VANCOUVER, June 2, 2016 /CNW/ - NexGen Energy Ltd.
("NexGen" or the "Company") (TSXV:NXE,
OTCQX:NXGEF) is pleased to announce that it has entered into a
binding term sheet with CEF Holdings Limited ("CEF") to
issue and sell to CEF and/or affiliates of its shareholders
US$60 million in aggregate principal
amount of unsecured convertible debentures of NexGen (the
"Debentures").
Leigh Curyer, Chief Executive Officer of NexGen commented: "It
is a pleasure to welcome CEF as a partner and strategic investor
into NexGen. We have been working to secure the right partner for
Arrow over the last 12 months in order to advance the project which
is among the best undeveloped uranium assets. CEF understands
the strategic significance of Arrow and NexGen's development
strategy. This is evident by CEF committing to support NexGen's
board and executive through the Company's development. This
supportive strategic investment represents one of the most
significant financing steps in NexGen's history and provides the
Company with sufficient capital to continue to optimize the future
development of Arrow."
Warren Gilman, Chief Executive
Officer of CEF commented: "CEF searches the world for mineral
resources which rank amongst the best in their sector and NexGen's
Arrow deposit meets that criteria in uranium. We are delighted to
support the NexGen team in moving Arrow and the Rook 1 property
toward production."
The Terms
The Debentures will carry a 7.5% coupon (the "Interest")
over a 5-year term. The Debentures will be convertible at the
holder's option into common shares of the Company ("Common
Shares") at a conversion price (the "Conversion Price")
of US$2.33 (C$3.05 at current exchange rate of 1.31), equal
to a 30% premium to the 20-day volume-weighted average trading
price calculated in U.S dollars ("20-day VWAP") of Common
Shares prior to announcement.
The Company shall be entitled, on or after the third anniversary
of the date of the issuance of the Debentures, at any time that the
20-day VWAP of the Common Shares exceeds 130% of the Conversion
Price, to redeem the Debentures at par plus accrued and unpaid
Interest if the Debentures are not converted after 30 days'
notice.
Two thirds of the Interest (equal to 5% per annum) is payable in
cash. One third of the Interest (equal to 2.5% per annum) is
payable in Common Shares issuable at a price equal to the 20-day
VWAP ending on the day prior to the date on which such Interest
payment is due.
Subject to an Investment Agreement to be entered into between
the parties, CEF will agree to: (i) not tender (or convert) the
Debentures or any Common Shares acquired on exercise of the
Debentures or otherwise to an unsolicited takeover bid, unless a
bidder takes-up and pays for a sufficient number of Common Shares
such that it, and persons acting jointly or in concert with it,
hold more than 66 2/3% of the outstanding Common Shares of the
Company, calculated on a fully-diluted basis; (ii) exercise the
votes attached to all Common Shares acquired on exercise of the
Debentures or otherwise in respect of any change of control
transaction, in accordance with the recommendation of the Company's
Board of Directors; and (iii) abstain from voting any Common Shares
obtained on conversion of the Debentures or otherwise in respect of
the election of individuals to the Company's Board of Directors who
are not nominees of management.
Use of Proceeds
Including the proceeds from the sale of the Debentures, NexGen
will have cash reserves of approximately C$100 million. Proceeds from the Debentures
will be used to fund the continuing exploration and development of
the Company's SW2 properties (which includes the Rook 1 project and
the Arrow deposit) and for general corporate purposes. These
development initiatives at Arrow include detailed engineering,
environmental and permitting studies in conjunction with continued
definition and expansion drilling.
Approval
The proposed transaction is subject to the satisfaction of
customary closing conditions, including regulatory approval, the
completion of definitive documentation, there being no material
adverse change in the business of the Company or any laws affecting
the Company, or a major event that disrupts the markets or the
business of the Company.
Conference Call
NexGen will host a conference call today, June 2, 2016 at 8:30 a.m.
Eastern Standard Time. Participants may join the conference
call using the following call-in details:
Participant Toll Free Dial-In: +1 888 231 8191
Participant International Dial-In: +1 647 427 7450
A replay of this conference call will be available until
August 4, 2016. The playback numbers
are: Local/International: +1 416 849 0833
North America Toll Free: +1 855 859
2056
Playback Passcode: 26009550 #
Advisors
TD Securities Inc. is acting as financial advisor and lead
placement agent. Farris Vaughn Wills & Murphy LLP is
acting as Canadian legal counsel to NexGen. CIBC World Markets Inc.
is acting as financial advisor to CEF. Stikeman Elliott LLP
is acting as Canadian legal counsel to CEF.
