NexGen Energy Ltd. ($NXE)

Thank you for standing by. This is the conference operator. Welcome to the NextGen Energy First Quarter 2026 Results Conference Call. The conference is being recorded. [Operator Instructions] I would now like to turn the conference over to Mr. Leigh Curyer, Chief Executive Officer and Director with NextGen Energy Limited. Please go ahead, sir.

Thank you, Betsy. Good morning, and thank you for joining NextGen's Q1 2026 Financial Results and Investor Conference Call. My name is Leigh Curyer, and I am the Chief Executive Officer. Today, I'm joined by Travis McPherson, Chief Commercial Officer; Ben Salter, Chief Financial Officer; and introducing to our quarterly calls, considering we are now entering into construction of this globally significant Rook 1 project, Chris Cochley, NextGen's Project Director, Engineering and Construction. During the call, I will highlight NextGen's milestone achievements over the first quarter of 2026, including the final federal approval for the Rook 1 project, provide an update on the 2025 site construction program, upcoming plans for the construction phase, as we have already made the final investment decision, provide an update on some incredible drilling results released just this morning at our exciting PCE discovery and speak to the NextGen strategy as we optimally advance towards production. At the conclusion of this presentation, we'll move to the Q&A portion of the call, where you'll have the opportunity to ask Travis, Ben, Chris and myself any questions you may have. Throughout the course of today's call, we'll be making forward-looking statements. So please visit our website for all the relevant disclaimers. Just the first few months of 2026 has already proved to be a defining period for NexGen, marked by significant milestones, none bigger than the optimal final approval of the Rook 1 project for construction. Following NextGen's successful completion of the 2-part Canadian Nuclear Safety Commission hearings on March 5, 2026, the CNSC then issued NextGen its license to prepare site and construct Rook I project, 14 business days after the conclusion of the Part 2 hearing. The approval process and response feed was a testament to the strength of the technical submission, NextGen's early and transparent communication with regulators and the deep genuine relationships established with local indigenous nations and stakeholders over the past 13 years. This approval represents one of the most comprehensive regulatory processes undertaken for a resource project globally and is a result of an unrelenting focus since 2013. I would also like to take the opportunity to congratulate Denison Mines and CEO, David Cates, in the approval of their Phoenix project. We, NextGen, have moved with purpose and clarity to deliver a new standard for resources development, one where we encourage all stakeholders to expect better. NextGen's culture of innovation, open-mindedness and continuous improvement have cultivated significantly better outcomes across the board for all stakeholders, and this will continue as we optimally progress through construction and into operation where we will be the most significant new entrant into the mining sector in the generation. Nearly two months into the Middle East disruption, the global energy system is not just absorbing a supply shock, it's being structurally reshaped by it. The effective closure of the Strait of Hormuz has exposed how vulnerable and interconnected the global energy system truly is, highlighting the risk of overreliance on hydrocarbons, particularly in geopolitically vulnerable regions. And so energy security is no longer being defined by access alone, but by resilience, the ability to withstand disruption. That means nuclear, domestic generation growth and capacity and critically reducing exposure to geopolitical choke points. Nations have been forced to reassess their energy strategies in real time, which has ultimately accelerated a focus on nuclear power as a reliable sovereign energy source. This is particularly true given the massive demand growth for power anticipated from electrification of transportation and industrial systems as well as data centers. These are new parts of the industrial landscape that are building new power generation for material electrical needs that are choosing systems that provide highly efficient, high output, reliable nuclear energy. Historically, oil shocks have acted as catalysts for structural change in energy policy, and this recent conflict is already being described as the most significant energy shock in modern history. With oil and gas still accounting for approximately 60% of global primary energy supply, a policy response prioritizing security, stability and diversification is inevitable and has been transitioning following the impacts of energy supply chains due to the Ukraine war. The direction is clearer than ever. Nuclear energy is not optional in the energy mix. It is essential to delivering long-term energy security and with the betterment of industry and civilization. There are currently 79 reactors under construction with operating capacity established within the next 5 years will total an additional 18% to the global nuclear electrical grid. This global shift is occurring at a time when highly quality scalable uranium supply is scarce and depleting rapidly, placing a premium on projects with the jurisdiction, geology and technical capability to deliver, positioning Rook I's project as the most valuable and strategic resource globally. The reality is current mine supply is under stress in maintaining current production levels, let alone growing current production. Further, the economic consequence is that the current production is becoming increasingly higher in cost as mines head into the latter years of their useful lives. To underpin this reality, one just needs to review the last 10 years. Uranium prices have risen from $17 a pound to $100 a pound, and there has effectively been no new material supply response. That's because there isn't purely a uranium price challenge. It's far broader incorporating discovery challenge, permitting challenge, CapEx challenge. It requires significantly elevated uranium prices over a significant amount of time to begin to solve this challenge. For NextGen, the supply-demand backdrop and limited market buffer continues to reinforce our marketing strategy, one that can be summarized as maximizing the value of every pound produced by maximizing the leverage to future uranium prices. Our strategy is being received by the market well as it undeniably benefits all participants by ensuring a more transparent and liquid market is developed and that both suppliers and consumers are able to respond to market changes with certainty to underpin the billions of dollars currently being deployed on a scale never witnessed before into nuclear