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Fission Underground-Only PFS Results: Reduced CAPEX, Strong OPEX, Minimized Surface Footprint

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Results highlight the enhanced economics and environmental aspects for the Shallow Depth, High-Grade Triple R deposit

TSX SYMBOL: FCU
OTCQX SYMBOL: FCUUF
FRANKFURT SYMBOL: 2FU

KELOWNA, BC, Sept. 23, 2019 /CNW/ - FISSION URANIUM CORP. ("Fission" or "the company") is pleased to announce the results of a prefeasibility study for an underground-only mining scenario, conducted by Roscoe Postle Associates Inc. "RPA", and entitled "Pre-Feasibility Study on the Patterson Lake South Property Using Underground Mining Methods" (the "U/G PFS") for its' PLS property in Canada's Athabasca Basin region. The U/G PFS follows the results of an earlier PFS report outlining a hybrid mine approach using both open pit and underground techniques (the "Hybrid PFS"). The U/G PFS highlights a substantial reduction in CAPEX and time requirements for construction of the Triple R mine due to simplified water control measures for underground mining. With the U/G PFS, access to the deposit is envisaged via a decline from land.  The revised mining method eliminates the need for a system of dykes and slurry walls, dewatering and overburden removal and results in a reduction of 90% of total mine-related earth movement from the Hybrid PFS to the U/G PFS.  The reduced earth movement results in reduced surface piles and overall minimized surface footprint.  With a projected OPEX of just US$7.18/lb, an IRR (pre-tax) of 34% and an NPV (pre-tax) at 8% of $1.33B, the U/G PFS outlines the potential for highly economic production at PLS.

While the U/G PFS only considers Indicated Resources from the R780E and R00E zones, the mine plan has been deliberately designed to easily accommodate additional material from the R1515W, R845W and R1620E zones based on potential future conversion of Inferred Resources to Indicated Resources.  The majority of mineralization at these three, on-strike, high-grade zones is currently defined as Inferred Mineral Resource classification and thus not considered for inclusion in the U/G PFS mine plan.  As proven by the Company's drilling at the Triple R deposit's R00E and R780E zones, Fission has an excellent track record of converting Inferred-category resources to Indicated-category. As a result, there is a clear path for growing the deposit, potentially leading to an increased resource as well as a longer mine life.

The PFS has an effective date of September 19, 2019. All currency figures are expressed in Canadian dollars unless denoted otherwise.

U/G PFS Highlights

Reduced Capital Costs, Low Operating Costs, and Robust Economics

  • Substantially reduced earthworks as a result of eliminating the dyke, slurry wall, dewatering, and overburden removal that was envisaged in the Hybrid PFS
  • Construction timeline reduction of 1 year from 4 years (Hybrid PFS) to 3 years (U/G PFS)
  • 21% reduction in capital costs from $1.50B (Hybrid PFS) to $1.18B (U/G PFS)
  • Seven-year production life
  • Average unit operating costs of US$7.18/lb U3O8
  • Pre -Tax economics:
    • IRR of 34%
    • NPV at 8% of $1.33B
    • Payback in 2.2 years

Demonstrated Scope for Substantial Growth

  • Additional Zones: The PFS mine plan has been designed specifically to accommodate all five currently defined mineral zones based on potential future conversion of Inferred Resources to Indicated Resources. These include the three high-grade, on strike zones - R1515W, R845W and R1620E – that are not yet part of Mineral Reserves.
  • Zone Expansion: The R780E is open at depth and along plunge to the east and further opportunity exists to continue to grow the resource in those directions, potentially extending the underground mine life.
  • Mineralization Upgrade: The PFS mine plan does not include areas of Inferred Mineral Resource in the R00E and R780E zones.

Reduced Environmental Impact

  • The U/G PFS mine plan completely eliminates the need for a ring dyke, slurry wall, dewatering, and overburden removal that was included in the Hybrid PFS.
  • Recovery of reserves near the overburden and bedrock contact (the crown pillar) will utilize artificial ground freezing technology drilled remotely from shore, which eliminates any disturbances into Patterson Lake.  Artificial ground freezing has been used extensively at uranium deposits in the Athabasca Basin.
  • Other than a freshwater intake pump, and treated effluent discharge point, all other infrastructure related to mining at PLS is set back a minimum of 100 m from the shoreline of Patterson Lake.
  • The revised mining method results in a reduction of approximately 90% of total mine-related earth movement from the Hybrid PFS to the U/G PFS (51.2Mt in the Hybrid PFS compared to 5.4 Mt in the U/G PFS), and a 58% reduction to the total disturbed area.

