Saskatchewan’s Athabasca Basin is widely known for being home to the highest-grade uranium deposits in the world, and has become a hotspot for exploration companies.
NexGen Energy (TSX:NXE) is one such company, and its 100-percent-owned Rook I property hosts the Arrow deposit. The deposit has an inferred resource of 3.48 million tons with 201.9 million pounds of uranium grading 2.68 percent.
In February, the company announced initial results from a winter 2017 drill program at Arrow, suggesting that “the full scope of Arrow is still in the very early stages.”
Following the release, the Investing News Network (INN), had the chance to speak with Leigh Curyer, CEO of NexGen, about the results. During the conversation, Curyer highlighted that Arrow is ranked as one of the last underdeveloped uranium projects in Canada.
“It’s very quickly developing a profile of perhaps one day being the number-one global supply of mined uranium when it goes into production,” he said.
Other highlights of the conversation include:
- what is important for investors to know about the results
- whether the company is optimistic going forward, even during tough times in the industry
- other plans NexGen has for 2017
- what has made the company successful in the Athabasca Basin
Below is a transcript of the interview. It has been edited for clarity and brevity.
INN: Initial 2017 results from Arrow suggest the deposit is still in the early stages of definition. What is important for investors to know about these results?
LC: We have an updated mineral resource coming out in the coming month, which incorporates all the drilling up to the end of 2016. The results that we posted last week were the initial results from our 2017 drilling, which won’t be included in the updated resource. So the updated resource that’s about to come out is effectively going to be out of date the moment it’s released. These results from last week show zone mineralization broadly into areas that are still untested, [as well as] the high-grade sub-intervals that normally are precursored to finding much higher-grade zones, like the A2 high-grade subzone within the area of mineralization.
INN: Can you elaborate on how this first batch of results suggests that the full scope of Arrow is still to come?
LC: We’ve been very bold with our stepouts into areas that are untested. To hit mineralization like this is a testament to the fact that we are still in the early stages of the ultimate size of Arrow. We estimate conservatively that we’ve probably got another four years of drilling before we truly understand the full size and scope of Arrow. The main resource — which was delivered 12 months ago — now ranks Arrow as one of the last underdeveloped uranium projects in Canada. It’s very quickly developing a profile of perhaps one day being the number-one global supply of mined uranium when it goes into production.
INN: It’s tough times right now in the industry. Going forward are you more optimistic?
LC: There are two elements that have made it a difficult, or a challenging environment. Primarily, the spot price of uranium has been at historical lows, but it’s at a level now that can’t sustain current production. So we’ve had the example in January of Kazakhstan announcing that they’re going to reduce their production by a minimum of 10 percent because they just can’t make money at current levels. Cameco (TSX:CCO,NYSE:CCJ), the other major low-cost producer, has also said that current prices are completely unsustainable to maintain current production levels.
So I think it has been tough, but with those two significant developments, I think you’re going to see a far more improved uranium price in the short and near term. With respect to raising equity to develop projects, we have a very supportive shareholder base. We’re well funded well into the future, probably for the next two and a half years, given our exploration and development program, which is the largest in Canada. We are actually in a fortunate position where we’ve got our funding in place and have many options with respect to funding because the project is of the quality that it’s exhibiting.
INN: Are there any other significant plans for NexGen this year?
LC: Yes, we are going to continue drilling at about the same rate as we did in 2016, which was somewhere between 75,000 and 90,000 meters. We’re also doing the various studies with respect to the geotech site characterization, environmental studies, which will form the basis of a prefeasibility study in late 2017, early 2018. That’s on the technical front. On the corporate front, we have an application that’s been accepted to list on the New York Stock Exchange, and we would expect to be listed on the NYSE within the first half of 2017. I think it’s a significant development for the company because we’re going to open up to a far greater pool of capital which are interested in investing our company, and we are responding to that demand primarily from the US to list on the NYSE.
INN: There are a lot of other companies situated in the Athabasca Basin. What has made NexGen successful?
LC: I think a couple of things. The board and the executive — in incorporating NexGen back in 2011 — we’ve all got very large public company experience in mining. We made the conscious decision to leave our respective roles and incorporate NexGen as an explorer and developer. We found what is considered to be a world-class discovery.
Uniquely for an explorer and developer, our group knows where we’re heading because we’ve already been at the other end of operating producing mines, and we have the experience of exploration, development, permitting, feasibility and ultimately construction and production, which are all the vital steps to taking the mine into production within the group. We’ve also recently been joined by some top executives that equally have very successful track records. Be it mine geology, mine development and operating, we’re well credentialed to take this project the whole way, and become the global leader in mined uranium, which is our company objective.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in contributed article. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.