VANCOUVER, June 30, 2017 /PRNewswire/ - NexGen Energy Ltd.
("NexGen" or the "Company") (TSX:NXE, NYSE MKT:NXE) is pleased to announce that it has entered into a
binding term sheet with CEF Holdings Limited ("CEF") for a second financing package totalling US$110 million, comprising:
(a)
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US$50 million of common shares of NexGen (the "Placement Shares");
and
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(b)
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US$60 million aggregate principal amount of unsecured convertible
debentures (the "New Debentures").
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The US$50 million placement will result in the issuance of approximately 24.1 million Placement
Shares at a price of C$2.70 (US$2.07 at an exchange rate of 1.3060)
per Placement Share representing the 20-day VWAP of the Company's common shares (the "Common Shares"). The New Debentures
will be convertible at the holder's option into Common Shares at a conversion price (the "Conversion Price") of
C$3.52 (US$2.69 at an exchange rate of 1.3060), equal to a 30%
premium to the 20-day VWAP of the Common Shares. The "20-day VWAP" was calculated as the volume weighted average trading price of
the Common Shares on the Toronto Stock Exchange (the "TSX") for the 20 trading days ending on the day prior to the date of
execution of the binding term sheet, converted into US$ using the C$-US$ daily average rate of exchange published by the Bank of
Canada for each relevant date.
In connection with the financing, the Company and CEF have also agreed to extend the maturity date of the existing
US$60 million aggregate principal amount of unsecured convertible debentures (the "Existing
Debentures") to match the maturity date of the New Debentures as well as certain other non-financial amendments including
the strategic alignment provisions described below.
Leigh Curyer, Chief Executive Officer of NexGen commented: "We are thrilled to build on the partnership between NexGen and
CEF, which formally commenced just 12 months ago with the initial investment of US$60 million. This
financing represents a very strong alignment between NexGen and CEF and funds the Company to expedite the optimal development of
Arrow."
"Our investment today builds on the shared long-term vision and close strategic partnership with NexGen," said CEF's Chief
Executive Officer, Warren Gilman. "NexGen continues to deliver on all its objectives as it
develops Arrow. We are excited at the opportunity to support the Company in its goal of maximizing shareholder value by
optimizing the development of Arrow which is proving to be one of the best mineral assets we've encountered."
The Existing Debentures, Placement Shares and New Debentures are expected to be held by CEF (Capital Markets) Limited, a
wholly-owned subsidiary of CEF (as to US$20 million principal amount of Existing Debentures,
US$25 million of the Placement Shares and US$20 million principal
amount of New Debentures); and holding companies (the "Li Investor") of which each of Messrs. Li
Ka Shing and his son Victor Li are entitled to exercise, or control the exercise of,
one-third or more of the voting power at general meetings (as to the balance of Existing Debentures, Placement Shares and New
Debentures). CEF (Capital Markets) Limited and the Li Investor are collectively referred to below as the "Investors".
The Terms
The New Debentures will carry a 7.5% coupon (the "Interest") over a 5-year term. The New Debentures will be
convertible at the holder's option into Common Shares at the Conversion Price of C$3.52
(US$2.69 at an exchange rate of 1.3060), equal to a 30% premium to the 20-day VWAP ending on the
day prior to the date of execution of the binding term sheet.
The Company will be entitled, on or after the third anniversary of the date of the issuance of the New Debentures, at any time
that the 20-day VWAP exceeds 130% of the Conversion Price, to redeem the New Debentures at par plus accrued and unpaid
Interest.
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 on either the TSX or NYSE MKT (whichever has the greatest
trading volume of Common Shares) ending on the day prior to the date such Interest payment is due.
Strategic Alignment Provisions
In consideration for the increased investment in NexGen, the Company and the Investors will enter into an investor rights
agreement (the "Investor Rights Agreement"). The Investor Rights Agreement will provide for the following:
(a)
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For so long as they hold at least 10% of the Common Shares (on a partially
diluted basis), the Investors will agree (i) not to tender or agree to tender (or convert) the New Debentures or the
Existing Debentures or any Common Shares they hold to an unsolicited takeover bid, (ii) to exercise the votes attached to
all Common Shares they hold in respect of any change of control transaction, and deposit or tender such Common Shares, in
accordance with the recommendation of the Company's Board of Directors (the "Board"), (iii) to withhold votes in
respect of any Common Shares they hold in respect of the election of individuals to the Board who are not nominees of
management, and (iv) in respect of non-change of control matters, not to exercise the votes attached to any Common Shares
they hold contrary to the recommendation of the Board;
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(b)
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For so long as they hold at least 10% of the Common Shares (on a partially
diluted basis), the Investors will agree to a standstill whereby they will, among other things, not acquire any
securities of the Company or solicit proxies or otherwise attempt to influence the conduct of security holders of the
Company;
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(c)
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For so long as they hold at least 10% of the Common Shares (on a partially
diluted basis), the Investors will be subject to restrictions on disposition applicable to any Common Shares they hold,
consisting of giving prior notice to the Company of any proposed disposition of more than 0.5% of the number of Common
Shares then outstanding and either: (i) disposing of such Common Shares to specific willing investors identified by the
Company within a 7-day period; or (ii) disposing of such Common Shares either through a broad distribution on the public
markets or in a private transaction or block trade to anyone other than specific investors identified by the Comany
within the 7-day period; and
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(d)
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For so long as they hold at least 15% of the Common Shares (on a partially
diluted basis), the Investors will have the right to nominate one director to the Board.
