CHARTS: The coming critical minerals trade war is BRICS short of a load
"While a large number of countries around the world continue to talk about securing raw material supply, China is actually doing something about it."
Fission Uranium Corp (CVE:FCU) jumped as much as 11% on Monday on massive volumes after announcing a C$82.2 million investment from China’s CGN Mining.
The cash injection is in exchange for a 20% stake in Fission, a Kelowna-based explorer advancing the Tripe-R project at its Patterson Lake South property in Saskatchewan abutting the Athabasca Basin.
In midday trade the Vancouver-based explorer retreated from its highs reached early on to change hands at $0.72, still up 5.9% on the Toronto big board. A whopping 2.5 million shares in the $278 million company had changed hands by 12:00 pm EST on Monday compared to the daily average volume of 400,000.
The deal with Hong Kong-listed CGN, the first time a Chinese company has invested directly in a Canadian uranium firm, also includes an offtake agreement for Fission’ wholly-owned PLS property. The controlling shareholder of CGN is China Uranium Development Company Limited, a fully-owned subsidiary of China General Nuclear Power Corporation.
The agreement comes after shareholders rejected a proposal for Fission to merge with Denison Energy Corp to combine the company’s adjacent properties in Saskatchewan.
Fission’s preliminary economic assessment for the Triple-R deposit released in September envisages a open pit–underground mine for an estimated capital outlay of $1.1 billion producing more than 100 million pounds of yellowcake over 14 years.
Fission estimates the hybrid approach utilizing a dyke system will result in operating expenditure of $14.02 per pound U3O8 over the life of mine, making Triple R potentially one of the lowest cost uranium producers in the world.
Spot uranium prices – usually much lower than long-term contract pricing which is the norm in the industry – were last assessed at $36.10. The commodity has been trading in tight range of $35 – $40 for the past year. Fission’s PEA assumes a long term price of $65 a pound for gross revenues over the life of the mine of $7.7 billion and net revenues of $7.1 billion after provincial royalties and transportation charges.
