NXG - NexGen Energy (Canada)

[Dona Ferentes]

I noticed this listed today on the ASX. And successfully. ..... Shares were issued at $5.60 .... opened at $6.15 and climbed through the day,closing at $6.70

NexGen Energy (Canada) Ltd (NXG) holds a dominant land position in the Southwestern Athabasca Basin in Saskatchewan, Canada including the largest undeveloped uranium deposit in the Basin.

Listing date 02 July 2021 1:00PM AEST ##

Company contact details.... https://www.nexgenenergy.ca/
Principal Activities .... Exploration and development of uranium assets

Issue Price ....... $5.60
Issue Type ........ CHESS DEPOSITARY INTERESTS 1:1
Security code ........ NXG
Capital to be Raised ..... $2,240,000

Expected offer close date ..... 25 June 2021
Underwriter...... Not underwritten. Argonaut Securities Pty Ltd (Lead Manager)

 

[Dona Ferentes]

NexGen Energy has secured $US155 million ($240 million) in financing from investment house Washington H. Soul Pattinson and recourse sector investor Queens Road Capital.

The $US110 million ($170 million) worth of convertible debentures have a 9 per cent coupon and a five-year term – part cash, part stock. Soul Patts has also bought a $US45 million ($70 million) block from Queens Road, taking the total transaction size to around $240 million.

Hong Kong billionaire Li Ka-shing is a major shareholder in the $3.5 billion market cap company. Queens Road Capital is backed by mining magnate Andrew Forrest and fast-food billionaire Jack Cowin.

NexGen Energy is developing the Rook 1 project in Canada’s Athabasca Basin, considered to be the largest undeveloped uranium deposit in the country. Once completed, it will be the single largest uranium-producing mine in the world at full production north of 27 million pounds of annual production.

As per the NI43-101 Rook 1 Feasibility Study, the payback on capex is less than 12 months and the company is projected to earn around $CA2 billion ($2.3 billion) earnings before interest, taxes, depreciation and amortisation at spot prices. Uranium spot prices have crept up to 12-year highs of $US58 per pound.
.
...since listing on ASX.

 

[Dona Ferentes]

bring on the lawyers ... dual listing => complexity . Refreshing, isn't it. Happy to stand aside!

THIRD REFRESH SUPPLEMENTARY PROSPECTUS
1. Important Information
This is a refresh supplementary prospectus (Third Refresh Supplementary Prospectus) which supplements and is intended to be read with the prospectus dated 9 January 2023 (Original Prospectus) as supplemented by:
(a) a refresh supplementary prospectus dated 6 April 2023 (First Refresh Supplementary Prospectus);
(b) a supplementary prospectus dated 1 May 2023 (First Supplementary Prospectus);
(c) a second supplementary prospectus dated 16 June 2023 (Second Supplementary Prospectus);
(d) a second refresh supplementary prospectus dated July 6 2023 (Second Refresh Supplementary Prospectus); and
(e) a third supplementary prospectus dated 29 August 2023 (Third Supplementary Prospectus); and
(f) a fourth supplementary prospectus dated 3 September 2023 (Fourth Supplementary Prospectus),each of which were issued by NexGen Energy (Canada) Ltd. (ARBN 649 325 128), a foreign company registered in its original jurisdiction of British Columbia

 

[houtman]

4th pick in the 2024 comp.

NXG is dual listed here and Canada.

It's Arrow deposit in the Athabasca Basin is high grade, how high?
For comparison, PDN has 600ppm, NXG has 23,700ppm or 2.37%.

From their report 30/9/23 they show @ US$90/lb U3O8 an NPV8% of Can$7.20 Billion (after tax) and an IRR of 76.8% after tax.

Cash on hand is $370m.

Working through approvals atm.

Positives -

• Grade
• Grade
• NPV and IRR if successful.
• Safe jurisdiction
• Plenty cash
• Annual production forecast to be 28.8Mlb for years 1-5.

Negatives -

• I'd like to see more Engineers/Geologists in leadership positions, maybe it's different in Canada but it looks like a surfeit of bean counters and Arts degrees.
• Share based compensation $10.9M for the last 3 months and over $23m for the last 9 months.
• Sponsoring an F1 team, I would have left this to after being cash flow positive.

If they can get to production it should be a cash cow.

MCap is about $5.3B

Merry Christmas all, enjoy the break.

 

[houtman]

It's all about permitting for NXG, just gotta wait.

The 3 companies that are mentioned most by the Aussie fundies are - near producer PDN, producer BOE, and NXG.

NXG averages 1.9m share turnover daily in Canada, but on the ASX about 10% of that, so there can be some variance on price match.

It pays to check the closing price in Canada before putting in an order on the ASX.

 

[houtman]

@debtfree

I had expected my monthly posts on NXG to be repeats of the January post given that not much was expected apart from waiting for permits.

But no, instead they have announced a 30,000m drill program for winter and summer.

Given their >$5B mcap, it would need to be a substantial discovery to move the needle.

NXG was down 10c on the Canadian exchange Friday night.

They have $410m Canadian cash.

 

[houtman]

@debtfree

NXG reported interesting drill results on 12/3.
Not that you would have known by looking at the share price reaction.

In part -
This hole which intersected 3.0 m of up to 61,000 cps
is significantly better on all metrics than RK-14-21(the Arrow discovery hole) which intersected less than
0.5 m of greater than 9,999 cps

So 6x count per second(not an SAE unit) and a 6x section compared to the Arrow discovery hole.

They also note - The overall setting is an approximate analog for the structural controls of Arrow.

Given their $5.5B mcap I'm not shocked that there was no price rise.

