NexGen Announces Additional US$110 Million Financing with CEF Holdings
NexGen Announces Additional US$110 Million
Financing with CEF Holdings
Vancouver, BC, June 30, 2017 – NexGen Energy Ltd. (“NexGen” or the “Company”) (TSX:NXE, NYSE
MKT:NXE) is pleased to announce that it has entered into a binding term sheet with CEF Holdings Limited
(“CEF”) for a second financing package totalling US$110 million, comprising:
(a) US$50 million of common shares of NexGen (the “Placement Shares”); and
(b) US$60 million aggregate principal amount of unsecured convertible debentures (the
“New Debentures”).
The US$50 million placement will result in the issuance of approximately 24.1 million Placement Shares
at a price of C$2.70 (US$2.07 at an exchange rate of 1.3060) per Placement Share representing the 20-
day VWAP of the Company’s common shares (the “Common Shares”). The New Debentures will be
convertible at the holder's option into Common Shares at a conversion price (the "Conversion Price") of
C$3.52 (US$2.69 at an exchange rate of 1.3060), equal to a 30% premium to the 20-day VWAP of the
Common Shares. The “20-day VWAP” was calculated as the volume weighted average trading price of the
Common Shares on the Toronto Stock Exchange (the “TSX”) for the 20 trading days ending on the day
prior to the date of execution of the binding term sheet, converted into US$ using the C$-US$ daily
average rate of exchange published by the Bank of Canada for each relevant date.
In connection with the financing, the Company and CEF have also agreed to extend the maturity date of
the existing US$60 million aggregate principal amount of unsecured convertible debentures (the “Existing
Debentures”) to match the maturity date of the New Debentures as well as certain other non-financial
amendments including the strategic alignment provisions described below.
Leigh Curyer, Chief Executive Officer of NexGen commented: “We are thrilled to build on the partnership
between NexGen and CEF, which formally commenced just 12 months ago with the initial investment of
US$60 million. This financing represents a very strong alignment between NexGen and CEF and funds the
Company to expedite the optimal development of Arrow.”
“Our investment today builds on the shared long-term vision and close strategic partnership with
NexGen," said CEF's Chief Executive Officer, Warren Gilman. "NexGen continues to deliver on all its
objectives as it develops Arrow. We are excited at the opportunity to support the Company in its goal of
maximizing shareholder value by optimizing the development of Arrow which is proving to be one of the
best mineral assets we’ve encountered.”
The Existing Debentures, Placement Shares and New Debentures are expected to be held by CEF (Capital
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Markets) Limited, a wholly-owned subsidiary of CEF (as to US$20 million principal amount of Existing
Debentures, US$25 million of the Placement Shares and US$20 million principal amount of New
Debentures); and holding companies (the “Li Investor”) of which each of Messrs. Li Ka Shing and his son
Victor Li are entitled to exercise, or control the exercise of, one-third or more of the voting power at
general meetings (as to the balance of Existing Debentures, Placement Shares and New Debentures). CEF
(Capital Markets) Limited and the Li Investor are collectively referred to below as the “Investors”.
The Terms
The New Debentures will carry a 7.5% coupon (the "Interest") over a 5-year term. The New Debentures
will be convertible at the holder's option into Common Shares at the Conversion Price of C$3.52 (US$2.69
at an exchange rate of 1.3060), equal to a 30% premium to the 20-day VWAP ending on the day prior to
the date of execution of the binding term sheet.
The Company will be entitled, on or after the third anniversary of the date of the issuance of the New
Debentures, at any time that the 20-day VWAP exceeds 130% of the Conversion Price, to redeem the New
Debentures at par plus accrued and unpaid Interest.
Two-thirds of the Interest (equal to 5% per annum) is payable in cash. One-third of the Interest (equal to
2.5% per annum) is payable in Common Shares issuable at a price equal to the 20-day VWAP on either the
TSX or NYSE MKT (whichever has the greatest trading volume of Common Shares) ending on the day prior
to the date such Interest payment is due.
