What seems sorely evident right now is that we’ve been so caught up in the trader agenda of staying focused on the share price that we’ve lost sight of what makes Triple R so valuable and unique when viewed within the context of Canada’s uranium mining history. This Easter weekend has provided a much-needed break from the trading action; an opportunity to relax and reflect on the basic underlying strengths of this world-class Uranium deposit, and focus on where Triple R stands on the world stage.

We see a lot of words and rhetoric about how special this discovery is, but I really feel that the importance of this deposit has not come through in the company messaging that we’ve seen so far. After doing a few hours of research with respect to major Uranium discoveries in Canada’s past, I’m left with the feeling that we are suffering from an undervalued share price because Fission’s marketing department has failed to tell the Triple R story in a way that resonates with investors. Fission has spent 10’s of millions of dollars to advance the technical side of the equation but have been weak on explaining to investors how amazing this discovery really is.

In my mind, more resources need to be deployed towards presenting the Triple R story in a new way that captures the true essence of what makes Triple R so special and unique. FCU has evolved from a minor “Junior” explorer to a major project generator with a half-Billion$ market cap, placing it in the top 100 Global Mining and Mineral Exploration companies in the world, yet it’s marketing team has not followed suit, in my opinion. Investors need to clearly understand what we have here in this asset they’ve dubbed “Triple R”.

The recent discovery of a new high grade zone in R600W has been called a “game-changer”, and the more I look at where Uranium exploration and mining have been going over the past 20 years, the more I see why that truly is the case. Terms like “game-changer” are seen as just marketing mumbo jumbo by many. But in this case the term really does describe the current situation. The supporting facts are readily available on the Internet. Google can lead you to an independent assessment of the importance of Triple R if you take some time to explore and review the major Uranium discoveries and developed mines of the past 4 decades.

Saskatchewan’s Athabasca Basin

Setting aside the complex geological descriptions of the Athabasca Basin, a simpler model like the one below is a good way to get your head wrapped around its basic structure. Think of it as a bowl of hard crystalline bedrock “the basement” filled with sand that has hardened into sandstone over millions of years. On top of that is a relatively thin surface layer of glacial till in which thousands of lakes have formed. From the outside edge of the basin towards the center, the interface between the basement and sandstone (the “unconformity”) is where over a billion years ago many significant mineral deposits were formed along the interface at increasing depth towards the center of the basin. Significant deposits of Uranium have been discovered, from the shallow near-surface Key Lake deposits near the outside edge down to the very deep high-grade deposits of Cigar Lake (400m+) and McArthur River (500m+) as you move towards the middle of the basin. (I’m sure the geologists are shuddering from my simplistic description but I think we do need an “Athabasca Basin Uranium Deposits for Dummies.”)



Early exploration for Uranium deposits in the basin was focused on the basin edge, where the unconformity surface is shallow and the U deposits are easy to access with simple open-pit mining methods. Shallow Uranium discoveries were made along the southern edge at Key Lake, the NE edge at Rabbit Lake, and Western side at Cluff Lake.



Key Lake

The similarities of Triple R with Key Lake are many. The two shallow deposits (Gaertner and Deilmann) were discovered in 1975/76 (under Key Lake) by tracing the path from uranium-bearing surface boulders 5km SW (sound familiar?) to locate the ore bodies. Like Triple R, the Key Lake deposits were 100% Basement-hosted, meaning the Uranium ore was contained in crystalline bedrock with just a thin layer of glacial till above that could be easily scraped away in an open-pit to gain access to the mineralized ore.

But it wasn’t easy to find. It took 4 years of surveys and drilling to fully define the ore bodies. In July 1975, Hole 25 in a 166-hole drill program was the first high-grade hit, and after 2 more years of drilling the Gaertner deposit was found to be over 1.4km long, 10-50m wide, with an average thickness of 60m. The primary high-grade zone was 800m long. The 2nd deposit, Deilmann, was discovered in June 1976 and fully delineated after drilling 2427 shallow holes totaling 266,000m of drill cores. The resulting Key Lake deposit hosted 208M lbs of U3O8 with an average grade over 2%, with small areas over 35%. Triple R, so far, has an average grade of about 1.65%.

