Fission Uranium Corp. (FCU-T)

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

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.

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.

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.

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

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.

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.

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.

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.

They were trying to merge with DML-T. It was beaten down. There is expectation for FCU-T to be taken over by a larger company and the merger was not for enough premium to the stock price. They have a strong management team and balance sheet. He likes it, but the price of Uranium is not a short term issue. He expects a recovery in 2-7 years. He has half a position.

He owns no uranium right now. It costs a lot to bring projects on line. He is not a buyer here. If you want to buy, wait for tax loss selling.

Uranium. He expected Japan would have to restart their fleet of nuclear reactors sooner than they did. It looks like it is beginning to happen, but don’t look for strength in uranium prices for 12-18 months. The merged company will be a takeover candidate.

They bought forward in the markets. Over the next couple of years the demand will move up substantially. When the commodity moves you want to own what the foreign investors will buy, but this is not it.

The merger with Denison (DML-T) is somewhat controversial. For people that were in Fission, they would prefer it to be a clean take out at some point, because they have done a great job exploring and discovering resources and have 150 million pounds, more than enough for a larger company to come around and takes them. This is more a merger of equals, so it makes sense from that point of view. In the short term, it doesn’t bring any upside to this company’s shareholders.