After posting the results of an independent Maiden Preliminary Economic Assessment of the company's Rook I deposit in the Athabasca basin of Saskatchewan, Nexgen Energy Ltd. (TSX:NXE) shares jumped by more than 4% on Tuesday on increased investor enthusiasm for the uranium exploration and development company.
Currently without profits and still in the exploration stage, Nexgen is largely viewed by the market as a speculative play on a commodity which many analysts believe will likely be volatile in the near to medium-term. The company may be years away from developing its assets or selling them off and retaining royalties, leading many investors who seek a return on investment today to look elsewhere.
That said, using conservative estimates, this report shows that the Rook I project alone carries with it a net present value of $3.5 billion. Using simple math, the fact that Nexgen's market capitalization of $1.1 billion incorporates only a fraction of the value of one of the company's core assets, it appears the market has for some time discounted the value of its uranium deposits, management team, or both.
I have covered this company for some time, and it appears to me that the company's management team and underlying asset base continue to be undervalued by the market, presenting investors with interest in gaining exposure to commodities with a very lucrative opportunity to get in at current levels.
Other iconic investors have jumped on board (albeit at much lower levels than today), however it remains clear that Nexgen is standing on the precipice of creating real value for shareholders, something which may be only a few years away.
While this remains a play for a patient investor, in my opinion, this is one company every long-term investor should be looking at today.
Invest wisely, my friends.
