NexGen Energy Ltd.

Good morning. My name is Anas, and I'll be your conference operator today. At this time, I would like to welcome everyone to the next 10Q1 quarterly conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to answer your question, please press star, too. Thank you. Mr. Lee Currier, you may begin your conference.

Thank you very much. Ladies and gentlemen, I'm Lee Currier, the Chief Executive Officer of NextGen Energy. Thank you for joining NextGen Energy's first quarter 2023 company results and update call. I'll speak for approximately 15 minutes and then open the line for any questions. We will be making forward-looking statements, so please visit our website for full disclaimers on such statements. Joining me on the call today are Travis McPherson, Chief Commercial Officer and Benjamin Salter, Vice President of Finance, whilst our Chief Financial Officer, Harpreet Dhaliwal, is on maternity leave. Given the exciting stage of NextGen's development and the changing uranium market dynamics, we are pleased to be with you today. We'll conduct these calls quarterly going forward, given the advanced stage of completing the permitting process, the stage of pre-construction activities at the Rook One project, and all the elements associated with the uranium fuel market entering into what I believe is the most fundamentally exciting in my plus 20 years in the sector, if not in the history of nuclear energy. For those of you on the call that are newer to covering NextGen, this company was founded on the principle that sustainable and responsible natural resource development has the potential to create prosperity, opportunity for generations nation is driven by our value to make the company a leading producer of clean energy fuel that the world requires to address three main components one the basic provision of a lot reliable electricity to the need for energy that is generated from a decarbonized source in the interests of a healthy planet for the current and future generations and thirdly energy security. Given recent geopolitical developments, the requirement for sensibly sourced fuel from countries that demonstrate peaceful respect for others is essential. Leading governments and companies have set an ambitious path to net zero, with many setting 2030 as the target date for the first phase of this essential global objective. To meet those goals, we must bring more zero emissions nuclear power online, In the US alone, the power sector's greenhouse gas emissions still amount to the second largest source of climate pollution. And 60% of US electricity was generated last year by burning coal, natural gas, and petroleum. When you look globally, that number climbs to 80%. As the cleanest form of power generation that provides utility companies with reliable, cost-effective, and carbon-free power, Nuclear is just not a piece of the energy transition. It is the linchpin. As essential as nuclear is to accelerating the energy transition, so is the need to diversify global uranium supply chains. Today, more than 71% of uranium production is from state-owned or quasi-controlled companies. This is not a recipe for energy security, and global allied nations are taking important action. Recent weeks have seen the US Department of Energy and the Department of Natural Resources of Canada issue a joint statement for increased collaboration on nuclear energy. And we've also seen G7 nations establish a civil nuclear fuel cooperation to reduce reliance on Russia, which is crucial for maintaining growth in the sector. While the growth opportunity for the sector demand is expanding rapidly, the supply is not. Of the non-state-owned producing mines in other parts of the Western world, the last decade has seen a rapid decrease in producible uranium reserves due to the natural mine depletion and increasing production costs relative to the realizable market price for uranium. With the exception of a few companies, uranium exploration and development investment has been extremely low for over a decade. contributing to this current demand and supply fundamental that will take decades to balance, meaning the pressure on uranium prices increasing substantially over the coming period is exceptionally high. An exponential increase in demand, which is great news for all uranium developers who have demonstrated commitment to the sector over this past decade. In the Athabasca Basin alone, alongside NextGen, Denison, Fission and ISO have all been advancing our respective advanced development projects, diligently and incorporating innovation into extractive techniques to meet this expanding nuclear demand. But even with all of our projects coming online, it simply won't be enough to meet the increase in demand. NextGen attended the recent World Nuclear Fuel Conference in The Hague last month. It was the most well-attended nuclear industry event in many years, perhaps over the last decade, with attendees from industry and investment sectors. Key takeaways from industry experts were that the shift in realities and prospects for nuclear power has been like change from night to day and from can we build it to can we build it fast enough. As a keynote, UXC's own Jonathan Hinzey, the well-known and typically conservative uranium market analyst, stated 33 to 44 million pounds has been swung and needed given the drop in Russian supplies and the conversion to overfeeding. And NextGen stands ready to realize this opportunity. As per the 2021 feasibility study, NextGen's RookOne project is capable of delivering up to 30 million pounds of uranium annually for decades. Once in production, RookOne will generate enough energy to power 46 million homes. That's all of the top five populous US states. California, Texas, Florida, New York, and Pennsylvania. And the equivalent of emissions taking 17 million vehicles off the road yearly based on the current US grid mix. The demand opportunity is clear. The market is enormous in our eyes. And the supply challenge is equally clear. Customers require suppliers who can meet environmental, social, and security standards and act as reliable partners to advance their businesses. NextGen's operations and supply chain are uniquely based and exclusively in Canada and its allied countries, which minimizes geopolitical risks for our customers and users and investors. It also makes NextGen a supplier of choice for customers as they seek to expand their nuclear energy operations, for investors who have previously overlooked nuclear or uranium, and for consumers who demand consistent, ethical behavior across a company's operations. New market demand, new stakeholders, and new expectations surrounding not just nuclear energy, but mining operations, indigenous equality, human rights, environmental protection, and geopolitics. Expect more from industry than in the past, an aspect NextGen has embraced and led with new ways of working. At NextGen, we've initiated and demonstrated that change, as change brings opportunity. Our approach to contracting is another way we'll bring innovative leadership to the market and our customers. While other companies have substantially increased their activity in the term contracting market, our market relationships show there is significant unfulfilled uranium demand from today onwards, and it's only exponentially increasing year on year for decades. It's clear. This approaching market presents greater demand-supplier fundamentals than what I experienced in 2004-08, when the price went from $7 to $140 a pound. At the recent WNFC in The Hague, the update on NextGen's Look 1 project was warmly received, accompanied by a heavy schedule of industry meetings, signifying that the demand for new suppliers