Silex Systems is unusual in that it is not a prospective uranium...

Silex Systems is unusual in that it is not a prospective uranium miner.

Rather it is a JV participant in a company called Global Laser Enrichment, in concert with global uranium giant Cameco, which is looking to use a novel technology to enrich spent uranium, recycling the product for use again by US nuclear facilities.

It says the Paducah Laser Enrichment Facility could turn this waste material into a virtual mine, delivering the equivalent of 5Mlb of U3O8 a year.

Since 2021, Silex has been a 51 per cent owner of the JV, with a pilot is expected to take place this year.

If that proves successful, GLE could be in full flight by 2028, with rising uranium prices and US support for new enrichment providers potentially accelerating its delivery timeline from the early 2030s.

That is because Russia’s invasion of Ukraine has thrown the spotlight on the reliance of US utilities on the belligerent nation for its nuclear fuel.

It has been revealed that 95 per cent of America’s uranium, all of its conversion and 70 per cent of its enrichment requirements are delivered from overseas – 24 per cent of the latter from Russia.

Did someone say bifurcated market? Silex and GLE are looking to produce a range of products from natural grade uranium (delivered as UF6, which has a U-235 assay grade of 0.7 per cent), to low-enriched uranium (assay grades of 3-10 per cent U-235 used in conventional reactors) to high-assay low-enriched uranium for next gen and small modular reactors grading 20 per cent.

The latter is the subject of a $US700 million request for proposals, issued by the US Department of Energy.

Apart from the issue of assessing the feasiblity of the PLEF project, it will be interesting to see how Silex can realise value from it.

Once GLE obtains technology readiness level 6 – expected from the successful demonstration of its pilot – Cameco will have 30 months to decide whether to up its stake to 75 per cent at “fair market value”.

Euroz analyst Steven Clark last year placed a $300 million estimate on the 26 per cent share covered in the option agreement, which could be used to fund SLX’s 25 per cent share of the eventual project.

Its ownership of the technology licence also means it will collect a 7-12 per cent royalty on GLE’s enriched uranium production. PLEF is modelled to run for 30 years at all in costs of under $US30/lb, and potential upside on current conversion costs of $US35/kg.

When the deal with Cameco was announced in 2021, Ux Consulting’s mid-case uranium price was just $US45/lb for 2025 and $US65/lb for 2030.