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Fission Uranium Corporate Presentation
Fission Uranium is advancing its high-grade uranium project in the Athabasca Basin, with a completed pre-feasibility study demonstrating low operational costs and significant production potential. The company is on track to progress towards feasibility studies, focusing on community engagement and environmental responsibility. The increasing demand for uranium coupled with a strengthened sector presents a favorable opportunity for the project's development.
Fission Uranium Corporate Presentation
- 1. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Developing the Athabasca Basin’s Largest Near-Surface, High-Grade Uranium Project October 2020 - Corporate Update EXPLORATION PROJECT OF THE YEAR 2015 TSX:FCU OTCQX:FCUUF FissionUranium.com
- 2. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com D I S C L A I M E R & T E C H N I C A L I N F O R M AT I O N Disclaimer The following information may contain forward-looking statements. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Technical Information Certain of the technical information contained herein is derived from the September 23, 2019 news release entitled “Fission Completes Prefeasibility for Underground-Only Mine at PLS: Lower CAPEX, Low OPEX, Minimized Surface Footprint” describing results of a PFS completed on the project – a copy of which will be filed on the Company’s profile on SEDAR at www.sedar.com within 45 days. The PFS considers the PLS project as a stand-alone mine and mill operation, which includes development and extraction of the R00E and R780E zones (Triple R deposit), based on a number of inputs, estimates, and results. The technical information in this corporate presentation has been prepared in accordance with the Canadian regulatory requirements set out in National Instrument 43- 101 and reviewed on behalf of the company by Ross McElroy, P.Geol. President and COO for Fission Uranium Corp., a qualified person. The Mineral Resources have an effective date of October 23, 2018 and are reported at a cut-off grade of 0.25% U3O8 based on a long-term price of US$50 per lb U3O8 and PFS cost estimates. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. 2
- 3. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com The Right Time & Project for Development New team with deep knowledge of uranium project advancement Recently appointed, award winning CEO has over 30 years of uranium experience - from exploration through development. One of the world’s largest and lowest cost uranium projects September 2019 PFS outlines UG mine production of 78.7M lbs of U3O8, averaging 13.1M lbs per for the first five years and LOM avg. cash costs of US$7.18/lb U3O8 Fission is significantly undervalued vs peers Comparison of deposits owned by peers within the same region shows a substantial gap in current valuations, presenting a clear opportunity for strong value growth via development. Clear development path PFS complete; now progressing to Feasibility Study. Social and environmental responsibilities consistently met since project commencement. Industry-leading expert on permitting and environmental processes in place. World class uranium district Saskatchewan consistently ranked in the Top 10 Mining Investment jurisdictions in the world. Project has excellent access to highway. Strengthened uranium sector Higher uranium prices and the continually increasing focus on green energy is shining the spotlight on Tier One uranium projects. 3
- 4. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Award Winning Management Team Ross McElroy, President and CEO, Director • Formerly with Cameco, Areva, BHP Billiton • Professional geologist of 30+ years experience • PDAC 2014 ‘Bill Dennis Award for Exploration Success’, Northern Miner ‘Person of the Year 2013’ • Significant role in 4 major uranium discoveries in Athabasca Basin, incl. Fission’s Waterbury Lake & PLS N e w l e a d e r s h i p t e a m a d v a n c i n g P L S t h r o u g h F e a s i b i l i t y a n d t o w a r d s c o n s t r u c t i o n d e c i s i o n Mark Wittrup Head of Regulatory and Environmental Permitting Ryan Cheung CFO Ray Ashley VP Exploration Chris Sammartino Controller D I R E C T O R S William Marsh Kelowna, Canada Frank Estergaard Kelowna, Canada Rob Chang Toronto, Canada Darian Yip Hong Kong, China He Fei Beijing, China Shiming Ma Beijing, China TSX: FCU | OTCQX: FCUUF | www.fissionuranium.com4 2014 FINALIST
