NexGen Energy Ltd.
Corporate Presentation July 2020 PROUD PARTNER
NexGen Energy Ltd. PROUD PARTNER Corporate Presentation July 2020 - - PowerPoint PPT Presentation
NexGen Energy Ltd. PROUD PARTNER Corporate Presentation July 2020 Forward Looking Statements Information Contained in this Presentation This presentation is a summary description of NexGen Energy Ltd. ( NexGen or the Company ) and
Corporate Presentation July 2020 PROUD PARTNER
2
Information Contained in this Presentation This presentation is a summary description of NexGen Energy Ltd. (“NexGen” or the “Company”) and its business and does not purport to be complete. This presentation is not, and in no circumstances is to be construed as a prospectus, advertisement or a public offering of securities. No securities regulatory authority or similar authority has reviewed or in any way passed upon the document or the merits of the Company’s securities and any representation to the contrary is an offence. Except where otherwise indicated, the information contained in this presentation has been prepared by NexGen and there is no representation or warranty by NexGen or any other person as to the accuracy or completeness of the information set forth herein. This presentation includes information on adjacent properties that was obtained from various publicly available sources referred to herein and the accuracy and completeness of such information has not been verified by NexGen. Except as otherwise stated, information included in this presentation is given as of the date
Forward-Looking Information The information contained herein contains “forward-looking statements” within the meaning of the United States Private Securities Litigation Reform Act of 1995 and “forward-looking information” within the meaning of applicable Canadian securities legislation. “Forward-looking information” includes, but is not limited to, statements with respect to the activities, events or developments that the Company expects or anticipates will or may occur in the future, including, without limitation, the completion of the technical report in support of the PEA. Generally, but not always, forward-looking information and statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes” or the negative connotation thereof or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved” or the negative connotation thereof. Forward-looking information and statements are based on the then current expectations, beliefs, assumptions, estimates and forecasts about NexGen’s business and the industry and markets in which it operates. Forward-looking information and statements are made based upon numerous assumptions, including among others, the results of planned exploration activities are as anticipated, the price of uranium, the cost of planned exploration activities, that financing will be available if and when needed and on reasonable terms, that third party contractors, equipment, supplies and governmental and other approvals required to conduct NexGen’s planned exploration activities will be available on reasonable terms and in a timely manner and that general business and economic conditions will not change in a material adverse manner. Although the assumptions made by the Company in providing forward-looking information or making forward-looking statements are considered reasonable by management at the time, there can be no assurance that such assumptions will prove to be accurate. Forward-looking information and statements also involve known and unknown risks and uncertainties and other factors, which may cause actual results, performances and achievements of NexGen to differ materially from any projections of results, performances and achievements of NexGen expressed or implied by such forward-looking information or statements, including, among
announced preliminary results, imprecision of mineral resource estimates, the appeal of alternate sources of energy and sustained low uranium prices, aboriginal title and consultation issues, exploration risks, reliance upon key management and other personnel, deficiencies in the Company’s title to its properties, uninsurable risks, failure to manage conflicts of interest, failure to obtain
Company’s Annual Information Form dated March 11, 2020 under “Risk Factors”. Although the Company has attempted to identify important factors that could cause actual results to differ materially from those contained in the forward-looking information or implied by forward-looking information, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that forward-looking information and statements will prove to be accurate, as actual results and future events could differ materially from those anticipated, estimated
information as a result of new information or events except as required by applicable securities laws.
4
25.4 15.3 13.7 7.8 5.2 5.2 4.7 4.7 4.4 4.3 4.3 – 10.0 20.0 30.0 Arrow Cigar Lake McArthur River Tortkuduk & Myunkum Olympic Dam Budenovskoye 2 Inkai SOMAIR South Inkai Ranger Budenovskoye 1, 3 & 4 Production (mmlbs U3O8)
$20 $30 $40 $50
40 60 80 100 120 140 Cash Cost (US$/lb) 2020 U3O8 Production (mmlbs)
Long Life Low Cost(1) Large (2,3) Arrow at the bottom of industry cost curve Arrow will be the World's largest mine with low technical risk Permit application for 24-year
Shaft #1 (Production, Access) Surfac e Overburd en Bedrock Shaft #2 (Exhaust Air) Inferred Resources Inferred Resources Inferred Resources Inferred Resources Inferred Resource s Inferred Resources PFS Mine Plan Source: SNL, World Nuclear Association and company disclosure (1) Represents 2020 uranium cost curve, adjusted for the inclusion of Arrow. Arrow data based on LOM average annual production of 25.4mmlbs and operating costs of C$5.81/lb converted to USD at 0.75 FX rate, as disclosed in November 2018 PFS (2) Represents Arrow LOM average production as disclosed in November 2018 PFS (3) Production shown on a 100% basis
5
Arrow Deposit
north of the town of La Loche, and 640 km northwest of Saskatoon.
