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CEO.CA members discuss high-risk penny stocks which can lose their entire value. Only risk what you can afford to lose.
@pinnsvin@TSXminer Thanks for the information regarding kriging interpolation method. That's *great*. I've been wanting to try my hand with generating a resource estimate but I wasn't sure where to start. This at least gives me some search terms. If anyone else can suggest some online sources or a text book, etc. on the subject, I'd be very appreciative. I have some software for generating algorithmic, parametric 3D models and I thought it might be fun to see what I could come up with.
@pinnsvinThe idea was to generate a rough 3D model myself. When I look at the data that is released, there is a map with drill hole locations, azimuth, dip, cps ranges at depth, and assay data. At least by my thinking that should be more than enough data to get in the ball park. I'd like to take a stab at it anyway. It's just for fun. I don't think I'm going to put ESRI out of business any time soon...
@pinnsvin@PamplonaTrader I've been thinking along the lines of @BruceWayne as well. I've been a bit nervous about the rapidly increasing valuation and hoping that we're not getting too far ahead of ourselves. But that image comparison makes me feel a whole lot better(!) In any case, we'll find out soon enough.
@pinnsvinThe writing is on the wall. At today's USD/ CAD FX rate $1.31 and spot price UxC $24.15 USD) the market is valuing $NXE as if it has 375 MM lbs uranium (based on a market cap of 10% spot). Undervalued I'd say. #nexgenandchill
@pinnsvin@HighROI An uptick in spot price is good news after a two week of downdraft. Assuming it doesn't reverse before the resource estimate, it should help solidly position the stock for a ramp up into the RE.
@pinnsvinLast year drill results were announced on February 23 (2016). The maiden resource followed on Thursday, March 3, 2016, the Thursday before PDAC. This year drill results were announced on February 23rd. Tomorrow is also the Thursday before PDAC. Leigh has stated RE2 could come late March or April 2017. An H1 NYSE listing requires an indicated resource; it may take a bit of lead time for the updated resource to get the official stamp of approval required for the listing (I don't know the process). Or perhaps I've come down with a light case of apophenia and wishful thinking.
@pinnsvinWhatever the case we'll find out tomorrow. As tempting as it is to stay up with a bowl of popcorn and wait for the news release, I'm still a working stiff. So I'll probably just check my phone first thing tomorrow like I do every other morning.
@EricTheActor@teevee, why do you think it takes so long for RE2? I figure at the worst case it will be at the back end of Leigh's recent Mar/Apr guidance. @pinnsvin, indicated resource is not required for NYSE resource. I confirmed this with management a few weeks ago.
@pinnsvin@EricTheActor Thanks, good information to know. Sorry about the misinformation; I should have verified that first myself before posting. @speculator Since there's 121 days left in H1, statistically there's a 99.2% chance RE2 falls on any other day than tomorrow ;)
@speculatorHahahahaha ... believe me, i want to see those numbers as bad as anyone. I sure hope RE2 drops in the morning. But now with your statistics in mind @pinnsvin and all the other potential senarios ... it seems we could be left to squirm. Its ok though, good things come to those that wait ... :D
@pinnsvin@Teevee It does bring up the question as to when the company will need to raise money again and what the best timing will be. Management has been very deliberate about maximizing shareholder value. Just my two bits, but H1 (or shortly after) is too soon for a financing. The coffers are loaded and the stock price has room to run. So why unnecessarily dilute shareholder value? There's still more than enough time without waiting until the last minute (@speculator). Why not, for example, wait until after the PFS when the RE is updated again? Arrow will be considerably de-risked by then and I doubt there will be any shortage of financing options for an asset as strategic as this. Again, I could be wrong but I don't see the strategic benefit of keeping the share price artificially low by holding off on RE2 if it could be released now. Arrow is being de-risked daily with every drill hole. Deep-pocketed buyers would have more opportunity to get a larger interest in the company especially if uranium prices continue to stay depressed.
@teevee@pinnsvin, it is never too soon for financing, and if you wait for the treasury to be depleted, the banksters will crush you when your back is against the wall. If institution demand is high after NYSE listing, NXE should take advantage of it and raise funds to carry them through bankable feasibility.
@pinnsvin@Teevee. It's an interesting thought especially as it relates to the continued depressed commodity price. Were it to stay lower for longer or general market sentiment turned negative, one would want to be well positioned. It's the prudent thing to do, so I see your point. And if NexGen were to get an offer after the PFS, having cash in the bank gives it a better negotiating position.
@pinnsvinI made some notes from this morning's conference call. Most of the call was Leigh Curyer (LC) reading the news release but near the end of the conference the analyst from TD Securities (TD) some questions (I believe it was Craig Hutchinson but I never quite got his name due to the poor call quality). I'm paraphrasing the conversation somewhat but it's fairly close:
TD: What are the next steps you’re looking at? You’ve got a 180 MM lbs of indicated category. Certainly that’s enough to go forward with a PFS. What are your plans in terms of development?
