Good morning, everyone. Welcome to Silex Systems Limited 2026 Annual General Meeting. I am Julie Russell, Silex's CFO and Company Secretary, and I am pleased to advise that we have a quorum present here at Dentons in Sydney. I declare that our 2026 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 in real-time. The minutes of last year's AGM, held here at Dentons on 17 October, 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 also been distributed, and we will also take that as having been read. I would now like to introduce your board to you. Here we have Craig Roy, our Chair. To his left, we have our Founder, CEO, and Managing Director, Dr. Michael Goldsworthy, and our Non-executive Directors, Chris Wilks and Susie Corlett. As per our notice of meeting, Craig is standing for re-election today. Turning now to our order of business. Craig will shortly provide his opening address, and following that, Michael will provide a presentation reviewing our highlights for the year together with a business update. Shareholders joining virtually have been provided with instructions on how to participate and vote in today's meeting, with details available in the notice of meeting. Michael's presentation, Craig's address, and the notice of meeting are all available on our website.
With regard to questions, we have 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 also now be submitted online at any time. To submit a written question, select the Q&A icon and select the topic to which your question relates from the drop-down list. Type your question in the text box and press send. Subject to the time available, questions that we receive will be addressed later in the meeting and after Michael's presentation, and we will run over if it is 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 in the room today, you will also have the opportunity to ask questions following Michael's presentation.
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Craig will give you a warning before moving to close voting. With that, I am now very pleased to welcome your Chair, Craig Roy, to provide his opening remarks.
Thanks, Julie. It is a little bit different sitting up front. You might remember we were here, for those of you who were here last year. We are out to the right. It is great to welcome you all to the meeting. We were pleased to have the chance to speak to a few of you before the meeting, and we look forward to doing that with others following the discussion today. Can I welcome you, as Julie did, to the Silex Systems Limited 2026 AGM. I think it is very fair to say the year ending June 2026 was another important year in the commercialization of our SILEX technology, and saw solid progress made together with our U.S. exclusive licensee and joint venture, of which we own 51% of the joint venture, Global Laser Enrichment. That is GLE for the rest of the presentation.
GLE's progress has been remarkably close across the last financial year in the commercialization of the technology plan through to technology maturation, licensing, site clearing. I will say a little bit more about this as we go through. Securing a U.S.-centric supply chain for the technology, in-house world-class fabrication facility, and securing U.S. government funding, and some quite material economic incentives from the Commonwealth of Kentucky and also the local Paducah Council. Both of which in the last 12 months, all of us on the table here have visited and throughout both Kentucky and Paducah delegates. Progress on these matters support the commercialization of the technology, and I am very proud of the work that both Silex and GLE teams have done over the course of that year. As I said last year, and I will repeat again this year, very pleased to be working alongside Cameco Corporation.
They are our joint venture partner. As many of you would know, we own 51% of the JV. Cameco own 49% of the JV. You probably also know they are one of the largest global providers of uranium and nuclear fuel, and they have now invested in Westinghouse. Westinghouse is an electricity company. They are 49% owners of Westinghouse, which adds more value to their whole supply chain across the nuclear power reactors. I think one of the most significant technology milestones over the course of the year, and it seems a long time ago, back in October 2025 now, but that was the achievement of TRL-6. This was the first time a third-generation laser enrichment technology had been demonstrated at large scale, pilot plant level, and full independent validation by a top-tier third-party engineering consultancy.
GLE and our partners in Cameco all feel it is very important to get that third-party validation from a top-tier engineering company. That represents a key de-risking event and sets Silex and GLE on a solid path to commercial deployment at the planned Paducah Laser Enrichment Facility. We refer to that as the PLEF, and that is how I will refer to it for the rest of the discussion. That is in Kentucky, and by 2030. The PLEF offers a unique single-site solution for U.S. domestic production of uranium conversion, most importantly, equally importantly, and enrichment services. With significantly higher efficiency and orders of magnitude increase in process throughput. The SILEX technology potentially places GLE in a strong position to help satisfy the global growing demand for nuclear fuel. GLE remains on track with the timelines we put out around the NRC license, and we anticipate that in CY 2027.
GLE owners, Silex and Cameco, continue to support activities focused on two key areas. Final design, detailed design demonstration of SILEX technology at full-scale commercial system performance under plant-like conditions. That is what we refer to as TRL-7. So that is a step up, obviously, from TRL-6 and planning for disciplined commercial deployment of the PLEF. That obviously is subject to the feasibility assessment and final investment decision, which we are all leading towards. Since the end of the year, and you would have seen a market announcement around this recently, GLE achieved another milestone, signing an offtake agreement with Cameco to purchase all future nuclear fuel production from the PLEF. I should add, the main point of the partnership is obviously GLE, but Silex was very comfortable with the arrangements and were a party to bringing that transaction together.
