Nexgen Energy Ltd T.NXE

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September 26, 2013
Kin Communications is pleased to provide the following information for interested parties. The analyst coverage below on NexGen Energy(TSX.V:NXE) was reported by Dundee Capital Markets, effective September 25, 2013.
Dundee Capital on NexGen Energy
Source: Dundee Capital Markets
Geological Setting Confirmed but Markets Expectations May Be High
Company Description
NexGen Energy is a Canadian based uranium exploration and development company focused on the Athabasca Basin in Saskatchewan. The company has a large land package in the Basin with two highly prospective flagship projects - Radio and Rook 1. Radio is located in the NE part of the basin on the Roughrider-Midwest trend. The company is currently earning in to a 70% interest in the property. The 100% owned Rook 1 property is located directly northeast and potentially on strike of the recent PLS property. NexGen holds several other claims in the area.
We continue to recommend NexGen Energy with a BUY and no target as it is on our Mineral Exploration Watch List. The completion of 8 DD holes and ~2,000m of a 3,000m drill program at 100%-owned Rook 1 property in the Athabasca Basin was announced. NXE is testing a 700m strike extension of Fission Uranium's (FCU-V, BUY, Spec. Risk, No Target) PLS discovery R945E Zone, situated just ~2.1km to the southwest.
For a first pass reconnaissance drill program the results are encouraging.NexGen hit basement structures up to 40m wide and had the right basement rocks in every hole. There was anomalous uranium in hole RK-13-06 with up to 1,000cps over 0.5m (most northerly hole, Figure 1). Hole -03 also shows particularly well hematite altered and brecciated rocks at just 149m depth and extending for 12m down hole (Figure 2). This suggests the presence of hydrothermal fluids in sufficient quantities running through these rocks. If those fluids had been mineralized, then there is likely a deposit in the neighborhood given a proper reducing/depositional environment like we see along strike at PLS. We are seeing the things needed in six of eight holes on Rook 1: holes are widely (200m) spaced and NXE was hitting similar results on multiple conductors. NexGen is well ahead of the curve technically that it expected to be at this stage - it has confirmed a highly prospective geological setting. Fission holes PLS12-014 and -15 located 800-1,000m from that discovery were similar and intersected thin intercepts of <1,000cps. NXE could be that close but time will tell.
Discoveries take time. While high grade U3O8 remains elusive, we remind investors to shed unrealistically high expectations at this early stage. The Athabasca Basin hosts variable and structurally complex uranium that are tricky if not very difficult to figure, especially right away, and it often takes several kicks at the can before the "discovery" hole is found. At this stage, even barren or weakly mineralized holes tell a story and geologists use this knowledge towards targeting future holes. In this content, today's results are encouraging and warrant further work - regardless of the nearing 40 MM lbs of high grade uranium that we believe is being delineated along strike next door.
Investors are likely a little spoiled with the success of nearby Fission exploration that found high grade on hole -22, but that wouldn't have been possible without knowledge from preceding holes, including the low grade uranium found in hole -16 (perhaps the true discovery hole). Fission's same technical team took -63 holes to find J Zone. Some of the Athabasca's largest deposits took years to find - systematic testing over 8 years at McArthur, and Phoenix at Wheeler River was found on hole 249. We don't believe it would take that long for NexGen to lock on to potential mineralization, if there. We still believe that Rook 1 remains the best PLS area play with potential for capital gains for those who missed out on the FCU/AMW run-up over the past year.We believe today's sell-off is unwarranted, but perhaps beneficial for the long-term as quick money exits. With $6 MM in cash, Radio has obligations of $6 MM next year and a $4-5 MM Rook 1 winter program is likely in the planning stages.
To view the full research report including detailed tables, figures, and disclaimers, please follow this link.