NexGen Announces Maiden Preliminary Economic Assessment of the Arrow Deposit
NexGen Announces Maiden Preliminary Economic Assessment of the
Arrow Deposit
Vancouver, BC, July 31, 2017 – NexGen Energy Ltd. (“ NexGen ” or the “ Company ”) ( TSX:NXE, NYSE:NXE) is
pleased to announce the positive results of its ind ependent maiden Preliminary Economic Assessment
(“PEA ”) of the basement-hosted Arrow Deposit, located on the Company’s 100% owned Rook I project in
Saskatchewan’s Athabasca Basin.
The maiden PEA was completed by Roscoe Postle Assoc iates Inc. (“ RPA ”), and is based on the mineral
resource estimate announced by the Company in March 2017 (with an effective date of December 20, 2016)
that comprised an Indicated Mineral Resource of 179 .5 M lb of U 3O8 contained in 1.18 M tonnes grading
6.88% U 3O8, and an Inferred Mineral Resource of 122.1 M lb of U3O8 contained in 4.25 M tonnes grading
1.30% U 3O8. The PEA does not include the results of the Compan y’s winter or summer 2017 drill programs
which will total over 66,000 m of additional drilling.
Table 1 – Summary of Arrow Deposit Preliminary Economic Assessment
PEA Financial Highlights
After-Tax Net Present Value (NPV 8%) CAD $3.49 Billion
After-Tax Internal Rate of Return (IRR) 56.7%
After-Tax Cash Payback 1.1 Years
Pre-production Capital Costs (CAPEX) CAD $1.19 Billion
Average Annual Production (Years 1-5) 27.6 M lbs U3O8
Average Annual Production (Life of Mine) 18.5 M lbs U3O8
Mine Life 14.4 Years
Average Unit Operating Cost (Years 1-5) CAD $5.53 (US $4.42)/lb U3O8
Average Unit Operating Cost (Life of Mine) CAD $8.37 (US $6.70)/lb U3O8
Uranium Price Assumption USD $50/lb U 3O8
Saskatchewan Royalties (Life of Mine) CAD $2.98 Billion
Exchange Rate CAD$1 = USD$0.80
Leigh Curyer, Chief Executive Officer, commented: “ The Arrow Deposit is one of the most strategically
significant and economically powerful mineral projects I am aware of across any resource commodity. Ye t, it
is still in it’s infancy in terms of ultimate resou rce size given the openness of mineralization and n ew
discoveries in close proximity to Arrow highlighted in our recent drilling results. This PEA highlight s Arrow’s
unique technical setting, grade and characteristics of mineralization, resulting in it hosting the potential to be
a leading source of mined uranium in the world with a relatively low capital and operating cost per lb over
the life of the mine. Importantly, the project is l ocated in Saskatchewan – regarded by the Fraser Institute in
2016 as the most attractive mining jurisdiction in the world for investment. With CAD$200 million in t he
treasury, NexGen is well financed to continue to expand and optimize economically this generational mineral
resource.”
