NexGen Energy Ltd.

Good morning, ladies and gentlemen, and welcome to the NextGen Energy's Q2 2024 Financial Results Conference Call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, August 8, 2024. I would now like to turn the conference over to Mr. Lee Currier, CEO and Director of NextGen Energy. Please go ahead.

Thank you, Calvin. Welcome and thank you all for joining NextGen's Q2 2024 update and financial results call. I'm Lee Currier, Chief Executive Officer of NextGen Energy. Joining me is Travis McPherson, Chief Commercial Officer, and Benjamin Salter, Chief Financial Officer. We will be making forward-looking statements throughout the call, so please visit our website for any relevant disclaimers. Since we last spoke in May, there have been exciting developments in advancing the RookOne project closer to production and actions within our industry that further underscore the need for a diversified and sustainable uranium supply chain, one that has more production capability and longevity in Western jurisdictions where there has been a tremendous underinvestment with the exception of a few in all aspects of the uranium industry for decades. The uranium market continues to be dynamic with demand for stable electricity in every country worldwide increasing whilst on the nuclear fuel supply side, current production continues to labour with significant production challenges regarding limited supply input availability, skilled labour and simply mine lives nearing the end of their resource life. During the quarter, additional factors arose, exacerbating these already significant supply-side challenges. Movements largely influenced by legislative impacts, including taxation in what is the current largest producer, Kazakhstan, which simply results in their in-country production costs becoming higher, and additional geopolitical impacts such as in Niger, cancelling mining leases. The focus on securing long-term supply in the face of these ongoing challenges continues to manifest amid the growing supply deficit, which is currently estimated to be approximately 60 million pounds annually and growing to over 240 million pounds by 2040. Long-term prices for uranium over the quarter continue to rise as demand continues to outpace supply An investment in the sector is nowhere near the run rate to ensure long-term supply stability, particularly as governments continue to reinforce their clean energy commitments as energy security concerns grow materially with the advent of energy-hungry data centres. The sector continues to receive a steady stream of positive news, reinforcing that the global resurgence in nuclear energy demand, it has never been stronger and is simply growing. In the United States, milestones include the Vogel IV reactor entering commercial operation, steps to boost advanced reactors, the Department of Energy's US$3.4 billion request for proposals to stockpile low-enriched uranium to provide a backup supply to replace Russian imports, and the bipartisan support to enhance the US and its allied partners' capacity to enrich, convert, mine uranium, in order to sustain the required nuclear power generation in the U.S. Other notable developments include the U.S. Senate passing the Advance Act and multiple initiatives to restart and extend the life of existing nuclear plants, including welcome turnarounds at Three Mile Island, the Palisades, and Indian Point. Additionally, Canada announced the construction of its first small mod reactor in Saskatchewan, home of the Rook One project. continues to make further investments in small-module reactor research while developing new nuclear engineering hubs. Furthermore, we've seen signs that both Australia and Italy are contemplating lifting their bands of nuclear power, and several European countries, including France, Poland, and the UK, are currently expanding their nuclear capabilities. South Korea, Japan, and India are also ramping up their nuclear energy programs. while other nations, Turkey, Saudi Arabia and the Philippines, are exploring new nuclear project objectives. It's a remarkable global effort in the expansion and procurement of clean baseload power while simultaneously decarbonising energy generation. We're seeing significant activity in the market, particularly from the US and European utilities, aiming to reduce reliance on Russian supplies and the revocation of uranium mining licenses in Niger and also ERA's Jabaluka mine, increasing the uncertainty of future suppliers. These actions further highlight the critical demand for uranium source from politically stable and sustainable regions such as Saskatchewan, the US, and Australia, also supporting the growing need for uranium and a stable supply of nuclear energy, representatives of Google, Microsoft, OpenAI, and Meta continue to advocate for nuclear power sources to help meet the growing demand for low-carbon energy to power AI and the data centers. Both US Democratic and Republican leaders have recently advocated the US would rely heavily on nuclear power to meet the electrical demand growth from these data centers. As the critical need for new uranium supplies grows, we are advancing our ROOC 1 project optimally and are in the final stages of federal approvals, having received both the acceptance of our federal license application as well as full provincial environmental assessment approval in September and November 2023, respectively. On June 21, 2024, the Canadian Nuclear Safety Commission concluded their 30-day completeness check of our May 2021 submission, which included responses to the remaining 49 aspects. Technical review of this submission is now nearing completion. We look forward to the CNSC confirming that all aspects are accepted, the EIS being deemed final, and the CNSC promptly setting the date for the federal commission hearing. The commission hearing date and subsequent commission decision representing the final stages of full approvals. The project is strongly supported by Indigenous nation partners who have advocated many times publicly and directly for this project to be approved immediately. The project squarely fits with all of the Government of Canada's targets with respect to critical minerals, Indigenous engagement and decarbonisation and will be instrumental to building Canada's place as the leading supplier of the cleanest baseload fuel source known to mankind. We're ready. to commence full-sale construction activities immediately upon