NexGen Energy Ltd. (NXE) Earnings Call Transcript & Summary

Good afternoon. My name is Sylvie, and I will be your conference operator today. At this time, I would like to welcome everyone to the NexGen Energy Ltd. Annual General Meeting of Shareholders Conference Call. [Operator Instructions] Thank you. Mr. Curyer, you may now begin your conference, sir.

Thank you, Sylvie. Hello, and welcome, everyone. I will be providing a brief webcast following the formal part of this meeting and then opening the meeting to questions and answers. The meeting will now come to order. Good afternoon. My name is Leigh Curyer, and I am a Director and Chief Executive Officer of NextGen Energy Ltd. I am pleased to welcome you to the Annual General Meeting of the Shareholders of NexGen Energy Ltd. I will act as Chair of this meeting. I ask that Harpreet Dhaliwal, Chief Financial Officer of NexGen Energy, act as secretary of this meeting. I appoint Mita Garcia of Computershare Investor Services, Inc. as scrutineer of this meeting. The secretary has tabled for inspection by any shareholder or proxy holder a declaration that the notice calling this annual general meeting was mailed to shareholders in accordance with applicable law. I will dispense with calling for a reading of the notice of meeting and direct that a copy of the declaration be kept by the secretary with the records of the meeting. The scrutineer has submitted a report on attendance to the secretary. The secretary will now read the scrutineer's report.

The scrutineer's report reads as follows: 2 shareholders in person representing 2,060 shares; 93 shareholders by proxy representing 238,831,138 shares; 95 total shareholders holding 238,833,198 shares; total issued and outstanding as at record date, 470,683,919 shares; percentage of outstanding shares represented at the meeting, 50.74%.

Thank you, Harpreet. I adopt the scrutineer's report and declare that a quorum is present. Adequate notice having been given and a quorum being present, I therefore declare this meeting to be properly constituted for the transaction of business. As a matter of procedure, I ask that shareholders wishing to speak during this meeting, please identify themselves by name and indicate that they are a shareholder or, if a proxy holder, their name and the name of the shareholder they represent by proxy. Voting today will be by a show of hands unless either a ballot is requested or more than 5% of the votes eligible to be cast by proxies are voted against a resolution. Voting for the election of directors will proceed by way of ballot. The corporation's articles under Section 1115 provide that, as Chairman, I may propose a motion and that no motion need be seconded. In the interest of expediting the business of the meeting, I will proceed on that basis. The financial statements of the corporation for the year ended December 31, 2020, and the report of the auditors thereon were delivered to the shareholders prior to this meeting and are available on SEDAR and are hereby placed before the meeting. It is now in order to proceed with setting the number of seats on the Board of Directors. I now ask the secretary to read the proposed motion.

Be it resolved that the number of seats on the Board of Directors of the corporation be set at 9.

Is there any discussion on this motion? All those in favor of this motion, please signify by raising your right hand. Thank you. Against, if any? [Voting]

I declare this motion duly carried. It is now in order to proceed with the election of directors. The number of directors of the corporation has been set at 9, and it is anticipated that 9 directors will be elected. In accordance with the advanced notice provisions contained in Section 261 of the corporation's articles, May 11, 2021, was the deadline for nominations for directors for the ensuing year. And no nominations have been received by the corporation prior to the deadline, other than those submitted by management. Accordingly, no further nominations for directors for the ensuring year will be accepted. I now ask the secretary to read the names of the persons nominated by management.

The names of the persons nominated for directors for the ensuing year are: Mr. Leigh Curyer; Mr. Warren Gilman; Ms. Karri Howlett, Mr. Christopher McFadden; Mr. Richard Patricio, Mr. Trevor Thiele, Ms. Sybil Veenman; Mr. Brad Wall, Mr. Don J. Roberts.

Thank you, Harpreet. I declare the nominations closed and will last -- sorry, and will call for a motion to elect the directors. I now ask the secretary to read the proposed motion.

