Q2 2023 NexGen Energy Ltd Earnings Call
Ladies and gentleman. Please could you just standby your conference will begin shortly and once again, ladies and gentlemen, please continue.
Conference will begin shortly.
[music].
[music].
Okay.
Good morning, and welcome to the Nextgen Q2 quarterly conference call.
Lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session.
To ask a question really just plain and simply press Star then the number one on your telephone keypad.
I would like to withdraw your question. Please press star two.
I will now hand, the call over to Lee.
You may begin your conference.
Thank you and good morning, everyone.
Ladies and gentlemen, my name is Lee Korea, Chief Executive Officer of Nextgen energy.
Thank you for joining our second quarter 2023 company update and financial results call I'll speak for about 10 minutes and then we'll move on to the Q&A.
Joining me on the call today are Travis Mcpherson, Chief commercial officer, and Benjamin Solta, Vice President of Finance acting Chief Financial Officer.
Throughout the call, we will be making forward looking statements. So please visit our website for a full disclaimers on such statements.
Okay.
This summer we are seeing record temperatures globally in July Phoenix recorded 30 consecutive days I've got 43, three degrees Celsius, the forest fires across continents, and Walmart Ocean temperatures, we cannot stay on the same path.
Global governments have set goals to reach net zero by 2050 with some ambitiously targeting 2034, the first small signs.
Many countries are acting now to bring more zero emissions nuclear power online and that's the cleanest and most cost effective form of power generation nuclear energy is the linchpin to the global energy transition.
Nuclear provides reliable carbon free a round the clock power.
And it is a reliable complement to the expansion of renewables like wind and solar as part of our clean energy mix.
Currently there are 436 nuclear reactors worldwide in operation, providing 10% of the world's electrical needs.
Last month, we sold the U S Commission instead at the U S Commission its best commercial reactor in many years.
Off the back of several lawsuits extensions issued out of the last 12 months.
And Japan brought it space nuclear reactor online.
In nearly a decade.
Additionally, the nuclear energy Institute as intense anticipating that 300, SMS will come online before 2050 and as reported by trade Tech. These 300, I surmise alone would increase uranium demand by 100 million pounds, which is approximately 50%.
Of current annual demand.
We continue to see notable global support for nuclear energy.
<unk> at Rolls Royce recently said Europe will not reach its net zero targets by 2050, unless it embraces nuclear.
And American entrepreneur, Sam Altman stated that nuclear is a way better deal than anything else out there in the provision of clean reliable energy reinforcing the cost effectiveness of nuclear and the need for a stable power grid.
Additionally, parnassus investments and investment firm known for its strong and focused ESG leadership with rigorous fundamental environmental social and governance criteria, they shifted and approved investments in nuclear the company believes nuclear energy.
It will be an essential fuel source in the transition to a low carbon economy.
Over the past quarter, we continue to see additional policy momentum that supports the clean energy future with <unk>.
At the center.
European lawmakers are great to endorse all nuclear power as a green technology for Europe's industrial revival.
Under the proposed net zero industry Act granting access to preferential funding.
Despite a decision 40 years ago to phase out nuclear power Sweden's government recently embraced nuclear energy is an essential way to increase electrical production and provide a stable energy system.
Just this week the government announced its plan to build 10, new conventional reactors. This is in addition to two semis previously announced and the commitment to extend the lifetime of existing reactors, whilst establishing generous loan guarantees for the additional reactors.
Reality is being realized renewables wind than solar alone cannot support a modern economy and population.
This is the reality and the consequence of that reality is that nuclear is the direction countries are adopting to meet the energy demands.
And you are undoubtedly aware of the significant U S investments in nuclear energy in.
In the U S.
The inflation reduction that bipartisan infrastructure law and the chips in science that on top of the advance at focus on boosting the development of nuclear technologies.
Adding to this momentum is the growth of it the semi market that I mentioned earlier, Ontario reached and recently announced it was building three SMS to power the province.
The U K is launching an SMA competition to fund projects, and France, and India at launching a cooperation program around SMS and advanced modular modular reactors.
