Good morning, everyone. Good morning and welcome to Silex Systems Limited 2025 annual general meeting. I am Julie Russell, Silex's Chief Financial Officer and Company Secretary, and I'm pleased to advise that we have a quorum present here at Dentons in Sydney. I declare that our 2025 AGM is now open. We also welcome those shareholders who are joining us virtually today and encourage you to participate in the meeting from wherever you are located. The online platform that we are using today allows shareholders, proxies, and guests to watch the live webcast of the meeting, and eligible attendees can vote and ask questions in real time. The minutes of last year's annual general meeting held here at Dentons on the 22nd of November 2024 are also tabled and are available for inspection by shareholders at the conclusion of the meeting. We will take those minutes as read.
A notice of meeting has been distributed, and we will also take that as having been read. I'd now like to introduce your board to you. Joining us here, we have our Chairman, Mr. Craig Roy, our Founder and CEO and Managing Director, Dr. Michael Goldsworthy, and our Non-Executive Directors, Chris Wilks and Susie Collette. Of course, Chris is standing for reelection today. Also joining us is our auditor, Ash Chandran from PwC. Craig will shortly provide his opening address, and following that, Michael will provide a presentation reviewing our highlights for the year and providing a business update. Shareholders joining virtually have been provided with instructions on how to participate and vote in today's AGM, with details available in the notice of meeting. As always, Michael's presentation, Craig's address, and the notice of meeting can be found on our website.
With regards to questions today, we've received a good number of questions in advance of today's meeting, and Craig and Michael have attempted to address these in their respective remarks and presentation. Questions can now be submitted via the online platform at any time. To submit a written question, select the Q&A icon and select the topic to which your question relates from the dropdown list. Type your question in the text box and press the send button. Subject to time available, questions we receive will be addressed later in the meeting and will be moderated as necessary to avoid repetition or in the interest of time. Should you wish to ask a verbal question, please follow the instructions below the broadcast window. For those of you attending in person, you will also have the opportunity to ask questions following Michael's presentation.
With regard to voting, all items of business today will be decided via a poll. For online attendees, if you have correctly registered for this meeting and are eligible to vote, the vote icon will appear on your screen. Selecting this icon will bring up the list of resolutions and present you with the voting options. To cast your vote, simply select one of the options. No need to hit submit or enter; your vote is automatically recorded, and you can change your vote right up until the time that Craig declares voting closed. For those of you attending in person and who are eligible to vote, you've received a blue voting card on entry today. We now declare voting open on all items of business, and for those shareholders attending virtually, the poll icon will soon appear.
Please submit your votes at any time, and Craig will give you a warning before moving to close voting. I am now very pleased to welcome your Chair, Craig Roy, to provide his opening remarks.
Thanks, Julie, and welcome everyone to the AGM. It's great to see so many familiar faces. It's great to see some new faces in the room as well. The past 12 months, I think it's fair to say, has comprised another really positive year for Silex. We've made a number of really important strides, continuing to build on what's a very, very unique company. I'm very proud of the efforts of our Silex team, a number of them in the room here today. We've seen it at Lucas Heights in the U.S. as well. The progress we've made on the SILEX Uranium Enrichment Technology, and of course the progress by our U.S.-based exclusive licensee, GLE. I'll call them GLE, Global Laser Enrichment, based in the U.S. You'll no doubt know that we have a great partner in Cameco. We have a joint venture partnership with them.
We own 51% of GLE. They own 49% of GLE today. Needless to say, they're one of the largest global providers of uranium and nuclear fuel. Obviously, across the world, they've just added a 49% stake in Westinghouse Electronics Company to their portfolio as well, and they're a leading supplier of nuclear fuel and nuclear power reactors. I think a great partnership between Silex and Cameco. No one in this room doesn't really, I don't think you underestimate the strength of the tailwinds in the nuclear behind the nuclear industry at the moment. Against that backdrop that we've seen, and we expect to see that for quite some time into the future, we, the company, the board, GLE are hyper-focused on building out the full commercial potential of our SILEX Uranium Enrichment Technology. That's what our focus is.
These tailwinds have set the industry on a path forward towards the greatest expansion of nuclear capacity the world's ever witnessed. That's coming out in so many different forums that you see those tailwinds are just so strong. We're positioning your company to take full advantage of that expansion. The global nuclear renaissance is gathering more momentum, as evidenced by, and Michael will pick some of this up in his presentation, life extensions of existing reactors, planned return to service of idled reactors, including the restarts announced in response to surging electricity demand from AI and hyperscalers, and construction of and planning for hundreds of new nuclear power units around the world. It's very, very clear is what we're seeing in those trends.
Additionally, a significant proportion of the expansion in nuclear capacity may be provided by next-generation advanced reactors, including small modular reactors, which could provide more flexibility and significantly at significantly lower costs as new demand, as an increase in new demand for nuclear fuel. Let's turn to the last 12 to 18 months. Let's now highlight the progress of some of the key activities towards our GLE commercialization of our technology. We announced in September the completion of the TRL-6 technology demonstration testing at the test site in Wilmington, North Carolina. This is a significant technology step forward, technology milestone, but we do note that it's still subject to independent expert assessment. We highlighted the activities related to the PLEF over the past year. It was an important strategic acquisition to secure the site in Kentucky adjacent to where the current source material is held.
It was quite a strategic decision on behalf of Cameco, Silex, and GLE, and we now have that in our hands. We submitted and was accepted the U.S. Nuclear Regulatory Commission license application, which is now undergoing formal review by the NRC. We've positioned GLE to be a potential beneficiary of substantial funding under the U.S. Department of Energy's LEU Enrichment Acquisition Request for Proposals Program. You may have seen from previous announcements, we're one of six shortlisted companies who put those proposals in. As we stand here today, the outcome is unknown as to what that bid will be, but we'd expect once the U.S. government reopens that there would be an announcement on that shortly and in due course. We firmly believe that we're on the precipice of doing something that many thought was never possible.