energy infrastructure. As the company most exposed to the future prices of uranium globally, NexGen will be able to maximize value in this highly constructive backdrop of structural supply deficits. Our strategy and structuring of offtake agreements to optimize the return on every pound produced has not been commonplace amongst producers over the past years and decades, but it's pleasing to see this next-gen approach is now being reflected more broadly amongst industry participants and can only act in the best interest of all participants for a sustainable and successful industry. With respect to our contracting activities, we continue to advance multiple offtake discussions with utilities across the U.S., Europe and Asia Pacific. We expect to formalize additional agreements through 2026 with an unrelenting commitment to maintaining our leverage to future uranium prices whilst providing customers access to an incredibly strategic supply source. As the structural supply deficit widens, the window to make meaningful new discoveries is now and our unparalleled ability to deliver new high-quality supply will play a critical role in meeting the world's future energy needs. Our winter drill program at Patterson Corridor East, PCE, continues to deliver highly encouraging results, further highlighting both the scale and growth potential of PCE. We have increased the vertical extent of the high-grade subdomain by 33% to 550 meters vertical with a growing strike length of over 200 meters, reinforcing the size of the system. Recent drilling continues to demonstrate strong continuity of high-grade mineralization across multiple holes with wide intercepts and clear extension at depth. And importantly, the system remains open for further expansion. In parallel, we are also seeing early indications of a separate parallel trend, highlighting the potential for multiple zones of mineralization within the broader PCE system. With only 30% of the 42,000-meter drilling program completed for 2026, a significant summer drilling program is about to commence in late May, and we see substantial opportunity for further growth of the system. Advancing this drill program methodically and responsibly today is how we ensure we are ready to be a reliable Western supplier for many decades to come. As construction activity for the Rook I project commences, our exploration team remains laser-focused on further defining and expanding this exciting discovery as well as the peripheral work on the 190,000 hectares of prime land position with an additional 3,500 meter program at SW3 and geophysics on SW1 to identify new opportunities for growth. On construction, with approvals now secured, the company is set to commence full-scale construction of the Rook 1 project this coming Northern Hemisphere summer, advancing long-term economic benefits, skilled employment, sustainable regional growth and reinforcing Canada's leadership in nuclear energy. It's great to see our Rook 1 project being recognized as a key pillar in the federal government's nuclear objectives for Canada. The team, procurement, engineering, vendors, contractors and capital are all in place. This readiness is underpinned by the deliberate assembly of a highly experienced team with deep expertise in hard rock mining aligned with the unique base marc setting of the deposit and complemented by strong uranium processing capability and experience in the Athabasca Basin. Since founding the company in 2021, NextGen has built around elite standards, elite standards in planning, discipline, accountability, and it is these ingrained standards combined with a highly experienced project team representing more than 2,900 years of combined global experience across underground mining, uranium milling and major project execution that positions NextGen to deliver construction with the same consistency and rigor that has defined NextGen to date. We have advanced Rook 1 with a clear focus on disciplined execution, drilling over 400,000 meters safely at an industry-leading cost efficiency while investing approximately $748 million to date at Rook 1. Throughout this period, we have consistently delivered meeting our commitments, maintaining strict cost control and meeting key milestones. That track record is the standard we carry into construction. Importantly, construction readiness is well advanced. Key elements are in place, including capital path procurement activities for the initial 2 years, including the shaft sinking contractor secured and engaged and the freeze plant ready for delivery to site. Our $100 million exploration site infrastructure program initiated in 2025, inclusive of accommodation expansion to over 600 beds, road upgrades to enable more safe and efficient traffic flow and the a strip is on budget, schedule and fully meeting the scope. This is a direct reflection of how we execute over the next 4 years. $2.2 billion in CapEx spend to build our project is made up of a number of $5 million to $100 million scopes, and we are executing the next phase successfully and early. Our approach is highly structured with clear accountability and daily oversight across every aspect of the build with a view on operational efficiency. We will be hosting an investor update call in the near future to transparently present each phase of construction pathway with registration details to follow in May. We have strong financial flexibility, supported by a cash position of over $1 billion at the end of Q1. We continue to access a range of highly accretive financing options and are assessing these with discipline, ensuring we select the optimal path while preserving our current strength and flexibility. The world is changing fast, and the role of energy is being redefined in real time. What was once a transition led by climate ambition is now driven by security, reliability and execution. The Middle East disruption has reinforced this shift, exposing the fragility of global energy systems and accelerating the move towards stable, domestically controlled nuclear power. At the same time, electrification, AI and industrial growth are driving unprecedented demand for reliable baseload energy, positioning nuclear at the center of the next phase of global development. As a result, uranium is no longer a cyclical commodity. It is a strategically critical resource and the market is approaching a tipping point where sustained demand and constrained supply will define the years ahead. NextGen's industry-leading leverage to future uranium prices optimized by our contracting strategy, combined with our uncontracted uranium resource, which totals currently 340 million pounds, makes NextGen the best positioned company in the uranium sector to maximize returns and value for our investors. Thank you, and I look forward to updating you on our progress throughout this transformative year. Now I'll open the call to questions.

