Q1 2024 NexGen Energy Ltd Earnings Call
Good morning, My name is Julie and I will be your.
Julie: Good morning, my name is Julie, and I will be your conference operator today. At this time, I would like to welcome everyone to the NexGen NRG Q1 2024 Financial Results conference call. All lines have been placed on mute to prevent any background noise.
Speaker Change: Our conference.
Julie: Today at this time I would like to welcome everyone to the Nexgen.
Julie: After the speaker's remarks, there will be a question and answer session at the end. If you'd like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you'd like to withdraw your questions, please press, Before we begin, please note that the following caution respecting forward-looking statements is made on behalf of NexGen Energy and all of its representatives on this call. The following statements made on this call will contain foreseeing information that involves risks and uncertainties. Actual results could differ materially from a conclusion, forecast, or projection in the foreseeing information, and Matteo Factor's assumptions were applied [inaudible] are detailed in the foregoing information.
Julie: Q1, 'twenty 'twenty financial results conference call.
Julie: All lines have been placed on mute to prevent any background noise. After.
Matt: Sure Matt.
Matt: A question and answer session at the end.
Matt: If you'd like to ask a question. During this time separate press Star then the number one on your telephone keypad.
Matt: Your question. Please press star two.
Speaker Change: We begin please note that the following caution respecting forward looking statements, which is made on behalf of Nextgen energy and all of its representatives on this call.
Speaker Change: The statements made on this call will contain forward looking information that involves risks and uncertainties.
Nextgen Energy: Results could differ materially from a conclusion forecast or projection in the forward looking information.
Nextgen Energy: Factors or assumptions were applied in producing forecasts and projections are detailed in the forward looking information.
Nextgen Energy: Information about those material factors and assumptions.
Nextgen Energy: And Nextgen NRG filings.
Peter: Billable on SEDAR website at chip I'll W that Peter.
Speaker Change: Mr. Li carrier.
Leigh Robert Curyer: Additional information about those material factors and assumptions is contained in NexGen Energy's filings, and they are available on the CDERplus website at www.cederplus.ca. Leigh Curyer, CEO and Director of NexGen Energy, you may begin your, Thank you, Julie. Welcome and thank you to all our shareholders and stakeholders around the world for joining NexGen's Q1 2024 update and financial results call. I'm Leigh Curyer, Founder and Chief Executive Officer of NexGen Energy. Joining me on the call today is Travis McPherson, Chief Commercial Officer, and Ben Salter, Chief Financial Officer.
Speaker Change: And director of Nextgen Energy you May begin your conference.
Julie: Thank you Julie welcome and thank you to shareholders and stakeholders around the world, but joining Nextgen Q1, 2020 full update and financial results call.
Leigh Robert Curyer: From a company and industry perspective, it's been a great first quarter to 2024. Now I'll commence by providing an update on the industry landscape and uranium market, which is entering into an unprecedented phase with last night the President of the United States, Joe Biden, signing into law legislation that bans the import of Russian uranium and unlocking $2.7 billion in spending to support the build-up of US domestic uranium supply. This purely reflects the particularly high risk surrounding a large percentage of current mine sources and available supply, and will provide progress in advancing the ROOC1 project, specifically federal permitting, which is in the final stages with the CNSE, project development, with respect to front-end engineering design and detailed engineering progress.
Speaker Change: <unk> founder and Chief Executive Officer of Nextgen Energy joining me on the call today is credits Mcpherson Chief commercial officer.
Leigh Robert Curyer: Exploration, which includes the early stage discovery of new mineralization in the first drill hole at the target on an entirely new conductor corridor 3.5 kilometers from the one that hosts the mighty Arrow deposit, and Finance, including discussion related to two transactions in the last fortnight, the Australian dollar 250 million CDIs raised exclusively on the ASX, which closed pre-market this morning, and the strategic purchase of 2.7 million pounds of euthro-8, which given last NexGen, on closing, now has cash and liquid assets of approximately $930 million Canadian in preparation for the construction of the Rook One project.
Speaker Change: And Ben Delta Chief Financial Officer.
Speaker Change: On a company and industry perspective, it's been a great first quarter to 2024 now commenced by providing an update on the industry landscape and uranium market, which is entering into an unprecedented fight with lost not president of the United States, Joe Biden signing into law lately.
Speaker Change: Slice in the bank.
Joe Biden: While brushing uranium in unlocking $2 7 billion in spending.
Speaker Change: Support the buildup of U S domestic uranium supply.
Speaker Change: It's purely reflects the particularly high risk surrounding a large percentage of current mine sources and available supplies.
Speaker Change: We will provide a progress in advancing the work one project, specifically federal permitting which is in the final stages with the San Jose project development with respect to front end engineering design and detailed engineering progress.
Speaker Change: Exploration, which includes the early stage discovery of new mineralized I should finish through hall at the target on an entirely new conductor, Colorado three five kilometers from the one the highest commodity alloy deposit.
Speaker Change: And financing, including discussion related to two transactions in the last fortnight.
IL, six: 250 million <unk> writes exclusively on the IL, six which closed this morning pre market.
Heathrow lights: And the strategic purchase of $3 7 million pounds of Heathrow lights, which given last night's Bang Bang passed into law is ultimately very very timely.
Nextgen Energy: Nextgen closing now has cash and liquid assets of approximately.
Speaker Change: $930 million Canadian in preparation for construction. The Roke won project. After this discussion I'll then move into our Q&A portion on the call.
Leigh Robert Curyer: After this discussion, I'll then move into a Q&A portion of the call, where I invite you all to ask questions. In the last six months, we're highly encouraged to see governments worldwide adopt energy policies and strategies that are aligning strongly with NexGen's recognition back in 2011 of the role sustainable and cost-effective nuclear energy will play in the 2020 decade and beyond. Increasingly, nuclear energy is being recognized as a critical component of the global energy mix, addressing the need for clean, efficient, and secure energy sources.
Speaker Change: Got you all to ask questions.
Speaker Change: Yeah.
Roke Won: In the last six months, we're highly encouraged to see governments worldwide adult energy policies and strategy. There are aligning strongly with mix change recognition back in 2011 of the row sustainable and cost effective nuclear energy will play in the 2020 decade and beyond.
Speaker Change: Increasingly nuclear is being recognized as the critical component of the global energy mix addressing the need for clean efficient and secure energy sources.
Leigh Robert Curyer: The world is on an aggressive path to bring more nuclear power online, tripling by 2050, both in the form of new builds in places like China, India, the UAE, the UK, and France, as well as restarts and extensions in large and key nuclear markets such as Western Europe, Japan, South Korea, and the United States.
The world: The world is on an aggressive path to bring more nuclear power online.
Speaker Change: Rippling by 2050, both in the form of new builds in places like China, India.
The world: UAE U K and France, as well as Ray Scott and extensions and lodge in key markets such as Western Europe.
The world: Japan, South Korea, and the United States.
The world: This expansion is increasingly critical as the electrification of that world accelerates Nigel Blake.
Leigh Robert Curyer: This expansion is increasingly critical as the electrification of our world accelerates, notably through the expanding adoption of artificial intelligence and electric vehicles. Both made or liable, and Base Load Power, leading to a paradigm shift in the energy market. We've seen this urgent need for a nuclear renaissance expressed by many thought leaders, including tech giants such as Microsoft and Amazon, as well as the likes of Sam Altman, OpenAI, and Brad Gerstner, legendary venture investors.
The world: They expand the adoption of artificial intelligence and electric vehicles.
The world: If NATO reliable baseload.
The world: Slide power source, leading to a paradigm shift in the energy market.
The world: Saying this urgent rate for a nuclear Renaissance to continue expressed by many thought leaders, including Tech Giants, such as Microsoft and Amazon as well as the lot. So Sam Altman, Open-eyed yacht and Brad guess, Matt legendary venture investors.
Leigh Robert Curyer: The market is robust, sustainable, and growing significantly faster than anyone forecasts, causing the focus to shift to the ability of the industry to supply this key energy fuel. Supply, however, tells a different story, a narrative of fragility and decline.
The world: Demand is robust.
Speaker Change: Signable growing significantly faster than any one forecast, causing the prices were shipped to the ability of the industry.
The world: Apply this key energy deal.
Speaker Change: Supply, however tells a different story and narrative of agility and decline.
Leigh Robert Curyer: The confluence of over a decade of extreme underinvestment, supply disruptions, dwindling inventories, and the overlay of significant geopolitical risk is precipitating a new market reality, one in need of more dependable uranium sources, and has led to uranium spot prices during this past quarter reaching new 15-year highs at $107 US a pound. In the face of supply challenges, new sources must be found through purposeful exploration efforts and then developed, which takes time. Even for those companies doing that good work, like ourselves and our Canadian Development Company colleagues, Denison, Fission, UEC, and ISO Energy in Canada. It's not simple, convenient, or quick to find and develop any mineral project.
Speaker Change: The confluence of Alibaba, a decade of extreme underinvestment.
Alibaba: Supply disruptions.
Alibaba: Wouldn't lean inventories with the overlay of significant geopolitical risk is.
Speaker Change: <unk>, a new market reality.
Speaker Change: One is made of more dependable youre, writing sauces and has led to the right spot. During this past quarter, reaching you picked a new highs at $107 U S patent.
Graham Yoshio Tanaka: In the face of supply challenges new sources must be found through the <unk>.
Speaker Change: Purposeful exploration efforts and then developed.
Denison region: Which type time, even for those companies doing that good wet like ourselves and our Canadian development company colleagues Denison region.
Speaker Change: We say and also energy tenant.
Speaker Change: It's not simple convenient all quick.
Speaker Change: And to develop any mineral project, it's at least a minimum of 15 years before.
Leigh Robert Curyer: Since it's at least a minimum of 15 years before new, undiscovered sources come online, it's more important than ever to advance the Rook One project into production this decade. And the NexGen team is delivering on that objective. In Canada, the federal government has recognized its importance and strongly emphasized its commitment to expanding the nuclear sector both domestically and globally. This includes efforts to expedite the approval process for nuclear projects in Canada and increase funding availability, as highlighted in the most recent federal budget.
Speaker Change: We've discovered sources.
Speaker Change: Come online.
Nextgen Energy: It's more important than ever to advance through one project into production this decade, and the Nextgen pain.
Nextgen Energy: <unk> on that objective.
Speaker Change: In Canada, the federal government is recognizing its importance and strongly emphasize its commitment to expanding the nuclear sector, both domestically and globally.
Speaker Change: This includes efforts to expedite the approval process for nuclear projects in Canada and increased funding availability as highlighted in the most recent federal budget.
Leigh Robert Curyer: NexGen is the Rook One project, and all its shareholders and stakeholders are extremely well positioned for this Canadian government commitment. The importance and reality of the need for allied supply chains were bluntly reflected last night with the signing of the Prohibiting Russian Uranium Imports Act.
Speaker Change: Next Gen is broke one project.
Next Gen: And all its shareholders and stakeholders are extremely well positioned for these Canadian government commitment.
Next Gen: Yes.
Next Gen: The importance and reality for the need of a large supply chains was bluntly reflected last month with the signing.
Next Gen: Abbott in Russian uranium imports Act.
Leigh Robert Curyer: This is set to take effect 90 days for any U.S. imports of Russian uranium in a phased manner through 2028. This legislation begins a new unprecedented era in the uranium market and is expected to tighten the market considerably, leading to significant and long-term upward pressure on uranium prices. Consequently, for all these reasons, utilities are seeking to diversify their highly concentrated nuclear fuel supply chains in allied jurisdictions. The Rook One project stands out as the world's largest and lowest cost future producer for an exceptionally sound technical and environmental setting, evident by its vertically stacked ore body that is large. Hi Graham, and it is located in ideal hard rock conditions with clean ore, making it truly unparalleled in the global uranium landscape.
Next Gen: This is set to take effect 90 days.
Abbott: U S imports of Russian uranium in a phased manner through 2028.
Abbott: This legislation begins a new priced it entered here uranium market and is expected to top the market considerably leading to significant and long term upward pressure on uranium prices.
utilities: Consequently for all these reasons utilities are seeking to diversify their highly concentrated nuclear fuel.
utilities: Fuel supply chains in at large jurisdictions.
utilities: The reform project stands out as the world's largest and lowest cost future producer for us.
utilities: Exceptionally sound technical and environmental setting evident by its vertically stacked ore body that is large.
utilities: Hi, Greg.
Clayton: And like I did at all ideal hard rock conditions, with Clayton or making it truly unparalleled in the global uranium landscape.
Leigh Robert Curyer: We're encouraged to know that our valued government partners and local communities acknowledge the importance of ROOC1's generational profile and recognize that ROOC1 will cement Canada as a global leader in the delivery of uranium as part of the green energy solution. Looking ahead. NexGen is energised to progress the Rook One project into construction and production through our innovative culture, deep expertise, operational excellence, and our collective commitment to being a key contributor to the essential global clean energy transition.
utilities: We're encouraged deny that are valued government partners and local communities acknowledged the importance of work once generational profile and recognize that Roke won Wilson, Canada as a global leader in the delivery of uranium as part of the Green energy solution.
utilities: Looking ahead.
utilities: Next Gen is energized to progress that work one project into construction.
utilities: And production through our innovative culture deep expertise operational excellence and our.
Next Gen: <unk> commitment to being a key contributor to the essential global clean energy transition.
Next Gen: Over the first quarter, we continued to execute our strategy to Rick one for construction.