- 5. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Capital Structure Share Price Performance (Last 12 Months) Research Coverage CORPORATE INFORMATION 70.00% Retail & Other 0.8% Management & Board 19.79% China General Nuclear Power 9.41% Institutions 5 Institution Analyst City BMO Capital Markets Alex Pearce London Eight Capital David Talbot Toronto H.C. Wainwright & Co. Heiko Ihle New York Tickers TSX: FCU OTCQX: FCUUF Frankfurt: 2FU Share Price (as of Oct. 9, 2020) C$0.31 52 Week Low / High C$0.095 / C$0.49 Basic Shares Outstanding 488.43M Options 17.46M Warrants 20.67M Fully Diluted Shares Outstanding 526.55M Market Capitalization (Basic) Approx. C$151.41M Cash & ST Investments (as of August 31, 2020) C$13.06M Debt - 4 year term until April 7, 2024 US$10M Investment in Fission 3.0 Corp. C$1.1M
- 6. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Uranium Sector is Strengthening Construction is Booming 1 Current Operable: 441 reactors Under Construction: +53 reactors Planned: +106 reactors Proposed: +325 reactors Demand is Growing 26% growth in global uranium demand expected this decade. 3 50% growth in global electricity demand 4 Prices Continue to Increase Uranium spot price has risen 36% during 2020. 5 6 Supply is Constrained 2 World’s Top-3 producers have reduced production. Major uranium mines, including McArthur River and Key Lake, shuttered due to market conditions, with no restart date. 1. World Nuclear Association, Sept 2020 2. Public Announcements 3. WNA Fuel Report, Sept 2020 4. EIA Energy Report, 2019 5. UxC
- 7. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com The Premier High-Grade Uranium District AT H A B A S C A B A S I N , S A S K AT C H E WA N 0 0.5 1 1.5 2 2.5 United States Kazakhstan Australia Niger Canada Average Grade (% U3O8) Jurisdiction Stable, supportive government and communities, skilled workforce and established infrastructure. Straightforward permitting procedures. Top-Rated Saskatchewan is in the top 10 ranked jurisdictions in the world for mining investment – 2019, the Fraser Institute Grade 10 to 20 times Global Average Global supplier In 2019 Canada (Saskatchewan) supplied 13.2% of the world’s uranium (currently due to COVID-19, Canada’s production has fallen to 0% U3O8) 7
- 8. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Canada’s Athabasca Basin District 8
- 9. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com 100 200 300 400 500 600 700 800 900 Cluff Lake Triple R 9 Key Lake McClean Lake Midwest Roughrider Phoenix Cigar Lake McArthur River Millennium Arrow Shea Creek Past Producer Producing Advanced * Based on company information The Basin’s Only Shallow, High-Grade, Undeveloped Project Orano Cameco Fission Orano Orano Rio Tinto Denison Cameco Cameco Cameco NexGen Orano Production on Hold 9
- 10. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Triple R Deposit – Cross Section Looking NW 10 U3O8 Resources U/G Only PFS – Indicated: U/G Only PFS – Inferred: U/G Only OPEX: 102.4 Mlb U3O8 at an average grade of 2.10% U3O8 32.8 Mlb U3O8 at an average grade of 1.22% U3O8 US$7.18/lb U3O8 2.22 million tonnes 1.22 million tonnes Mineral Resources are reported within an underground design at a cut-off grade of 0.25% U3O8
- 11. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Robust Pre-Feasibility Results Triple R deposit uniquely demonstrates flexibility for multiple mining methods. Two PFS studies were completed 2019: “Underground Only” and Hybrid “Open-Pit / Underground”. Advantage of Underground Scenario • ~C $320M less initial capital cost compared to Open-Pit / Underground Hybrid • Construction time reduced by 25% to 3 years • Bottom quartile OPEX cost of US $7.18 per lb U3O8 • Surface footprint reduced by 90% and potentially environmental impact • Higher IRR (25% After-Tax) • Favorable scenario with rights-holders and local communities 11
- 12. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com PLS: Underground Only PFS 12
- 13. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Clear Potential for Low Cost Production A P R I L 2 0 1 9 P F S ( O P/ U G ) A N D S E P T 2 0 1 9 P F S ( U G O N LY ) Units UG Only (PFS Case) OP/UG (PFS Case) Mine Type 7.3 years UG 6 years OP 2 years UG Mine Life Years 7.0 8.2 Construction Period Years 3 years 4 years Ore Mined M tonnes 2.3 2.9 LOM Avg. Head Grade % U3O8 1.61 1.42 LOM Production M lbs U3O8 81.4 90.5 Avg. LOM Annual Production M lbs U3O8 11.3 11.0 Operating Costs C$/tonne $274 $335 C$/lb U3O8 $9.03 (US$6.77) $9.57 (US$7.17) Initial Capital Cost C$M $1,177 $1,499 LOM Sustaining Capital Cost C$M $209 $137 Project Economics at US$50/lb U3O8 and C$1.00:US$0.75 Pre-Tax Cash Flow C$M $2,656 $2,910 After-Tax Cash Flow C$M $1,568 $1,759 After-Tax NPV8% C$M $702 $693 After-Tax IRR 25% 21% 13 Operating Costs C$/tonne $328 $274 C$/lb U3O8 $9.57 (US$7.18) $9.03 (US$6.77)Operating Costs
