Fission Uranium : Entering a New Stage

In the last five weeks our relationship with CGN Mining has gone from announcing a binding LOI to executing an agreement that covers such things as purchase of shares, board seats, anti-dilution clauses and more. TSX approval has been obtained and the $82 million has now been released to Fission.

Considering that our new partner not only had to deal with internal approvals but also had to deal with its mothership (CGN) and their government, we are looking at record speeds. That should tell you just how committed both sides have been to getting the deal done. This is the culmination of over sixteen months of very hard work by both companies

Let's look at what this means from a corporate perspective. As Ross mentioned in his blog post last week, our cash requirements are taken care of for a minimum of the next three years. For a highly active exploration company, that fact alone is tremendous. Of course, with the markets where they are it, it's very hard to move the needle even with the fantastic drill results we've become known for. As a result we are going use an even more targeted approach for our drill programs until the markets turn around. More growth for R600W and focusing on the very highest prospective exploration and resource growth targets.

Unlike other financings, there is no interest in short term gain because CGN Mining is in it for the long-term. However, the upside of this deal goes well beyond that.

We've signed an off-take agreement that CGN Mining will purchase between 20% - 35% of the Triple R's uranium at such point as it is put into production. The purchase price will be in line with industry standards, which means a slight discount to the spot price at time of saleHere's why the off-take agreement adds value to Fission shareholders: at some point the Western Athabasca region is going to need a mill. Having a significant portion of the future production sold, it will add financing leverage to whoever controls PLS at the time, to finance the construction of a mill. In essence, the off-take is another step in de-risking the project.

It will be some years before the Triple R sees production and while no one can say for sure where prices will be at that time there has been a lot of positive Media attention in the last few months. If you haven't seen our latest corporate presentation, you may be interested in a few quotes we added from recent articles:

• 'Uranium prices are expected to outperform other commodities in 2016 and beyond as a global climate-change deal and growing demand from Asia bolster the prospects of the nuclear industry.' (Clara Denina, Reuters, Dec 28, 2015)
• 'Prospects of higher demand and strategic stockpiling from U.S. utilities sent spot prices to an average of $39 (U.S.) a pound in 2015, up 18 per cent from $33 last year, making it the best-performing metal of the year and one of the few commodities to post a yearly increase.' (Clara Denina, Reuters, Dec 28, 2015)
• 'It is expected to climb further, according to analysts, after governments forged a landmark agreement to reduce greenhouse gas emissions at a global climate summit in Paris last month - a move that supports nuclear power generation and, in turn, uranium.' (Clara Denina, Reuters, Dec 28, 2015)
• 'Uranium has proven to be a pretty good place to hide for resource and energy-focused investors. I think it will continue.' (Edward Sterck, BMO Nesbitt Burns, Dec 28, 2015)
• China plans to close 1,000 [coal] mines to trim excess capacity, aims to reduce coal's share of energy mix in 2016 to 62.6%. China will stop approving new coal mines for the next three years and continue to trim production capacity as the world's biggest energy consumer tries to shift away from the fuel as it grapples with pollution. (Bloomberg News, December 28, 2015)

At a time when the markets remain troubled, commodities are down and raising money will become harder than ever, Fission has the right strategic partner, the right funding and the right team to push forward to grow shareholder value.

Dev Randhawa, CEO of Fission Uranium

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