The biggest question around NexGen Energy Ltd. (TSX: NXE) (NYSE: NXE) is no longer whether it has found enough uranium. It is whether the company can build fast enough to meet a market that is running short of supply.

That pressure is already building as the global nuclear revival drives demand while new mines can take 15 to 20 years or longer to reach production.

“Anything discovered tomorrow is not coming into production until the 2040s at the earliest,” said Travis McPherson, NexGen’s Chief Commercial Officer, as the World Nuclear Association projects the global primary uranium supply deficit could widen to 335 million pounds annually by 2040.

That is where NexGen’s Rook I mine in Saskatchewan’s Athabasca Basin stands apart, with construction now underway around Arrow, one of the world’s largest and highest-grade uranium deposits.

Discovered in 2014, Arrow contains 239.6 million pounds of probable uranium reserves and sits inside a much larger resource base. NexGen says the Rook I mine is designed to produce up to 30 million pounds annually, enough to account for more than 20% of current global primary uranium supply and more than half of Western supply.

That scale puts Rook I in a category of its own among uranium projects now under development.

“Full-scale construction is well underway and there is a significant amount of activity going on up at site,” said McPherson, adding the work includes water management infrastructure, shaft preparation, airstrip development, and other earthworks construction.

He said execution so far has matched the plan, with “everything going to schedule or ahead of schedule in some instances, to budget, and very importantly to scope.”

The progress is being helped by Arrow’s geology, which gives Rook I a major advantage over many traditional Athabasca Basin uranium mines. Many of those operations are hosted in wet, pressurized sandstone, creating difficult mining conditions that can require extensive ground freezing.

Arrow is different. The deposit is hosted in competent basement rock, allowing NexGen to use more conventional hard-rock underground mining methods.

McPherson said that difference is still not fully understood by the market.

“What is misunderstood is just how flexible the asset is, how simple the asset is from a development perspective and operating perspective,” he said.

He compares Rook I to a compact underground gold mine, except with uranium grades capable of generating far more value from a relatively small amount of ore.

The planned operation is designed to process about 1,300 tonnes of ore a day, a modest mining rate for a project capable of supplying such a large share of global uranium demand.

Rook I is also moving toward production at a time when the uranium market is facing a problem that higher prices alone cannot quickly solve.

About 80 reactors are under construction globally and 38 countries have pledged to triple nuclear generating capacity by 2050. NexGen estimates that new nuclear capacity expected by the early 2030s could add another 35 million to 44 million pounds of annual uranium demand.

Utilities are beginning to recognize the supply problem just as artificial intelligence and data centres add another source of potential nuclear demand, McPherson said.

NexGen estimates that meeting projected U.S. AI electricity demand entirely through nuclear power could require as much as 60 million additional pounds of uranium a year by 2030.

McPherson argues that NexGen does not need that demand for its investment case to work.

“Even if no reactor got built again from this point forward, you still need multiple new Arrows for the existing reactors that are in operation.”

NexGen is also taking a different approach to how it plans to sell its uranium. The company has 11.7 million pounds of future sales commitments with major utilities and has kept a substantial portion of future production uncommitted.

McPherson said NexGen does not intend to simply produce as much uranium as possible and sell it years ahead.

“Our philosophy and approach is very simple and intuitive, which is to maximize the value of every pound we produce.”

That gives the company flexibility to use long-term contracts, spot market sales, or other arrangements depending on uranium prices and market conditions. If the supply shortage develops as expected, retaining a large portion of future production uncommitted could give NexGen greater exposure to stronger uranium prices, analysts say.

McPherson said NexGen has about C$1 billion on its balance sheet and is working through the final stages of securing the remaining capital.

That current cash position provides NexGen roughly 15 to 16 months of full-scale construction funding while negotiations over the remaining financing continue. The total project build is estimated at about C$2.2 billion, with management considering a mix of debt, equity, and product prepayments to complete the financing.

But Rook I is only part of the longer-term opportunity.

NexGen controls more than 190,000 hectares around the project with 150 exploration targets across 27 corridors, giving the company room to turn one major mine into a much larger uranium district.

The strongest evidence so far is Patterson Corridor East, or PCE, which sits just 3.5 kilometres from Arrow that has advanced into a significant discovery.

The latest results show the high-grade zone now extends 644 metres vertically, with uranium mineralization reaching about 930 metres below surface. NexGen plans 45,500 metres of exploration drilling this year, including 42,000 metres at PCE, and has added a fifth drill to speed up the program.

“We have targets everywhere across our 190,000-hectare land package, and we will over the fullness of time continue to explore those and really demonstrate that this is the home of uranium mining globally,” said McPherson.

NexGen has also signed Benefit Agreements with all four Indigenous communities identified within the project’s Local Priority Area, including Clearwater River Dene Nation, Birch Narrows Dene Nation, Buffalo River Dene Nation, and Métis Nation Saskatchewan Northern Region II.

The company reported that 94% of Rook I procurement spending in 2024 went to local suppliers and Indigenous partnered businesses, representing C$56.6 million. It also reported that 82% of site employees that year came from its Local Priority Area in northern Saskatchewan.

“We call that reconciliation in action that is built around local jobs, training, and business opportunities.”

After NexGen Energy was named a Top Pick at CEM’s Muskoka Capital Event, Chief Commercial Officer Travis McPherson outlined why the uranium story is changing and what investors should watch next.

“Two years ago, there were definitely more people asking whether 30 million pounds a year from Rook I was too much uranium to bring into the market. Today, most industry participants, including utilities, are asking us to expand production.

I’m not saying we would do that, but it shows how much the market has changed. The question has shifted from whether Rook I could produce too much uranium to whether enough new supply is coming.

Utilities are looking further ahead now. They understand how long it takes to bring a new mine into production, and that current producers don’t have ample uncommitted supply, all of which is making Rook I incredibly strategically valuable.”

“We found this project ourselves way back in 2014, and that is very rare. We’ve designed every single study and every single drill hole since the beginning, so the foundation here is extremely strong.

The second thing is the asset itself. The technical setting lends itself to very simple development schedules and conventional mining methods. We’re sinking shafts through competent basement rock, and we can draw people from gold, underground copper, uranium, and other parts of the mining industry rather than relying on a very specialized labour pool.

Then we had a seven-year permitting process. We weren’t just sitting there waiting for a call from the regulators. We were testing everything. Around each shaft, for example, we drilled about 30 holes to characterize the ground and confirm the sinking rates and methodologies.

Now we’re in construction and everything is being executed to the NexGen standard.”

“Construction progress is number one, particularly the start of shaft sinking. That is a massive milestone because it gives investors something very tangible to measure against the schedule.

The second is uranium contracting. We expect to sign more sales agreements with utilities. There is a narrative in parts of the market that utilities are moving slowly, but that is not what we are seeing. They are becoming increasingly concerned about where future supply is going to come from, and we are seeing a lot of interest.

The third is completing the balance of the financing. Those three things together will show investors that we are delivering as we always have.”

CEM is preparing a new slate of 2027 Capital Events where investors can get an early look at emerging companies and the opportunities shaping the year ahead.

Warm Regards and Happy Investing,

Fabian Dawson

Each week, CEM Partner and Portfolio Manager, Ryan Iverson, spotlights the ideas and companies sparking investor interest form emerging growth stories to the Top Pick featured across CEM’s Capital Events. This series brings real insights from the annotators shaping tomorrow’s markets and reveals where investors are finding the next breakout opportunities.

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