Nexgen Energy Ltd T.NXE

Dundee Capital Markets comments on NexGen Energy Limited

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According to Dundee Capital Markets:

https://personal.crocodoc.com/6uOE0qN

NexGen Energy Ltd.

(NXE-V: C$0.55), intraday

April 29, 2015

BUY, Venture Risk

Dundee target: N/A

Thickest Intercepts Yet with Total Composite Mineralization of 226m

We continue to recommend NexGen Energy with a BUY and No Target Price. Scintillometer results from the final angled hole at Arrow Zone, Rook 1 Project in the Athabasca Basin, were reported this morning. Winter saw a highly successful program with tremendous success at both increasing the size and potential grade of Arrow. The Bow discovery adds to the upside potential and scale of Rook 1.

Recent results have significantly changed Dundee's interpretation of Arrow for the better (see note). We had believed that structural control resulted in several stacked, parallel, plunging high grade U3O8 mineralized shoots, separated by dead zones. We now believe that mineralization is more continuous and consistent over significant vertical and horizontal extent within the A2 and A3 shears. This has positive implications for potential tonnage and contained uranium when estimating a resource or mineral inventory. We do expect some vertical structural control still - the entire mineralized packages on both A2 and A3 shears appear to plunge steeply to the SW, while dipping near vertical. And presence of higher grade shoots within the broad but consistently mineralized shear planes may exist, but more drilling is required to fully identify these, and our interpretation could be skewed because of lack of drilling. High grades expected from AR-44b's pending assays may go a long way in increasing what we estimate as average grade of ~1.1% U3O8 (using a 0.1% cut-off) and 3.5% at a 1% cut-off.

AR-15-45b hit is thickest to date with 226m of total composite mineralization including 9.8m off-scale (>10,000cps) from 391m to 859m depth. It was designed to test A2 shear 50m up-plunge from -44b, and A3 shear 25m down-plunge from -41. Three high grade intercepts were identified: one within A2 shear at 403m; and two within A3 shear at 788m, and 807m. While -45b wasn't designed to extend Arrow's strike, we believe it helps reinforce it as being 1) robust, with many styles of mineralization including wormrock, veins, blebs, flecks, chemical solution fronts and semi-massive to massive pitchblende; 2) continuous, as gaps were filled between blockbuster holes -30 and -44 on A2 shear; and 3) thickening at depth, at least within A3 shear that appears to have greater horizontal thickness (N-S) than previously expected and A2 shear.

Successful winter program nears completion. Assays for 8 holes are outstanding, with results due over the next several weeks. The lab appears to have cut wait times YTD, perhaps due to lower spending Basin-wide. Arrow has been tested with 46 holes, 44 of which hit. Bow discovery, 3.7km to the NE, appears narrow thus far, but photographs suggest exceptionally strong alteration (see note).

Even larger summer program planned. 25,000m with 5 rigs are expected to test both A2 and A3 shears, strike extensions, and regional targets including Bow, and the Dirksen corridor east of the Patterson corridor. Budgets are being discussed but may come in around $15 MM. NXE had ~$15 MM before Winter Program, and spent $8-$10 MM, which means the treasury will likely need topping up. SRK is engaged and we expect an initial resource estimate following summer drilling.