Resource World Magazine

f e b r u a r y / m a r c h 2 0 1 6 www.resourceworld.com 51 mINING nexGen's arrow discovery aims to fly by Jennifer S. Getsinger, PhD, PGeo THE ARROW URANIUM discovery in Saskatchewan has shot NexGen energy ltd. [NXE-TSXV; NXGEF-OTCQX] into prominence as a potential producer of uranium for nuclear power plants of the future. Its high-grade intercepts rival those of the world's best mines and the fact that mineralization is completely land-based is convenient from a permitting and develop- ment perspective. In addition, NexGen has ample funding for its ambitious exploration and development plans. The company holds a significant land position in the Athabasca Basin, with properties in the historically productive northeast part of the uranium mining area (Thorburn Lake, 2Z Lake, Madison, and Radio), and some of the largest claim hold- ings in the southwestern region (Rook I project and others). The Patterson Lake corridor, at the southwestern edge of the Athabasca Basin, is a hotbed of uranium exploration activ- ity, churning out some exceptionally high uranium grades from several properties and generating excitement. NexGen's Rook 1 Project, which contains its Arrow Zone and Bow discovery, is nearby to Fission Uranium's Patterson Lake South (PLS) Project, whose preliminary economic assessment has Chinese buyers looking at it. Canadian uranium mining compa- nies can make deals directly with foreign country utilities, so long as that country has signed nuclear non-proliferation trea- ties. In 2015, Cameco made a $350 million deal with India to supply its nuclear reac- tors with uranium for years to come. The McArthur River Mine (Cameco 70%, Areva Resources Canada 30%), in the eastern Athabasca Basin, is currently the most productive and highest-grade ura- nium mine in the world, providing 13% of global uranium in 2012 (more than 1 million tonnes with average grade 15.76% U 3 O 8 ), making up most of Canada's 15% contribution to world uranium supplies. Other large producers are Kazakstan, Australia, Niger, Namibia, Russia, Uzbekistan, United States, and China. Top consumers of uranium are United States, France, China, Russia, South Korea, Ukraine, Japan, Germany, and Canada. Although all are "unconformity- related," uranium deposits in the Athabasca Basin concentrate in three related geological settings: within the sandstone, spanning the contact with basement rocks, or entirely within under- lying basement rocks. The uranium came from detrital minerals in the sediment; hydrothermal fluids may have come from a combination of meteoric and magmatic sources; and the structural preparation (deformation leading to shear zones) and chemical conditions for mineralization and subsequent concentration originated in the underlying granitoid rocks. The Arrow Zone is located in a highly sheared package of basement gneisses (resembling the geologic setting of Cameco's Eagle Point Mine). This means it does not have the same technical challenges as mines hosted by wet and/or unconsolidated sandy-textured strata (it's hard rock rather than soft rock, and therefore more straight- forward for underground mining). NexGen intends to file its first technical resource report on the Rook I property in the first half of 2016 based on results up to the end of 2015 exploration efforts, which intersected radioactive rock in 80 of 82 holes drilled. Recent assays from seven drill holes were reported in a news release dated January 5, 2016, and included highlights from the A2 and A3 shears in the Arrow Zone. In shear A2, hole AR-15-59c2 inter- sected 36.5 metres at 10.11% U 3 O 8 including 14.5 metres at 20.38% U 3 O 8 , including 3.5 metres at 52.33% U 3 O 8 ; hole AR-15-54c4 intersected .5 metres at 6.93% U 3 O 8 . In shear A3, hole AR-15-56c2 intersected 32.0 metres at 1.58% U 3 O 8 . The mineralized section of Arrow Zone is delineated to be approxi- mately 235 metres wide with a strike of 645 metres and extends from about 100 metres below surface to a depth of 920 metres. In addition to the Bow discovery, there is a lot of open ground for more discovery which will be drill tested in 2016. With its strong cash position ($34 mil- lion), NexGen can carry out its ambitious plans for 30,000 metres of winter drilling, followed by another 30,000 metres of sum- mer drilling. It might have to update the resource estimate calculations fairly quickly due to the magnitude of that program, con- tingent on expected favourable results. In a January interview with CEO, Leigh Curyer, and Travis McPherson (Corporate Development), Resource World learned that NexGen's management and directors bring together financial and uranium mining expertise from around the world as well as Canada, including experience with Rio Tinto as well as local projects. Outstanding grades and potential size encourage the team to feel positive about future development of the project. In reference to the Arrow discovery, Curyer said, "We don't know how big it is yet, but it's big. We're very confident that Arrow could become a major supplier of uranium on the world-stage." n NexGen Energy's Arrow Zone uranium discovery in the Athabasca Basin of northern Saskatchewan. Photo courtesy NexGen Energy Ltd.

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