receipt of those final federal approvals. And we'll be in production approximately 40 months, four zero months thereafter, bringing online what is capable of being the world's largest uranium mine, and one capable of generating in excess of $2 billion Canadian annually in free cash flow at current uranium prices. We've made significant progress progress with the Rook Run project this year. Procurement of critical path items are tracking well, including the temporary freeze pump, which are now complete, in storage, and ready for shipment to site. Both the shaft infrastructure partner and hoist partner have been identified, and with final contractual terms being concluded, the team is ready to mobilize as soon as final permits are received. Excuse me. The remaining procurement plan for 2024 is consistent with previous communications and is predicated on optimising the timing of financial commitments based on a combination of risk reduction, optimisation of the project's critical path and capital spend efficiency to maintain a ready state to commence construction upon receipt of requisite final federal approvals. We've completed enhanced site infrastructure on and around the site in preparation for full construction to commence upon final federal approval. Last week, we provided updated feasibility study economic estimates for the Rook 1 project. The updated estimates place Rook 1 as one of the world's elite resource projects economically, whilst delivering elite environmental performance throughout its life cycle, and on closure, alongside industry-leading local community aspects and outcomes. Incorporating US $95 a pound, the NPV of the project increased to 6.3 billion Canadian, and the payback period remained consistent at approximately 12 months, whilst incorporating CAPEX adjustments to 2.2 billion Canadian, or 1.58 billion US, and an OPEX increase to $9.98 US per pound. related to inflation and enhanced environmental performance. This is supported by advancing from 18% as per the feasibility study to 45% through the completion of front end and engineering design. As guided, this increase includes approximately 320 million Canadian due to inflation and approximately 590 million Canadian for design enhancements, improving the efficiency, operating flexibility, and operability of the mine. The mine life and production profile are entirely consistent with the 2021 feasibility study. Importantly and uniquely included in the cost for the project are reclamation liabilities being incurred throughout the mine life. This totals approximately 900 million Canadian and will leave the project with a full estimate on closure of $70 million Canadian. which is a fraction of that of other projects in Canada where liability is significant and at the time multiple decades taken to reclimate, such was the case at Clough Lake. This aspect is one of the many elite design and industry innovative approaches the company is committed to investigate and subsequently materialise. This approach will be applied throughout its operational phase with further advancements in technology and innovations, with the objective of having as few persons underground as achievable through the use of remote sensing and operation technology, which delivers optimal operation and safety performance. NextGen is going further in line safety and production efficiency than has ever been seen before. Further, this updated cost reflects the advanced stage of the project with the site enhancements over the first half of 2024, incorporating a doubling of the accommodation support for exploration and development activities and road maintenance in readiness for heavy haulage transportation on the successful receipt of federal approvals. This has been achieved side by side with our local community partners who are currently contributing either directly or in partnership to 82% of Rook One site services and commerce. Rook One is ready to begin major construction upon receipt of final approvals. with identification engagement of the industry experts in shaft sinking, infrastructure, underground development in place. Early stage construction aspects are fully engineered and designed. The team continues to work towards further optimisation such as enhanced recoveries, energy initiatives through kinetic heat recovery and increased automation of material handling and processes. To exploration. In March, we announced a new greenfield discovery on Patterson Corridor East, PCE, 3.5 kilometres east of Barrow on our 100% owned SW2 Rook 1 property. We continue to build on these positive results, with this morning announcing very exciting preliminary summer drilling results. To date, 8 of 12 summer drill holes intersected mineralisations, which is indicating a large mineralised footprint with remarkable continuity. Referencing figures 1 and 2 in this morning's news release, the footprint of PCE is currently larger than Arrow's at the same stage of metres drilled, with the geological setting indicating a tremendously prospective basement-hosted system with many geological similarities to Arrow's. In the first 15 holes at Arrow, mineralisation was defined over 550m vertical extent, 500m strike length and 150m width. PCOE already exhibits broader vertical and strike lengths of 600m and 540m respectively, with a width currently of 75m. there is the presence of intense mineralisation greater than 61,000 counts per second, which is the ultra-high-grade mineralisation in four holes at PCE, whereas at Arrow, at the same stage, we had not intersected that until AR1415, the 15th hole drilled, which then led to the vectoring in and discovery of the A2 high-grade heart, which represents approximately 180 million pounds at just under 20% average grade. When you consider the combination of these broad-spaced holes at PCE and the similarities to Arrow, the growth potential here is obvious. The drilling program at PCE is now specifically targeting two aspects, continued broad-space drilling to define the extent of mineralisation, and two, vectoring into the ultra-high-grade zones within the area of mineralisation. Discoveries of the calibre of Arrow all take their own path in terms of time and extent of drilling to fully define a world-class ore body. PCE is now commencing its path, showing all the characteristics of Arrow at the same stage. PCE validates the continued prospectivity of the next-gen land package is incredibly immense, and underpins the southwest section