NexGen Provides Updated Economics for the Rook I Project
NexGen Provides Updated Economics for the Rook I Project
• Revised Capital Cost C$2.2 Billion /USD$1.58 Billion (C$/US$ 0.72)
• Average Annual After-Tax Net Cash Flow (Years 1-5) of C$1.93 Billion (at US$95/lb U3O8)
• Consistent Mine Life and Production Capability up to 30 Million Pounds U3O8 Annually
• Elite Environmental Plan Incorporates Reclamation during Operations resulting in minimal
C$70 Million Closure Cost.
Vancouver, BC, August 1, 2024 – NexGen Energy Ltd. (“NexGen” or the “Company”) (TSX: NXE) (NYSE:
NXE) (ASX: NXG) announced today an update to the initial capital, sustaining, and operating cost estimates for the
Company’s 100% -owned Rook I Project (or “the Project”). The estimated pre -production capital costs
(“CapEx”) are Canadian Dollar (“C$”) C$2.2 billion / US Dollar ( “USD”) $1.58BN, with an average cash
operating cost (“OpEx”) over the life of mine (“LOM”) estimated at an industry leading C$13.86/lb /
USD$9.98/lb U3O8. Sustaining capital costs (“SusEx”) were also updated and are estimated at C$785 million
(average of ~C$70 million per year), inclusive of closure costs of approximately C$70 million. The change in costs
reflects both inflationary changes as well as the significant advancement of engineering and procurement,
optimized constructability, and enhanced environmental performance.
Unique to a mining project in the Athabasca B asin is the Project’s incorporation of costs associated with the
progressive reclamation of a tailings management facility into the CapEx, OpEx and sustaining capital costs, which
totals approximately $900 million of spending over the LOM. The vast majority of Rook I’s mine reclamation will
occur concurrently with production through the design incorporating the underground tailings management facility
(“UGTMF”). This will enhance the environmental performance of the operation and reduce the risk of ongoing
reclamation, costly decommissioning at the end of the production period, and the post -closure risk to the local
environment and communities. As a result of this incorporatio n of reclamation and the UGTMF at the outset of
development, full closure costs are set to be approximately C$70 million at the end of the mine life, materially lower
than other uranium mines in Canada, setting a higher standard for environmental performance and the safe
disposal of tailings.
Incorporating an average long-term uranium price of approximately USD$95.00/lb U3O8 (UxC average Long-Term
prices from 2029 to 2040, as published in June 2024), net of transportation fees, the updated cost estimate results
in an After-Tax Net Present Value (8% discount rate) of C$6.3 billion, and a payback period of approximately 12
months, as shown in the sensitivity table below . Despite increased costs, at USD$95.00/lb U3O8, average annual
after-tax net cash flow (“Free Cash Flow”) from the Project (years 1 -5) remains materially the same as in the FS
(as defined below). As shown in the sensitivity table below , average annual Free Cash Flow is now estimated at
C$1.93 billion versus C$2.01 billion, demonstrating that the Project is less sensitive to changes in CapEx relative
to uranium price.
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Sensitivity of Project Economics to Uranium Prices
The sensitivity of the economic model in the FS to the price of uranium is shown below:
Feasibility Study (2020 Dollars) Updated/Revised Estimate (2023 Dollars)
Uranium
Price
(US$/lb)
Average
Annual
Free Cash
Flow
(Y1 – 5)
(C$ billion)
Payback
Period
(Years)
Internal
Rate of
Return
(“IRR”)
(%)
Net
Present
Value
(“NPV”)
(C$ billion)
Average
Annual
Free Cash
Flow
(Y1 – 5)
(C$ billion)
Payback
Period
(Years)
Internal
Rate of
Return
(“IRR”)
(%)
Net
Present
Value
(“NPV”)
(C$ billion)
$150 3.19 0.4 101.8 12.80 3.13 0.7 61 11.52
$100 2.11 0.6 81.6 8.13 2.04 1.0 46.9 6.79
$95 2.01 0.6 79.2 7.67 1.93 1.0 45.2 6.32
$80 1.68 0.7 71.5 6.27 1.61 1.2 39.6 4.89
$50 1.04 0.9 52.4 3.47 0.97 2.0 25.2 2.10
Notes:
1. The base case for the economic analysis in the FS (the “FS Base Case”) is based on, among other things, the timing of a final
investment decision and a discount rate of 8%. It assumes that 100% of uranium produced from the Project can be sold at a long -
term price of US$50/lb U3O8 at an exchange rate of C$/US$ of 1.00:0.75.
2. The Updated/Revised Estimate reflects an internal Company assessment of CapEx and OpEx, as well as other currently expected
Project costs, including estimated sustaining capital, royalties, and taxes.
3. As noted in the FS, NPV, and IRR are most sensitive to metal prices, grade, metal recovery, and exchange rates. To demonstrate the
sensitivities of NPV and IRR to uranium prices, alternatives to the uranium price assumption used in the FS Base Case are shown in
the table for illustrative purposes. Readers are cautioned that such information may not be appropriate for other purposes, including
an assessment of expected Project economics. Such illustrative prices were chosen to approximate long-term and various spot price
assumptions but are not forecasts of expected uranium prices or prices at which uranium produced from the Project can be sold.
