Shares in NexGen Energy (TSX: NXE; NYSE: NXE; ASX: NXG) have risen by half in the past six months on surging uranium prices but the federal regulator has put a temporary hold on approving the company’s $1.3-billon Rook 1 project in Saskatchewan.
NexGen’s environmental assessment filing doesn’t adequately address how proposed underground tailings and a flooded mine area might leach towards a lake near the site, the regulator says. It is pausing a two-year approvals process while the company addresses the issues for the project in the province’s far north Athabasca Basin.
The disclosure has come as a bit of a surprise to some NexGen shareholders and uranium watchers.
“Even if NexGen’s underground tailings management facility project gains regulatory approval, uncertainties related to construction and life-of-mine development persist,” @PraiseKek, who scrutinizes uranium companies, wrote on X on Tuesday. “These may lead to the mine’s closure at any indication of contamination or technical difficulties.”
Rook 1, Canada’s largest development-stage uranium project, received provincial approval in November. It still needs OKs from federal environmental, provincial permitting, and federal licensing before construction. But the Canadian Nuclear Safety Commission notes it may have to review NexGen’s submissions “several times to ensure the responses meet requirements,” according to letters from the commission posted to a government website.
‘Within weeks’
NexGen will reply within weeks to the 49 remaining items to address with the regulator, the company said by email on Friday in response to questions from The Northern Miner. It backed up statements by CEO Leigh Curyer on a March 11 earnings conference call.
“It is normal for uranium mine and mill developments undergoing federal environmental assessment to have follow-up comments during this process, which range from clarifications to requests for additional information,” spokesman Travis McPherson said.
“NexGen is highly confident in addressing these remaining federal comments, and notes that the provincial environmental assessment process is complete, and evaluated all of these same aspects, including components such as tailings storage, water (e.g., lake) quality, and fish health.”
The company’s submission has already shown its plan to put tailings in a paste cemented to deep rock similar to granite is safer than surface storage, and it’s supported by the project’s Indigenous partners.
“There would be no significant adverse effects on biophysical, cultural, or socio-economic components relating to water and fish as a result of the Rook 1 project,” McPherson said.
Fuel shortage
The project is needed to narrow a forecast shortage in nuclear fuel as more countries embrace fission for electricity generation that doesn’t produce greenhouse gases. There are also concerns about securing Western supplies of the heavy metal as China ramps up reactor construction and Russia remains a pariah state for the war in Ukraine yet controls most of the world’s uranium processing plants.
Rook 1 would produce 21.7 million lb. of uranium oxide annually over 11 years from the Arrow deposit, according to a 2021 feasibility study. Last month, the company said it had found a new deposit 3.5 km east of Arrow. The Athabasca Basin is one of the world’s leading sources of uranium production.
Yet one NexGen shareholder from the United States, who declined to be named for this story, was driven to email The Northern Miner about concerns over the environmental approval process.
“The nuclear regulator has made the information requests public for the environmental impact and, although I’m not a mining professional, some of them sure look serious,” the shareholder said. “Seeing how critical the environmental permitting is to the project, the lack of clarity by the company is problematic.”
Shares double
The shareholder acknowledged the shares have performed well. The stock has more than doubled in the past year to $11.48 apiece on Friday morning in Toronto from $4.89. They’ve traded in a 52-week range of $4.75 to $12. The company’s stock market value is $6.2 billion.
Uranium similarly doubled from a year earlier to a 16-year high of US$106 per lb. in February before easing to US$87 a lb. this week.
In comments on the earnings call in March, NexGen’s Curyer expressed confidence with the company’s ability to respond to the regulator’s queries.
“While every question is very, very important, we assess the materiality of them to be low and they will be easily clarified and concluded,” the CEO said. “We are in the final stages of the process and we also have full community support.”
who wrote this article? the northern miner quotes an anonymous twitter account and an unnamed shareholder who isn’t a professional? brutal “reporting”