Table 2 – Summary of Arrow PEA Production Profile
Unit Years 1-5 Years 1-10 LOM
Recovered Production
Total Tonnes kt 2,502 5,050 7,310
Average Annual
Tonnes ktpa 501 505 487
Tonnes per Day
Processed tpd 1,430 1,445 1,448
Average Annual
Grade U3O8 % 2.62 2.14 1.73
Total Pounds U3O8 ‘000 lbs U 3O8 137,955 227,713 267,203
Average Annual
Pounds U3O8 ‘000 lbs U 3O8 27,591 22,771 18,549
Unit Operating Cost per Tonne
Underground
Mining C$ / t proc 129 128 132
Processing C$ / t proc 112 112 111
Surface & GA C$ / t proc 64 63 63
Total Operating
Cost C$ / t proc 305 303 306
Unit Operating
Cost C$ / lb U3O8 5.53 (US $4.42) 6.73 (US $5.39) 8.37 (US $6.70)
Operating Margin % 90.4 88.3 85.5
Table 3 – PEA Sensitivity to Uranium Price
Uranium Price ($ USD/lb
U3O8) After-Tax NPV 1,2 After-Tax IRR After -Tax Cash Pay
Back 1,2
$80/lb U 3O8 CAD $6.45 Billion 82.3% 0.7 Years
$60/lb U 3O8 CAD $4.48 Billion 65.9% 0.9 Years
$50/lb U3O8 CAD $3.49 Billion 56.7% 1.1 Years
$40/lb U 3O8 CAD $2.49 Billion 46.2% 1.4 Years
$30/lb U 3O8 CAD $1.50 Billion 34.1% 1.9 Years
$25/lb U 3O8 CAD $1.00 Billion 27.0% 2.4 Years
Notes:
1. Based on an 8% Discount Rate.
2. Based on a 0.80 USD / 1.00 CAD Exchange Rate.
Figure 1 – Arrow Undiscounted Cumulative After-Tax Cash Flow
Production Summary
The PEA envisions a production profile supported by conventional long-hole stope mining averaging 1,44 8
tonnes per day at an average head grade of 1.73% U 3O8 over the life of mine. It is envisaged that mine
production will be fed into a conventional uranium processing plant where uranium recovery is projected to
be 96.0% over the life of mine.
It is envisaged that cemented paste fill tailings will be used, where tailings are constituted into a paste, mixed
with approximately 5% cement and delivered back underground. The cemented paste fill tailings will be used
to backfill stopes and the excess will be placed in a, purpose built, Underground Tailings Storage Facility (see
Figure 3 below). Among many other benefits, this t ailings management process is expected to significa ntly
reduce the surface footprint of the project.
The positive results of the PEA are a function of a conventional long-hole stope mine plan conceivably
extracting compact near-vertical high-grade uranium mineralization localized in competent crystalline
basement rocks. Arrow is considered an optimal deposit for long-hole stope mining because it is comprised of
stacked high-grade veins with strong continuity on strike, dip and vertical extent. Additionally, the re are
natural pillars due to the spacing between the mineralized A1 through A4 shears. Due to the geometry of the
Arrow deposit, approximately 93% of the mineral res ource was converted into mineable resources. The
positive results of the PEA are further supported b y a high process recovery rate (96.0%), due to simp le
mineralogy and low deleterious elements.
Figure 2 – Arrow Annual Production and Grade Profile
Figure 3 – Long Section View of Conceptual Arrow Deposit Mine Infrastructure
Capital Costs
The capital costs (CAPEX) for the contemplated unde rground mine, process plant and supporting
infrastructure at Arrow are estimated at CAD $1.66 billion including initial capital costs of CAD $1.1 9 billion.
The initial capital cost includes a contingency of 25% or CAD $237 million. RPA estimated the capital costs
based on input and consultation with leading expert service providers who have experience in construct ion
projects and cost estimation both in the Athabasca Basin and globally. The CAPEX is summarized below i n
Table 4.
Table 4 – Summary Breakdown of Capital Cost Estimates
Capital Costs ($ CAD Millions) Initial Sustaining T otal
Mine $324 $205 $529
Process Plant & Infrastructure &
Indirect Costs $627 $199 $826
Decommissioning - $64 $64
Contingency $237 - $237
Total Capital Costs $1,188 $468 $1,656
Operating Costs
The operating cost estimate (OPEX) is based on a sh aft accessed underground mine with a conventional
longitudinal and transverse long-hole stope mining method, conventional processing facility and
underground placement of cemented paste tailings. The OPEX is summarized below in Table 5, and the tot al
cash costs and average production from the Arrow de posit over the first five years is compared to curr ent
global producers of uranium in Figure 4 and other s elect underground global producers across commodities
in Figure 5.
