NexGen Energy Ltd.

Good morning, ladies and gentlemen, and welcome to the NextGen Q3 quarterly conference call. At this time, note that all lines are in a listen-only mode. But following the presentation, we will conduct a question-and-answer session. And if at any time during this call you require immediate assistance, please press star zero for the operator. Also note that this call is being recorded. And I would like to turn the conference over to Lee Currier. Please go ahead, sir.

Thank you.

Thank you for joining NextGen Energy's third quarter company update and financial results call. My name is Lee Currier, CEO of NextGen Energy. Joining me on the call today are Travis McPherson, Chief Commercial Officer, and Benjamin Salter, Chief Financial Officer. I'll commence with an update covering milestones and activities during the quarter and moving forward prior to handing over and opening up the call for Q&A. Throughout the call, we will be making forward-looking statements. So please visit our website for relevant disclaimers. Since the company was started in 2011, industry leaders have been saying no to greenfield projects. Irrespective of that, NextGen has backed our objective judgment and built an incredible team that knew the pursuit was not only possible, but absolutely necessary. The decision-making, dedication and commitment to setting new industry standards in every respect of our operations has resulted in NextGen, together with our valued shareholders and stakeholders, laying the foundation of now being on the cusp of making an even bigger impact on global clean energy. Only three years after incorporation in 2014, we discovered the Arrow project, deposit, sorry, the largest, highest-grade uranium deposit in Canada that's currently under development. And we opened up the southwest section of the Athabasca Basin as the future of world uranium production. Every day, NextGen has and confidently applies innovation to all aspects, both technical, environmental, social and commercial, all whilst delivering in an industry-leading cost and time efficiency relative to activity and market capitalisation. Today, on behalf of everyone at NextGen, I'm incredibly proud to reflect on November the 8th, NextGen secured provincial environmental assessment approval for the Rook One project, home of the Arrow deposit. Remarkably, Rook One stands as the first greenfield uranium project in Saskatchewan to reach this stage in more than 20 years and the first ever inside of Canada. This is a historic and well-earned milestone. With securing this primary approval, the project is now elevated to seek finalization of the requisite federal approvals to commence construction and subsequently delivering the RUC1 project to operation. As part of this focus during Q3 2023, we submitted responses to the technical review comments we received in the Q4 2022 federal review process of the draft environmental impact statement. Our submissions are currently under review by the CNSC and we look forward to the conclusion of this process. Furthermore, in September of this year, the CNSC accepted NextGen's initial licence application to prepare the site and construct the project. This acceptance by the CNSC confirmed completeness and compliance with all applicable CNSC licensing requirements. Once the provincial and federal approvals are both in place, the project development schedule is fully in our hands. The design of the RUK1 project is rooted in maximising benefits and minimising effects. Our development prioritises environmental protection, ensuring minimal disruption to local ecosystems and wildlife. Currently, our work on the 2023 site program is approximately 60% complete, including the installation of the 200-person construction camp road enhancements, and preliminary shaft preparation drilling. With regards to project engineering, front end engineering design, or FEED, this is scheduled to be completed during this quarter. And further, advancement of detailed engineering for critical path aspects of the project. We have also been advancing process design work through the continued mill flow sheet testing, through which we have validated the uranium concentrate product G308 that will be generated by the project. In addition, we're in the process of continually seeking the application of technology and innovation to mining methods to ensure the highest achievable cost and environmental efficiency, along with the priority of safety and well-being of all employees and contractors at site. This is a never-ending process. Furthermore, the extensive process of awarding the shaft sinking contractors will be finalised within the coming months, signalling an increase in activity on the ground at Rook One. As we have noted in past quarters, next-gen energy, sorry, nuclear energy is emerging as the critical source for reliable, efficient, clean energy. With increasingly favourable public appreciation of global and global policy momentum around nuclear energy, Demand for uranium continues to grow substantially, while supply significantly lags due to decades of underinvestment. Prices are up almost 50% this year alone, surpassing 2010 highs and reaching $81.50 as per yesterday's UXE close. During the upcoming COP28 conference held in Dubai, which NextGen will be attending alongside Premier Mo of Saskatchewan, it is expected that the US will join the UK in France, Sweden, Finland and South Korea in committing to tripling nuclear capacity by 2050. The US tripling their nuclear capacity over the next 25 years would be an increase in uranium consumption by over 100 million pounds per year. And this is just in the US alone. These latest commitments are in addition to the prior ones committed by the likes of China and other countries that are all already well in progress. Demand for uranium today and through the next three decades