Leigh Robert Curyer: In the first quarter, we continued to execute our strategy to permit Rook One for construction, after receiving Saskatchewan Provincial Environmental Approval of the Rook One Project on November 8, 2023, which was the first green-filled uranium mine and mill project in Canada to receive Provincial EEA approval in over 20 years. We immediately submitted responses to the CNSC technical comments on February 12, 2024, at the conclusion of the prescribed 90 days following that. NexGen received only 49 comments remaining to address, and once done so successfully, it will have concluded the Federal Environmental Impact Study.
Speaker Change: After receiving Saskatchewan provincial environmental approval of the route one project on November eight 2023.
Speaker Change: Was the first Greenfield uranium mine and mill project in Canada.
Saskatchewan provincial: Hey, provincially I approval in 20 years.
Speaker Change: We have mainly submitted responses to the say NSE technical comments on February 12, 2024.
Speaker Change: <unk> has been prescribed 90 days following that submission.
Speaker Change: Nextgen received only 40 non comments remaining to address and once done. So successfully will have concluded the federal environmental impact study.
Leigh Robert Curyer: We are extremely pleased with this CNSC review and have been finalizing our subsequent responses to these remaining 49 comments, which we will be submitting imminently this week or early next and will be reflected in a news release at that time. This is all against the backdrop of full support from our local Indigenous community partners, who have all signed impact benefit agreements with NexGen for the full life cycle of the Rook One project.
Nextgen Energy: We're extremely pleased with the same let's say, you're a D and had been finalizing a subsequent responses today's remaining forty-nine comments, which will be submitting imminently. This week or early next and will be reflected an unusually at that time.
Nextgen Energy: This is all in the backdrop of full support from our local indigenous community partners, who had also an impact benefit agreements would make Shane on the full lifecycle of their one project.
Nextgen Energy: On project development, the 2023 stock compensation program is informing and validating the final dates out design.
Leigh Robert Curyer: On project development, the 2023 Site Confirmation Program is informing and validating the final detailed design of the production exhaust shafts, water treatment, Underground Tailings Management Facility, Mill, and Surfer Surface Infrastructure. This work is estimated to be completed at or around the end of Q2, where we will then provide an updated cost summary on CAPEX, OPEX, and project economics, regarding procurement. We are finalizing details of the shaft sinking contract award and advancing the procurement of the mine hoist system, which will be awarded in the near future.
Nextgen Energy: Production exhaust shops water treatment.
Speaker Change: Underground tailings management facility mill and Seth.
Speaker Change: <unk> infrastructure.
Speaker Change: This way it is estimated to be completed at or around the end of Q2 way will then provide an updated cost summary on capex Opex and project economics.
Speaker Change: Regarding procurement, we are finalizing details of the shaft sinking contract award and advancing the procurement of the mine hoist system, which will be awarded in the near future.
Leigh Robert Curyer: Additionally, we are awarding various ancillary site contracts, including the LNG power plant, during the second half of this year. As we shared earlier this year, our 2024 Winter Exploration Program has returned successful results at a brand new discovery on the Patterson Corridor each year, which lies 3.5 kilometers east of Arrow on a separate conductor package. The intense mineralization discovered in RK14183 meant that we focused the balance of winter exploration solely in this area to first understand the extent of the system.
Speaker Change: Additionally, we are awarding various ancillary site contracts, including the LNG power plant during the second half of this year.
Speaker Change: As we shared earlier this year at 2020 for Winter exploration program has returned and successful results at a brand new discovery on the Patterson cargo <unk>, which slide three five kilometers east of ore on the conduct of package.
Speaker Change: The intense mineralization discovered in our Kay 14, one.
Speaker Change: 183 meant that we focus the balance of winter exploration solely in this area. So first on the expand the extent of the system.
Speaker Change: The geological similarities between Patterson, Colorado eighth MRO livestock.
Leigh Robert Curyer: The geological similarities between Patterson Corridor East and Arrowhead Star dictated the summer program would focus on this area for a considerable period of time. The early exploration holes at Arrow in early 2014 were hitting the top of the strong and large mineralization below. This discovery and the holes drilled to date suggest a similar setting of an extensive mineralization event in the vicinity.
Speaker Change: That dictated the summer program focus on this area for a considerable period of time.
Patterson: The early exploration holes that arrow in early 2014 were hitting the top of the strong and large mineralization below.
Speaker Change: This discovery and the holes drilled to date suggest the similar setting of an extensive mineralized <unk> bank in the vicinity.
Leigh Robert Curyer: Results of the remaining 2023 program are imminently pending, and the 2024 summer drilling program will be commencing late May and will be an expanded program from winter, all on this new discovery. All discoveries have their own unique nature, and this will be no different, but note the execution of this drilling program is incorporating the same industry-leading technical approach and discipline as deployed at Arrow on Discovery and in a manner which was the most time and cost efficient per meter drilled in the discovery of a plus 100 million pound deposit in the world.
Speaker Change: Results of the remaining 2020 trade program imminently pending in the 2020 for summit drilling program will come they will be commencing late may and will be an expanded program for winter and all on this new discovery.
Speaker Change: <unk> discoveries have their own unique nature and this will be no different.
Speaker Change: But note the execution of this drilling program is incorporating design industry, leading technical approach and discipline as deployed at.
Speaker Change: On discovery and in a manner, which was the most time and cost efficient permitted drilled and the discovery of the plus 100 million pound deposit in the world.
Speaker Change: Regarding contracting.
Leigh Robert Curyer: Regarding contracting, our discussions continue to advance well with respected nuclear power utilities who have been recognized as a significant producers in the future with a strong understanding of NexGen's key positioning in any utility's future supply portfolio. As evidenced in industry market commentary, contract negotiations for 2028 and beyond are occurring now. Last week, NexGen announced the purchase of 2.7 million pounds of physical uranium at US$92.50 per pound via the issuance of a US$250 million convertible debenture at a 30% premium to our five-day VWAP share price.
Speaker Change: Our discussions continue to advance well with respected nuclear power utilities.
Speaker Change: Have been recognized as a significant producer in the future with a strong understanding of Nextgen key positioning in any utilities future supply portfolio.
Speaker Change: As evidenced in industry market commentary contract negotiations with 20 trading item beyond high recurring now.
Speaker Change: Last week, Nextgen announced purchase of $2 7 million pounds of physical uranium at U S $92 50 per pound via.
Nextgen Energy: By the issuance of the U S $250 million convertible debenture.
Nextgen Energy: 30% premium to a five day <unk> share price.
Leigh Robert Curyer: This debenture is on the same terms of which we have successfully executed in the past with CEF Leigh Ka-Shing in 2016 and 2017, Queens Road Capital, and more recently Salt Patterson's in Australia, which all incorporate an investor rights agreement that contains shareholder voting alignment, standstill, sale and transfer restriction covenants, and anti-hedging through short-selling, options, swaps, or derivatives. The rationale to procure uranium now is logical given our stage of development in approaching final permitting, then construction, and more so, the contracting cycle for delivery from 2028 and beyond is occurring now.
Nextgen Energy: This debenture is on the same terms of which we have successfully executed in the past with say yet late cashing in 2016 and 17.
Speaker Change: Wayne drive capital and more recently, so patterson's in Australia.
Speaker Change: Which all incorporate an investor rights agreement that contains shareholder voting alignment standstill style and transfer restriction covenants and anti hedging through short selling options swaps so derivatives.
Speaker Change: Now to procure uranium now is logical given that stage of development and approaching final permitting and construction and more site contracting cycle for delivery from 2028 and beyond is occurring now that's right brought now.
Leigh Robert Curyer: That's right, right now. Last night's signing of the Russian-Uranian ban, fully enforced by 2028, means the importance of procurement for this time and beyond has even more significantly elevated in the last 24 hours. Nuclear fuel is unique in the sense it's a highly specialized input of production for power utilities that takes many years to procure and is not commonly available if caught short.
Speaker Change: Last not signing of the Russian uranium ban fully enforced by 2020 eights maintain importance of procurement for this time and beyond.
Speaker Change: Has they been more significantly elevated in the last 24 hours.
Speaker Change: Nuclear fuel is unique in the sense, it's a highly specialized and put up production propel utilities that takes many years to procure and not commonly available if caught short.
Leigh Robert Curyer: The producers and the spot market are no longer flush with inventory levels to accommodate any unexpected shortfall. Given the supply-side dynamics of fragility, utilities are rightfully focused on security of supply now. This purchase shows utilities NexGen has their backs and is a responsible, reliable supplier, reflecting respect and understanding of their risks and requirements for successful operation. With respect to the price of $92.50 per pound, based on recent spot market purchases over the last six months, £100,000 has been resulting in a greater than $1.50 upward price movement.
Speaker Change: That produces and spot market is no longer a flush with inventory levels to accommodate any unexpected shortfalls gives.
Speaker Change: Given the supply side dynamics up for agility utilities are rightfully focused on security of supply and now.
Speaker Change: This purchase.
Speaker Change: Those utilities Nextgen has their back and as a responsible reliable supplier, reflecting respect and understanding of their risks and requirements for successful operation.
Utilities Nextgen: With respect to the price of <unk> 50 per pound based on recent spot market purchases over the last six months.
Nextgen Energy: <unk> thousand pounds, as being resulting in rather than $1.50 upward price movement.
Leigh Robert Curyer: We are confident we have purchased extremely diligently and at the same time as enhancing our contracting and debt financing approach. With respect to the debt package, which we will continue to advance through due diligence and schedule completion shortly after federal approval. This includes many different potential avenues, and significant capacity is being evaluated with maintaining leverage to future uranium prices, evidenced by expressions of interest from lenders which now total property US $1.4 billion, which provides substantial excess capacity to fund and execute the project.
Speaker Change: We are confident way of purchase extremely diligently and at the same time is enhancing our contracting and debt financing approach.
Speaker Change: With respect to with respect to the debt package, which will continue to advance through due diligence and scheduled concluding shortly after federal approval.
Speaker Change: This includes many different potential avenues and significant capacity is being evaluated with maintaining leverage to future uranium prices prices.
Speaker Change: Evidenced by expressions of interest from lenders, which now totals approximately U S $1 4 billion, which provides substantial excessive capacity to fund and execute the projects.
Leigh Robert Curyer: We continue to experience strong institutional and retail shareholder support from Australia and the broader Asia-Pacific region, who exhibit strong demand for unhedged uranium development opportunities. Our listing and subsequent inclusion in the ASX 300 index on March 18th marked a significant milestone reflecting our company's continual commitment to finding new shareholder markets. Thank you, in line with these subjects. Two weeks ago, NexGen issued a Canadian $224 million placement to ISX Invest, which together with the issuance of the $250 million convertible takes our cash and liquid assets to approximately $1.5 billion.
Speaker Change: We continue to experience strong institutional and retail shareholders support from Australia, and the broader Asia Pacific region.
Speaker Change: Strong demand for unhedged uranium development opportunities at listing and subsequent inclusion in the ICD 300 index on March 18.
Speaker Change: Not the significant milestone.
Speaker Change: Our company's continued commitment to finding new shareholder market exposure.
Speaker Change: And in the process leveraging optimal outcomes for our shareholders and stakeholders.
Speaker Change: In line with this objective two weeks ago, Nextgen issued a tonight in $224 million placement.
Nextgen Energy: <unk> investments, which together with the issuance of the 250 million convertible.
Nextgen Energy: <unk> cash and liquid assets to approximately.
Leigh Robert Curyer: 930 million Canadians, and that is excluding our investment in ISO energy. We have significantly addressed the equity component of funding the construction of Rook One, providing the market with clear visibility of our objective of taking Rook One immediately into construction upon receiving federal approval, with the value of that milestone unencumbered. In September of 2023, NexGen raised approximately $540 million Canadian with a discount to market being an industry leading one and a half to 4% discount, while still maintaining sector leading share price performance. Further, this has been during a period when CEF liquidated their shareholding. This represented approximately 18% at the beginning of last September, but yesterday, it was advised that it is now holding less than 0.1%.
Nextgen Energy: 913 million Canadian.
Speaker Change: And that is excluding our investment in <unk> energy.
Nextgen Energy: We have significantly address the equity component of funding construction of book, one providing the market with clear visibility about objective of.
Speaker Change: Taking a look one mainly into construction on receiving federal approval with the value of that milestone unencumbered.
Nextgen Energy: In September of 2023, Nextgen has raised approximately at 540 million Canadian with a discount to market being an industry, leading one that IHOP to 4% discount while still mining sector, leading share price performance.
Speaker Change: <unk>.
Speaker Change: Further this is bank during a period see yes.
IHOP: Liquidated their shareholding this represented approximately 18% at the beginning of last September to only yesterday, saying advised is now holding less than 0.1%.
Leigh Robert Curyer: We are very proud of this investment return to CEF since 2017, of over 500%, and equally excited it has been replaced by new, predominantly large, Australian-based shareholders with an affinity for a new world mining company delivering exceptional returns. By the end of Q1 2024, we will have invested approximately $459 million in the successful exploration and development of the Rook One project. And this has resulted in a current market capitalization of $5.4 billion.
Speaker Change: We are very proud of these investments tend to say, yes since 2017.
Speaker Change: Over 500% and equally excited and is being replaced with new D. A dominantly large Australia by shareholders with an affinity for a new world mining company delivering exceptional returns.
Speaker Change: By the end of Q1 2024, we will have invested approximately 459 million Canadian.
Speaker Change: In the successful exploration and development of the <unk> project.
Shareholders: And this has resulted in our current market capitalization of $5 4 billion Canadian.
Speaker Change: The day prior to the announcement of the uranium purchase last week Nextgen hit a new all time high market capitalization at Canadian $12 14 per share.