sourced from conventional, well-understood mining methods in a top-rated sovereign location of Saskatchewan is what the industry has been seeking for decades. As a consequence, in meeting that market, NextGen is approaching contracting in a manner that reflects RookOne's technical and cost characteristics of low-risk conventional mining, which provides customers with high levels of predictability and certainty of delivery, whilst being flexible from one year to the next tailored to the market conditions at that time. NextGen is fully levered to meeting future demand and fully levered to future uranium prices with no legacies. This has not existed in the nuclear space to date, and it's an aspect fuel customers are expressing significant interest in with respect to their current uncommitted demand and in the knowledge of sourcing uranium from an elite ESG company. While this will be a shift in the historical uranium market dynamics, it's not new to commodity markets. We've seen similar market transformations in the iron ore industry in the last 15 years as a consequence of a new entrant in Fortescue Metals, which led to a stabilised commodity environment and delivered better financial results for producers and customers alike. This dynamic is a welcomed improvement. NextGen's ROOC1 project, with its economic power, reliability and full leverage to future uranium prices, isn't the only thing that sets NextGen apart. NextGen is in the closing stages of finalising the ROOC1 project EIS, or submission to the Ministry of Environment in the province of Saskatchewan. Concurrently, we are working with the CNSC to finalise the submissions for their technical and public review. which will follow shortly after the provincial EIS. Additionally, we are nearing completion of the front-end engineering design and have already transitioned resources into critical path detailed engineering and procurement activities in the execution phase. Our recently released 2022 sustainability report showcases our industry-leading commitment to sustainable development and transparency. The report completely incorporates all aspects of global reporting initiatives, GRI compliance. We're incredibly proud of our investment and innovative approach, the social and environmental performance of our operations. For example, our engagement with local communities. This started with us approaching the local Indigenous communities at the outset of this project prior to the first exploration hole. and it's resulted in meaningful and mutually beneficial relationships. To have the Indigenous leaders advocating for us in the Saskatchewan Parliament in early March and the public support by the province's government is a testament to the collaboration, trust and shared belief in the transformational economic, social and community enhancement opportunities in front of us. We're proud of our relationship with local communities and governments. This year has seen an expansion in our community programs, including trades training and the youth mentorship program with the Vancouver Canucks. Another recent effort is a clear example of our philosophy of developing sustainable opportunities that are beyond mine development, ensuring a stable legacy prevails for local communities. In partnership with the Clearwater River Dene Nation, we created a gravel crushing operation that is 100% community-owned and operated. This will provide for site infrastructure valued at $36 million in the first three years of construction alone. As we receive improvement and move into construction, these opportunities will exponentially increase in size and positive impact. Training programs are already underway in local project communities, which has resulted in the added benefit of ensuring jobs stay local. and we go even further with enticing population inflows back into those local communities. I encourage you all to visit our website to view the short videos on all these community programs. Finally, before we get into the financials, to deliver the full potential of Rook One to our stakeholders, local communities and energy markets, we are building an industry-leading team. Most recently, at the board level, we are excited to welcome Ivan Mulaney to our board. As a member of the Canadian Institute of Mining and Metallurgy and a fellow of the Australian Institute of Mining and Metallurgy, his 35 years in mining project execution, including shaft sinking for major Canadian mining entities, will provide valuable expertise. At the technical team level, just this past month, six new appointments to Team NextGen that all reflect exceptional skill, diversity, and commitment to NextGen's objectives. Now for an overview of our financial position. The company currently has a treasury to fund its committed development and operating costs. NextGen had a working capital of 132.9 million as of March 31, 2023. Analysis-wise, we are an industry-leading and outperforming in the effective use of capital across all key metrics. To the end of Q1 2023, NextGen has deployed approximately $340 million in the successful exploration and development of the RookOne project against the current market capitalization of approximately $2.5 million. To our knowledge, no uranium project of this significance has been discovered and developed as cost-effectively in history. Our exploration drilling program is strong. We've got an enormous number of targets still to drill. And look, we found this deposit with our very first drill hole back in 2014. We're obviously very good technically, but I doubt not that lucky or that good to have found the best deposit on the property first up. It's the site we're on. It's an incredible geological uranium bearing setting and has much more to offer. Also regionally, in the western side of the basin where NextGen has the dominant land position, along with the other discoveries at Fission and more recently F3, it's clearly just the beginning. On the financing front, only this last Monday we announced an update on the debt financing progress. We've received expressions of interest for over $1 billion US. It's a real vote of favour for the Rook1 project on the economics front and these institutions' view of the unfolding uranium demand and supply fundamentals and how NextGen exists in it. As we move forward in 2023, we're eagerly approaching key milestones. The submission of the provincial and federal final environmental impact statements, advanced detailed engineering and procurement activities, Initiation of approved site works in preparation for construction, completion of our licensing, with a concluding commission hearing held by the CNSC. Thank you for joining our quarterly call today. We appreciate your support as we continue to develop the ROOC 1 uranium project. We are poised to significantly contribute to this century's most important global initiative. We remain laser focused on delivering a generational project for the benefit of shareholders and stakeholders, incorporating world-class environmental, social and economic outcomes. And I'm proud about what has been achieved to date and how the company is positioned for the future. We encourage questions from all of you. Our team is here and available to address all questions. Now I'll turn it over to the moderator to begin the Q&A portion of the call.

Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a three-tone prompt, a closing request, and your questions will be pulled in the order they are received. Should you wish to decline from the pulling process, please press star followed by two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question. Your first question comes from Winston Miles with A Capital. Please go ahead.