Dec 4 (Reuters) - Canada-based uranium miner NexGen

Energy ( NXE ) said on Wednesday it had signed its first

agreements with U.S. utility companies to supply 5 million

pounds of the nuclear fuel ingredient.

Uranium will be supplied from NexGen's Rook I Project

currently being developed in Saskatchewan. The company

anticipates annual delivery of about 1 million pounds per year

from 2029 to 2033 subject to the commencement of commercial

production.

Travis McPherson, chief commercial officer of NexGen,

told Reuters this announcement is in line with the company's

strategy to get small contracts in place to effectively backstop

debt financing required for the construction of its mine in the

Western Canadian province.

WHY IT'S IMPORTANT

Nuclear energy has come into focus in recent years as

companies explore alternative sources of power to drive the

rapid development of artificial intelligence tools and vast data

centers. Russia's temporary ban on enriched uranium to U.S.

utility companies highlighted the need to diversify supply from

friendly countries. U.S. President-elect Donald Trump's threat

to impose 25% tariffs on all exports from Canada, however, has

added to the uncertainty around the supply of the commodity.

The U.S. Energy Information Administration estimates

record-high power consumption in 2024 and 2025.

NexGen Energy ( NXE ) is also in discussions with additional

U.S., European, and Asian utilities for similar contracts.

CONTEXT

The sales contracts announcement follow the company's

completion of an important step of the ongoing Federal

Environmental Assessment for the Rook I project.

NexGen is well-positioned to secure financing if the

project secures federal approval in 2025, RBC Capital Markets

analyst Andrew Wong wrote in a note, adding that the terms of

the contract likely "mitigates the risk from potential delays in

project start-up."

KEY QUOTES

"Energy demand from reliable sources is increasing by the

week with the need to expand existing nuclear energy

infrastructure and the construction of power consuming data

centres at a time the security of uranium supply is under

significant technical and sovereign risk," NexGen CEO Leigh

Curyer said.

SHARE REACTION

Shares of the company were up 1.7% to C$11.63.

(Reporting by Divya Rajagopal in Toronto and Pooja Menon in

Bengaluru; Editing by Tasim Zahid, Anil D'Silva and Paul Simao)