Ross McElroy, President, COO, and Chief Geologist for Fission, commented, "This prefeasibility report presents an underground-only method for production at PLS as an alternative to the hybrid base case, which combined underground with open pit mining. The report highlights important potential advantages to the underground approach, including large reductions in capital expenditure, construction time and surface footprint, while still enjoying low operating costs and a very strong return on investment. We are delighted by the results and have demonstrated the flexibility of the Triple R to be mined by multiple methods.  Fission is now able to transition confidently into the feasibility study phase."

Technical Summary

Overview

The U/G PFS was prepared by independent consultants led by RPA, who carried out resource estimation, mining design, and overall compilation, assisted by BGC Engineering Inc. (geotechnical aspects), Newmans Geotechnique Inc. (artificial ground freezing), Wood Canada Ltd. (process and infrastructure), Melis Engineering Ltd. (metallurgical testing), Clifton Associates Ltd. (environment and tailings), Artisan Consulting Services Ltd. (directional drilling assistance), and Thyssen Mining Construction of Canada Ltd. (mine design, scheduling, and cost estimation support).

In addition to managing radiological issues common to uranium mining, key technical challenges to developing the operation will be 1) accessing the deposit through the saturated sandy overburden, and 2) recovery of the crown pillar reserves.  To access the deposit, a decline is planned through the overburden using the New Austrian Tunnelling Method (NATM) and other ground support measures, a common technique used for developing through soft ground.  The design of the decline is undergoing further optimization and refinement.  In addition to the decline, two vertical shafts will be developed to provide a dedicated ventilation system for the mine and secondary egress.  The crown pillar will be partially recovered with the installation of an artificial ground freezing system, using holes drilled from the shore of Patterson Lake using directional drilling technology.  Once the holes are drilled, a refrigerated brine solution is pumped through the holes in order to freeze the ground, providing ground improvement and reducing permeability of the rock. 

Mineral Resources
The Mineral Resource block model is unchanged from the previous PFS that was completed in April 2019, other than re-reporting the block model based on the changes to the proposed mining method and associated cut-off grade.  The Mineral Resource statement does not include the drilling that was done over the Winter or Summer of 2019.  Estimated block model grades are based on chemical assays only.

The Triple R deposit as defined in the Mineral Resource estimate is comprised of several nearly vertical stacked lenses across five mineralized zones that are generally oriented with an azimuth 66.2°.  A set of cross-sections and level plans were interpreted to construct a total of 82 three-dimensional wireframe models (domains) for the mineralized zones at a minimum grade of 0.05% U3O8.  Of the 82 wireframes, 16 are High Grade domains created at a minimum grade of approximately 5% U3O8, which are enveloped within the Low Grade domains.

Block model grades were interpolated by inverse distance cubed (ID3).  Classification into the Indicated and Inferred categories was guided by the drill hole spacing and the continuity of the mineralized zones.  The updated Mineral Resources are shown in Table 1.



Table 1: Mineral Resource Statement – October 23, 2018



Tonnes

Metal Grade

Contained Metal

Classification

Zone

(kt)

% U3O8

g/t Au

(M lbs U3O8)

(koz
Au)

Indicated

R780E

1,922

2.18

0.66

92.4

40.6


R000E

97

1.5

0.16

3.2

0.5


R1620E

42

2

0.22

1.8

0.3


R840W

88

1.68

0.32

3.3

0.9


R1515W

66

1.13

0.38

1.6

0.8

Indicated
Total


2,215

2.1

0.61

102.4

43.1








Inferred

R780E

549

0.83

0.57

10.1

10


R000E

8

4.09

0.78

0.7

0.2


R1620E

59

3.52

0.47

4.6

0.9


R840W

280

1.86

0.49

11.5

4.4


R1515W

227

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