In an Dec. 11 research note, Talbot wrote that NexGen Energy Ltd. (NXE:TSX; NXE:NYSE.MKT) had announced the findings from 21 holes of summer infill drilling at Arrow and among them were "the best assay results to date from the A3 shear."
A highlight hole, AR-17-147c3, showed 3.7% over 60 meters (60m), including 6.51% over 33m and 17.68% over 6m between depths of 597m and 657.5m. Generally, the A3 shear results "fall within," "confirm" and expand "slightly" the high-grade resource area, noted Talbot. "While somewhat expected, these results should help increase resource confidence from Inferred to Indicated upon the next resource estimate."
Drilling was successful, too, in filling some of the mineralization gaps to the southwest and northeast, Talbot said. "Mineralization isn't quite as strong in these areas, but zones remain relatively wide, suggesting ample hydrothermal fluid flow," he added. Further, the A3 shear remains open at depth.
Modest resource increases like these only minimally affect NexGen's stock, Talbot pointed out, because the Arrow deposit has a "+300 million pound U3O8 deposit already defined."
What has impacted the company's share price, asserted Talbot, is the recent upswing in the uranium price on the news that Kazakhstan will cut production by 20% between 2018 and 2020. The boosted uranium price, in turn, has caused the stocks of uranium firms like NexGen, "larger market cap names with longer time horizons," to increase. "We believe this trend will continue as NexGen becomes one of the sector's go-to names," said Talbot, adding that the company's market cap has surpassed $1.1 billion.
Eight Capital has a Buy rating and a CA$6.10 per share target price on NexGen Energy. The stock is trading now around $3.51/share.
Read what other experts are saying about:
Want to read more Energy Report articles like this? Sign up for our free e-newsletter, and you'll learn when new articles have been published. To see a list of recent articles and interviews with industry analysts and commentators, visit our Streetwise Interviews page.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: NexGen Energy. Streetwise Reports does not accept stock in exchange for its services. Click here for important disclosures about sponsor fees. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the interview or the decision to write an article, until one week after the publication of the interview or article.
Disclosures from Eight Capital, NexGen Energy Ltd., Comment, Dec. 11, 2017
Conflicts of Interest: Eight Capital has written procedures designed to identify and manage potential conflicts of interest that arise in connection with its research and other businesses. The compensation of each Research Analyst/Associate involved in the preparation of this research report is based competitively upon several criteria, including performance assessment criteria, the quality of research and the value of the services they provide to clients of Eight Capital. The Research Analyst compensation pool includes revenues from several sources, including sales, trading and investment banking. Research analysts and associates do not receive compensation based upon revenues from specific investment banking transactions.
Eight Capital generally restricts any research analyst/associate and any member of his or her household from executing trades in the securities of a company that such research analyst covers, with limited exception.
Research Analyst Certification
Each Research Analyst and/or Associate who is involved in the preparation of this research report hereby certifies that:
• the views and recommendations expressed herein accurately reflect his/her personal views about any and all of the securities or issuers that are the subject matter of this research report;
• his/her compensation is not and will not be directly related to the specific recommendations or views expressed by the Research Analyst in this research report;
• they have not affected a trade in a security of any class of the issuer whether directly or indirectly through derivatives within the 30-day period prior to the publication of this research report;
• they have not distributed or discussed this Research Report to/with the issuer, investment banking at Eight Capital or any other third party except for the sole purpose of verifying factual information; and
• they are unaware of any other potential conflicts of interest.
The Research Analyst involved in the preparation of this research report does not have any authority whatsoever (actual, implied or apparent) to act on behalf of any issuer mentioned in this research report.
IIROC Rule 3400 Disclosures are available here.