NexGen Energy (TSXV:NXE) announced a potential uranium discovery in the SW Athabasca Basin region of Northern Saskatchewan yesterday. Visible uranium was seen in the first hole drilled into the Arrow target at the Western side of NexGen’s Rook 1 project, which caused shares in the junior explorer to rise over 90% Wednesday.
“There’s an element of luck,” CEO Leigh Curyer said by phone from Toronto at 10AM PST this morning. “This hole was really to get a sense as to what was happening with the geology in the area, and we nailed it.”
The sheer zone, or potentially mineralized area, appears to be large, Curyer says. The first hole began hitting radioactive anomalies at 49 meters depth, and yesterday’s announcement reported visible uranium in the core at 321 meters. That hole continues drilling, and is now past 500 meters.
“We would stop the hole if the area of interest had stopped. We’re still in the right type of rock setting and the drilling continues.”
Following completion of the hole and assays to confirm the presence and grade of uranium mineralization, the company will drill two holes 50 meters out on either side of the discovery hole. These are quite wide stepouts, Curyer says.
“We’re sticking to our disciplined approach to get a sense of what the geology is in this particular target area and then we will vector in.”
The discovery is in its very early days, Curyer warned, saying it’s too early to answer most questions yet.
“There’s more holes to drill and there will be some that don’t come up, but from this one hole and applying [VP Exploration] Andy Browne’s 40 years of experience and the experience of the two guys that were on the Roughrider discovery, the grade is going to be there, and they have yet to define the area of interest.”
Curyer made a point of saying the discovery was independent from PLS, Fission Uranium’s 100% owned shallow, high grade uranium deposit on the adjacent South East property to Rook 1.
“It’s got nothing to do with PLS. It’s on the trend, but the rocks are slightly different, and it’s in a different type of zone.”
According to Curyer, this suggests that the Western Side of the Athabasca Basin could be a prolific uranium district, and is quick to remind me that NexGen has the most dominant land position in that section of the Basin. Others in the area include Skyharbour Resources and Aldrin Resource Corp.
“We’ve got nine other target areas just on that Western section of our Rook property that are based on the same principles of Arrow that haven’t yet been drilled.”
“The three of the twelve targets that we’ve drilled, we’ve hit mineralization in each of them. Arrow being the most significant to date.”
NexGen has $7.5 million in the bank currently, Curyer says, but they’ll have $5.5 million left at the end of March or in early April, when the Winter drill program concludes. That number could be slightly lower if they are able to bring in a third rig, which the company is working to procure before the end of the season. For now it’s just two rigs.
Curyer will be presenting the NexGen story at the PDAC convention in Toronto in early March, as well as at a Dundee Capital Markets uranium conference the Friday leading up to the PDAC.
“We’ve had finance offers and all sorts of things. I’m in Toronto at this moment and absolutely jammed for meetings.”
I let Leigh get back to it and told him I look forward to following more news from the company.
NexGen Energy shares trade on the TSX-Venture Exchange under the symbol NXE.
Yesterday Dundee Capital Markets analyst David Talbot re-stated his buy recommendation on NexGen’s shares with no price target.
We have been covering the company since before it became public and own a small share position which does make us somewhat biased.
Comments made by Mr. Curyer were off the cuff and are forward looking. Please read NexGen’s Cautionary Note Regarding Forward Looking Statements. All facts are to be verified by the reader. This is not investment or professional advice of any kind. Always do your own due diligence. Thank you.