hosts 5 uranium discoveries over a 10 km strike length.
uranium deposit located within the Rook I Project discovered in February 2014.
World where NexGen is permitting a dedicated mine and mill complex.
NexGen Energy Ltd.
Saskatoon.
World’s next generation uranium mine to fuel global clean energy initiatives.
maintaining complete operational and supply autonomy.
utilities.
6
Premier of Saskatchewan, Brad Wall, to Board
Environmental Assessment for Rook 1 Project, home of Arrow by successful acceptance of Project Description.
2014 discovery
Property with first drill hole.
drill campaign and published largest Maiden Mineral Resource Estimate in the Basin’s history with the Arrow Deposit.
US$60M strategic investment by CEF Holdings (Li Ka- Shing), includes voting rights.
announced filing
Mineral Resource Estimate, the Pre-Feasibility Study on the Arrow Deposit, Rook I Project.
2019 2014 2016 2017 2018
filing of 2nd updated Mineral Resource Estimate, The Pre- Economic Assessment on the Arrow Deposit, Rook I Project.
additional US$110M financing with CEF Holdings (Li Ka- Shing), includes voting rights.
2020
announced US$30M strategic financing with Queens Road Capital, includes voting rights.
7
Insider Ownership
Options Conversions
Shing
Management LLC
Shareholders
Shares Issued Fully Diluted
(1)(2)
Cash
Cash & Share Structure as at July 1, 2020 (1) Inclusion of potential debenture conversions would bring the number of fully diluted shares to 471,440,882 (2) The US$15M 2020 Debenture – Potential Conversion is based on the US$15M Debenture amount converted to CAD at May 8, 2020 FX rate of 1.3934 at the conversion price of $2.34.
Institutional: 74% Retail: 26%
2016 CEF Conversion Price: US $2.33 2017 CEF Conversion Price: US $2.69 2020 QRC Conversion Price: CAD $2.34
Winner of PDAC 2018 Bill Dennis Award For a Canadian Discovery Winner of PDAC 2019 Environmental & Social Responsibility Award
9
stored in an Underground Tailings Management Facility (“UGTMF”). The UGTMF will significantly reduce the surface footprint of the Rook I project and represents continued and ongoing reclamation during operations, allowing for industry leading environmental sensitivity;
strength meet or exceed all requirements set in the original design for a potential Paste-Backfill to be used for underground stope stability;
risk of surface tailings failures, entirely mitigating one of the largest risks in existing and development-stage mining projects;
environmental mine management.
BEST-IN-CLASS
10
since inception in 2016;
related and non-mining related vocations;
students that show exemplary efforts for education and community – 6 have been provided bursaries into Geology, Human Resources and Environmental Sciences programs.
students in all 3 schools in La Loche and CRDN breakfast every school day;
volleyball teams including trips to National Championships as well as initiation of a local youth hockey team to play in tournaments in the southern part of Saskatchewan for the first time;
utilization and programing.
From Left to Right: Premier Scott Moe, Mayor Robert St. Pierre, MP Georgina Jolibois, NexGen CEO Leigh Curyer
11
industry with 8 completing the program;
businesses to support the Project in this stage and also in preparation for future development;
programs in the North for the project;
(the largest drill program in Saskatchewan);
post-secondary student work a priority for Residents of Saskatchewan’s North;
Canada with 4,400 at peak during development;
(92% to Saskatchewan) and support C$18.9 billion in total economic output;
to the Canadian economy.
From Left to Right: NexGen CEO Leigh Curyer, Prime Minister Justin Trudeau
12
and local grocery stores to ensure over 1,000 students continued to receive healthy and nutritious breakfast during school closure.
vouchers for all registered students.
employment of local Pandemic Coordinators to actively support La Loche and CRDN in containing the pandemic.