Speaking to some of you beforehand, talking about laser technology back into university days of the 1990s, and then following the advice of your dad in the early 2000s, I think it was, or late 90s, many people thought it wasn't possible. Bringing a new enrichment technology to market will differentiate us from the competition and provide a real competitive advantage for Silex and for GLE. It's been built on over two decades of world-class research, development, engineering, and will potentially culminate in our cutting-edge technology being largely de-risked and a set path forward for commercial deployment of the planned PLEF in Kentucky no later than 2030. I've been around science and technology, as many of you have been, for a while. These things don't happen overnight. They very rarely happen overnight.
The two decades to get to where we are today is not unrepresentative of where some markets are when you're talking about very deep technology. We're on that precipice, as we said. Let me shift gears for a minute to the Quantum Silicon Production project. During the year, we continued to make substantial progress on the construction of the quantum silicon production module, including in-house laser and plant component manufacturing at the Lucas Heights facility. In addition, we've continued to engage with, and this is through, I'll mention him later, with Silex Quantum computer developers and other industrial users. We're working on more than just the technology. We're working on what's at the back end of the technology, where's the market, who do we want to partner with when we're ready to sell product.
As I would say, Geordie is, or I'll mention you, Geordie Graetz is our Chief Commercial Officer. He's someone else that I wanted to recognize in the audience today as well, along with the other KMP in the audience. I've tried to set this scene as the world is shifting. I think I've just shifted a slide too, talking about the world is shifting. I'll take that back for you there, Michael. If I go, as I look forward, let's step back for a moment before we look forward. We are set to operate in the nuclear industry. That's what we're all working towards, a sector with strong tailwinds that are set to be with us for a long, long time as clean energy demand continues to grow and the world inevitably transitions towards net zero. Many of you may turn your mind back to COP 28.
That was a very interesting moment. You had 20 countries commit to tripling nuclear power output by 2050, 2020 to 2050. There were some pretty important countries. U.S., Canada, France, Japan, U.K. were all in that basket of those 20 countries, a range of others as well. That's where our markets are offshore. That megatrend is not going away. At a company level, we're working with Global Laser Enrichment towards deployment of that globally unique enrichment technology that provides significant benefits to rebuilding of the U.S. nuclear fuel supply industry, which is inevitably underway now, which could bring great value to you and all other shareholders. The growth and opportunities are made possible by the utility of the technology. This is a platform technology. That's why we're able to take it from the nuclear sector into other sectors about enriching isotopes as well too. We're making strategic investments.
Under this framework, our progress towards commercialization has been building significant momentum due to our exceptionally talented Silex and GLE team members, which are the core of our activities and achievements. Just as a side comment again, every time I go out to Lucas Heights or we go across to Wilmington in North Carolina, just the quality of the staff that we have at both of those sites, the quality of the engineering staff, the physics staff, the machining staff, the staff who do the finances, the staff that do the HR is just second to none. I've left people out there, but I just want to leave you with the point that everyone's there for a reason and everyone's expert at what they do.
In order to invest in that path forward and with the balance sheet replenished after successfully deploying an equity placement in August this year, we have an additional AUD 150 million on our balance sheet, very heavily oversubscribed institutional placement that we had at the time, and also completed a share purchase plan that went close to AUD 20 million. Based on our current forecast, the company currently expects to remain fully funded through to the end of FY 2028. If I shift just briefly to governance, your company's led by a highly committed and focused board, and we work to ensure that we continually improve our governance and the right breadth of competence and skills, not only on the board but also within the executive leadership team, including those having the expertise to ensure we continually evaluate and respond to risk.
Susie, who's in the middle of the table there, joined our board last year actually at this event as a Non-Executive Director. I think it's very clear, Susie, to all of us that your long executive career in global mining, finance, project development, operations, and now in governance and risk management, you brought a new dimension to our board, and we're very grateful for that. In accordance with this notice of meeting, as Julie mentioned before, Chris Wilks is standing for reelection today. He absolutely has the full support of the board and management in that decision. You know he's our longest serving board director and remains a major contributor to the board. Chris, you have a long experience with the company, but as Chair, I do not ever underestimate the value you bring. Thank you and good luck with your reelection.
We believe we have the right mix of skills on the board for where we are today, which aids the navigation of the company and our core priorities. We operate in a complex market. We're regulated. We've got security. We've got deep technology. We operate offshore. We operate in joint venture partnerships. This is a complex environment we're in, and it takes very prudent and appropriate management and leadership to do that. I'd like to thank fellow directors over the past year. It's been a busy year. Someone asked me before, has it been a busy year? Yes, it's been a busy year, because I think we had moved on to different discussions there, but it's been a fun year at the same time. I'd like to recognize the leadership of Michael, our Founder and CEO.
He continues to do an excellent job, continues to lead the company fantastically, very, very well supported by our CFO, who you met, Julie, before standing up and making some comments as well. There's a couple of other individuals who like to hide down the back of the room, Carla Renouve and also Marianne Perry. Thank you for your contribution as well. The company's bigger than just one person, and I mentioned Jordy as well too. You have, apart from the board, five other people in the room today. Feel free to mingle with them after this meeting. That's it for me at the moment, but thank you very much for your support. It's great to see so many shareholders in the room this year as well too.
I'll now hand over to Michael, and then we'll come back and do a few more formalities a bit later in the AGM.
Thanks very much, Craig. That was a great summary of what we've been doing over the last year and where we're heading. Welcome everyone. I see a lot of smiles. Something must be going well. Maybe the share price. Does anyone know what that is today?
That's got a little weird on it today.
Yeah, everything's down today, but that's okay. The markets are markets. Yeah, it has been a very interesting year, and we've still got two and a half months to go, which we need to tighten our seat belts and enjoy the ride into the new year. Without further ado, I'll run through our update. We do have our normal disclosures and forward-looking statements. I encourage you to have a look at those on the website. Our investment highlights, as Craig said, an innovative third-generation laser-based enrichment technology for uranium and nuclear fuel production in the U.S., pacified by the U.S. and Australian governments way back in 2000 under a treaty, quite a unique treaty for a private technology between those two governments. We're leveraged to the nuclear tailwinds that Craig just spoke about, blowing harder than ever before. Nuclear energy growth, with net zero targets and U.S.
government actions to revitalize the U.S. nuclear industry, which has been neglected for the last 30 years, and energy security ambitions are all driving that resurgence in interest in nuclear power around the world. We go to our joint venture, Global Laser Enrichment, GLE. We'll spend some time focusing on GLE's activities and update where we are on some important matters there. As Craig mentioned, we are 51% owners of GLE and Cameco 49%, a great partnership. We are all working with GLE to bring this technology to the market in the U.S. We do have some unique leverage points to value propositions, which I'll talk about in more detail shortly. This is quite a unique company, and GLE is a very unique organization within the nuclear industry.
