NXE was on BNN at 8:33AM Pacific - Indicated vs Inferred Was a good interview with Leigh on BNN this morning. They even went over 3 Bear Factors and let Leigh refute them.
How is this relevant to FCU? Well my question of late is how much IS indicated versus inferred worth? What is, if any, the premium value of an indicated pound versus an inferred one? Right now the market is not really giving the FCU Indicated a higher value versus an NXE inferred. Leigh addressed the step outs of 50 meters and how they are cutting that in half with infill drilling at 25 meter intervals between the previous step out. He mentioned, I think, 80 of 82 holes hitting on the main resource area. AND implied that this is why he is not concerned about inferred versus indicated, because he sees continued hit rate in the 25 meter infill drilling and even higher grades than the original holes. Perhaps that is why NXE is being valued as if holes are indicated and non inferred.....
I thought he spoke well, and doubt he would go on BNN and say those things if he didn't mean them. Just like I think Dev really thought FCU was worth $3 a year ago (yes, based on more historical $/pound Athabasca Uranium deals).....I happen to still think that, but what do I know, lol.
the other thing I found of interest is that Leigh says they still plan and PEA in 2017. So, I imagine that means he feels they will have enough infill drilling done and can use indicated pounds at that point, if indeed Indicated pounds are required to issue an offical PEA.
Is there such a thing as a company issued unofficial PEA? Is 25 meter step outs, with a Uranium zone structure that NXE has, enough to convert inferred into indicated. It does seem that FCU has to drill more holes (it is a wider discovery), albeit shallower ones, to build up pounds.
So, perhaps the structure of nXE makes it easier to switch from inferred to indicated. I don't know. It would seem, that for now at least, the market is confident the NXE pounds will turn out to be there, unlike other company stories we have heard. Also, maybe it won't cost as much for NXE to infill drill as it does for other companies - and maybe that is reflected in share price.
Like I have said before, I remain curious if FCU will not worry about indicated as much now and do slighly wider step out holes, or does the geography of FCU zones require smaller step outs, with the benefit that most of the results then fall into indicated anyway.....Perhaps they will try to continue to differentiate themselves as shallow and indicated high grade pounds - their brand, so to speak.
i did not get the felling NXE planned to do more than cut the 50m step outs in half as part of infill drilling, from what Leigh was saying on TV this morning.
Was interesting. NXE is spending money on Environmental, etc as well now to prepare for PEA - so that is something that starts to drain the coffers, as we've seen on FCU.
I am looking forward to the massive and re-targetted summer drill season that FCU will likely launch.
I continue to feel FCU is significantly undervalued, but if we are trying to explain the difference in valuation, maybe some of what Leigh had to say would explain that, in addition to the general momentum NXE has and other reasons that have been floated by other posters. Usually not just one thing.
NXE was up quite a bit earlier on decent volume...