Be it resolved that Leigh Curyer, Warren Gilman, Karri Howlett, Christopher McFadden, Richard Patricio, Trevor Thiele, Sybil Veenman, Brad Wall and Don J. Roberts be and are hereby elected as directors of the corporation to hold office until the close of business of the next annual meeting of shareholders of the corporation or until their successors are elected or appointed.

Thank you, Harpreet. Shareholders are entitled to vote in favor of or withhold from voting separately for each director nominee as it is necessary to ensure that the number of shares voted in favor of or withhold from voting for each individual director is recorded, I direct that a poll be taken. The scrutiny distributed ballots at the beginning of the meeting. If you are a registered shareholder or a proxy holder and do not have a ballot, would you raise your hand? Please mark an X in the appropriate spaces on the ballots before returning them to the scrutineer. [Voting]

With respect to the motion to elect the director nominees, I'm advised that a majority of the votes have been cast to elect each of the directors nominated. As a result, I declare that Leigh Curyer, Warren Gilman, Karri Howlett, Christopher McFadden, Richard Patricio, Trevor Thiele, Sybil Veenman, Brad Wall and Don J. Roberts be elected as directors of the corporation to hold office until the close of business of the next annual meeting of shareholders of the corporation or until their successors are elected or appointed. I direct that a copy of the final scrutineer's report on this motion be kept by the secretary with the recorded minutes of this meeting. The next item of business relates to the appointment of auditors. I now ask the secretary to read the proposed motion.

Be it resolved that KPMG LLP be appointed as auditors of the corporation at a remuneration to be fixed by the directors to hold office until the next annual general meeting of the corporation.

Thank you, Harpreet. Is there any discussion on this motion? All those in favor of this motion, please signify by raising your right hand. Thank you. Against, if any? [Voting]

I declare this motion duly carried. As I mentioned earlier, a presentation, question-and-answer session will follow the formal portion of the meeting. Is there any further business to be brought before the formal portion of this meeting? I now propose a motion concluding the formal portion of this meeting. Is there any discussion on this motion? All those in favor of this motion, please signify by raising your right hand. Against? [Voting]