Leigh Robert Curyer: The day prior to the announcement of the uranium purchase last week, NexGen hit a new all-time high market capitalization, a Canadian $12.14 per share, and led all year to date one year rolling tables relative to its peers.
Nextgen Energy: And led all year to date, one year rolling tables relative to its PS.
Leigh Robert Curyer: The 2.7 million pound purchase of uranium represented approximately 4% dilution to that market cap and placed NexGen in a far stronger position than it was prior to the announcement. Before we turn to the Q&A, I'd like to mention Susanna Pearce's nomination for election to our Board of Directors at our upcoming AGM in June. This is referenced in the NexGen Management Information Circular issued last week. Susannah currently serves as President and Country Chair of Shell Canada.
Nextgen Energy: The $3 7 billion pound purchase of uranium represented approximately 4% dilution to that market cap and his place nextgen in a far stronger position than what it was prior to that announcement.
Susanna: Before we turn to the Q&A a lot you mentioned Susanna pieces nomination for election to our board of directors at our upcoming AGM in June and this is referenced in the Nextgen management information circular issued last week.
Susanna Pieces: Susanna currently presides as president and country chair of Shell Canada.
Leigh Robert Curyer: Her expertise and experience in the global energy industry and genuine engagement with local Indigenous communities and government stakeholders make her a natural fit for our organization. I encourage everyone to read the NexGen Management Information Circular, which details all aspects of our approach. Governance and Diligence in delivering the world's largest environmentally, socially, and economically viable uranium development project. Our team's strength lies in its diverse composition, enriched by top-tier talent from a variety of backgrounds, reflecting a wide-reaching perspective that enhances our approach. In 2023, total employees by gender were 66% male and 34% female, compared to a Canadian average of females in mining measuring 16%, more than double.
Susanna: Our expertise and experience in the global energy industry and genuine engagement with local indigenous communities and government stakeholders makes it a natural fit for our organization.
Susanna: I encourage everyone to read the Nextgen management need to match secular.
Susanna: We stay tells all aspects of our approach.
Susanna: Governance, and diligence and delivering the world's largest environmentally socially and the late economic uranium development project.
Susanna: Our team strength lies in its diverse composition enriched by top tier talent from a variety of backgrounds, reflecting a wide reaching perspective that enhances our approach in.
Susanna: In 2023 total employees by gender statistics, with 66% mile and 34% female.
Susanna: Badger like Canadian average of Fame housing mining measuring six 8% more than doubled.
Leigh Robert Curyer: Proudly, 80% of Rookwan SAW employees were from the local priority area. Additionally, over $44 million has been spent on local priority area supplies in 2023, which stimulates economic development within local communities and builds long-lasting and self-sustaining community resilience. As we move forward with the project, we continue to add to our high-performance team. Building and investing in a skilled talent pool is central to our continued success and the local economy's success. In summary, we are moving forward with the support of our valued Indigenous partners, our shareholders, the regulatory and governmental authorities, and our dedicated team. As we look toward the rest of 2024, our focus is on advancing the Rook One project.
Speaker Change: Proudly IV Center Brook once all employees were from the local priority area.
Speaker Change: The 44 million Headspace bank on the local priority priority area supplies in 2023, which stimulates economic development within local communities and builds long lasting and self sustaining community resilience.
Speaker Change: As we move forward with the project, we continue to add to our high performance team building and investing in skilled talent pool is central to our continued success in local economies success.
Speaker Change: In summary, we are moving forward with the support of our valued indigenous partners, our shareholders, the regulatory and governmental authorities of that dedicated team.
Speaker Change: As we look toward the rest of 2024, our focus is advancing the <unk> project. We are at a pivotal and exciting time for our company and as always it's a privilege to share our continued growth with you as we work together to secure the energy transition.
Leigh Robert Curyer: We are at a pivotal and exciting time for our company. And, as always, it's a privilege to share our continued growth with you as we work together to secure the energy transition. Now we're transitioning to the Q&A, and we encourage questions from all of you. I'll hand it over to the moderator. Thank you. Ladies and gentlemen, should you have a question, please press star 1. To withdraw your question, press star 2.
Moderator: Now, let's transition to the Q&A and we encourage questions from old I'll hand, it over to the moderator.
Speaker Change: Okay.
Moderator: Thank you ladies and gentlemen, so do you have a question. Please press star one to withdraw your question Press Star two one moment. Please for your first question.
Moderator: Your first question comes from Andrew Wong from RBC. Please go ahead.
Julie: One moment, please. Your first question comes from Andrew Wong from RBC. Please go ahead. Hey, good morning.
Andrew Wong: Hey, good morning, Thanks for taking my questions. So.
Andrew Wong: Thanks for taking the questions. So, it's great to hear you're about to resubmit the EIS soon. Just kind of wanted some clarity around the timeline. So, after you submit, what are the specific steps and timeline that need to happen before a public hearing can be scheduled? And what actually happens during the public hearing?
Andrew Wong: So it's great to hear Youre about to resubmit the EIF soon.
Andrew Wong: Just kind of just wanted some clarity around the timeline. So after you submit.
Andrew Wong: What are the specific steps and timeline that needs to happen before a public hearing can be scheduled and.
Leigh Robert Curyer: Could there be some public commentary that comes out that needs to be addressed in that process? And then after that, what's the timeline from the public hearing until you get to the sort of final decision from the government? Yes, thanks Andrew, yeah, looks like... We're very pleased with the response that we received from the CNSC. To have 277 questions in the first place, according to our consultants, was unprecedented for this stage of a project.
Andrew Wong: What actually happens during the public hearing could there be some public commentary that comes out that needs to be addressed you in that process and then after that like what's the timeline before from the public hearing until you get to <unk>.
Speaker Change: Sort of a final decision from administered.
Andrew Wong: Yeah, Thanks, Andrew Yeah, it looks right.
Andrew Wong: Well, we're very pleased with the response that we received from the same let's say like to have 277 questions in the first place according to al.
Andrew Wong: Consultants was unprecedented for this stage of the project.
Leigh Robert Curyer: We're down to 49 and they're really, whilst every aspect is very, very important and we're respectful of that, we are submitting imminently, either late this week or early next. Now, as prescribed by the rules and regulations, the CNSC is entitled to another 90 days to review and close out those remaining 49 aspects. On closing those 49 aspects out, the EIS will be deemed final, and at that point, it will then establish a commission hearing date. Now, every project that has gone to a commission hearing has been approved within 60 days.
Andrew Wong: But down to 49 and I really whilst every.
Speaker Change: <unk> is very very important and we're respectful of that.
Speaker Change: We are submitting imminently.
Speaker Change: This wake oily next now as prescribed by the roads and regulations. They say NSA is entitled to another 90 days to review and close out those remaining 40 non aspect.
Speaker Change: Aspects.
NSA: On closing those forty-nine aspects out the elas will be deemed fun.
NSA: At that point.
NSA: It will then establish a commission hearing date.
Speaker Change: Now every project that has gone to a commission hearing has been approved within 60 days.
Leigh Robert Curyer: I think, whilst all aspects are very, very important and material, it's very, very significant with respect to concluding the EIS, and we are very much looking forward to the conclusion of this next 90 day period, which I think is at the end of July, off the top of my head. We very much look forward to those 90 days, that's for sure. Now, with respect to other public comments that can arise, well, the federal government already ran its 120-day public comment period back in 2022, and those questions that we've already addressed were directed at those public and technical comments.
Speaker Change: Think whilst all aspects are very very important and material.
Speaker Change: Very very significant.
Speaker Change #102: With respect to concluding the.
Speaker Change: And we are very much looking forward at the conclusion of this mix 90 day period, which I think is at the end of July.
Speaker Change: Off the top of my head.
Speaker Change: And very much look forward to.
Speaker Change: That is 90 days.
Speaker Change: Ah.
Speaker Change: For sure now with respect to other public comments that can arise while the federal government.
Speaker Change: Has already ran at 120 day public comment period back in 2022.
Speaker Change #106: And those questions that we've already addressed were directed at those public and technical comment.
Speaker Change: From our perspective, it's very very well.
Leigh Robert Curyer: From our perspective, it's very, very well done, or has been very rigorous, and has incorporated all stakeholders. And this is on the overlay of having 100% community support from the communities in the local project area, who have all reviewed and signed off on the EIS as we have presented to the CMSC. Okay, that's great.
Speaker Change: There has been very rigorous as incorporated all stakeholders and this is on the overlay of having.
Speaker Change: 100% community support from the communities and the local project area, who evolve reviewed.
Speaker Change: And signed off on the ice as we have presented to the same assay.
Speaker Change: Okay, that's great.
Leigh Robert Curyer: And then just talking about the lift lung project itself, you've been pretty clear on, I think, your intention to bring it into production. Sounds like there could potentially be a construction start within the next... to 12 months. So you just talk about the technical team that you have in place already; what's the size of that team right now, and how much more do you need to build it out? How quickly can you hire the labor force that you need to build a project?
Speaker Change #105: And then just talking about the Brooklyn project itself, you've been pretty clear on I think your intention to bring it into production.
Speaker Change #105: Sounds like there could potentially be a construction start within the next six.
Speaker Change: For the 12 months. So can you just talk about the technical team that you have in place already what's the size of that team right now and how much more do you need to build it out how quickly can you hire the labor force need to build the project.
Leigh Robert Curyer: Yes, sure. So, on receiving federal approval, we'll be in a position to start immediately the following week. We have done 100% engineering of a lot of the site infrastructure aspects, the preliminary works in order to commence construction in earnest, and all the early stage items are 100% engineered. The remaining engineered items are around the specifics in the middle, to put that into perspective around the wiring, and so we're ready, subject to federal approval, to immediately start.
Speaker Change: Yes sure.
Speaker Change: Yes.
Speaker Change #248: On receiving federal approval.
Speaker Change: We'll be in a position to start immediately the following week.
Speaker Change: We have done 100% engineering of a lot of the site infrastructure aspects the preliminary works in order.
Speaker Change: To commence construction in earnest in all of the early stage items are 100% engineered the remaining engineered items around the specifics in the mill to put that into perspective around the wiring.
Speaker Change: And and so we're ready.
Speaker Change: Subject to federal approval to immediately stop.
Leigh Robert Curyer: With respect to the team, we currently have about 76 people in our Saskatoon Head Technical Office, and at NexGen, our culture is absolute responsibility, and so we have a dedicated NexGen person for every aspect of our operations.
Speaker Change: With respect to the team.
Speaker Change: We have currently about 76 people.
Speaker Change #104: In our Saskatoon head technical office and at Nextgen, Our culture is.
Nexgen: Absolute responsibility and so we have a dedicated nexgen person for every aspect of our operations and that's that's not just.
Leigh Robert Curyer: That's not just the construction of the project that exhibits geology, the financial side, the commercial side, everything. So we have been very, very strategic and well-planned in acquiring the personnel and the technical expertise that we want since 2017. We knew at that stage we had a project, and we're taking it forward into production. That's escalating as we speak, and to give you one example, on the safety side of things, we're now breaking that out into very specific areas of safety at surface, underground, radiation experts, and given the profile of the project and the culture that NexGen is exhibiting. We're very, very pleased with the calibre of the applicants that we're receiving, not just within Saskatoon and Saskatchewan but also from outside of Saskatchewan.
Nexgen: The construction.
Nexgen: Of the project that exhibits in geology, the financial side commercial side everything.
Nexgen: So we have been very very.
Speaker Change #116: Strategic and well planned in acquiring.
Speaker Change #101: Personnel and the technical expertise that we wont ever since 2017, we knew at that stage, we had a project and we're taking it forward into production.
Speaker Change #101: That's elevated.
Speaker Change #114: We space.
Speaker Change #103: And to give you. One example, like on the safety side of things, we're now breaking that out into very specific areas of <unk>.
Speaker Change #110: Safety at surface underground radiation experts.
Nexgen: And given the profile of the projects and the culture that nexgen is exhibiting.
Nexgen: We're very very pleased with the caliber of the applicants that way, we're saving not just within Saskatoon and Saskatchewan, but also from outside.
Nexgen: Saskatchewan and so.
Leigh Robert Curyer: And so Saskatchewan is going to be experiencing an inflow of skilled labor as a consequence. With respect to the labor force on the ground, well, our community team, led by Adam Engle and Dylan Smart in Saskatoon, have already been running training programs with the various government technical colleges in Saskatchewan, and the take-up of those training programs has been absolutely phenomenal, so we are, you know, well prepared on both fronts, and it exhibits our commitment to making as many of the jobs as local as achievable, and so you're going to also be I appreciate all of that. Thank you very much.
Nexgen: Saskatchewan is going to be experiencing an influx of of skilled labor.
Nexgen: Labor.
Nexgen: As a consequence with respect to the lie before us on the ground.
Speaker Change #101: Well.
Speaker Change #108: Our community team led by Adam angle and Dylan Smart in.
Speaker Change #101: Saskatoon.
Speaker Change #109: I have already been running training programs with the various government technical colleges in Saskatchewan and the take up of those training programs has been absolutely phenomenal and we are well prepared on both.
Friends: Friends and it exhibits our commitment to making.
Friends: As many of the jobs as local as as achievable and so.
Speaker Change #111: You're going to also be saying, an inflow of population into the local community area.
Speaker Change #111: On the commencement of construction of the project.
Michelle: Michelle Thank you very much.
Michelle: Thank you Andrew.
Speaker Change #257: Your next question comes from Tony <unk> from H capital. Please go ahead.
Julie: Thank you, Andrew. Your next question comes from Puneet Singh from Haight Capital. Please go ahead. Hi, good morning.
Tony: Hi, good morning.