There is a lot of focus as we come towards the end of the year on our large-scale technology demonstration, technology readiness level six, which has been conducted by GLE with our support in Wilmington, North Carolina, in the test loop that has been established there over the last few years. We still expect to finish that TRL-6 demonstration by the end of this calendar year. It will be a key de-risking step in the path to commercialization, along with some potential U.S. government support, which I'll also talk about shortly. There are some competitive bids under assessment as we speak, although the U.S. government is shut down. We don't know how that will affect the decision process with the Department of Energy.
We're here today because of a very important agreement between GLE and the DOE, which was struck in 2016 after three years of a bidding process, a competitive bidding process. Many of you are familiar with that. We call it the Tails Agreement. It's giving us access to over 200,000 tons of legacy depleted tails material, and that will be a feedstock for 30 years or more for GLE's activities, potentially the first activities to re-enrich those tails back to natural grade. We call that an above-ground uranium mine. I'll come to that shortly as well. That agreement essentially saved GLE and Silex in a very dark period post-Fukushima, set us backwards nearly a decade.
We've all survived, and now we're in the home straight, as we say. There are additional growth opportunities that we'll cover briefly at the end of the presentation, including the quantum silicon project and the medical isotope project. The two distinct value propositions for you, our shareholders, and I'm one of them. Firstly, our equity interest in GLE, 51% today. When we restructured GLE in the period 2017- 2020, and that was approved by the U.S. government in early 2021, there was an option agreement negotiated and signed as well. That is in favor of Cameco, a call option to acquire an additional 26% of GLE that would take Cameco to 75% and Silex to 25%. That transaction is subject to, or those discussions are subject to confidentiality. We can't disclose any details around that.
What has been disclosed is that there's a fair market valuation that will be the basis of determining compensation for that transaction. We've disclosed that the window for the call option opened in early 2023, and that the window closes 30 months after successful TRL-6 demonstration, which we are hoping will be at the end of this year. That window, that call option is important. Either way, Silex is comfortable at 51% or 25%. Fair market value will value that share of the enterprise at a discount today, as opposed to waiting for those cash flows down the track. That's the first important value proposition for Silex. Today, 51%, at least 25% equity in GLE down the track.
The second value proposition that is often glossed over, and recalling that until the restructure of GLE, we had zero equity, and all we were focused on was maximizing our royalty from the technology license agreement that was signed in 2006. The perpetual SILEX royalty, a minimum of 7% up to 12% of GLE's enrichment spool revenues, is potentially a very, very valuable aspect of our valuation. We do give an example here for 8 million units of operations down the track at PLEF. If that was to occur, the royalties could potentially reach $90 million annually based on the minimum royalty of 7% and the current price for enrichment of AUD 170 a unit. It should not be underestimated, the value of the license royalty to you and the company, very important. That royalty, the license, is perpetual because the technology is classified by the U.S.
and Australian governments and will remain so in perpetuity. We're not allowed to disclose patents, and therefore the IP, if it's protected as it is today into perpetuity, there will be no sunset on that IP, and there will be no sunset on those royalty streams. Today it's kept as a trade secret technology under the strictest mandated government security protocols, both here and in the U.S., military-grade security. That has not impeded us in any way. We're used to that environment now. It's been quite successful in protecting the technology. Two very important value propositions. Recent highlights, obviously, the technology demonstration in Wilmington, North Carolina. GLE announced, as we did a month ago, that testing had been completed. You can safely assume that the assessment by the independent contractor is underway, given we're already halfway through October.
The positive enrichment results and throughputs measured are now being analyzed by the independent contractor, and we'll hear more about that over the next couple of months. Also, recently, GLE acquired the site for the planned Paducah Laser Enrichment Facility in Paducah, Kentucky, 700 acres. I'll show you a picture of what the plant might look like in the 2030s. That site is located strategically right next door to the Department of Energy site, where the depleted tails are stored that remain under contract to GLE. If we could just silence our phones, that'd be great.
Sorry, really.
Legislative government policy in the U.S. is extremely positive. We've had very strong support from both sides of politics in the U.S. The Biden administration brought in the Inflation Reduction Act with AUD 700 million for HALEU and some conversion activities, and also the Nuclear Fuel Security Act with AUD 3.4 billion of support. Since President Trump's second inauguration, he has issued several very strong executive orders in support of the nuclear industry. That is directed towards the regulatory framework and also reestablishing U.S. leadership in nuclear energy. The U.S. basically was asleep at the wheel for 30 years. That's all being addressed now under these initiatives. One of the initiatives that GLE is very heavily focused on is under the Nuclear Fuel Security Act with the LEU Enrichment Acquisition RFP. GLE submitted a bid a few months ago for that second task order.
We're hearing that at least one award of AUD 900 million will be made and possibly two. That's about all we know at this point in time. As I mentioned before, the process has slowed down with the shutdown of the U.S. government, but we still believe that award will be made before the end of this year. In terms of upcoming catalysts, we've got the TRL-6 pilot demonstration assessment by the independent contractor. We've got the outcome of that funding initiative, the AUD 900 million bids for LEU production. That's enrichment, normal enrichment capacity in the U.S. There is a smaller innovative technology fund that GLE has bid for, which may be up to about AUD 24 million. All helps, but obviously the big one is the AUD 900 million award, which we believe GLE 's bid was very strong and positively received.
We do not know the outcome of that process yet. NRC license, the Nuclear Regulatory Commission is currently assessing GLE 's license for the Paducah plant. That includes up to 8 million SWU of capacity, and that is ongoing. The good news is one of President Trump's executive orders is focused on making the NRC more efficient. The quoted traditional time of 30 months has been potentially shortened to 18 months, we're hearing. If that was the case, then the license could be decided as early as early 2027. We've got some other commercial milestones and industry stakeholder engagements, including the utilities that signed letters of intent with GLE over the recent years. Those discussions are hopefully leading somewhere on the commercial front. Snapshot of our corporate position. For the first time, we hit AUD 2 billion market capitalization over the past week.
