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Fission Uranium Corporate Presentation


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Fission Uranium's latest corporate presentation, featuring information on the company's award-winning team and PLS project, as well as the uranium sector and nuclear industry.

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Fission Uranium Corporate Presentation

  1. 1. TSX: FCU | OTCQX: FCUUF | PLS: Athabasca’s Shallow Depth, Highly Awarded Uranium Project JULY 2019 EXPLORATION PROJECT OF THE YEAR 2015 TSX:FCU OTCQX:FCUUF
  2. 2. TSX: FCU | OTCQX: FCUUF | D I S C L A I M E R & T E C H N I C A L I N F O R M AT I O N Disclaimer The following information may contain forward-looking statements. Forward- looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. The technical information in this corporate presentation has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43- 101 and reviewed on behalf of the company by Ross McElroy, P.Geol. President and COO for Fission Uranium Corp., a qualified person. The updated Mineral Resources as reported April 15, 2019 are as reported from data up to and including 2018 drill programs and are reported within an open pit design at a cut-off grade of 0.15% U3O8 and 0.25% U3O8 for resources outside the pit that are potentially mined by underground methods. The R1620E, R840W and R1515W zones are evaluated as underground at this time. Technical Information Certain of the technical information contained herein is derived from the April 15, 2019 news release entitled “Fission's PFS shows Low OPEX of US$6.77/lbs U3O8, High IRR and Clear Growth,” describing results of a PFS completed on the project – a copy of which is filed on the Company’s profile on SEDAR at The PFS considers the PLS project as a stand-alone mine and mill operation, which includes development and extraction of the R00E and R780E zones (Triple R deposit), based on a number of inputs, estimates, and results including the following (all values in C$ unless otherwise noted): Mineral Resources and Mineral Reserves are reported within the open pit design at a pit discard cut-off grade of 0.15% U3O8 and outside the design at an underground cut-off grade of 0.25% U3O8 based on a long-term price of US$50 per lb U3O8 and PFS cost estimates. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. Physicals • Four years of pre-production and 8 years of mine life, processing nominally 1,000 tonnes per day (350,000 tonnes per year) • Total Tonnes Processed: 2.89 million tonnes at 1.42% U3O8 average grade; open pit mining of 2.30 million tonnes at 1.62% U3O8 • Underground mining of 0.59 million tonnes at 0.63% U3O8 • Process recovery of 96.7%, supported by metallurgical testwork • Production of 90.5 million lbs U3O8; an average of almost 15 million lbs U3O8 per year for 5 years, followed by a lower-production tail Revenue • Long term uranium price of US$50 / lb U3O8 • Exchange rate of 0.75 US$ / C$1.00 • Gross revenue of C$5.84 billion, less Saskatchewan gross revenue royalties of $423 million • Net revenue of C$5.41 billion Operating Costs • Average OPEX of C$9.03/lb (US$6.77/lb) U3O8 over the life of mine • Unit Operating Costs of C$274 per tonne processed. • Combined Mining C$89 per tonne processed • Processing: C$115 per tonne processed • Surface and G&A: C$71 per tonne processed • Operating cash flow of C$4.62 billion Capital Costs • Pre-Production capital costs of $1.498 billion • Dyke and Slurry Wall - C$371 million • Open pit mining - C$44 million • Process plant - C$241 million • Tailings Facility - C$101 million • Infrastructure - C$114 million • Indirects & Owner’s Costs - C$376 million • Contingency - C$250 million • Sustaining capital costs of C$137 million (includes all underground mine capital costs, and tailings dam lifts) • Reclamation and closure cost of C$77 million • Cash flow from operations of C$2.91 billion 2
