NexGen's latest mineral resource estimate for the
Rook I property has caught the attention of industry analysts.
Earlier this month, NexGen Energy Ltd. (NXE:TSX; NXGEF:OTCQX) released an
updated mineral resource estimate for the 100%-owned Rook I property in Canada's
uranium-rich Athabasca Basin. The estimate includes Indicated resources of
179.5 million pounds (179.5 Mlb) of U3O8 in 1.18 million tonnes (1.18 Mt)
grading 6.88% U3O8, including the high-grade A2 core of 164.9 Mlb of U3O8 in
0.40 Mt grading 18.84% U3O8. The Inferred resource estimate is 122.1 Mlb in
4.25 Mt grading 1.30% U3O8.
The company noted that the 2016 drilling has "converted 89% of the
March 2016 Arrow Deposit Maiden Inferred Mineral Resource into the updated
Indicated Mineral Resource category. This level of conversion is truly
unprecedented, which continues to confirm the strong continuity of grade and
thickness seen across the Arrow deposit converted."
Paradigm Capital analyst David Davidson noted in a March 7 research report
that "NexGen's discovery of the Arrow uranium deposit represents one of
the larger and highest-grade discoveries in the Athabasca basin in decades.
After only three years of drilling, the company released an updated NI-43-101
indicated & inferred resource of 5.5 Mt grading 2.5% U3O8 for a contained
302Mlb of U3O8. Additional drilling in all likelihood will expand the
resource, which should allow for a potential development scenario."
Looking ahead, Davidson added, "NXE is well into its planned 35,000m
2017 winter drill campaign and we remain convinced that additional uranium
pounds will be added, albeit at a slower rate than to date."
A March 20 uranium outlook report by BMO Capital Markets had analyst
Alexander Pearce and Edward Sterck reporting, "We have upgraded NexGen
to Outperform (Speculative) on the back of improved valuation multiples
following its resource update and the recent share price pullback." He
added that "the geological qualities of the orebody warrant a premium,
in our view, particularly given further upside potential from what is already
one of the largest resources in the Athabasca. Near-term catalysts include a
PEA in mid-2017 and PFS by year-end."
Eight Capital analyst David Talbot noted in a March 6 report that
"this new resource bodes well for an upcoming PEA. While Arrow's
ultimate size remains unknown, it has become clear that the A2 HG Shear Zone
alone can make a tremendous starter zone down ~400m. This will likely become
the basis for the PEA. We expect excellent recovery at 98%, and there does
not appear to be many deleterious metals which complicate milling. . .high
grades and relatively little tonnage or throughput requirements should make
this a very low cost production."
Rob Chang, in an interview with Uranium Investing News on March 16,
stated that "NexGen recently increased their resource to 300 million
pounds. Fantastic size. This is a world-class asset, and even though the
market may have been expecting a little bit more, I think it will eventually
get to that size anyway, maybe 400, perhaps 500 million pounds. But 300 on
its own is fantastic and should not be sneezed at at all."
"Not only am I certain this will become a mine, this might very well
be the best uranium mine out there, and perhaps one of the best mines period
across any commodity when you factor in how cheap it's going to be to produce
from it, and the quality and the grades that you're going to get from this
asset. NexGen's sitting on one of those once-in-a-career type of assets
that's very nice to see," Chang concluded.