Puneet Singh: Just a couple of questions on the convertible. Just regarding strategy, you know, the way the uranium price has traded, why not do this a couple years ago? And what specifically were you seeing in the market that made you pull the trigger now? Yeah, look, you're quite right.
Tony: Just a couple of questions on the convertible.
Speaker Change #249: Just regarding strategy.
Tony <unk>: The way that uranium prices traded why not do this a couple of years ago and what specifically are you seeing.
Tony <unk>: In the market that made you pull the trigger now.
Speaker Change #234: Yes, it looks you're quite right, we've always been confident that the price of uranium.
Leigh Robert Curyer: We've always been confident that the price of uranium is going higher, even, you know, five years ago, and it's going to go higher still. But the decision to purchase pounds of uranium now is completely in line with our stage of development. We're about to, in the final stages of federal approval, we're immediately on the receiving approval to start construction, and the contracting cycle for 2028 and beyond is now, and so that is predicated given the fragility around current production and available supplies, like the producers have had a significant drawdown of inventory on hand over the last two years, and then also the spot market is incredibly tight.
Speaker Change #234: Is he is going higher even.
Speaker Change #234: Five years ago.
Speaker Change #118: And and it's going to go higher but the decision to purchase <unk>.
Speaker Change #118: Sounds of uranium now is completely in line with that stage of.
Speaker Change #118: Development, we're about two <unk> in the.
Speaker Change #118: Final stages, all federal approval will mainly on receiving approval to start construction.
Speaker Change #118: And the contracting cycle for 2028 and beyond.
Speaker Change #118: He is now and say that predict predicated.
Speaker Change #112: Given the fragility around.
Speaker Change #112: Current production and available supplies.
Speaker Change #112: Juices have had a significant drawdown of inventory on hand over the last two years.
Speaker Change #112: And then also the spot market is incredibly types.
Leigh Robert Curyer: And dealing with nuclear fuel, the utilities want a surety of delivery. So us... acquiring 2.7 million pounds is very significant in our contract negotiations with the utility and recognizes the utility's risk around security of supply. And so, the timing of that is evident today, and I would say the Russian ban introduced last night has elevated that significantly into a new era that is unprecedented, frankly. Yeah, and hey, Puneet, it's Travis here.
Speaker Change #112: Dealing with the nuclear fuel.
Speaker Change #112: The utilities want authority all delivery.
Speaker Change #112: The us acquiring.
Speaker Change #112: $2 7 million pounds.
Speaker Change #112: He is very significant in our contract negotiations with utility and recognizes the utilities risks around security of supply.
Speaker Change #112: And so.
Speaker Change #112: The timing of that is evident today in and outside the Russian band.
Speaker Change #115: Introduced last knot has elevated that significantly into a new area era.
Speaker Change #112: That.
Speaker Change #112: Is unprecedented frankly.
Travis G. McPherson: I would also just add that, yeah, with respect to the timing, like, you know, 3, 4, 2 years ago, we weren't at the point of these negotiations with the utilities. We're there now, and to Leigh's point, you know, the world that the utilities live in is, it's 2028 tomorrow. And so that's where the decision to, in terms of the exact timing, it's not a, while we're extremely bullish on the uranium price, obviously, for all the reasons and more that Leigh has outlined in the opening remarks, it wasn't purchased on the basis that, you know, we're speculating on the uranium price. It's really tied to the development of the Arrow project as it Okay, I got it.
Speaker Change #112: Yes.
Speaker Change #256: Her name is Travis here.
Travis: So just add that with respect to the timing like.
Speaker Change #274: 342 years ago, even we werent at the point of these negotiations with the utilities are there now and to Lee's point.
Travis: World that the utilities live in two.
Travis: <unk> 2028 tomorrow and so that's that's.
Travis: Where the decision to in terms of the exact timing, it's not a <unk>.
Travis: While we are extremely bullish on the uranium price obviously for for all these reasons and more of that Lee has outlined.
Speaker Change #246: In the opening remarks, it wasn't purchased on the basis that we're speculating on the uranium price, it's really tied to the development of the Arrow project as it relates to contracting, which obviously feeds into the debt financing.
Speaker Change #246: Discussions that we're having as well.
Speaker Change #277: Okay got it and then.
Puneet Singh: And then, just building on that, Ben, if it's tied to the utilities, should we expect more purchases from you guys? Or how should we look at that in terms of a strategy, contracts versus physical inventory? Yeah, look, what you're not going to see is like, materially fill, obviously, the production volumes that are coming out of Aero.
Speaker Change #259: Building on that then if it's tied to the utilities.
Speaker Change #254: Would we should we expect more purchases from you guys or how should we look at that in terms of a strategy contracts versus physical inventory.
Speaker Change #251: Yes look we're not going to see is like.
Speaker Change #261: Materially fell obviously the production volumes that are coming out of arrow.
Travis G. McPherson: And, you know, those contracts that we do sign will be filled predominantly by Aero's production, the vast, vast majority of this, again, to Leigh's point, these 2.7 million pounds, and whether it grows from here or not, to be determined. But I think we're very happy with 2.7 million pounds that we got, because it does just provide a bit of an insurance policy to the utilities. And again, really, I think this shows that understanding the supply challenges, meaning the available insurance that exists out in the market is very limited. And Wallace's, it's, um...
Travis: And.
Lee: But those contracts that we do sign will be filled predominantly by arrows production like vast vast majority of of this again to Lee's point, these $2 7 million pounds and whether it grows from here or not to be determined.
Travis: We're very happy with $2 7 million pounds that we got.
Travis: Because it does just provide a bit of an insurance policy to to the utilities and again really I think demonstrates that the understanding of the supply challenges meeting the available insurance that exists out in the market is very limited.
Travis: And we're all set.
Travis: It's.
Travis: Yes.
Travis G. McPherson: It is very, very unique to the nuclear fuel market in respect to mining. It is a necessity of a start-up operation, but it's not unique when you would have seen other developers do a similar thing as they approach production. FOSS Energy has done it, Denison has done it as well, so it's not unique in that sense, and it does reflect the aspect of commencing a uranium mine. It really does reflect that we are taking this project into production. Your next question comes from Katie Lachapelle from the Canaccord Junior League. Please go ahead. Guys, thanks for taking my question. I have two, but I just want to quickly follow up on Puneet's question.
Travis: It is very very unique to the nuclear fuel market in respect to mining it is.
Travis: This necessity of a startup operation.
Speaker Change #250: But it is not unique.
Speaker Change #250: When you.
Speaker Change #250: You would've seen other developers.
Speaker Change #250: Do a similar thing as I approach.
Speaker Change #250: Production plus energy had done it denison they've done that as well so it's not.
Speaker Change #253: Unique in that sense and it does reflect.
Speaker Change #253: The aspect of <unk>.
Speaker Change #253: Commencing a uranium month.
Speaker Change #314: Okay got it thanks for Android it.
Speaker Change #253: It really does reflect we are tightening this project into production.
Speaker Change #268: Okay great.
Travis: Okay.
Speaker Change #119: Your next question comes from Kt less Chapelle from Canaccord Genuity. Please go ahead.
Speaker Change #126: Hey, guys. Thanks for taking my question I'll ask you, but I just wanted to quickly follow up on Anthony's question.
Katie Lachapelle: With respect to the contract negotiations that you're having right now, what sort of volumes or tenor would you be looking to lock down when you are looking to sign contracts? Well, I'll start with the question and hand it over to Travis. We are in current negotiations with four main utilities at the moment, all to different degrees. We've been very, very clear that we are looking for three-year off-take arrangements that are tied specifically to market prices at the time of delivery. Volume levels at the moment are commercially sensitive, but given the supply and demand gap that all market commentators are saying for 2028 and beyond.
Speaker Change #272: With respect to the contract negotiations that you're having right now what sort of volumes or tenure or would you be looking to lock down.
Speaker Change #126: When you are looking to sign contracts.
Speaker Change #266: Well I'll start with your question and then hand over to Travis.
Speaker Change #255: Our current negotiations.
Travis: With the full nine utilities at the moment all bearing degrees.
Speaker Change #126: Very very clear that we are looking.
Travis: For three year.
Speaker Change #126: Offtake arrangements.
Speaker Change #119: Todd.
Speaker Change #119: Specifically to market prices at the time of delivery.
Speaker Change #119: Volte.
Speaker Change #119: Volume levels at the moment are commercially sensitive.
Speaker Change #121: But given the supply and demand gap that old market commentators are saying 2020 and beyond and I'll say this morning that in Australian Bank came out with.
Leigh Robert Curyer: And I say this morning that an Australian bank came out with a $150 uranium price forecast for the year end 2025. I've got no doubt that we're going to be filling contracts to the tune of $1.5 million, which is what Arrow's capable of producing annually. Yeah, and I might just add, yeah, there, you know, there's no urgency.
Australian Bank: <unk> hundred 50 dollar you're writing profitable costs for the year end 2025.
Speaker Change #120: I've got no doubt that we're going to be filling.
Speaker Change #119: Contracts.
Speaker Change #140: To the tune of Av.
Speaker Change #140: What arrows capable of reducing annually.
Travis G. McPherson: We need to sign some contracts, or it's optimal to sign some contracts, you know, in this kind of time frame that we're in now. In terms of the specific volume, say, day one, when we look out for the foreseeable, say, three to five years of Eros production. I mean, to the extent we take on and finance it with debt, which we're, again, going down that path right now, there'll be a minimum level.
Speaker Change #316: Yes, I might just add.
Speaker Change #119: Yes.
Speaker Change #119: There is no urgency.
Speaker Change #119: We need to sign some contracts or its optimal to sign some contracts.
Speaker Change #119: Yeah.
Speaker Change #328: In this kind of timeframe that we're in now.
Speaker Change #119: Terms of the specific volume say day, one when we look out.
Speaker Change #289: For the foreseeable say three to five years of arrows production.
Travis G. McPherson: I think, you know, in order of magnitude, it's minimal in the context of Eros' overall production to shore up the cash flows necessary to make those debt service payments and make it comfortable for utilities or the lenders. And then, as we progress from today onwards, I think you'll just see contracts and offtake negotiations and deals get done progressively as we, you know, march from today through to the ultimate startup of production. Got it. That's super helpful.
Speaker Change #192: To the extent, we take on and finance it with the debt, which we're again going down that path right now there'll be a minimum level I think in order of magnitude. It's minimal in the context of arrows overall production to to shore up the cash flows necessary to make those debt service payments and make it comfortable.
Speaker Change #119: For utilities.
Speaker Change #141: Are the lenders.
Speaker Change #141: And then as we progressed from today onwards, I think youll just see contracts.
Speaker Change #141: And offtake negotiations and deals get done.
Speaker Change #141: Progressively as we March from today through to ultimate startup of production.
Speaker Change #141: Got it that's super helpful.
Katie Lachapelle: Maybe just one other question. In the prepared remarks, you mentioned that you guys are going to provide updated capital as well as operating costs around the end of this quarter or early Q3. Can you provide any detail on where you guys are seeing some of the largest impacts on the cost side? Yeah, I'll start and, again, hand over to Travis.
Speaker Change #317: Maybe just one other question in the prepared remarks, you mentioned that you guys are going to provide updated capital as well as the operating costs.
Speaker Change #125: In the end of this quarter or early Q3.
Speaker Change #262: Can you provide any detail on where you guys are seeing some of the largest impacts on the cost side.
Speaker Change #124: Yeah, I'll start and again hand over to Travis, but on the cost side and as I explained in the earlier coal the inflationary impact.
Leigh Robert Curyer: But on the cost side, and as I explained in an earlier call, the inflationary impact on the 1.3 billion Canadians as estimated in the 2021 feasibility study to date is at around $320 million. Labor wages are probably the biggest one out of everything on a weighted basis. But we're also experiencing some decreases in raw materials as well. The biggest cost component of the construction is the two shafts, and we'll be entering into a contract which limits subsequent inflationary pressure on the construction of both the production and the exhaust shelves. But to answer your question, Katie, it's predominantly around work.
Travis: On the $1 3 billion Canadian as as estimated in 2021 feasibility study to do.
Travis: Is it around 320.
Travis: <unk> million dollars.
Speaker Change #119: Labor.
Travis: Wages has been yes.
Speaker Change #142: Probably the biggest one.
Speaker Change #142: Out of everything on a on a weighted basis.
Speaker Change #142: But we're also experiencing.
Speaker Change #119: Some decreases in raw materials as well.
Speaker Change #119: The biggest cost component of the construction.
Speaker Change #119: Is the two shops.
Speaker Change #119: And we'll be entering into.
Speaker Change #121: Our contract which limits.
Speaker Change #143: Subsequent inflationary pressure.
Speaker Change #313: On the.
Speaker Change #139: Construction of both the production they exhaust chefs, but to answer your question Katy is predominantly around labor.
Travis G. McPherson: Yeah, yeah. And I think, you know, just on the inflationary thing, I think it's important as well that that is not some kind of, that is not calculated based on some kind of, you know, marketing to see, like we went, unit cost by unit cost comparison from the feasibility site to today to make sure that we understand exactly what that is. And then the remaining aspects, over and above the inflationary impacts, are being finalized now through some ongoing test work and finalization there.
Speaker Change #121: Yes, yes, and I think just on the inflationary thing I think it's important as well, but that is not some kind of.
Speaker Change #123: That is not calculated based on some kind of market indices like we went.
Speaker Change #123: Unit costs by unit cost comparison from the feasibility study to today to make sure that we understand exactly what that is and then the remaining aspects.
Speaker Change #123: Over and above the inflationary impacts are being finalized.
Speaker Change #130: Now through <unk>.