Table 5 – Unit Operating Cost Estimates
Operating Costs $ CAD/lb U 3O8
Mining $3.61
Mineral Processing $3.03
General and Administration $1.73
Total Operating Costs $8.37
Figure 4 – Total Cash Costs and Annual Production Compared Globally
Notes to Figure 4:
1. Adapted from SNL Metals and Mining.
2. Arrow production and costs based on PEA results.
3. All other data based on 2016 modelled costs and pro duction from SNL Metals and Mining. NexGen makes no representations as to
the reliability of this information.
4. SNL estimates costs and production for approximately 70% of uranium operations.
5. Costs include operational costs.
6. Costs exclude sustaining capital costs, taxes, profit-based royalties, depreciation, and corporate costs.
7. The cost curve does not consider secondary supplies of U3O8.
Figure 5 – Total Unit Operating Costs Per Tonne Costs Compared Globally
Notes to Figure 5:
1. Unit operating costs are the sum of site-based mining, processing, and general and administration.
2. All of the comparable projects are underground mines with production rates ranging from nominally 1,000 tpd to 6,000 tpd.
3. The majority of data points are mines that are considered to be in remote areas.
4. Data is based on a variety of sources, including SNL Metals and Mining, and publicly available information. NexGen makes no
representations as to the reliability of this information.
The PEA is preliminary in nature and includes infer red mineral resources that are 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 r esults will be realized. Mineral resources that are not
mineral reserves do not have demonstrated economic viability.
Conference Call & Webinar:
NexGen will host a conference call and accompanying live webinar today, Monday July 31, 2017 at 8:15 a.m.
Eastern Standard Time.
NexGen will discuss the results of the PEA before opening the call to questions from participants. To join the
call please dial (647) 427- 7450 (Local/International) or ( 888) 231-8191 (North America Toll Free) and an
operator will put the call through. An accompanying live webcast and slides are available at the following link
https://event.on24.com/wcc/r/1473876/9E04D006580642EEF7C22DCE3E35143A .
A recorded version of the proceedings will be avail able on our website ( www.nexgenenergy.ca) shortly after
the call. The playback numbers are (416) 849-0833 ( Local/International) or (855) 859-2056 (North Ameri ca
Toll Free) (Playback Passcode 60229327) and available until October 30, 2017.
About NexGen
NexGen is a British Columbia corporation with a foc us on the acquisition, exploration and development of
Canadian uranium projects. NexGen has a highly expe rienced 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 expl oration assets in the Athabasca Basin, Saskatchewan ,
Canada, including a 100% interest in Rook I, locati on of the Arrow Discovery in February 2014 and Bow
Discovery in March 2015 and the Harpoon discovery i n August 2016. The Arrow deposit’s updated mineral
resource estimate with an effective date of Decembe r 20, 2016 was released in March 2017, and comprise d
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.
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
http://www.nexgenenergy.ca
Technical Disclosure
The scientific and technical information in this ne ws release with respect to the PEA has been reviewe d and
approved by David Robson, P.Eng., M.B.A., and Jason Cox, P.Eng. of RPA, each of whom is an independent
“qualified person” under National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“ NI-43-
101 ”). All other scientific and technical information in this news release has been approved by Mr. Garr ett
Ainsworth, P.Geo., Vice President – Exploration & D evelopment for NexGen. Mr. Ainsworth is a qualifie d
person for the purposes of NI 43-101 and has verifi ed the sampling, analytical, and test data underlyi ng the
information or opinions contained herein by reviewing original data certificates and monitoring all of the data
collection protocols.
Technical Reports
The mineral resource estimate referred to herein wa s announced by the Company on March 6 th , 2017, and
has an effective date of December 20, 2016. For details of the Rook I Project including the quality assurance
program and quality control measures applied and ke y assumptions, parameters and methods used to
estimate the mineral resource set forth herein please refer to the technical report entitled “Technical Report