has never been more positive, as the world now understands that nuclear energy is the linchpin to energy security and the energy transition. Many multiples of Rook One's annual production will be needed, and they aren't known globally today. It's our ongoing exploration efforts to find more arrows on our dominant land position in the Southwest. The security of supply from stable and ethically sourced is of utmost importance. And NextGen is ideally positioned with a project exhibiting strong technical and environmental setting with high certainty on production volumes to meet the world's utility requirements. Our strategic long-term contracting strategy reflects these attributes. And we'll continue our term book approach to volume-based and unhedged, thereby focus on optimising returns for our stakeholders while delivering to a growing nuclear industry. Our priority is clear in developing the ROOC 1 project into production. In parallel, we are exploring our highly prospective properties located in the southwestern section of the Athabasca Basin, adjacent to Look one. The industry is on track to see a 200-plus pound deficit by 2040. In 2023, we drilled 22,100 metres and made numerous intersections of prospective structure and alteration, providing a new understanding of previously unexplored corridors. The 2023 results provide a framework for a large-scale follow-up exploration program in 2024, of which details will be presented soon. NextGen is leading a change in the sector. We recognize uranium is far too essential for our future to be anchored in the past practices. We recognize the conventional methods of building shareholder value, managing risk, and addressing stakeholders' needs to adapt to meet present-day dynamics. That's why we're approaching Rook One in a way that upholds all environmental, social, labour and economic standards. Our approach has delivered enhanced returns for our shareholders and our stakeholders. Throughout our conversation with utilities, investors and others in the industry, a recurring sentiment is emerging loudly. There is pronounced interest in next gen and an essential demand for new production from Western suppliers. Amid geopolitical uncertainty and security concerns of supply, many companies anticipate constraints affecting their contracted capabilities in the medium to long term. NextGen stands poised and eager to be the solution that enables companies to deliver clean energy to their customers, with the confidence that their supply comes from a secure jurisdiction with the highest environmental, community and labour standards. For example, earlier this month, members of our team participated in Team Canada's trade mission to Japan, led by the Honourable Mary Ng, Minister of International Trade, Export Promotion, Small Business and Economic Development. Japan is actively promoting greater use of nuclear energy, maximising the use of existing reactors and developing the next generation of reactors. The trade mission discussed the unparalleled opportunity for uranium source stable democracies like Canada, quite literally the fuel to Japan's nuclear expansion. Before we move into the financial section of the call, I want to recognize Ben Salter for his appointment as Chief Financial Officer during the quarter. Ben has been a key figure in our growth story for the past few years, and his experience prior to NextGen is absolutely critical in positioning the company for future expansion. Additionally, NextGen also appointed Tracey Primeute to our advisory committee, and she's focused on our community approach, advancing education on climate and growing Indigenous knowledge to benefit all involved with the project. As I've detailed today, we've set and met ambitious goals and done so while maintaining and establishing new industry-leading standards. For an overview of our financial position ending on the 3rd of September 2023, NextGen has a working capital balance of $357.8 million as of September 30. To the end of Q3 2023, NextGen has deployed approximately $91.4 million in the successful exploration and development of the RookOne project, against the current market capitalisation of approximately $4.5 billion. We're developing this mine with the community at the forefront, embracing the opportunity for full and active engagement and partnership with the local priority area communities as a vital part of the process. Additionally, as of September 29, NextGen has outperformed the S&P TSX Global Mining Index by approximately 41% this current year. As we near the completion of the approvals process for the project, we've received expressions of interest from over six traditional lenders. We executed financing through convertible debentures from two supportive long-term shareholders for $110 million US, together with strategically executing the ATM for another $150 million Canadian, to less than a handful of existing and new shareholders, all at a maximum of a 1.5% discount to the spot share price at the time. Comparatively, other financings have been executed at up to 10% discounts. This dilution avoidance equates to hundreds of millions in preserved value and whilst saving approximately $10 million in financing execution fees that would have otherwise applied. In parallel to securing financing, we are working towards index inclusion in the ASX 300. We expect this update in March 2024. This continued interest from lenders and shareholders reinforces that we have a sound strategy and there is strong support within the investment community to bring clean energy solutions to the market. To conclude, we continue to see strong shareholder support for the global appetite for uranium and nuclear power. We're incredibly proud and excited to drive the future of nuclear to solve what is currently one of the world's greatest challenges. Moderator, please open the call to Q&A.