- 14. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com OPEX and Peer Comparisons Mine/Project Location Stage OPEX (C$ / lb U3O8) PLS Western Basin PFS $9.57 1 Arrow Western Basin PFS $5.81 2 Wheeler River Eastern Basin PFS $9.27 2 McArthur River Eastern Basin Mine $14.97 1 Cigar Lake Eastern Basin Mine $18.75 3 14 Company Resource 6 Deposits Enterprise Value $/lb U3O8 5 Market Cap 4 NexGen (TSX:NXE) Indicated: 256.6M lbs 2 Inferred: 91.7M lbs 2 Arrow $2.75 $855.3M Denison (TSX:DML) Indicated 140.1M lbs 2 Inferred 11.0M lbs 2 Phoenix, Griffon, Midwest, Midwest A, J Zone, Husky $1.80 $297.4M Fission (TSX:FCU) Indicated 102.4M lbs 1 Inferred 32.8M lbs 1 Triple R $1.08 $151.3M Operating Costs for Athabasca Basin Projects Valuation Comparison vs Peers Currently trading at large discount to peers Highly competitive prospective OPEX 1 2019 NI 43-101 technical report 2 2018 NI 43-101 technical report 3 2016 NI 43-101 technical report 4 Based on closing share price Oct 14, 2020 5 Ycharts.com 6 Based on percentage of company ownership of deposit
- 15. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Fission’s Plan and Timelines 15 Complete Team Expansion and Transition Q4, 2020 PLS Commence Environmental Assessment (EA) Phase 2021 Feasibility Study (FS) 2021/22 Environmental Impact Statement (EIS) 2023 Construction Decision 2026 PLS Development Advantages • Straightforward permitting process • Government support • Skilled workforce • Key activities are already underway
- 16. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Next Steps for the Feasibility Study 2021 Winter / Summer • Resource drilling on R780E and R840W zones to build mine reserves and move 840W into mine plan (est. 22,110m in 67 holes) • Decline holes, test pits and hole freezing to prove concept of decline for mine plan • Permitting / Social Impact, including Engineering, Stakeholder and Rights- holder Agreements • Immediately follow with full Feasibility Study in winter / summer 2021, including • Mine design • Process plant design • Site work 16
- 17. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Next Steps for the Environmental Assessment (EA) EA work well underway, including: • 7 years of comprehensive baseline data collected since 2013 • Baseline survey essentially completed in 2019, with on- going monitoring in 2020 and beyond • Areas completed included wildlife tracking, air quality monitoring program, aquatic studies focused on a broader regional study area (further downstream along the Clearwater River). 17
- 18. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Capital Costs for Key Development Activities Through to Construction Decision Targeting Construction Decision by 2026 18 REQUIRED WORK FOR EIS ▪ Feasibility Study (field work and report, owners rep) ▪ Permitting and Social governance PROJECT ENHANCEMENT (Preferred but not Required) ▪ Increase Mine Resource/Reserve (22,000m in 70 holes for R780E and R840W) COMPLETION BY 2026 2021 – 2023 2021 – 2026 COMPLETION BY 2021 2021 $43,000,000 $27,000,000 $17,000,000 $12,000,000 $12,000,000 Targeting Construction Decision by 2026
- 19. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Fission’s Commitment: Communities & Economy 19 Fission is working to build relationships with key stakeholders and rights-holders for support and approvals for all development stages Commencing in 2012, Fission has consistently prioritized local workers and companies: • Geotechnical • Carpenters, mechanics & electricians • Camp catering, security & maintenance • Accommodation, Logistics support & vehicle hire Fission has provided additional support through: • Event and sports sponsorship • Covid-19 pandemic community funding • Community donations • School program funding
- 20. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Environmental Leadership 20 • Robust: Began baseline in 2013 using CanNorth Environmental (100% owned by LaRonge Band – Kitsaki Dev. Corp.) and adjusted scope of baseline as project developed • Proactive: Developed drill cuttings capture methodology when working from barges – prevented potential contaminants from reaching lake • Careful: Minimized project footprint on land and started reclamation in unused areas • Compliant: Consistently compliant with permits and permissions and regularly inspected by MOE • Expert: ESG QP/expert hired in 2017 to advise Management and the Board on the process of permitting and approvals through all development stages
- 21. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Environmental Win 21 • Initial hybrid plan including a large open pit in Patterson Lake • Technically feasible • Fission re-evaluated options and examined potential for underground-only mining • Stronger, more robust economics • Dramatically smaller environmental footprint • More favourable option with stakeholders, rights-holders, regulators • Revised PFS showed U/G approach superior to hybrid on costs, schedules and bottom line • A real win in listening to stakeholders, responding positively and building trust
