NexGen Energy Ltd.

Good morning. My name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the NextGen's NRG Q1 2024 Financial Results 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 at the end. If you'd like to ask a question during this time, say, progress star, then the number one on your telephone keypad. If you'd like to withdraw your question, please press Star 2. Before we begin, please note that the following caution respecting forward-looking statements, which is made on behalf of NextGen Energy and all of its representatives on this call. The statements made on this call will contain forward-looking information that involves risks and uncertainties. Actual results could differ materially from a conclusion, forecast, or projection in the forward-looking information. Certain material factors or assumptions were applied in producing forecasts and projections are detailed in the forelooking information. Additional information about those material factors and assumptions are contained in NextGen Energy's filings and they are available on Cedar Plus website at www.cedarplus.ca. Mr. Lee Currier, CEO and Director of NextGen Energy, you may begin your conference.

Thank you, Julie. Welcome and thank you to all our shareholders and stakeholders around the world for joining NextGen's Q1 2024 update and financial results call. I'm Lee Currier, founder and chief executive officer of NextGen Energy. Joining me on the call today is Travis McPherson, chief commercial officer, and Ben Salter, chief financial officer. From a company and industry perspective, it's been a great first quarter to 2024. Now I'll commence by providing an update on the industry landscape and uranium market, which is entering into an unprecedented phase with last night, President of the United States, Joe Biden, signing into law legislation that bans the import of Russian uranium and unlocking $2.7 billion in spending to support the buildup of US domestic uranium supplies. This purely reflects the particularly high risk surrounding a large percentage of current mine sources and available supplies. We'll provide a progress in advancing the RUC1 project, specifically federal permitting, which is in the final stages with the CNSC project development with respect to front end engineering design and detailed engineering progress Exploration, which includes the early stage discovery of new mineralisation in the first drill hole at the target on an entirely new conductor corridor 3.5 kilometres from the one that hosts the Mighty Arrow deposit. And financing, including discussion related to two transactions in the last fortnight. The Australian dollar 250 million CDIs raised exclusively on the ASX, which closed this morning pre-market. and the strategic purchase of 2.7 million pounds of U308, which given last night's ban being passed into law is ultimately very, very timely. NextGen, on closing, now has cash and liquid assets of approximately $930 million Canadian in preparation for construction of the RookOne project. After this discussion, I'll then move into a Q&A portion on the call where I invite you all to ask questions. In the last six months, we're highly encouraged to see governments worldwide adopt energy policies and strategies that are aligning strongly with NextGen's recognition back in 2011 of the role sustainable and cost-effective nuclear energy will play in the 2020 decade and beyond. Increasingly, nuclear is being recognised as the critical component of the global energy mix, addressing the need for clean, efficient and secure energy sources. The world is on an aggressive path to bring more nuclear power online, tripling by 2050, both in the form of new builds in places like China, India, the UAE, UK and France, as well as restarts and extensions in large and key nuclear markets such as Western Europe, Japan, South Korea and the United States. This expansion is increasingly critical as the electrification of our world accelerates, notably through the expanding adoption of artificial intelligence and electric vehicles. Both need a reliable and baseload power source, leading to a paradigm shift in the energy market. We've seen this urgent need for a nuclear renaissance to continue, expressed by many thought leaders, including tech giants such as Microsoft and Amazon, as well as the likes of Sam Altman, OpenAI, and Brad Gerstner, legendary venture investor. Demand is robust, sustainable, and growing significantly faster than any one forecast, causing the focus to shift to the ability of the industry to supply this key energy fuel. Supply, however, tells a different story, a narrative of fragility and decline. The confluence of over a decade of extreme underinvestment, supply disruptions, dwindling inventories with the overlay of significant geopolitical risk is precipitating a new market reality. One in need of more dependable uranium sources and has led to uranium spot during this past quarter reaching new 15-year highs at $107 US a pound. In the face of supply challenges, new sources must be found through the purposeful exploration efforts and then developed, which take time, even for those companies doing their good work like ourselves and our Canadian Development Company colleagues, Denison, Fission, UEC and ISO Energy in Canada. It's not simple, convenient or quick to find and develop any mineral project. It's at least a minimum of 15 years before new, undiscovered sources come online. It's more important than ever to advance the RUQ1 project into production this decade, and the NextGen team is delivering on that objective. In Canada, the federal government has recognised its importance and strongly emphasised its commitment to expanding the nuclear sector both domestically and globally. This includes efforts to expedite the approval process for nuclear projects in Canada and increase funding availability, as highlighted in the most recent federal budget. NextGen is RUC1 project and all its shareholders and stakeholders are extremely well positioned for this Canadian government commitment. The importance