Ann: GLE's Evaluation of US DOE HALEU Enrichment Acquisition RFP, page-34

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blt23

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25/03/24

22:12

Post #: 73052430
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Originally posted by il duce: ↑

It seems to me that GLE is playing a very clever hand in not pursuing HALEU now.

We know the Silex process has a cost advantage over centrifuges. Once GLE is a producer of natural grade UF6 at a lower cost than its competitors it has the flexibility to enrich what it produces to LEU and or HALEU at lower costs to its competitors or to sell what it produces into the market at prevailing prices if its in its interests to do so. It seems to me GLE will have a lot of scope to influence market prices and sell what it produces into any of the those markets to maximise its return for shareholders

Contrast that with our competitors. If they want to go after HALEU they will have to invest billions of dollars building enough centrifuge cascades to produce HALEU at commercial scale.

Now cast your mind to the late 2020's or early 2030's when those competitors have invested billions in all those redundant centrifuges. Wouldn't that be the perfect time for GLE to announce their HALEU plant at Paducah just as the demand for HALEU is predicated to be growing rapidly. They'd blow away the competition and dominate the market.

Now imagine your a director at Centrus, Urenco or Orano right now mulling over a recommendation to invest billions of dollars of shareholder capital on those redundant centrifuges. I'd be wondering what return on capital I'd be looking at after a lower cost competitor enters the market and would be thinking about whether the US Government subsidies would be enough to induce me to take that risk on a long term investment.

The key thing I'll be looking for is US Government approval to build LEU and HALEU halls at Paducah when they choose to. I suspect GLE's competitors will be watching for that too. At this stage I'm just happy to see Silex including the LEU and HALEU halls in the Paducah site renderings that they've beeing including in their most recent investor updates.

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What I can't get my head around though is that Silex released an announcement in January relating to the DoE RFP. So unless it is some game playing by our CEO there must be a U turn in strategy as to not release a response to the RFP.

SLX Price at posting: $4.83 Sentiment: Hold Disclosure: Held
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