NexGen Energy (NXE.TO)

A uranium exploration play. They are sitting on about 200-220 million pounds of uranium. It is very likely this is an asset that will get developed. A world-class deposit, which may attract the attention of some major developers. Uranium has been a dark cloud for a long time, and prices have been trading below the cash cost of production until very recently. At higher uranium prices, this is a stock that is likely going to be a take out. He likes the company.

The energy sector is a volatile sector. This stock looks great. The volume looks great. In a crazy market like this, you need to see volume. Right now the market is hot, but so was the volume. The sector is good and this kind of junior could reap the rewards.

Uranium explorer. One of the most successful stocks in the junior mining space. It did very, very well. They have a fantastic deposit that they are proving out. It has a good chance of being sold to a bigger player, but these things take time.

He likes this stock. They have a good balance sheet that will carry them through next year. Uranium is a commodity that has been in a decline for the last 10 years, because of the disasters, where Japan shut down all their reactors. It is a clean burning fuel. What he likes about this stock is that it has the best discovery right now. It has the highest grade. They are going to put out a big resource calculation in the 1^st half of next year. This company is going to be acquired by one of the larger players, for a future project.

You had a consolidation that was a kind of triangle through the middle of this year. He does not like the stock. There is a support at $1.50.

Support is at around $1.50. Chart shows this was definitely overbought earlier this year, and now we are seeing some selling here. For the time being, he thinks we will correct between $2 to maybe $1.50. Look at the volume, and from the volume you should be able to see where the selling pressure is, and at what prices supply is waiting. This is going sideways for now.

They seem to be coming out with good drilling news every other week, and continue to expand their properties and resources. The fundamentals are very good. The issue is more to do with the uranium market. He continues to be bullish on uranium. This market is dominated by utilities and governments, so it takes a long time to turn. He can see $45-$50 in the next couple of years, and it is a name to accumulate on the downside.

He likes the uranium business, but doesn’t think the uranium price moves for at least 18-24 months. If you own this, it is not because they are in the uranium business, but because they have made a spectacularly great discovery. It is in the Western part of the Athabascan Basin. He likes the deposit and its proximity near the Vision (?) deposit. Those 2 high grade deposits together will justify the infrastructure to build them out. Don’t own this if you are impatient, and don’t buy it looking for leverage to uranium, because he doesn’t see the uranium market happening for 18-24 months. Own it because of the discovery.

Besides Cameco (CCO-T), the 4 main names to own in uranium would be Fission (FCU-T), UEX Corp (UEX-T), Denison (DML-T) and this company, Nexgen. They are in the relevant exploration plays. Fission for the longest time was the “go ahead” name with its Patterson Lake South project of over 100 million pounds and continues to grow. Nexgen has sort of taken the mantle on the West Athabascan side of the basin, which could become a $300-$400 million pound deposit, which brings you to a threshold that starts to possibly make sense.

He tends to buy larger cap names in this area, so it wouldn’t be a name he would own. However, fundamentals look attractive so he is bullish on the name.

Stock had formed a long base from July to February, followed by a nice upward trend. There were some pretty big swings in this, and you really needed the stomach to handle them, so that you didn’t get flushed out. There is also a little top, and if it gets above that, it is probably going to be a pretty good sign, at right around the $3 level.

He has been doing very well on it. It is clearly a good hold for a turn, whenever it comes.

Uranium will come back because longer-term it is needed in nuclear power. It is clean with no CO2 emissions. In the short term, it is still coming back from the huge nuclear accident in Japan, but it is just a matter of time before China, Japan and Korea will be building nuclear reactors. The company has a huge discovery, one of the best, highest grade and biggest resources. Sees a lot of upside here.

(Market Call Minute.) A uranium exploration company, and scores as one of the top momentum plays in his universe. The problem is, there is really no hard valuation to go off of yet. If you own, have a Stop Loss on it.

Uranium grades are kind of through the roof. Every time they come out with new drill results, the numbers just keep getting better and better. There is lots of speculation that it will get taken out at some time. It seems a little expensive to him. Without them actually being in production, and without a lot of outlook on the future of any earnings or cash flow, he has stayed away from this. As a speculative play, this is one you probably want to trade around. As they come out with great numbers you would probably Sell some stock, and on a pullback you would probably Buy some. Always hold a core position, because if they do get taken out, you can take advantage of that.