(SMA) to ensure residents of La Loche and CRDN have masks, gloves, sanitizer and other supplies to reduce the spread of COVID-19
14 Drivers:
reactors operable in 30 states generating 55%
Significantly, the US reactors run at full capacity 92% of the time bringing large grid security implications in an increasingly unstable global world (cyber threats, etc.)
power.
energy demand globally including China, India, Russia, UAE, Saudi Arabia, Turkey, etc.
paradigm shift in nuclear energy policy with a renaissance underway to compete on the global stage with next generation reactor buildouts in sensitive jurisdictions – Middle East, Asia.
“Bringing our nuclear energy industry back, small modular reactors for instance, that’s on the front burner so to speak,” Former US Secretary of Energy, Rick Perry.
Source: WNA Fuel Report 2019, NEI
15 Nuclear Energy: 2016-2020:
demand hole created by the accident in March 2011;
Source: WNA Fuel Report 2019, WNA 2019
16
financial interests.
significantly tighter than it has been in recent years thus setting up the opportunity for utilities to re-enter the long-term contracting market.
cost.
Source: TD Securities
Primary Supply Impacts
the market since 2016.
jurisdictional concentration.
maintain energy security in some of the most influential economies in the world.
17
Source: TradeTech
18
which creates large inventory reductions and reliance on short-term secondary sources. This is an unstable market.
to follow.
Source: TD Securities
20
Source: Company filings Note: Free cash flow (FCF) is calculated by subtracting capital expenditures from operating cash flow (OCF). Based on US$50/lb U3O8.
Overview Pre-Feasibility Study(1) (November 2018)
environmental mine management and social participation.
Tailings Management Facility which will significantly reduce the surface footprint of the project.
Free Cash Flow Profile (C$ MM)
($178) ($550) ($519) $1,296 $1,656 $1,659 $1,670 $1,684 $1,675 $1,554 $1,032 $239 Year -3 Year -2 Year -1 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 OCF Capex FCF
Mine Life
(years)
9 LOM Avg. Throughput
(tpd)
1,039 LOM Avg. Uranium Grade
(%)
3.09% LOM Avg. Uranium Recovery
(%)
98% LOM Avg. Uranium Production
(mm lbs U3O8)
25.4 Mining
(C$/lb U3O8)
$2.35 Processing
(C$/lb U3O8)
$2.46 G&A
(C$/lb U3O8)
$1.00 LOM Avg. Cash Cost
(C$/lb U3O8)
$11.17 LOM Avg. By-Product AISC
(C$/lb U3O8)
$12.11 Development Capex
(C$ mm)
$1,247 Sustaining Capex
(C$ mm)
$214 Uranium price
(C$/lb | US$/lb)
$66.7 | $50.0 Discount Rate
(%)
8.0% Exchange Rate
(US$/C$)
0.75x After-Tax NPV
(C$ mm)
$3,661 After-Tax IRR
(%)
57% After-Tax Payback Period
(years)
1.2 Operations Operating Costs Capital Expenditures Economics
21
$80 $120 $160 $200 1968 1973 1978 1983 1988 1993 1998 2003 2008 2013 2018 Nominal $ Real $
Uranium Price (US$/lb U3O8)
Arrow Break-Even Cost
Arrow’s economic cost of production is below the long-term nominal and inflation adjusted uranium spot price.
22
23
[ " [ " [ " [ " [ " [ " [ " [ " [ " [ " [ "
[ "
! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! !
A l b e r t a
ROOK I PROJECT
t u
905 Shea Creek Cluff Lake Patterson Lake South Spitfire Centennial Dufferin Lake Millennium Phoenix Maverick Key Lake McArthur River Cigar Lake Roughrider Midwest Lake Natona Bay
THORBURN LAKE 2Z LAKE MADISON RADIO
McClean Lake Eagle Point Collins Bay Rabbit Lake
NORTHWEST ATHABASCA
Gunnar Lorado
NORTH THORBURN CARLSON CK. BOW, ARROW, SOUTH ARROW, & HARPOON DISCOVERIES
t u
955
! ! ! !Legend
[ " Discovery / Mineral Deposit
! ! Active or Depleted Uranium Mine
NexGen Mineral Tenure IsoEnergy Mineral Tenure Other Mineral Tenure Athabasca Basin Margin
25 50 KmAthabasca Basin Projects
Saskatchewan, Canada
209,000 hectares of prospective exploration ground in the southwest Athabasca Basin.
focus and, specifically, the Patterson Corridor which currently hosts 9 uranium discoveries
length.
