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A Monster In The Making

|Includes:ESOFF, Fission Uranium Corp. (FCUUF)


Fission Uranium (OTCQX:FCUUF) and Alpha Minerals (OTCPK:ESOFF) have released an update on their ongoing Patterson Lake drilling program. The companies have identified a 4th zone of mineralization on line 945E and have extended the total mineralized strike length to over 1 kilometer.

A link to the full press release can be found here.

The stocks will resume trading at 10:30am EST.

The results continue to confirm that the mineralizing system at Patterson Lake is robust and extensive in terms of strike length and depth extent. For them to have hit on their first hole into a totally new target should tell investors something. The JV partners are either extremely lucky or they are dealing with what is potentially a very large system. Once again, a hole like the one they have just drilled at PLS13-084 simply cannot occur in isolation.

It's hard to assess just what "very" large might mean at this stage. As mentioned before, all of Hathor's mineralization at Roughrider was contained within about a 350m strike length, and that was a 57 million pound resource when it was bought by Rio Tinto in late 2011 for $650 million. PLS is now over 1 kilometer in strike length and still open to expansion. I will not mince words, the potential is enormous. It's still relatively early days in terms of delineation, but results consistently confirm the robust and extensive nature of this mineralizing system.

I believe that the 50 million pound "potential target" that the street is focused on right now is but a formality at this stage, which should easily be attained through even partial success on infill drilling of existing known zones. I also believe that comparisons may soon be drawn between Patterson Lake South and other world class deposits like Key Lake and perhaps eventually even something as big as McArthur River. The footprint of PLS is already huge and continues to grow.

Many investors will not have the skill sets to evaluate this data, but the majors in the sector and those who understand mineral deposits will.

On yesterday's close, using AMW's 31.4 million shares outstanding and a fully diluted cash position of over $33 million, the project is valued just over $300 million on a 100% basis, which I believe is a very attractive valuation for what appears to be one of the best mineral discoveries in recent memory in terms of the miner's holy trinity of scale, grade, and depth.

I would expect both Fission and Alpha to be materially higher on this news today. I believe their days may be numbered at this rate. I believe that the target on their backs just got even bigger in terms of takeout potential.

As always, I encourage readers to do their own due diligence. These views are merely my opinions and are not meant as investment advice. Best of luck to all as this impressive discovery continues to be drilled.

Disclosure: I am long OTCPK:ESOFF.