Nexgen Energy Ltd T.NXE

RE:NXE is Massively Undervalued Pt 3... The Step-Out

[PamplonaTrader]

Posted July 9th before the 50m/55m/100m/200m stepout results were released

PamplonaTrader wrote:

Herein I present my follow up to HighROI's "NXE is Massively Undervalued" analysis (pt 1, pt 2). Shares closed at $0.50 on the day of his report and price has since gone on to improve 50%+ ($0.89 high).

Several analyst have already modeled resource estimates following assays from AR-15-44b. Cormark estimates 80-100mm lbs while Cantor Fitzgerald believes the resource stands at 115mm lbs. Remarkably, these estimates are for the A2 shear only and do not include estimates for the A1 or A3 shear (which has the potential to be more than double the size of A2). Below a cross-section of the 3D model:

NXE has managed to put together this staggering mineral inventory at Arrow in under 50 holes, but perhaps most exciting is that management believes that thickness and grade will continue to improve down dip to the SW.

The following is an exercise contemplating the impact of a 50m step-out and a 200m step-out from barn-burner AR-15-44b. We have confirmed with management that these are in their immediate plans. Through our ongoing discussions and analysis, we have good reason to believe that shares can double or more in just a few short weeks upon release of step-out drilling results. But first, let's zoom on the 3D model for some visual context:

The above is the area we are dealing with and is small relative to the size of the massive deposit. That said, the impact is immense if NXE can effectively show continuity of mineralization out 50m to 200m.

Without further ado...

Known:

• 168.5m composite (4.5m max ore dilution) down-hole depth
• 43.6m true thickness
• 5% composite grade
• 1 tonne = 2,204.62 lbs/cubic meter

Assumptions:

• 162.7m vertical depth - Using the down-hole intercept of 168m and true thickness of 43.6m, we can calculate AR-15-44b's dip angle at 75 degrees and to a vertical depth of 162.7m using simple trigonometry.
• specific gravity 2.87 - The specific gravity of gneiss ranges 2.6-2.9 whereas uraninite ranges 8.0-10.5 (uranium is actually extremely dense at ~19). I used the low end of each for a conservative calculation. At 5% U308, I can use a crude calculation of 95% gneiss (2.6 sg) + 5% uraninite (8 sg) to arrive at ore density of 2.87.

Calculation:

50m stepout adds:

43.6m true thickness * 162.7m vertical depth * 50m strike * 2.87 specific gravity * 5% U308 * 2204.62 lbs/cubic meter =112.2mm lbs U308

200m stepout adds:

43.6m true thickness * 162.7m vertical depth * 200m strike * 2.87 specific gravity * 5% U308 * 2204.62 lbs/cubic meter =448.8mm lbs U308