NexGen Energy Ltd. Q2 FY2026 earnings call

Market and Policy Context

• Global policy and demand for nuclear energy is highly supportive, with Canada targeting a doubling of uranium exports by 2035, and both Canada and the U.S. prioritizing energy sovereignty and supply chain diversification for critical nuclear fuel.
• The uranium market has a structural supply deficit: prices have risen 500% over the last decade while supply has grown only 14%. In Q2 2026, spot prices consolidated around $85 per pound, the 5-year forward price reached $105 per pound (above the 2007 cycle high), and management expects prices to continue strengthening materially.

Commercial and Offtake Strategy

• Management maintains a strategy of maximizing leverage to future uranium prices: 96% of the project's reserve base remains available for future sale, with all new contracts structured to retain exposure to spot market prices at the time of delivery.
• In Q2 2026, NextGen executed a 1.3 million pound term sheet with a U.S. utility customer, bringing total contracted volume to 11.3 million pounds (all retaining price exposure). Multiple additional agreements with global utilities across North America, Asia, Europe, and the Middle East are currently in negotiation, including a 20 million pound contract under discussion.

Rook One Construction Milestones

• All planned Q2 2026 construction milestones were completed on scope, budget, and schedule. A 3,000 foot airstrip is complete, the 700-person accommodation complex is fully commissioned and occupied, with 300 personnel currently on site growing weekly.
• Major earthworks and surface infrastructure are well advanced; the 5,840 foot full airstrip extension is scheduled for completion in December 2026. Shaft sinking is planned to commence in Q1 2027, with pad construction for shaft infrastructure in Q3 2026 and concrete foundations starting in Q4 2026.
• All major engineering procurement and shaft sinking contracts have been awarded; long-lead mine hoist equipment is progressing on schedule, and management pre-orders all equipment as soon as designs are finalized to avoid unforeseen delivery delays. As of the end of Q2, 575,000 tons of crushed aggregate have been pre-produced for construction via a partnership with a local indigenous business, employing up to 50 local residents.
• A public groundbreaking ceremony for Rook One was scheduled for August 13, 2026, and an Investor Day webinar with full construction updates is scheduled for September 1, 2026.

Exploration Activities

• The 42,000 metre drilling program at the Paterson Corridor East (PCE) exploration project is approximately 50% complete, focused on expanding the mineralized footprint of the high-grade discovery. Results will be released in batches over the coming months, with drilling planned to continue through 2028.
• NextGen controls a large district-scale land position in the southwestern Athabasca Basin, and exploration success is expected to drive long-term growth for the company beyond the Rook One project.

Community and Balance Sheet

• The balance sheet remains strong with over CA$970 million in liquidity at the end of Q2 2026, providing flexibility to evaluate multiple funding options for remaining construction costs, including project finance, strategic financing, and prepayment agreements.
• The company recently completed the groundbreaking for the La Loche Hotel, a community development project with indigenous and local government partners, as part of NextGen's commitment to inclusive resource development.

The provided Q2 2026 earning call transcript does not break out financial performance by separate product segments. NextGen Energy is currently focused on advancing the Rook One (RUC1) uranium project in Saskatchewan, Canada, which is still in the construction phase and has not yet commenced commercial production. No segment-level revenue or absolute financial performance data is provided in this call.

• Management reaffirms the total capital cost guidance of CA$2.2 billion for the Rook One project, originally issued in August 2024. The recently awarded shaft sinking and underground engineering contract (covering over 50% of the total build) came in line with the 2024 guidance, validating the conservative assumptions built into the original estimate, and no material cost inflation has been observed to date.
• Construction remains on schedule for shaft sinking to begin in Q1 2027, with first production at Rook One on track for 2030, matching prior timelines. There are no changes to the existing geotechnical plan for shaft freezing, which is still scheduled to commence in early 2027.
• Management maintains its long-standing contracting approach: only enough production to cover the project's break-even point (3.7 million pounds per year) will be contracted in advance of production, leaving the remaining ~26.3 million pounds of annual production exposed to future spot uranium prices to maximize shareholder upside. No changes have been made to this target.
• Management expects continued material upward movement in uranium prices from current levels, driven by the structural global supply deficit and rising contracting activity post-summer 2026.

• Management acknowledges general industry-wide capital cost inflation and wage pressure, but notes that NextGen has built conservative assumptions into its cost estimates, and has not seen material cost pressure to date that would impact the CA$2.2 billion capital guidance. The shaft sinking contract includes pain-gain incentives that align the contractor with on-schedule, on-budget delivery.
• While the company has ample current liquidity, it still needs to secure additional financing for the remaining construction capital, and there is no guarantee that financing will be obtained on the favorable terms management is targeting, though multiple options are currently being pursued.
• Exploration results at the PCE project remain uncertain: the full scale and mineral resource of the discovery is still being defined via drilling, and there is no guarantee that PCE will be converted into a producing mine or add meaningful reserves to the company's portfolio.

Q: Why was the most recent offtake term sheet only for 1.3 million pounds, rather than a larger volume, and what is the delivery timeline? What catalysts could push uranium contract prices sustainably above $100 per pound in the next 12-18 months? / A: The 1.3 million pound contract is an introductory short-duration agreement to build a relationship with a new U.S. utility customer, and it retains full exposure to spot price at delivery. It is not the template for all future contracts; NextGen currently has a 20 million pound contract under negotiation, with strong demand across multiple regions. The recent $85 per pound spot price is seen as a new floor for the market, and forward prices have already hit record highs above 2007 levels. Management expects a large uptick in contracting activity after the September WNA conference in London through the winter months, with supportive policy from both the U.S. and Canadian governments continuing to drive demand growth.

Q: Has capital cost inflation changed the 2024 CA$2.2 billion capital guidance for Rook One? / A: The recently completed shaft sinking and underground engineering contract, which makes up over 50% of the total build, came in exactly line with the August 2024 guidance. This validates that the original guidance was intentionally conservative. While some wage and general cost pressures exist industry-wide, NextGen has not seen material cost increases that would change its capital estimate to date. The contract also includes risk-reward incentives for the contractor that help manage cost and schedule risk.

Q: Can prepayment financing transactions be structured to retain NextGen's leverage to future spot uranium prices? / A: Yes, management reports that market interest for prepayment financing is very strong, and all ongoing discussions are structured to retain price leverage. Standard prepayment terms currently under discussion would adjust the volume of uranium delivered based on the spot price at delivery: less uranium is delivered if prices are higher, and more if prices are lower. Even a 10 million pound prepayment at current spot prices would cover almost all remaining construction capital and represent less than 0.5% of the project's total reserve life, so it would not meaningfully reduce NextGen's overall price leverage.

Q: What is the status of discussions for U.S. or Canadian government funding to offset construction costs? / A: Management confirms there is substantial interest in providing government funding from both the U.S. and Canadian governments, with available funding exceeding the amount NextGen needs to complete the project, on very favorable terms. Government funding is one of the top priority financing options for the company, and further updates will be provided in the near future.