NexGen Energy Ltd. Q2 FY2024 earnings call

Key Points

• Rook I Project: Advancing through federal approvals; CNSC completed 30-day completeness check of May 2021 submission, technical review nearing completion. Procurement of critical path items tracking well. Updated feasibility study shows NPV of CAD 6.3 billion, payback period ~12 months, CapEx CAD 2.2 billion, OpEx USD 998 per pound. Ready to commence construction upon final federal approvals, with production expected 40 months thereafter.
• Exploration: New greenfield discovery on Patterson Corridor East (PCE); 8 of 12 summer drill holes intersected mineralization, similar to Arrow with broad footprint and ultra-high grade intercepts. Drilling program to target mineralization extent and ultra-high grade zones.
• Sustainability: Fourth annual sustainability report released; expanded training programs (anticipate 400 participants in 2024, 100% indigenous); 82% of site procurement through nation partners; 34% female employees in 2023, 30% female directors.

No traditional product segment financial performance breakdown provided in the transcript. Focus is on Rook I project progress and exploration.

Forward-Looking

• Rook I Production: Expect 40 months post-federal approval to start production. Awaits CNSC reply on remaining 49 aspects by end of month/early next, then 40 months to production.
• Exploration: Summer drilling program may extend into winter, targeting mineralization extent and ultra-high grade zones.

Risks

• Permitting Uncertainty: Volatile timeline for remaining permits and approvals; CNSC timeline critical for production start.
• Market/Geopolitical: Uranium supply challenges, geopolitical impacts on producers (e.g., Kazakhstan, Indonesia) may delay production or affect supply stability.

Q: Thoughts on Patterson Lake area development?

A: Focused on own projects, but Rook I designed to service nearby deposits subject to approvals.

Q: Strategy on selling uranium?

A: Selling under contracts with market-related pricing, increasing interest from utilities, negotiations progressing post-WNA.

Q: M&A interest in Arrow?

A: Increased interest from financiers, permit nearing is key trigger, interest may elevate post-federal approval.

Q: CapEx increase for Rook I?

A: CAD 2.2 billion includes early works, CAD 590 million increase from flexibility and operability enhancements.

Q: Timing of first production?

A: 40 months post-federal approval, awaiting CNSC reply on remaining aspects.

Q: Permitting and construction timing?

A: Expect EIS deemed final end of September, commission hearing date set, then 40 months to production.

Q: Exploration results and mine life?

A: PCE shows promising mineralization, permitting battery limits with potential for extended mine life via subsequent amendments.

Q: Contracting and production delays?

A: Contracts tied to start of commercial production, mitigating financial impact from delays.