Investors have spoken, and they said they don’t want a merger of Fission Uranium and Denison Mines. In this interview with The Energy Report, Marin Katusa, founder of Katusa Research, shares his insight on why Fission investors rejected the deal and where he is finding value in the uranium and oil sector today.
The Energy Report: What happened to the Fission Uranium Corp. (FCU:TSX)-Denison Mines Corp. (DML:TSX; DNN:NYSE.MKT) deal? Why did investors reject it and what does it mean for the junior uranium mining landscape?
Marin Katusa: Ross McElroy and his team have done a great job growing the Patterson Lake South (PLS) resource, which is turning out to be a world-class deposit. It is clear the majority of the Fission shareholders wanted the company to stay focused on its PLS project and didn’t believe the benefits of diversification, including access to a mill, the Lundin group and Wheeler River, outweighed the potential of the PLS deposit.
I had a great run early on with Fission. We tripled our money, and we sold, albeit a bit too early, but a profit is a profit. I think both Fission and Denison are still interesting opportunities, because both are much cheaper than they were before the deal was offered. I own neither currently.
TER: What’s next for Fission? It isn’t going to try to take Patterson Lake to production, is it? Are there other suitors in the wings?
“I think Fission Uranium Corp. will keep drilling fantastic numbers.”
MK: It is difficult for an exploration company to take something like PLS to production; it rarely works. A completely different skill set is required. PLS will have a permitting hurdle, not to mention there’s no mill that could take their feed currently, so the company would have to build …read more