Resource World Magazine

A P R I L / M A Y 2 0 1 7 www.resourceworld.com 15 MINING A world class uranium deposit in a world class jurisdiction by Andrew Nelson, Davidson & Company LLP NEXGEN ENERGY LTD. [NXE-TSX] announced on March 6, 2017 the results of its updated mineral resource estimate for the basement-hosted Arrow uranium deposit on its 100%-owned Rook 1 prop- erty in Saskatchewan's Athabasca Basin. The resource update was based on about 200 drill holes from the initial discovery to early November 2016. Management is pleased the Arrow deposit now hosts an indicated resource of 179.5 M lbs U 3 O 8 contained in 1.18 M tonnes grading 6.88% U 3 O 8 , including the A2 high-grade core of 164.9 M lbs U 3 O 8 contained in 0.40 M tonnes grad- ing 18.84% U 3 O 8 and an inferred mineral resource of 122.1 M lbs U 3 O 8 in 4.25 M tonnes grading 1.30% U 3 O 8 . This equates to 301 M lbs averaging 2.54% U 3 O 8 . Haywood Securities mining analyst, Colin Healey, commented on the update, "NexGen's first resource update for the Arrow deposit sets the stage for the first formal study of the potential economics of a mine at the Rook 1 Project. We expect the super high-grade, A2 sub-zone will support a very low tonnage, low cost production profile in the early years of a mining con- cept, with more than 174 million pounds U 3 O 8 contained in only 430,000 tonnes of ore grading 18.4% U 3 O 8 (indicated + inferred). In terms of our expectations for the update and our modelled mining con- cept, the new resource fits right into the assumptions underpinning our valuation, as it includes a subset (at select cut-offs) that is perfectly in-line with our modelled mineral inventory, where we assume a con- ceptual resource of 262 M lb grading 5.1% U 3 O 8 ." Mr. Healey has a price target of CDN $6.00 on the NexGen stock. For commodity investors new to NexGen's story, only 12 months ago did the company release its maiden mineral resource estimate which comprised an inferred 201.9 M lbs U 3 O 8 averaging 2.63% which incorporated the high-grade A2 domain of 120.5 M lbs U 3 O 8 averaging 13.26%. This maiden resource estimate already ranked Arrow in the league of world class deposits and provided the deposit with the rights to claim it as the single largest undeveloped uranium deposit in the Athabasca Basin at that time. The recent announcement inform- ing the investment community of the improvements in category confidence, from inferred to indicated, and resulting quantity only solidified its stature in that league. The maiden inferred resource saw an 89% conversion rate to the indicated category in the updated mineral resource estimate which is an indication of strong continuity of mineralization at Arrow. Leigh Curyer, CEO, stated during the conference call, "The key takeaway from today's updated release is that it validates Arrow as one of the most impressive known mineral discoveries in uranium worldwide. It is still very early in the stages of definition with considerable drilling ahead of it before the true extent of its quantity and grade can be determined. Further, given the size and grade validated today it also now ranks as one of the most impressive mineral discov- eries across all the commodity sectors." Plans for 2017 will be to continue ongo- ing expansion and infill drilling at Arrow and in parallel conduct various economic studies. The company is planning to con- tinue drilling at about the same rate as it did in 2016, which was in the range of 75,000 to 90,000 metres. To give the market some indication in regards to the economics of Arrow, the company is contemplating a Preliminary Economic Assessment (PEA) in Q3 2017 based on the updated resource. Going forward the company has mentioned it has enough pounds in the indicated cate- gory to release a Pre-Feasibility Study (PFS) in late 2017 or early 2018. There is strong demand from US insti- tutional investors looking for exposure to NexGen which has led the company to make an application to list on the New York Stock Exchange. This will be a major corporate development as the company will now have access to a significantly larger pool of capital and the largest invest- ment marketplace on the globe. At the time of the last press release NexGen had CDN $65 million in the trea- sury which the company said would provide approximately 2.5 years of fund- ing based on current exploration and development plans. NexGen can add to the list that they now officially operate in the top jurisdic- tion in the world for resource focused investments as Saskatchewan was just ranked the #1 jurisdiction by the Fraser Institute in their Annual Survey of Mining Companies for 2016. n

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