Investing in the Athabasca Basin: "The Saudi Arabia of Uranium"

Editor’s Note: Uranium is finally starting to receive well-deserved attention as the supply/demand fundamentals are extremely bullish. There are few companies that have a track record of discoveries in the uranium space and even fewer with the amount of projects that Fission 3.0 (TSX-V: FUU)(OTC: FISOF) possesses in its vast portfolio.

I reached out to Chairman & CEO Dev Randhawa to talk about the uranium space, the company’s portfolio of uranium properties, and how his thoughts on the uranium sector moving forward.

Enjoy,
—Gerardo

 

Gerardo Del Real:  This is Gerardo Del Real with Resource Stock Digest. Joining me today is the CEO & chairman of Fission 3.0 — Mr. Dev Randhawa. Dev, how have you been? It's been a bit!

 

Dev Randhawa:  Well, fantastic since the middle of August! So Peter Grosskopf turned the heat up on the utilities — so it's been since the middle of August when Peter Grosskopf bought all of that uranium and he started running that ETF properly — we've all done much better.

And so, obviously, very excited and happy for the people who hung in all of those tough years and finally are seeing the party beginning in uranium.

 

Gerardo Del Real:  We clearly are in the early stages of what I believe is going to be a historic uranium bull market. You've seen one or two in your lifetime, and you've done very well with those.

I want to get into a bit of your background, Dev, because, I think, in this upcoming cycle  — quality, experience, and, obviously, exploration is going to deliver a lot of big winners. But there's not that many great teams or companies that actually know how to explore for uranium. It's a tricky industry. Can we speak a bit to your background, Dev?

 

Dev Randhawa:  Sure. My background, although it's financial, we got into uranium in 1996 thanks to some strong encouragement and help from Rick Rule. We saw a nice run there. And then, really, the big one was in 2005 when uranium went from the teens all the way to US$140 [per pound]. And the same thing happened where you have people buying the commodity itself, the yellowcake, and then, the stocks followed. So you're seeing something similar here.

Back then, we went from five companies to a thousand. So there's a lot of people jumping into that space. However, having gone through this, what I've learned is that everything will go up. The question is… what's going to go and be attractive enough for someone to buy.

And secondly, I've learned that discoveries — if investors really want to make a big return on their portfolio — they've got to have stocks in their account. Not just the Camecos, the Fissions, or NexGens, and etc., but you've also got to have somebody who's actually looking for a new deposit because the reality is that the industry needs a new Cigar [Lake] discovered every year if we're going to meet the demand.

 

Exploration is very important. And, obviously, you want to do it with people who've made discoveries before. We're fortunate to be blessed with a technical team that made a discovery at Waterbury, which was a typical unconformity deposit similar to Cigar and some form of MacArthur. But we've also made a much bigger discovery on the west side of the basin, which was basin-hosted; not unconformity. So we've got a technical team that understands both models that are found in the basin.

So if you're going to bet on somebody that's actually found before because I see a lot of guys raising a lot of flow-through over the last couple of decades but never found anything. They got smells… but they never actually found anything. So if you're going to bet on somebody, bet on people who've done it before and are still valued properly. And I believe Fission 3.0 is valued very cheaply still given we have 18 fantastic projects; projects that we staked 100% of during a bear market.

Bear markets are the time to buy assets. Bull markets are when you bring joint ventures in, drill, and etc. So our team was diligent… even though we didn't make a lot of news, we were still picking up land.

In fact, we picked up more land about two weeks ago. We have staff watching properties drop. So exploration counts. The right team. And we own 100% of all of our projects; no royalties, nothing. We staked every property we have. And every one staked on a geological reason, whether it's boulders sitting on the ground or drilling that was done that we don't think was interpreted properly.

For example, Hardy Bay; Cameco did drill it under the old name, El Dorado. But they were looking for unconformity deposits. Unconformity… you've got to have this sandstone, which is like a milkshake sitting on top of the basement. They were looking for that. So they wouldn't drill unless they saw sandstone.

We want to drill where there is no sandstone because we believe that's where mother nature has moved the sandstone off and left the basement. So that’s an example, Hardy Bay; just one project we hope to drill. Well, I know we're going to drill it this winter.

So that's what I would say is that we've been through these cycles before… we’ve been on teams who've done it before… not just luck. There's a lot of marketing that goes on, and brand names are built. But I don't want to wonder what the brand names are built on when they've never had any success!