The demand for uranium is evident at its current prosper pound, which then just about about $56 U S. As the price remained steady in the mid fifties. During this traditionally quiet summer period in the northern Hemisphere, we are seeing increased interest from utilities to enter into offtake contracts.
And as we head into the second half of the year with the WSI in London in early September where.
Where we historically say higher volumes transacted, we are well positioned for sustainable and promising long term future for the commodity.
Global nuclear capacity is currently 390 Gigawatts with the International Energy agency estimates more than double by 2050.
To meet this increased uranium supply will need to nearly triple because by 2040, it would equate to a 200 million pound deficit and growing.
On the supply side.
We have not seen the increase needed to meet the rising demand due to mine deflation rising costs and geopolitical instability.
And while we may be turning a corner and exploration and mining, especially when it comes to the Athabasca basin. It still won't be enough to meet the rising demand.
In addition to Nexgen there were a number of additional mining and exploration companies advancing respective projects targeting to be in production during the next decade.
That means action now.
Rick One project.
We will be the cornerstone to closing that gap within four years of permitting approval.
Delivering up to 29 million pounds of uranium annually.
With Nexgen, Duke one project located in our premiere stable democracy of Saskatchewan, Canada, Nexgen is committed to being a partner of choice for few buys and nations actively seeking to mitigate or exclude volatile nations from their supply chains.
Brook, one coming online within four years of permitting approvals is a critical as it will help accomplish three imperatives, one provide the world with reliable western supply.
Tiling outside influence on our energy markets.
To secure the energy transition four nations Allied to energy security and targeting net zero.
And three avoid supply chain issues as we're currently seeing in the electrical vehicle market.
Business leaders must be able to drive the quarter and have the experience vision and courage to say the bigger picture.
And that picture is ever expanding.
Having a strategy in place that anticipates and mitigates risk for customers investors employees.
And Allied nations as well as the citizens is how we approach it at Nextgen, while Spain highly leveraged.
Terrific economic outcomes.
We recently shared some of this thinking because we fundamentally believe businesses have no reason to wait on policy mandates to do the right thing.
Those four commitments.
We will only sell to nations, who a lot for energy security and targeting net zero.
We will maintain a checklist of standards for all partners in the China of custody all value radium.
We will keep our supply chain and operations onshore in these nations to.
Guarantee the highest levels of security safety labor standards and local community partnership.
And we will advocate for policies that support essentially produce uranium to set a new standard for the industry.
While these commitments have been embedded in the next Gen strategy from the beginning as supply chain diversity has become central to the discussion around decarbonization.
We wanted to bring them forward.
And our recent news events al approach.
The cooling Asia has put the country's uranium exports and serious question.
Nisha exports.
6% <unk>, 6% of the wells total supply and approximately 20%.
Europe's.
Uranium <unk>.
Additionally.
The ace increasingly complicated geopolitical situation is a major risk for those operating that and for their investors.
These events underscore the need to reduce the influence of governments that may not share our core values and interests.
Conventional approaches to stakeholder engagement and risk management must evolve to meet present day dynamics. This applies across many industries and mining is no different.
What has changed since 19 seventies, and we need leaders, who can embrace the opportunities those changes create.
This is why after decades in the sector are founded Nextgen in 2011.
Uranium is thought to essential to our future to rest on the industry practices of the past custom.
Customers require suppliers, who can meet environmental social labor and security standards and act as reliable partners to advance their businesses.
Communities desert meaningful partnerships that create sustainable generational impact through positive social economic and environmental outcomes that extend beyond non dependent opportunities.
Doing things. The next Gen Y has led to amazing outcomes and extends to our relationships with indigenous communities in Saskatchewan.
I am proud to say that during this past quarter we.
We signed an industry, leading impact benefit agreements with the <unk> nation of Saskatchewan, Northern region, too and the Mighty Nation Saskatchewan.
Covering all phases of the <unk> project.
The RBI defines environmental cultural economic employment and other benefits to be provided to the <unk> nation hub.
<unk>, Saskatchewan is not too.