4. There has been no material update to the estimates of Mineral Resources or Mineral Reserves.
Leigh Curyer, Chief Executive Officer, commented: “NexGen’s updated CapEx, OpEx and sustaining capital reflect
the Company’s focus on thorough planning and responsible financial management, ensuring that every aspect of
the Project aligns for the development of a truly world-class resources project. The updated capital cost presents
an all -encompassing spend to bring the Rook I Project into production based on robust, proven mining and
construction methodologies, with a payback period of 12 months. Our commitment to developing this Project to
the highest environmental standards ensures sustainable and responsible operations from the outset whilst
delivering industry leadi ng profitability and local community consultation and engagement . This includes the
incorporation of reclamation activities and the significant associated costs during operations, minimizing future
closure liabilities which are estimated at C$7 0 million for the Project , and setting a higher standard for
environmental performance in the mining industry.
It is a very exciting time at NexGen as the Company advances the finalization of the Federal Environmental
Assessment, readies for immediate commencement of construction on final Federal Approval, and in parallel
continue to test the recently discovered Patterson Corridor East mineralization 3.5kms east of the Arrow deposit.”
The Feasibility Study (“FS” or “Feasibility Study”), published March 2021, estimated CapEx at C$1.3 billion and
average OpEx over the LOM at C$7.58/lb U3O8. The updated CapEx reflects approximately C$310 million in direct
and attributable inflationary increases since 2020, and approximately C$590 million in increased CapEx from
enhancements identified through advanced engineering and procurement activity since March 2021. The updated
OpEx estimate reflects an increase of C$2.65/lb U3O8 due to inflationary adjustments and an additional C$3.63/lb
U3O8 increase due to advanced design developments, advancement of procurement, and operational and ongoing
elite environmental enhancements. The mine life and production profile including capability of up to 30 million
1407-7407-5405, v. 3
pounds U3O8 annually is consistent with the FS. The updated CapEx utilized a P50 contingency which was also
consistent with the FS.
The updated costs reflect the advancement of Project engineering from 18% complete at the time of the
Company’s FS, to approximately 45% complet e currently, within an accuracy range of +/ - 10%. The Project is
ready for major construction activities to commence immediately following final Federal Environmental Assessment
approval with critical path detailed engineering and procurement advancing in parallel. Further, the Company is
advancing well with the significant build out of the project development team that includes industry experts in shaft
sinking, underground mining and development, and surface operations.
The Company is progressing discussions with various prospective financing entities – including commercial
lenders, export credit agencies, and alternative sources to secure financing for the Project . The Company is
receiving interest in significant new sources of potential project financing which would fully satisfy the capital
requirements for the Project in combination with its current cash and liquid investments.
The Company is continually refining the current dollar cost estimates as engineering, procurement, and contracting
activities advance over the coming months. In addition, NexGen’s internal team is investigating areas of operational
improvements, including enhanced recoveries, supplemental energy efficiency initiatives through kinetic heat
recovery, and increased automation of material handling and processes throughout the operations.
About NexGen
NexGen Energy is a Canadian company focused on delivering clean energy fuel for the future. The Company’s
flagship Rook I Project is being optimally developed into the largest, low -cost producing uranium mine globally,
incorporating the most elite standards in environmental and social governance. The Rook I Project is supported by
a NI 43-101 compliant Feasibility Study which outlines the elite environmental performance and industry leading
economics. NexGen is led by a team of experienced uranium and minin g industry professionals with expertise
across the entire mining life cycle, including exploration, financing, project engineering and construction,
operations, and closure. NexGen is leveraging its proven experience to deliver a Project that leads the entire mining
industry socially, technically, and environmentally. The Project and prospective portfolio in northern Saskatchewan
will provide generational long-term economic, environmental, and social benefits for Saskatchewan, Canada, and
the world.
NexGen is listed on the Toronto Stock Exchange and the New York Stock Exchange under the ticker symbol
“NXE,” and on the Australian Securities Exchange under the ticker symbol “NXG ,” providing access to global
investors to participate in NexGen’s mission of solving three major global challenges in decarbonization, energy
security, and access to power. The Company is headquartered in Vancouver, British Columbia, with its primary
operations office in Saskatoon, Saskatchewan.
For additional information and media inquiries:
Leigh Curyer
Chief Executive Officer
NexGen Energy Ltd.
+1 604 428 4112
www.nexgenenergy.ca
Travis McPherson
Chief Commercial Officer
NexGen Energy Ltd.
+1 604 428 4112
1407-7407-5405, v. 3
Monica Kras
Vice President, Corporate Development
NexGen Energy Ltd.
+44 (0) 7307 191933
Technical Disclosure
All technical information in this news release has been reviewed and approved by Kevin Small, NexGen's Senior Vice
President, Engineering and Operations, a qualified person under National Instrument 43-101.
