New Zone of Uranium Mineralization Discovered, NexGen Shares Soar

good newsSouthwestern Athabasca Basin uranium hopeful, NexGen Energy (TSXV:NXE) announced the discovery a new zone of uranium mineralization at the Rook 1 project, setting investors abuzz and the company's share price soaring. In early day trading, NexGen shares climbed 104 percent, bouncing up from $0.225 to $0.50.

The company's first hole at Area C, now known as Arrow - which is still being drilled - was targeted based on geophysics and so far has intersected 26.2 meters of highly anomalous uranium mineralization. The zone is located roughly 4.5 kilometers along trend about halfway up tenement position, headed north from Area A.

In a research update from Dundee Capital Markets, the firm writes that NexGen's discovery appears to be a separate conductor than seen at neighboring Patterson Lake South, however, it definitely lies on trend.

Andrew Browne, NexGen's Vice-President of Exploration and Development commented in the company's press release that "The Arrow prospect represents a totally new zone of uranium mineralization in the SW Athabasca Basin, completely unrelated to any other known occurrence in the region. Its discovery demonstrates the commitment and geoscientific expertise of NexGen's technical team of employees and consultants."

These early results at Arrow suggest that the southwestern section of the Athabasca Basin could prove to be a rival district to that of the east. With NexGen holding the most dominant position in this section of the Basin, the company is poised to take advantage of this increasingly prolific area.

From Dundee's perspective, NexGen is still considered a Buy with not target price. The firm views the recent announcement of a potential discovery as "not only a game-changing hole for NexGen, but the western side of the Athabasca Basin." Analysts David Talbot and Aaron Salz wrote in their note that they believe "that this entire, underexplored, western half of the basin has yet to show its full potential."