Third Quarter 2023
Dear Shareholders and Followers,
Recently, we’ve seen a surge in uranium prices, climbing from US$60/lb to over US$70/lb U3O8 during the past month. The coup in Niger, supply disruptions in Kazakstan, and Cameco production cuts are some of the factors at play. Notwithstanding these recent events, the macro fundamentals are aligning for a sustained bull market as global sentiment shifts toward clean nuclear energy to address climate change. Currently there are 60 new reactors under construction, 110 planned and 321 proposed. In addition, SMR’s are advancing rapidly, in part backed by smart Silicon-Valley money (Bill Gates, Peter Thiel, Jeff Bezos, Sam Altman and more). Projected uranium demand exceeds current supply forecasts, and new sources of uranium will undoubtably be required. With ever increasing geopolitical and security-of-supply concerns, uranium sources in safe jurisdictions will become highly sought after.
Located in mining-friendly Saskatchewan, the Athabasca Basin is the world’s premier jurisdiction for high-grade uranium and, not surprisingly, the Basin is fully staked with explorers looking to make that next discovery. Not every part of the Basin is prospective and the past 40 years of exploration have shown that high-grade deposits are associated with graphite-rich basement rocks recognizable as electromagnetic, or “EM”, conductors from geophysical survey. Almost every high-grade discovery in the Basin has been made testing EM conductors, from McArthur River and Cigar Lake in the east, to Arrow and Triple R in the west.
Commencing in 2021, Fortune Bay has assembled a dominant land package of EM conductors in the Uranium City area on the northern rim of the Athabasca Basin, with ~20,000 hectares of highly prospective ground covered by our two uranium projects. The area has an incredible endowment of uranium, peppered with high-grade uranium occurrences (>1% U3O8) and three significant historical uranium mines. Despite this endowment, the EM conductors in this area are largely untested because historical exploration, conducted from the 1950’s to the early 1980’s, targeted a different type of uranium mineralization (Beaverlodge-type) before the exploration strategy in the Basin shifted to targeting of EM conductors. In addition, these graphitic rocks (EM conductors) are soft and consequently occur in valleys overlain by overburden or small lakes, rendering historical prospecting efforts ineffective. At our Strike Uranium Project the EM conductors had never been tested, and at Murmac only limited testing of the EM conductors was carried out despite extensive drilling for Beaverlodge-type mineralization.
In 2022, following geophysical surveys, Fortune Bay set about maiden drill testing across both projects, which cumulatively boast over 60 kilometres of prospective EM conductors. Our initial results did not disappoint. The drilling encountered favorable graphite-rich rocks in all the 24 drill holes completed, apart from one drill hole designed to test a faulted offset. Evidence for mineralizing fluids was noted in the majority of drill holes, by the presence of diagnostic alteration and pathfinder elements. Most importantly, new discoveries of uranium mineralization were made, with five drill holes returning intercepts of greater than 0.1% U3O8 over 0.1 metre. The intersections are shallow, all occurring within 150 metres from surface in competent basement rocks, making for attractive targets from a mining standpoint. The drilling results have validated the exploration strategy of targeting EM conductors and demonstrated the potential for a high-grade discovery.
Prospecting work at Murmac during 2022 uncovered a mineralized boulder assaying 8.82% U3O8 located approximately 100 metres from a natural spring with extremely high levels of radioactivity (15,000 counts per second). Numerous geological indicators provide compelling support for the potential discovery of a high-grade source within the project area.
Based on my experience with Denison Mines as VP Exploration, and being involved in two high-grade discoveries in the Athabasca Basin’s basement rocks, the initial results from 2022 certainly warrant follow-up. Our experienced team is currently at work to prioritize targets for the next phase of drilling, which is expected to include follow-up on existing drill results and the testing of new targets that incorporate our improved geological understanding.
Fortune Bay is currently evaluating the most appropriate means to advance these high-potential uranium projects, amongst other initiatives to unlock value on our Goldfields and Ixhuatán Projects. Please see our recent news release for further details.
Despite the challenging markets Fortune Bay remains well-positioned with a diversified set of assets, all of which have potential for significant value creation.
Please reach out at any time if you need any more information, and continue to make use of our website functionality to ‘Book an Investor Call’ or ‘Ask a Question’. If you’re not signed up please subscribe on our website and follow us on Facebook, Twitter, Instagram, YouTube and LinkedIn to ensure you catch all the Fortune Bay action. And don’t forget to join us for our live Webinar on Wednesday 11 October at 09h00 PST.
As always, we encourage you to read this newsletter in conjunction with our material news items, provided in our news releases, and our quarterly financial statements and MD&A. This update does contain Forward-Looking Statements so please refer to the Company’s Cautionary Note appended below.
Yours sincerely,
Dale Verran
Chief Executive Officer
Cautionary Note and Technical Disclosure:
Information set forth in this letter ‘From the CEO’s Desk’ contains forward-looking statements that are based on assumptions as of the date of this letter. These statements reflect management's current estimates, beliefs, intentions, and expectations. They are not guarantees of future performance. Words such as “expects”, “aims”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “continues”, “may”, variations of such words, and similar expressions and references to future periods, are intended to identify such forward-looking statements. Fortune Bay Corp. (“Fortune Bay” or the “Company”) cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, many of which are beyond Fortune Bay's control. Such factors include, among other things: risks and uncertainties relating to metal prices, changes in planned work resulting from weather, COVID-19 restrictions, availability of contractors, logistical, technical or other factors, the possibility that results of work will not fulfill expectations and realize the perceived potential of Fortune Bay's mineral properties, uncertainties involved in the interpretation of drilling results and other tests, the possibility that required permits may not be obtained in a timely manner or at all, risk of accidents, equipment breakdowns or other unanticipated difficulties or interruptions, the possibility of cost overruns or unanticipated expenses in work programs, the risk of environmental contamination or damage resulting from the exploration operations, the need to comply with environmental and governmental regulations and the lack of availability of necessary capital, which may not be available to Fortune Bay, acceptable to it or at all. Fortune Bay is subject to the specific risks inherent in the mining business as well as general economic and business conditions. Accordingly, actual, and future events, conditions and results may differ materially from the estimates, beliefs, intentions, and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Fortune Bay undertakes no obligation to publicly update or revise forward-looking information. Fortune Bay does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. For more information on Fortune Bay, readers should refer to Fortune Bay's website at www.fortunebaycorp.com.
Information set forth in this letter ‘From the CEO’s Desk’ is intended to summarize or highlight the Company’s results for the previous quarter based upon previously disclosed results provided in the Company’s news releases. Readers of this letter should refer to the Company’s news releases, available on the Company’s website or SEDAR.com, to obtain important additional technical information and disclosure in accordance with the requirements of National Instrument 43-101. The technical and scientific information provided in this letter has been reviewed and approved by Dale Verran, M.Sc., P.Geo., Chief Executive Officer of the Company, who is a Qualified Person as defined by NI 43-101. Mr. Verran is an employee of Fortune Bay and is not independent of the Company under NI 43-101.