NexGen Energy buys 2.7 million pounds of uranium
NexGen Energy (ASX: NXG) has secured a $380 million deal with investment vehicle MMCap International for the purchase of approximately 2.7 million pounds of natural uranium concentrate.
NexGen has agreed to issue the consideration as unsecured debentures, which will be convertible at MMCap’s option into approximately 23m common NexGen shares at $16.31 each, equivalent to 4.3% equity.
They will carry a 9% coupon (or interest) over a five-year term.
Interest payments
Two-thirds of the interest (equating to 6% per annum) will be payable in cash, while the final third (3% p.a.) will be payable in common shares.
NexGen has agreed to issue MMCap an aggregate of 909,090 common shares as an establishment fee in connection with the transaction, representing 3% of the aggregate principal amount of the debentures.
NexGen will also enter into an investor rights agreement with MMCap, containing voting alignment, standstill and sale and transfer restriction covenants.
Farris LLP has been appointed legal advisor to NexGen for the debenture transaction, while MMCap is being advised by Wildeboer Dellelce LLP.
Pivotal time
NexGen chief executive officer Leigh Curyer said the transaction comes at a critical time for the company.
“At a time when available physical uranium is extremely tight and expected to continue to be scarce given the long-term supply deficit, this purchase represents a strong opportunity for us to bolster our marketing discussions and optimise the optionality of project financing structures under evaluation,” he said.
“It is also a significant endorsement of NexGen’s approach, role and opportunity in the nuclear sector.”
“We are at a pivotal time in shaping the industry towards transparency while prioritising local community engagement and participation in Saskatchewan and Canada and providing the world with clean energy fuel.”
Low-cost mine
Rook I is being developed into the world’s largest low-cost producing uranium project, incorporating an underground mine and mill development.
It is located in the uranium-rich district of the southwestern area of the Athabasca Basin and is centered around the basement-hosted Arrow deposit.
The project maintains a robust economic profile and is being developed with elite ESG commitments focused on maximising community benefit.
Ministerial approval
In November, NexGen received ministerial approval under the Environmental Assessment Act of Saskatchewan to proceed with the project’s construction.
It is believed to be the first company in more than 20 years to receive full environmental assessment approval for a greenfield uranium project in the province.
Mr Curyer said Rook 1 – along with NexGen’s prospective portfolio in northern Saskatchewan – is expected to provide generational long-term economic, environmental and social benefits for the region.