 

Gerardo Del Real:  You have the good fortune, by way of not luck but diligence, to be in the premier high-grade uranium district; of course, you mentioned, the Athabasca Basin. I think it's important to note that the grade there tends to be 10 to 20 times the global average. And so when there is a discovery made, it tends to be of consequence. And that's where you get the 10, 20, 50-baggers in this space, right?

 

Dev Randhawa:  Absolutely, and if you look at IsoEnergy or NexGen; real discoveries, like when we made our discovery on Triple-R — look at the returns. Stocks that are 15 cents go to a dollar or even higher depending on how many shares outstanding.

The Athabasca is considered the Saudi Arabia of uranium where it’s high grade; you've got a great government that won't take it from you. They've got 70 years of uranium experience. So they know the rules, and everybody knows the rules, and you stay within them — you're fine. So it's high grade, right infrastructure, and the right government involvement. We've got people who have worked for Cameco… who’ve worked in Saskatchewan.

Looking for gold in Saskatchewan is very similar to looking for gold in Australia. That's not the case with uranium. It's very different. Our grades are higher, and the geological setting is extremely different. You can get little blobs of uranium inside of a football field; 50 - 60 million pounds. While you can have the same amount of land in Africa or the United States and you might have 5 million pounds because the grades are so high and everything is in the blobs.

So it takes a different kind of team. And, to me, Athabasca is the only place in the world. Solution mining can work in other places. But if you're going to do hard underground mining or open pit, it has to be the Athabasca because the grade is so high.

 

Gerardo Del Real:  How's the market cap looking and what's the treasury look like, Dev?

 

Dev Randhawa:  We're very fortunate. Red Cloud just financed us so our treasury is around C$9 million. We have about 5 million of flow-through that we'll spend. We were very lean during those times so we're good there. Really, our market cap is still only about C$50 million, which is still quite low when you consider the 18 projects and a great technical team.

Ross [McElroy] is on the board. He's won every award a geologist could win. When we had two big deals in a very short time in bear markets… if you had the Oscar that's won every award possible — we've done a sweep of it. So you’re backing a good group of people who've done this before. Maybe we haven't marketed ourselves as well as we should have but, hopefully, the story gets out that the uranium is here.

The big difference that I see in this cycle is the change in the mentality of the green movement. Before, they were always focused on… we gotta have wind, we gotta have more solar, and more wind turbines. And now, they're realizing that the pressure they're putting on each other to meet their ESG goals are only going to be met by nuclear power. Has to be!  

And as you saw… eight, ten countries, last week, petition Brussels saying… look, we can't get there with wind, and you're telling us we've got to get our emissions down. But the problem is the system isn't working. The problem is, as you know, it's called baseload power. Baseload power… we all use it between five and eight o'clock at night. We come home… we turn on TVs, cook, and everything.

Well, you can't tell the sun at that point… can you shine a little brighter… or the wind. You just can't. This is very different than the last cycle. And this is why I think this can be a longer bull market simply because the greenies are on the side of nuclear, right?

And they realize, if there's not enough wind and sun, they've got to go to natural gas or oil. And so, finally, Biden to Europe, other countries… and Japan, for example, has been, as you know, one of the leaders in the world. And after Fukushima, they dropped off. But now, they've committed to turn on all 30 reactors.

So this is a fundamental difference over the last time we have seen. And because of that, you've seen all of this money pour into Sprott’s physical fund because they don't know how to play it. So all of these fund managers, up to $30 - $50 million a day, are pouring into that fund. Sprott just goes around and buys more uranium.

So it starts having an attitude change and people waking up. What you and I have known for a long time is that you’ve got to have a good mix for electricity, especially if you're talking about 70% of all cars going electrical… and look at crypto, how Bitcoin is mined. You need a lot of energy. Where's it going to come from? Where do you get the energy and still not increase your emissions? Well, nuclear power is part of that.

 

Gerardo Del Real:  Dev, you’ve got the team, you’ve got the treasury, you have the projects, you have the trend.

 

Dev Randhawa:  Thank you.

 

Gerardo Del Real:  It's going to be an exciting couple of years. I'm looking forward to it! Thank you so much for your time today.

 

Dev Randhawa:  Thank you for having me on.

 

Gerardo Del Real:  Chat soon, Dev.

 

Dev Randhawa:  Thank you, talk to you soon. Goodbye.

 

We’ve got plenty more uranium content for you, including this brand new video from Digest Publishing co-owner Nick Hodge. He’s putting his money where his mouth is when it comes to uranium stocks.

Check out our latest uranium research here.