- Silex Systems (ASX:SLX) develops laser technology to enrich uranium
- The US has been cognisant of its own inability to make the type of enriched uranium needed in next-generation small nuclear reactors
- The American government passed a law late last year phasing out imports of uranium from Russia by 2028
- The US DOE is now putting out a call to developers for technological assistance
- SILEX sees itself as a contender and the market is paying attention
- Shares are up 14.9 per cent, trading at $4.66 at 3:58 pm AEDT
Silex Systems (ASX:SLX) shares were up more than 14 per cent in afternoon trades on its belief it can help the US produce nuclear fuel.
As of 2:20 pm AEDT today, Silex is the second largest gaining stock on the ASX, defying a red day and coming second only to Alumina (ASX:AWC), set to start saving US$70 million a quarter later this year.
The culprit behind Silex’s stellar gains? Movements in the US uranium space.
In 2022, Russia was the largest foreign supplier of uranium to the US.
Late last year, the Biden administration passed a law phasing out imports of Russian uranium, which I wrote about in December.
The US can still import uranium from Russia until 2028 if it needs to, but after this point, it’s a full ban (assuming the law is not overturned by another administration, which is possible for obvious reasons).
But this law poses a problem – right now, the only country able to enrich uranium to a standard high enough for use in modern-day small nuclear reactors is Russia.
That type of uranium has a name: High Assay Low Enriched Uranium, or HALEU for short
Today, the US Department of Energy (DOE) has put out a request to the private sector asking for proposals on how much it would cost, and how it would work, to make HALEU in America, subverting the need to worry about Russian geopolitics and its discontents.
So why is Silex up?
ASX-listed Silex Systems develops laser technology that is capable of enriching uranium, and it believes it can produce the HALEU the USA wants and needs to secure for its own purposes.
It owns an entity alongside uranium giant Cameco called Global Laser Enrichment (GLE) through which the IP is stored.
The market is clearly interested in what Silex can do with GLE for the DOE.
With shares in the more than A$4.00 range, today’s rise of 14 per cent is significant.
This isn’t a microcap we’re talking about – Silex boasts a capitalisation of in excess of A$1 billion.
Five brokers rate the stock a ‘Buy’; one rates it a ‘Hold’, and none rate it a ‘Sell’.
There’s clearly a sense of conviction happening in the market today for those buying SILEX.
The share price movements also tap into the robust uranium thematic, which appears set to quickly win out over lithium – something I predicted would happen last year.
One to watch.
Shares were up 14.9 per cent, trading at $4.66 at 3:58 pm AEDT.