William - I really do wish you would refrain from "talking through your hat" on a subject you appear to understand little. My background has (through many years but now retired) been in development of technically challenging projects and you really should understand that they are fraught with "technical" issues in the early development stages; you appear to have no concept of the difficulties in developing a technology strewn with failures and market collapses. In this case the problems (of uranium enrichment) have challenged all approaches and are further dampened by the process being highly sensitive (you make nuclear weapons with it) - you would really struggle to find a more politically sensitive technology.
Actually your time line (25 years) is understated. The early development path is outlined in a Greenpeace (yes I know it's a very biased source) document dated 2004 (see HERE) where it talks about the early laser enrichment development by Horst Struve (MG partner - now retired) from 1974 (pg 8/9) when the project was supported by the Australian government. Silex report (when MG became involved) started research in 1990 (see page 16 - although it appear the company came into existence in 1987) however, ANSTO say their involvement ceased in 1994; Sonic health Care then took up sponsorship from 1994 to 1998 although USEC (now Centrus) took up sponsorship (then dropping AVLIS) from 1996 to around 2003 - during this period development expenditure was a USEC (not Silex) liability - however they spent a lot on it and then dropped it (I understand under pressure from Oak Ridge NL who did the early American Centrifuge development - started in the 1980's).
A fairly thorough account of Silex history (to 2015) since 1988 is provided on pg 10 of the Silex 2015 annual report (see HERE). An important point is that USEC dropped Silex in 2002 and "cast them into the wilderness" until GEH picked it up gain in 2006; however the company continued development and proved a pilot plant (albeit noncommercial with "batch" operation). From 2006 to June 2014 - GEH was responsible for the development of the Silex process (SLX was a subcontractor) and according the MG spent about US$500m on development - you really can't blame MG for "lack of progress" during this period - IT WAS NOT HIS RESPONSIBILITY. Nevertheless SLX were paid US$15m (on top of paying the costs of the Silex team in Wilmington) for proving up the Wilmington test loop and were sufficiently confident to proceed (and obtain in 2013) and NRC license for a 6MSWU/yr enrichment plant. Also (in 2008) Cameco were sufficiently confident to take up a 24% interest and (in 2015) write off C$183,615,000 against this investment. MG is on the record as saying that US$500m has been spent by US parties (USEC and GEH) (I presume this includes both GEH and USEC)
From June 2014 - GEH cast SLX into the wilderness and ceased spending on the project (although they allowed SLX to "mothball" the Wilmington test loop facility) and Cameco continued to pay 24% of SLX's ongoing expenses to 2019 and 49% to date). Work on the laser continued at Lucas Heights (sponsored by both Cameco and SLX)
I have been through CJJ MD&A since 2015 and calculate that since 2015 Cameco and SLX have both spent (in C$ - the CJJ MD&A's are in C$):
Year
Spend (K C$)
CCJ %
Pro rata SLX spend (K C$)
Total spend (K C$)
1
2023
$21,036
49%
$21,895
$42,931
2
2022
$12,175
49%
$12,672
$24,847
3
2021
$7,168
49%
$7,461
$14,629
4
2020
$3,965
49%
$4,127
$8,092
5
2019
$6,058
49%
$6,305
$12,363
6
2018
$1,757
24%
$5,564
$7,321
7
2017
$5,660
24%
$17,923
$23,583
8
2016
$4,952
24%
$15,681
$20,633
9
2015
$6,587
24%
$20,859
$27,446
10
Total
$69,358
$112,487
$181,845
Cameco guidance for 2024 is C$37m which implies:
Spend (K C$)
CCJ %
Pro rata SLX spend (K C$)
Total spend (K C$)
1
CJJ 2024 guidance
$37,000
49%
$38,510
$75,510
In US$ and A$ terms this implies that the spend from July 2014 (by both CJJ and SLX) to EoY 2024 is:
Spend (1000's $)
CCJ %
Pro rata SLX spend (1000's $)
Total spend (100s $)
1
Total to EoCY24 C$
$106,358
$150,997
$257,355
2
Average US$/C$
0.8
3
Average US$/A$
0.7
4
Total US$
$85,086
$120,797
$205,884
5
Total (A$)
$151,940
$215,710
$367,650
This would imply to me (excluding Australian government and Sonic Healthcare) that about US$700m has been (or is to be) invested in the Silex process up December 2024 will be about US$700m (and about US$1 bn accounting for inflation) - hopefully by this stage we will have a successful TRL/6 pilot system. This is actually quite low when compared to the investment to date by world governments (USA, France, Japan, Argentina, Brazil etc) on AVLIS and MLIS and also low compared to the money spent on (and development) Centrifuge technology.
The main thing you have to take into account regarding the SLX spend is that they have only outlayed about 20% (~US$200m) of the overall spend and ended up with 51% of the equity plus a royalty of 7% to 12% of the revenue - not bad (IMHO). In addition you also have to say that over most of that period (from 1997 to 2002 and then 2006 to 2014) they did not control the expenditure. In addition once they were aware (in June 2014) that GEH had deserted them they stuck to there guns and sold down all their interests in Translucent, Solar Systems and Chronologic and focused on saving their isotope separation business. This was not the fate of their competitors in laser technology. Further they ensured that the DoE tails contract stayed in place (as Grant Isaacs of CJJ says - "in 2015 the project morphed into a UF6 mine due to the collapse in uranium/enrichment prices") and the project was saved - IMHO a pretty good effort for which we all have to be thankful. I guess we also have to be thankful the DoE also wanted to keep the project in place by no doubt pressuring GEH to allow the test loop to stay in place and selling GLE to SLX/CJJ (there were evidently no other takers - according to MG they were worried about the maturity of the laser technology - evidently work (at Lucas Heights) since 2014 has been successful) and also confirming the Paducah tails deal to underwrite the PLEF. Since then nuclear markets have improved and we should (depending upon successful TRL/6) have a very viable project which give the USA (and SLX shareholder + CJJ) an "edge" over the rest of the world
SLX Price at posting:
$6.04 Sentiment: Buy Disclosure: Held
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