of the Athabasca Basin as the future of Canada's uranium industry is growth, from the latter part of this decade and for over the balance of this century. Our summer drilling program is likely to be extended into the winter, incorporating a short break during the change of seasons, and more information regarding this will be disseminated once approved. We look forward to answering any questions the audience may have at the conclusion of this report on these exciting results. We are also progressing negotiations with the utilities and will advance this post the WNA in London this September. On the back of the uranium purchase NextGen undertook, multiple new utilities have approached NextGen seeking uranium supply from 2028 and beyond, as well as there has been a material increase in the project from a variety of financiers. The current and future scarcity of uranium in the market cannot be understated. and hence why we remain steadfast in our contracting approach on maximising leverage to future prices. We will only contract on terms that reflect a sustainable price to encourage and promote a more diversified Western world mine supply platform. This assessed price being substantially higher than the current uranium prices when considering the economics and permitting hurdles of Western world advanced development projects. I'd like to take the opportunity to highlight and remind the audience, profitable uranium projects in the Western world are straight up scarce. Those currently in production are either making razor thin returns and in some cases losses. And those proposed face the toughest development and permitting challenges in the entire resources sector. NextGen being at the conclusion of the permitting process has the most recent and firsthand experience of what is involved. It cannot simply be assumed, and history will support us on this, that all stated uranium development projects will move into production as forecasted or possibly at all. A significant component of permitting success is dependent on multiple factors, economic, technical, environmental, skilled and experienced labour, stakeholder engagement, all facets which have to be met prior to a single pound being produced. There are currently less than a handful of projects located in Canada, the US and Australia, capable of reaching production within five years from now and at the current prices. To the financial section. As for the financial statements and disclosures released just prior, at the end of the second quarter, ending 30 June 2024, NextGen has approximately 570 million Canadian in cash, having raised $346.5 million during the first half of 2024, and $340 million Canadian in uranium on our balance sheet. $161 million is budgeted spend for the full year 2024, covering site program, engineering, procurement of long lead time items, project development costs, exploration, permitting, community programs and training. Cashed G&A for the quarter was $11.03 million, inclusive of some of the one-off costs associated with the capital raising proceeds of $346.5 million. For the year 2024, G&A's forecast will represent less than one-fifth of those total expenditures for the year. In supporting a workforce approaching 100 persons and up to another 50 consultants and service providers engaged across all activities, totaling $161 million, all focused in readiness for final approval and subsequent commencement of construction, and once in operation, generating over $2 billion Canadian free cash flow. As we work to advance the ROOC 1 project, we maintain high standards for our sustainability practices and corporate governance. In May, we released an annual sustainability report The report marks the fourth year NextGen has reported the company's robust environmental, social and governance profile and is in accordance with global reporting initiative GRI. Highlights include expanded training and education programs, launching groundbreaking and unprecedented partnerships with local industry, education institutions and communities to offer trade training and certification for the creation of a strong, and thriving workforce in the local community adjacent to the Rook One project. These programs resulted in more than 300 students and community members participating throughout 2023, of which 39% were female and 99% indigenous. We anticipate approximately 400 participants for our 2024 programs and expect 100% of the participants to be indigenous. Diverse top-tier talent. We foster a diverse, safe work environment where everyone is treated with respect. Our commitment to community development training is exemplified by 80% of site employees in 2023 being local community members residing in the local priority area. Furthermore, in comparison to industry standards that see 16% female employees, 34% of next-gen personnel were female in 2023. And with Susanna Pierce joining our board, women now represent 30% of our directors. Local careers and procurement. Through the four benefit agreements with our nation partners, mechanisms are in place to ensure procurement opportunities are communicated transparently and well in advance to allow for maximum local supply chain participation. With the result being 82% of procurement for one site going through our nation partners. The key to this positive outcome is the continuation and growth of training initiatives for local priority area community members, and that is something the company is incredibly proud of. Our dedicated team, along with our valued Indigenous partners, shareholders, government and regulatory partners, should all be credited with how we are working collectively through the approvals, all in the service of bringing the largest single-source uranium deposit to production this decade. As we look to the second half of 2024, our focus is on finalising the federal permitting process to advance the RUC1 project that is poised to have a positive impact on both the economy, the environment, local communities and generating the generational benefits. With current mine supply having never been more fragile and the growing deficit requiring more than five one-size projects to be found, permitted, financed and constructed over the next 20 years, we'll continue to lead the industry with our innovative approach and steadfast dedication to excellence in all aspects of mine development. Now let's transition to the Q&A, and I look forward to all the questions that the audience may have.

