NexGen Energy Ltd. (TSX: NXE) (NYSE: NXE) (ASX: NXG) has successfully expanded its shareholder and liquidity base to Australian shareholders by closing its previously announced offering of approximately 20 million common shares in CHESS Depository Interests (CDIs), at roughly CAD$11.11 per share.
Announced on Saturday, these offerings were based on a daily average exchange rate of A$1 per CAD$0.89 as per the bank of Canada on April 29, 2024.
CDIs are a way for Australian investors to hold shares in international companies listed on the Australian Securities Exchange (ASX). When a company is listed on the ASX as a CDI, it means that the actual shares of the company are held by a depository bank, typically in the company’s home country. In return, the depository bank issues CDIs on the ASX, which represent an interest in the underlying shares held by the bank.
CDIs allow Australian investors to trade and own shares in international companies without having to deal directly with overseas markets or the complexities of international share trading. They also allow international companies to access Australian investors and capital markets more easily.
Australian investors received the offering to boost the liquidity, trading volumes, and market capitalization of the company’s CDIs listed on the ASX.
The net proceeds from the offering will fund the ongoing development and further exploration of the company’s mineral properties, as well as general corporate purposes.
There is some strong potential upside for Australian shareholders with the addition of CDIs.
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NexGen adds USD$600M to its cash position
In 2023, NexGen Energy completed a significant drilling program, totalling 22,114 meters at SW1 and SW2 at the Arrow deposit. This initiative aimed to provide crucial information for identifying priority targets for the upcoming 2024 program.
This drilling effort represents the largest exploration program since the discovery of the Arrow Deposit. NexGen Energy is presently focusing on 10 different conductive trends at SW1 and SW2, with drilling planned for 14,300 meters and 15,700 meters at each respective property. Additionally, the company has planned geophysical surveys for SW1, SW2, and SW3 to identify further exploration targets.
Furthermore, ATHA Energy Corp (TSXV: SASK) (FRA: X5U) (OTCQB: SASKF) holds a 10 per cent carried interest in key land held by NexGen Energy, including the Arrow Deposit.
The company also recently entered into an agreement with MMCap International Inc. SPC (MMCap) to buy 2.7 million pounds of natural uranium concentrate (U3O8) for USD$250 million, based on the five-day average UxC spot price.
The company will issue USD$250 million worth of unsecured convertible debentures to satisfy the asking price, which will be convertible into 23 million shares. This is the functional equivalent to approximately 4.3 per cent of the company’s total shares.
However, now that the CDI offering is closed, the transaction with MMCap gives NexGen a cash position of $600 million, and USD$250 worth in physical uranium.
ATHA Energy Corp. is a sponsor of Mugglehead news coverage