By Nextgen in respect to the project.
And to confirm community consent and support for the project <unk> complete lifecycle.
This agreement follows the signing of benefit agreements with each of the Clearwater River denim nation, the batch narrowest ni nation, and the Buffalo River denied nation.
That's 100% support from all our local indigenous communities.
This is a historical model Stein for the Canadian mining for a Canadian mining company and a critical step to advancing the <unk> project.
We are proud to share that the communities have joined us in advocating for regulatory approvals to realize the opportunity ahead for all of us.
Nexgen has raised a significant milestone in advancing the regulatory approvals for the 100% owned Roke won project.
By submitting the final provincial environmental assessment and federal license application during the quarter.
We have also received provincial approval for the commencement of the 2023 saw infrastructure and confirmation private jet program at Roke won.
This program includes comprehensive fieldwork focus on infrastructure upgrades, which will support the increased activity.
With the phrase holes on the critical path. The program is going smoothly and is expected to be executed on time and budget.
Before we get into the financial update.
I wanted to reflect on some exploration drill programs on a rip one property regionally and DSW one property in the south west of the Athabasca Basin.
Our drilling will continue to test high priority targets.
Those properties and we will provide a further update on these program once it is complete.
Total meters to be drilled during 2020.
23 has increased to 22 and a half thousand.
<unk> thousand meters.
Now for an overview of our financial position ending on the 30% at June 2023.
Nextgen had a working capital of <unk> 9 million as of June 32023.
To the end of the quarter Nexgen has deployed approximately $39 4 million in the successful permitting exploration and development of the <unk> project.
On the financing side last quarter, we shared that we've received strong expressions of interest totaling over 1 billion U S in del Webb.
We've recently heard from additional parties also expressing expressing their interest.
On that huge becoming public.
This engagement is a testament to the economic and IHG profile of Roke won and the strong investor support and you get to bring the required project online.
As we look forward to the rest of 2023 and into 2024, we are scheduled to meet critical milestones to advance Roke won project.
These include the acceptance and approval of the final provincial environmental assessment.
To the submission and acceptance of the final federal environmental assessment.
And three completion of the final licensing and securing a commission hearing date.
For the conclusion of the permitting process.
While the <unk> program progresses on time and within budget.
I am proud of the work of the Nextgen team.
Yes.
As a leader in the energy transition, we will continue to share our commitments with the world and bring to bear generational project that will benefit all shareholders and local communities, while upholding industry, leading economic social labor and environmental standards.
Now, let's transition to the Q&A and we encourage questions from from all of you I'll hand, it over to the moderator to commence.
Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press the star followed by the one on your Touchtone phone.
You will hear <unk> telecom acknowledging your request.
Questions will be taken in the order received should you wish to cancel your request. Please press the star followed by the two.
Your first question is from Andrew Wong from RBC. Please ask your question.
Hi, good morning, Thanks for taking my questions and thanks for the update.
So I'm just kind of curious just wanted to ask about your strategy to focus on.
Selling to nations who are allied.
For energy security and.
I'm just wondering like how do you make that distinction.
Which countries would that include or exclude today and.
Yeah, just just wanted to hear more about that thanks.
Well I think the recent events that were saying.
Around the world in some countries where.
Nations that are focused on the central provision of power.
To the populations is the key definition of that.
Obviously, Canada U S.
And many countries in Europe fall into that category.
When we're talking about such a important global objective.
It requires leadership.
Unfortunately, not all.
Players in on.
On the planet.
<unk> behave in the interest of all <unk>.
Yes.
Very openly.
Stating what our values are.
And the direction in which we will.
So it's basically open for any country.
The highest sensibly and act as a as a goodwill neighbour and they will be the countries that.
We will sell out uptake too.
Okay.
Maybe just switching gears here, a little bit obviously, a lot of geopolitical challenges in the uranium market.
Definitely a lot of interest now in nuclear and we're seeing a renaissance in the nuclear industry. So clearly a need for more uranium in Canada can play a critical role in Silicon Nexgen does that help with your approvals process in.
Is there any update on the timeline for federal permitting.