Over to you, moderator. Thank you.

Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press the star button followed by the number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press the star button followed by the number 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 the line of Andrew Wong of RBC Dominion Securities. Please go ahead.

Hey, good morning. Thanks for taking my questions. So, Lee, I was curious, like, what are your thoughts on how the Paterson Lake area should be developed in the future? I mean, it's pretty clear that there's a lot of uranium in the area. It's very high in perspective. You have the PLS project just kind of across the lake from Rook 1. So, you know, like, does it make sense to develop these areas separately or would they be developed together to share infrastructure and hospitals and maybe be more efficient?

Yeah, that's a good question. And, look, with respect, I can only really answer for ourselves. We are very focused, as you know, having discovered this project in February 2014 and It clearly looks like we're on to another magnificent discovery. This area is going to be the future growth of Canada's uranium industry. Look, we are obviously clearly advanced in our project. We are looking forward to the federal approvals and we've built this or designed this project to service ore from nearby deposits as well, obviously clearly subject to subsequent approval, federal permitting and provincial permitting aspects. How it's optimally done or accessing ore from other projects coming into our mine site must be seen. There's clearly some synergies for those other deposits to access the Rook 1 mill. And at the appropriate time, those discussions will be had. And if concluded, we'll go through that. But we're focused on our Arrow deposit first. Obviously, mineralisation that is in and around Arrow. And everyone's aware that Arrow is open at depth as well. you know, on the basis that PCE shapes into something similar to Arrow, well, you know, we're going to be very busy for many, many decades just focused on our own ore. So, yeah, it's a good question, Andrew. We, as I said, I can only really answer it from our perspective based on what we have in the company's portfolio as we speak.

Okay, that's all fair. Maybe just switching a little bit onto the strategy around selling and marketing uranium. I think you've been pretty clear, you know, that you have plans to sell through contracts that maybe are short of duration and give you 100% market-related pricing. And I'm just curious, as you have more conversations with potential utility customers and others in the industry, has that evolved over time? And if there's anything that's changed.

Thanks. Yeah, just to clarify that.

Sorry, Travis.

Go ahead, Lee.

Yeah, I might start and then hand over to Travis. But what we've been, just to clarify, what we have said, and it's on public record, we will sell under contract with pricing mechanisms to be heavily weighted to market prices at the time of delivery. And that is what we are pursuing. And that will be a transition over a period of time. And I can say the number of inbound calls that we have as a company from utilities looking to undertake offtake agreements with us from 2028 and beyond, well, we've had our busiest year yet.

