Fission rides uranium optimism with $8 million bought deal
Fission Uranium Corp. [FCU-TSX; FCUUF-OTCQX; 2FU-FSE] has announced details of an $8 million bought deal financing, with proceeds earmarked for its flagship Patterson Lake South property in Saskatchewan, which hosts the high-grade Triple R uranium deposit.
News of the financing follows a resurgence in the price of uranium as nuclear power is once again embraced by countries who are looking for ways to cut carbon emissions and ease concerns about supply.
Raymond James analyst Brian MacArthur recently said he expects demand for uranium to increase as nuclear energy is increasingly embraced as a “green” power source. Nuclear energy’s chief benefit is that it generates no C02 emissions.
Fission said an underwriting syndicate has pledged to acquire 6.72 million flow-through common shares on a bought deal basis for $1.19 per flow-through share. The underwriters have been granted an option to purchase up to an additional 15% of the number of flow-through shares sold in the offering to cover over-allotments, if any. That option is expected to remain open for 30 days after closing which is expected to occur by October 4, 2023.
The flow-through shares will be issued as charitable flow-through shares.
Details of the offering were announced after the close of trading on September 25, 2023, when Fission shares closed at 93 cents. The shares are currently trading in a 52-week range of $1.00 and 54 cents. The shares have rallied from the 75-cent level in early September.
Fission was in the news recently when it submitted an application for a license to construct a uranium mine and mill facility at its Patterson Lake South property in Saskatchewan, which hosts the high-grade Triple R uranium deposit.
The 31,039-hectare PLS project is 100%-owned and operated by Fission. The project is accessible by road with primary access from all-weather Highway 955, which runs north of the former Cluff Lake mine and passes the NexGen Energy Ltd. [NXE-TSX, NYSE] Arrow deposit located 3.0 kilometres to the east and the Uranium Energy Corp [UEC-NYSE] Shea Creek discoveries located 50 kilometres to the north.
Fission recently published the results of a feasibility study outlining the potential for Triple R to become one of the lowest cost uranium mines in the world.
Highlights of the study include a construction timeline of three years with an estimated initial capital cost of $1.15 billion. The study also envisages an increased time line of 10 years with a life of mine production of 90.9 million pounces of U3O8 at an average unit operating cost of $13.02 a pound (US$10 a pound).
The study is based on an indicated resource of 2.7 million tonnes of 1.94% U308 and 0.61 g/t gold or 114.9 million pounds of uranium and 52,700 ounces of gold in five zones.