Stockchase Opinions

Benj Gallander Fission Uranium Corp. FCU-T COMMENT Jun 28, 2016

This company doesn’t fit into his model at all. He doesn’t like companies that don’t have revenue and a lot of it is hype and hope.

$0.680

Stock price when the opinion was issued

Mining
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COMMENT

It wouldn’t surprise him if there was a 2 year wait for a price change in uranium. This is an extraordinarily exciting exploration play with uranium grades, outside of Cameco (CCO-T), which the world has never seen before. Failed in an attempt to merge with Denison Mines (DML-T), probably giving some disappointment in the stock in the near term. Good exploration news or a resumption of some sort of amalgamation in the uranium space, could give you some near-term joy.

COMMENT

Always amazed with this company because they have such a following. The share count has skyrocketed over the last 4 years. Just had an investment from a Chinese company for $82 million, to take about 20% of the company. It could be years down the road before they have this developed and producing. He doesn’t buy into anything that doesn’t have revenues, unless he is very convinced it will do so in the next 6 months or so. Uranium is probably undervalued, and nuclear plants are coming back into style. Prefers GSE Systems (GVP-A), a great company with no debt and good management.

COMMENT

You are facing the general risk of earlier stage and higher risk companies. He doesn’t think this is going to build a uranium mine. Expects there is a surplus of uranium for the next year or 2, so with this one you are really relying on it being acquired.

DON'T BUY

The Japan incident set the industry back. This is a tough one and is not on his radar.

COMMENT

The Hinckley Point reactor in Great Britain is going to go ahead. Also, there is a report that China, by the year 2020, will have as many reactors built as there are in the US. This is why he is bullish longer-term. With the slowdown in the last few years, the inventory has built up and the buyers are utilities or governments, which are very slow moving. Transition might be a little slower, but he does believe in this longer-term. He likes this.

DON'T BUY

Sold his uranium stock last year. It looks like the market is fairly well balanced, such that he doesn’t see a turn around anytime soon, because there is still such a big overhang in the inventory. The way to play this would not be with production, and potentially not with near-term development, but more with exploration. He is not playing anything in uranium right now.

COMMENT

You have to be very patient in uranium, as the uranium market is overstocked right now. The price of uranium really depends on the pace of Japanese restarts. This company’s party to a world-class discovery.

BUY
NexGen vs. Fission He owns both Fission and NexGen. They're far from infrastructure in the Athabasca Basin and would be challenged if it wasn't for their deposits being large and of quality (and next to each other). They could get built as a pair. The Fission deposit is borderline-tier one deposit, whole Nexgen's is. The quality is so high is that if they're not built in the next cycle, they will get taken over.
BUY

Expecting merger with NextGen. Will continue to own shares. Large deposits of Uranium. Very bullish on upside for company.