And what is very pleasing to us is that it's new to utilities.

over and above that we've had conversations with in the past. So our strategy is on track, and we're getting a very good soundboard from the utilities with respect to that strategy. Travis?

Yeah, I might just add that, yeah, the discussions with the utilities are progressing well. Lots and lots of interest, I would say growing interest globally. As we mentioned earlier, it will be focused of the second half of the year post the WNA, kind of after the summer break, although we are busy in the summer actually on this front, which is a bit unique in our experience. The summer tends to be a slower time but continues to progress on next-gen front with these utilities. And as we mentioned, we're not seeing any material concerns or anything part of a transition, part of negotiations that I think are, and then all the macro tailwinds that Lee talked about, you know, they're all playing in favor of this, of us being able to optimize every pound that we produce, dependent on how many pounds we produce. And I think that is being recognized.

Okay, that's great. Thank you for all that.

Your next question comes from the line of Katie LaChapelle of Canaccord Genuinity Group. Please go ahead.

Hey, guys. Thanks for taking my question, and congrats again on today's expiration update. I was just wondering if you could comment further on M&A. Clearly, you're in a position now where you could push forward and build Arrow yourself, but you are nearing the end of the federal approval process, and that does seem like a key trigger for a potential acquisition if someone did have interest in Arrow. So I know you're probably restricted in what you can say, but any further color in terms of any interest that you are seeing in Arrow specifically?

Yeah, thanks, Katie. I mentioned during the transcript that we've had increased interest from various sources of financiers. Look, the Given the nature of the project, it's clearly on the radar of anyone who's in the production of energy fuel and clearly on the radar of anyone who's in mining. The big majors out there have all been very open about transitioning their portfolios towards a heavier weighting to clean energy metals with strong ESG profiles in politically stable jurisdictions. NextGen ticks all of those boxes very, very strongly. The permit, though, you know, we got the first provincial permit in over 20 years. Subsequently, there hadn't been one in over 20 years federally. So it's a very big gate for NextGen to walk through and it's approaching quickly. So I think it's fair to say that the interest or their preparedness to act may elevate post-federal approval. But as I've always said, we always approach this project on the basis that, and you've seen that in the feasibility study, we'll be the ones closing the mine down. Well, that is if we're still alive. And so we continue on that process, on a daily approach of optimising this project in every aspect, and we'll continue to do so. But to answer your question, yes, there is an increase in interest. But, you know, how that eventually, we will see.

Awesome. That's all from me, guys. Thank you.

The next question comes from the line of Craig Hutchinson of TD Securities. Please go ahead.

Hi, good morning, guys. Just on the CapEx increase for Arrow, $2.2 billion, does that include any early works or is that separate? And I think you mentioned your opening remarks about a $161 million budget for this year. Just any kind of context in terms of whether that includes early works? And then maybe just as a follow-up, the $590 million of increased CapEx enhancements, can you just provide some more color in terms of what those enhancements are? Thanks.

Yeah, I'll start the first part of that, Craig. The $161 million only includes items that we're permitted to do currently. And then on top of that, there's things such as long lead time items that we've ordered and paid deposits on that we have yet to take delivery of and won't take delivery until the final federal approvals.

Yeah, and then with respect to what makes up that $590 million increase, I would say it's certainly spread across a number of things. It's not like we saw big, chunky things go up by a lot. Actually, the shaft sinking as an example, which is clearly a critical path and very vital for the project's success, didn't actually see a material increase in cost at all. So it was really spread out over Things like increasing, as Lee said, I would kind of categorize them as flexibility options and then constructability, operability improvements. So with respect to flexibility, increasing the size of the skip from 15 to 20 tons helps with reliability, obviously, but also flexibility. Similarly with the power plant size up to give us that increased flexibility Things that relate to the reliability and operability would be increasing the processing equipment size, which improves the plant availability, and other things like that. But it's really spread out across a number of things, which really, I would say, is a result of taking the project from 18% up to over 45% and going through that whole process, as well as, I think, being sincere the whole time of actually – being the ones that are going to construct and operate it. When you have that mind set, I think you pay attention to all of these little details to make sure that you get it right.