I declare this resolution duly carried and the formal meeting to be concluded. A presentation by myself, the Chief Executive Officer, will now follow the formal portion of the AGM. After which, a question-and-answer session will be held. To view the presentation, please access through the webcast link provided. A recording will also be available on NexGen's website. So turning to the presentation. And just -- this is a brief presentation to really provide just a summary as to the company's performance during 2021 and as we head into a very exciting 2021. Of course, there's forward-looking statements, and please read those at your discretion. With respect to share price performance in the 2020 year and 5-year performance, as evidenced on the graph on Page 3, NexGen compared to the TSX Global Mining Index, TSX Composite Index and the TSX Total Return Index since December 2015, we are clearly performing very strongly relative to those 3 dominant TSX indexes, which is a good thing. With respect to the company itself, in Q1 2021, the company was 31% share price increase from the start of the year, and that included a raise of $172.5 million during that period. For the year 2020 itself, we're 100% -- 110% increase in the share price, which is the highest in the sector against our peers. And then also, since 2013, since the company incorporated, it has been 1,002% share price increase during that period, which has also incorporated an equity raise in the order of approximately $425 million. So it's something that we're incredibly proud of and are always very, very mindful of as to how we are comparing, not just in the resources sector, but specifically in the uranium sector. And year-on-year, we're performing very, very strongly. Just turning the page and going to Page 4. This is a ratio which we always have a lot of focus on at NexGen, and we have a razor-sharp focus on every dollar deployed at the organization, be it to general and administrative or with respect to exploration development spend. And we've highlighted there, which is also evident in our management information circular, which we've lodged, the last 5 years with respect to development spend per dollar of executive salary. And that graph tells a very clear story that we always have had a very high ratio of dollars in the ground relative to executive salary compensation. And really, what we're just showing there is very transparently is some of the focus that the company has with respect to the deployment of capital and ensuring that it's highly effective for a development stage company, giving shareholders the best possible opportunity of share price performance by having a very tight control on expenditure. Even in the year 2020, which was impacted by COVID-19, we still maintained a very healthy average of -- healthy ratio of dollars in the ground relative to executive salary. And that's going to continue right throughout the company's entire life cycle and one that we're very, very focused on. Just moving into 2021 and a couple of the exciting objectives that have been achieved. We had a conversion of the CEF convertible debentures to equity and approximately 18 months prior to their term expiry, which has been a fantastic result for the company. It also shows that the financings that we did back in 2016 and 2017 were highly effective with respect to antidilution of the company's equity or an optimal financing perspective. We did those raises at a $0.30 premium to the prevailing 10-day VWAP at the time, and those financings have proven to be highly successful in allowing the company to develop the Rook I project in a very, very optimal manner. We then had that followed closely by our feasibility study and -- which incorporated environmental performance into the design parameters. And that's been obviously very well received by the market, primarily around 2 aspects, not only the phenomenal economic returns of this project, which we'll see when we go into production at a conservative $50 a pound uranium price that we will clear after-tax cash flow of about $1 billion every year. Now that type of after-tax cash flow will take us towards the top 15 of all mining companies worldwide. It's an incredibly exciting proposition for shareholders to have in front of them. And the other aspect of it was the incredible consistency that we've shown from the preliminary economic assessment completed back in 2017 through the pre-feasibility study in November of 2018 and then into the feasibility study. We've got a lot of very strong feedback that investors really appreciated the amount of work that went into the original PEA back in 2017, and we've demonstrated very strong consistency with respect to the design aspect of the project and also the economics of the project, and it's something which we've put an enormous amount of work into and are on a fantastic platform or foundation to move this project forward in an optimal manner. Financing-wise, we have currently approximately $220 million in the treasury, which has us very well financed for our next stages of permitting and development, which incorporate front-end engineering design work. And as per that feasibility study, we identified $158 million of precommitment capital works. We wanted to provide a very transparent understanding for our shareholders of what we're going to be focusing the money on before major construction decisions occur. And we're well placed to spend that money over the over the -- over 2021 and 2022, but we are in a very strong financing position. We've had additional team members as well join us. And Harpreet, who joins us today as Chief Financial Officer after a very long search, has joined the company and already put her stamp on the organization with very strong cost controls over the spending. And particularly important, considering we have a $1 billion-plus spend ahead of us, and to have all of those controls in place prior to commencing, that is extremely important, and you're going to be seeing and hearing a lot more from Harpreet going forward. We're very excited about our maiden sustainability ESG report, which is imminent. We have a fantastic ESG story, and the report that Travis and the team have been working on is very exciting for us to be able to provide another window into what a terrific ESG story NexGen is, and we're looking forward to the dissemination of that in the imminent future. Community agreements, well, we are working on those agreements negotiating. We're at the table. We have been for a substantial period of time, and they are off the back of the study agreements, which we already have in place with respect to the communities in the local project area. And it -- we are very much looking forward to continuing those negotiations