in this type of environment. They're familiar with the project.

I think that importantly, we're also working with a number of third party consultants, which are all regarded as the best in the industry at what they do. It's a pretty full complement, with RPA leading the report, pulling everything together into the single, cohesive PFS study, and with several experts in different fields, in metallurgy, and processing, and geotechnical all coming together, working together as a group, which, in my opinion, gives us the strongest backing of anybody in the sector.

Gerardo Del Real: Excellent. Ross, I want to thank you for your time. I look forward to speaking with you soon. I know I mentioned in passing that resource estimate. Everybody's eagerly anticipating that. Anything that you'd like to add before you leave here?

Ross McElroy: Well, we're still expecting to have a resource estimate out sometime in early 2018. What it'll do is start pulling in the numbers from the zones that don't yet have an estimate on. Those would be the 1620 to the east, the 840 to the west, and now the recent holes that we have in the 1515. So, they'll all be part of it. It's just something that'll complement the overall project. But really, the Triple R deposit itself is really a standalone deposit, as we've defined before. So I think that these extra zones are additional, they're accretive, they add blue sky potential to the overall resource, which is pretty robust just on the main Triple R deposit itself.

So, look for early 2018 for that resource number to come out.

Gerardo Del Real: Fantastic. Ross, thank you again for your time.

Ross McElroy: Good. Great talking to you. Thanks, Gerardo.

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