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NexGen's Arrow meets Queen's Road investment aims

Uranium developer NexGen Resources has secured a US$30 million investment from Queen’s Road Capital - controlled by Australian rich-listers Andrew Forrest and Jack Cowin - for use at Rook 1 and the standout 2014 discovery, Arrow, in Saskatchewan’s Athabasca Basin.
NexGen's Arrow meets Queen's Road investment aims NexGen's Arrow meets Queen's Road investment aims NexGen's Arrow meets Queen's Road investment aims NexGen's Arrow meets Queen's Road investment aims NexGen's Arrow meets Queen's Road investment aims

NexGen has secured a US$30 million investment as it works towards finalising a feasibility study on Arrow's Rook 1 project in Saskatchewan

Mining magnate Forrest and Canadian-born Cowin own more than 50% of Queen's Road, which has its registered office in Hong Kong. In its latest presentation the firm says Arrow is the world's largest, high-grade undeveloped uranium deposit and a project that meets its key criteria of being in a safe jurisdiction and near-production.

 

The $30 million investment is in shares - $15 million placement at C$1.80 - convertible debentures, in line with Queen's Road's model. The debentures have a 7.5% coupon over a five-year term, convertible to about 8.9 million common shares at a price of C$2.34.

NexGen will pay two-thirds of the accrued interest in cash and the balance in scrip pegged at a 20-day volume weighted average price.

A November 2018 preliminary feasibility study ranks Arrow as a "disruptive asset" at the bottom of the industry cost curve with projected average life-of-mine all-in sustaining costs on a by-product basis, of $12.11/lb.

It is expected to produce 25.4Mlb uranium over a nine-year mine life, with capex pegged at C$1.25 billion (US$891 million).

Arrow has an indicated resource of 179.5Mlbs within 1.18Mt grading 6.88% uranium oxide, including a high-grade core of 164.9Mlbs held within 400,000t grading 18.84%.

NexGen is working towards completing a feasibility study later this year.

Shares in the company (NXE:TSX) are up 56% in the past 30 trading days at $1.99, which capitalises it at $717 million (US$511 million).