Looking fwd to the follow ups.

 

[houtman]

@debtfree

A quiet month on the announcement front for NXG, with no exploration or permitting news.

Share price has dropped from $13 to $12 for the month.

There has been some discussion on whether NXG will struggle with permitting which may have impacted the share price.

Given yearly demand will be about 200mlb of which NXG is expected to supply 28mlb/yr, any delay may impact U pricing.

 

[Dona Ferentes]

A quiet month for NXG, with no exploration or permitting news.
...Share price has dropped from $13 to $12 for the month.

And.. according to the wires:

"NexGen Energy gave its brokers the go-ahead to launch a $200 million equity placement on Tuesday evening.

 

[Dona Ferentes]

"NexGen Energy gave its brokers the go-ahead to launch a $200 million equity placement on Tuesday evening.

... NXG announces that it has received firm commitments, through a syndicate of Australian managers led by Aitken Mount Capital Partners as the sole lead manager and bookrunner and Canaccord Genuity acted as Lead Co-Manager, to raise A$250 million through the issue of 20,161,290 new CHESS Depository Interests at a price of A$12.40 per New CDI to institutional and sophisticated investors. The Offering is intended to enhance the liquidity, trading volumes and market capitalization of the Company's CDIs. One New CDI represents a unit of beneficial ownership in one underlying common share in NexGen.

The Offering Price represents a 4.83% discount to the last traded price of NexGen's CDIs on ASX on 30 April 2024, being A$13.03.

 

[houtman]

... NXG announces that it has received firm commitments, through a syndicate of Australian managers led by Aitken Mount Capital Partners as the sole lead manager and bookrunner and Canaccord Genuity acted as Lead Co-Manager, to raise A$250 million through the issue of 20,161,290 new CHESS Depository Interests at a price of A$12.40 per New CDI to institutional and sophisticated investors. The Offering is intended to enhance the liquidity, trading volumes and market capitalization of the Company's CDIs. One New CDI represents a unit of beneficial ownership in one underlying common share in NexGen.

The Offering Price represents a 4.83% discount to the last traded price of NexGen's CDIs on ASX on 30 April 2024, being A$13.03.

The market didn't like it, down nearly 10% last night to $10.48 Canadian, equivalent to A$11.75.

Sponsoring F1 can be expensive.

 

[Dona Ferentes]

The market didn't like it, down nearly 10% last night to $10.48 Canadian, equivalent to A$11.75.

Sponsoring F1 can be expensive.

lucky if it opens @ A$12.00 here.

 

[Dona Ferentes]

lucky if it opens @ A$12.00 here.

And this'll push it lower... again.

NexGen Energy issued $US250 million ($380 million) in unsecured convertible debentures to buy physical uranium just over a week after it raised $250 million from investors.

Concerns range from further dilution so soon after the equity raise to paying the spot price with expensive debt. The company is either super bullish on the uranium price in the medium term or it needs inventory to be in a position to negotiations with counterparties for offtake.

.
The dual-listed stock plunged 12.3 per cent overnight on the Toronto stock exchange. And, wiped off all the hard work on ASX today - a 10 per cent drop

 

[houtman]

And this'll push it lower... again.

NexGen Energy issued $US250 million ($380 million) in unsecured convertible debentures to buy physical uranium just over a week after it raised $250 million from investors.


.
The dual-listed stock plunged 12.3 per cent overnight on the Toronto stock exchange. And, wiped off all the hard work on ASX today - a 10 per cent drop
View attachment 176529

Dropped again Friday night to $10.91AUD equivalent.

A strange deal, allowing for the 9% interest, say 5% interest they would have received on the cash over the 5 years, and the 909090 shares paid to MMcap for the deal, NXG probably need the U price to get close to doubling over the 5 years.

I hope it will.
If it does double then NXG should more than double, good for MMcap, as they have the option on 4.3% of NXG.
The Debentures will
be convertible at the holder's option into approximately 23 million common shares of NexGen (the
“Common Shares”) equivalent to ~4.3% of the Company’s issued and outstanding Common Shares.

I've lost some confidence in NXG lately. Trading only.

 

[houtman]

@debtfree

NXG has the annual vote on Director numbers and members approaching.

currently they have 10 Directors( same number as BHP)

It will be interesting to see if there is a meaningful backlash to the $US250m deal discussed above.

 

[houtman]

@debtfree

NXG has the annual vote on Director numbers and members approaching.

currently they have 10 Directors( same number as BHP)

It will be interesting to see if there is a meaningful backlash to the $US250m deal discussed above.

@debtfree
Well here's the answer -

They're a forgiving lot on the TSX, I had expected Leigh to feel more heat.

Waiting on approvals.

 

[houtman]

@debtfree

NXG has continued to drift lower since their "strategic" purchase of Uranium on 29/5.

Cash burn is a concern.

Waiting on approvals, being a high grade underground mine there are many hoops to jump through.

It's a great deposit, I'd just like to see more focused management.

 

[houtman]

@debtfree

Another month of drifting lower, NXG has dropped about 30% since the raising in May, gotta be some sad faces there.

They announced some good exploration results this month, but it is approvals that will move the needle.

Management have some work to do to win back confidence, presuming they care.

Not held.

 

[houtman]

@debtfree

A quiet month for NXG, with no announcements and the general malaise of the U spot price.

Looking fwd to seeing an updated cash position, outgoings will be interesting.

 

[houtman]

@debtfree

A good month for NXG price wise, from about $9.50 to $11.70.

No announcements of note from NXG for the month, only an increase in general Nuclear Power news driven by AI power demands.

Still awaiting approvals and permits.