over the ensuing period. We have a EIS submission scheduled for the second half late this year, 2021, in December of this year. It is on schedule to be completed by then, and another magnificent milestone ahead of the company that's within reach. That will also be accompanied by the licensing submission as well. And the 2 points I want to make about the EIS and the licensing submission is that it is a formal documentation of all of the work that the company has been -- has conducted since 2013. So it's basically the amalgamation and formal documentation of about 8 years of work on a project which is very well understood in a very competent technical setting and has a very, in a mining sense, straightforward processing circuit attached to it as well. We are very much looking forward to the submission of that EIS and licensing. And at that point, the government will have the opportunity to review what they have not already reviewed in terms of our dialogue over the last 7 years with the company on all aspects of the project covering technical, environmental, community or the aspects with respect to approving this exciting project. And with that, I might just make a quick note with respect to the market, and there has been a real uptake in focus by ESG funds into the uranium nuclear space. It really does feel that the general public has really understood the science of nuclear energy and adopted that it is the only viable solution for base load power generation that does not create a carbon emission. When you consider Tesla produce 500,000 vehicles a year and then show the equivalent of cars that NexGen's Arrow project at GBP 30 million per annum will take off, which is over 70 million cars a year in CO2 equivalent, it really does highlight the opportunity that we have in front of us and just how material it is in terms of addressing carbon emission reductions on a global scale. 70 million cars a year whereas Tesla currently, which is a fantastic company, mind you, currently only produce 500,000 cars a year. So the scale and size of what NexGen has got in front of it is highly material to the planet, and it's an absolute privilege for the team at NexGen Energy to be in such a position to have influence over that. Moving into policy, which is reflecting that adoption of the -- of nuclear power going forward in order to meet carbon reduction targets. We've seen Europe, its official science arm has officially recognized nuclear energy as being clean, green and safe. That is going before the European parliament, this northern hemisphere summer and, on ratification, will effectively expand the scale of investment into the nuclear energy space thereafter. Secondly, we've had the U.S. Biden's election win, he immediately resigned onto the Paris Agreement, which has very strict protocols and targets for carbon reductions into the future. They have a personal or a country goal of having carbon neutrality of their power grid by 2035. The only way, and that is underlined, the only way that can occur is for greater nuclear power generation. And the U.S. is still the largest producer of nuclear power worldwide. They will be well into the 2030th decade, at which point, China's incredible growth program will eventually catch up to it. And with this trillion dollar infrastructure spend and the energy secretary stating nuclear will be a key component, what is going to occur is you're going to see those reactors that were scheduled to close during this decade seek license extensions, and then you're also going to see subsidies brought in for nuclear to compete alongside wind and solar. We -- just yesterday, we saw Illinois already put into its -- towards its parliament legislation for nuclear power subsidies. So there's an example of the states even getting ahead of it, not even waiting for the federal tax incentives to come along. And it just really, just really emphasizes the focus that both space and countries have right around the world with respect to carbon emissions. It's incredibly exciting. And I would say this, it's actually happening faster than I ever anticipated it to, which is incredibly exciting, just as us as a company and as a project are taking this into development, permitting and construction and production thereafter. Just some of the other headlines. And as you all know, I am from Australia. I think Australia is one of the -- probably the toughest public opinion markets in the world on nuclear, and I've been watching it very closely. And the Australian media is reporting regularly about Australia's disposition towards nuclear is increasing materially on a quarterly basis. Just the other day, New South Wales, of which there has not been any uranium exploration for over 40 years, is looking at overturning the ban on uranium exploration and would like to adopt one of the first small module reactors globally into their state. They actually currently do have a nuclear reactor, Lucas Heights, but it's one that's focused on producing medical isotopes. In my home state of South Australia, the community is bidding for the nuclear pure repository. Just incredible for a guy who grew up in that country where the public opinion towards nuclear was once very negative, it's incredibly positive. And we have experienced at NexGen an enormous amount of investor interest and demand down in Australia, and I think it's an incredibly exciting market, and I think you're only just going to see that grow as time goes on. And NextGen, who's already has about 30% of its shareholding base in Australia and the Asia Pacific region, I think you're just going to see that grow as a percentage of our overall shareholder ship going forward. So there's plenty of exciting things going on at the company and from a sector perspective, and we are very, very well placed and head into 2021 and the remaining part of 2021 in this decade with an enormous amount of excitement and confidence with respect to NexGen's objectives and the attainment of those. So I promised I'd keep it brief. I will now open up the question -- the call to any questions that any listener may have.

[Operator Instructions] And at this time, sir, it appears that we have no phone questions.

Thank you, Sylvie, and that's completely fine. And as all shareholders and listeners know, we are very accessible at any moment. So if any of the shareholders would like to call on a sidebar, very happy to take those questions at any time. With that then, I will conclude that the -- this agenda for the meeting and thank everyone for their attendance. Thank you.

Thank you, sir. Ladies and gentlemen, this does indeed conclude your meeting for today. Once again, thank you for attending. And at this time, we do ask that you please disconnect your lines.