The development of the Key Lake mine and mill started in 1977 when approvals were given to begin de-watering Key Lake. In 1981 the open-pit mine was underway while the Key Lake Mill was being constructed. By 1983 the mill was fully operational and for 16 years processed 10-14 Million lbs of Uranium per year with 98% efficiency (same as described in Triple R’s NI 43-101 Maiden Resource Estimate met tests). By July 1999, the Key Lake deposit was mined out but the Key Lake Mill became the processing facility for the high-grade McArthur River Mine, 80 km away, becoming the World’s Largest high-grade Uranium mill producing around 25M lbs/year.



Take a close look at the aerial view of the Key Lake Mill. That is the future for Triple R and Patterson Lake!

Rabbit Lake

Up in the NE corner of the Athabasca Basin, the Rabbit Lake deposit was discovered in 1968, also by using boulder train “tracing” methods. Delineation drilling took 4 years, up to 1972, defining a deposit 550m x 250m x 200m deep, about 50M lbs of U3O8 at 0.5% grade. In 1975 an open-pit mine was begun and the world’s 2nd largest and longest operating mill was constructed. The Rabbit Lake deposit was mined out by 1984 but the mill continued to process ore from 4 other nearby mines for a total of 208 M lbs in total. The mill continues to operate processing ore from Cigar Lake.

Cluff Lake

In 1975 a shallow high-grade deposit was discovered at Cluff Lake, on the west side of the basin. A resource of 62M lbs was delineated and by 1980 an open-pit mine and on-site processing mill were constructed that produced an average of 5M lbs/year for 22 years until 2002 when the mill was decommissioned.

Uranium Discoveries heading Deep – Cigar Lake and McArthur River Mines

The 1970’s were watershed years for the discovery of shallow open-pittable Uranium deposits in the basin. In fact, 2 of the largest Uranium Mills in the world came about from those early discoveries at Rabbit Lake and Key Lake and are still operational today. Open-pit means low cost and faster permitting and development of a mine, with a high profit margin that provides for rapid recovery of capital expenditures made to build the mine and mill. Hence, mills are built on-site that process the nearby ore and become the destination for other U3O8 ore from mines within the regional mining district.

But, since those large open-pit mines of the 1980’s, the discoveries of other 100% basement-hosted open-pittable deposits have been few and far between. The world demand for Uranium was growing but new shallow deposits to economically mine were not being found. The industry was forced to look deeper in order to meet the growing demand for supply. Deeper required finding deposits hosted in sandstone deep below the glacial till, where groundwater flooding and other complexities make mining expensive, more hazardous and less profitable. (Re: Bill Kerr’s PDAC talk previously discussed)



As it turned out, going deeper has had its plus side: higher grades. Cigar Lake has an average grade of 17.7% beginning at over 400m depth. McArthur River has the highest grades at average 26.3% beginning at over 500m depth (underground at the height of the tallest buildings in the world). Higher grade means higher profit per tonne of ore extracted, but the huge cost to construct deep underground mines quickly eats away at the profits.

The Cigar Lake deposit was discovered in 1981, but only came into production in 2014. It took 23 years and an expenditure of over $2.6 Billion to bring the mine (no mill, just a mine) into production. Being so deep and complex in a sandstone setting, prone to massive water flooding, the mine has been extremely difficult and expensive to build and operate. Even now it costs Cameco about $18.60/lb U3O8 in operating costs. (Triple R should be half that, in my view.)
Worker safety is paramount in such a deep mine with exposure to high grade uranium ores, so costly remotely-operated mining equipment has to be used. Profits are sacrificed in order to protect workers and still access the high grade ore.

McArthur River mine is even deeper, and with higher grades, so the issues of mine complexity, worker safety, and profit sacrifices are even greater.

Patterson Lake South and Triple R – 40 years after Key Lake discoveries

Industry expectations, after decades of surveys and aerial mapping of the southern and south western edges of the Athabasca Basin, were that there were few, if any, shallow and highly profitable basement-hosted deposits still to be found. Then came Garrett Ainsworth and Ross McElroy who went back and re-interpreted those surveys from decades ago, and using new state-of-the-art surveying and mapping tools, were able to locate a surface U-mineralized boulder field which they traced back to Patterson Lake, and subsequently discovered the new Patterson Lake deposit dubbed “Triple R”.

