GLE production start prediction and progress, page-18

Terang - At current uranium prices and a 6% DCF I have the value of GLE at US$2,141,512,245. On this basis the 26% Cameco option would be US$556,793,184. The actual figure will depend largely upon the detailed meaning of "fair market value" which is no doubt set out in detail in the Cameco/Silex partnership agreement and I guess will be a lower figure than the 6% DCF number I have in my model. I guess it will be somewhere between my above number and the PAC estimate of US$203m. Most (if not all) of this will no doubt be SLX's 25% contribution to the PLEF build. It's possible (in my view likely) that some (if not all) of the Cameco payment will be in Cameco script.

A lot of the valuation depends on the deal (hopefully there will be one) which can be done for HALEU (PLEF was only for natural uranium) - the Centrus ACP cascade (16 deep for 1T/yr HALEU- US$115m - now extended with an extra US$15m) cost sharing HALEU deal was 80% (Dept of Energy - DoE). The original estimate for PLEF was US$1bn with a US government guarantee. No doubt there will be inflation of that number but against that the actual enrichment factors determined from the lead cascade build (for TRL/6 planned for 2025) will have an impact not only on the PLEF build cost but also the royalty SLX receive which is 7%- 12% based upon the Capex of the PLEF build. Publicly SLX have said the enrichment factor is between 2 and 20 but from the hatch report (done for the SA government in 2016) working the numbers contained within it backwards it would appear to be about 5 to 6 on the test loop (they may be better now). The issue is that the higher the enrichment factor the less cascades are required thus reducing the capex of the plant (PLEF or HALEU) and the higher the SLX royalty (on revenue)