We are now keenly focused on the final design, detailed design, and demonstration of full-scale commercial performance of the SILEX technology and preparations for feasibility assessment of the PLEF, which I mentioned before. Let me go back a minute to the offtake agreement because there has been a little bit of chatter in this. I just want to clear that up. The agreement provides a key commercial pillar to support future FID. That is something we need to have in place before a final investment decision and is structured to ensure that GLE benefits from Cameco's future contracting efforts. Future contracting efforts is probably what I will underline there, in what we believe to be a tightening market.
During the year, we also continued to strengthen diversified business from the SILEX technology, including the recent completion of construction of the world's first laser-based enrichment plant for commercial production of Quantum Silicon at the company's Sydney facility out at Lucas Heights. We are continuing to see great interest in our plan to supply a key enabling material for silicon quantum computing and look forward to commencing commercial production in CY 2027. I know when I was circling the floor before, there were a number of questions around that. If you had any further questions, then let us pick them up in the discussion point at the end. Despite our achievements over the last year and the unprecedented positive fundamentals for the global nuclear fuel industry, we believe our share price has not reflected the enormous potential value of the company, particularly in recent months.
We see big swings across the whole sector day to day, some days up 5%, some days down five-plus percent. It moves around. What we do as a company is we focus on what we can control. We can control the work that I've outlined before in terms of building the best capability in the world to deploy uranium enrichment and conversion services to the U.S. Market stuff that's happening around us, yes, disappointing, but it's not something we can control. After three decades of decline in the nuclear industry, the U.S. has moved decisively to reverse this trend and reestablish itself as the global leader in civilian nuclear power.
U.S.-based GLE, and it is U.S.-based for an important reason, is positioning itself to be a leading enrichment company to operate in a sector with very strong tailwinds that are set to be with us for the foreseeable future as clean energy demands continue to grow and the world inevitably transitions towards net zero. This mega-trend is not dissipating, and we're a potential beneficiary of this trend. We continue to work diligently with GLE towards deployment of this very unique technology that potentially offers significant benefits to you, our shareholders.
Our growth and opportunities are made possible by the utility of the technology, our strategic investment in GLE, and the further exploitation of our core strengths in building the world's first laser-based enrichment. As I mentioned before, our progress towards commercialization in these projects has been underpinned by the exceptionally talented Silex and GLE team members, which are quality of activities and achievements who tightly work to maximize value from the investments made today. I must say, whenever the board, and again, we've been to the Paducah site, as I mentioned, we've spoken to the folks in Kentucky and also the Paducah Council, we've also been to the Wilmington site in the last 12 months. Just the level of energy in that site and what's, well, it's two sites and what's been built up on those two sites is just astronomical.
The energy of the staff there is absolutely remarkable. They're focused on our mission of getting this technology to market so it's actually producing enriched product, baseline uranium product, and tapping the conversion services. Equally, when we visit Lucas Heights, we get the same mood and approach from Lucas Heights of the expertise of the staff and the passion of the staff to make the Silex vision a reality. I'm going to move to governance briefly. It's terrific working with this board. Highly committed, focused, work to ensure we continually try to drive high levels of governance performance with the right breadth of skills and competencies, including having the expertise to evaluate and respond to the various opportunities and risks that confront us from day to day, week to week. It's not necessarily a straightforward company. We operate in a classified space, as many of you know.
We operate across borders. We operate in deep technology, first of its kind. But the board's been very diligent in approaching all of those issues. So before handing over to Michael, I would like to thank my fellow directors, Chris Soucy, and obviously our Managing Director, Michael as well too, and the whole talented Silex team. I would also like to acknowledge, and I do not know how many of you have met Steve, seen Steve Long before, our CEO of GLE, but Steve's our SAM.
And I would like to thank him. He comes out of GE Hitachi. He was there while they were still owners, partial owners of previous nuclear Submariner. He is doing a great job leading the operations on the ground with approximately 120 staff in the U.S. representing our interests and representing the interests of Cameco. They work very differently, but he is doing a great job.
I just want to acknowledge that. And in closing, obviously, our shareholders, I would like to thank you. A number of very patient shareholders in Silex, which we are all very grateful for your continued loyalty and support. In closing, and in accordance with the notice of the meeting, including the 10th of April, I am standing for re-election today with the support of my fellow directors.
I would not be doing this if I was not passionate. I am very passionate about the company. Grown well over the last six or seven years. Many of you have been on the journey for the long term than others. But all of us at this table are helping this company to wherever its potential can take it. So I am now going to hand over to Michael. Yeah. We are going to move to seats so we are not at the back of the theater.
Good morning, everyone. Welcome to the AGM. My voice is a little froggy. I have come off a big trip and caught a bug at the end of it, but I am 99% back on track now, so hopefully my voice holds up. Forward-looking statements to read at your own leisure. But I am here to update you on progress that we have had over the last year and highlight what will happen over the next 12 or so months.
