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NexGen's ambitions grow after latest high-grade discovery

Last updated: 12:58 12 Aug 2016 BST, First published: 07:58 12 Aug 2016 BST

Uranium oxide
More drilling rigs needed at the Arrow deposit

Canada-based uranium exploration company NexGen Energy Ltd (CVE:NXE) ended the first half of 2016 with more than C$100mln in cash and cash equivalents.

Working capital at the end of June stood at C$94.1mln, up from C$33.8mln at the end of 2015, which the company said was sufficient to carry out committed exploration activities and cover corporate and administrative costs for the next two years.

In the three months ended June 30, 2016, the pre-revenue company a net loss of C$7.83mln, equivalent to three cents a share, compared to a net loss of C$1.24mln (one cent a share) for the same period of 2015.

NexGen has thus far drilled 270 holes and six partial holes on the Rook 1 project in Saskatchewan, drilling 30,704 metres at a cost of around C$54.8mln.

The company had planned to continue exploring the Rook 1 project, targeting 35,000 metres of drilling in its 2016 summer programme, as it moves towards an update of its recent mineral resource estimate, but his ambitions have grown following another high grade discovery this week.

Yesterday the company revealed it had made a new high-grade discovery 4.7 kilometres (km) north-east of the Arrow deposit on the Rook 1 property in the Athabasca basin, Saskatchewan.

Discovery hole HP-16-08 intersected 17 metres of continuous mineralisation , including 4.5 metres of off-scale radioactivity (greater than 10,000 counts per second to greater than 61,000 counts per second).

This new zone has been named the Harpoon discovery, and is defined by the presence of strong visible uranium mineralisation, and includes dense accumulations of massive to semi-massive pitchblende – a mineral comprised mainly of uranium oxides UO2 and UO3 - mineralisation.

The Harpoon discovery is on land and starts at a vertical depth of some 210 metres.

In addition, uranium occurrences between Arrow and along trend to the north-east at Harpoon have now been traced over a mineralised strike length of 5.6 kilometres all within the Rook 1 property, the company told investors.

"This is an extremely exciting development for NexGen and our shareholders,” said Leigh Curyer, chief executive officer of NexGen.

“The Rook 1 property is delivering multiple high-grade discoveries and is still in its infancy when you consider the relatively limited drilling along the Patterson corridor to date. The focus on targeted regional drilling along with Arrow in-fill and expansion is meeting all objectives of the summer programme,” Curyer continued.

“Given the nature of the Harpoon discovery, we are currently seeking additional drilling capacity to the current summer 35,000-metre summer programme in order to maintain the resource development optimisation of Arrow," Curyer said.

How that programme turns out will determine whether Nexgen decides to proceed with a preliminary economic assessment or similar study on the Rook 1 project.  

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