Speaker Change #148: Some ongoing test work and Finalization.
Speaker Change #123: There.
Travis G. McPherson: With respect to, you know, the just we've got under just just shy of a billion dollars Canadian in the Treasury now, and with the debt process over, you know, expressions of interest over 1.4 billion US, we have got more than enough capacity with respect to even taking into account the impact of inflation on the feasibility study. We are very, very well financed in order to execute this project with our current cash and liquid assets, including the debt expression of interest. Awesome. Thank you, guys. I appreciate the details. Thank you, Katie.
Speaker Change #144: With respect to <unk>.
Speaker Change #123: Yes.
Speaker Change #134: Just under just just shy of the $1 billion Canadian in.
Speaker Change #131: In the Treasury now and with the debt process that are the expressions of interest out of the $1 4 billion U S.
Speaker Change #131: We have got more than enough capacity with respect to even taking into account the impact of inflation.
Speaker Change #127: Onto the feasibility study.
Speaker Change #150: We are very very well.
Speaker Change #128: Finance in order to execute this project with a car.
Speaker Change #128: Cash and liquid assets, including that.
Speaker Change #128: The expression of interest.
Speaker Change #135: Awesome. Thank you guys I appreciate the detailed response.
Eddie: Thank you Eddie.
Speaker Change #129: Your next question comes from Craig Jetson from TD Cowen. Please go ahead.
Craig Hutchison: Your next question comes from Craig Hutchison from TD Cohen. Please go ahead. Hey, good morning, guys. I've got a follow-up question regarding the timing of the purchases that you did. Like, from my perspective, I thought, you know, your tier one asset and your tier one jurisdiction that you guys would be in the driver's seat with regard to offtake discussions and that you would not have to enter into purchase agreements now. Can you just talk about those discussions, are you seeing the utilities not that rushed right now to enter into contracts, are they not short material, just some sense on that because I think in previous discussions you guys have talked about the potential to do, even like, a forward sale of uranium. Yeah, so, Craig, and good morning.
Craig Hutchison: Hey, good morning, guys.
Speaker Change #155: Just a follow up question regarding the timing of the purchases that you did like.
Craig Jetson: From my perspective, I thought your tier one assets tier one jurisdiction that you guys would be in the driver's seat with regards to offtake discussions and that you would not have to enter into purchase agreements now.
Craig Jetson: Can you just talk to those discussions or are you seeing other utilities not that rush right now to enter into contracts are they are they not sharp sharp material.
Craig Jetson: Some sense on that because I think in previous discussions you guys had talked about potential to do.
Speaker Change #129: Even like a forward sale of uranium.
Speaker Change #129: Yes.
Greg: Let say Greg that.
Speaker Change #133: And good morning.
Speaker Change #133: <unk>.
Leigh Robert Curyer: The, in terms of that description box C, well, we're working with the utilities to get contracts in place and arrangements in place which meet a win-win situation. So it's not like we're going to flex our muscles and have a win-loss situation. We are developing relationships with these key utilities for the long term, and that uranium purchase reflected our understanding of that. There are sensitivities around a start-up operation, which exist for any start-up operation, and as we've seen, Denison and Biosex have done a similar thing, which is very, very astute and reflects their understanding of the contracting process.
Speaker Change #133: The.
Greg: In terms of that description bulk sale well with working with the utilities to get contracts in place and arrangements in place, which may win wins.
Speaker Change #159: So its not like were.
Speaker Change #136: Going to flex their muscles and have our win loss situation. We are developing relationships with these K utilities for the long term and that uranium purchase reflected.
Speaker Change #133: Us and understanding.
Speaker Change #133: The sensitivities around a startup operation, which exists for any startup operation and as were saying Denison and Bosch et cetera have done the similar thing which is very very.
Greg: Jude.
Greg: And reflects our understanding of the contracting.
Greg: Process Theres no doubt.
Leigh Robert Curyer: There's no doubt that the focus on the security of supply is now significantly elevated and is rising week by week with these market developments. We are entering into an unprecedented stage. Yes, there is a possibility of a forward sale of a contract.
Greg: That.
Greg: The.
Speaker Change #145: Focus on the security of supply is now significantly elevated and elevating week by week with these market developments, we are entering into an unprecedented stage.
Speaker Change #149: Yes, there is a possibility of a forward sale.
Speaker Change #185: All of the contract.
Travis G. McPherson: But that may not necessarily be with a utility. We are receiving expressions of interest from not just utilities but also financial players with respect to that possibility. So our approach is one that understands the utility's specific requirements and one which is about a win-win for both the producer and the utility, taking into account the risks around producing nuclear energy. Yeah, I might just add, Craig, but this is really about optimization and our view of how to do that best. We didn't get contracts without necessarily having purchased uranium. I mean, that's obviously been done before.
Speaker Change #157: That might not necessarily be with a utility.
Greg: We're saving expressions of interest from not just utilities, but also.
Speaker Change #318: Financial plays with respect to.
Speaker Change #137: That possibility so.
Speaker Change #137: Our approach is one that is understanding the utilities.
Speaker Change #137: Specific requirements.
Speaker Change #137: And one which is about.
Speaker Change #137: Win for both the <unk> and utility.
Speaker Change #321: New account.
Speaker Change #146: The risks around.
Speaker Change #146: Producing nuclear energy yes.
Craig: Yes, I might just add Craig but.
Speaker Change #137: This is really about optimization and our view of how to do that best.
Speaker Change #137: Right.
Speaker Change #137: We didn't get contracts without necessarily having purchased uranium I mean, thats, obviously been done before but business around.
Craig Hutchison: But this is around, you know, A lot. Really, I think the best way of thinking about it is we're trying to maximize the value of the plus 350 million pounds we have in the ground, and, you know, buying some uranium now, like 2.7 million pounds, to help us potentially optimize what those contracts look like for the sale price of that plus 350 million pounds is a really good and astute move. So, yeah, it's not, look, you're right, and we're all right, like, this asset is what it is, and it represents what it represents in the uranium market, which is unique and of scale and quality. But this is around optimizing so that we're not just sitting back and saying, well, we have the best. So, you know, take it or leave it.
Speaker Change #137: Really I think the best way of thinking about it is we're trying to maximize the value of the plus 350 million pounds, we're having the ground.
Speaker Change #137: And buying some uranium now by $2 7 million pounds to help us potentially optimize what those contracts look for the sale price of that plus 350 million pounds is a really good and astute moves so.
Speaker Change #137: Yes, it's Scott.
Speaker Change #137: You're right.
Speaker Change #137: We're all right like this asset is what it is and it represents what it represents in the uranium market, which is unique in and of scale and quality.
Speaker Change #137: But this is around optimizing that we're not just sitting back and saying well we have the best so.
Leigh Robert Curyer: This is about working with the utilities and evolving the market over time. Okay, thanks for that, guys. Maybe just follow up, given the expressions of interest you've had on debt and the finance news you guys have done the last couple weeks here, you had talked previously about the potential to do project equity with a non-mining partner. Is that still on the table?
Speaker Change #163: Take it or leave it this is about working with the utilities.
Speaker Change #163: Evolving the market overtime.
Speaker Change #152: Great. Thanks for that guys and maybe just follow up just given the expressions of interest you've had on debt and the financing that you guys have done the last couple of weeks here you had talked previously about potential to project equity with a non mining partner is that still on the table or is that sort of off the table just given the recent financings.
Travis G. McPherson: Or is that sort of off the table, just given the recent funding? It's still a possibility, but I would say maybe less so, given the recent findings. I get the commentary about why would you do it now when you've got such a significant milestone coming up with federal permitting, but similar to the uranium purchase of 2.7 million pounds. Having the Treasury in place prior to approval is a necessity to give the CNSC and the Federal Government of Canada knowledge that we have the funds in place.
Speaker Change #156: It's still a.
Speaker Change #156: Possibility.
Speaker Change #151: But yes.
Speaker Change #158: I would say maybe less site.
Speaker Change #152: Given the RASM.
Speaker Change #152: And look at.
Speaker Change #320: Yeah, and I get the commentary about well why would you do it now when you've got such a significant.
Speaker Change #152: Milestone coming up with federal permitting.
Speaker Change #152: But similar to the uranium purchase of $2 7 million pounds, having the treasury in place prior to approval is a necessity.
Speaker Change #152: Give the same let's say in the federal government of Canada knowledge that we have the funds in place.
Speaker Change #152: It's a very important aspect in.
Leigh Robert Curyer: It's a very important aspect, and so doing it prior to that Federal approval news coming through and obviously subject to concluding the process, respectfully. We now have that in place, and on receiving that approval.., well-financed in order to construct the Rook One project, very, very clear, and we appreciate the opportunity to really provide the color behind that, because on face value, as I said, we get, well, you know, it's less dilutionary post a milestone, but this way, we've got it in front of it, and it reflects the practicality of building a mine with regulators, but also, you know, gives that significant milestone that the company's.
Speaker Change #152: And so doing it prior to that federal approval news coming through and obviously subject to concluding the process respectfully.
Speaker Change #154: We now have that in place and on receiving that approval well finance in order to construct the rook one project.
Speaker Change #154: Hi.
Speaker Change #174: I think that's.
Speaker Change #154: That's <unk>.
Speaker Change #170: Very very clear and we appreciate the opportunity to really provide the color behind that because on face value as I said, we get well, it's less violation aerie.
Speaker Change #170: Post post a milestone but this way.
Speaker Change #198: In front of it and it reflects the practicality of building them on with regulators.
Speaker Change #162: But also.
Speaker Change #162: Gives that significant milestone that the companies.
Leigh Robert Curyer: I'm going to deliver on federal approval, absolutely clear air for it to be reflected in the value of the organization at that time, so it's very, very exciting for all shareholders and stakeholders. Yeah, and Craig, just with respect to the joint venture you referenced, and it's true for the debt and everything else, I think... All of these things are negotiations, and when you're in a negotiation, you know, demonstrating that you have other options is really important. So by having a really robust balance sheet today helps, you know, optimize the debt discussions that we're having because we're not in a weak position there, like we have other options.
Speaker Change #322: Going to deliver on on federal approval, absolutely clear air for to be reflected in the value of the organization at that time.
Speaker Change #162: It's a very very exciting grow shareholders and stakeholders.
Speaker Change #166: And Craig just with respect to the joint venture you referenced and it's true for the debt and everything else I think.
Speaker Change #166: All of these things or negotiate ends up being in a negotiation.
Speaker Change #166: Demonstrating that you have other options is really important so.
Speaker Change #161: By having a really robust.
Speaker Change #161: Our balance sheet today helps optimize again that discussions that we're having because we're not.
Speaker Change #161: We're not in a weak position there like we have other options similar with the joint venture discussion like we can then work to actually optimize those Michelle we have other paths and other opportunities to fund it and we do it is true we have watched it shouldn't be surprising anyone there's lots of ways to fund this project.
Travis G. McPherson: Similar with the joint venture discussion, we can then work to actually optimize those. We show we have other paths and other opportunities to fund it, and we do, it's true. We have lots, it shouldn't be surprising to anyone, there are lots of ways to fund this project under our stewardship. Okay, thanks for that, guys.
Speaker Change #172: Under our stewardship.
Speaker Change #154: Yes.
Speaker Change #189: Okay, great. Thanks for that guys, maybe just a very quick question just on the early works I think your budget, it's been about $46 million to the end of last year could you just give us an update kind of where that's at.
Craig Hutchison: Me just a quick question just on the early works, I think your budget was about 46 million at the end of last year. Can you just give us an update kind of where that's at? And then I think on the last conference call, you said your budget for this year was around 170 million excluding expiration. And is that still the case?
Speaker Change #181: And then I think on the last conference call. You said your budget for this year. It was around 170, excluding exploration and is that still the case.
Speaker Change #154: Yeah.
Leigh Robert Curyer: Thanks. Yeah, it's subject to the timing of the federal permit, yeah. It's the the deployment of capital will increase significantly on immediately receiving that federal approval. So we're well under budget, frankly, for 2024 and incredibly well financed. [inaudible] through into 2027, frankly, based on the cash we have on hand at just under a billion Canadian dollars as we speak. Alright, thanks guys. Thanks, Craig. Your next question comes from Orest Waukodo from Skolshevik. Please go ahead. Hi, good morning.
Speaker Change #176: Yes, it's subject to the timing of the federal permit.
Speaker Change #176: Yes.
Speaker Change #176: It is.
Speaker Change #167: The deployment of capital will increase significantly on immediately you were saying that federal approval.
Speaker Change #154: Sorry.
Speaker Change #154: We're well under budget.
Speaker Change #164: Frankly for 2024 and incredibly well financed.
Speaker Change #164: Through into 2027.
Speaker Change #164: Frankly based on the cash we have on hand at just under 1 billion Canadian.
Speaker Change #164: As we say.
Speaker Change #165: Alright, thanks, guys.
Greg: Thanks, Greg.
Speaker Change #190: Your next question comes from Rs <unk>.
Scotiabank: <unk> from Scotiabank. Please go ahead.
Speaker Change #169: Hi, good morning, two questions if I could the first one.
Orest Waukodo: Two questions, if I could. The first one, Leigh, your comments about having financing in place in order to show the government or give the government confidence in your ability to build the project, does that suggest that you plan to confirm all of the debt financing as well prior to the permanent financing? Yeah, prior to or just after federal permitting, the debt, you know, the way it works is that the equity has to be spent first. So, um... It's not a... [inaudible] So, um...
Speaker Change #171: Your comments about having financing in place in order to show the couple of it.
Speaker Change #168: The government confidence in your ability to build the project.
