Hong Kong tycoon boosts NexGen with $110M financing

VANCOUVER Hong Kong billionaire Li Ka-shing isn’t fazed by a commodity that’s been on the skids for five years. He just more than doubled down on his investment in a Canadian uranium explorer.

NexGen Energy Ltd. soared as much as 11 per cent Friday after announcing US$110 million in financing from CEF Holdings Ltd., which is 50 per cent-owned by Li’s CK Hutchinson Holdings Ltd. That follows a previous deal for US$60 million a year ago.

“It’s a very strong validation from Li of the need for nuclear power in that part of the world,” said NexGen chief executive Leigh Curyer. “Uranium prices are at historic lows, and the world’s top two producing miners are experiencing economic difficulties — that means the price of uranium has to rise.”

Under the deal’s structure, Li and his son Victor also will be allowed to appoint one of the company’s seven board members, according to Curyer.

“Seriously valuable rock” is how Cormark Securities Inc.’s Tyron Breytenbach has described NexGen’s Arrow project in Saskatchewan, considered one of the world’s most promising deposits of the metal used by power plants to produce nuclear energy.

NexGen, which is up 23 per cent this year in Toronto trading, had sought more financing after exploration studies indicated a resource base much larger than originally anticipated — 300 million pounds instead of the 202 million pounds the company had stated just a year earlier. The latest investment is enough to meet the Vancouverbased explorer’s financing requirements for the next three to four years, according to Curyer.

Arrow is expected to start production early in the next decade, when a global uranium glut is set to tighten and demand could rise.