[Operator Instructions] The first question today comes from Anthony Taglilieri with Canaccord.

Maybe just on long-term contracting. You guys have mentioned wanting to remain flexible. What is the right level of contracting look like then for NextGen? And are the pricing terms you're seeing out there currently in terms of floors and ceilings attractive enough to incentivize you guys to layer in materially more contracts? Or would you rather see -- or do you think you'll see better pricing terms moving forward?

Yes. I'll start the question there, Anthony, and then hand over to Travis. This is developing very, very quickly the market and recent market commentary by another industry participant was very clear with respect to the way pricing is heading well above $100 a pound, and they're seeing that now in their negotiations. That's very similar to our experience as well, one which we kicked off over 18 months ago. And with respect to NextGen, our overriding principle is to maintain absolute exposure to future prices at the time of delivery. Now future prices at the time of delivery are often a combination of spot, floors and ceilings. I also like to make the point that it's not a uniform approach. It's horses for courses. So various utilities have different preferences for structures of contracts. Some are happy for all spots, some are happy for floors and ceilings, and they are in -- the floors are -- you can typically think of them as at or near spot with the ceiling approximately double that of what the floor is and escalated. Some are happy with no floor and a very high ceiling. And we have a combination of all of those with the 4 contracts that we currently have. It's to the tune of GBP 10 million in total over the first 5 years. And we currently have 28 million pounds uncontracted per year going forward over those 5 years and then GBP 30 million thereafter. Now we will take a very staged approach. We're not going to have an approach where we fix where we want a certain percentage in under contract and a certain percentage available for realization at that particular point in time. So I guess to answer your question the best is, yes, we are -- we do have contracts in place. We are negotiating further contracts, which will be a combination of those structures. The overall principle, though, we'll maintain our industry-leading position of realizing the optimal pricing achievable at the time of delivery, which is very heavily tied to prices at the time of delivery. And it's just common sense when you've got a project in a premium jurisdiction and let's face it, Athabasca Basin is the best jurisdiction globally for a uranium project with very high certainty of production and a very low economic cost per pound. It's our job to maximize return to shareholders, and you do that by having a perspective of optimizing the return on every single pound produced. I can't predict where the price is going to be precisely by a certain date. I am extremely confident that the price is going well above $100 a pound in the short term. And I don't see any material production coming online globally. And I want to make the point, NextGen will -- 30 million pounds will only be replacing what's coming or what is forecasted to come offline between now and 2030. And so our view is, which is based on technical and financial fact is that the uranium price is going significantly higher. And we had that perspective 5 years ago. We've proven to be right. We didn't lock in contracts that may have seemed attractive at the time, but are now underwater relative to the spot price today. And it's proven to be right, and that's our view going forward. And so I can't give you a precise percentage of under contract or -- and then still available to sell. But the important takeaway is we will maintain our position as being the world's most levered uranium company to the future price of uranium. Travis, have I missed anything there?

No, I'd just really emphasize exactly that patience has paid NextGen in this market, and we don't see that slowing down. So being patient while still when contracts make sense for us to sign, we'll sign them with aligned counterparties. But we're not in a rush and there's no necessity to do any more contracts by a certain date or a certain percent by a certain date. So patience continues to pay us, and we'll continue to recognize what we have, how scarce it is and particularly going forward so that we can absolutely maximize the returns for everyone involved.

Great. That's very clear. Maybe just as a follow-up on project financing. So I'm sure there's a lot of things happening in the background. Obviously, with a strong treasury, you aren't necessarily hard-pressed to come to a conclusion there. But maybe some color would be great. How things progressed, structures that maybe you guys have looked at and maybe when we could see something finalized there?

Travis?

Sure. Yes. Thanks, Leigh. Yes, I mean, again, going back to the quality of what we're talking about here and all the points Leigh made, I mean, there's a lot of options for us and very attractive accretive options. As you point out, with over $1 billion, that's kind of half of the CapEx on the balance sheet as we speak. So there is no rush or urgency and the market is developing quickly, and we have a lot of key milestones upcoming, including obviously commencing construction, but also a lot of exciting events along the path. So we're not in a rush. In terms of options, I'd say nothing's materially changed from what we've previously discussed. So prepayments on product, that's obviously a big focus. And then all the project finance and convertibles and all the other things that we've talked about are obviously options for us. But -- we have very -- what do you want to call it, champagne problems, I guess, in the sense we have so many options, all of which are very, very attractive. And so we're still evaluating and going through doing our due diligence and counterparties involved and structures involved, making sure that we capture where the market is going and NextGen's place in it because if we lock in a financing that's reflective of what's going on today, it's not going to look great in a few years' time. So we have to also maintain our exposure to the future.

Yes. And we won't be cute about it. We'll do it with -- well ahead of time. And -- and at a time that makes sense, well, it's worked so far that we could have secured financing 2 years ago for the CapEx, but it would have been at a lower spot price at the time and not a sound turn. So as I said, we -- our positions at the spot price is rising. A higher spot price means the cost of capital comes down, and that's our responsibility to shareholders. And we're not going to run the treasury to 0. And we've always proven a very strong track record in raising funds optimally in the market at the time and in the least dilutive fashion. So that's going to continue, and you'll see news of that in due course.

The next question comes from Ralph Profiti with Stifel.

Leigh, of the 29,000 meters this summer, what does the pipeline look like? Because it's going to be significantly bigger than the winter program. Where are you prioritizing between the high-grade subdomain, some of these parallel structures? Is there any discussion to changing the strategy as the picture evolves? And where are the earliest results going to come from?

