NexGen Energy rises on $130 million offering in Australia

NexGen’s Rook I project the Athabasca Basin of Saskatchewan. Credit: NexGen Energy

Shares of NexGen Energy (TSX: NXE) (NYSE: NXE) (ASX: NXG) rose on Tuesday as the uranium developer launched a private placement of C$180 million ($130m) targeting the Australian market. Aitken Mount Capital Partners will act as lead manager and bookrunner.

Under the placement, NexGen will sell approximately 16.13 million common shares priced at C$11.11 per share. The price is based on the daily average CAD/AUD exchange rate of 1:0.8963 published by the Bank of Canada the previous day.

NexGen traded 6.1% higher at C$11.54 during pre-market trading in Toronto, within a 52-week range of C$4.91-C$12.00, for a market capitalization of C$6.2 billion ($4.5bn).

In a press release, NexGen said this offering will be marketed to Australian investors to enhance the liquidity, trading volumes and market capitalization of the company’s CHESS depositary interests (CDIs) listed on the ASX.

CDIs represent the beneficial interest in an underlying share, and are traded in a manner similar to shares in an Australian company listed on ASX. The exchange uses an uncertificated electronic system called CHESS for the electronic clearance and settlement of trades involving CDIs.

To create room for the shares to be distributed, the company has amended the at-the-market program announced in December by reducing the maximum value of common shares that may be sold from C$500 million to C$315 million. To date, about 14 million common shares of NexGen have been distributed under the ATM program, for total proceeds of C$134.9 million.

Net proceeds of the CDI offering will be used to fund the continued development and further exploration of the company’s mineral properties spread across the Athabasca Basin of Saskatchewan, a premier region for uranium discoveries.

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

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

A 2021 feasibility study for Rook I outlined an initial 11-year mine capable of producing 29 million lb. of uranium oxide (U3O8) per annum during the first five years, with capex of C$1.3 billion, making it the largest and lowest cost uranium mine in the world.

NexGen is also exploring for the next Arrow-style uranium discovery across its 1,900 sq. km. land package in northern Saskatchewan. A 30,000-metre drill program was started earlier this year, targeting the SW2 — home of Arrow at the Rook I project — and SW1 properties.