We're very happy and proud of that achievement with a good strong share price. We took the opportunity in early August to raise capital, as Craig mentioned. We jumped at that opportunity with the submission to the DOE for the AUD 900 million, requiring some support from the counterparties, so from Global Laser Enrichment. Obviously, if Global Laser Enrichment is going to support a share of funding that is either equal to or some ratio of that government funding, then looking at Silex at the time with less than AUD 70 million in the bank, I guess there was a question of how we would carry our share of that funding into the future. That was a good result, as Craig mentioned, heavily oversubscribed. Now our balance sheet is quite strong, about AUD 200 million in the bank.
As Craig mentioned, current forecasts that should carry us through to the end of FY 2028. What's so special about the SILEX Technology? Two things. Much higher enrichment efficiency and, secondly, much, much higher throughput. Centrifuge replaced diffusion. It has a modest enrichment efficiency, but it has very low throughput. Centrifuge machines operate down towards vacuum. They can't put much gas through a centrifuge machine, otherwise it doesn't work efficiently. To compensate for that, firstly, for the lower efficiency factor, a centrifuge cascade going from the feed assay to the product assay will contain more steps of centrifuge processing. To compensate for the low throughput, it needs many more parallel cascades to achieve the plant throughput. In comparison, the SILEX Technology has a higher efficiency, so there'll be less steps in each cascade, and there'll be less parallel cascades to achieve plant throughput.
Therein lies the two fundamental differences between SILEX laser and the current centrifuge technology that is used around the world. We still have to fully commercialize our technology. Centrifuge is a well-entrenched competitive technology, but we are on the right track to achieve our important results over the next couple of years and take this technology to Paducah, Kentucky. Looking at the technology development, today we're finishing the TRL-6 step of the path to commercial production. TRL-7 has already started in Wilmington, North Carolina, and we're doing some TRL-7 laser activities here in Lucas Heights. Those activities are pretty full on at the moment. We're taking learnings from TRL-6 and making the equipment more efficient and absolute full scale. That is one of the metrics for TRL-7, to finalize your plant scale equipment ready for manufacturing.
TRL8, we envisage that will involve putting a number of these modules, enrichment modules, together in what I referred to earlier, a cascade. We call it a lead cascade. When that lead cascade is operated, then we're in TRL9. They're the steps in very simple terms. We haven't really formalized that description yet, but at some point in the future, we might spend a bit of time detailing the rest of the process with TRL-7, 8, and 9. In parallel, there's manufacturing readiness level 7, 8, and 9. They address things like manufacturing, in-house contract manufacturing, and supply chain, getting the supply chain all ready for engineering, procurement, and construction of the first commercial plant. GLE is now numbering 110 employees. When we came out of the depressed years, around 2019, 2020, there was probably a dozen people in GLE and a dozen here at Lucas Heights.
Between us now, 150 employees, of which 110 are based with GLE in the U.S. As Craig said, very talented teams. GLE has two, well, three sites, actually. Two in Wilmington, North Carolina. The test loop facility is still in the GE Hitachi factory where it was set up some years ago. A new facility across the river, 70,000 sq ft, is GLE's headquarters and quite a sizable manufacturing facility. That plant, of course, is situated right next door to the DOE plant where those depleted tails inventories are stored. The tails project will become equivalent to an above-ground uranium mine by processing those tails at that Paducah Laser Enrichment Facility.
Moving to the triple opportunity that we've talked about now for some time, the first opportunity is the tails project, processing the tails as an above-ground mine at a rate of production equal to a uranium mine producing 5 million pounds a year for 30 years. That is a big project for uranium in anyone's language. That resource is the largest resource of uranium in the U.S. That has quite a large potential for us. 5 million pounds at today's price would be a AUD 400 million annual revenue stream. The bonus here is that material is already converted to uranium hexafluoride. That is valued today at AUD 50 a kilogram. There is about AUD 100 million worth of conversion capacity wrapped up in that annual production.
The second opportunity is using our technology, laser enrichment technology, to produce low-enriched uranium, LEU, and a new grade of fuel coming to market, LEU+, slightly higher assay. LEU is around 5%, LEU+ is between 5% and 10% assay. This is the standard enrichment process that is conducted with centrifuge today around the world. The initial production would probably envisage processing what comes from the tails material as natural grade and enriching that to LEU. That would require about 2 million units of enrichment a year. At today's price of AUD 170 per unit, that in itself is nearly AUD 350 million of potential revenue down the track. HALEU is a very active focus of the industry today. This is a high-grade fuel for small modular reactors, advanced reactors, and is also the subject of the funding program I mentioned under the Inflation Reduction Act.
GLE decided not to bid for that funding because that market is still nascent. It's hard to define. It's hard to determine when that market will become a going concern, a valuable market. For now, GLE is focused on the natural-grade production and the LEU production. This is the triple opportunity shown in a production sequence. The green circles, the first one top left, is processing the tails to natural grade. The second step would be PLEF enrichment for LEU, LEU+, taking the natural grade up to LEU. If that third opportunity comes to fruition down the track, producing HALEU. The plant might look like this one day. The DOE plant is shown top left of the picture. You can see acres and acres of cylinder yards there. This facility is vast.
The diffusion plants that operated decades ago are huge plants, and they had the least efficiency of all three technologies. There was quite a lot of good uranium left in those tails and material that came out the back door of the gas diffusion plants. That inventory there is contracted. Over 200,000 tons of that is contracted to GLE, and that would be processed in that blue plant. That is what we call the above-ground uranium mine. It will produce natural-grade uranium like uranium miners would, except that it's already converted with that extra value. If the plan then leads to processing that material to LEU, we will start to build capacity in the gray plant on the left, firstly for 2 million SWU for the DOE material. The expansion could then take place for taking third-party natural-grade uranium hexafluoride, which is produced from mining operations around the world.