Yes, great question, which is always evolving. You can think of those meters as 3/4 of them are focused purely on PCE looking for extensions but not just in the footprint at PCE, but those high-grade subdomains. And they are still materializing. As I speak with PCE, there's no project other than Arrow or no deposit other than Arrow that demonstrates such strong continuity, high-grade broadness in competent basement rock in the basement other than Arrow. Like PCE is replicating all of those amazing features of Arrow, but it's still forming, and we're still trying to get an understanding of its entire extent, both the footprint, but also those high-grade subdomains within it. Given that, the majority of those meters are going to be directed at those 2 objectives. The third is looking for those parallel zones of mineralization to PCE. Now, those who are very familiar with the story and our exploration history know that we're incredibly structured around our exploration. We don't spray holes anywhere. Every hole has to have an enormous amount of merit. It goes through a very rigorous process of evaluation before it's drilled right up towards myself and the Board. And so as you get results, it can change the weighting to, all right, we're going to put some emphasis in understanding the high-grade subdomain within the area of mineralization because if you hit one of those high-grade holes, it's incredibly material to the overall resource calculation. But similar to what Trevor said around the financing, it is a fantastic challenge to have as to where do you put those holes. Every hole though, I can tell you, is going to be very, very productive in advancing our understanding of PCE. I think at a minimum, whilst we don't have a resource estimate on it officially, but given the economics at Arrow and once you've sunk all the capital at Arrow, these PCE pounds would be classed, I believe it's reasonable to say, are most likely economic and improving by the day. So playing Devil's advocate, if we didn't even have Arrow when we made this discovery, it would be the hottest news on the planet in the uranium space as we speak. I think Arrow is a bit unfair to PCE because it exists only 3.5 kilometers away and it's probably taken a bit of its limelight. But I'd just encourage everyone to really -- and we released results today and -- we've got more assays coming in another 29,000 meters. This is an incredibly exciting story in resources full stop and right alongside the construction of what is currently the world's most globally significant uranium resource going into production in 4 years from now.

Yes. I appreciate that. As a follow-up, Leigh, without front running the larger scheduling update that's coming, I do appreciate having Chris on the call. What's the latest thinking around the schedule and the timing around the surface freezing strategy, right? How does that look like in the early stages of construction starting in those next -- those first few months?

Yes, I can give a high level and then hand over to Chris. And look, I'd remind everyone, we're going to have details imminently around a very detailed webinar around the construction. We're going to be introducing the team right up to Ivan Marlaney, who is our Director with enormous amount of world-class mining project construction experience and go through the stages of construction and be very transparent around what that looks like so people can make their own assessment of progress. And I'm very much looking forward to myself and the team presenting that most likely sometime in June. But holistically, from the moment we start construction officially -- there's -- and you start the freezing process, there's around 6 months of freezing whilst you're adding to the surface infrastructure in order to commence thinking. Thinking through the overburden will be 6 to 9 months until you're into the basement rock. Once you're in the basement rock, and I don't want to take too much of the profile away from this webinar we're about to do, but I'll give you a preview. Once you're into that basement rock, which will have occurred 6 to 9 months after the commencement of shaft preparation. And the cost -- the risk around cost and schedule variability goes down to near on 0 due to the competency of the rock. So everyone is going to have -- like it's not going to be a 4-year risk assessment. That -- the most riskiest part is the overburden, and it's going to be determined before the end of year 2 and once we're in the basement rock. And everyone should very much dial in on that aspect of it. Now having said that, whilst I say it's the most risky part of the construction, the overall risk profile of our project is very, very low risk for a mining project. We've been planning this for over 7 years. We have the team in place. We've been reviewing those plans for 7 years. We know exactly what each member of the team and of our contractor team is doing on every single day over the next 4 years. And we have a management system in place, which gives us real-time assessment of any variable and allows us to take action accordingly. So it's -- as I said, I very much look forward to this presentation, which you'll hear a lot more from Chris in June, and everyone will have a very transparent analysis of what that construction program looks like, what's entailed and the way we're approaching it. And it's an incredibly exciting time for everyone involved. Chris, would you like to -- anything you'd like to add that I may have overlooked?

No, I think you've covered it, Leigh. Like the freezing is obviously a key element of achieving the sync and a focus of the team right now. insofar as starting the site development this summer and preparing for ground freezing by early next year. Participants are reminded that the freeze plants themselves have already been ordered and are stored offsite ready to be deployed as well as the sinker being engaged and active in the project. So we are well on our way to achieving the schedule that will be laid out further in the June call.

The next question comes from George Eadie with UBS.

Just back to PCE, do we still think about this as likely accessed underground via Arrow and going up the rook shafted infrastructure? And I guess, secondly there, what is the permitting status for PCE? Can you just remind me and talk through the steps given it's different ore but potentially using the other infrastructure?

Yes. George, as we speak, I would say that is a very real possibility based on what we know of all the technical facts. PCE is contained in the same basement rock as Arrow, only 3.5 kilometers away. Conceptually, you would run a tunnel from the underground engineering workings of Arrow over to PCE. -- and access it. And it -- the ore would come up through the same production shaft as what you see as designed for Arrow. Having said that, PCE is outside the boundary for the approved license and construction of the Rook 1 project. Now having said that, everything we've seen to date is that it's the same mineralization. It's the same ore body. There's been an incredible mineralizing event on Rook 1. And I don't think we've remotely discovered or defined the true extent of uranium mineralization. For those who have been on the story for -- since 2013, we'll know that we found Arrow with only the 21st drill hole on the property, but the very first drill hole within a 4.5-kilometer radius. We are discovering mineralization way better than the odds are in mineral exploration. It's -- we've clearly got an incredibly good approach to exploration, but are we that good that we find the world's best with the first drill hole within a 4.5-kilometer radius in the middle of nowhere. I don't think we are that good. To say there's additional mineralization there, I think, is anyone who's looked at the geological setting, everyone would concur there's a lot more yet to be discovered and defined. So if you're thinking about a scenario of increasing the production at PCE, that would be subject to an amendment in the permitting with respect to the exploitation of PCE. But having said that, given it's the same mineralization, it's only 3.5 kilometers away. The mineralization at Pon Lake South is we suspect based on all the facts that have been reported on, it's the same mineralizing event as well, and that's 7.5 kilometers away. It wouldn't be the same process as what NextGen went through right from the beginning. All of that environmental data analysis over a 10-year period is still incredibly valid and will be valid during our operations. And so I would say the process of getting access or approval, and this is a forward-looking statement, would be relatively certain. But again, subject to the rigorous oversight of the CNSC and the Ministry of Environment in Saskatchewan, which we fully embrace.

