Fission Uranium (TSX:FCU) says the last three holes completed during summer drilling at its Patterson Lake South (PLS) project have all returned “substantial intervals of high-grade uranium.”
PLS is located in Canada’s Athabasca Basin region, a known hotspot for uranium. The three holes were drilled at the project’s R780E zone, which is one of several zones that comprise the Triple R deposit.
Ross McElroy, president, COO and chief geologist at Fission, said hole PLS17-MET-C (line 660E) has “a composite GT score of 958.9 [and] ranks as one of the strongest holes drilled at PLS.”
PLS17-MET-C intersected 144 meters of total composite mineralization, including a continuous interval of 108 meters at 8.46 percent U3O8. The company said PLS17-MET-C has the “widest continuously mineralized intervals drilled on the Triple R deposit to date.”
According to Fission, the three holes were drilled to collect material for preparation of representative metallurgical sample composites for laboratory testing to provide process design data; the data will ultimately be used in a prefeasibility study. SGS Canada is completing the metallurgical study under the management of Melis Engineering.
McElroy also said Fission is “encouraged by the very positive preliminary results of high uranium recovery, low detection of deleterious elements in the mineralization, short leach times using low acid concentrations, and ease of grindability — all of which are important features for low-cost production.”
Although uranium prices are currently at unsustainably low levels, industry participants and analysts expect the market to improve as utilities companies begin renewing their supply contracts. As of Monday (January 1), the U3O8 spot price was at $23.75 per pound, unchanged from the previous month.
To help reduce market oversupply, some major producers are cutting production. Cameco (TSX:CCO,NYSE:CCJ) recently announced plans to suspend production at its McArthur River mine and Key Lake milling operations by the end of January 2018, and Kazatomprom has said it will reduce its output by 20 percent over the next three years.
Fission Uranium CEO Dev Randhawa (TSX:FCU) told the Investing News Network recently that uranium is “the ultimate contrarian play” for investors. He expects to see a “strong upturn for uranium at some point in 2018, driven by further supply disruption.”
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Securities Disclosure: I, Melissa Shaw, hold no direct investment interest in any company mentioned in this article.