Suitors eye Fission Uranium as CEO tries to buy time

Sun Mar 2, 2014 5:54pm EST
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By Rod Nickel

TORONTO (Reuters) - One of the most closely watched uranium deposits not owned by a major miner, Fission Uranium Corp's FCU.V Patterson Lake South project, is attracting attention from potential buyers, but Fission's CEO hopes to buy time.

Drilling results displaying the ore's rich grade and shallow depth have caught the eye of investors and analysts over the past two years, even before Patterson Lake South, in the Athabasca Basin, has an established resource recognized by Canadian regulators.

Now with uranium's three-year slump showing signs of ending, three groups have signed non-disclosure agreements to take a closer look at Fission, Chief Executive Dev Randhawa said in an interview at the Prospectors & Developers Association of Canada (PDAC) convention in Toronto on Sunday.

The interest from two Asian groups and one North American group is welcome, but the timing isn't ideal for a sale, Randhawa said.

"We're not going to let this go very easily. It's the first time in 40 years someone's made a high-grade discovery that is so shallow. I'm not in a hurry to sell."

For starters, the uranium spot price is hovering around $35.50 per pound, just above an eight-year low and limiting the sector's outlook.

The 2011 Fukushima meltdown led to most of Japan's nuclear reactors being shut down, depressing the radioactive metal's price and weighing down uranium equities. But uranium stocks got a bump last week when Japan's draft energy plan included a place for nuclear power.

Fission also does not yet have an established resource, meaning that drilling results to date may have only scratched the surface of Patterson's potential, Randhawa said.   Continued...