Yes. Okay. No, that makes a lot of sense. And just last one, sorry. Just thinking time lines for the rest of the year. So we've got the webinar probably in June, as you said. And I think in the past, you said more contracts will be released by year-end -- or sorry, by '26 year. Is that right? Or is the financing package more of a 2027 story given commentary before?

Yes. No, I think it's either going to be in 2026 or early '27. -- the financing package, additional contracts, they will be released as we secure them on the terms that we're happy with and that of the utility as well. We have the official commencement of construction this summer. We're just coordinating a number of VIP attendances who have expressed very strong interest in attending the opening ribbon cutting ceremony that involves government community chiefs, community leaders, shareholders, industry representatives as well. And you're going to see a lot of activity at site. It's going to be an absolute hive of activity. And with the air strip, we'll be also facilitating a number of site visits as well. And with the air strip, the logistics of entry and exit to the site safely has been significantly elevated. So yes, an incredibly busy year, one that we've been preparing for, for over 7 years now. So keep watching this space and all along with PCE results, which they haven't disappointed yet. They've been incredible. And every indication is that, that is going to continue.

The next question comes from Orest Wowkodaw with Scotiabank.

Leigh and Travis, I was hoping you could give us some color on how you're thinking in terms of potentially flexing material with respect to volume at the mine. I mean this -- your asset will be the single largest or could be the single largest producer in the world. There's a lot of material to come on in the early years. Can you remind us of sort of how you're thinking about your philosophy with respect to volume versus price here and whether we could see the Arrow run at lower rates if there's a negative price reaction in the market?

I'll start, Orest, and then hand over to Travis. Very simply, the project is capable of 30 million pounds per annum produced at 1,300 tons per day. That's one of the world's tiny underground mines, hard rock underground mines. Hence, we have a very low cost of -- if we were to produce 30 million pounds, it's basically an expense of $350 million a year. Now we would produce and store if we were not satisfied that we were getting a fair price for our production. And we can do that because we have a very low cost base of producing 30 million pounds per annum as opposed to dialing back production and having to terminate a number of staff. We're not going to do that. So every -- first of all, every market indicator we have seen, and as I said, we're very technically and financially fact-based and we've been proven to be correct as to where this uranium price is going. On top of that, the amount of inbound calls that we have with respect to the volumes that we have under negotiation for offtake. I am certain we'll be producing at 30 million pounds per annum from the very first year of production. We will continue that. And as I said, it's not really a question as to whether the market is there. If it is not at a price that we deem appropriate, we will produce and store. And I want to be very clear on that because I think there's been some other market participants that have insinuated that 30 million pounds would just be hitting the spot market. We've never said that. It's completely incorrect. And I've been very, very clear with our approach. And I'd just encourage everyone to focus on what we are saying because everything we've said since 2011, we have done. And going into construction and production, we will continue to do everything we said we will do and be very transparent about it. There's no tricks. Nothing. This industry is very simple. You need to be able to produce uranium at X and sell it for a price well beyond X. And that gap needs to be able to pay back the CapEx. Our gap between X and the current price of $85 is paying back the entire CapEx within 11 months. So a very simple economic equation at NextGen. We're becoming a top 10 world mining company based on after-tax cash flow at GBP 30 million per year at the current spot price. And that is our strategy, and we actually feel that the spot price is going to be significantly higher when we are actually in production. So -- and we're seeing the level of demand certainly supporting that. So that is our approach on it. It will always be our approach, and we look forward to executing it.

The next question comes from Craig Hutchison with TD Cowen.

I just wanted to circle back on the shaft question there. I think you mentioned, Leigh, in your opening remarks, you guys have awarded the shaft contract. Can you just confirm if that's correct? And then if you have, is that contract based on a fixed price? Or are you guys managing yourself?

Yes, we have awarded that contract, and I'll hand over to Travis as the Chief Commercial Officer, who has been the quarterback on that contract structure.

Yes. Thanks, Leigh, and thanks for the question, Craig. Yes, the short answer is no. The contract will not be a fixed price contract. Realistically, that's not really a model that actually makes sense for a contract like a shaft sink. But what we've done without getting into obviously commercial details, but we've aligned the risk of shaft sinking, which again, to Leigh's earlier point, in our case, is actually quite low, but there are obviously some uncertainties there. And so what we've done is kind of a risk -- paying game model. So there's bonuses and incentives for safety, performance schedule and budget as well as pain in the event that those things don't go accordingly. And so in that sense, ourselves and our shaft sinking partner as well as the important, I think, nuance here is that we have essentially a self-performed shaft sinking team in-house at NextGen. That's not only been across, obviously, the technical requirements and our own assessment of what it will take to successfully complete the shaft sink, both in terms of scope, schedule and budget, but also in terms of what are the best models for aligning incentives because really, that's all we need to do. And so it's a -- so again, the short answer is it's a pain game contract with a lot of great synergies between the shaft sink ourselves and the broader team. So we're extremely excited about who we've got partnering with us, our own team's assessment and the model in terms of the contractual model that we've employed here.

