This is what Silex said back in August 2016, when I first read this release I thought to myself, there is some useful information in here, I reckon the answer is in there somewhere Areva? Urenco?
I believe 2020 will be when we start construction of the full commercial plant to produce LEU.
Here is a description of what an OFF TAKE agreement means-
An
off take agreement is an
agreement between a producer of a resource and a buyer of a resource to purchase or sell portions of the producer's future production.
Off take agreements are legally binding agreements related to transactions between buyers and sellers. The agreements are reached prior to the actual goods being produced, such as with futures. Often, these agreements can help the selling company acquiring financing for future construction or expansion projects through the promise of future income and proof of an existing market.
Would part of the reason why this off take agreement is possible, is because GLE will agree to take their nuclear waste away (perhaps for a price) and the reactor company agrees to take back the reprocessed LEU or maybe a MOX fuel?
Maybe early adopters will get special rates?
http://www.asx.com.au/asxpdf/20160822/pdf/439h4qdgc5mpjy.pdf
Page 17
The GLE Business Case Uranium and SWU Production Global
Global Factors:
•Global growth in nuclear capacity is accelerating with surging world energy demand
•Geo-political factors driving increasing vulnerability with rising influence of Russia and China
•Energy security, grid stability, pollution and climate change will all support future nuclear growth
Uranium Production:
•Curtailment of uranium production and mothballing of resources will create a delay in bringing new (higher cost) supply on-line when market tightens in early to mid 2020’s
•Nuclear power countries (including China, India, US etc) will all need stable supplies of uranium
•Reprocessing DOE tails by GLE in Paducah could potentially provide at least 5 million pounds of natural grade uranium per year for ~40 years (not including other sources of tails)
SWU Production:
• Enrichers turning capacity over to
tails reprocessing and
shutting older capacity(
Urenco, Tenex)
•
Urenco / Areva mothballed centrifuge factory - limiting ability to increase capacity in the short term
•GLE is positioning to build new SWU capacity in the US
to serve US utilities (and others)
•With low cost production, GLE could support new capacity with
conditional off-take contracts
page 21
Uranium and SWU Market Recovery Why is recovery inevitable?
•Global growth in nuclear capacity is accelerating per current industry forecasts
•Japanese reactor restarts will also accelerate over the next few years
•Increasing unfilled demand (per UxC forecasts) will increase pressure
•Curtailment of uranium production and mothballing of resources since Fukushima will create a delay in bringing new higher cost supply on-line
•Enrichers turning capacity over to tails reprocessing and shutting down older capacity
•Climate change will likely drive low-emissions generation, with nuclear the only economic option for carbon-free base-load electricity generation
•Geo-political factors becoming more influential – US utilities are becoming vulnerable to external market factors including rising Russian and Chinese influence
•US utilities are very keen to see a second US based SWU producer
Page 22
Enrichment Market Considerations Window of Opportunity for GLE
•High barriers to entry
-Highly restricted access to sensitive nuclear technology
-Only four active producers: Urenco, Areva, Tenex, China
-High technology hurdle - transition from GDP to centrifuge only recently completed
•Important geopolitical dimension – Russia and China’s rising influence
-Russia is largest enricher; China the fastest growing
-Potential for trade restrictions, supply disruptions
-Increasing concern to US utilities and others - would support another US supplier
•Market conditions support GLE market entry in 2020’s
-U/SWU price recovery and uncovered demand expected to improve
-Align with future GLE commercial production of enriched uranium
•Demand will increase and ‘accessible’ supply could decrease
All point to a unique ‘Window of Opportunity’ for GLE
(20min delay)