SOURCE:[MetalGuru] - On Sept 25, 2013 NexGen Energy (NXE-TSX.V) announced that it had completed 8 diamond drill holes at the Rook 1 project along interpreted extensions of Patterson Lake South. The results covered 1,957 meters of the planned 3,000 meter drill program
Although the stock pulled back on the maiden drill program, analysts at Dundee Capital maintained their BUY recommendation on NXE.
"We continue to recommend NexGen Energy with a BUY and no target as it is on our Mineral Exploration Watch List," states the Dundee Report, "We believe today's sell-off is unwarranted, but perhaps beneficial for the long-term as quick money exits. NXE is testing a 700m strike extension of Fission Uranium's PLS discovery situated just ~2.1km to the southwest."
Dundee, who has considerable experience in the Athabasca Basin, warns investors against "unrealistically high expectations at this early stage." Typically uranium explorers in structurally complex basins execute multiple drilling programs before hitting a discovery hole.
"At this stage, even barren or weakly mineralized holes tell a story and geologists use this knowledge towards targeting future holes," states Dundee, "In this context, 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."
The Dundee report suggests that “investors are likely a little spoiled” with the success of nearby Fission (FCU-TSX.V). But Fission drilled many holes before the high grade Hole -22. Fission's technical team took 63 holes to establish J Zone. Some of the Athabasca's largest deposits took years to find.
"We are seeing the things needed in six of eight holes on Rook 1," states Dundee: "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."
Reconnaissance Drilling Highlights
- All holes intersected varying types of structural zones in basement lithologies, maximum downhole width was 38.3m in hole RK-13-03.
- Holes RK-13-02, -03, -04, -05, -06, and -07 intersected graphitic basement lithologies.
- All holes intersected varying widths of mineralisation generally associated with structural zones.
- Several holes intersected zones of elevated radiometric readings using a hand scintillometer, the most notable reading being to a maximum of 1000 counts per second (cps) over 0.5m in hole -06 from 152.6m downhole depth.
- Shallow basement rock was encountered in the 8 holes, ranging from 48.7m to 82.6m downhole.
"Our technical team has done a terrific job in only the first 8 holes to be drilled in this zone of Rook I," states Leigh Curyer, CEO of NexGen, "To be in this position, this early in the exploration program is very exciting for us and our shareholders."
Weather permitting, the current 3000m drill program will continue into early October subject. NXE is already planning a winter campaign to further test the immediate area within the initial zone of drilling. NXE currently has about $6 million in cash.
NexGen has a veteran team of exploration professionals including senior geologists James Sykes and Matthew Schwab who joined NexGen from Rio Tinto (RIO-NYSE).
NexGen owns a portfolio of highly prospective uranium exploration assets in the Athabasca Basin, Saskatchewan, Canada. As well as a 100% interest in Rook 1, immediately adjacent to the north east of Patterson Lake South, NXE has an option to earn a 70% interest in the Radio Project, immediately adjacent to Rio Tinto’s Roughrider Deposit.
The Athabasca basin contains known uranium reserves with the energy equivalent of 19 billion barrels of oil.
"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," summarized the Dundee Report.
NXE is currently trading at .32 with a market capitalization of $41 million.
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