Okay. Perfect. And maybe just -- I know you guys...

Sorry. And Craig, with respect to the cost and the feasibility study, the contract that we have in place, there's very strong alignment, which shows to the actual cost as what was presented in the August feasibility study, which shows that our feasibility studies have always been very conservative in nature. So -- and they're always done on the basis that NextGen was building this ourselves and operating the project as well. So these were always -- even from the very first scoping study through to the definitive feasibility study, the whole principle of these studies have been to inform us on the design and cost as NextGen being the builder and the operator of the mine. And so there's really good evidence there with -- that Travis has outlined with respect to the shaft thinking and the underground engineering of very close synergy between what's been presented and now what's being executed.

Okay. Perfect. That was essentially my next question. I know with the construction update in June, I was just wondering if you guys were planning to have a CapEx update with that number? Or it sounds like you guys are pretty comfortable with the number you already have given the market.

Yes. We've seen nothing to date. obviously, labor changes, the impact on the price of diesel would have an impact. But as I said, we were -- we have -- the conservative nature of the $2.2 billion was clearly evident in August of 2024. Everything we've done to date, we are still in that $2.2 billion range. Now if that changes materially and changes our ability to finance the project, we'll be the first to be transparently informed the market of that. But as I said, what we've seen to date, everything is intact from a materiality perspective.

Okay. Perfect. And just my last question, just back on PCE. You guys mentioned it's probably getting lost in the limelight of Arrow. Just any thoughts around the timing for a maiden resource to just put more focus on that project?

I don't see one as we speak in 2026. We're doing an internal assessment around that at the moment, Craig. If that is to change, again, we'll be first to inform the market. But I think that's reasonably expected sometime in 2027. Obviously, heavily subject to the next 29,000 meters over the summer period.

The next question comes from Alexander Pearce with BMO.

So just building on the PCE questions you've had so far. Obviously, you've had great success with the exploration for that deposit. And it's based on your -- the comments you just made, it's probably reasonable to assume you're going to be drilling out and working on this thing for the next couple of years. Is it possible to give us an idea of how much you expect to spend, let's say, over the next sort of 12 to 24 months, given what you know about the project so far?

So PCE, another 30,000 meters or 29,000, approximately $10 million and price of diesel would impact that maybe a little higher from a drilling cost. So yes, it's a very -- it's a sizable program in the Athabasca Basin for 2026. And I'd just like to make the point, Alex. Our geological team operates independently from the construction team. So there would be -- there's no distraction whatsoever on the construction as a result of the exciting results coming from PCE. But yes, from this moment on for the balance of 2026, about $10 million will be -- is budgeted for the remaining PCE drilling.

The next question comes from Brian MacArthur with Raymond James.

It relates to PCE as well and a lot of my questions have been answered. But maybe philosophically, an even bigger question for PCE and how strategic this may be going forward. When you talk to utilities about signing contracts, do you think they're willing to give you value for it yet? And it really goes to this. I mean, you've got, as Orest said, a bunch of 5 years of very high production. You've talked about extending it. But say, we got into an environment like 15 years ago when people want to sign 10- or 20-year contracts, someone might say to you, you don't have that long reserve life. Is there anyone out there who is willing to sort of pay for that yet? And can you use that in your negotiating tactics going forward?

I might start the answer and hand over to Travis. First of all, I don't think there's another project out there with a longer resource life than NextGen as we speak. And I can't see that changing anytime soon, particularly with PC. So I don't really see us being limited, Brian, if I've understood your question with respect to the demand for longevity of reliable supply. There's a lot of the current producers whose mines are going to be extended in the 2030 decade, early in the 2030 decade. And we've seen from Kaza prom they've been very, very clear with their production profile come 2029, 2030, it significantly reduces quickly. So I don't actually see the -- any inhibitor on demand from a utility looking for a secure long-life offtake contract. We are really front and center if that is their requirement. And I would also say not so much PCE, but I think with -- I'd put it down to receiving the permit, which took everyone by a very pleasant surprise being 14 days after the conclusion of the Part 2 hearing. The amount of inbounds have come up since the granting of the permit. So I think that's been also a factor as well with the utility demand. Travis?

Yes. I would just reiterate similar points, like we're not having any issue with demand. We're just not executing ones over the quarter, but that's why NextGen is choosing. So there's tons of demand. So we don't really need any like -- there's no outstanding questions from utilities around should we try to get contracts from NextGen, like everyone wants contracts with NextGen. It's really our determination as to whether they make sense for us at this point in time. And yes, to Leigh's point, like there's not once has it come up in any contract negotiation or discussion or otherwise about the reserve life or resource life of Arrow. Like everyone understands what we're talking about, which is a generational projects coming online at a time where everything else is basically coming offline. So yes.

