November 11, 2016 - 9:00 AM EST
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The US Department of Energy and GLE (Licensee for the SILEX Technology) Reach Agreement for the Sale and Purchase of Depleted Uranium Hexafluoride

Opens pathway for the first commercial SILEX laser enrichment plant in Paducah, Kentucky

Highlights:

  • An agreement between the US Department of Energy (DOE) and Global Laser Enrichment (GLE) – licensee of the SILEX technology - has been signed for the sale and purchase of depleted uranium hexafluoride (DUF6);
  • DOE approval provides for the sale and purchase of approximately 300,000 metric tons uranium (MTU) of DOE-owned high assay tails inventories for re-enrichment with the SILEX technology to produce natural grade uranium;
  • This pivotal event in the commercialisation of the SILEX technology paves the way for the potential construction of the first laser enrichment facility in Paducah, Kentucky;
  • The restructure of GLE, being led by Silex, continues to progress positively with a number of potential investors currently undertaking due diligence activities.

Silex Systems Limited (ASX:SLX) (OTCQX:SILXY) (Silex) announced today that an agreement has been signed between the US Department of Energy (DOE) and the exclusive licensee for the SILEX laser-based enrichment technology, GE-Hitachi Global Laser Enrichment LLC (GLE). The agreement, which facilitates the sale of approximately 300,000 MTU of ‘high assay’ DUF6 to GLE, follows the DOE’s selection in 2013 of GLE’s proposal to construct a SILEX laser enrichment facility in Paducah, Kentucky, to re-enrich the tails inventories.

“The finalisation of the agreement with the DOE is a pivotal step in the path to commercialisation for our unique third generation SILEX laser enrichment technology. We wish to thank federal, state and local partners, including the DOE, the state of Kentucky and the city of Paducah for supporting this opportunity,” Dr Michael Goldsworthy, Silex CEO said today.

“We look forward to working with the many stakeholders involved to make this opportunity become a commercial reality over the next few years. In particular, we are enthusiastic about engaging with the local Paducah and Kentucky workforces to bring our cutting edge laser enrichment technology to the traditional heartland of the US enrichment industry, and helping to restore US leadership in nuclear technology.”

Subject to timely completion of the technology commercialisation program, prevailing market conditions and receipt of required regulatory approvals, realization of GLE’s proposed Paducah Laser Enrichment Facility (PLEF) would see the construction and operation of the world’s first commercial laser enrichment facility, with the anticipated timing for the construction of the PLEF in the early 2020’s. GLE would finance, construct, own and operate the PLEF adjacent to the existing DOE site. Silex and GLE are also investigating the possibility of utilising a US government loan guarantee facility to support the financing of the project. The PLEF would become a commercial uranium enrichment production facility under a US Nuclear Regulatory Commission (NRC) license.

Re-enrichment of the 300,000 tons of high assay tails inventories at PLEF would occur over a period of at least 40 years, producing in the order of 100,000 tons of natural grade uranium, with the balance (low assay tails) being returned to the DOE for disposition. The natural grade uranium produced at the PLEF would be sold into the expanding global uranium market, and depending on the production rate, would be equivalent to one of the world’s largest uranium mines.

The PLEF production rate and subsequent sale of uranium into the market is likely to be regulated by the US government at around 2,000 metric tons of uranium per year (equivalent to a mine producing around 5 million pounds of uranium oxide), equating to approximately US$200 million in sales of uranium per year at today’s low uranium term prices.

Given the current state of the enrichment market, the PLEF opportunity provides an alternative path to market for the SILEX laser enrichment technology, and establishes a foundation for further expansion by GLE into the enrichment market when new capacity is needed to supply future increasing demand. As previously disclosed, in 2012 GLE obtained a combined construction and operating license from the US NRC for an enrichment plant of up to 6 million separative work units (SWU – the unit for enrichment) planned for Wilmington, North Carolina. The current annual demand for enrichment is around 50 million SWU, equivalent to approximately US$3 billion at today’s current low SWU term prices.

The US DOE has made a parallel announcement regarding the agreement. The DOE announcement, including comments by Secretary of Energy Dr Ernest Moniz, can be found on the home page of the DOE website (energy.gov) under the ‘News’ section.

WE Buchan
Catie Corcoran, 813-895-4575


Source: Business Wire (November 11, 2016 - 9:00 AM EST)

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