TD Report on NXE - $4.00 Target NexGen Energy Ltd. (NXE-T) C$1.44 Resource Estimate Update Slated For H1/17
Craig Hutchison, P. Eng Derick Ma, (Associate)
Recommendation: SPEC BUY Risk: SPECULATIVE 12-Month Target Price: C$4.00
Event This morning, NexGen Energy reported assay results for 14 drill holes from its summer drilling program at its wholly owned Rook I property, in northern Saskatchewan. Impact: SLIGHTLY POSITIVE
In our view, the highlight hole from today's assay results was AR-16-98c2 (drilled in the A2 shear), which intersected 73.5m of total composite mineralization including a 10.0m subinterval grading 51.4% U3O8 (502.0– 512.0m).
Of additional importance, in our view, is the assay results for hole AR-16-97. Hole AR-16-97 (along with hole AR-16-100 and AR-16-103) were completed between the Arrow deposit and the mineralization previously defined 180m to the southwest (scintillometer results for these holes were released on Nov. 2nd). Hole AR-16-97 intersected 18.0m of total composite mineralization including a 6.0m grading 5.89% U3O8 (753-759m).
Holes AR-16-97, AR-16-100 and AR-16-103 are important in our view, as we believe they suggest the continuation or extension of mineralization between the Arrow deposit and new zone to the southwest. As a reminder, drill results from the mineralized area to the southwest of Arrow are not included in the company's resource estimate.
The company continues to maintain a strong balance sheet (cash of approximately $75mm) which we believe can fund its exploration and development program through 2019.
The 2016 drill results continue to highlight the significant resource expansion potential at Arrow, both within extensions of the five existing shears along with further step-out targets such as Bow and Harpoon.
NexGen is currently planning to release an updated resource estimate in H1/17, a maiden pre-feasibility study is scheduled for H2/17. In our view, it is important to note, that Arrow's maiden resource, released in March of this year, does not include any results from the 2016 drilling program.