There is quite a bit of expansion capacity shown here. Potential future expansion for LEU is principally the biggest opportunity for GLE. Even though the natural-grade uranium project is very valuable to us, the LEU opportunity could be quite massive. The metrics for the first opportunity in that blue building producing natural-grade uranium have been disclosed at a very high level. We've talked about the all-in costs of that project and compared them to a mining operation above ground compared to in-ground. Our all-in costs, including CapEx, sustaining CapEx, OpEx, payments to the DOE for the feed material, and royalty payments from Silex back from GLE back to Silex for the technology license. All those costs, all-in sustaining costs of less than AUD 30 a pound, noting that today's long-term price is around AUD 80 a pound. That is a huge resource, 150 million lb contained.
We believe that's the biggest uranium reserve in the U.S. known today. Just mentioning again that the feed, the product of that operation, does carry conversion capacity, which is worth AUD 50 a kilo. A very important project for GLE and our SILEX technology. The timeline is pretty much the same it's been for the last year or so, showing on the top line, going through technology maturation and manufacturing readiness levels 7, 8, and 9 through the next few years. The U.S. Nuclear Regulatory Commission license for the Paducah Laser Enrichment Facility is being assessed currently and potentially being finalized in early 2027. There will be a feasibility assessment for the PLEF at some point in the next couple of years or so, leading to a final investment decision, FID, at some point.
That would open the gate for funding of engineering, procurement, and construction of the first commercial plant at Paducah. Although the current plan is to start processing the Department of Energy tails, if GLE is lucky to be the recipient of a AUD 900 million award, then LEU might be the first operation because that funding is specifically for LEU production. What that means is the blue plant might trail the first lot of capacity in the gray plant for LEU production. That is for the future. We don't know how that funding will land. Hopefully, we'll know in the next couple of months or so. We're still aiming to have first commercial operations at no later than 2030. The site has already seen early works in Paducah, Kentucky. It is a very valuable site and source of material for us, being next to the DOE plant.
As I said before, we're hoping that site is licensed for the construction of the plant in early 2027. Just a couple of pictures here that we've shown over the last six months or so of GLE's new head office and manufacturing facility. The manufacturing facility is having machinery added almost weekly. It's a very impressive manufacturing facility now with quite a bit of capacity in tooling machines and engineering equipment. They are marching down that TRL-7 track quite rapidly in this building here. Summary and status of GLE's commercial activities: technology maturation proceeding through to the end of TRL-6, hopefully this year, and parallel operations in TRL and MRL-7 at the plant I just mentioned. The site secured and access to 30 years of feedstock for the above-ground uranium mine, the natural uranium production, U.S. market access, the multipurpose PLEF project.
If all those activities come to fruition with the triple opportunity, that means you have one company with one technology producing multiple grades of fuel, natural grade, LEU, LEU+ and HALEU for the U.S. nuclear industry. I think that's quite unique in the nuclear industry, that proposition. Regulatory permitting assessment underway, in-house manufacturing, facility expansion, onshoring of supply chain. Some of the equipment had the vendors in the U.S. packed up shop, and the remaining vendors were all in Europe. Some of that is being onshored in the U.S. now. There's a big focus on manufacturing capability in-house and with vendors. Stakeholder support: we've got four very large nuclear utilities in the U.S. who are keen to work with GLE with letters of intent signed in recent years, and those relationships are building.
We actually hosted a visit from several of those utilities to our Lucas Heights site, and they were very impressed with our operations, and they've also been to the Wilmington site as well. Meaningful U.S. government funding programs to roll out over the coming months. Hopefully, GLE's bid is a winner and that GLE will be able to inject some of that government funding into the path forward. That remains to be determined. We take pride in our ownership of GLE and the SILEX technology. We take the technology lead for GLE in our joint venture. Cameco, as Craig outlined, is one of the largest Western nuclear fuel cycle companies in the world, almost fully vertically integrated nuclear business. When GLE can come to the party, then they will be fully integrated. Environmental benefits, obviously mentioning clean energy and net zero, nuclear has a huge future to play.
The rest of the world is rapidly going for nuclear expansion or getting into nuclear for the first time. A few slides here on that very theme. The merits of nuclear clean energy are able to support net zero targets like no other source of electricity. Advanced reactors coming down the pipeline, still one of the lowest cost electricity sources in the world. No matter what the media says or what politicians say, nuclear, when it's run properly and efficiently, is one of the lowest cost forms of electricity generation. 24/7 reliability, base load stability, building a modern grid on a very high percentage of renewables is a recipe for trouble. It's very hard to stabilize a grid with intermittent energy sources. Nuclear has by far the highest capacity factors, over 93% in the U.S. That's a 24/7 operation for 93% of the time.
We've seen in the last couple of years very strong interest from the hyperscalers building massive data centers, developing AI, crypto. You've got electrification of transport, hydrogen still being developed in some parts of the world. All arrows are pointing towards nuclear. It's a very strong story. What has happened in the U.S. has been a story of neglect over the last 20, 30 years. That's why we're seeing so much active initiatives now being rolled out by Congress and the U.S. government. Western supply chain recent history is one of curtailment and underinvestment, especially in the U.S. The overdependence on Russian-sourced nuclear fuel has become quite a big contributor to nuclear fuel supply in both the U.S. and Europe, around 25%- 30% in each of those areas. In terms of conversion, there's only three Western conversion companies, excluding Russia, Cameco, Orano, and Combidon.
There is nowhere near enough conversion capacity to feed the Western nuclear industry once Russia is fully excluded. The same story for enrichment. Only two Western suppliers, Urenco and Orano, with their centrifuge machines made in the same factory, by the way, they're joined at the hip. All government-owned, French Orano and Urenco, Dutch, British, German government-owned. When Russia was fully excluded from 2028 onwards, there will likely be supply issues for enrichment service in the Western world also. Of course, HALEU fuel, there is no HALEU capacity in the U.S. or Europe. It was all going to be coming from Russia. That has been addressed now as well. In terms of nuclear power growth, there's 439 operable reactors supplying about 10% of global electricity. That's going to rapidly increase over the coming decades. We'll just mention the demand from new sources of electricity users, the hyperscalers and AI.
