Refer to announcement on the TSX. Curious that it has not been reported to the ASX.The 2.7 Mlb is about 10% of their planned initial production and gives them credibility of supply to demanding consumers.
https://money.tmx.com/quote/NXE/news/8102569452714586/NexGen_Announces_Strategic_Purchase_of_27_Million_Pounds_of_Uranium_with_Issuance_of_US250_Million_Convertible_Debenture
VANCOUVER, BC , May 8, 2024 /CNW/ - NexGen Energy Ltd. ("NexGen" or the "Company") (TSX: NXE) (NYSE: NXE) (ASX: NXG) is pleased to announce that it has entered into a binding term sheet with MMCap International Inc. SPC ("MMCap") for the purchase (the "Purchase") of 2,702,410 pounds natural uranium concentrate (" U 3 O 8 ") for an aggregate purchase price of US$250 million based on the five day average UxC spot price.
In satisfaction of the purchase price for the U3O8,the Company has agreed to issueUS$250 millionaggregate principal amount of unsecured convertible debentures (the "Debentures"). The Debentures will be convertible at the holder's option into approximately 23million common shares of NexGen (the "Common Shares") equivalent to ~4.3% of the Company's issued and outstanding Common Shares.
Upon closing of the previously announced Australian Chess Depository Interest ("CDI") offering, as well as this transaction with MMCap, the Company will have~C$600 millionin cash andUS$250 millionworth of physical uranium on its balance sheet.
Leigh Curyer, Chief Executive Officer, commented: "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 for the Company to bolster its marketing discussions and optimises the optionality of project financing structures under evaluation. The Company is at a pivotal time, shaping the industry towards transparency, whilst prioritising local community engagement and participation inSaskatchewanandCanada, and providing the globe with clean energy fuel. The transaction is also a significant endorsement of NexGen's approach, role and opportunity in the nuclear sector. Upon closing of the CDI offering and this strategic uranium purchase, the Company will hold cash and uranium worth overC$930 millionand will significantly assist the Company in funding the anticipated capital needs to develop the Rook I Project."
Strategic Alignment Provisions
In connection with the Debenture issuance, the Company will enter into an investor rights agreement with MMCap, containing voting alignment, standstill, and sale and transfer restriction covenants.
Terms of the Debentures
The Debentures will carry a 9.0% coupon (the "Interest") over a 5-year term. The Debentures will be convertible at the holder's option into Common Shares, at a conversion price (the "Conversion Price") per Common Share ofUS$10.73(C$14.70per Common Share equivalent incorporating today's exchange rate) representing a 30% premium to the volume-weighted average trading price (the "VWAP") per Common Share on the Toronto Stock Exchange (the "TSX") for the 5-days ending on the day prior to the date of this announcement.
Two-thirds of the Interest (equal to 6% per annum) is payable in cash. One-third of the Interest (equal to 3% per annum) is payable in Common Shares issuable at a price equal to the 20-day VWAP on the New York Stock Exchange (the "NYSE") ending on, and including, the third trading day prior to the date such interest payment is due.
The Company will be entitled, on or after the third anniversary of the date of the issuance of the Debentures, at any time that the 20-day VWAP on the NYSE exceeds 130% of the Conversion Price, to redeem the Debentures at par plus accrued and unpaid Interest.
The Company agreed to issued to MMCap an aggregate of 909,090 Common Shares as an establishment fee in connection with the Debentures, representing 3% of the aggregate principal amount of the Debentures.
Conditions
Closing of the Purchase is conditional upon the satisfaction of customary closing conditions prior toJune 28, 2024, including stock exchange approvals and third-party approvals required for the transfer of theU3O8and issuance of the Debentures and the completion of definitive documentation.
Farris LLP were legal advisors to NexGen and Wildeboer Dellelce LLP advised MMCap.
(20min delay)