Yes, I think it is actually.
Really just blowing the wind.
Stronger into add backs.
Many statements from the environment Minister Wilkinson, and I'll say that the Christy.
Chrystia Freeland.
Regarding the acceleration of.
Projects involved in clean energy metals, and the provision of energy.
In order to export two to those good neighbor countries.
And.
Look we will have already very advanced on the permitting front.
There's no doubt about that.
And making significant progress, but yes, it's always nice to hear from a.
Federal and provincial political level.
The support for your business initiatives.
<unk>.
Earlier in the year launch their critical minerals strategy.
Used our office in Saskatoon to launch that strategy, where they openly stated a doubling of uranium production by 2030.
Yes, Thats our project Denizens project No doubt, Yes, Inc. Incredibly positive.
<unk>.
By both provincial and federal governments in Canada.
Again, I've said it in the past.
Canada is an outstanding country for the development of <unk>.
<unk> projects, particularly uranium projects and it's very rigorous.
And that rigor is in the interests of the long term success.
Of the project and as I mentioned, when dealing with such a key component of energy transition and central energy.
<unk> policy is the key ingredient to a higher standard of living for the entire world population.
It roughly has a very rigorous approach and we absolutely.
Adopt that and I appreciate that.
Okay. Thank you.
Thank you. Your next question is from Alex Pearce from BMO. Please ask your question.
Good morning, Lee you touched on this already given the additional uncertainty you've mentioned it did not.
Can you provide a little bit more commentary on how your conversations with utilities have changed in the last few months and do you think we're getting closer to the point, where utilities may be willing more willing to sign kind of mutually acceptable contracting terms or prepayments et cetera that could help finance to predict when that when the time comes.
Yes, Hi, Alex Yeah look I think that they know everything has been on the back or in addition to what was already.
Caring.
Yes.
<unk>.
We're seeing more rfps by initiate.
In the in the sector, which I think is highlighting that utilities are.
Really starting to focus on their supply chains and in the end actually the materialized <unk> of.
That sovereign risk that was already around over 70% of mine production worldwide.
It's been there, but now it's materializing in the form of yes, we say the actions of Russia at the moment and now the <unk> in Asia.
And it really is highlighting that that sovereign risk that's always been there.
Naturally.
Lot of the western World and Youre paying.
And middle East and.
And Asian countries are looking at that supply chain and some some countries are more vulnerable than others given that posture alliance.
On some of those sovereign locations that are now.
In question.
And so I think you will say over time.
A change in the way some of the elements around contracting what utilities want to say, though is <unk>.
Strong, yes sovereign jurisdiction that.
That's reliable and also strong technical.
Delivery and <unk> DRAM production volumes.
Banging Saskatchewan.
Makes the first box in the second box, while it runs well aware of that the technical strength of our project with the high levels of sand DRAM production volumes in <unk>.
<unk>.
Moving into the latter part of this decade and into the following decades.
Our profile certainly meets those two ingredients that utilities are seeking.
Great. Thanks Lee.
Thanks, Alex.
Thank you. Your next question is from Winston miles from loop capital. Please ask your question.
Hey, How's it going.
Just wanted to.
Congrats on all the success this year in progress at the Brooklyn project, So far in 2023.
Been a lot of talk by other companies, especially in sector around your contracting strategy.
I guess my question is are they accurate with their assertion you could kind of quote unquote dumped all your production into spot and then part two to that question would be how does your contact attracting strategy in <unk>.
That process you are undertaking thanks a lot.
Yes, so I'll answer the first part of that question Winston and then hand over to Travis.
The debt side.
He is running that process.
And look we're being very very clear.
Irrespective of how its being compensated by others that we are.
Simply taking an approach, which reflects the technical and sovereign nature of our projects and so.
We are going to.
Contract.
On that basis, and basically what we are going to do.
Is really heavily.
Leave it to prices at the time.
Delivery.
And we.
Our position is that the uranium price needs to go considerably higher in order to encourage production.
From a number of these development projects.
That are nearing permitting approval and even nearing production such as the denizens.
