Like the Elton Britt song popularized by the video game “Fallout 4,” “Uranium Fever,” said, “Uranium fever has done and got me down.” And uranium fever indeed got Fission Uranium (TSE:FCU) down, as it hit a jackpot in the Athabasca Basin. But shareholders, somehow, were not at all pleased, sending shares careening down over 3% in Wednesday morning’s trading.
Fission Uranium brought out a winner of a report from its operations in the Athabasca Basin. The last 13 drill holes all came up with minerals therein, and around two-thirds—nine holes—showed high-grade portions. The test holes found several sections with radiation measuring over 10,000 counts per second.
Fission’s CEO and president, Ross McElroy, noted that the results still needed to be qualified and quantified appropriately but made it clear this was a win. Mine reserves could surge accordingly, and the production profile of the PLS property in the Athabasca Basin would look even better.
Limited Benefit to Canada
The news about the Athabasca Basin may be of limited benefit to Canada, as about three weeks ago, Paladin Energy (PALAF) of Australia bought Fission Uranium for around $833 million. Thus, Fission Uranium’s huge new strike might end up doing more good for Australia than it will for Canada, especially at a time when uranium is increasingly in demand.
More and more countries are shifting away from wind and solar for large-scale power generation and toward nuclear power. In fact, some are already projecting bigger things ahead for mergers and acquisitions in this space, largely because of that growing uranium demand.
Is Fission Uranium a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on Fission Uranium stock based on three Buys assigned in the past three months, as indicated by the graphic below. After a 113.79% rally in its share price over the past year, the average Fission Uranium price target of C$2.22 per share implies 77.24% upside potential.
