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Tuesday, May 21, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.


NexGen Energy to buy 2.7 million pounds of uranium concentrate from MMCap fund

The uranium miner will issue unsecured convertible debentures valued at over C$343 million in exchange

NexGen Energy to purchase 2.7 million pounds of uranium concentrate from MMCap
Yellowcake uranium concentrate. Photo credit: Areva S.A.

NexGen Energy Ltd. (TSX: NXE), one of Canada’s top uranium companies, has decided to purchase a vast quantity of uranium concentrate in response to an increasing supply deficit.

The Rook I mine operator will acquire 2.7 million pounds of it from Toronto’s MMCap International hedge fund, valued at C$343.25 million. NexGen will provide the fund manager with the sum in the form of convertible debentures equivalent to 23 million shares or a 4.3 per cent stake.

“At a time when available physical uranium is extremely tight and expected to continue to be scarce given the long-term supply deficit, this purchase represents a strong opportunity,” chief executive Leigh Curyer said.

Combined with a previously announced C$224 million NexGen share purchase deal expected to close May 15, the Saskatchewan miner will soon have a favourable cash balance of C$600 million for its activities.

In addition to a multi-million-pound uranium deficit forecasted in the coming years, NexGen has predicted that demand for the commodity will increase by 127 per cent by 2030. Furthermore, the company expects the demand for nuclear energy needed to power the artificial intelligence industry to grow immensely.

Read more: ATHA readies equipment for June drilling at new Nunavut uranium project

Read more: ATHA enters C$8M option agreement with Inspiration Energy for Saskatchewan assets

Rook I project to eliminate 300 million tonnes of CO2 annually

NexGen claims that the nuclear fuel supply from its primary operation will enable emission reductions equivalent to removing 70 million cars from the road each year. As a result, it will help generate enough carbon-free energy to power up to 33 per cent of United States houses, the company says.

NexGen has received support from four local Indigenous communities for its major Saskatchewan mining endeavour. The project, which is the world’s largest uranium asset under development, is expected to generate C$19 billion for Canada’s economy during its lifespan.

Rook I will churn out 30 million pounds of the radioactive element per annum.

NexGen has made strategic investments in other uranium operators in the Athabasca Basin as well. The company currently has a 33.9 per cent stake in IsoEnergy Ltd. (TSX-V: ISO) and a uranium extraction partnership agreement with ATHA Energy Corp. (TSX-V: SASK) (OTCQB: SASKF) (FRA: X5U).

Saskatchewan and Alberta just signed a new nuclear power collaboration agreement. They will exchange information and technical expertise for the benefit of western Canada’s atomic energy industry.


ATHA Energy is a sponsor of Mugglehead news coverage 


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