Ivanhoe’s Kipushi zinc mine in the DRC officially reopens
The restart marked exactly a century since the mine first went into production.
In an Oct. 2 announcement, NexGen Energy Ltd. (NXE:TSX; NXE:NYSE.MKT) reported “radioactivity results for 22 holes as part of the on-going summer drilling program on our 100% owned, Rook I property, Athabasca Basin, Saskatchewan.”
Among the results: “Infill hole AR-17-147c3 intersected 79.5 m of total composite mineralization including 17.35 m of total composite off-scale radioactivity (>10,000 to >61,000 cps) within a 114.5 m section (542.0 to 656.5 m). This intersection is the most extensive off-scale radioactivity intersected in the A3 shear to date,” the company stated.
Writing for Eight Capital following the company’s announcement, analyst David Talbot wrote that “. . .management seems to be doing it all: delineation, expansion and exploration drilling should each be accretive to resources.”
Analyst Rob Chang of Cantor Fitzgerald also commented on NexGen’s report, writing “The apparent record intercept in the A3 shear will serve to upgrade the confidence of mineralization in that area. Moreover, the expansion in the southwest and northeast gaps will serve to add additional mineralization to what is already a world-class project.”
“Positive scintillometer results from 22 wide-ranging holes foreshadow the success we expect over the next couple of years,” Talbot continued. “Even though growing a 302 MM lb U3O8 deposit with a PEA seems less material, these step-out and exploration holes could help keep investors’ attention.”
The company also reported that “In the resource growth areas of the southwest and northeast gaps, broad zones of mineralization including off-scale radioactivity have been intersected throughout.”
Commenting on other aspects of the NexGen report, Chang noted that “eight diamond drill rigs targeting 35,000m are active at the Arrow Deposit and South Arrow performing infill, step-out, and exploration drilling. A sonic drill rig is also on site testing subsurface conditions as part of the pre-feasibility geotechnical study.”
In addition, the analyst reported that “NexGen continues to be extremely well funded with cash on hand of $185M.”
Cantor Fitzgerald has a CA$5.65 target price for NexGen; the shares are currently trading around CA$2.75.
In summing up his commentary on the NexGen news, Talbot wrote, “NXE shares have been flat as has much of the uranium industry. However, volumes appear to have increased sector wide, particularly since a physical holder of uranium upsized a $37 MM bought deal. Should investors hedge bets during a period of prolonged low uranium prices, they will likely look to the cream of the crop. We believe NXE qualifies.”
Eight Capital’s target price on NexGen is CA$6.10.
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Additional Disclosures for this Content
Disclosures from Cantor Fitzgerald, NexGen Energy Ltd., Company Update, Aug. 1, 2017
Facts may have changed.
Potential conflicts of interest: The author of this report is compensated based in part on the overall revenues of CFCC, a portion of which are generated by investment banking activities. Cantor may have had, or seek to have, an investment banking relationship with companies mentioned in this report. CFCC and/or its officers, directors and employees may from time to time acquire, hold or sell securities mentioned herein as principal or agent. Although CFCC makes every effort possible to avoid conflicts of interest, readers should assume that a conflict might exist, and therefore not rely solely on this report when evaluating whether or not to buy or sell the securities of subject companies.
Disclosures as of August 1, 2017: CFCC has provided investment banking services or received investment banking related compensation from NexGen Energy within the past 12 months.
The analysts responsible for this research report do not have, either directly or indirectly, a long or short position in the shares or options of NexGen Energy. The analyst responsible for this report has visited the material operations of NexGen Energy. No payment or reimbursement was received for the related travel costs.
Analyst certification: The research analyst whose name appears on this report hereby certifies that the opinions and recommendations expressed herein accurately reflect his personal views about the securities, issuers or industries discussed herein.
Disclosures from Eight Capital, NexGen Energy Ltd., Comment, Oct. 2, 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;
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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.
