Andrew. We do call our presentation the world's largest above- ground uranium mine. You might wonder what a laser enrichment technology has to do with mining, which is my job to educate you in the next 10 minutes, 15 minutes. That encapsulates what I am going to try and describe. It has taken us over 30 years, and I have to tell you in 15 minutes what it is all about. Just a few key points. We do have this third-generation laser-based enrichment technology, which we invented in Sydney some years ago. We licensed that to a U.S.-based joint venture, Global Laser Enrichment, and that is currently owned 51% by Silex. Silex, my company, listed on the ASX with a market cap of around AUD 1 billion, and Cameco Corporation, based in Canada, you are probably all familiar with Cameco holding 49%.
There is a technology license in place, in perpetuity. The technology is classified, so we cannot publish patents, so the technology has no IP sunset, essentially, and the royalty is therefore perpetual. We completed a key demonstration last year, large- scale technology readiness level 6, which is a scale that many governments and companies use around the world. We are now in the final stage of engineering. In about a year from now, we will be completing all the full-scale demonstration of commercial equipment in Wilmington, North Carolina.
The first project is based on a contract and agreement signed between the U.S. Department of Energy and GLE back in 2016, which gives GLE access to over 200,000 tons of depleted uranium tails, and I will explain what those tails are in a minute. That material will be our feedstock for our first project for 30 years of production of natural-grade uranium.
In other words, the same grade of uranium that the miners produce, and that is why we call it an above- ground uranium mine, at a sizable rate of 5 million pounds a year for the 30 years. Just recently, we signed an offtake agreement between GLE and Cameco, which will see Cameco as GLE's sole customer. Cameco is going to be the purchaser of all GLE's products, including the 150 million pounds odd of natural-grade uranium from that first project. Just to point out, there are two distinct value propositions. Firstly, our equity ownership in GLE at 51%. There is an option for Cameco to go to 75% by acquiring 26% of equity from Silex at fair market value. That is a discussion for the future, but that window for Cameco to exercise is until April 28. As I mentioned, there is a perpetual royalty in place, minimum 7%.
Just briefly, if we have a decent-sized operation of 8 million Separative Work Units with our laser enrichment technology operating, that could bring in about $100 million of cost-free royalty streams from GLE back to Silex, if that eventuates. I am going to skip all the way down through here to the nuclear fuel supply chain. This is the conventional supply chain. Uranium mining conducted around the world, including our partner Cameco, one of the largest uranium miners, produce natural-grade uranium. This is the same assay wherever you find it. That means that the assay of the active isotope, U-235, uranium-235, is about 0.7% of the naturally mined uranium, and the less active isotope, uranium-238, is 99.3%. To make nuclear reactors work effectively, firstly, the oxide, uranium oxide, has to be converted to uranium fluoride. That is a conversion industry, and that is traded in kilograms of converted uranium.
Today's price is about $60 U.S., and of course, the uranium price as we all know is $90- $100 a pound. The third step is enrichment, where the uranium-235 isotope is enriched from 0.7% to around 4% or 5% assay, and then that is active enough. It is made into nuclear fuel rods and goes into nuclear power plants to make electricity. There are some market slides here, which we do not really have time for today, but just noting America has very little in terms of uranium resources, producing 1% at best of its own uranium requirements. This resource I am going to talk to you about today is by far the largest uranium resource in the United States by a fair margin. Our technology is third-generation laser enrichment.
I can come back to this slide shortly if we have time, but basically, it is much more efficient than today's centrifuge machinery that does the enrichment around the world. A very high efficiency factor and an enormous throughput compared to centrifuge machinery. All that means our footprint is much less, our CapEx is much lower, potentially only half the CapEx of centrifuge, and our operating costs are lower. As I mentioned, we are in the final stage of engineering. After that, we move into commercial plant construction, in our site at Paducah, Kentucky. GLE, our JV, has those two sites shown here on the East Coast, headquartered in Wilmington, North Carolina. The commercial plant will be built in Paducah, Kentucky. Now we are going to get to the interesting part about this above-ground uranium mine.