  3. 3. TSX: FCU | OTCQX: FCUUF | Why Invest Electricity Demand • Electricity demand growing at rapid pace and increasingly integrated into daily life • EV’s (Electric Vehicles) entering the marketplace by major automobile manufactures • Bitcoin consumes more energy than the entire nation of Switzerland Serially Successful Management Team Dev Randhawa, Chairman & CEO, Director Finance Monthly ‘Dealmaker of the Year 2013’, Northern Miner ‘Person of the Year 2013’ Ross McElroy, President & COO, Director Significant role in 4 major uranium discoveries in Athabasca Basin, incl. Fission’s Waterbury Lake & PLS Clean, Baseload Energy Source “Nuclear is ideal for dealing with climate change, because it is the only carbon- free, scalable energy source that's available 24 hours a day.” — Bill Gates Award Winning Project • Large, High-Grade, Shallow • Low Cost – under PFS Base Case, Life of Mine avg. cash cost of of US$6.77/lb. • Triple R deposit is open in multiple directions • Only a small portion of the property explored to date 3
  4. 4. TSX: FCU | OTCQX: FCUUF | Clean Energy C L E A N B A S E L O A D P O W E R “Nuclear is ideal for dealing with climate change, because it is the only carbon-free, scalable energy source that's available 24 hours a day.” BI LL GATES 4
  5. 5. TSX: FCU | OTCQX: FCUUF | Electricity Demand R E A C T O R S U N D E R C O N S T R U C T I O N , P L A N N E D & P R O P O S E D More reactors operating in 2018 than in any other time in history Middle East (home of Big Oil) aggressively securing nuclear energy supply USA: 25 EUROPE: 14 INDIA: 49 RUSSIA: 52 CHINA: 225 E. ASIA: 17 TSX: FCU | OTCQX: FCUUF | Current Reactors Operation 447 Under construction 55 Planned 111 Proposed 328 Reactor Builds at 25 year high More Japanese reactors coming online due to strong regulator support 5 Source: WNA
  6. 6. TSX: FCU | OTCQX: FCUUF | www.fissionuranium.com6 Moving Forward Growing electric demands and nuclear solutions • Electricity demand growing at rapid pace and increasingly integrated into daily life • As demand for electricity increases, demand for clean energy is paramount • EV’s entering the marketplace by major automobile manufactures • Bitcoin POW mechanism annual electric consumption same as Switzerland Small Modular Reactors (SMR’s) – implementation is a game changer • Small Modular Reactors (SMR’s) - Game Changing Technology • Assembly line construction will standardize build and reduce construction risk and decrease cost (analogous to Ford’s Model T) • Shorter construction time (3 years vs. 10 years) • Transport modular components reduces major transport requirements • Small footprint allows smaller safety zones around reactors • Incremental power thus suitable for more countries, more locations E L E C T R I C V E H I C L E S C R Y P T O C U R R E N C Y S M A L L M O D U L A R R E A C T O R S
  7. 7. TSX: FCU | OTCQX: FCUUF | A N D S U P P LY S T I L L B E I N G C U T Low U3O8 price impacts low cost producers: • Kazakhstan production cut by 20% over three years starting in 2018 • Production indefinitely suspended at McArthur River • Canadian operations shut down at Rabbit Lake and Eagle Point • Production cuts at Cigar Lake 0 50 100 150 200 250 2019 2020 2021 2022 2023 2024 2025 Uncovered US Utilities Uncovered Non-Us Utilities Covered Uncovered US Utilities Uncovered Non-US Utilities Cover 7 1B lbs U3O8 Uncovered in next 8 years Source: WNA
  8. 8. TSX: FCU | OTCQX: FCUUF | T O G E O P O L I T I C A L I N S TA B I L I T I E S Nearly 60% of primary supply comes from politically unstable countries Saskatchewan, Canada: • Ranked #2 mining investment jurisdiction in 2018 by Fraser Institute 41% Kazakhstan (to reduce planned uranium production by 20%) 15.5% Russia & E.Europe 16% Africa 13.2% Canada (indefinite suspensions at McArthur River) 12% Australia 3.5% China Politically unstable Permitting issues Stable & supportive 8 Supply Side Vulnerable 2.6% Other Source: WNA
  9. 9. TSX: FCU | OTCQX: FCUUF | China’s Strong Nuclear Buildout C H I N A’ S R E A C T O R C O N S T R U C T I O N B O O M 150 reactors in operation* 50 under construction* * CGN Personal communication CGN Fission’s Strategic Partner 22 operating reactors* 6 new reactors under construction Important domestic and global builder of reactors 19.9% ownership of Fission Offtake agreement 20% of annual uranium production from PLS; option to purchase additional 15% Beijing, China: Air Quality Red Alert CHINA 2030 ESTIMATE * CGN Personal communication 9
