Natalie Pearson reports that Hong Kong richest man Li Ka-shing is making a bet that uranium prices, down more than 60% from a 2011 record, are set for a comeback.
NexGen Energy Ltd. has agreed to sell $60 million in convertible bonds to CEF Holdings Ltd. and affiliated shareholders to raise money to help develop uranium projects in Saskatchewan, the company said Wednesday in a statement. CEF Holdings is 50%-owned by Li CK Hutchinson Holdings Ltd. His involvement is a very good sign to generalist funds out there about uranium fundamentals, NexGen Chief Executive Officer Leigh Curyer said. The current spot prices seem low but the fundamentals indicate there is going to be a very large demand and supply gap, soon.
NexGen expects to start production in the early 2020s, when the uranium market is set to tighten as older mines in Namibia and Australia end operations while demand from nuclear utilities in Asia and the Middle East ramps up, he said. NexGen expects to start production in the early 2020s, when the uranium market will be tight as older mines in Namibia and Australia end operations while demand from nuclear utilities in Asia and the Middle East ramps up, he said.
The NexGen Arrow project is the most promising uranium discovery in years. Selling the unsecured convertible debentures to CEF Holdings will raise NexGen cash reserves to C$100 million ($76 million), which will be enough to complete exploration and development activities prior to production in the early 2020s.
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