Okay, so if and when you guys get the permit, I guess there will be some additional early work still to be done, I guess, that's outside that $161 million budget?

We will get the permit, Craig. So in terms of when, that is the question, but we will get the permit.

Yeah, and just in terms of the early works, basically we're ready to start the shaft sinking process the minute we get our permit. That is where we're at. We've got, yeah, the site's ready to start that once we get the requisite final federal approvals to do so.

Gotcha, thanks. And then just on the contracting, you guys obviously ramp up the discussions here around W&A. Is there a certain percentage of contracts you'd like to have in place before you guys get your permits, or are you kind of flexible on that front?

Yeah. Sorry, Travis?

Go ahead, Lee.

Yeah. Obviously, that's a function of the project financing and the debt component, et cetera. We won't be looking to contract all of the production, clearly not, and that will evolve as we get closer to that first year's production. You'll see an increase in the percentage of volume contracted as we get closer and closer to the start date and that first year of production.

Yeah, and Craig, from a financing perspective, there's no kind of timeline related to the receipt of permits or anything. There will be some tied to first drawdown and then project completion, but those are obviously far, far in the future from now. So we do have time, as Lee mentioned, to optimize, let the market develop for one thing, which has definitely played in our favor over the last few years in terms of waiting to sign contracts, and then and then being able to get that balance right in the structuring of them.

Okay, great. Maybe one last question from you guys, just on the financing, just any updates in terms of the expresses of interest, the kind of dollar amount you guys are hearing now, obviously given the increase in the CapEx for Arrow. Thanks.

Yeah, Craig, no issues on capacity. That's certainly the case. there's obviously been some challenges in the mining industry, but in fact, those have actually played into our favor because it's really highlighted to these lenders. And this has been communicated directly to us, just how rare an opportunity to lend and put money to work on a project of this quality in this jurisdiction, et cetera. So, um, yeah, the, the interest is very, very robust, very strong and growing, um, growing both in terms of new parties, levels of interest, but also existing parties increasing their level of interest. So, yeah, we're not concerned on the capacity and availability of capital for this project at all.

Thanks.

Your next question comes from the line of Gordon Lawson of Paradigm Capital. Please go ahead.

Hey, good morning, everyone. On the drill results, so my understanding of the scintillometer is that a reading of 10,000 roughly equates to a 1% grade uranium, and this tapers off such that a reading of around 60,000 gets you a range of between 30% and 40%. Is that in line with your estimates?

It varies depending on the deposit. But, yeah, it is. Yeah, it's reasonable assertion or assumption or correlation if you'd like to make it. We always release the assays subsequently and so that correlation factor gets more accurate over time and every deposit is different.

Yeah, fair enough. Next question is on the remaining permitting and construction process. I mean, it can be a volatile timeline. I understand that. But what's your best estimate for timing of the first production and duration of ramp-up at this point?

It'll be 40 months, 4-0 post the federal approval. And, you know, we are expecting end of this month, early next. a reply from the CNSC with respect to those 49 aspects that will then determine the timing of those final approvals and from there it will be four zero months construction so I'm respecting the CNSC's timeline we have fulfilled all all of the answers for those remaining 49 aspects. We look forward to their reply at the end of this month, early next, and its conclusion. So I'll allow you to determine how quickly they may reciprocate and add 40 months to that.

Okay. Okay, fair enough. Thank you very much. That's it for now.

Your next question comes from the line of Alex Serenti of Ventum Financial. Please go ahead.

Hey, hello, guys, and exciting times ahead definitely for NextGen here. So I just wanted to touch base again just on the permits there. I mean, and the timings. Lee made it very clear, obviously, that, you know, you do expect that permit. So, you know, can you just clarify for me, I mean, you know, based on your best understanding of the process, Can you kind of lay out for me here the timings of approvals and effectively when you expect the first shovel to kind of break ground? As you said here, the technical review should finish this month, and then there's other processes that have to happen afterwards. But I just want to get a better understanding of what those are and how long they could take so that when that shovel breaks ground. And second point to that is, You know, how do your financing plans factor into this? I mean, obviously, once that permit is in hand, then I expect some sort of financing to be announced. Anyway, I just wanted to see how your financing expectations factor into the approval process.

