In a recent The Deep Dive interview, Leigh Curyer, CEO of NexGen Energy Ltd. (TSX: NXE), discussed significant developments for the company and provided insights into the broader uranium market landscape, especially related to the recently signed Russian uranium ban by US President Joe Biden.
Biden’s recent legislation banning the import of Russian uranium marks a pivotal shift in the global uranium market. The ban, which will be phased in over the next four years, aims to reduce reliance on Russian low-enriched uranium. The move has already prompted reactions from Russia, with its state-owned subsidiary Tenex demanding waivers from customers within 60 days of the ban’s announcement.
Curyer emphasized that this ban introduces a new era for the uranium market, which was already under significant supply and demand pressure.
“The U.S. consumes 50 million pounds of uranium annually but produces less than 1 million pounds domestically,” said Curyer. “This ban introduces significant pressure on the already fragile supply chain. Utilities will need to secure alternative sources, increasing demand for Western suppliers.”
The ban’s full implementation by 2028 is expected to exacerbate supply shortages and drive up prices.
“I personally don’t believe it’s been priced in yet,” said Curyer. He drew parallels to the 2002-2008 period when uranium prices soared from $7 to $136 per pound due to security of supply concerns, suggesting that current market conditions could lead to even higher price surges.
NexGen’s Strategic Uranium Purchase
To address future supply concerns and secure long-term contracts, NexGen recently acquired 2.7 million pounds of uranium through a $250 million convertible debt deal with MMCap. This strategic purchase, at a cost based on the five-day average spot market price at the time of the transaction, aims to provide utilities with assurance of supply as they negotiate contracts for 2028 and beyond.
“This purchase acts as an insurance policy for utilities,” Curyer explained. “With historically low inventory levels globally, securing this uranium positions us favorably in negotiations and solidifies our commitment to meeting future demands.”
Progress on the Rook I Project
NexGen’s flagship Rook I Project, poised to become the largest low-cost uranium mine globally, continues to advance through regulatory milestones. Curyer expressed confidence in the project’s regulatory progress, noting strong support from local communities and the federal government.
“We’ve addressed all 49 aspects requested by the CNSC, building on our initial 277 responses,” Curyer stated. “The local communities are fully supportive, and we’re hopeful for a positive conclusion within the next 90 days.”
The Rook I Project is expected to play a crucial role in meeting global clean energy demands and strengthening energy security. The 90-day period for CNSC’s final assessment is crucial, with potential regulatory approval paving the way for construction to commence.
Exploration activities are also set to intensify, with summer drilling programs building on recent discoveries east of the Arrow deposit. These activities aim to further delineate the resource base and enhance the project’s value proposition.
Curyer remains optimistic about NexGen’s future, highlighting the company’s financial readiness and strategic positioning.
“With nearly a billion Canadian dollars in hand, we are well-prepared for the upcoming milestones. Our focus remains on delivering a project that sets new standards in the industry,” he said.
Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
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How does the Russian uranium ban affect the demand for Western uranium suppliers, according to Leigh Curyer?