Speaker Change #188: That suggests that you plan to confirm all of the debt financing as well prior to permitting.
Speaker Change #187: Prior or just at the federal permitting the debt the way.
Speaker Change #179: Works is that the equity has to be spent first.
Speaker Change #179: So.
Speaker Change #179:
Speaker Change #179: It's not a.
Speaker Change #168: Given that we will arrange that prior to federal permitting or just after waking on it now but the debt is obviously subject to federal.
Speaker Change #168: Permitting approval and getting into construction and after you've spent the equity.
Speaker Change #168: So.
Speaker Change #168:
Speaker Change #168: I wouldn't say, it's contingent on it but it's a function of it.
Leigh Robert Curyer: I wouldn't say it's contingent on it, but it's functional. Okay, and then, alternatively, just on the inventory and the purchase of physical goods, I think that surprised pretty much all of us in terms of that transaction. Your comments about you could add more are there, like when I look at what Cameco carries from an inventory perspective of 10 to 12 million pounds, that's about a third of their annual sales. Is that ultimately where you think you might have to get to in terms of volume on hand in terms of being able to sign offtake agreements down the road? No, look, they're completely different operations with completely different technical risks. So, as you're aware, Cameco's mines are in the sandstone, which requires freezing in order to keep the cavities open. We're in the hard rock genre.
Speaker Change #173: Okay, and then alternatively, just on the inventory and the purchase of physical I think that surprised pretty much all of us in terms of that transaction.
Speaker Change #210: Your comments about you cut out or is there like what I look at what chemical carriers from a regulatory perspective 10 to 12 million pounds. That's about a third of their annual sales is that ultimately where you think you might have to get to in terms of.
Speaker Change #173: Volume on has in terms of.
Speaker Change #206: Being able to sign offtake agreements down the road.
Speaker Change #193: No look they are completely different operations with completely different technical risks.
Speaker Change #191: As you're aware <unk> minds.
Speaker Change #178: Sandson cause phrasing.
Kate: Kate the cavities open we're in the hard rock.
Leigh Robert Curyer: We drill a cavity into the hard rock, and it'll be open for 1,000 years. So we have the flexibility to ramp production up and ramp production relative to market conditions at that time. We can afford having a far lower level of inventory on hand at any particular time, but during commissioning, having 2.7 million pounds on hand is very, very astute. It is a quantity which we have targeted and have acquired, with a very sound technical and economic basis behind it, to help launch the company into production at that time.
Kate: We drill a cavity into the hard rock kind of reopened for a thousand years say.
Kate: We had the flexibility to ramp production up and ramp production.
Speaker Change #211: Relative to market conditions at that time.
Speaker Change #211: We can afford having.
Kate: Lower level of inventory on hand at any particular time, but during commissioning.
Kate: Having $2 7 million pounds on hand is very very steep so.
Kate:
Speaker Change #175: It is.
Speaker Change #175: Ah quantity, which we had targeted.
Speaker Change #197: And have acquired.
Speaker Change #180: The very.
Speaker Change #182: Very sound technical and economic basis behind it too.
Speaker Change #195: To help.
Speaker Change #183: Help launch the company into production at that time.
Leigh Robert Curyer: So, you know, Cameco's inventory, you know, up until a couple of years ago, was always over 30 million pounds, representing entire years of production. I think that just goes to show the availability of supplies and fragility of supply, of mine supplies, is very, very high at the moment, and so. I think the, whilst it may have surprised people.
Speaker Change #183: Yes.
Speaker Change #183: Kevin.
Speaker Change #183: Inventory up until a couple of years ago was always over 30 million pounds representing.
Speaker Change #185: And Todd Yes.
Speaker Change #182: Production.
Speaker Change #203: I think that just goes to show the availability of supplies and fragility of supply is a month's supply is very very high at the moment and so.
Speaker Change #184: I think the wall Street might have surprised people.
Leigh Robert Curyer: It is a function of a company going into production, I think, in light of the market circumstances, which we have read very, very accurately since 2011. The astute nature and timing of that purchase will materialize in the near future. So two things, I definitely wouldn't read any parallels or correlations between the percent of anyone else's production profile and how much inventory they hold and draw a correlation to, therefore, how much we need to hold or anything. As I said, we don't need to have any pounds to get a contract. It's not like it's a requirement to get a contract.
Speaker Change #184: It is a function of the of the company going into production I think in light of the market circumstances.
Speaker Change #184: We have read very very accurately since 2011.
Speaker Change #184: The the nature and timing of that that purchase will materialize.
Speaker Change #184: In the in the near future yes.
Speaker Change #184: Yes.
Speaker Change #184: <unk>.
Speaker Change #209: So two things I wonder if it definitely wouldn't read.
Speaker Change #199: Any parallels or correlations between the percent of anyone else's production profile and how much inventory they hold and draw a correlation to therefore, how much we need to hold or anything as I said, we don't need to have any pounds to get a contract. It's not like it's a requirement to get a contract it's about optimizing.
Travis G. McPherson: It's about optimizing what those contracts look like, and we feel very comfortable with, again, this insurance policy, the amount that we have now to provide that to, therefore, optimize and maximize the value that those contracts that we do sign now represent, again, all the pounds that we have. But I guess this 2.7 million pounds really makes a difference at the end of the day, given it's, call it 10% of your annual sales. Is that sufficient to actually move the needle with respect to giving utilities confidence? Yes.
Speaker Change #201: What those contracts look like and we feel very comfortable with again this insurance policy would the amount that we have now.
Speaker Change #201: To provide that to therefore optimize.
Speaker Change #201: And maximize the value that those contracts that we do sign now.
Speaker Change #201: Represent again, the all the bonds that we have in the ground.
Speaker Change #213: But I guess, there's 2.7 million pounds really make a difference but at the end of the day given its call. It 10% of your annual sales is that sufficient to actually move the needle with respect to giving utilities confidence.
Speaker Change #213: Yes.
Orest Waukodo: Yeah, because the concern is not around once you're ramped up. Look, we're very confident in our ability to ramp up our minds. This isn't about our view on, you know, production, startup risks or anything. This is just a perception that utilities could have or have around any new idea starting up that there are risks associated with that. And so having 2.7 million pounds, just again, it's an insurance policy, like an insurance policy you don't buy that and cover all the value of whatever you're insuring.
Speaker Change #201: Yes, because the concern is not around once you ramped up the.
Speaker Change #215: Look we're very confident in our ability to ramp up our mined this isn't about her.
Speaker Change #201: <unk>.
Speaker Change #201: Our view on production.
Speaker Change #193: Production startup risks or anything this is just a perception that utilities could have or have around any new mines, starting up that there are risks associated with that and so having $2 7 million pounds. Just again, it's an insurance policy life insurance policy.
Speaker Change #195: By that I can cover all of the value of whatever you're ensuring this is about just that small window of time say three to six months. When the mine is ramping up for the first bit and just providing a bit of insurance around that to therefore again optimize the value of these contracts.
Orest Waukodo: This is about just that small window of time, say three to six months, when the mine's ramping up for the first bit, and just providing a bit of insurance around that to, therefore, optimize the value of these contracts. Thank you very much. Your next question comes from Graham Tanaka from Tanaka Capital Management. Please go ahead.
Speaker Change #200: Okay. Thank you very much.
Speaker Change #231: Your next question comes from Graham Tanaka Tanaka Capital Management. Please go ahead, yes, yes. Thank you.
Graham Yoshio Tanaka: Yeah, yeah, thank you. So, trying to tie this all together, the establishment of inventory, I understand, is to help you stage, create an inventory in hand, and allow you to negotiate on stronger terms with utilities with greater confidence with inventory in hand, even as you're starting up the mines. So trying to understand what your timing was on purchasing at current prices and financing it with Quasi-Equity with a convertible. What were your alternatives? You could have waited.
Graham Yoshio Tanaka: Wanted to understand so trying to tie this all together.
Graham Yoshio Tanaka: Establishing a inventory I understand is to help you stage.
Speaker Change #204: Create an inventory in hand.
Speaker Change #204: Allow you to negotiate on stronger terms with utilities with greater confidence with the inventory and even as you're starting up the minds.
Speaker Change #204: The mines so.
Speaker Change #204: Trying to understand what your timing was on purchasing at current prices and and the.
Speaker Change #204: Answering it with.
Speaker Change #204: Quasi equity with a convertible.
Speaker Change #221: What are your alternatives you could have waited you could still wait and do this a year from now.
Leigh Robert Curyer: You could still wait and do this a year from now, or you could have done it a year ago. I'm just curious about your timing and what the current price and your outlook for prices in the future have to do with your timing. Thank you.
Speaker Change #204: You could have done it a year ago I'm, just curious about your timing and what the current price and your outlook for prices in the future has to do with your timing. Thank you.
Leigh Robert Curyer: Thanks, Graham. As in the call, it specifically relates to the fact that the contracting cycle for 2028 and beyond is now, that that is what the utilities are focused on, and so when you're having those discussions about offtake in 2020 and beyond, it's relevant to buy the pounds now.
Speaker Change #223: Sure. Thanks, Thanks scribe it as.
Speaker Change #205: As in the coal it specifically relates to the fact that the contracting cycle for 2020 and beyond is now.
Speaker Change #229: That is what the utility.
Speaker Change #214: <unk> focused on and then say when you're having those discussions for uptake in.
Speaker Change #214: In 2020 and beyond.
Speaker Change #204: It's it's relevant to buy the pounds now so yes, we could have bought it earlier, if we were just making a trade because.
Leigh Robert Curyer: So yes, we could have bought it earlier if we were just making a trade because we're always very confident the uranium price is going to be a lot higher. And we think it's going significantly higher in the future, at $92.50. It was, at the time we bought it, 93.85 on the spot market.
Speaker Change #204: Always very confident the uranium price.
Speaker Change #204: What's going a lot higher and we think it's going at a significantly higher.
Speaker Change #204:
Speaker Change #204: In the future at $92 50.
Speaker Change #204: It was at the time, we bought it 90 <unk> thoughts on the spot market.
Leigh Robert Curyer: 100,000 pound purchases over the last six months have resulted in, at times, greater than $1.50 increase in the spot price. So if we'd bought those 2.7 million pounds on the spot market, the price probably would have been driven up to over $120 a pound U.S. based on those past transactions over the last... We have bought them extremely astutely. With respect to the financing of it in issuing a convertible debenture, it was at a 30% premium to our five-day VWAP, only $14.80 Canadian, so, you know, incredibly good use of an instrument which is on identical terms to the one we've done with CEF very successfully, QRC very successfully, and more recently with Sol Patterson's out of Australia. It's not like your typical convertible; it's a bit of a hybrid that we developed with Warren Gilman.
Speaker Change #204: 100000 pounds purchases over the last six months has resulted in at times greater than a $1 50 increase in the spot price.
Speaker Change #204: We bought those $2 7 million pounds on the spot market the price probably was about driven up to over $120.
Speaker Change #204: A pound U S based on those Pos transactions over the last.
Speaker Change #217: Six months, so with both of them extremely.
Speaker Change #207: With respect to the financing of it in issuing a convertible debenture it was at a 30% premium.
Speaker Change #207: Two a five day they wet.
Speaker Change #207: Yeah.
Speaker Change #207: Late $14 Canadian.
Speaker Change #207: So.
Speaker Change #207: Credibly.
Speaker Change #208: Good use of an instrument, which is on identical terms to the one with them, we say very successfully to us a very successfully and more recently with sole patterson's out of Australia, we're very.
Speaker Change #208: It's not like your typical convertible it's bit of a hybrid that we developed with the with Warren Gilman.
Leigh Robert Curyer: And it works very, very well for us and has worked very, very well in the past. And when it comes to voting alignment, and it's with one party, we know exactly what we're dealing with, and it wasn't a drain on the current cash balance. The other aspect too, like we're very, very cost conscious; we avoided a broker fee of $10 million US in implementing that convertible as well. So it's a very successful transaction and it was actually, whilst it was a 30-day, a 30% premium to our five-day VWAP at the time. It was also a 33% premium to the raise we did in Australia only seven days before.
Speaker Change #208: And it works very very well for US and has worked very very well in the past and when it comes with voting alignment and and it's.
Speaker Change #212: One party.
Speaker Change #242: Exactly what we're dealing with.
Speaker Change #208: <unk>.
Speaker Change #208: And it wasn't a drain on the current cash.
Speaker Change #208: Balance.
Speaker Change #208: The other aspects like we're very very cost conscious.
Speaker Change #208: We avoided the broker sales of $10 billion U S in implementing that convertible as well so.
Speaker Change #208:
Speaker Change #208: It's a very successful transaction and it's actually well sort of the 30 day.
Speaker Change #208: A 30% premium to al.
Speaker Change #208: Bob Davie walk at the time. It was also a 33% premium to the raise we did in Australia only seven days beforehand. So.
Speaker Change #208: That speaks for itself in terms of.
Speaker Change #208: The strength of that financing.
Leigh Robert Curyer: So that speaks for itself in terms of the strength of that financing. Well, I understand, and thank you very much for that explanation. I'm just curious what the potential is for future equity raises should you deem the market attractive relative to what your needs might be for future expansion, whether it be for exploration or for one or two of your other Patterson Corridor or other opportunities become very ripe for development. I hope I'm not getting too far ahead of myself here, but what could be your additional capital requirements going forward, or is this enough now to take you through full production as well as continuing exploration? Thank you. This cash balance of just under, of cash and inventory, just under a billion dollars Canadian plus the debt expressions of interest, I think speaks for itself.
Speaker Change #208: Well.
Speaker Change #219: I understand and thank you very much for that explanation.
