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Fission Energy: What the market is missing - Still more value when you consider the cash

January 17, 2013


Fission Energy (TSXV: FIS, BUY Speculative)

Current Price: $0.76

Price Target: $0.90

Market Cap: $68.5M

What the market is missing - Still more value when you consider the cash

  • Fission Energy currently trades in the mid $0.70s, which is below fair value
  • The 0.355 DML share offer is currently worth $0.56/share to Fission shareholders based on a DML trading price of $1.57/share.
  • The value for Patterson Lake South, which will be spun off into a stub company can be implied from the enterprise value of Alpha Minerals (AMW: TSXV), which is the 50% owner of the PLS project.  Based on today’s trading, AMW has an enterprise value of $37.4M, or $0.26/share to Fission shareholders
  • Combined, the DML and PLS values equate to $0.81/share - $0.05 from where FIS is trading at now and a reasonable post deal announcement discount.
  • What the market is missing is the cash.  As stated in the transaction announcement, $18M in cash will be going to the stub company.  Based on the current FIS trading price, options and warrants that are in the money would add another $4.4M cash and inflate the share count to 145.2M shares or $0.15/share.
  • Moreover, the cash is protected since Denison is on the hook for all expenditures on properties that it is acquiring in the transaction.
  • Combined, Fission is worth $0.97/share based on current trading values. 

Fission Valuation based on recent trading prices for DML and AMW

Fission Valuation

Denison Shares


per share

Patterson Lake South


per share



per share



per share

Source: Cantor Fitzgerald Research


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Rob Chang
Research Analyst, Metals & Mining

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