NexGen Energy falls 50% from February high

NexGen Energy (NXE:TSXV) has come off nearly 50% from its all-time high of $0.65 per share, hit in late February.

The company’s share price almost tripled in February following the announcement of a new discovery in the Athabasca Basin of Saskatchewan. NexGen Energyquickly became one of the most liquid stocks on theTSX Venture.

The company immediately dubbed its new discovery the “Arrow” Prospect. NexGen announced drilling 26.2 meters of highly anomalous radioactivity on its first hole at Arrow and has been attracting significant attention ever since.

There has been a flurry of insider buying from one of the company’s largest shareholders: Sheldon Inwentash.

Inwentash is the Chairman and Founder of venture capital firm Pinetree Capital, which is focused on investing in early stage micro and small cap resource companies.

We have highlighted some of Shedlon’s insider buying in companies such as POET Technologies in recent articles.

Sheldon Inwentash has purchased 656,600 shares and sold 250,000 shares of NexGen Energy, since April 7th, according to CanadianInsider.com.

His purchases were made as high as $0.42 per share and as low as $0.344 per share. He sold 250,000 shares on April 17th at $0.38.

NexGen was off 8% Tuesday to $0.335 per share after hitting a multi-week low of $0.33 per share earlier in the day. Liquidity continues to find NexGen as it had traded more than 1.1 million by 2:30 PM EST.

A Brief History

NexGen Energy traded somewhat under the radar for much of January and February, prior to announcing its new discovery in the Athabasca Basin. Retail investors who had been wooed by high flying uranium stocks, such as Fission Uranium, subsequently rushed into NexGen Energy following its discovery.

Its volume went from a few hundred thousand shares per day to more than 6 million on the 19th of February. Its volume has continued to average roughly 500,000 shares per day.

The title of that historic February 19th news release read:

NexGen Drills 26.2 Meters of Highly Anomalous Radioactivity on First Hole at Arrow, Rook I, SW Athabasca Basin Highlights

A quote from that press release is featured below.

Andrew Browne, NexGen’s Vice-President, Exploration and Development, commented “The Arrow prospect represents a totally new zone of uranium mineralisation 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.”

Click here to read the entire press release.

NexGen Energy wasted little time transforming its exploration success into capital raised when on March 26th it announced the closing of an $11.5 Million bought deal financing. An excerpt is below.

NexGen Energy Ltd. (“NexGen” or the “Company”) (TSX VENTURE:NXE) is pleased to announce that it has completed its previously announced bought deal offering, including the exercise in full of the over-allotment option (the “Offering”), raising aggregate gross proceeds of $11,540,250.

Pursuant to the Offering, 25,645,000 units (the “Units”) of NexGen were issued at a price of $0.45 per Unit (the “Offering Price”).

Click here to read the entire press release.

NexGen has crashed below its 50 day moving average of $0.433, and just today has dropped below its all-important 200 day moving average of $0.345. With the summer months approaching, it is important NexGen finds support soon or a further breakdown could be forthcoming.

Cameco CEO Tim Gitzel made some less than bullish comments on the uranium sector this week, stating that,

“While we do not expect improvement in the near to medium term, the long-term outlook for the industry remains strong, and we’re making efficient use of our resources to be ready for that future growth.”

He made these comments in Cameco’s April 29th news release, which highlighted its first quarter results.

Click here to read more comments and sentiment from Canada’s largest uranium producer.

NexGen Energy – 1 Year Chart