TLDR
- NexGen Energy stock jumped more than 7% after confirming regular talks with BHP about its Rook I uranium project.
- CEO Leigh Curyer confirmed an open technical dialogue with BHP, which has bought land near the Rook project in Saskatchewan.
- NexGen broke ground on Rook I on Thursday, targeting production by 2030.
- The company plans to raise $1 billion in capital over the next nine months through prepayment deals, debt, and direct equity.
- BHP evaluated a possible NexGen acquisition last year under former CEO Mike Henry.
NexGen Energy stock surged more than 7.6% on Monday after Reuters reported the Canadian uranium miner is in regular talks with BHP about its Rook I mining project in Saskatchewan.
NexGen CEO Leigh Curyer confirmed the dialogue in an interview, saying the two companies share technical information openly. He noted that BHP has purchased a large parcel of land near the Rook project in the Athabasca basin.
“We always speak to them. We have a very open dialogue in terms of technical information,” Curyer told Reuters.
NexGen broke ground on Rook I on Thursday. The project is targeted to become one of the world’s largest uranium mines and is expected to begin production by 2030.
To fund the build, NexGen is looking to raise $1 billion in capital over the next nine months. Financing options on the table include prepayment agreements with utility companies, project debt, and direct equity stakes.
BHP’s interest in NexGen is not new. Under former CEO Mike Henry, BHP’s business development team ran the numbers on a possible NexGen acquisition last year, according to two sources familiar with the matter.
BHP’s current CEO Brandon Craig, who took the top job on July 1, has signaled he wants to take a “really good look” at uranium. One investor told Reuters Craig acknowledged that “scale was hard” in the sector.
NexGen’s market cap has doubled over the past year to around C$9.68 billion. That run-up has led some investors to question whether the company has become too expensive for BHP to acquire.
Athabasca Basin: The World’s Richest Uranium Region
Canada’s Athabasca basin holds the world’s largest known uranium deposits at the highest grade, according to Canada’s natural resources ministry. NexGen is one of several miners advancing projects in the region, alongside Denison and Paladin.
BHP already has a growing presence in Saskatchewan, where it is building the world’s largest potash mine. The company also produces around 5% of global uranium supply as a byproduct at its Olympic Dam copper operations in South Australia.
Uranium Demand in Focus
Uranium demand is being driven by the rapid expansion of data centres and a push by governments to diversify energy sources following the Iran war. Broker Canaccord expects demand for uranium to triple by 2035 from 2025 levels.
Canadian investor and TV personality Kevin O’Leary was on hand to MC the Rook I groundbreaking ceremony, calling the project a “great energy story.”
BHP declined to comment on the Reuters report.
NXE stock was trading up 6.81% as of the latest data, while BHP rose 1.39%.
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