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.