and reality for the need of allied supply chains was bluntly reflected last night with the signing prohibiting Russian uranium imports act. This is set to take effect 90 days banning US imports of Russian uranium in a phased manner through 2028. This legislation begins a new unprecedented era in the uranium market and is expected to time the market considerably leading to significant and long-term upward pressure on uranium prices. Consequently, for all these reasons, utilities are seeking to diversify their highly concentrated nuclear fuel supply chains in allied jurisdictions. The ROOC1 project stands out as the world's largest and lowest cost future producer. For an exceptionally sound technical and environmental setting, evident by its vertically stacked ore body that is large, high-grade and located in ideal hard rock conditions with clean ore, making it truly unparalleled in the global uranium landscape. We're encouraged to know that our valued government partners and local communities acknowledge the importance of Rook One's generational profile and recognise that Rook One will cement Canada as a global leader in the delivery of uranium as part of the green energy solution. Looking ahead, NextGen is energised to progress the RUC1 project into construction and production through our innovative culture, deep expertise, operational excellence, and our collective commitment to being a key contributor to the essential global clean energy transition. Over the first quarter, we continue to execute our strategy to permit RUK1 for construction. After receiving Saskatchewan Provincial Environmental Approval of the RUK1 project on November the 8th, 2023, which was the first greenfield, uranium mine and mill project in Canada to receive provincial EA approval in over 20 years, we immediately submitted responses to the CNSC technical comments. On February 12th, 2024, at conclusion of the prescribed 90 days following that submission. NextGen received only 49 comments remaining to address, and once done so successfully, will have concluded the Federal Environmental Impact Study. We're extremely pleased with this CNSC review and have been finalising our subsequent responses to these remaining 49 comments, which we will be submitting imminently. this week or early next and will be reflected in a new release at that time. This is all in the backdrop of full support from our local Indigenous community partners who have all signed impact benefit agreements with NextGen on the full lifecycle of the RUC1 project. On project development, the 2023 Site Confirmation Program is informing and validating the final detailed design of the production exhaust shafts, water treatment, underground tailings management facility, mill and surface infrastructure. This work is estimated to be completed at or around the end of Q2, where we will then provide an updated cost summary on TAPEX, OPEX and project economics. Regarding procurement, We are finalising details of the shaft sinking contract award and advancing the procurement of the mine hoist system, which will be awarded in the near future. Additionally, we are awarding various ancillary site contracts, including the LNG power plant during the second half of this year. As we shared earlier this year, our 2024 winter exploration program has returned successful results at a brand new discovery on the Paterson Corridor East, which lies 3.5 kilometres east of Arrow on a separate conductor package. The intense mineralisation discovered in RK14183 meant that we focused the balance of winter exploration solely in this area to first understand the extent of the system. The geological similarities between Paterson Corridor East and Arrow are stark. and have dictated the summer program will focus on this area for a considerable period of time. The early exploration holes at Arrow in early 2014 were hitting the top of the strong and large mineralization below. This discovery and the holes drilled to date suggest a similar setting of an extensive mineralizing event in the vicinity. Results of the remaining 2023 program are imminently pending and the 2024 summer drilling program will be commencing late May and will be an expanded program from winter and all on this new discovery. All discoveries have their own unique nature and this will be no different. But note, the execution of this drilling program is incorporating the same industry-leading technical approach and discipline as deployed at Arrow on discovery and in a manner which was the most time and cost efficient per meter drilled in the discovery of a plus 100 million pounds of it in the world. Regarding contracting, our discussions continue to advance well with the respected nuclear power utilities. We have been recognized as a significant producer in the future. with a strong understanding of NextGen's key positioning in any utilities' future supply portfolio. As evidenced in industry market commentary, contract negotiations for 2020 and beyond are occurring now. Last week, NextGen announced the purchase of 2.7 million pounds of physical uranium at US$92.50 per pound via the issuance of a US$250 million convertible debenture at a 30% premium to our five-day VWAP share price. This debenture is on the same terms of which we have successfully executed in the past with CEF, Li Ka-Shing, in 2016 and 17, Queens Road Capital, and more recently, Sol Patterson's in Australia, which all incorporate an investor rights agreement that contains shareholder voting alignment, standstill, sale and transfer restriction covenants, and anti-hedging through short-selling options, swaps, or derivatives. The rationale to procure uranium now is logical, given our stage of development in approaching final permitting, then construction, and more so, the contracting cycle for delivery from 2028 and beyond is occurring now. That's right, right now. Last night's signing of the Russian uranium ban, fully enforced by 2028, means the importance of procurement for this time and beyond has even more significantly elevated in the last 24 hours. Nuclear