NexGen inks uranium sales agreements with major US utilities (updated)

Nexgen Energy

04/12/2024 15:25

(Adds Rook I project details, analyst comments in paragraphs
2,6,7; Updates shares in paragraph 9)
       Dec 4 (Reuters) - Canada-based uranium miner NexGen
Energy  NXE.TO  said on Wednesday it had signed agreements with
multiple U.S. utility companies to supply 5 million pounds
(Mlbs) of the nuclear fuel ingredient.
    Uranium will be supplied from NexGen's Rook I Project
currently being developed in Saskatchewan. Company anticipates
annual delivery of about 1Mlbs/year from 2029 to 2033 subject to
commencement of commercial production. 
    
    WHY ITS IMPORTANT
        Nuclear energy has come into focus in recent years as
companies explore alternative sources of power to drive the
rapid development of artificial intelligence (AI) tools and vast
data centers.
  
        The U.S. Energy Information Administration (EIA)
estimates record-high power consumption in 2024 and 2025.
        NexGen Energy is also in discussions with additional
U.S., European, and Asian utilities for similar contracts.
  
    
    CONTEXT
    The sales contracts announcement comes close on the heels of
the company completing an important step of the ongoing Federal
Environmental Assessment for the Rook I project.
        NexGen is well-positioned to secure project financing
post a potential Federal approval of the project in 2025, RBC
Capital Markets analyst Andrew Wong wrote in a note, adding that
the terms of the contract likely "mitigates the risk from
potential delays in project start-up".
  
    
    KEY QUOTES
    "Energy demand from reliable sources is increasing by the
week with the need to expand existing nuclear energy
infrastructure and the construction of power consuming data
centres at a time the security of uranium supply is under
significant technical and sovereign risk" said Leigh Curyer,
Chief Executive Officer of NexGen Energy.
    
    
    SHARE REACTION
    Shares of the company rose 3.6% to C$11.78 in early trade.

 (Reporting by Pooja Menon in Bengaluru; Editing by Tasim Zahid
and Anil D'Silva)
 ((Pooja.Menon@thomsonreuters.com;))