You know the story. 105.5M lbs and growing, with a new discovery zone at R600W that has completely changed the game from a shallow deposit under Patterson Lake to a land-based high-grade zone that can be open-pit mined, faster and easier than an underground mine, and provide for a rapid recovery of CAPEX investments needed to build a mine and processing mill on-site. R600W opens up many new possibilities for how an overall mine plan will develop, and provides the opportunity to get a mill built and mine underway on land before tackling the slightly more difficult problem of damming and de-watering the SW corner of Patterson Lake in order to access the high-grade R780E zone and to the East beyond.

These are not just marketing words… this really is the largest significant open-pit deposit discovered since 1975… nearly 40 years! Dev’s comparison with Cigar Lake or McArthur River is badly misplaced, in my view. In order to really get investor attention and share price traction, Dev should be calling Triple R the new Key Lake. That’s what it really is to me. It’s the most valuable and economically-viable 100% basement-hosted Uranium deposit to be discovered in 4 decades. Located outside the edge of the Athabasca Basin (the edge of the basin runs between Triple R and NexGen’s Arrow discovery), the Triple R deposit has all the characteristics that made Key Lake such a large and profitable mine that has been the envy of every major Uranium producer in the world. A few years ago even the possible existence of another Key Lake type of deposit was considered nearly impossible. Now, one has been discovered and continues to be proven to meet the requirements for the newest, and likely one of the most profitable Uranium mines in Canadian Uranium mining history. That’s my conclusion, for what it’s worth.



The other conclusion I’ve reached is that Triple R can speak for itself now. We have an official NI 43-101 Maiden Resource Estimate filed on SEDAR that includes preliminary metallurgic and geochemical test data showing Triple R can be mined, milled and leached with 98% efficiency. The latest drill program continues to discover more high-grade zones and expands the ones we already know. The discovery of the R600W land-based ore body seals the deal. Anyone who says Triple R won’t be sold to a major mining company or consortium must be living on a different planet or has their head firmly planted well beneath the sandstones 400m above Cigar Lake. EVERY significant open-pittable high-grade U deposit in the world has been developed! Companies are scrambling to find new deposits. Everything near the surface has already been found, or so they thought. One cannot stress enough how significant Triple R is on the global mining scene.

Time for my own hiatus

Having said that, I’ve come to the conclusion, like others have, that the FCU Bullboard has been overrun with posters who say things which only a naysayer working for one of the potential acquirers could say. FCU Management has not wavered from their game plan and continue to increase the potential wealth of shareholders, yet they are criticized every step of the way. It would not surprise me in the least to learn that the share price is being manipulated by those who have an interest in keeping both the share price and expectations low. They know that Triple R is the next Key Lake, and they’d rather you didn’t know that at all. Games are being played in the boardrooms and trading desks, imho. Considering the unrealized value of Triple R, is it any wonder? This is a gem worth fighting for!

So, if you are still awake and have read down this far then I thank you for at least taking the time to read and hopefully understand my lengthy post. (It would be better as a presentation ;-) This may be my last for a while. We’ll see. But in the meantime, after all I’ve learned from my research, I intend to increase my investment in FCU at the current low share price. The more I explore, the more I see how valuable Triple R really is. It’s risky going overweight with FCU but even with the inherent risks I see a strong likelihood of an excellent profit at the end of the day. Even the takeover of Hathor did not suffer that much from the Fukushima disaster, still achieving over US$10/lb in the sale, and Saskatchewan is one of the most politically stable and “friendly” Uranium mining jurisdictions on earth! The Uranium industry is strongly supported by the Saskatchewan and Canadian governments. Triple R has a very bright future ahead, as far as I can see. ;-)

This is my research and my opinions and not investment advice.
Do your own due diligence. Invest according to your own goals, risk tolerance, and time horizon.

If you’d like to contact me, feel free to drop a message in my Inbox. You could also email me at [email protected] if you’d like to get my attention faster and have questions or information you wish to share.

Good luck with your investments and enjoy the rest of your Easter weekend!