SMRs will play a role, but I believe large-scale nuclear reactors will be built probably quite steadily over the coming decades. The U.S. itself has plans for 10 new large-scale reactors to be built before 2050. There's been quite a few reactor restarts and license extensions, operating license extensions. We also have conventional and SMRs all being planned for production in the 2030s to contribute to the nuclear story. The countries are shown here. There's 439 current reactors, 15 countries planning to build 70 more. That's firm plans or under construction, sorry. Firm plans for another 113 in 16 countries and proposed 312 in another 25 countries. Some new countries shown here as well, Egypt, Poland, Saudi Arabia, Turkey, Indonesia, Vietnam. Interestingly, our near neighbors in Asia are going nuclear. Country in the world is going for 80% renewables.
We are witnessing a renaissance, to put it mildly, with significant private public sector support. These are the current operators. U.S., by far the largest, still China will catch it at some point in the future. It's building reactors faster than anyone. The U.S. will be back in the saddle shortly, building more large-scale reactors to feed its rapidly increasing demand. The U.S. uranium nuclear fuel cycle has been left in a pretty dire strait through that neglect to the point where over recent years it was importing 90% of its uranium and importing about three quarters of its enrichment capacity, and a lot of that from Russia. There is a huge opportunity for GLE just in the U.S. alone before we even consider other parts of the Western world industry.
Uncovered demand means that these graphs showing how much utilities need to contract to supply their operations over the coming years. Still a huge amount of uncontracted supply to be negotiated. In the case of the U.S. alone, in excess of GBP 25 million of uncontracted demand of the uranium in the U.S. It's quite a huge number. Where is that going to come from? There's going to have to be a lot more mines built and a lot of expansion of uranium mining. Enrichment is the same. 3 million SWU in uncontracted demand from 2028 rising to 14 million SWU. That's about 30% of the U.S. demand still not contracted. That's going to cause pricing to increase further. Uranium pricing has found a plateau around AUD 80, but that is going to have to increase if more mines are going to be brought into production to feed that demand.
Conversion has more than doubled over the recent years, and again, there's not enough capacity. A conversion price could easily go higher. Enrichment, again, is a choke point potentially over the coming years once Russia is fully excluded from 2028. We expect the enrichment price, the SWU price, to increase considerably over the coming decade. That's the market situation for uranium and the update on GLE. I'll now just turn briefly to our silicon project here at Lucas Heights in Sydney. As you probably all know, we're in a partnership with Silicon Quantum Computing and the UNSW to establish the first commercial quantum silicon production plant here in Australia and the first in the world using laser. There is another company based in South Africa using aerodynamic separation, but we believe we'll be the first in the world to produce high-purity enriched silicon with laser technology.
We had the initial project that successfully verified the technology, and now we're in the commercialization phase. We're building the first production module at Lucas Heights. We had some visitors out there this week who were suitably impressed. That is supported with over AUD 5 million in the federal government defense trailblazer program and another AUD 4.3 million from our partners who are our first off-take partner. Our first production from that initial module at Lucas Heights will start around the middle of next year. It's a top-rated 24/7. It'll probably produce close to 20 kg of highly enriched silicon. We're also paying a lot of attention to chemical purity, which the semiconductor companies are very, very particular about. They will not let a new material into their fabrication plants unless it's gone through a couple of years of qualification on purity issues.
We're aiming to produce two products, quantum silicon gas in the form of silane. That's the mainstream chemical that's used in CVD production in today's semiconductor industry. There is probably a smaller market for polysilicon, poly or monosilicon that is used in molecular beam epitaxy. That's an alternative process for fabricating quantum chips. A new emerging opportunity is also being explored. We've had discussions with a group at the University of California, Berkeley, that have published very positive, interesting results that address the thermal overload in today's massive silicon chips. The types of chips that NVIDIA, AMD, Intel, and TSMC make today have a billion transistors on a tiny piece of silicon, and it's just creating too much heat. There's self-limited performance. Once they build up that heat, it's very hard to extract that heat efficiently out of the chip structure to the heat sinks.
Enriched silicon has been shown by this group in the U.S. to transport heat 2.5x more efficiently. There might be an application with conventional chips, the GPUs, and that's the NVIDIA chips and the upcoming tensor processing units. That's the next generation that will feed quantum and AI. These enriched silicon nanowires act as heat pipes. There is an evolving second application for enriched silicon there that we're quite excited about. Just a couple of photos from our silicon production plant. This is part of the chemical processing, the gas handling units, and the control system in the middle. We build all our own control systems. That panel there is full of IP electronics. There's a central processor unit, an industrial-grade programmable logic controller, and there's umpteen different modules measuring different things in the plant.
When something goes offline, it sends a signal to the central processor unit, and that interprets and sends out a corrective action. We build all that in-house. It's industrial-grade control systems, and we're very proud of that ability that we have to integrate the technology all the way through to industrial grade. Finally, the medical isotope separation technology project, we're still focusing on enriching Ytterbium-176, which is used to produce Lutetium-177. Long story short, that is a breakthrough treatment for advanced prostate cancer today, already approved in the U.S., U.K., and EU, and is already under clinical trials for a host of other cancers. It's called targeted beta therapy. It has a huge focus in oncology today. We think that that market is already disrupted because all the Lutetium was coming from Russia.
That market will only grow stronger and stronger over the coming years as that type of technology is adopted around the world. We're still in early stage technology validation. I haven't got much to report on that yet. It's a difficult isotope to work with, but we are making some progress and more on that to come. To wrap up our update here, Silex, your company, represents unique leverage into the nuclear fuel supply chain with significant potential value through our ownership in GLE, 51% currently, and not to forget the important perpetual royalty flows under the SILEX Uranium Enrichment Technology license.
GLE's path to market, underpinned by the PLEF project, is firstly to produce natural-grade uranium from the DOE legacy depleted tails, and then looking at the broader opportunities, the triple opportunity to include production of LEU, LEU+, and potentially HALEU down the track, all at that Paducah Laser Enrichment Facility site. We are experiencing those tailwinds, and we believe that both Silex and GLE will benefit from those tailwinds spurring the nuclear renaissance, particularly in the U.S., with strong U.S. government support. Last but not least, we are intensely focused and being patient in waiting for the independent assessment of the TRL-6 pilot demonstration program and still hoping that we will complete that exercise before the end of this year. As I mentioned, the additional opportunities with Quantum Silicon and MIST. That's your company today. We feel like we are a bit in the home straight.