And I would also suspect Dennison would be in a similar position with the approval of their project as well that the number of inbound calls to Denison would have increased as well because NextGen can't solve all the utilities supply requirements on its own. And that's even if the current producers were able to maintain current production levels, which I would say is less likely than more likely. We don't wish anyone any year will, but there's evidence right across the globe around production issues, sulfuric acid supply issues into Kazakhstan, the list goes on. So there's -- to Travis' point, there's no shortage of demand and anyone who's taking a project into production that has a healthy resource life fully exposed to the future price of uranium are in the leading positions with respect to economic returns of the future.

Maybe I would just ask you back to the other question then because that's sort of where I'm going with this is the big shortfall out in the future. Do people start to think you're going to expand above 30 million pounds plus post -- in your negotiations post 2030?

I would say that at the moment, we couldn't commit to that because we will only commit to what we are certain we can deliver. And as we speak, we are permitted for 30 million pounds we're permitted to construct a project that will be capable of 30 million pounds per annum once in operation. So that is always managing as we speak, if PCE materializes and we commence the amendment to the permit or the addition to the existing permit to facilitate that. That's a whole new exercise, which is going to take a lot of time to conclude. And we are not going to do it at any expense to getting Rook 1 into production at 30 million pounds per annum for the time being.

Great. Very clear. And just -- sorry, I just want to check, talking about 29,000 meters of drilling at PC in January, I believe you announced 42,000 and then another 3,500 to SW3. Has anything changed? Or what's the difference?

No, that's correct. No, you're exactly right, Brian. We did about 10,200 meters in the winter before we had to stop given the thaw and the ground conditions. So we -- the program for 2026 was at 42,000 meters. We've done 10,200 of it or thereabouts, and the balance of the 42,000 meters, including the 3,500 meters will occur prior to the end of 2026.

And sorry, my last question. Given how strategic and interesting this could be, is there any reason why you wouldn't advance this faster? I mean I take your focus on -- the focus has got to be on Aero, but is there any reason why you can't go a little faster, just constrained by drills and stuff at the moment?

Yes. I'd say it's a combination of those things, Brian. We've got a history of doing what we do well. We're very foundational, like bottom-up conservative, I guess, to a certain degree -- well, conservative around execution. We are very driven to deliver what we said we would before elevating further. Look, I think I love the question. I love the perspective about where PCE is heading. I just -- I only like to comment on things I can be conclusive about. Everything looks great at PCE. I think the optionality that it gives NextGen is incredible, but we're just not advanced enough yet to be more conclusive about it. If all of a sudden, we hit some zingers at PCE, additional zingers similar to what happened at Arrow, it changes the whole equation, and we will adjust accordingly. But as I speak, we are very, very focused on constructing safely 2 scope to cost and schedule Rook 1 at 30 million pounds per annum and watching PCE develop in parallel to it. And I think 4 rigs and everything, given our resources and our focus is a really good balance. It is one of the biggest programs in the Athabasca Basin on its own at PCE. So in context, everyone is incredibly busy at NextGen. So yes, that's our position on it as it currently stands, Brian.

The next question comes from Dave [indiscernible] with Investments.

Yes. This is D. Osborne. Major oil companies, the reserve is not forever. Why wouldn't those companies be interested in stepping in here and having this as the next step in their business because their business is not forever. And I'm amazed that you haven't had some discussions with major oil companies to do exactly that.

Excellent question. Yes. I think all I could really say there is watch this space. I think you're completely on it. And I think there is realization by the oil companies as to where this is heading. And I think you'll see that materialize in due course. it's about as transparent as I could be around that question. But what you are doing is recognizing the importance of nuclear energy and the aspects of the hydrocarbons, there is problematic hydrocarbons given the centralization of production, yet the global usage of oil. You've got a similar situation in uranium as we speak, the current majority of production worldwide is very centralized in Kazakhstan and/or countries that have what is considered very substantial sovereign risk. Any uranium producer or company going into production in the near term with an asset in Canada, the U.S. or Australia has a tremendous advantage because it's the Western world, which are the largest consumers of nuclear energy currently. And so there has been that mismatch. NextGen, Dennison have the opportunity to help return Canada to be the world's leader in the production of nuclear fuel. And that's going to materialize over the world. And it's energy, which oil is as well. And those big energy companies, they don't want to close down. I think you're going to see that. And you actually saw that in the 1980s, go through the historical ownership records of uranium deposits in the U.S.A. in the '80s, and a lot of them were by the oil companies. So we may see the day where that returns.

If I were a Chief Executive of a major oil company, I would be looking down the road for the future. And this is the way to do it. is to put this in reserve for when the time comes that the energy is declined, the source has declined. It would be -- if a major company took a look at this and got serious about it, I think it would be the most productive and forward thinking that any company could do.

Yes, I agree. I think it's very astute observation. I actually -- and I agree with you totally. I think the hyperscale's might be a little more nimble and a little more proactive with respect to that actual aspect that you mentioned. Makes perfect sense for an oil company to do, but I think my prediction is that you'll see the hyperscalers get ahead of the oil companies in the first instance because they are building billions of dollars worth of data centers. They are contracting power rates at multiples of what it currently costs to ensure that the power is coming from nuclear energy. So I think they're actually leading the charge in that respect. But no, very astute question.

The next question comes from Graham Tanaka with Tanaka Capital Management.

Congratulations on your progress so far. I'm very curious, you mentioned that PCE could be accessed from Arrow. Is that correct with a horizontal shaft? Is that correct?

That's correct.

