NexGen Energy (TSXV: NXE; US-OTC: NXGEF) has kicked off a 30,000-metre drill program at its exciting Arrow uranium discovery in Saskatchewan’s Athabasca basin, after last year’s success.
“Drilling at Arrow to date has confirmed the presence of a truly unique and world-class uranium zone,” Travis McPherson, NexGen’s corporate development manager, said in an email.
Since uncovering Arrow on its wholly owned Rook I property in February 2014, NexGen has systematically tested the mineralized area by drilling on a uniformed grid using 95% angled holes.
Of the 82 holes drilled so far, 80 have hit uranium mineralization, showing “just how large and continuous Arrow is, especially when you remember these are holes drilled in a uniform pattern,” McPherson says.
Arrow is 235 metres wide by 645 metres in strike, with mineralization starting at 100 metres below surface and extending to 920 metres deep. It remains open for expansion.
On Jan. 5, the junior explorer reported assays from another seven holes from its 33,000-metre mid-2015 program. All intersected uranium mineralization. The best hole, 59c2, returned 36.5 metres of 10.1% uranium oxide (U3O8), including 14.5 metres of 20.4% U3O8 and 3.5 metres of 52.3% U3O8 within the higher-grade A2 Sub-zone, which is part of Arrow’s A2 shear zone.
NexGen drilled 59c2 at the Sub-zone’s southwest extent. “Cutting such significant grades and thicknesses at the edge of the zone suggests the high-grade mineralizing system is alive, well and not weakening, and implies excellent potential to extend the Sub-zone along strike, with small step outs at similar drill orientations,” David Sadowski, an analyst at Raymond James, comments in a note.
The Sub-zone measures 203 metres in strike, with mineralization starting at less than 400 metres below surface. It remains open in all directions.
To date, the junior has released assays for six of the seven holes drilled into the Sub-zone. These holes have “cut significant runs of plus-8% U3O8 material,” Sadowski notes.
NexGen claims they represent “five of the top-eight best angled holes drilled into basement-hosted mineralization in the Athabasca basin’s history, in terms of continuous [grade multiply thickness] on public record.”
Sadowski says the Sub-zone’s hole 62, the only hole pending from 2015, will be another “barn burner,” based on its scintillometer reading of 30.4 metres of off-scale radioactivity, which suggests high uranium grades.
Other assays include 54c4 returning 9.5 metres of 6.9% U3O8 in the A2 shear zone, and 56c2 hitting 32 metres of 1.6% U3O8 in the A3 shear zone.
On Jan. 11, the junior reported assays from another six holes, including 61c2, the best hole drilled to date in the A3 shear. It intersected two intervals, including 10.5 metres at 8.5% U3O8 and 37 metres at 6.3% U3O8. The second interval is the best continuous GT (236) received from A3 to date, McPherson says.
Hole 59c3 also cut 4.5 metres at 13.2% U3O8 in the current south-western edge of the A3 shear.
“The A3 is now identifying higher-grade zones within that are open, like the A2 did at the start of mid-2015,” McPherson adds.
To follow up on the 2015 results, NexGen has initiated a $12-million, six-rig program. In early January it started three rigs, with two delineating the Sub-zone, and the third expanding mineralization within the A2 and A3 shears to the southwest.
A fourth rig this month will test around hole 36, where NexGen intersected uranium mineralization 4 metres below the Athabasca Sandstone and basement unconformity.
A fifth rig will come online in late January to drill along strike the Arrow zone and the 9 km Patterson corridor.
A sixth rig — scheduled for early February — will drill the Bow zone, discovered last March, some 3.7 km northeast of Arrow.
“The addition of a sixth rig makes this winter’s program the largest ever at Arrow,” CEO Leigh Curyer said in a release.
NexGen plans to publish its maiden resource estimate on Arrow in the first half of 2016, with McPherson noting it won’t include results from the current program.
Raymond James’ Sadowski projects Arrow’s resource could contain 125 million lb. U3O8, with potential to grow to 200 million lb.
While McPherson declined to comment on the initial resource’s size, he did emphasize Arrow’s attractive traits.
Unlike most uranium deposits in the Athabasca basin, “there is no waterbody on top or affecting mineralization at Arrow,” he says, adding that it is “extremely high-grade.”
Finding a comparison to Arrow is difficult because it is “so unique,” McPherson contends. Arrow’s size and scalability “puts it in the basket of top projects globally, but it doesn’t have the technical challenges that many of the same projects do.”
Along with drilling, NexGen has improved the camp at Rook I and will begin metallurgical, geotechnical and hydrogeological test work this year. The work will form the basis of future economic studies.
With $34 million in its treasury, the junior has enough funds to cover its activities “well into” 2017, McPherson says.
The stock recently closed at 79¢, within a 52-week trading window of 31¢ to 89¢.
Sadowski has a “strong buy” on NexGen and a $1.80 target, noting the company is his top uranium pick.
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