Fortune Bay Corp: Option Partner to Begin Uranium Drilling in the Athabasca Basin

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Late last week, Fortune Bay (FOR) announced that priority drill targets have been selected for the upcoming exploration campaign at the Murmac and Strike Uranium Projects, located in northern Saskatchewan. The program is being funded by Manhattan Uranium Discovery Corp (MANU, formerly Aero Energy Ltd) under an option agreement signed with Fortune Bay in late 2023. Fortune Bay remains the operator of the Projects during the earn-in period.    

The Murmac and Strike Projects comprise 21 mineral claims covering an area of approximately 20,000 hectares located within 25km of Uranium City in Northern Saskatchewan, on the northern rim of the Athabasca Basin. The Project is endowed with established infrastructure including existing roads, active hydro-powerline, and nearby facilities and an airport at Uranium City. 

The Projects host over 40 km of previously underexplored prospective buried graphitic electromagnetic (EM) conductors, the typical host rocks for high-grade unconformity-related, basement-hosted uranium deposits in a geological setting similar to other discoveries on the margin of the Athabasca Basin.

PREVIOUS EXPLORATION HIGHLIGHTS AT MURMAC & STRIKE

At Murmac, previous drilling has confirmed shallow uranium mineralization associated with structured graphitic rocks, the typical host rocks for basement-hosted high-grade Athabasca Basin uranium deposits. Drill hole M24-017, completed at Howland Lake North, intersected 8.40m grading 0.30% U3O8, including 1.20m grading 1.79% U3O8, with individual assays up to 13.80% U3O8 over 0.10m and 4.54% U3O8 over 0.10m. This high-grade mineralization was intersected at approximately 64m below surface within favorable structured graphitic rocks. Drilling at Murmac has intersected elevated uranium (> 100 ppm) associated with graphitic rocks and hydrothermal alteration in 12 of 31 previous holes across the entire length of the targeted conductors, indicating the presence of a large-scale uranium mineralizing system.

At Strike, historical small-scale mining at the Tena Zone reportedly produced over 1,000 tons in the 1950s at grades of 0.6% to 3.5% U3O8. Confirmatory surface sampling by Fortune Bay returned high-grade uranium assays, including 3.51% U3O8 and 1.75% U3O8, confirming the presence of high-grade uranium mineralization at surface. Fortune Bay’s maiden drill program at Strike also confirmed basement-hosted uranium mineralization. Analytical results confirmed anomalous uranium in three of nine shallow drill holes, including a maximum individual assay of 0.43% U3O8. Uranium mineralization was associated with enriched pathfinder elements commonly associated with high-grade, unconformity-related uranium deposits in the Athabasca Basin.

SUMMER DRILLING TARGETING 5,000 METRES

The upcoming program is expected to consist of approximately 5,000m of drilling to test up to 25 priority targets across the Projects. The targets include both follow-up opportunities near previous uranium results and first-pass tests of newly defined targets along more than 60km of prospective electromagnetic conductor packages on the northern margin of the Athabasca Basin. The program is being funded by Manhattan Uranium Discovery Corp. (formerly Aero Energy Limited), under an option agreement with Fortune Bay (acting as project operator).

VALUATION & CONCLUSION

As Fortune Bay advances its flagship Goldfields Project, uranium optionality has been maintained via the option agreement negotiated with Aero Energy Ltd (now Manhattan Uranium, MANU) as announced on December 15, 2023. We would argue that given the generous option agreement terms for Murmac and Strike, Fortune Bay stands in an enviable position given a total package involving expected cash flow of C$1.35M, a management fee equating to 10% of exploration expenditures, C$2.15M in MANU shares and exploration upside given the C$6.0M MANU must spend over a 3.5 year timeframe. Provided the earn-in terms are satisfied by MANU, Fortune Bay will retain a 30% stake in the Projects. 

We continue to value Goldfields using a base case, LT gold price of $4,000 per ounce (below the current spot at $4,330 per ounce). Factoring in a partial future equity financing (post-PFS provided a positive FID), we derive a 12-month price objective of C$2.35 per share by applying a 0.15x NAV8% multiple. Given the most recent close (June 5), shares of Fortune Bay currently trade at a 0.05x P/NAV multiple. As mentioned, Fortune Bay also trades at an attractive EV per ounce multiple of $45 – well below the peer group. Acknowledging the acute sensitivities to the LT gold price (below), our price objective equates to upside of +221% from the most recent close.

We are excited with Fortune Bay’s prospects this year and note that 2026 will be the first year in which the company should potentially re-rate to being viewed as a pure-play gold company with an advanced project working towards PFS completion by ~year-end. Recall that in previous years, the company was considered as a uranium exploration company focused primarily on the Murmac uranium project. We expect material news flow to trickle out from the winter drill program at Goldfields. With a PFS expected to be competed by year-end or Q1/2027, as the story becomes more familiar to the market, we would expect this company to re-rate to similar valuation metrics as seen with the North American Peer group. Moreover, given further evidence that the resource is expanding beyond the historically defined area, we would expect the upcoming PFS to surprise on the upside in terms of production metrics and economics. For additional details, refer to our February 3, 2026 initiation of coverage report.

NEAR-TERM TIMELINE & POTENTIAL CATALYSTS

• Alternative production study for Goldfields – expected later this summer.

• Metallurgical and Geotech results over the course of the year.

• Follow-up drilling at Goldfields.

• Goldfields PFS details leading up to an actual study scheduled for year-end or Q1/2027.