fuel is unique in the sense it's a highly specialised input of production for power utilities that takes many years to procure and not commonly available if caught short. The producers and spot market is no longer flush with inventory levels to accommodate any unexpected shortfalls. Given the supply side dynamics of fragility, utilities are rightfully focused on security of supply now. This purchase shows utilities NextGen has their back and is a responsible, reliable supplier, reflecting respect and understanding of their risks and requirements for successful operation. With respect to the price of 92.50 per pound, based on recent spot market purchases over the last six months, £100,000 has been resulting in greater than $1.50 upward price movement. We are confident we have purchased extremely diligently and at the same time as enhancing our contracting and debt financing approach. With respect to the debt package, which we will continue to advance through due diligence and schedule concluding shortly after federal approval, This includes many different potential avenues and significant capacity is being evaluated with maintaining leverage to future uranium prices. Evidence by expressions of interest from lenders, which now totals from the US 1.4 billion, which provides substantial excessive capacity to fund and execute the projects. We continue to experience strong institutional and retail shareholder support from Australia and the broader Asia Pacific region who exhibit strong demand for unhedged uranium development opportunities. Our listing and subsequent inclusion in the ASX 300 Index on March 18th marked a significant milestone, reflecting our company's continual commitment to finding new shareholder markets, exposure and in the process, leveraging optimal outcomes for our shareholders and stakeholders. In line with this objective, two weeks ago, NextGen issued a Canadian $224 million placement to ASX investors, which together with the issuance of the $250 million convertible takes our cash and liquid assets to approximately $930 million Canadian. And that is excluding our investment in ISO Energy. We have significantly addressed the equity component of funding construction of Rook One, providing the market with clear visibility of our objective of taking Rook One immediately into construction on receiving federal approval with the value of that milestone unencumbered. In September of 2023, NextGen has raised approximately 540 million Canadian dollars with a discount to market being an industry-leading 1.5% to 4% discount, while still maintaining sector-leading share price performance. Further, this has been during a period CEF have liquidated their shareholding. This represented approximately 18% at the beginning of last September, to only yesterday being advised is now holding less than 0.1%. We are very proud of this investment return to CEF since 2017 of over 500% and equally excited it has been replaced with new, predominantly large, Australian-based shareholders with an affinity for a new world mining company delivering exceptional returns. By the end of Q1 2024, we will have invested approximately 459 million Canadians in the successful exploration and development of the RUC1 project. And this has resulted in a current market capitalization of 5.4 billion Canadian. The day prior to the announcement of the uranium purchase last week, NextGen hit a new all time high market capitalization at Canadian $12.14 per share and led all year to date, one year rolling tables relative to its peers. The 2.7 million pound purchase of uranium represented approximately 4% dilution to that market cap and has placed NextGen in a far stronger position than what it was prior to our announcement. Before we turn to the Q&A, I'd like to mention Susannah Pearce's nomination for election to our board of directors at our upcoming AGM in June. And this is referenced in the NextGen management information circular issued last week. Susanna currently presides as President and Country Chair of Shell Canada. Her expertise and experience in the global energy industry and genuine engagement with local Indigenous communities and government stakeholders makes her a natural fit for our organisation. I encourage everyone to read the NextGen Management Information Circular, which details all aspects of our approach, governance and diligence into living the world's largest environmentally, socially, and elite economic uranium development project. Our team's strength lies in its diverse composition, enriched by top tier talent from a variety of backgrounds, reflecting a wide reaching perspective that enhances our approach. In 2023, total employees by gender statistics were 66% male, and 34% female, compared to a Canadian average of females in mining measuring 16%, more than double. Proudly, 80% of Rook One site employees were from the local priority area. Over $44 million has been spent on the local priority area supplies in 2023. which stimulates economic development within local communities and builds long lasting and self-sustaining community resilience. As we move forward with the project, we continue to add to our high performance team. Building and investing in skilled talent pool is central to our continued success and local economies success. In summary, we are moving forward with the support of our valued indigenous partners, our shareholders, the regulatory and governmental authorities of our dedicated team. As we look toward the rest of 2024, our focus is on advancing the ROOC1 project. We are at a pivotal and exciting time for our company. And as always, it's a privilege to share our continued growth with you as we work together to secure the energy transition. Now, let's transition to the Q&A. And we encourage questions from all of you. I'll hand it over to the moderator.

Thank you. Ladies and gentlemen, should you have a question, please press star one. To withdraw a question, press star two. One moment, please, for your first question. Your first question comes from Andrew Wong from RBC. Please go ahead.