Speaker Change #220: Just curious.
Speaker Change #224: What the potential is for future equity raises should you deem the market attractive realm.
Speaker Change #226: Relative to what your needs might be on future expansion, whether it be for exploration.
Speaker Change #232: One or two of your other patterson quarter or are there other opportunities.
Speaker Change #208: Become very ripe for development.
Speaker Change #216: I hope I'm not getting too far ahead of myself here, but what could be your additional capital requirements going forward or is this enough now to take you through a full production as well as continuing exploration. Thank you.
Speaker Change #227: This cash balance of just under a passion and inventory just under $1 billion Canadian plus with the debt expressions of interest.
Leigh Robert Curyer: It's far in excess of the capex that we need to take Group 1 into production and receive the federal permit. This new discovery would be a completely exclusive aspect, which we're still in the very early days of understanding. It would be amazing, frankly, to have another arrow in our hand, and if we do so, and if that's what eventuates, we'll navigate that financing accordingly, I think. Whilst that may have shocked some investors, the close proximity of both of them, I hope today has explained the rationale behind it, which reflects a company that is taking a mine into production.
Speaker Change #230: I think speaks for itself, but it's far in excess of the Capex that we need to take grew quite into production, we're saving the federal permit.
Speaker Change #232: This new discovery would be yes.
Speaker Change #216: Completely exclusive.
Speaker Change #216: Aspect, which was still in the very early days of understanding.
Speaker Change #208: Yeah.
Speaker Change #208: It would be amazing frankly to have another arrow in our hands.
Speaker Change #208: And it's doing site.
Speaker Change #208: That's what our bench whites will will navigate that financing accordingly, I think.
Speaker Change #208: Yes.
Speaker Change #217: That might have shocked some investors the close proximity of Av.
Speaker Change #217: I hope today has explained the rationale behind it which reflects a company which is taking them on.
Speaker Change #217: And into production.
Leigh Robert Curyer: I've just asked everyone to look at our history of financing along the way. We've done it in the least diluted manner every time, in a very cost-efficient manner every time in the context of the market, with very small discounts.
Speaker Change #217: Just ask everyone to look at our history of financing.
Speaker Change #217: Along the way we've done it in the most lace dilutive manner every time at a very cost efficient manner.
Speaker Change #217: Every time in the context of the market very small discounts.
Leigh Robert Curyer: We've done it in a very cost-efficient manner every time in the context of the market, at the spot share price at the time, or at 30% premiums through the use of convertible instruments. And whenever we do raise money, and if we do have another arrow in our hands, it'll be the same discipline and approach that we've always exhibited. [inaudible] So in the short term, yeah, we are very, very well covered between what we have on hand plus the debt that we're working on to more than adequately get Arrow into production.
Speaker Change #217: To the share price at the time or at 30% premiums.
Speaker Change #217: Through the use of the convertible and whenever we do raise money and we do have another arrow in our hands it'll be the same discipline and approach that weibo has exhibited.
Speaker Change #217: But to.
Speaker Change #217: So in that in the short term yeah, we are very very well covered between what we have on hand, plus the <unk>.
Speaker Change #217: That that were working on two more than adequately get arrow.
Speaker Change #221: Arrow into production and Graham if we <unk>.
Leigh Robert Curyer: Yeah, and Graham, if we, you know, your world, which is a very exciting world where, you know, this new discovery turns into the other Arrow, then what we have in terms of the plans, the CapEx, and all of that to build Arrow will stay what it is. You know, something new that comes along that we discover and looks like it can go into our minds and everything that will likely come into our minds later in life.
Speaker Change #225: Your world, which is a very exciting world.
Speaker Change #225: Where this new discovery turns into the other aero.
Speaker Change #225: What we have in terms of the plan for Capex and all of that to build arrow will stay what it is.
Speaker Change #225: Something new that comes along that we discover and it looks like it can go into our mind everything about will likely come in lighter than the mine life. So it's not like.
Speaker Change #235: Sorry, if this turns out to be another arrow.
Travis G. McPherson: So it's not like, you know, say, this turns out to be another era that we. I wouldn't think of it, or there's no, yeah, there's no way I'm thinking of it where, you know, all of a sudden, the CapEx is, you know, doubled because we made a new discovery or something like that. It's really would come in later in the mine life, and obviously all the infrastructure built to develop the era. So the timing of any future exploration in advance of even developing a second or third mine, should you be successful, will come when you are generating surplus cash flows anyway from the Rook One project, correct? Exactly, Graham.
Speaker Change #235: I wouldn't think of it or Theres no yeah, there's no way I'm thinking of it where all of a sudden the capex has doubled because we've got a new discovery of something like that or it's really.
Speaker Change #235: It would come in later in the mine life and obviously all of the infrastructure would be built to develop era.
Speaker Change #225: So you so the timing of any future.
Speaker Change #225: Exploration.
Speaker Change #225: In advance of even developing a second or a third mine should you be successful.
Speaker Change #236: Would come when you are generating surplus cash flows anyway from the from the Brooklyn project correct.
Greg: Exactly Greg look I think there's the.
Leigh Robert Curyer: I think the geological evidence suggests we didn't hit the big mother load on the very first drill hole back in 2014. This new discovery would suggest we've got a lot more mineralization on our hands. We've actually got significantly more mineralisation at the bottom of Arrow and in and around Arrow that we haven't fully defined on our balance sheet. But 3.5 kilometres away, we'll probably come in during the end of the Arrow mine light.
Greg: The geological evidence suggests.
Greg: We didn't hit the big mother load on the very first drill held back in 2014.
Speaker Change #225: This new discovery would suggest we've got.
Speaker Change #225: A lot more mineralization on our hands, we've actually got significantly more mineralization at the bottom of that.
Speaker Change #225: And in and around areas that we haven't fully.
Speaker Change #225: Defiance.
Speaker Change #225: Now on our balance sheet.
Speaker Change #225: But three five kilometers away.
Speaker Change #225: We will come into the probably most slightly coming during the end of the arrow Mon lot will be fully funded from the cash that's generated out of <unk>.
Leigh Robert Curyer: We'll be fully funded from the cash that's generated out of Arrow, so I think your perspective on no future equity requirements is very, very real. That's great.
Speaker Change #243: I think your your perspective on.
Speaker Change #225: No.
Speaker Change #225: <unk> equity requirement seeds is very very.
Speaker Change #225: Really.
Speaker Change #239: That's great.
Graham Yoshio Tanaka: Changing the subject a little bit, I just got some industry feedback that there are some more traditional suppliers in the industry that are not, that confident, shall we say, that a... pricing of long-term contracts at market prices, quote-unquote, would be unacceptable to many utilities. So I'm just curious, in your discussions with utilities, how many utilities have you had discussions with that are leading to your being confident that you can actually sign multi-year contracts from a new mine that are going to be priced at market? And what is the at market going to be a function of, you know, one or two or three market, you know, spot market entities or what? How are you going to set up that marketplace?
Speaker Change #239: Changing subject a little bit I, just get some <unk>.
Speaker Change #239: Industry feedback that there were some more traditional.
Speaker Change #225: Suppliers in the industry that are not.
Speaker Change #225: That confidence shall we say that a.
Speaker Change #225: Pricing of long term contracts at.
Speaker Change #225: At market prices quote unquote would be.
Speaker Change #237: Acceptable too many utilities, so I'm just curious in your discussions with utilities, how many utilities have you had discussions with that.
Speaker Change #237: Leading to.
Speaker Change #241: You're being confident that you can actually signed multi year contracts.
Speaker Change #241: From a new mine that debt or it could be priced at market and what is the at market is going to be a function of.
Speaker Change #241: One or two or three market.
Speaker Change #237: No.
Speaker Change #237: Market.
Speaker Change #247: Entities or what how are you going to set that marketplace. Thanks.
Speaker Change #244: Yeah, well, Greg just just frankly, you've heard that from other.
Leigh Robert Curyer: Thanks. Yeah, well, Graham, just frankly, you've heard that from other companies in the sector, be it other companies or anonymous people on social media, and only based on our discussions with utilities. So everyone's got an opinion. It reminds me of Fortescue Metals Group back in the mid-2000s, developing a mind between two majors. A lot of comments about, well, you can't do this, you can't do that.
Speaker Change #237: Companies in this in the safe bet.
Speaker Change #237: Other companies or anonymous people on on social media.
Speaker Change #237: Yes.
Speaker Change #245: And only dealing with based on discussions with utilities.
Speaker Change #245: Everyone's got an opinion.
Speaker Change #225: It reminds me of.
Speaker Change #225: Fortescue metals group.
Speaker Change #225: In the mid two thousands.
Speaker Change #225: Developing a mine in between two majors.
Speaker Change #225: A lot of comments about well you can't do this you can't do that analysts, saying that though lay down on the railway tracks because they will never be all.
Leigh Robert Curyer: Analysts say that they'll lie down on the railway tracks because it'll never be all coming out from their minds. That happens, and I would just encourage everyone to focus on the actual facts as we present them. And we present the facts in full compliance with the rules and regulations under the securities legislation. That is evident, we're aware of it, but we're only going to continue to do so in principle, and I'm telling you what our discussions are indicating. And that is what we're doing. But every situation is different. Our mind is completely different from whatever existed before.
Speaker Change #225: Coming out from from them on.
Speaker Change #225:
Speaker Change #225: That happens.
Speaker Change #225: And I would just encourage everyone.
Speaker Change #225: To focus on the actual facts as we present them.
Speaker Change #225: And we present the facts.
Speaker Change #225: Without with full compliance with the rules and regulations under the securities legislation side.
Speaker Change #225:
Speaker Change #225: The.
Speaker Change #225: That is evident.
Speaker Change #225: We're aware of it but we're only going to continue to do in fact and on telling you what our discussions are indicating.
Speaker Change #225: And that is what we're doing but yes every situation is different and mine is completely different whatever has existed before it's going to follow the technical risk.
Leigh Robert Curyer: It's got a far lower technical risk, and hence, it provides greater flexibility in terms of contracting, and the contracting will be different. Every mine's contracts reflect its technical risk. [inaudible] Moving forward into the future, and everyone's aware that the cost of pounds for a utility is such a small percentage of their overall operating costs. So the need...
Speaker Change #225: And hence it provides greater flexibility in terms of.
Speaker Change #225: Contracting in the contracting will be different every mines contracts reflect this technical risk.
Speaker Change #225: And to have a low and.
Speaker Change #225: And so we just labor ageing that so if it's not common or hasn't been done in the past so be it.
Speaker Change #225: Thereabout.
Speaker Change #225: Moving forward into the future.
Speaker Change #225: And everyone's aware that the cost of pounds.
Speaker Change #225:
Speaker Change #225: For a utility is such a small percentage of their overall operating costs. So the ne.
Travis G. McPherson: In that sense, it is less weighted with oil coming from a project such as Ruk-One. Yeah, and Graham, I think there are lots of other future suppliers, which the world needs a lot more, future suppliers coming to production that are also undertaking this type of strategy, which I think is helpful in moving the market and evolving the uranium market into something that has more transparency and liquidity. I think that's a good thing.
Speaker Change #225: In that sense.
Speaker Change #225: Is.
Speaker Change #225: Is less weighted with the with all coming from.
Speaker Change #225: Projects such as <unk>.
Graham Yoshio Tanaka: Yes, Graham I think theres lots of other future suppliers into the world needs a lot more future suppliers come into production that are are also undertaking this type of a strategy, which I think it is helpful.
Speaker Change #225: In moving the market evolving the uranium market into something that has more transparency and liquidity I think that's a good thing and.
Travis G. McPherson: And, Again, for us, I think we've also been clear that we're about maximizing the value of every pound that's produced. That's what we're about. And to us, that means understanding our technical risks, understanding our resulting cost profile, which is industry-leading and low. And so we're able to confidently and prudently expose ourselves or stakeholders or shareholders to those optimal outcomes in a rising price environment and, subsequently, be completely protected in a world where uranium prices go down for whatever reason, both because of our cost structure and also because we will hold supply back then and we have the ability to So that is what we're targeting, what we're about, and I think it is undeniably in the best interest of all of our shareholders and stakeholders. Just another completely different subject.
Speaker Change #225: Again for US I think we've also been clear that.
Speaker Change #225: We're about maximizing the value of every pound that is produced and so.
Speaker Change #225: That's what we're about.
Speaker Change #225: To us that means yes.
Speaker Change #225:
Speaker Change #225: Ending our technical risks understanding our resulting cost profile, which is industry, leading and low and so we're able to confidently and prudently.
Speaker Change #225: Expose ourselves our stakeholders, our shareholders to those optimal outcomes in a rising price environment and subsequently be completely protected.
Speaker Change #225: In a world where the uranium prices go down for whatever reason, both because of our cost structure.
Speaker Change #225: Also because we will hold supply back then and we have the ability to ramp production up and down very quickly because of the technical settings. So.
Speaker Change #225: That is what we are.
Speaker Change #225: Targeting what we're about and I think undeniably is in the best interest of.
Speaker Change #225: All of our shareholders and stakeholders.
Speaker Change #225: Great.
Graham Yoshio Tanaka: The debt financing, what do you anticipate roughly to be the debt, the total debt capital raised, and what kind of interest rates are you assuming in your projections? You know, we've seen a rise in the yield curve. I'm just curious, you know, you're having discussions with the debt providers already, I'm sure, so I'm just wondering what kind of range that would be and to what extent that might have an influence on profitability going forward. Thanks. Yeah, we currently have US $1.4 billion in debt. [inaudible] The debt decision is more driven by the structure, who it is with, and not having excessive penalties for early repayment.