Boston <unk> Palatin are out there as well.
And because of the supply got bank side great.
<unk> diversified uranium supply mined uranium supply.
Particularly in countries that exhibit the sovereign risk of other countries as we speak that produce a large portion of the welds uranium. So we are purely going to leverage sovereign aspect and out in a highly competent technical nature, which provides very high same DRAM production volumes.
Sure.
And so we will be entering most likely into shorter term contracts.
Over the shoulder periods.
From that fact, which basically takes our company exposed to future uranium prices in a sensible manner, we will be contracting.
Portions of the production there is no doubt about that.
But that will be tied to market prices at the time of delivery and it's very very clear.
I think the contracts are going to be moving.
More weighted to <unk>.
Market prices at the time of delivery.
As we move forward.
Yes.
Incredibly leave it.
To that development.
On the second part yes.
Yes, so on the debt side I would say the lenders that we're speaking to and there are more coming to the table as we mentioned earlier.
Wholeheartedly agree with our strategy frankly, they see the opportunity.
Maintaining they know the position of this asset in the uranium market.
And taking advantage of.
Production flexibility is important to optimizing the economic outcomes, which obviously benefits. These lenders so from a debt side.
One thing we flushed out very early with them is this isn't a typical mine.
Whether its uranium or another commodity price hedging.
Our requirement for that is not required and as Lee pointed out is not required.
For one reason, which is the technical profile of the mine and the.
Consequential.
Cost profile.
But also philosophically with respect to this opportunity at hand.
Flex up and down the mine according to market demand is to make sure that the uranium price stays stable and could bring online.
More stability.
Stability in production, particularly in the west so from a debt side, we will be signing a minor portion of production under volume based contracts no pricing mechanisms required meaningful spot exposure at the time of delivery is fully accepted and agreed to by the lenders.
Excellent. Thank you.
Thanks Vincent.
Thank you. Your next question is from Chris Thompson from Pi Financial Please ask your question.
Alright, good morning, gentlemen, thanks for the insight there.
Good good discussion good recap I guess so.
On what's happening with the uranium market.
Perfectly agree.
Just a couple of quick questions I Hope you don't mind I just wanted to unpack some of the details that relate to I guess, Joe on the permitting side.
My understanding is we're writing for the conclusion of the final I guess provincial approval.
Mid teens.
Sometime this month is that correct.
Yes.
It is imminent.
How exactly how far why that is.
We'll we'll say.
It's fully with the.
Environment Department of the provinces of Saskatchewan is referring to the provincial environmental approval here.
On a daily basis, we have done everything that we are able to do and so.
Latest feedback is that we can expect to imminently.
That will then.
Commenced a 30 day public record.
Period.
And then at the conclusion of that well the minister the.
The environment Minister will be in a position.
To grant approval.
Yes, we recently for in mining with the project in Saskatchewan Ruse approval within 14 days following the conclusion of that 30 day.
Public record periods.
Chris it's imminent.
Sure.
I can tell you the whole team here at Nextgen, and there's not a day that.
Yes.
On a daily basis, we ensure that we have done everything we possibly can so it's imminent.
And in parallel to that we've got the engineering.
Preceding really really well and.
Construction preparation.
Bain undertaking that as we speak.
Great. Thanks, Lee and then I guess, the central the Fayetteville Elas.
Side of things.
When do you anticipate I must give you your questions you, probably Steve but I Wonder if you can just provide just a little bit of color on the sort of lag I guess between provincial approval on schedule.
Yeah, well look the Chris it's a good question because it is.
Detailed and rigorous process.
The provincial one is is incredibly material and the federal one will always.
Come after the provincial one.
Brian Yes that process in tandem.
And we've already completed 120 day public comment period in 2022 on the federal <unk>.
Since we know all the questions that came in.
The large majority of those questions or clarifications.
And <unk>.
<unk> set in paragraphs.
In the Aif, which as you are aware is a very large document.
And with I'll say at the same time.
Had.
Very letters of support from each of the four communities in the project area.
Expressing there.