It's been a long haul. I know many of you have been with us on this journey for two decades or more. We even lost one of our most avid fans during the year, Moosey on Hot Copper, who unexpectedly passed. You know we are doing our best. We are working as hard as we can in an industry which works at snail's pace. We're really starting to get traction in the U.S. with the government, with utilities, with other stakeholders. Tighten your belt and enjoy the ride. Thank you.
I'll do these first.
We do have some questions online, but if there's any questions from the floor, we can do those first.
Any questions from the floor? Since you've turned up, you can get the first question. Sure.
Is it true that China is building a lot of SMRs?
I think China is definitely developing a few different SMRs. I'd say they're not a leader at this point. I think the U.S. is putting a lot of money into SMRs. Probably Canada is more advanced than anyone. They've got a regulatory framework already in place. Europe's not far behind. To answer your question, we don't know exactly what's happening in China, as always, but they're definitely active. I don't know where they are positioned in terms of leadership.
Our solar inventions all went to China, who then?
China has the ability to produce things cheaper than anyone because maybe they don't pay their workers as much. Look, China's an industrial giant. It's got the ability to build. We were in solar and they killed our business essentially, but we went and saw some of their plants. They were gigawatt-scale solar production plants built in 18 months. They would take three or four years anywhere else in the world. They have that ability to mobilize and invest very heavily, very quickly. I don't think we should look at China as a threat all the time. I think there's scope to have, you know, they're our biggest trading partner for Australia. We should look at them as a competitor, but also a nation that we can do business with over the coming decades.
My understanding is that they're already SMRs could fit into a container.
There are micro reactors being developed in the US and Europe.
An ordinary job.
Yeah, I mean, there are some micro reactors you can, you'd probably be able to fit in your car if you were able to license it. We're getting into a territory which is still fairly speculative and early stage.
Hope so.
Yeah.
Quantum Silicon Production for Quantum Computing project, your third leg of the stool, sounds marvelous. What does it take to take that to full production, export? You mentioned supply chain being developed. I think there's serious potential there for an Australian operation.
Yeah, it's a good question. I mean, the fact is silicon-based quantum computing is one of half a dozen or more different technologies. Only silicon has the know-how. The silicon semiconductor industry has the know-how already to build atomic-scale structures. In conventional chips, we call them transistors. In quantum chips, we call them qubits. They're all now atomic scale. Transistors are down to less than five nanometers. That's atomic scale in conventional chips. Silicon quantum computing has a huge advantage over other technologies. It also has some leading players. Intel is totally backing silicon-based quantum computing because obviously their business is silicon. You'll see others, there are some big European organizations and others in the U.S. that are really pouring billions into silicon quantum computing. It's hard to say how fast and when that market will take off. No one's going to overinvest yet.
When silicon quantum computing is commercialized and becomes mainstream, that will be when we get really excited and we'll have to mobilize and potentially scale up our production capacity.
The panels after the lasers enriched it, you can't tell us how much is left over in the completed panel.
No, it's all, it's public information. GLE has access to the better two-thirds, I believe it is, of what's stored at Paducah. It's in that ballpark. There is another inventory of lesser quality, lesser assay depleted tails that GLE does not have under contract. It's not economic in GLE's view.
What I mean is when someone comes to you with natural uranium and you enrich it, there's going to be a depleted tail like with the other. You can't tell us how much is left over.
If we're enriching for LEU, we will produce tails. Our technology is very efficient, and we will not be leaving much of the good uranium in the tails as the diffusion plants did over the decades. Our tails will be low assay from our LEU.
Very low assay compared to.
Yeah, it's going to be driven by economics. The tails assay is always driven by the cost of uranium, the cost of enrichment. That's what drives the tails assay.
Are there utilities looking at getting you to enrich it or a centrifuge? They'll provide less uranium to our laser than they will to a centrifuge.
Only if they contract for lower tails. Yeah, that'll depend on what they're paying for uranium and enrichment. It's an economic formula. It's not just feed and product. The tails are a very important economic driver in enrichment operations.
Just got a question around the DOE RFP, the Task Two, AUD 900 million funding. How much do we, how much do we know about the structure of the way that funding would be released? In other words, I'm assuming there's a right to check the AUD 900 million off you go. Does it all get drawn down in one tranche? Does it get drawn down on milestones? Just wondering whether you can add anything to the structure of that way that funding would be awarded.
What we know is that it'll be drawn down with successive milestones. Those milestones would be negotiated between the awardee or awardees and the DOE after that decision's made. We believe that there's about 70% that would be structured under those milestones, and then another 30% would be administered in some way further down the track. Yeah, that's what we've learned. That's about all I can tell you at this point.
Apart from Russia, are you aware of anybody else doing zero spin silicon?
Apart from who?
Apart from Russia, are you aware of anybody else?
The company I mentioned, ISP, Isotopes, but they use aerodynamic separation process. That's what ISP stands for. That's a technology that sort of sits between diffusion and centrifuge. It's a sort of a stationary wall centrifuge process that we believe has higher costs than our laser technology. Another thing with the centrifugal force-based process is it cannot separate lighter isotopes than silicon. They will also get enriched in the product stream. You can only separate from silicon up or down. We believe our laser-produced product will be chemically more pure because the laser picks out the single isotope rather than everything above it or everything below it.
As GLE moves from TRL-6 to TRL-7, TRL-8 and beyond, are there any other independent analysis that will take place at any of those stage gates, or is TRL-6 the only one that had to be independently verified?
No, we've had the same independent contractor come in for the last 12, 15 years and do assessments of technology levels. I would imagine that will continue. This contractor is a top-tier engineering contractor. You'd know their name. We can't disclose it. They've been in multiple times over the years. It's not just important for Silex and Cameco and our shareholders, it's also important for Cameco to have an independent assessor involved because they're not able to be involved in the technology development. They're outside the technology tent, so to speak. I'm sure that will continue.