24
decoupled production areas in both the A2 and A3, enabling flexibility of mine sequencing.
through the A2 High Grade, will support significant scheduling flexibility enabling NexGen to correlate supply quickly and inexpensively to market conditions.
conventional longhole stoping mining method including the use of longitudinal and transverse stopes, 30 m level spacing, and the nominal stope strike length of 15 metres to 30 metres which represents an excellent stope stability range for underground mining in highly competent conditions.
26
Name Experience Leigh Curyer Chief Executive Officer, President & Director
experience in the uranium mining sector having raised over $500M in equity
feasibility study work on the Honeymoon ISL uranium project in South Australia
assessing global uranium projects for First Reserve Corporation Travis McPherson Vice President, Corporate Development
was led Corporate Development across a variety of mandates including M&A, equity, project financing packages, budgeting, permitting and investor relations
natural resources boutique. Gillian McCombie Vice President, Human Resources
procedures and international service.
Tony George, P.Eng Chief Project Officer
management and construction of mining projects.
construction.
responsible for all aspects of the feasibility study for the advancement and development of the Fruta del Norte project in Ecuador.
Victoria Gold Corp. Where he oversaw the Eagle Mine through detailed engineering and construction which was successfully completed ahead of schedule and on budget on June 2019.
NexGen Executive team spans the entire mining cycle including experience in permitting, project financing, construction and operations.
27
Name Experience Charles Scorer Special Advisor Uranium Marketing
partnership with First Reserve Corporation.
nuclear fuel market.
company, Nufcor International Limited. Andrew Browne Technical Advisor
mining geology globally.
specializing in global uranium projects. Craig Parry Technical Advisor
Fund.
29
March 2017 Arrow Mineral Resource Estimate 2018 Arrow Mineral Resource Estimate
Mineral Resource Estimate Structure Tonnage (Tonnes) Grade (U3O8%) Metal U3O8 (U3O8 lb) Tonnage (Tonnes) Grade (U3O8%) Metal U3O8 (U3O8 lb) Tonnage (Tonnes) Grade (U3O8%) Metal U3O8 (U3O8 lb) Indicated Mineral Resources A2 790,000 0.84 14,500,000 1,240,000 0.79 21,700,000 450,000 (0.05) 7,200,000 A2 HG 400,000 18.87 164,900,000 460,000 17.85 181,000,000 60,000 (1.02) 16,100,000 A3 No Indicated in 2017 1,010,000 0.70 15,500,000 1,010,000 0.70 15,500,000 A3 HG No Indicated in 2017 180,000 9.68 38,400,000 180,000 9.68 38,400,000 Total: 1,180,000 6.88 179,500,000 2,890,000 4.03 256,600,000 1,700,000 (2.85) 77,200,000 Inferred Mineral Resources A1 860,000 0.75 14,300,000 1,510,000 0.72 23,900,000 650,000 (0.04) 9,600,000 A2 1,100,000 0.76 18,500,000 1,290,000 0.70 19,900,000 190,000 (0.06) 1,400,000 A2 HG 30,000 13.00 8,600,000 5,000 12.70 1,400,000 (25,000) (0.30) (7,200,000) A3 1,460,000 1.16 37,300,000 1,230,000 1.11 30,000,000 (230,000) (0.05) (7,300,000) A3 HG 150,000 8.53 28,200,000 1,000 9.07 200,000 (149,000) 0.54 (28,000,000) A4 550,000 1.06 12,900,000 800,000 0.92 16,300,000 250,000 (0.14) 3,400,000 180 110,000 0.95 2,300,000 Combined into A3 & A4 (110,000) (0.95) (2,300,000) Total: 4,260,000 1.30 122,100,000 4,840,000 0.86 91,700,000 580,000 (0.44) (30,400,000)
Notes: 1. CIM Definition Standards were followed for Mineral Resources. 2. Mineral Resources are reported at a cut-off grade of 0.25% U3O8 based on a long- term price of US$50 per lb U3O8 and estimated costs. 3. A minimum mining width of 1.0 m was used. 4. Numbers may not add due to rounding.