  10. 10. TSX: FCU | OTCQX: FCUUF | “Our resource-poor country cannot do without nuclear power to secure the stability of energy supply while considering what makes economic sense and the issue of climate change.” Shinzo Abe, re-elected Prime Minister of Japan Oct. 2017 2010 2016 2030 Nuclear Energy 25% 2% 20-22% 9 reactors restarted 17 reactors currently in the process of restart approval 2 reactors under construction 8 reactors planned and proposed 10 Japanese Recovery Continuing
  11. 11. TSX: FCU | OTCQX: FCUUF | Award Winning Management Team Devinder Randhawa, Chairman & CEO, Director • Fission Energy founding CEO and chairman from 2007 to 2013 leading company to Tier One status • Finance Monthly ‘Dealmaker of the Year 2013’, Northern Miner ‘Person of the Year 2013’ • Founder of Pacific Asia China Energy, sold for $34M Ross McElroy, President & COO, Director • Formerly with Cameco, Areva, BHP Billiton • PDAC 2014 ‘Bill Dennis Award for Exploration Success’, Northern Miner ‘Person of the Year 2013’ • Significant role in 4 major uranium discoveries in Athabasca Basin, incl. Fission’s Waterbury Lake & PLS • Professional geologist of 30+ years experience S E R I A L LY S U C C E S S F U L M A N A G E M E N T Ray Ashley VP Exploration Paul Charlish CFO & Corporate Secretary D I R E C T O R S William Marsh Kelowna, Canada Frank Estergaard Kelowna, Canada Robby Chang Toronto, Canada Darian Yip Hong Kong, China Deshao Chen Beijing, China Shiming Ma Beijing, China TSX: FCU | OTCQX: FCUUF | www.fissionuranium.com11
  12. 12. TSX: FCU | OTCQX: FCUUF | Building Shareholder Value 1996 S I N C E 1 9 9 6 Strathmore Minerals Corp. • U3O8 spot price at US$7/lb • C$2M market cap to peak valuation of C$457M in 2007 • JV Sumitomo (Japan) (C$50M) • Acquired by Energy Fuels, 2013 2007 Fission Energy Corp. • JV KEPCO (Korea) (C$15M) • J-Zone (Waterbury) discovery, 2010 • Acquired by Denison Mines, 2013 2013 Fission Uranium Corp. • Takeover of Alpha Minerals • Triple R Deposit: discovered (2012) • Completed maiden reserve estimate and PFS in April 2019 • Chinese Utility (CGN Mining) buys 19.9% for C$82M Fission 3.0 Corp.(2013) • Project Generator with several high-potential projects: drilling-boulders-geochem-geophysics- showings in Athabasca • Rhyolite to spend C$22M to earn-in 80% of Macusani Assets, Peru 12
  13. 13. TSX: FCU | OTCQX: FCUUF | Canada’s Athabasca Basin District Triple R Deposit FCU Property Holdings FUU Property Holdings 13
  14. 14. TSX: FCU | OTCQX: FCUUF | The Premier High-Grade Uranium District AT H A B A S C A 0 0.5 1 1.5 2 2.5 Namibia United States Australia Niger Canada Average Grade (% U3O8) Jurisdiction Saskatchewan was ranked as #2 jurisdiction in the world for mining investment in 2018 by the Fraser Institute Grade 10 to 20 times Global Average Global supplier Supplies 13.2% of the world’s uranium 60+ years of mining 14
  15. 15. TSX: FCU | OTCQX: FCUUF | Triple R Deposit TSX: FCU | OTCQX: FCUUF | Five separate mineralized zones (R1515W, R840W, R00E, R780E and R1620E) over a 3.2 km strike (drill defined) mineralized system 15
  16. 16. TSX: FCU | OTCQX: FCUUF | Triple R Deposit ~50 m starting depth of high-grade deposits Total strike length is now well beyond that of Cigar Lake (1.95 km) or McArthur River (1.70 km) Triple R Deposit Longitudinal Cross Section View Looking Northwest 3.18 km east-west strike length 16
  17. 17. TSX: FCU | OTCQX: FCUUF | PLS Project A P R I L 2 0 1 9 P F S ( O P/ U G ) A N D A P R I L 2 0 1 9 P E A ( U G O N LY ) Units OP/UG (PFS Case) UG Only (PEA Case) Mine Type 6 years OP 2 years UG 7.3 years UG Mine Life Years 8.2 7.3 Construction Period Years 4 years 3 years Ore Mined M tonnes 2.89 2.55 LOM Avg. Head Grade % U3O8 1.42 1.64 LOM Production M lbs U3O8 90.5 81.4 Avg. LOM Annual Production M lbs U3O8 11.0 11.2 Operating Costs C$/tonne $274 $335 C$/lb U3O8 $9.03 (US$6.77) $9.57 (US$7.17) Initial Capital Cost C$M $1,498 $1,194 LOM Sustaining Capital Cost C$M $137 $258 Project Economics at US$50/lb U3O8 and C$1.00:US$0.75 Pre-Tax Cash Flow C$M $2,910 $2,587 After-Tax Cash Flow C$M $1,759 $1,533 After-Tax NPV8% C$M $693 $696 After-Tax IRR 21% 26% 17 Operating Costs C$/tonne $274 $335 C$/lb U3O8 $9.03 (US$6.77) $9.57 (US$7.17)Operating Costs