Support for immediate regulatory approval.
On receiving the provincial environmental assessment, we already have with the signing of that fourth agreement during the quarter.
100% community support.
And Thats been expressed both provincially and federally and say.
I suspect the federal process will will be within a reasonable timeframe.
Following.
The provincial approval and Thats.
The indications we have received federally.
Brought throughout.
And I think youll see things start to accelerate on the federal level once that provincial approval is in place and better.
I wanted to be clear once that provincial approvals in place.
That federal process is going to be running in parallel to.
A lot of activity at site.
And so the.
Federal government.
And saying that they see what's happening in say the support from the local communities.
Looking forward to delivering Canada's next uranium mine.
And then just finally, just one quick quick question Im assuming that it gets traffic did lead to a couple of minutes ago and that is the ability of the operation to flex up flex down production.
Could you maybe expand a little bit on that and how are you going to be communicating that to the Bakken. Obviously this is not a discussion now with something that I think the market is going to want to dive a little bit more detail.
As you start development.
Yes.
With the deposit vein and such highly confident.
<unk> rock, we can flex production up and flex production down from one quarter to the next we also have such an incredibly low cost base.
That.
The economics obviously.
Play into that that that flexibility.
And so we are purely in very simply leveraging.
The technical nature of the setting and.
And by now to deliver that to the market.
And so yes it is.
I think a highly advantageous element of the <unk> project.
That is meeting that demand by.
The utility sector.
So.
To answer your question, Chris It is purely around the technical sitting in the low economic cost of producing a pound which facilitates that flexibility.
Yes, and to be clear Chris to be clear, Chris we are very confident on what we've outlined in terms of production volumes like we don't see a world, where we need less uranium from our mind, Mike Arrow, but this is just to say that we have that optionality to make sure the uranium price stays.
Strong sustainable price for the long term.
And the feasibility study based on 3900 tonnes a day yes.
Putting in flexibility into that as well.
Because we actually.
Very strong advocates that.
The world needs more than three arrows.
Online by 2030, and yet they don't exist.
With respect to that size and scale.
Yes, that's our position.
Beautiful guys. Thank you very much.
Thanks, Chris.
Thank you. Your next question is from Brian Macarthur from Raymond James Please ask your question.
Hi, Good morning, and thank you for taking my question.
I just wanted to follow up on the potential debt.
Obviously getting a lot more interest in us.
Hi, I had a little while ago.
Do you still think youll have.
Stuff in place at Q4 does it make more sense to wait longer or is it irrelevant because the way youre going to sign the contracts suggest youre going to get delivered spot in the future. So there's no real value in waiting to get a higher price you're better to just get money in the door upfront.
Yes, I'd say.
<unk>.
With these other parties coming to the table, we are definitely flushing those out and seeing.
Their level of interest and so that may push it back a little bit from Q4 into early in the new year, but generally still tracking well and definitely not on the critical path in terms of a holdup or anything.
You actually start.
Instructions activities and shaft sinking.
Demand when we get that.
Approval to do so.
Thanks, maybe just Lee you talked about four years after permitting.
Not to get technical on this are we talking four years. After we received the permit thereafter CNS license taken I mean, obviously, what I'm really trying to get at here is when do you think first production is.
Tensely at the mine now.
Yes.
On the provincial pending that feasibility study.
Start from scratch said 42.
Months.
And.
And so we're going off the engineering schedule with respect to that timeline, but it is subject primarily to the provincial.
Permitting approval.
And in some elements, we've already got hedged.
The head start because we've already got an accommodation camp day, we're expanding it.
We have already <unk>.
The pads for the sinking of the production shaft.
And the exhaust shop, and we're doing the phrase how preparations.
As we speak.
We are already getting into that 42 months timeline from from.
<unk> zero.
Yes.
It's those two components, which is which is influencing that.
Subject to the timing of the actual provincial approval as the primary.
Awesome.
If you.
If we receive the provincial permit this.
<unk>.
Quarter, one next next quarter in Q4 2023.
You can reasonably ashamed based on all those factors it is going to be around four years or within four years following that.
