NexGen Energy, next moves

NexGen Energy (NXE.V) energized the junior mining world Tuesday (after being halted all day Monday) with a drill hole described variously as “landmark” (by the company) to a “barnburner” (Dundee).

NexGen’s AR-14-30 at its Rook 1 project, part of the Arrow discovery in the Athabasca Basin, Saskatchewan, hit 186.9 metres of uranium mineralization including about 54 metres of “off-scale radioactivity.”

It was an exceptional hole, even by the standards of the Athabasca Basin, home to the world’s richest uranium grades. I took a position in NexGen last summer, in late June, at 25 cents and wrote about that here.

NexGen shares surged about 30% Tuesday on 10X average volume, closing at 54 cents. The stock held those gains on strong volume today and closed a cent higher.

NexGen Energy, year-to-date

Doubles, especially in the current Venture market – and in uranium!, don’t come around every trading session, so the stock action presented a classic investor’s dilemma. Sell the microcap stock (which has been quite volatile) and book all or part of my gains, or ride this winner?

I decided on the latter. My position is relatively small and I believe Tuesday’s drill result buttresses the case that NexGen has a high-grade uranium deposit that will prove economic. Management is top-rate, the company is cashed-up and there are a slew of catalysts that should help underpin and drive the stock going forward, including further drill results and analyst coverage.

Getting in before the crowd remains one of the keys to successful microcap investing.

Travis McPherson of recently went on a NexGen site visit and wrote up a good report here.

Disclosure: I own NexGen shares, but this item and this blog should not be considered investment advice. All investors should do their own due diligence. Please read my disclaimer.

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