With respect to the perhaps 900 million lits available for the LEU, if that goes into LEU, is there any similar funding available for the tails processing, or are we going to have to fund that separately? If we do, what are our contingencies for that?
Yeah, so there's no funding for tails processing. That will be funded by GLE's shareholders, that's Cameco and Silex in a ratio, either today's or after option. The good news there is the deal with the DOE is very attractive. We pay for that feed material, but until we are up and running and making good profits, it's minimal. Long story short, the NPV of that project is quite attractive, even with funding from private, from the shareholders.
Supplementary to that, my understanding is we've got to be processing the tails by 2030, or we risk losing them. Is that correct?
That's one of the milestones in the agreement, yes.
If we get the LEU, we're still going to start reasonably quickly.
Yeah, we can't neglect the depleted tails processing project. It needs to be addressed.
What's the value of it?
It's definitely got fantastic value, but LEU is potentially a bigger opportunity for GLE. I'll just run through a couple of these other questions. One I just covered earlier is based on, is Silex expected to be the cost leader for LEU production related to centrifuge? I did explain that there are two advantages laser technology has in terms of higher enrichment efficiency and much higher throughput. That one's pretty much done. There's a question on the exclusivity of the DOE tails, noting that another company, a startup, General Motor, apparently offered 7,600 UF6 cylinders. I did explain that GLE has the better half or two-thirds of the tails stored at Paducah. That's a contract. It's a legally binding contract in the U.S., and we don't see that is threatened at all by these other activities.
Given the classified nature of the SILEX technology, how will the company balance national security obligations with providing investors meaningful operational disclosure once commercial production begins? The answer there is that we're a public listed company. We've got mandatory disclosure of half yearly and annual audited results. Beyond that, we have ASX continuous disclosure obligations. We'll be bound under those obligations to disclose any price-sensitive news as we go into commercial operations. One on silicon construction progress. What is the status of the first full-scale production plant? Is it within budget? When is operation expected? I made some comments earlier, but just to focus on those details, we're about 80% complete on the first production module at Lucas Heights. We'll then be going through cold commissioning and hot commissioning in the first half of next year.
We're going to be starting initial test production beginning the second half of next year and then progressively ramp up operations. If we run that plant 24/7, we hope to hit up to 20 kg a year. Russians are selling a kilogram for AUD 500,000, less purity. Even if it was at that price point, that's $10 million of revenue a year. The market's only a few tens of kilos, but hopefully we'll grow rapidly. That plant is only costing about the same, $10 million . One year payback for that plant. There are just a few questions from that list. Do we have any others that we want to cover?
Yep, sure. There's a question here around how many full-time staff we have. I guess at GLE and at Lucas Heights, Australia, and what the impact is of AI in our workforce expected to be.
Okay, so we have 110 employees with GLE. We have about 40 in Silex, but we don't have any robots yet. I don't know how to answer the AI one.
Another question is, have we ever given any thought to the separation of helium-3? It's definitely a question for you.
Yeah, no, we haven't. The main application for helium-3 is in fusion, nuclear fusion. The catch cry for nuclear fusion is it's only 30- 40 years away, but they've been saying that for decades. I did my PhD in laser fusion, and I actually think there's better fuels than helium-3. Yeah, it's for the future.
I think most of the other ones we've covered in your remarks and the questions from the floor, but there is a governance question. If you want to take a break. It's, will we consider lodging proxy results, including the number of shareholders that are voting in each resolution in advance of the AGM in the future?
That's a suggestion that's come up at a bunch of different AGMs over the course of this AGM season. We'll take it away and have a look at it. What I can say is a bit over 50% of eligible votes were cast before we came into this meeting today.
Thanks, Nancy. Are there other questions from the floor?
Another question, one more.
One more.
If Cameco goes to 75%, are they still outside the technology tent?
Yes.
Oh, okay.
Yeah, the U.S. government is pretty strict on accessing enrichment technology. Certainly within the U.S., they're extremely strict, and even outside, they're strongly supporting non-proliferation around the world. As you know, they're very active behind the scenes trying to control or influence Iran's program. The same with other countries: Pakistan, India, North Korea. They all have weapons programs. I think the U.S. government's pretty determined to make sure that doesn't spread too far. Cameco is not in the technology tent and would not be allowed into the technology tent as we understand for the foreseeable future.
Would you consider sending your nuclear slides to Chris Bowen?
I don't know if he could read them.
Thanks for that, Michael.
All right, thank you.
I think actually the ministers probably tapped into that AI and they automatically get sent to the bin, so they probably wouldn't get through. Look, it's been a long morning. Thanks for that presentation, Michael. That was quite excellent. Thanks for taking all the questions from the floor. I'll try and wrap this up quickly, but we do have the formal business to attend to before we have a bit of a break. Looks like there's some lunch up the back as well, too. The notice of meeting went out in accordance with when we need to send it out, so I'll take that as read. We have Ash in the room from PwC, as we mentioned before, who's our auditor. The first thing we need to do is basically table and accept the company accounts. Are there any questions from the floor online around the accounts? Thanks, Ash.
That was your day done then. Thank you. Thanks. We'll now move to the resolutions. Am I moving the slides here or is someone else?
There we are.
All right, there we go. Now, the proxy results for the various resolutions are shown on the screen and will be recorded in the minutes of the meeting. I intend to direct undirected proxies in favor of the resolutions. Are there any questions from anyone in the room or online around any of those resolutions at all? No? No questions there, Julie? All right, you know my normal trend, sort of like say voting's open, then quite quickly move to voting is closed. You've got a little bit of time now if you wanted to update voting online. You can't do it online now. Anyway, if you're on the system, you can do it online. I think we'll ask our friends from Computershare to come and the opportunity to collect any of your forms that you might have now to put in that lovely purple box.
Just while that's happening, once the vote is closed, we'll work with Computershare to have that tallied up and we'll make a release to the market hopefully later today where the final results rested. Can I just check in the room? Is that the end of the little blue forms that need to go in from here? Thank you. We're now declared voting closed. Thank you very much for that. Thank you again for your attendance. Thanks for your commitment to Silex. Thanks for wanting to learn more about the company and wanting to join us for a light snack over lunch. Thank you very much.