Okay. And so with that kind of scenario, which is new to me, what -- could this speed up the development of PCE should it be deemed to be commercially attractive? How much faster could you bring PCE on or when could you bring PCE on if demand does, in fact, become one of almost perhaps a hyper shortage of uranium in the industry. How fast could you bring PCE on? And would it be at a lower cost per pound than Arrow was de novo?

Yes, Graham, I'll start then hand over to Travis. And thanks for the question. Again, conceptually, based on what we know, I think that perspective that the ore at PCE could be accessed from the underground workings at Arrow. But I want to be -- I don't want to look like -- I'm very respectful of the regulatory process. And so I want to caveat everything that it is subject to a substantial amount of future drilling, engineering study, environmental study, that is an absolute given. But conceptually, the answer to your question is correct, it could be. But I have no economic cost data as we speak. I think it's reasonable to conclude at a similar cost to what Arrow is without operating costs to Arrow, but without the CapEx apart from the tunnel going from the underground workings at Arrow 3.5 kilometers to PCE. But the cost of that would be immaterial relative to the overall economics. So whilst I don't have the precise cost per pound incorporating the parameters of a technical study, I think conceptually, yes, I believe that is possible. And I think it's reasonable that you would consider it at or near similar economic operating cost to the Arrow deposit. But that's as much as I could -- we're in a position to convey without further study and regulatory approvals.

Yes. I might just add to Graham, just that you raised a good point actually, which is back to the earlier question on the oil companies and hyperscalers and all of that. Mining is a very long-term business. And to your question around speeding things up, the reality is there's only so much you can do to speed up once you make a discovery to speed things up. There's obviously some regulatory efficiencies that the government of Canada and other policymakers have tried to address. But the bulk majority of -- like look at NextGen, as an example, 2014 discovery 4 years from now to 2030 in production, that's 16 years. We didn't waste a minute of a day. And the vast majority of that time line is actually not regulatorily. It's actually just advancing the project, doing all the drilling, engineering studies, all the other things you need to do. And so PCE, while there, to Leigh's point, likely be significant efficiencies and synergies between the fact that we have the world's best asset built and operating 3.5 kilometers away, there is still just a length of time that it takes. And that speaks to why our contracting strategy and our certainty around where this market is going is based off the fact that we don't have enough supply today. And even when you look out at, okay, well, when could things get into production, like look at PCE, you're talking many years from now. You can't really speed things up is the point. You can speed them up a little bit, but you can't materially speed them up. So yes, I just wanted to make that point.

Yes. Okay. So relative to that, and investors trying to determine the sort of the net present value of that asset, how large do you think PCE could be based on this preliminary drilling that you've done to date? How large could that prospect be relative to Arrow? And what is the possibility that Arrow itself could have significantly more addition to not only resources but annual production as one of the other analysts was asking about. It seems to me that if there is a shortage scenario that could be a really serious one for the industry, NextGen might really almost have a responsibility to be able to have some upside flexibility in adding to pounds per year. So I'm just wondering how those -- the dynamics of those 2 assets, the sizes and at what point you could expand production in total by NextGen?

Yes. Thanks, Grant. I can't give any guidance on respective sizes of what PCE relative to Arrow is. We've been very transparent with all of the technical fact and measurements in our news releases and relative to Arrow, that's as conclusive as we can be at this stage. But just maybe just take a moment to also highlight that Arrow itself isn't closed off. We've drilled 3 holes under the grade shell of Arrow, and that grade shell goes down to 920 meters. And we intersected mineralization in 3 holes over a distance of 500 meters. There's very clear expansion at Arrow before we even went to PCE. But obviously, subject to additional drilling, delineation and regulatory approval. In that scenario you outlined, Graham, yes, we would have a responsibility alongside with the Canadian government. We would work in lockstep with the Canadian government to then execute a development and production profile that got as much uranium processed as possible from the mineralization within the Rook 1 project whilst respecting all of the -- and meeting all of the regulatory and social aspects that we would do. So Graham, yes, we would. Would we meet the challenge? Absolutely, we would subject to doing things which involve all the relevant stakeholders and their agreement to it.

The next question comes from Mohamed Sidbi with National Bank.

So most of my questions on PCE and the CapEx have been answered. So maybe a question for Ben. On the balance sheet, could you maybe help us think about the convertible debt that you currently have on the book? Should we expect that to run their course? Has there been any indication or willingness for an early convert on those I believe they're in the money, frankly.

I'll hand over to Travis as the Chief Commercial Officer, but those converts are well in the post conversion zone at the end of the third year anniversary. Yes. Over to you, Travis.

Yes. Well, exactly. I mean that summarizes it. So yes, they're in the money. And on or after the third anniversary of those converts, we can convert them at our discretion. So that is the likely scenario. The first year coming up in September of this year and then the next tranche is May of '27. So we've done that in every case that we've had since we've started these converts back in 2016. We've always done that. And so it's reasonable to assume that we would continue to do that, all things being equal.

This concludes our question-and-answer session. I would like to turn the conference back over to Leigh Curyer for any closing remarks.

Yes. Thank you, Betsy, and thank you, everyone, who attended today's call, and thank you very much for all the questions we received. And thank you to my team of Travis, Ben and Chris. As I said, we look forward to providing the date and time of our webinar around the construction phase and introducing the broader team. And very exciting time at NextGen and keep watching this space. There's a plethora of exciting developments, and we appreciate your interest and support to what is a fantastic good news story in resources in Canada and for the globe. And with ourselves, Dennison, we're going to be bringing back Canada as the world leaders in the production of this key fuel for the globe. And we're very proud of our position in….