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Use of Proceeds
Including the proceeds from this financing, NexGen will have cash reserves of approximately C$200
million. Proceeds from the financing will be used to fund the continuing exploration and development of the Company's SW2
properties (which includes the Rook 1 project) and for general corporate purposes.
Approval
The financing 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 a major event of national or
international consequence that disrupts the financial markets or the business, operations or affairs of the Company.
Advisors
TD Securities Inc. is acting as financial advisor and lead placement agent to NexGen and CIBC World Markets Inc. is acting as
financial advisor to CEF.
This news release shall not constitute an offer to sell or a solicitation of any offer to buy any securities, nor shall
there be any sale of any securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The
securities referenced herein have not been, nor will they be, registered under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act"), and such securities may not be offered or sold within the
United States absent registration under the U.S. Securities Act or an applicable exemption from the registration
requirements thereunder.
Early Warning Disclosure
This portion of the news release is issued pursuant to National Instrument 62-103 – The Early Warning System and Related
Take-Over Bid and Insider Reporting Issues ("NI 62-103") of the Canadian Securities Administrators, which also
requires an early warning report to be filed with the applicable securities regulators containing additional information with
respect to the foregoing matters. A copy of the early warning report of the Li Investor will be available on NexGen's
issuer profile on SEDAR at www.sedar.com.
Following completion of this financing, the Li Investor will hold: (a) an aggregate of 13,903,461 Common Shares, representing
approximately 4.2% of the issued and outstanding Common Shares; (b) US$40 million aggregate
principal amount of Existing Debentures; and (c) US$40 million aggregate principal amount of New Debentures. For the
Placement Shares that partially gave rise to the early warning reporting requirements, the Li Investor paid C$2.70 per share and
C$32.597 million in aggregate. Immediately before this financing, the Li Investor holds 1,250,735 Common Shares,
representing approximately 0.4% of the issued and outstanding Common Shares as well as US$40 million aggregate principal amount
of the Existing Debenture. The Li Investor does not have any present intention to acquire ownership of, or control over,
additional securities of NexGen, other than pursuant to the terms of the New Debentures and Existing Debentures and the placement
fee owing in connection with this financing which will be paid in Common Shares at closing. It is the intention of the Li
Investor to evaluate its investment in NexGen on a continuing basis and such holdings may be increased or decreased in the
future, subject to the strategic alignment provisions. For the purposes of NI62-103 the head office address of the Li Investor is
East Asia Chambers, P.O. Box 901, Road Town, Torotola, British Virgin Islands and the head office address of the Company is 3150
– 1021 West Hastings Street, Vancouver BC Canada V6E 0C3.
About CEF Holdings Limited
CEF Holdings Limited is owned 50% by CK Hutchison Holdings Ltd. and 50% by the Canadian Imperial Bank of Commerce
("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 the combined market cap of the Group in excess
of US$100 billion. CIBC is a leading North American 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 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 and Bow Discovery in March 2015 and the Harpoon
discovery in August 2016. The Arrow deposit's updated mineral resource estimate with an effective
date of December 20, 2016 was released in March 2017, and comprised
179.5 M lbs U3O8 contained in 1.18 M tonnes grading 6.88% U3O8 in the indicated mineral resource category and an additional 122.1
M lbs U3O8 contained in 4.25 M tonnes grading 1.30% U3O8 in the inferred mineral resource category.
All scientific and technical information in this news release has been prepared by or reviewed and approved by Mr.
Garrett Ainsworth, P.Geo., Vice President – Exploration & Development for NexGen. Mr.
Ainsworth is a qualified person for the purposes of National Instrument 43-101 – Standards of Disclosure for Mineral
Projects ("NI 43-101") of the Canadian Securities Administrators, and has verified the sampling, analytical, and test
data underlying the information or opinions contained herein by reviewing original data certificates and monitoring all of the
data collection protocols. For details of the Rook I Project including the quality assurance program and quality control measures
applied and key assumptions, parameters and methods used to estimate the mineral resource set forth herein please refer to the
technical report entitled "Technical Report on the Rook 1 Property, Saskatchewan, Canada" dated
effective March 31, 2017 (the "Rook 1 Technical Report") prepared by Mark B. Mathisen and David A. Ross, each of whom is a "qualified person" under
NI 43-101. The Rook I Technical Report is available on NexGen's issuer profile on SEDAR at www.sedar.com.
U.S. investors are advised that while the terms "indicated resources" and "inferred resources" are recognized and required
by Canadian regulations, the U.S. Securities and Exchange Commission does not recognize these terms. U.S. investors are cautioned
not to assume that any part or all of the material in these categories will ever be converted into mineral reserves.
Forward-Looking Information
The information contained herein contains "forward-looking statements" within the meaning of the United States Private
Securities Litigation Reform Act of 1995 and "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 financing, the use of proceeds from the financing described in this news release, and the receipt
of all required regulatory approvals, including of the TSX and the NYSE MKT. 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 financing, the use of proceeds from the financing, the
satisfaction of each party's obligations in accordance with the terms of the definitive agreements for the financing; failure to
receive any required regulatory approvals (including stock exchange) or other approvals, and other factors discussed or referred
to in the Company's Annual Information Form dated March 31, 2017 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.