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NexGen rises on $250m uranium purchase deal

Shares of NexGen Energy (TSX: NXE) (NYSE: NXE) (ASX: NXG) rose on Thursday as the uranium developer inked an agreement with MMCap International for the procurement of 2.7 million pounds of uranium concentrate.

The deal is valued at $250 million, based on the five-day average spot price.

NexGen traded 4.6% higher at C$11.00 at 12 pm EDT. The company has a market capitalization of C$5.9 billion ($4.3bn).

In a binding term sheet, NexGen commits to issuing $250 million in secured convertible debentures to MMCap in exchange for the uranium concentrate. These debentures will be convertible into about 23 million common shares of NexGen, equating to about 4.3% of the company’s issued and outstanding common shares.

“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 the company to bolster its marketing discussions and optimizes the optionality of project financing structures under evaluation,” said NexGen CEO Leigh Curyer.

NexGen’s main development focus is the Rook I project, hosting the Arrow discovery from 2014, considered to be the largest development-stage uranium deposit in Canada.

In November 2023, the company obtained environmental approval for the proposed mine, making it the first approved greenfield uranium development in 20 years. Permitting to construct the underground mine and mill is underway.

Rook I would produce 21.7 million lb. of uranium oxide annually over 11 years from the Arrow deposit, according to a 2021 feasibility study. Last month, the company said it had found a new deposit 3.5 km east of Arrow. The Athabasca Basin is one of the world’s leading sources of uranium production.

Source: MINING.COM – Read More