NexGen Energy (TSX: NXE; NYSE: NXE; ASX: NXG) has made a new greenfield uranium discovery at its SW2 property in Saskatchewan, 3.5 km east of its Arrow deposit, currently in permitting. The new occurrence is located on a previously untested conductor segment of the Patterson Corridor East.
“Ten years after the discovery of our world-class Arrow deposit, we are thrilled to be sharing this exciting news,” CEO Leigh Curyer said in a release. “This new intercept reflects the high potential of NexGen’s extensive land package in the southwestern section of the Athabasca Basin, and is a testament to the strategic and disciplined approach to identifying new Arrow-type zones of mineralization.”
The new mineralization was intersected by drilling for 19.8 metres beginning at 347.7 metres. The highest reading was over 61,000 counts per second (cps) over 3 metres.
Analysts say the reading compares favourably to the discovery hole at Arrow, which is part of NexGen’s Rook I project and cut less than 0.5 metre of over 9,999 cps.
“It’s too early to tell how big this discovery can get, and assays are still pending, but high radioactivity is often associated with high-grade uranium assays in the Southwestern Athabasca Basin, as seen with the JR zone discovery and Triple R deposit,” David Talbot, head of equity research at Red Cloud Securities wrote in a note to clients.
He noted that assays from SW2 that show a major discovery could serve as a catalyst for the stock.
The project, which won provincial environmental approval in November, is also awaiting federal approval.
NexGen released a feasibility study for Rook I in 2021 that outlined an 11-year operation that would produce 21.7 million lb. of uranium oxide annually and cost US$1.3 billion to build.
The exploration target is predominantly open in all directions including over 1.5 km along strike, said NexGen.
NexGen says the new mineralization is an approximate analog for the structural controls at Arrow. Follow-up drilling cut anomalous features including hematite-quartz breccia, strong silicification, dravitic clay fracture fill, redox alteration, and elevated radioactivity similar to early discovery holes at Arrow in 2014.
The Arrow deposit has measured and indicated resources, which total 3.8 million tonnes grading 3.1% uranium oxide (U3O8) containing 256.7 million lb. U3O8, and an inferred resource of 4.4 million tonnes at 0.83% U3O8 containing 80.7 million lb. U3O8.
A total of 15,700 metres of drilling is planned this year at the SW2 target, and an additional 14,300 metres at SW1.
NexGen shares traded up 0.2% at the end of the day at $9.92 apiece, giving the company a market cap of $5.3 billion. The stock has traded in a 52-week range of $4.75-$11.17.
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