TORONTO • In the halls of this year’s Prospectors and Developers Association of Canada (PDAC) mining conference in Toronto, Leigh Curyer was treated like a star.
“It was a lot of fun, but we’ve still got a lot more work to do and many more things to achieve,” Curyer, the chief executive of NexGen Energy Ltd., said in an interview.
Vancouver-based NexGen has been on an incredible run. The stock is up 38 per cent since March 3, when the company announced an initial uranium resource of 201.9 million pounds at its Arrow project in Saskatchewan’s Athabasca Basin. The resource included an enormous high-grade zone of 120.5 million pounds, which has convinced some analysts that it is among the world’s best uranium finds in decades.
“The maiden resource blows street estimates right out of the water,” Cantor Fitzgerald analyst Rob Chang said in a note.
That was just the start of the good news. On Tuesday, NexGen reported results from a drill hole that intersected 92 metres of very high-grade uranium. This hole was located outside of the initial resource, and Curyer claimed it is so strong that last week’s estimate is already out of date.
“Many are telling me it’s the best hole ever drilled in the Athabasca,” the 44-year-old said.
NexGen’s roots date back to 2010, when Curyer, a former executive at Uranium One Inc., said he started hunting for uranium projects in the Athabasca Basin. He considered Arrow the company’s second-best target, but it quickly became number one after Fission Uranium Corp. made a major find next door at its Patterson Lake South project in late 2012.
NexGen made its first big discovery at Arrow on Valentine’s Day of 2014. And since then, the deposit has gotten better and better. The company has only spent about $26.5 million on drilling, but it already has a market capitalization of $390 million. (It was $430 million before an overdue pullback on Wednesday.)
The NexGen and Fission discoveries are two of the only bright spots in the global uranium industry, which has been in a horrendous bear market since the Fukushima disaster in March of 2011. Both firms have been able to raise significant capital, which shows that good projects can get financed in even the worst commodity markets.
The discoveries lie on the west side of the Athabasca Basin, an area that was largely ignored by most uranium companies as they thought (until recently) that better prospects lay to the east.
It is still early days at Arrow. The project has a long way to go before it can be considered in the same class as McArthur River and Cigar Lake, the Athabasca’s top two uranium mines. But Curyer noted it has a few advantages over most Athabasca projects: It is shallow, it is entirely on land (rather than water), and it is hosted in very solid rock. Cigar and McArthur have far more challenging ground conditions, and have faced water inflow problems.
“We simply could not have dreamed of hitting a resource as technically competent as Arrow has become,” Curyer said.