30
Uranium Price ($ USD/lb U3O8) After-Tax NPV8 (CAD $ Billions) After-Tax IRR (%) After-Tax Cash Pay Back (Years) $80/lb U3O8 $6.62 80.4 0.8 $60/lb U3O8 $4.65 65.5 1.0
$50/lb U3O8 $3.66 56.8 1.2
$40/lb U3O8 $2.67 46.9 1.5 $30/lb U3O8 $1.69 35.6 1.9 $25/lb U3O8 $1.19 28.9 2.3
31
All-in Sustaining Cost PFS $ CAD/lb U308 Operating Cost 5.81 Revenue Royalties 4.81 Reclamation Cost 0.21 Sustaining Capital 0.94
All-in Sustaining Cash Cost 11.77
the Arrow deposit combined with an innovative design regarding the mining and milling at Arrow, creates industry leading low AISC.
is included, the All-in Cost is C$17.23/lb U3O8.
32 OPEX Per Tonne PFS $ CAD/t U308 PEA $ CAD/t U308 Variance Mining 157.31 131.87 19% Mineral Processing 164.65 110.91 48% General and Administra tion 67.11 63.20 6% Total Operating Costs 389.07 305.98 27% OPEX Per Pound PFS $ CAD/lb U308 PEA $ CAD/lb U308 Variance Mining 2.35 3.61 (35%) Mineral Processing 2.46 3.03 (19%) General and Administra tion 1.00 1.73 (42%) Total Operating Costs 5.81 8.37 (31%)
recategorizing the underground tailings to operating cost instead of sustaining capital as per the PEA in order to reflect a more wholesome ‘operating cost’ figure. These costs account for 21% of operating costs.
33
Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9
Cumulative Revenue Revenue by Year
Arrow Deposit PFS - Government Revenue
Gross Revenue Royalties Profit Royalties Federal Corporate Income Tax Provincial Corporate Income Tax Cumulative Total Value to Government
$5.4 Billion in total Government Revenue over the life of asset.
$3.9 Billion in Saskatchewan Government revenue over the life of asset.
gross revenue royalties (based on 4.25% net) are CAD $122 Million (versus CAD $80 Million in PEA).
34
Technical Disclosure The scientific and technical information in this presentation with respect to the PEA and PFS has been reviewed and approved by Paul O’Hara, P.Eng., P.Geo. of Wood, David Robson, P.Eng., M.B.A. and Jason Cox, P.Eng. of RPA, each of whom is a “qualified person” under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”). All other scientific and technical information in this presentation has been approved by Mr. Troy Boisjoli,Vice President – Operations & Project Development for
contained herein by reviewing original data certificates and monitoring all of the data collection protocols. Inferred Mineral Resources in PEA The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that PEA results will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Technical Report The mineral resource estimate referred to herein was announced by the Company on November 5th, 2018. For details of the Rook I Project including the quality assurance program and quality control measures applied and key assumptions, parameters and methods used to estimate the mineral resource set forth herein please refer to the technical report entitled “Arrow Deposit, Rook I Project Saskatchewan NI 43-101 Technical Report on Pre-feasbility Study" dated effective 5 November, 2018 (the "Rook 1 Technical Report") . The Rook I Technical Report is available on NexGen’s issuer profile on SEDAR at www.sedar.com and EDGAR (www.sec.gov/edgar.shtml). SEC Standards Estimates of mineralization and other technical information included or referenced in this presentation have been prepared in accordance with NI 43-101. The definitions of proven and probable mineral reserves used in NI 43-101 differ from the definitions in SEC Industry Guide 7. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. As a result, the reserves reported by the Company in accordance with NI 43-101 may not qualify as “reserves” under SEC standards. In addition, the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount
ever be upgraded to a higher category. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Additionally, disclosure of “contained ounces” in a resource is permitted disclosure under Canadian securities laws; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measurements. Accordingly, information contained or referenced in this presentation containing descriptions of the Company’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of United States federal securities laws and the rules and regulations thereunder. Non-IFRS Measures This presentation refers to cash costs, which measurement has no standardized meaning under IFRS and may not be comparable to similar measures presented by other
prepared in accordance with IFRS.