Cameco end game, page-3

@JLSSC

I suspect the reasons why Cameco are sticking with GLE today might be different from the reasons why they originally bought their stake back in 2008, given the dramatically changed price environment for both U3O8 and SWUs.

At the 2016 AGM, Silex Management apparently made a reference to uranium production being viable at present, as opposed to uranium enrichment which wasn’t, to justify the current focus of GLE on tail reprocessing (I gathered this from the contributions of other HC posters who were present at the AGM, as I wasn’t there in person).

If the reprocessing of tails via LIS proves to be a reliable low-cost way of producing natural-grade uranium on a commercial scale, having this asset as part of their portfolio may be of long-term strategic importance for a big uranium miner like Cameco.

So, while they originally purchased their stake in GLE through their US enrichment subsidiary (Cameco Enrichment Holdings LLC) in 2008, their rationale for staying in today may not be exactly the same.

With regard to the possibility of Cameco taking a more active role in GLE after the restructure, I cannot give you a definite answer on that, but we cannot exclude that part (or all) of the 25% (or however much it is) that is not being taken up by Silex, could actually have been purchased by Cameco themselves.

It did cross my mind, after the recent announcement was made, that, given the difficulty in securing new investors in the current market, GEH, Cameco and Silex could simply have decided to temporarily reorganise GLE in such a way that:

a) Silex and Cameco (the parties who are still committed to GLE) continue as joint shareholders, with stakes of 51% and 49% respectively (or thereabout).

b) GEH (the party who wanted out) becomes a controlling shareholder in Silex, thanks to some form of "equity swap"; so GEH would keep effective control of GLE and some economic upside to it, while relinquishing all the ongoing development work and costs to the parties who are still committed.

We are in the realm of conjectures here, so everything needs to be taken with a (big) pinch of salt, but it would sort of make sense to me as an interim strategy in a difficult market.

Finally, with regard to the potential for a SILEX plant at Chalk River, I haven’t been able to find anything on that specific topic, so there isn’t much value I can add there. One link I did find that is broadly related is this paper on the potential for uranium enrichment in Canada, where Silex is mentioned as a possibility (subject to scalability and costs). It is from 2009, so I am not sure how relevant it is today, but here you go:

https://www.cigionline.org/sites/default/files/nef_5.pdf

All IMHO & DYOR, cheers