Strategic Alignment Provisions
In consideration for the increased investment in NexGen, the Company and the Investors will enter into
an investor rights agreement (the “Investor Rights Agreement”). The Investor Rights Agreement will
provide for the following:
(a) For so long as they hold at least 10% of the Common Shares (on a partially diluted basis),
the Investors will agree (i) not to tender or agree to tender (or convert) the New
Debentures or the Existing Debentures or any Common Shares they hold to an unsolicited
takeover bid, (ii) to exercise the votes attached to all Common Shares they hold in respect
of any change of control transaction, and deposit or tender such Common Shares, in
accordance with the recommendation of the Company’s Board of Directors (the “Board”),
(iii) to withhold votes in respect of any Common Shares they hold in respect of the
election of individuals to the Board who are not nominees of management, and (iv) in
respect of non-change of control matters, not to exercise the votes attached to any
Common Shares they hold contrary to the recommendation of the Board;
(b) For so long as they hold at least 10% of the Common Shares (on a partially diluted basis),
the Investors will agree to a standstill whereby they will, among other things, not acquire
any securities of the Company or solicit proxies or otherwise attempt to influence the
conduct of security holders of the Company;
(c) For so long as they hold at least 10% of the Common Shares (on a partially diluted basis),
the Investors will be subject to restrictions on disposition applicable to any Common
Shares they hold, consisting of giving prior notice to the Company of any proposed
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disposition of more than 0.5% of the number of Common Shares then outstanding and
either: (i) disposing of such Common Shares to specific willing investors identified by the
Company within a 7-day period; or (ii) disposing of such Common Shares either through
a broad distribution on the public markets or in a private transaction or block trade to
anyone other than specific investors identified by the Comany within the 7-day period;
and
(d) For so long as they hold at least 15% of the Common Shares (on a partially diluted basis),
the Investors will have the right to nominate one director to the Board.
Use of Proceeds
Including the proceeds from this financing, NexGen will have cash reserves of approximately C$200
million. Proceeds from the financing will be used to fund the continuing exploration and development of
the Company’s SW2 properties (which includes the Rook 1 project) and for general corporate purposes.
Approval
The financing is subject to the satisfaction of customary closing conditions, including regulatory approval,
the completion of definitive documentation, there being no material adverse change in the business of
the Company, or a major event of national or international consequence that disrupts the financial
markets or the business, operations or affairs of the Company.
Advisors
TD Securities Inc. is acting as financial advisor and lead placement agent to NexGen and CIBC World
Markets Inc. is acting as financial advisor to CEF.
This news release shall not constitute an offer to sell or a solicitation of any offer to buy any securities, nor
shall there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be
unlawful. The securities referenced herein have not been, nor will they be, registered under the United
States Securities Act of 1933, as amended (the “U.S. Securities Act”), and such securities may not be
offered or sold within the United States absent registration under the U.S. Securities Act or an applicable
exemption from the registration requirements thereunder.
Early Warning Disclosure
This portion of the news release is issued pursuant to National Instrument 62-103 – The Early Warning
System and Related Take-Over Bid and Insider Reporting Issues (“NI 62-103”) of the Canadian Securities
Administrators, which also requires an early warning report to be filed with the applicable securities
regulators containing additional information with respect to the foregoing matters. A copy of the early
warning report of the Li Investor will be available on NexGen’s issuer profile on SEDAR at www.sedar.com.
Following completion of this financing, the Li Investor will hold: (a) an aggregate of 13,903,461 Common
Shares, representing approximately 4.2% of the issued and outstanding Common Shares; (b) US$40
million aggregate principal amount of Existing Debentures; and (c) US$40 million aggregate principal
amount of New Debentures. For the Placement Shares that partially gave rise to the early warning
reporting requirements, the Li Investor paid C$2.70 per share and C$32.597 million in aggregate.
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Immediately before this financing, the Li Investor holds 1,250,735 Common Shares, representing
approximately 0.4% of the issued and outstanding Common Shares as well as US$40 million aggregate
principal amount of the Existing Debenture. The Li Investor does not have any present intention to acquire
ownership of, or control over, additional securities of NexGen, other than pursuant to the terms of the
New Debentures and Existing Debentures and the placement fee owing in connection with this financing
which will be paid in Common Shares at closing. It is the intention of the Li Investor to evaluate its
investment in NexGen on a continuing basis and such holdings may be increased or decreased in the
future, subject to the strategic alignment provisions. For the purposes of NI62-103 the head office address
of the Li Investor is East Asia Chambers, P.O. Box 901, Road Town, Torotola, British Virgin Islands and the
head office address of the Company is 3150 – 1021 West Hastings Street, Vancouver BC Canada V6E 0C3.
