Cormark, Haywood, Raymond James and Cantor Fitzgerald Analysts all see a World-Class Uranium Asset Emerging
VANCOUVER, BC / ACCESSWIRE / January 11, 2016 / Four analysts from Canadian mining investment firms, Cormark Securities, Haywood Securities, Raymond James and Cantor Fitzgerald have all updated coverage on NexGen Energy (TSX-V: NXE, OTCQX: NXGEF) ahead of the maiden resource estimate planned for release in the first half of 2016.
The drill results at the Arrow project to date have been nothing less than spectacular with the company reporting, "5 drill holes at Arrow rank in the top 8 for best angled drill holes in the history of the Athabasca Basin within the basement rock."
There is more than meets the eye when estimating what a resource might look like ahead of a published, compliant NI 43-101 report, however, these veteran analysts sharpened their pencils, plugged in the results and published their own conceptual resource estimates which should make any uranium company in the world envious and every astute mining investor pay very close attention.
Here are some of the highlights and estimates of what the analysts have to say.
Cormark Securities – Tyron Breytenbach, P. Geo - $3.00 Target (Implied 305% Return)
"In our view, Arrow is the most prospective U discovery in years due to its prime location straddling the basin/sediment contact and elevated grade. Our target is based on a long-term 150 MMlb resource estimate valued at $4.00/lb in situ. The technically superior and high grade character of the asset makes it a logical and desirable takeout target for established producers in the basin."
Haywood Analyst - Colin Healey - $2.10 Target (Implied 185% Return)
"We believe NexGen is peerless in the Athabasca Basin and globally as the only company with the potential to deliver a world-class high-grade maiden uranium resource in H1/16 with the potential scale and grade to be standalone economic. We estimate that with drilling to date, NexGen already has visibility on more than 120 Mlb U3O8 at the Arrow Zone within the A2 and A3 shear zones alone.
We anticipate that the maiden National Instrument 43-101 resource estimate (H1/16) will delineate between 100 and 120 Mlb U3O8, with an average grade in the range of 2.0% to 2.5% U3O8.
With those numbers in mind, it is clear that we expect the initial resource estimate for NexGen's Arrow deposit to rival the best we have seen in almost two decades globally, and to place it easily among the top four undeveloped uranium deposits in the Athabasca Basin"
Raymond James – David Sadowski $1.80 Target (143% Implied Return)
"We urge investors to bolster positions in NexGen, our top uranium pick, on our expectation of stellar assays pending from A2 Sub-zone’s hole 62; potential further positive results from an aggressive 30,000 m winter drill program starting early January; and maiden 43-101 resource due late-1H16E. We expect the resource to rank Arrow as the largest, undeveloped, high-grade uranium asset in the world. We have increased our 6–12 month contained metal target by 25% to a conservative 125 Mlbs, with long-term potential of 200 Mlbs to us entirely reasonable."
Cantor Fitzgerald (Rob Chang, MBA) – No Share Price Target
"We reiterate our Buy (Speculative) rating and continue to see NexGen Energy as our top pick in the uranium space. We strongly encourage investing in this emerging world class asset on the ground floor.
Our rationale behind not providing a target price stems from the lack of a NI 43-101 compliant resource for Arrow. While we are comfortable with our current resource estimate of 148.6M lbs., our conservative view recognizes that our estimate does not go through the rigorous protocol required for the NI 43- 101 compliant resource, which is the minimum basis for us to provide a price target.
That being said, our view of a "reasonable" valuation for a quality Athabasca basin uranium asset in the current market would be in the $3.00-$6.00/lb. range, which would translate to a valuation of $1.41-$2.82/share for NXE based on our resource estimate."
Conclusion:
Over the last year, money has clearly flowed into Nexgen, significantly outperforming its peers.
Image: https://www.accesswire.com/images/317/NEX.jpg
Time is only going to tell how big the Arrow deposit becomes, but if these analysts are anywhere near close, investors should be very well rewarded in the coming months.
NexGen Energy last at $0.79CDN with a market cap of $225M
SOURCE: Resource News Report