Speaker Change #225: Just another completely different subject.
Speaker Change #263: The debt financing, what do you envision roughly to be the debt total debt capital raise and what kind of interest rates are you assuming in your projections, we've seen a rise in the yield curve I'm just curious.
Speaker Change #258: You're having discussions with the debt providers already I'm sure. So I'm, just wondering what kind of range that would be and to what extent that might have an influence on profitability going forward. Thanks.
Speaker Change #281: Yeah. We currently have one 4 billion.
Speaker Change #260: <unk> debt expressions.
Speaker Change #284: Of interest the rights that we're experiencing.
Speaker Change #286: <unk> commercial rights that you were saying Graham but.
Speaker Change #260: Yes.
Speaker Change #273: We don't spend an extra dollar then we have to but the interest coupon on the debt considering you'll be over such a short period of time.
Speaker Change #260: Being material to the company.
Speaker Change #267: That decision is more driven by the structure who are these with.
Speaker Change #267: And the.
Speaker Change #267: Having excessive penalties for early repayment.
Leigh Robert Curyer: So that's our approach and our thinking around it. And so I know that you're talking about debt terms not being long because the cash flows from the mine production will be able to pay off the debt pretty quickly. That's correct, yes. Thank you very much.
Speaker Change #267: That's our approach and our thinking around it.
Speaker Change #260: And so we know that.
Speaker Change #260: We're talking about debt terms not being long because the cash flows from the mine production will be able to pay off the debt pretty quickly.
Speaker Change #260: Correct.
Speaker Change #260: Correct.
Speaker Change #260: Yes.
Speaker Change #265: Thank you very much good luck.
Leigh Robert Curyer: Good luck. Thank you, Graham. Thanks. Your next question comes from Fred Berliner, a private investor. Please go ahead. Good morning.
Speaker Change #287: Thank you Greg Thanks Graham.
Speaker Change #276: Your next question comes from Fred Berliner Private Investor. Please go ahead.
Fred Berliner: Good morning.
Fred Berliner: I am concerned that the whole complexion of the company has changed. You had a vast landholding of uranium, and now you're going into the mining business, which is fraught with cost, and fraught with unpleasant surprises, and you are now debt-laden. I don't understand why at this point you would be gambling on the price of uranium when you can just sit there with a product in the ground and watch it rise. So please explain to me how you, I mean, going into the mining business is just so difficult, and for you to cross that divide, you have to have real expertise and experience, and I don't know if you have it. So, please enlighten me.
Fred Berliner: I am concerned.
Fred Berliner: The whole complexion of the company has changed you had a.
Speaker Change #270: Dash land holding.
Speaker Change #264: Uranium and now youre going into the mining business, which is fraught with cost fraught with unpleasant surprises.
Speaker Change #275: You will know that late.
Speaker Change #279: I don't understand.
Speaker Change #264: Why at this point, we would be gambling on the price of uranium when you can just sit there with a product in the ground and what should rights. So please explain to me how you.
Speaker Change #264: I mean going into the mining business is just so difficult.
Speaker Change #271: And for you.
Speaker Change #269: <unk> that divide you have to have real expertise and experience.
Speaker Change #282: No if you got it.
Speaker Change #269: So please enlighten me.
Speaker Change #278: Yeah, Good morning, Fred.
Leigh Robert Curyer: Yeah, and good morning, Fred. Look, all the valid risks of mining, you know, mining is not a simple endeavor, but everyone at the company has been in the business from very large mining companies to the smallest. I would say we faced far greater challenges earlier on in our incorporation back in 2011, with actually just trying to find a discovery in the first place than we have in front of us. You know, when we went out to the other side of the basin, we were laughed at by some of the industry leaders saying, "You'll never find economic mineralization out there." Well, we happened to have discovered the largest and most economically and environmentally elite mineralization that exists on the planet. We then got told, you know, you'll never get a permit.
Speaker Change #283: Oh valid risks of mining Monty is not.
Speaker Change #269: A simple.
Speaker Change #269: Simple endeavor, but.
Speaker Change #269: Everyone at the company is waning in the business from very large mining companies to the smallest then.
Speaker Change #269: I would say with fist far greater challenges.
Speaker Change #269: Earlier on you know incorporation back in 2011, we've actually just trying to find the discovery.
Speaker Change #269: In the first place than what we have in front of us.
Speaker Change #269: When we went out to the other side of the basin, we'll lap that by some of the industry.
Speaker Change #285: <unk> sang you'll never fun economic mineralization happening, while we happened to have discovered.
Speaker Change #269: The largest and most economic.
Speaker Change #269: Environmentally late mineralization.
Speaker Change #269: That exists on the planet.
Speaker Change #269: We then got Tau we.
Speaker Change #269: Never get a permit well, we got the provincial permit and the and the.
Leigh Robert Curyer: Well, we got the provincial permit in the quickest time ever, and the first one in the last 20 years, and the federal permit will be no different. We have assembled the best of the best into the company and will continue to do so. We have partnerships with extraordinary organizations where we are going to be introducing additional innovation and optimizing efficiency and safety. So yeah, you're quite right. Mining is a challenging game; there is no doubt about that.
Quickest on ever and the first one in the last 20 years in the federal payment will be no different.
Speaker Change #269: We have assembled assembled the best of the best.
Speaker Change #269: Into the company and we'll continue to do so.
Speaker Change #269: We had a.
Speaker Change #269: Partnerships with <unk>.
Speaker Change #269: Extraordinary organizations, where we're going to be introducing additional innovation and optimizing.
Speaker Change #269: Efficiency and safety.
Speaker Change #288: Okay, you're quite right mining is a challenging guy.
Speaker Change #288: About it but tracked.
Leigh Robert Curyer: But our track record has demonstrated clearly that we understand exactly what we're doing, the risks and the opportunities, and we approach it in a manner which employs fact-based objectivity from all the relevant disciplines required to be successful. And so, the permitting aspect. Even when we're in production in the future, when we look back, what was the biggest risk? It was always going to be around the permit, because it's got the most variables and the largest number of stakeholders involved, but we've already got the provincial permit, and the federal permit is in the final stages. We look forward to that permit and getting just into construction. We're then narrowed down to just one aspect. And we love nothing more than having everything in our control.
Speaker Change #288: <unk> track record has.
Speaker Change #288: Demonstrated clearly that we understand exactly what were doing the risks and the opportunities.
Speaker Change #288: And we approach it in a manner, which employees fact based objectivity.
Speaker Change #290: From all the relevant disciplines required to be successful and so.
Speaker Change #288: The permitting aspect.
Speaker Change #288: Even when we're in production.
Speaker Change #288: And in the future when we look back what was the biggest risk it was always going to be around the Permian.
Speaker Change #288: Because it has got the most variables and the most variable.
Speaker Change #288: Largest number of stakeholders involved.
Speaker Change #291: We've already got the provincial permit and the federal permit is in the final stages and we.
Speaker Change #292: We look forward to that permit and getting just into construction within narrowed down to just one aspect.
Speaker Change #292: And we love nothing more than having everything in our control and construction will predominantly be 100% in our control. So.
Leigh Robert Curyer: And construction will predominantly be 100% in our control. So, a very exciting time for investors. We're at a real inflection point.
Speaker Change #293: It's a very exciting time for investors, where at a real inflection point.
Leigh Robert Curyer: And the moment we receive that federal permit, we'll be constructing the mine and accelerating towards cash flows, which will take us into a top 10 mining company worldwide. So whilst you may not have seen NexGen as a brand, Construct a Mind, the people within our organization have in their previous roles, and so we're very excited and energised more than ever for these next phases. Yeah, Fred, I might just add that it's important to put in context that while this all sounds big, like a big mine going to produce lots of uranium, you're talking, if this was a gold mine, you wouldn't even hear about it in terms of the tons that we're moving a day.
Speaker Change #294: And the moment, we received that federal permit will be constructing them on an accelerating towards quechuas, which would take us into a top 10 Mani company worldwide. So whilst you might notice, saying nextgen as a brand.
Speaker Change #295: Construct demand.
Speaker Change #292: The people within our organization has in the previous.
Speaker Change #292: Rose.
Speaker Change #292: And so.
Speaker Change #292: Yes.
Speaker Change #296: We're very excited and energized more than ever these next slides.
Fred Berliner: And Fred I might just add too I think it's important to put in context that this well. This all sounds big like a big mine going to produce lots of uranium you're talking if this was a goldmine you wouldn't have even heard about it in terms of the tons that we're moving a day like it's a very small physical mine all conventional and so yeah look if were.
Leigh Robert Curyer: Like, it's a very small, physical mine, all conventional. And so, yeah, look, if we're developing a very complex, you know, mine that's very large or complex, as I said, yeah, I mean, on a risk-adjusted basis, you got to consider those things.
Speaker Change #297: <unk> are very complex.
Speaker Change #298: Mine, it's very large or complex as I said.
Speaker Change #298: Yes.
Fred: On a risk adjusted basis, you got to consider those things, but for US we're building a very tiny little conventional underground gold mining.
Travis G. McPherson: But for us, we're building a very tiny little conventional underground gold mine in an effectively granite, hard rock setting using long hole stoping and conventional processing at surface. Except the difference, obviously, being the product that we're producing is extremely valuable and extremely strategic because it's actually an energy battle in the green energy transition. So, yeah, mining's not easy, but the size of the prize here is enormous. Your next question comes from Reed Rubin from Private Investor. Please go ahead. Good morning.
Speaker Change #300: Secondly, granite hard rock setting.
Speaker Change #301: Using long haul stoping and conventional processing at surface.
Speaker Change #302: Except the difference obviously being the product that we're producing is extremely valuable and extremely strategic because it's actually an energy metal in the green energy transition so.
Speaker Change #301: Yeah, Marty is not easy, but the size of the prize here is enormous.
Speaker Change #301: Your next question comes from Reed Rubin private Investor. Please go ahead.
Reed Rubin: On the mill, what is the budget for the completion of the mill? And what will the annual capacity be? And let me point out, as far as I know, there's only one mill in the lower 48.
Reed Rubin: Good morning on the mill what is the budget for the completion of the mill and what will the annual capacity.
Reed Rubin: And let me point out there as far as I know, there's only one mill in the lower 48.
Speaker Change #301: Yeah.
Leigh Robert Curyer: Yeah, so as per the feasibility study of 2021, and hello Reid, it's been a while since we spoke pre-COVID, so appreciate the support throughout here. Yeah, so as per the feasibility study of 2021, the mill represented approximately a third of their overall capex. That will need to be inflation adjusted, and we'll provide those numbers at or around the end of Q2. There is one. And we will be building a mill which has a capacity of 30 million pounds per annum. 30 mil per annum, yes.
Reed Rubin: As per the feasibility study of 2021.
Reed Rubin: Hello <unk>.
Speaker Change #304: It's been a while since we've spoken pre pre COVID-19. So I appreciate your support throughout here.
Speaker Change #307: Yes, so as part of the feasibility study in 2021 the mill represented.
Speaker Change #303: Approximately a third of their outgrow.
Speaker Change #303: Capex.
Speaker Change #310: That's under yet.
Speaker Change #303: That will make the inflation adjusted.
Speaker Change #309: And we will.
Speaker Change #308: Those numbers at.
Speaker Change #306: Or around the end of Q2.
Speaker Change #306: There is one.
Speaker Change #306: Yeah.
Speaker Change #311: And we will be building, a mill, which has a capacity of 30 million pounds per annum output.
Speaker Change #324: 30000 per annum, yes.
Speaker Change #311: Yes.
Speaker Change #312: That's a fabulous mill, thank you very much.
Reed Rubin: That's a fabulous meal. Thank you very much. Thank you, Greg. And there are no further questions at this time. I will turn the call back over to the CEO, Leigh, for closing remarks. Thank you, Julie. Yeah, so I thank everyone for their time and interest and questions on today's call. We are incredibly excited about the balance of 2024 and, as I mentioned, this inflection point as we look to conclude the federal permitting process with the CNSC.
Greg: Thank you Greg.
Greg: And there are no further questions at this time I will turn the call back over to the <unk> Li for closing remarks.
Julie Welcome: Thank you Julie.
Speaker Change #306: Yes, sorry.
Julie Welcome: I, thank everyone for their time and interest and questions on today's call.
Julie Welcome: We are incredibly excited about the balance of 2024 and as mentioned this.
Julie Welcome: Inflection point as we look to conclude the federal permitting process with the same let's say.
Julie Welcome: Storage stronger than ever work, one waiting production, we're going to be at the bottom of the cost curve and fully exposed to future uranium prices.
Reed Rubin: Stories stronger than ever. Rook One went into production. We're going to be at the bottom of the cost curve and fully exposed to future uranium prices. The provincial permit is in place, and the federal permitting is in the final stages. And this Iranian market is entering into a new, unprecedented era, and NexGen is incredibly well positioned. Ready? and Leigh bridged to it all.
Speaker Change #325: The provincial permit is in place and the federal permitting is in the in the final stages and this Iranian market is entering into a new unprecedented era.
Speaker Change #325: <unk>.
Speaker Change #325: <unk> is incredibly well positioned ready.
Les: And Les reached total so thank you for your interest and look forward to.
Leigh Robert Curyer: So I thank you for your interest and look forward to our next call, the Q2 call for 2024. Thank you. Ladies and gentlemen, this concludes today's conference call. You may now disconnect.
Speaker Change #325: Mexico.
Speaker Change #326: The Q2 call for 2024, thank you.
Speaker Change #327: Ladies and gentlemen. This concludes today's conference call you may now disconnect. Thank you.
Speaker Change #327: [music].