(Adds CEO interview)
By Rod Nickel
Jan 12 (Reuters) - Fission Uranium Corp shares jumped as much as 23 percent on Monday after the company said late on Friday that an independent resource estimate showed its Triple R deposit at Patterson Lake South contained 105.5 million pounds of uranium.
The surprisingly large estimate by RPA Inc of the deposit in Canada’s northern Saskatchewan could position the tiny company as the next takeout target, an analyst said, just as the sector slowly emerges from a nearly four-year slump.
Fission’s deposit is the largest in Saskatchewan’s Athabasca Basin after the world’s largest high-grade uranium mine, McArthur River, and the Cigar Lake mine. Both are owned by Cameco Corp and Areva SA.
Fission Chief Executive Officer Dev Randhawa said he was in no hurry to sell before the resource is fully explored.
“Right now, I think we’re the best technical team to develop it,” Randhawa told Reuters from New York, “and the evidence is we knocked (the resource estimate) out of the park.”
However, Dundee Capital Markets analyst David Talbot said the deposit was “ripe for the picking,” adding that resource estimates usually grow as deposits are further explored.
Randhawa said British Columbia-based Fission had signed non-disclosure agreements with about six parties, including Cameco, Areva, Denison Mines Corp and state-owned power company China General Nuclear Power Group. It is also talking with streaming companies about buying future gold production.
The 2011 Fukushima meltdown led to shutdowns of all of Japan’s nuclear reactors, depressing the radioactive metal’s price. The sector got a boost in late 2014 as Japan moved toward re-starting some reactors.
The Triple R deposit is unusually shallow, allowing for some or all mining to occur in an open pit, rather than underground.
Even so, some miners consider the uranium spot price of about $35.40 per pound far too low to justify starting new projects. A Patterson Lake South mine would require construction of a mill, and Fission does not expect to have a preliminary economic assessment until sometime next year.
Patterson is on the basin’s west side, where no one has mined uranium since Areva’s Cluff Lake mine ceased production more than a decade ago.
This year, Fission will focus on further drilling at Patterson and start drilling at nearby Forrest Lake, Randhawa said.
Around midday, Fission shares were up 13 percent at C$1.14 in Toronto after rising as high as C$1.24. (Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by Lisa Von Ahn)