Yes, so we – waiting on the federal government, the CNSC, to come back to us with their views on our responses to the 49 aspects that were remaining. And we submitted that back on May the 21st. We're expecting a response at the end of this month, early next, with respect to those 49 aspects. We're very, very confident with what we have submitted. And... on the basis that they are all accepted, the EIS will be then deemed final and complete by the federal government. Gotta remember we've already received our provincial permit and it's the same EIS and we have all four communities formally have endorsed and support the project. The federal government will then set a commission hearing date. Now, that is at their discretion. But there is, given the circumstances and the strong support from all key stakeholders and the importance of this project, as they have stated to their critical minerals strategy, I would expect that commission hearing date to be issued very shortly after the EIS being deemed final. The earliest the EIS can be deemed final, I estimate end of September. but it will be subject on satisfactory resolution of those remaining 49 aspects. On the Commission hearing date, it's legislated that a project be approved within 60 business days following that Commission hearing date. Now, a couple of aspects. Historically, every project that's been deemed final, various final, has gone to a Commission hearing date and has been approved. From that final approval, it will be four zero months. But I'm not going to, you know, with respect to the CNSC, I'm going to respect them coming back to us once they are satisfied. And that will be determined by the CNSC. So I wish I could be more quantitative for you in that respect, but I think I've given you... broad parameters enough to know that we expect the project to be in production prior to the end of this decade with all things being equal and assessed objectively. With respect to the financing, like with the debt one or the debt process that we're running, it's still subject to receipt of federal approval. and you'll spend the equity first in any event. So you will see the complete financing package, most likely post-federal approval, with respect to the timing of that being secured.

Okay. All right, that sounds good. And if I just kind of do some... simple math here, you know, end of September approvals, commission hearing date, then max 60 business days after that to get, you know, to have that set. So, I mean, realistically, I guess Q1 2025, some point in that quarter, we could see, you know, construction officially start. Does that roughly make sense?

I'll refer to you as to how you interpret what I said.

Okay. Good stuff. Thank you.

Thank you.

Your next question comes from the line of Brian MacArthur of Raymond James. Please go ahead.

Good morning, and thank you for taking my question. Sorry, can we just go back to the $161 million you talked about spending this year? I have two questions. One, is any of all of that included in the new $2.2 billion capital estimate? And two, you've spent $58 as I look at the financials so far. Can I assume that the rest of that $100 million is spent in the last six months of the year or is part of that, as you said, subject to permits and things like that? If you just go over that again, I'm just trying to figure out the exact cash flows here, please.

Yeah, you're right, Brian, on both fronts. So some of that 161 million is for the full year. We have already spent 50 odd million of that in the first six months. And some of those items, so like plant and equipment, deposits on plant equipment and like the freeze plant, et cetera, and deposits on hoists, et cetera, that we won't take delivery of until we have approval. Only activities that you're seeing at site are fully approved activities. But of that 161, some are plant equipment for when we will, which would be part of that CAPEX.

Okay, that's clear. Second question, you talk about the NPV of over $6 billion at 95. Uranium. Can I... As I understand it, there's going to be no updated filing for all these new economics. But did you sort of assume in that that that value was a T minus three like we did before, i.e. that that value you'd assume sort of three years of construction? Again, I just want to make sure, because obviously this generates so much cash that time value a year here or there makes a big difference. Is that correct when you did that calculation?

That's correct.

Thanks.

Yeah, on the same basis, like for like as the FS.

Okay, great. Thanks. Just to be clear. And then the third question, obviously very interesting exploration results. Technically, the way you worded this now is you can produce up to 30 million pounds under the new economic study. But just to be clear, in the permitting process, is your cap at 30 million pounds or is it cap per tonne per day? I guess where I'm going with this is obviously before you, if you start to be very successful in PCE, you can extend the mine life a lot and therefore you may even have a strong market. Maybe you want to produce more than 30 million pounds in the early years. Would you be able to do that technically under the permit or are you actually capped at 30 million pounds? Because obviously... But if you can extend the mine life a lot with PCE, it changes maybe what you want to do in a strong market.

Yeah, I think, Brian, you need to look at that. Obviously, there's permitting battery limits. There is flex in the design of what we've put forward, but I wouldn't say it's material flex. any material change to the project would require a subsequent permitting addendment. So I think you should think of any new discovery as adding mine life at that 30 million pounds per annum capability.

