More than half a billion dollars has been wiped off the value of uranium enrichment technology company Silex Systems Ltd (ASX: SLX) after it missed out on a major US contract.
The company said in a statement to the ASX on Tuesday that Global Laser Enrichment, which was the exclusive licensee of its uranium enrichment technology, had been selected for an award of up to US$28 million "to advance next generation laser-based uranium enrichment technology''.
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Passed over for contract
While that was a positive, the licensee company was not selected for an award under a separate US$900 million program focused on "low enriched uranium".
Silex owns a 51% stake in GLE, with major uranium producer Cameco Corporation owning the remainder.
Silex's system utilises laser technology to enrich uranium, and the company stated in a recent investor briefing that this technology is anticipated to be lower in cost than other processes, with higher efficiency and throughput.
The company has validated the process at the pilot plant scale but has not yet deployed it on a commercial scale.
Forward plan still bright
Silex said on Tuesday it was actively pursuing the next steps to advance its Paducah Laser Enrichment Facility (PLEF) in Kentucky, "and commercial deployment of its laser enrichment technology''.
The company went on to say:
The significantly higher enrichment efficiency and throughput of the Silex technology places GLE in a very strong position relative to competitors using second generation centrifuge technology.
Silex said in terms of its path forward, it intends to "re-enrich" depleted uranium tailings from the US Department of Energy at the Paducah facility.
The company said further:
This would generate up to 5 million pounds of uranium and 2,000 metric tonnes of conversion capacity annually for up to three decades – enough domestic supply to fuel around 10% of current US nuclear reactor demand. This represents a nearly ten-fold increase in domestic natural uranium output, significantly enhancing US national energy security and fuel independence.
Silex also reaffirmed its commitment to commercialising its technology, saying it was the "world's most advanced enrichment technology''.
The company added:
Subject to various factors, including industry and government support, a feasibility study for the PLEF, and supportive market conditions, the Silex uranium enrichment technology could become a major contributor to nuclear fuel production for the world's current and future nuclear reactor fleet, through the production of uranium in several different forms.
Silex shares jumped on Monday, likely in anticipation of the contract announcement, but plunged more than 29% on Tuesday morning to be changing hands for $6.93.
The company was worth $2.71 billion at the close of trade on Monday.