That approval based on the engineering schedule as <unk>.
Currently defined.
Great. Thank you and maybe if I ask one other philosophical question, you've talked about you've got obviously, a very unique asset.
Large good jurisdiction low cost.
And youre going to be somewhat selective in who you sell to do you think that allow you to get a premium price from from those customers versus what historically, maybe being been quoted in the market we've been able to build in anything for that do you think.
Hey, Brian .
<unk> brought it is a very unique asset that hasnt been in the market before.
All we're doing is leveraging it given its characteristics, both sovereign wise and technically and cost wise.
And I think as you say.
Other dynamics in the market playing out.
And.
Sovereign risk or asset.
Sources of production.
And technical risks and then the advent of.
Highly focused investment funds expecting companies to have a late <unk> profiles.
That environment with a very tightening market with.
Limited supply from good good good actors.
I think it could eventuate into that.
That situation.
And I think.
Well I don't think all we're doing is keeping labor reached to that outcome, which I think is paramount and an interest solved.
Investors and stakeholders community governments, everyone associated with the project.
Got it got it also.
Take into account that the cost of the uranium going into a nuclear.
Utility makes up such a small component of the overall cost.
Utilities.
Okay.
The ability.
For them to pie substantially high prices, whilst I don't want to pay an extra dollar than they have today, but the market is the market and given the low cost that uranium makes up of that and overall.
Nuclear utility.
Terrific scope.
For higher prices going forward.
Great. Thanks, Lee and crowded for answering my questions I'll get back in line. Thank you.
Thank you Brian .
Thank you.
Should you wish to ask a question. Please press star one. Your next question is from Graham Tanaka from Tanaka Capital Management. Please ask your question.
Thank you Lee and Travis I've got a couple of questions one relates to sort of the macro you talked about the need for all of our three arrows to come online by 2030.
What is your best guess as to what the.
Price would have to be.
Clearing market price to incentivize additional mines.
To be able to meet that demand what kind of price level would you need to see in U S dollars.
And where would that come from.
Are there any prospects that are close.
Yes.
You need to look at it.
The region I think regionally because obviously the Athabasca basin has significantly higher grade.
Grades and lower cost profiles then.
Other countries in the U S.
There's projects under development, but lower grade enhanced server.
Hi.
Economic cost and then in Australia as well you've.
<unk> got some smaller projects RSL going into production, which which have a slightly lower cost by site.
It's it really depends on the nature of the projects that we're talking about obviously, the Athabasca basin projects.
Require a lower use price to getting production outside the U S and Australia, you need higher prices in the past when we saw.
Uranium prices go to $140 a pound.
In the late two thousands of lot of the U S project development projects did not go into production.
Projects in Libya, as well did not go into production with uranium prices over $100.
<unk>, formerly a chartered accountant.
Three cost driven and data focused and look at cost structures in terms of.
Defining our strategy ourselves and understanding where we are placed in it.
I think overall to answer your question simply uranium prices are going significantly higher we say production at the moment.
Barely breaking even.
Even at current prices.
So I believe that uranium prices going significantly higher and it has to go significantly higher to get additional production on board.
<unk> front, it's more than just the Athabasca basin developers, it's also in development.
In the U S. We made development projects in Australia, all coming online.
To meet this very important goal of sensible.
Provision.
Okay. So so would you hazard a guess at what kind of clearing price would be needed or price can be seen back over 100, or 90 or $80 U S. What kind of level do you think needs to incentivize additional.
Mine.
Additions.
Oh boy.
Sure sorry in the U S. You want to say over $100, a pound to say any material increase in uranium production.
And when you consider they produce 15 million pounds consumed 50 million pounds per annum, yet produce less than one.
That's probably going to be one of the driving.
<unk> in this market moving forward.
I'm wondering if that one of the interesting things Graham is like it is less of a question about price because even if we had 100 dollar uranium today and had that for the next five years.
Not clear at all where you get to those three arrows.
They're just they're not in the pipeline that we went through post Fukushima a very long period of time like over a decade, where there was no investor appetite no exploration being done anywhere outside of ourselves Denison Division and a couple others globally.