Great, thanks. That's what I thought, but I just wanted to check. Thank you very much. I appreciate you taking my questions. Thank you, Brian.

Your next question comes from the line of Roland Vetter. Please go ahead.

Hello. Good morning. Could you please explain how you will structure contracts with utilities? For example, if you contract a specific year and there would be delays, which are possible, there could be material financial impact on you. So how do you deal with the uncertainty when you precisely will produce

Yeah, we're not going to sign any contracts pre-permits that would have any kind of financial impact if there are delays, because they'll actually be tied to the start of commercial production, which will have a series of tests around defining it. But that's how you mitigate that. And the company certainly will not put itself in a position, nor is it the expectation of utilities, frankly, at this stage to be put in that position. um of you know financial burden in the event that there's um any kind of um timing uncertainty which to lee's earlier point on permitting there is some that exists right now because we aren't in total control of this final aspect of the permitting process okay but if you for example bind the contracts to start a commercial operation it could also mean the utility doesn't precise you know in what year they get the volume is this correct Yes, correct.

Okay. And the second question, if I understood correctly, you said that you expect production before the end of this decade. Could you be a bit more precise? Because I think in an interview in spring, you mentioned that it could be beginning of 28. There was a press article not too long ago, which mentioned more 29. Could you narrow a little bit down the year? When do you think that you can really produce on a large scale?

Yeah, well, I can only comment to what we have said.

Whether a press article suggested something else, yeah, I can't really comment. But I want to be very, very clear that we have given the best guidance possible with respect to the timing, with all things being equal and based on our expectation and... substance of our replies to the remaining 49 aspects. And I'm being very respectful of the CNSC. They're the regulator and they'll make the determination ultimately. All things going according to plan and as we expect, we expect EIS will be deemed final imminently at the end of this review period, which concludes end of this month, early next. Obviously, there'll be some dialogue and how long that takes. I can't be more specific. It'll depend on the responses from the CNSC, but we're in the final stages and all aspects are very, very important and need to be resolved. From that moment, it'll be 40 months as per the feasibility study in terms of getting into production. I look forward to the day we can be very, very specific. And that day is coming, but respecting the permitting process. And just to add to your earlier question, as we get close, as we get that permit, well, we've got greater visibility on timing, which means the ability to enter into contracts and then as we get through the construction period and about to approach that start date, you'll naturally see an increase in the amount of volume of our production that will be agreed under off-takes. So, yeah, that is the approach that we're taking and the best guidance I can give you based on what I know today.

Okay, thank you very much.

Thank you.

Once again, ladies and gentlemen, should you have a question, please press the star button followed by the number one on your touch-tone phone. You will hear a prompt that your hand has been raised. There are no further questions at this time. I'd now like to turn the call back over to Lee Currier for final closing remarks. Please go ahead.

Yeah, thank you, Calvin, and thank you, everyone, for listening today. Incredibly exciting time for the company, you know, the dual process of being in the final stages of federal approval, respecting the Santa C's process, and at the same time has lightning strike twice with respect to mineralisation on the Rook One property. As everyone is aware, Arrow is a geological phenom and we found it very, very early in our drilling on the Rook One property, the 21st drill hole, but it was actually the first drill hole within a four and a half kilometre radius. We and everyone involved with that program did an amazing job. But we always felt you know, did we find the only mother load, um, so early on a, on a 320,000 hectare exploration portfolio? Probability was that we, we only found one of a number. And, um, uh, what we're seeing in the very early stages of, of PC is incredibly exciting. And right next door to it's probably it's most analogous, um, comparable. And, uh, To get the high-grade intercepts, the ultra-high-grade, greater than 61,000 CPS in four of the holes over large distances, incredibly exciting because when you consider how to intercept those so frequently over such large distances, we have all the ingredients of another phenomenal discovery. Time will tell, and this deposit will go down its own path but we have all the characteristics of another significant mineralised zone and we look forward to those drill rigs turning going forward. So thank you, everyone, for your time and interest. And as always, myself, Travis, Monique, Stacey and the team are available to answer any questions that you may have. Thank you.

Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.