This is a picture of the first-generation gas diffusion plant that the U.S. Department of Energy operated from 1952 to 2013. Firstly, to make material for their military or their weapons program in the 1950s, 1960s, and then more so in the latter part of last century, 1970s, 1980s, and 1990s to make enriched uranium fuel for the growing nuclear power industry in the U.S. This plant was very inefficient, very costly, and because of that, a lot of the tails that came out the back door of this plant still contained high-value uranium-235 assays. The assays that have been included under the contract I mentioned between GLE and the DOE range between 0.25%- 0.45% assay. Remember that natural is 0.7%, and today's assays are down around 0.2%- 0.18%, even less.
That gives you a bit of an idea why we are going to process these, because there is still appreciable value in the material that came out the back door of this plant for all those decades of operation. We will be taking about 200,000 tons, a bit more than that, over time when our first operation is up and running. These materials are stored in cylinders, about 25,000 cylinders in the yards around those buildings you can see in that picture. It is a vast quantity of legacy depleted tails waiting for GLE, and that is exclusive. Those tails are GLE's for keeps, and they will be processed at a plant built next door to this site. GLE has purchased 700 acres adjacent to the DOE plant, as you can see here.
Our plans will involve, firstly, a tails processing plant, shown in blue, that will produce the natural-grade UF6. We are going from 0.3% back up to 0.7%, the same grade that the uranium miners produce. That is the above-ground uranium mine. As I said before, producing 5 million pounds equivalent a year for 30 years. That plant in itself, just producing natural-grade uranium, is around $500 million of revenue value at today's prices. There is a bonus here. Because the material stored in those cylinders has already been converted before it went through that first-generation plant, we get the conversion value for free. That trades today at about $60 a kilogram. That is icing on the cake for that first project in the blue building.
Then we would build out some capacity of our laser enrichment technology in the gray building on the left to produce low-enriched uranium, which is reactor grade. That is the third step I showed in that nuclear fuel supply chain. That would be built out in the gray building, firstly, for the DOE material. That would require about 2 million Separative Work Units. A unit of enrichment trades separately at about $180 U.S. today. That in itself from the DOE material would generate another $360 million of annual revenues for 30 years. Then there is room for expansion of the LEU capacity because that is the big target market for GLE. There is a threatened supply deficit of nuclear fuel in the coming years, in the 2030s, due to the fact that Russian imports of nuclear fuel into the U.S. and some other Western countries are being phased out.
In the U.S., there is a total ban on Russian imported fuel from 1st of January 2028, and basically about 1/3 of America's nuclear fuel was coming from Russia. So we have potential to expand the LEU capacity quite dramatically from the first 2 million units to potentially 10 million units or more. Noting that Cameco itself produces 20-odd million pounds of uranium a year and also has a conversion business. So there is a lot of room for expansion at this site that will hopefully come into play in a market that needs more enrichment services. Then there is 1/3 opportunity shown in green to keep going with the enrichment up to what we call high assay LEU, which is up to 20% enriched in the U-235 uranium isotope, and that would be for small modular reactors. Right now, we are focused on that first project.
The costs of that first project have been analyzed in quite some detail and compared to uranium mining metrics. All in sustaining costs of around $30 a pound or maybe a bit less, very competitive, if not Tier 1 level. As I mentioned, 5 million pounds for 30 years, 150 million pounds of uranium-contained resource. We know what is in every cylinder that sits above- ground in those cylinders. This is a very prospective project to start our journey with. Our timeline sees us finishing the engineering this time next year, followed by a feasibility assessment. We are also due to receive a full operating and construction license early next year, first quarter 2027, and all that would lead to an FID around the end of 2027 or early 2028.
If that all goes to plan, then we are into engineering procurement and construction of the PLEF laser enrichment facility, that blue building first. That would take two or three years to get the first production capacity up and running, hopefully before the end of 2030, then continuing to expand operations from there. The site works are underway. Clearing is happening. The headquarters in Wilmington, North Carolina, also contains a very large manufacturing facility, so a lot of equipment will be manufactured in-house. GLE is also lining up its contract manufacturers as we speak and putting in place the supply chain. I hope that all made sense. Basically, we have a very unique project here, a laser enrichment technology, the first third-generation laser enrichment technology to be commercialized in the world.
