NexGen inks first uranium sales deals with major US utilities

NexGen Energy (TSX: NXE; NYSE: NXE; ASX: NXG) announced on Wednesday that it has signed agreements with multiple utility companies in the United States to supply 5 million lb. of uranium.

The agreements outline the delivery of 1 million lb. of uranium oxide (U₃O₈) annually between 2029 and 2033.

The company also stated that it is in discussions with additional utilities in the U.S., Europe, and Asia for similar contracts.

“Energy demand from reliable sources is increasing by the week, driven by the need to expand existing nuclear energy infrastructure and the construction of power-consuming data centres, at a time when the security of uranium supply is under significant technical and sovereign risk,” NexGen CEO Leigh Curyer said.

David Talbot, Red Cloud Securities’ head of equity research, wrote in note on Wednesday said the news about the sales contracts should “come as a comfort” to investors.

“It is a start to NexGen’s financial de-risking during the early days of production, while starting to forge those relationships with Western utilities that will be required for the long haul,” he said. “That said, there is a lot more to go – these contracts only total 5 million lb. over the first five years, representing just 3.5% of the 144.2 million lb. of anticipated uranium production during that period. “

NexGen is well-positioned to secure project financing after 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”.

The U.S. Energy Information Administration (EIA) forecasts record-high power consumption in 2024 and 2025, fueled by growing demand from AI usage, data-center expansion, and residential and commercial consumers.

NexGen’s Rook I project in Saskatchewan is considered one of the largest development-stage uranium deposits in Canada.

A 2021 feasibility study outlined an initial 11-year mine capable of producing 21.7 million lb. of U₃O₈ annually during the first five years, with production estimated to reach as high as 30 million lb. per year, according to an update in August. With a $1.3 billion capital expenditure, it is projected to be the largest and lowest-cost uranium mine in the world.

The project contains 3.7 million measured and indicated tonnes, grading 3.1% U₃O₈.

Last month, NexGen successfully completed the final federal technical review for the project. It is now eligible to schedule a federal commission hearing, the final step before securing federal project approval.

Shares of NexGen Energy gained 1.8% to $11.65 apiece in Toronto, valuing the company at $6.5 billion. Its shares traded in a 52-week range of $7.04 to $12.51.

NexGen inks first uranium sales deals with major US utilities

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