So you need to have elevated prices.
What Lee was mentioning in terms of those incentive prices, but it's not like you just get those incentive pricing in a bunch of production comes online.
Alright take a long time to get discoveries made developed et cetera.
Okay. So so this links up with my next question, which is what is the upside flexibility.
For nextgen to be able to.
Increase its production.
Both at the.
Future mill and the mine itself at Arrow.
As I believe if you can confirm that it's still open at depth and to two or three directions.
And as well.
What can you what do you need to do from an exploration development point of view to bring on another arrow in one of the other Patterson corridors, which you are exploring today. Thank you.
Yes, well.
We currently have a resource base of 350 million pounds.
Very very significant.
And al.
Al.
Proposed.
Mine plan at 3900 tonnes, a day is very very small physically yet will produce around 30 million pounds per annum. It's clearly evidence that that could be expanded.
In the future.
Yeah.
But.
As we speak.
We are going in at that 30 million pounds.
Per annum capability.
There's undoubtedly huge exploration.
Upside at <unk>.
Rick one alone and we've got two other land packages as well.
Yes.
<unk>.
Along the boundary of the Athabasca basin and the privilege.
Southwestern region.
Just on the Patterson Garden door line like we found arrow in the very fit.
<unk> deposit on the Rubicon project on the very first drill hole within a $4 five kilometer radius.
Seven kilometers along the same corridor with 130 million pounds.
At three have recently made a discovery up the road adjacent to ours, one project, where we were exploring at the moment.
Yes, I think youre going to say that area producing uranium for many many many decades.
And even the Paterson corridor, and the <unk> project with really only explode, probably less than 10% of it as we speak.
We've got another Ike kardos in parallel on that project that we need to explore.
So with that.
But also having hit.
Mineralization below arrow.
I think it is undoubtedly that.
There is a resource expansion.
Very high resource expansion potential as we continue to explore.
I just was wondering to what extent if there really is a great shortage.
And the price goes way say considerably above the 100.
What would next gen be incentivize to crank up production and also expand.
Yeah.
Mill operation.
And how much was that.
Yes.
Certainly possible, we havent done that costing.
Yet, but based on what we've already learned about our current proposed mine.
Slightly confident it would be both economically and technically.
Achievable.
Okay, great. Thank you very much good luck.
Thank you.
Thank you.
Next question is from Andrew Wong from RBC. Please ask your question.
Hi, Thanks for the follow up I, just wanted to ask what kind of construction works in <unk>.
Just just what kind of site works can you get done with the provincial permitting.
And also given that your permission permitting could be imminent what kind of construction do you plan to have done within the next six to 12 months. Thanks.
Yes.
Got a lot of the early stage items.
100% engineered at the start of the construction period. The detailed final engineering that we're doing is.
Our focus mainly on the surface infrastructure and surrounding the mills.
Yeah on receiving permanent approval, we can get into it.
Immediately.
The work will primarily revolve around the shops to begin with and.
Noting that.
We are not actually touching any uranium.
During the first three years of construction site, it's all very benign activities and we currently do.
The tiling those with.
With the province, as we speak.
Okay, great. Thanks.
Thanks, Andrew.
Thank you.
There are no further questions at this time.
Now I'll hand, the call over to Lee Thank.
Thank you.
Thank you, yes, sorry, thank you for everyone's attention its a very exciting time.
For the company.
Very significant inflection point.
Going from from pre provincial approval to post provincial.
Approval.
Imminently.
The company is ready.
Ready and.
The team is ready and that with the overlying market development, both on the demand side.
And the supply side make an incredibly exciting time for for all of our shareholders and stakeholders.
Again.
Absolutely privileged to be.
Involved and the commitment of the team.
Absolutely.
Thank you for everyone and thank you everyone for your attention if theres any additional questions that you might have placed I hesitate to reach out Monica Travis or myself and we look forward to speaking with you again.
Thank you ladies and gentlemen, the conference has now ended thank you all for joining you may all disconnect.