About CEF Holdings Limited
CEF Holdings Limited is owned 50% by CK Hutchison Holdings Ltd.
and 50% by CIBC. CK Hutchison Holdings is the publicly-listed
flagship company of the CK Hutchison Group of companies, the
Hong Kong based multi-national
conglomerate with a combined market cap of the Group in excess of
$100 billion as of December 31,
2015. CIBC is a leading Canadian-based global financial
institution with operations around the world. CEF is an investor in
significant resource assets on a global basis.
About NexGen
NexGen is a British Columbia
corporation with a focus on the acquisition, exploration and
development of Canadian uranium projects. NexGen has a highly
experienced team of uranium industry professionals with a
successful track record in the discovery of uranium deposits and in
developing projects through discovery to production.
NexGen owns a portfolio of highly prospective uranium
exploration assets in the Athabasca Basin, Saskatchewan, Canada, including a 100%
interest in Rook I, location of the Arrow Discovery in February 2014. The Arrow Deposit's maiden
Inferred mineral resource estimate is 201.9 M lbs U3O8 contained in
3.48 M tonnes grading 2.63% U3O8. Rook I also hosts the Bow
Discovery which is 3.7 km along trend and northeast of Arrow and
was made in March 2015.
The TSXV has neither approved nor disapproved the contents of
this press release. Neither the TSXV nor its Regulation Services
Provider (as that term is defined in the policies of the
TSXV) accepts responsibility for the adequacy or accuracy of this
release.
Forward-Looking Information
This news release contains "forward-looking information"
within the meaning of applicable Canadian securities legislation.
"Forward-looking information" includes, but is not limited to,
statements with respect to the activities, events or developments
that the Company expects or anticipates will or may occur in the
future, including, without limitation, the completion of the
proposed transaction, the use of proceeds from the Debentures, and
the receipt of all required regulatory approvals, including of the
TSXV. Generally, but not always, forward-looking information and
statements can be identified by the use of words such as "plans",
"expects", "is expected", "budget", "scheduled", "estimates",
"forecasts", "intends", "anticipates", or "believes" or the
negative connotation thereof or variations of such words and
phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur"
or "be achieved" or the negative connotation thereof.
Forward-looking information and statements are based on the
then current expectations, beliefs, assumptions, estimates and
forecasts about NexGen's business and the industry and markets in
which it operates. Forward-looking information and statements are
made based upon numerous assumptions, including among others, that
the proposed transaction will be completed, the results of planned
exploration activities are as anticipated, the price of uranium,
the cost of planned exploration activities, that financing will be
available if and when needed and on reasonable terms, that third
party contractors, equipment, supplies and governmental and other
approvals required to conduct NexGen's planned exploration
activities will be available on reasonable terms and in a timely
manner and that general business and economic conditions will not
change in a material adverse manner. Although the assumptions made
by the Company in providing forward looking information or making
forward looking statements are considered reasonable by management
at the time, there can be no assurance that such assumptions will
prove to be accurate
Forward-looking information and statements also involve known
and unknown risks and uncertainties and other factors, which may
cause actual results, performances and achievements of NexGen to
differ materially from any projections of results, performances and
achievements of NexGen expressed or implied by such forward-looking
information or statements, including, among others, negative
operating cash flow and dependence on third party financing,
uncertainty of the availability of additional financing, the risk
that pending assay results will not confirm previously announced
preliminary results, imprecision of mineral resource estimates, the
appeal of alternate sources of energy and sustained low uranium
prices, aboriginal title and consultation issues, exploration
risks, reliance upon key management and other personnel,
deficiencies in the Company's title to its properties, uninsurable
risks, failure to manage conflicts of interest, failure to obtain
or maintain required permits and licenses, changes in laws,
regulations and policy, competition for resources and financing,
specific risks relating to the negotiation and execution of the
definitive agreements for the Debentures, the use of proceeds from
the Debentures, the satisfaction of each party's obligations in
accordance with the terms of the definitive agreements for the
Debentures; failure to receive any required regulatory approvals
(including stock exchange), shareholder approval or other
approvals, and other factors discussed or referred to in the
Company's Annual Information Form dated April 13, 2016 under "Risk
Factors".
Although the Company has attempted to identify important
factors that could cause actual results to differ materially from
those contained in the forward-looking information or implied by
forward-looking information, there may be other factors that cause
results not to be as anticipated, estimated or intended.
There can be no assurance that forward-looking information
and statements will prove to be accurate, as actual results and
future events could differ materially from those anticipated,
estimated or intended. Accordingly, readers should not place undue
reliance on forward-looking statements or information. The Company
undertakes no obligation to update or reissue forward-looking
information as a result of new information or events except as
required by applicable securities laws.
SOURCE NexGen Energy Ltd.