There are some startups that are well behind us, a few years behind us, going down paths that are notoriously difficult. We give ourselves a pretty good chance of becoming the first laser enrichment technology enterprise in the world through Global Laser Enrichment, our JV with Cameco. We are looking at the triple opportunity beyond the initial project of producing natural-grade uranium, producing LEU plus, the slightly higher assay the utilities are asking for now, and the HALEU opportunity down the track for small modular reactors. We also have a silicon enrichment project, which is just hitting commercial production next year. That is an exciting side business for us that hopefully will evolve over the coming years. It is not just a one-trick pony. We have some diversified activities coming down the pipeline. I will just mention the cash balance now, AUD 180 million.
We are burning about AUD 50 million a year this year and next year, then after that, we would switch to project finance, hopefully for the first commercial plant. Thank you very much for your attendance.
Thank you, Mike. Do we have any questions from the floor for Mike?
Thank you for the presentation and answering my questions. Sorry, just the $30 AISC, is that including the credit for the conversion, or is the conversion on top of that?
No, it includes the conversion. The conversion is worth about 1/3 of that in terms of, it would be 1/3 higher if you did not include the conversion.
Right. It's the 2,000 tons at $ 60 is basically what you're-
Correct. Yep.
Okay. Thank you.
Thanks for your question. Any other questions from the floor?
I think you mentioned production by potentially the end of 2030. Do you know how long ramp-up to the 5 million pounds would take post-2030?
That's going to be driven by the market, and the contract portfolio that Cameco builds. Our aspiration is to have the full 2,000 tons production and the 2 million SWU production up and running three or four years after starting, so maybe 2033, 2034. But look, that's speculative, aspirational at this point. But it does depend on how much demand there is in the market.
Sorry, and you said the tails assays were 0.25%-0.4 5%. When you talk the 5 million pounds, what are we using as the feed for that? And are those cylinders, is it known where the 0.5%, 4.5% is versus the 0.25%? I mean, are you-
Yeah. So the av-
It's your question on the ramp-up. Thanks.
Yeah, we know what's in every cylinder. It's all logged by the Department of Energy. The average, I think, is just above 0.3, maybe between 0.3 and 0.35. So that's the average. We'll be processing slowly through that, taking the best tails first, obviously. Okay.
We have one more from over here.
Sorry, I'll be quick, and it's on financing. I was fortunate enough to spend a bit of time with the U.S. ambassador to Chile last week. While he was talking about the DFC funding, which is for international, felt like the impetus to spend money on projects that are critical and linked to the national strategy that Trump administration put out earlier this year is really coming to the forefront. I'm just wondering what options, given your U.S. base, are available to you.
To fund that first plant, it will cost around AUD 1.3 billion±, depending on how much we have front-loaded with other infrastructure. We have looked at different funding options at Silex. There is what used to be called the Loan Programs Office in Department of Energy, now called Office of Energy Dominance Financing. They have a $2 billion fund available specifically for new technologies like this. The solicitation documents actually call out laser enrichment as a qualifying technology. For that first plant, if it was AUD 1.3 billion, say, for argument's sake, we would be looking at debt financing for maybe 70%. That could well come from EDF office. It could come from market debt.
Then the equity component of AUD 400-odd million, currently we are 51% of that. If Cameco exercised its option, then we would be 25% of that. At this point, all options are on the table.
At Silex, we have even discussed an IPO, but at this point, it is early days.
I think the premise behind that question too, Mike, is clearly you have got a very strategic project here in the U.S. context. One of your charts showing that the U.S. consumes about 50 million pounds of uranium a year, only produces 2 million. Your project potentially producing 5 million, but will become the single largest source of uranium production in the U.S. I note that the NNSA, the National Nuclear Security Administration, recently had an RFI out, seeking 4 million pounds of supply from 2030 of non-obligated uranium. Does your project qualify for that sort of program?
No. Under the treaty that covers our technology between the U.S. and Australian governments, our technology is excluded from all military applications of nuclear fuel. I would assume that relates to U.S. government military needs, and therefore, we would not be able to participate due to the fact that our product will be obligated.
Okay. Got it. Nonetheless, you will still be a big source of American supply. I think we have reached our time limit now. Mike, thank you so much for that presentation. Very exciting project. One that you have still got work to do over the next three or four years to bring it into production, but probably just in the right time to meet this incredible growing demand for nuclear fuel that we can all see coming.
Thanks a lot, Andrew. Thanks, everybody.