Lukas Lundin and Dev Randhawa held a town hall meeting in Toronto to address shareholder concerns about the Fission-Denison tie-up. Photo: Aaron Vincent Elkaim for National Post

Lukas Lundin and Dev Randhawa held a town hall meeting in Toronto to address shareholder concerns about the Fission-Denison tie-up. Photo: Aaron Vincent Elkaim for National Post

Fission Uranium CEO Dev Randhawa says he’s determined to fight through both negative market sentiment and the opposition of some retail shareholders who want him to step down after the failed merger with Denison Mines.

Randhawa said in a phone interview late this morning that it’s business as usual as he advances and markets Fission’s high-grade Triple R deposit on the western side of the Athabasca Basin. A positive PEA will help on that front.

“This’ll probably be the cheapest uranium mine in the world one day, that’s the story,” he said.

Fission is waiting for assays from about 20 drill holes from its summer 2015 program, including from new high-grade zones that aren’t included in the current resource estimate, Randhawa said.

He said Fission has about $11 million in the treasury, down from $25 million as of June 30. The company “doesn’t have to” raise money until March or April, but Randhawa said he is working on some financing angles.

Randhawa acknowledged discontent – “I get the emails,” including from his 92-year-old father – about the declining share price, which has dropped about 46% in the past 6 months including 36% since the merger with Lukas Lundin’s Denison Mines was first announced. The merger failed to get the required two-thirds approval from Fission shareholders – Randhawa said “FOR” votes were in the mid-50% range.

Is the embattled CEO worried about keeping his job? Randhawa said institutional shareholders are supportive of his leadership and repeated that expectations of retail shareholders for a takeover premium were simply too high given market sentiment – and given “past sins” of the majors that overpaid for Athabasca Basin uranium plays, including Rio’s takeover of Hathor.

“The retail people have different expectations, they like takeouts, they don’t like diversified companies sometimes. They like a simple story,” he said. “I know retail people want a takeout, but they’re dreaming because there are no buyers. Trust me, I’ve gone to Paris and met with AREVA, I’ve met with every senior, large company out there, even companies like Teck, who could do an open pit. … unfortunately the market sentiment is against you.

“The big boys understand that there’s nothing you can do about market sentiment.”

Randhawa criticized the “shadow group” of dissenting Fission shareholders – “FCU Oversight” – and said they don’t represent a large group of shareholders. After the group emerged publicly on Oct. 6, more shareholders voted for the merger with Denison than against it – contrary to the group’s claims, he said.

One criticism of dissenting shareholders was doing a deal when a preliminary economic assessment was imminent. The Denison deal was announced on July 6 and Fission came out with a PEA on Sept. 3. The PEA showed a post-tax net present value of $1.02 billion (10% discount rate) and operating costs of $14.02 a pound over a 14-year mine life. The study was done at US$65/lb uranium (significantly higher than the current spot price of US$36.50).

“The PEA was so good, it blew our minds,” he said. Randhawa insisted that Fission “had no idea” that the third-party PEA would be that good: “People think I’m God.”

There was a similar dynamic when Fission’s maiden resource estimate of 105.5M lbs (79.6M indicated, 25.9M inferred) was released, he pointed out – most investors and analysts were expecting a much lower number.

He said it was unfortunate that some shareholders didn’t recognize the value of Denison’s assets – “we would have been the go-to name after Cameco” – but said the focus now is on building pounds at Patterson Lake South and telling the story. “Nothing has changed.”

“All you can do is drill, and promote the story, drill and promote the story,” he said.

Randhawa acknowledged that money has been flowing from Fission to “honeymoon stock” NexGen, as the latter’s share price continues to register gains (25% in the past 6 months). Fission’s neighbour in the western Basin, NexGen has a market capitalization of about $185 million, compared to about $240 million for Fission.

“I’m pretty happy for (NexGen CEO) Leigh (Curyer),” Randhawa said. “But when they get a 43-101 (resource estimate), let me know.”

He said Fission’s Triple R deposit is more favourable because it’s shallower and open-pittable. Most of Fission’s resource is located within 300 metres from surface, while the high-grade in NexGen’s deposit starts 400 metres down, Randhawa said.

NexGen also uses a cut-off grade of .01% for mineralization, Randhawa said, compared to .1% for Fission’s resource estimate. “.01% is not uranium.”

“It’s like I can tell you I’m going to go to a party and every woman’s a 10, but I forgot to tell you it’s from 0 to 100.”

Also Tuesday, Fission announced an advance notice bylaw regarding the nomination of directors. Fission’s AGM is scheduled for Dec. 15.

On Wednesday another feature article about the Athabasca Basin goes live at CEO.CA.

Join the conversation at CEO Chat, where the shareholder town hall meeting featuring Fission CEO Dev Randhawa and Denison chairman Lukas Lundin was covered live.

Related: Athabasca Basin heats up as Fission Uranium-Denison Mines deal on ice

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