About CEF Holdings Limited
CEF Holdings Limited is owned 50% by CK Hutchison Holdings Ltd. and 50% by the Canadian Imperial Bank
of Commerce (“CIBC”). CK Hutchison Holdings is the publicly-listed flagship company of the CK Hutchison
Group of companies, the Hong Kong based multi-national conglomerate with the combined market cap
of the Group in excess of US$100 billion. CIBC is a leading North American financial institution with
operations around the world. CEF is an investor in significant resource assets on a global basis.
About NexGen
NexGen is a British Columbia corporation with a focus on the acquisition, exploration and development
of Canadian uranium projects. NexGen has a highly experienced team of uranium industry professionals
with a successful track record in the discovery of uranium deposits and in developing projects through
discovery to production.
NexGen owns a portfolio of prospective uranium exploration assets in the Athabasca Basin, Saskatchewan,
Canada, including a 100% interest in Rook I, location of the Arrow Discovery in February 2014 and Bow
Discovery in March 2015 and the Harpoon discovery in August 2016. The Arrow deposit’s updated mineral
resource estimate with an effective date of December 20, 2016 was released in March 2017, and
comprised 179.5 M lbs U3O8 contained in 1.18 M tonnes grading 6.88% U3O8 in the indicated mineral
resource category and an additional 122.1 M lbs U3O8 contained in 4.25 M tonnes grading 1.30% U3O8
in the inferred mineral resource category.
All scientific and technical information in this news release has been prepared by or reviewed and
approved by Mr. Garrett Ainsworth, P.Geo., Vice President – Exploration & Development for NexGen. Mr.
Ainsworth is a qualified person for the purposes of National Instrument 43-101 – Standards of Disclosure
for Mineral Projects (“NI 43-101”) of the Canadian Securities Administrators, and has verified the
sampling, analytical, and test data underlying the information or opinions contained herein by reviewing
original data certificates and monitoring all of the data collection protocols. 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 “Technical Report on the Rook 1 Property, Saskatchewan, Canada”
dated effective March 31, 2017 (the “Rook 1 Technical Report”) prepared by Mark B. Mathisen and David
A. Ross, each of whom is a “qualified person” under NI 43-101. The Rook I Technical Report is available
on NexGen’s issuer profile on SEDAR at www.sedar.com.
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U.S. investors are advised that while the terms “indicated resources” and “inferred resources” are
recognized and required by Canadian regulations, the U.S. Securities and Exchange Commission does not
recognize these terms. U.S. investors are cautioned not to assume that any part or all of the material in
these categories will ever be converted into mineral reserves.
Leigh Curyer
Chief Executive Officer
NexGen Energy Ltd.
+1 604 428 4112
www.nexgenenergy.ca
Travis McPherson
Vice President Corporate Development
NexGen Energy Ltd.
+1 604 428 4112
tmcpherson@ nxe-energy.ca
www.nexgenenergy.ca
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 proposed financing, the use of proceeds from the financing
described in this news release, and the receipt of all required regulatory approvals, including of the TSX and the NYSE
MKT. 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, that the
proposed transaction will be completed, 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 others, negative operating cash flow and dependence on third party
financing, uncertainty of the availability of additional financing, the risk that pending assay results will not confirm
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previously 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 or maintain required permits and licenses, changes in laws,
regulations and policy, competition for resources and financing, specific risks relating to the negotiation and
execution of the definitive agreements for the financing, the use of proceeds from the financing, the satisfaction of
each party's obligations in accordance with the terms of the definitive agreements for the financing; failure to receive
any required regulatory approvals (including stock exchange) or other approvals, and other factors discussed or
referred to in the Company’s Annual Information Form dated March 31, 2017 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 or intended. Accordingly, readers
should not place undue reliance on forward-looking statements or information. The Company undertakes no
obligation to update or reissue forward-looking information as a result of new information or events except as
required by applicable securities laws.