The Feasibility Study referred to herein, entitled “Arrow Deposit, Rook I Project, Saskatchewan, Nl 43- 101 Technical
Report on Feasibility Study dated March 10, 2021”, has been filed on SEDAR+ ( www.sedarplus.ca) and EDGAR
(www.sec.gov/edgar.shtml), and is available on the Company’s website (www.nexgenenergy.ca).
Cautionary Note to U.S. Investors
This news release includes Mineral Reserves and Mineral Resources classification terms that comply with reporting
standards in Canada and the Mineral Reserves and the Mineral Resources estimates are made in accordance with NI
43-101. NI 43-101 is a rule developed by the Canadian Securities Administrators that establishes standards for all public
disclosure an issuer makes of scientific and technical information concerning mineral projects. These standards differ
from the requirements of the Securities and Exchange Commission ("SEC") set by the SEC's rules that are applicable to
domestic United States reporting companies. Consequently, Mineral Reserves and Mineral Resources information
included in this news release is not comparable to similar information that would generally be disclosed by domestic U.S.
reporting companies subject to the reporting and disclosure requirements of the SEC Accordingly, information
concerning mineral deposits set forth herein may not be comparable with information made public by companies that
report in accordance with U.S. standards.
Forward-Looking Information
The information contained herein contains "forward-looking statements" within the meaning of applicable United States
securities laws and regulations 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 estimates for CapEx,
OpEx, SusEx and a payback period of 12 months, the appointment of a lead lender group, the availability of financing for
the Project, the advancement o f detailed engineering and contract negotiations, bolstering the globe’s uranium supply
chains to meet the rising demand for nuclear energy, the timing and cost of reclamation, including as part of the UGTMF
and after-tax free cash flow remaining materially consistent with the FS, Free Cash Flow, Payback Period and IRR relative
to various uranium prices, the delivery of clean energy fuel for the future, the development of the largest low cost
producing uranium mine globally and incorporating elite standards in environmental and social governance, delivering a
project that leads the entire mining industry socially, technically and environmentally, providing generational long -term
economic, environmental and social benefits for Saskatchewan, Canada and the wor ld, planned exploration and
development activities and budgets, the interpretation of drill results and other geological information, mineral reserve
and resource estimates (to the extent they involve estimates of the mineralization that will be encountered if a project is
developed), requirements for additional capital, capital costs, operating costs, cash flow estimates, production estimates,
the future price of uranium and similar statements relating to the economics of a project, including the Rook I Pr oject.
Generally, forward-looking information and statements can be identified by the use of forward-looking terminology 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 NexGen’s current expectations, beliefs, assumptions,
estimates and forecasts about its business and the industry and markets in which it operates. Forward-looking information
1407-7407-5405, v. 3
and statements are made based upon numerous assumptions, including, among others, that financing for the Project
will be available in a timely manner and on terms acceptable to the Company, the results of planned exploration and
development activities will be as anticipated and on time; the price of uranium; the cost of planned exploration and
development activities; that, as plans continue to be refined for the development of the Rook I Pro ject, there will be no
changes in costs, engineering details or specifications that would materially adversely affect its viability; that financing
will be available if and when needed and on reasonable terms; that third- party contractors, equipment, suppl ies and
governmental and other approvals required to conduct NexGen’s planned exploration and development activities will be
available on reasonable terms and in a timely manner; that there will be no revocation of government approvals; that
general business, economic, competitive, social and political conditions will not change in a material adverse manner;
the assumptions underlying the Company’s mineral reserve and resource estimates and updated/revised CapEx, OpEx,
SusEx, sustaining capital and other co sts, and pay back period; assumptions made in the interpretation of drill results
and other geological information; the ability to achieve production on the Rook I Project; and other estimates,
assumptions and forecasts disclosed in the Feasibility Study for the Rook I Project. Although the assumptions made by
the Company in providing forward -looking information or making forward -looking statements were considered
reasonable by management at the time they were made, 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 additional financing, the risk that pending assay results will not confirm previously announced preliminary results, the
imprecision of mineral reserve and resource estimates, the price and appeal of alternate sources of energy, sustained
low uranium prices, aboriginal title and consultation issues, de velopment risks, climate change, uninsurable risks,
reliance upon key management and other personnel, risks related to title to its properties, information security and cyber
threats, failure to manage conflicts of interest, failure to obtain or maintain r equired permits and licences, changes in
laws, regulations and policy, competition for resources, political and regulatory risks, general inflationary pressures,
industry and economic factors that may affect the business, and other factors discussed or referred to in the Company’s
most recent Annual Information Form under “Risk Factors” and management’s discussion and analysis under “Other
Risks Factors” filed on SEDAR+ at www.sedarplus.ca and 40-F filed on Edgar at www.sec.gov.
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 statements or implied by forward -looking information or
statements, 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 are
cautioned not to place undue reliance on forward -looking information or statements due to the inherent uncertainty
thereof. 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.