  18. 18. TSX: FCU | OTCQX: FCUUF | Trade-off Between Hybrid (OP/UG) and UG Development Options Both scenarios results in bottom quartile cash costs. Base Case scenario 15M lbs U3O8 of annual production over first 5 years, and a high IRR at a US$50/lb uranium price April 2019 PFS Hybrid (OP/UG) April 2019 PEA UG Only Capital Cost • Does not require construction of a sand dyke and plasticized cement slurry cut-off wall • ~C$400M (20%) lower initial capex • Eliminates pre-stripping • Shorter construction period LOM Production • Access additional 9.1M lbs of reserves • 11% increase in LOM U3O8 production • Extends mine life by ~1 year Operating Costs • Modestly lower cash costs over LOM (~6%) Permitting • Reduces permitting time and costs • Potentially lower environmental impact and reclamation costs Project Economics • 15% higher LOM free cash flow (after-tax) • Higher IRR (26% vs. 21%) 18 PLS Projects
  19. 19. TSX: FCU | OTCQX: FCUUF | Exploration Potential PLS has over 100 EM Conductors and multiple exploration hotspots Triple R deposit associated with just one of these EM conductors 19 31,039 ha property in the Athabasca Basin district, with ~ 80% under explored 5X the size of Manhattan Island Triple R deposit is open in multiple directions and at depth
  20. 20. TSX: FCU | OTCQX: FCUUF | PLS Project Next Steps Addition of Zones to Mine Plan: three other mineralized zones (R1515W, R840W and R1620E) along strike requiring drilling to upgrade inferred to indicated Zone Expansion: R780E Zone is open at depth and along plunge to east with opportunity to extend mine life MINERALIZATION UPGRADE UG only scenario to PFS level (by Summer 2019) Advance towards Feasibility Study (toward end of 2020) R780E R00E TSX: FCU | OTCQX: FCUUF | www.fissionuranium.com20
  21. 21. TSX: FCU | OTCQX: FCUUF | Tickers TSX: FCU OTCQX: FCUUF Frankfurt: 2FU Share Price (as of July 24, 2019) C$0.41 52 Week Low / High C$0.39 / C$0.75 Basic Shares Outstanding 486.3M Options (weighted avg. strike price of C$0.89) 25.5M Fully Diluted Shares Outstanding 511.8M Market Capitalization (Basic) C$199.5M Cash & ST Investments (as of May 31, 2019) C$8.5M Investment in Fission 3.0 Corp. C$1.1M Enterprise Value (Basic) C$209.1M Capital Structure Share Price Performance (Last 12 Months) 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 $0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70 $0.80 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Volume(M) SharePrice(C$) Research Coverage Institution Analyst City BMO Capital Markets Alex Pierce London Eight Capital David Talbot Toronto H.C. Wainwright & Co. Heiko Ihle New York Red Cloud Klondike Strike Derek Macpherson Toronto C O R P O R AT E I N F O R M AT I O N 66% Retail & Other 1.6% Management & Board 19.9% China General Nuclear Power 12.1% Institutions 21
  22. 22. TSX: FCU | OTCQX: FCUUF | Why Fission Award winning project and management team Discovered two world-class uranium deposits since 2010 One of the world’s largest and lowest cost uranium projects April 2019 PFS outlines OP/UG mine producing 15M lbs/yr U3O8 and LOM avg. cash costs of US$6.77/lb Large, shallow, high grade Triple R Deposit Maiden reserve estimate of 90.5M lbs U3O8 at 1.42% U3O8 Untapped exploration potential Majority of 31,039 ha property, which is 5 times the size of Manhattan Island, remains unexplored 100s of potential drill targets World class uranium district Triple R on a 3.2 km mineralized trend - largest lateral footprint in the Athabasca Basin Near-term resource growth Future 2019 drill program Triple R deposit is open in multiple directions 22
  23. 23. TSX: FCU | OTCQX: FCUUF | Fission Uranium Corp. Phone: +1 250 868 8140 Toll Free: +1 877 868 8140 (North America) Investor Relations: Email: TSX:FCU OTCQX:FCUUF 23=