- 22. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Triple R Tailings Fission proposes to use “Pervious Surround” method • Utilized at Key Lake, McClean Lake and Rabbit Lake operations • Considered state-of-the-art for uranium tailings in Saskatchewan • Will require a purpose-built pit as no open pits available • Allows for optimal design • Promotes proper density of tailings through dewatering • Eliminates contaminant escape during operations • Facilitates decommissioning • Low profile final shape that fits into the landscape • Reclaimed with local vegetation • Modelling shows negligible impacts to Clearwater River system
- 23. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Fission Uranium Corp. Phone: +1 250 868 8140 Toll Free: +1 877 868 8140 (North America) Investor Relations: Email: [email protected] TSX:FCU OTCQX:FCUUF FissionUranium.com
- 24. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com PFS Results Physicals • Three-year construction period, consisting of box cut and portal, decline, ventilation shafts, underground capital development, and plant and infrastructure construction • Approximately seven years of operations at 1,000 tonnes per day (tpd) ore • 2.3 Mt processed over the LOM, grading 1.61% U3O8, containing 81.4 M lbs U3O8 • Process recovery of 96.8%, based on PFS-level metallurgical testwork • Production of 78.7 M lbs of U3O8, averaging 13.1 M lbs per year for the first five years Revenue • Uranium price of US$50/lb U3O8, based on long-term consensus forecasts. • Exchange rate of 0.75 US$/C$1.00 • Gross revenue of C$5,250 million, less Saskatchewan Government Gross Revenue Royalties of C$381 million • Net revenue of C$4,869 million • Pre-Tax Cash Flow of 2,656 million • After-Tax Cash Flow of 1,568 million Operating Costs • Average OPEX of C$9.57/lb (US$7.18/lb) U3O8 over the life of mine • Unit Operating Costs of C$328 per tonne processed. • Mining: C$137 per tonne processed • Processing: C$116 per tonne processed • Surface and G&A: C$75 per tonne processed Capital Costs • Pre-Production capital costs of $1.177 billion • Underground mining - C$201 million • Process plant - C$350 million • Infrastructure - C$120 million • Indirects & Owner’s Costs - C$315 million • Contingency - C$192 million • Sustaining capital costs of C$209 million • Reclamation and closure cost of C$74 million Physicals • Four years of pre-production and 8 years of mine life, processing nominally 1,000 tonnes per day (350,000 tonnes per year) • Total Tonnes Processed: 2.89 million tonnes at 1.42% U3O8 average grade; open pit mining of 2.30 million tonnes at 1.62% U3O8 • Underground mining of 0.59 million tonnes at 0.63% U3O8 • Process recovery of 96.7%, supported by metallurgical testwork • Production of 90.5 million lbs U3O8; an average of almost 15 million lbs U3O8 per year for 5 years, followed by a lower-production tail Revenue • Long term uranium price of US$50 / lb U3O8 • Exchange rate of 0.75 US$ / C$1.00 • Gross revenue of C$5.84 billion, less Saskatchewan gross revenue royalties of $423 million • Net revenue of C$5.41 billion • Pre-Tax Cash Flow of 2,910 million • Post-Tax Cash Flow of 1,759 million Operating Costs • Average OPEX of C$9.03/lb (US$6.77/lb) U3O8 over the life of mine • Unit Operating Costs of C$274 per tonne processed. • Combined Mining C$89 per tonne processed • Processing: C$115 per tonne processed • Surface and G&A: C$71 per tonne processed • Operating cash flow of C$4.62 billion Capital Costs • Pre-Production capital costs of $1.498 billion • Dyke and Slurry Wall - C$371 million • Open pit mining - C$44 million • Process plant - C$241 million • Tailings Facility - C$101 million • Infrastructure - C$114 million • Indirects & Owner’s Costs - C$376 million • Contingency - C$250 million • Sustaining capital costs of C$137 million (includes all underground mine capital costs, and tailings dam lifts) • Reclamation and closure cost of C$77 million • Cash flow from operations of C$2.91 billion Hybrid PFS U/G Only PFS Appendix
- 25. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Exploration Potential PLS has over 100 EM Conductors and multiple exploration hotspots Triple R deposit associated with just one of these EM conductors 25 31,039 ha property in the Athabasca Basin district, with ~ 80% under explored 5X the size of Manhattan Island Triple R deposit is open in multiple directions and at depth
- 26. TSX: FCU |OTCQX: FCUUF | www.fissionuranium.com Decarbonizing our Electrical Future 26 Average life-cycle carbon dioxide-equivalent emissions (Source: IPCC) The United Nations recognises climate change as “the most systemic threat to humankind.” • Nuclear plants produce no greenhouse gas emissions during operation. • During its life-cycle, a nuclear plant produces same emissions per unit of electricity as wind, and one-third of the emissions compared with solar.