Silex Systems (ASX: SLX) is a step closer to concluding an arrangement made last year with Cameco Corporation to buy-out GE-Hitachi Nuclear Energy’s stake in Global Laser Enrichment after a 2016 sales agreement between Global Laser Enrichment and the US Department of Energy was amended to reflect the prevailing nuclear fuel market conditions.
Global Laser Enrichment is the exclusive licensee of Silex’s laser uranium enrichment technology.
Under a deal executed in December last year, Silex and Cameco are jointly purchasing GE-Hitachi Nuclear Energy’s 76% interest in Global Laser Enrichment.
Once concluded, Silex will own 51% of Global Laser Enrichment, while Cameco will own the remaining 49%. It is anticipated the ownership restructure of Global Laser Enrichment will secure final US Government approvals by the end of this year.
In the original 2016 deal between Global Laser Enrichment and the US Department of Energy, Global Laser Enrichment will have access to the US Department of Energy’s uranium hexafluoride (UF6) inventories.
UF6 is used during the uranium enrichment process to generate fuel for nuclear reactors and weapons.
Paducah uranium project
According to Silex, access to these inventories is critical to the Paducah project opportunity, which is believed to be an “ideal path to market for the Silex technology”.
“The opportunity would allow for the initial commercial deployment of the technology on a smaller scale and at a lower cost, representing a lower risk path to market for the company and all stakeholders,” Silex stated.
Silex noted preliminary evaluation of Paducah indicates it would rank as a large tier one uranium mine with long-life and low production costs by today’s standards.
As part of this project, Global Laser Enrichment would construct the proposed Paducah laser enrichment facility.
The facility would be based on the Silex technology and would be used to re-enrich the Department of Energy’s UF6 stockpiles.
Amended deal between Global Laser Enrichment and US Department of Energy
The amended agreement ensures the 2016 deal between Global Laser Enrichment and the Department of Energy remains in effect through to the anticipated recovery in nuclear fuel markets.
This gives Global Laser Enrichment sufficient time to complete its plan for the Paducah laser enrichment facility.
Global Laser Enrichment is targeting the start of commercial operations at the plant before the end of the current decade.
It is anticipated the re-enrichment of the Department of Energy’s inventory would continue “over several decades” and result in the production of natural grade uranium to be sold into global markets.