LC: You’re quite right. We have more than enough defined pounds in the inferred category and the indicated category to commence a PFS. We’ve been conducting the various engineering studies to form the basis of the PFS late 2017, early 2018. But we’re currently considering we might do a PEA based on this updated resource to give the market some direction on the economic power of the asset because a lot of people have moved past the resource growth know that it’s a special asset and they now want some direction on the economic power. So we’re currently assessing doing a PEA in the near future which will be wedged between now and the PFS either late 2017 or early 2018.
TD: Something before the first half of this year for the PEA?
LC: I’d expect it probably in Q3.
TD: What are the main things holding back the prefeasibility study? Underground drilling?
LC: Nothing is holding back doing the PFS. We’re doing various engineering studies as we speak. You raise a very good point. I don’t believe the true extent of Arrow can be determined until possible underground drilling. There’s a lot work to be done before we assess if we’ll do that avenue. If you take the history and experience of other deposits in the Basin of this calibre, the deposits expanded materially, like by multiples, once drilled underground. When you’ve got a multi-decade project like this I think the balance of evidence would weigh it towards going underground but that still remains to be seen. We still have a lot of work to do before we can assess that.
TD: Do you think you’ll have a decision on that by the second half of this year whether you decide to go underground?
TD: The size of the indicated resource seems you’d have enough to ahead with a sizeable mine plan to accelerate development.
LC: That’s true and we may do that and we may do that. But, at the moment, based on what we know today, when we’re dealing such a long-life asset, spending a bit time understanding what the deposit looks like from underground to get a really solid mine plan will be ultimately in the interests of the project over its life. But I actually don’t think going exploring underground will delay the permitting process materially at all because you’ll have a far better understanding of the project in order to meet those permitting requirements. So, whilst you may delay the start of the permit, I think once you’re into you ultimately get that permit sooner than you would.
TD: What’s you’re estimate for permitting an exploration shaft?
LC: We’re currently getting that information. Previous experience in the Basin for permitting exploration shafts is anywhere from 6-12 months . But we’ll continue drilling from surface in parallel to going through that process.
End of call.
@cole119Thank you everyone for their input and live updates today, @JamesKwantes, @pinnsvin@dufflite and many others. Does today's RE update eliminate suitors from stepping to buy out Arrow? Or does it have suitors salivating at the 180M Lbs of indicated U. In the end, it won't matter what retail traders do. I didn't sell any shares today, nor plan on it. Holding the course, steady as she goes - even thru rougher waters. Bring on the Index buying, drill results, NYSE listing, PEA, PFS, and (hopefully) buyout, all within 12 months.
@pinnsvin@cole119 While todays RE2 may have initially disappointed many investors (including myself), the results are far from disappointing. The trajectory of what I imagined the RE to become remains intact but it's merely the timeline I was thinking that has changed. NexGen will likely get to same resource size but just 6-9 months later than I imagined but with greater certainty. I'm quite glad to have a clearer picture today than I did yesterday. The company is significantly de-risked from where it was yesterday. As of today, there's a large enough indicated resource to build a profitable mine. My two bits, if anything I think the risk of a buyout is higher now. U3O8 price is still close to the bottom and there's enough indicated resource to produce a profitable mine for more than decade.
@cole119Resource will be updated for the PFS for sure, not sure if they will do an update for the PEA. Probably not, is my guess. Agreed @pinnsvin and @JKMD43. Leigh continues to push on towards development but we all know a buyout is way more likely than NXE taking it to production themselves. Today's indicated number has to have Cameco et all trembling.
@pinnsvinPerhaps many were drawing parallels to RE1 where a number of institutions made overly conservative resource estimates and undershot the NI-43101 last year. Many of the same institutions explicitly stated they were likely being over-conservative. I mean if you can't trust an investment bank, who can you trust? :S And then of course there are one a dozen assumptions one could make in their calculations that would throw the RE off. For example, going from IDW3 to a combination of Kriging and IDW2 makes a bit of difference. Kriging is above my pay grade as a retail investor. How the grade shell is defined is another example.
@pinnsvin@hotmail Well-reasoned skepticism is one thing but yellow dot anonymous was engaging in ad hominem. There was nothing well-reasoned about it, just name calling. It added nothing to the debate. Well reasoned dissent and name calling aren't the same thing.
@cole119@pinnsvin I'd say post RE2 positioning is the main reason. Reality is there is some impatient money which was likely hoping for more/better share price appreciation after RE2 and is now taking this opportunity to allocate $$ elsewhere. So we may see selling into strength for the foreseeable future, at least until some news. Anonymous is very active last 3 days - usually disguising their true intent. Asks very thin, so the volatility will continue...
@pinnsvinFor me at least the most important new was this, "The winter 2017 campaign is focused within a 1 km radius of Arrow where the growth is evidenced by the recent results of broad and sub interval high-grade intercepts in the A2 and A3 shears to the northeast and also to the southwest towards the 180 m zone." Hopefully this means some material news soon..
@pinnsvin@RedRocket Your $720 MM calculation is more or less correct and I take no issue with it (I get $1016 MM CAD based on a $25.15 spot and $1.337 CAD/ USD). However, the 300 MM lbs U3O8 is calculated solely the A2 and A3 shears. A1, A4, A5, Harpoon, etc are excluded from the price.