As you are all aware, we are focused on commercializing our innovative SILEX laser enrichment technology, the leading third-generation laser technology for uranium enrichment in the world. Now at the final stage of engineering, which is a very important point that I want to emphasize today. TRL-7 is the last stage of engineering. I will talk about that in a little more detail shortly, but our primary focus is on uranium enrichment with GLE, as Craig has just detailed.
And our secondary focus is on silicon enrichment, firstly for quantum silicon computing and secondly an emerging application in conventional chips for thermal management of those big GPUs and TPUs that are now housed in our massive data centers around the world. We have a third program in early stages for additional semiconductor isotopes and medical isotopes. And hopefully, we can bring some more information and news on that project as we move forward over the next 12 months. So investment highlights. Unique third-generation laser enrichment technology being commercialized in the U.S. under the auspices of a government treaty between the Australian and the U.S. governments, which was signed in 2000.
President Clinton and Prime Minister Howard. That still provides the overarching framework for the cooperation between us here in Australia with our Australian teams and GLE's team in Wilmington, North Carolina, and Paducah with their U.S. citizens working on the project. As Craig pointed out, we have unprecedented positive tailwinds in the nuclear industry. I was just looking at a report from Andrew Hines from Shaw and Partners that was released only half an hour ago. He's probably a world authority on all things nuclear, particularly the uranium industry. He's pointing out how perilous the uranium supply situation is going forward over the next 5-10 years with expansion of nuclear around the world, and not enough uranium being produced today or in the pipeline, resources being developed.
There is enormous momentum in nuclear around the world today, but not enough fuel is being made or can be made in the near future if the industry does not pick up its game. Craig detailed our JV with Cameco, Global Laser Enrichment, 51% owned by Silex, 49% by Cameco. Apart from our equity ownership, we also have a very attractive royalty through our technology license to GLE, which I'll come to shortly. We did complete TRL-6 this time last year. We're now charging ahead with TRL-7, which is a full-scale demonstration of commercial scaling equipment. We'll be operating that new pilot plant in Wilmington, North Carolina under plant-like conditions in about a year from now. Our path forward with GLE is underpinned by a very important agreement between GLE and the Department of Energy, which was signed in 2016 and amended in 2020.
That gives GLE access to 30 years of feedstock for our first project. Come to that shortly, but we call that the world's largest above-ground uranium mine, because that project will produce huge amounts of natural-grade uranium for the nuclear industry from a feedstock which is not in the ground. It's above ground stored in cylinders. As Craig just mentioned, we have recently signed an offtake agreement between GLE and Cameco that will see all of GLE's products purchased by Cameco going forward at Cameco's average realized price less some costs. That's a very important pillar for FID, final investment decision, which we will be focusing on more so towards the end of next year. Our two distinct value propositions. Firstly, an equity in Global Laser Enrichment, 51%.
When we restructured GLE back in the late teens, Cameco requested the option to acquire an additional 26% to take their stake to 75%, and we would drop to 25%. That would be transacted at what we call fair market value. That would be a negotiated fair market value. Hopefully, if Cameco exercise that option, we can agree on that. There's some terms of arbitration if we can't. That option is open at Cameco's call until April 2028. That's not far away, a bit more than a year. The second part of our value proposition is our royalty. Minimum 7% on GLE's enrichment SWU revenues. We have plans to have a multi-purpose plant, single site, multi-purpose plant to produce natural-grade uranium, LEU, that's reactor-grade enriched uranium, LEU+, and ultimately, potentially HALEU, high assay, low-enriched uranium for small modular reactors.
But any of those activities using our technology, our SILEX technology, would result in a calculation being done at the end of each year's operations of the SWU revenues and then a 7% royalty applied. That is perpetual because our technology has been classified by the U.S. and Australian governments for many years now. We cannot publish patents, so the technology is held in trade secret with military-grade security in perpetuity. So as long as GLE is using our technology, there is no sunset on the IP because patents will not drop off. The license is perpetual and the royalty is potentially perpetual. I do not think there are many royalties at a 7% rate in any case. It is a very high royalty rate. We have the chance to lift that up to a cap of 12%.
That is leveraged to reducing CapEx over time as we build out expansion of capacity at our Paducah site. Right now, we are at the bottom end, as you would expect with first-of-kind technology. I repeat, 7% is a very good royalty rate in anyone's language. The license that GLE is applying for is for 8 million SWUs of operations. We give an example based on 8 million SWUs of operations at today's enrichment price, around $180 a unit. That would equate to a royalty each year of $100 million U.S. coming back from GLE to Silex. That is something to look forward to. Recent highlights, the offtake agreement that we have talked about on all of GLE's products to be purchased by Cameco.
This does underpin FID and allows GLE to avoid the costs of starting up a full sales and marketing team and all the resources that go with that. This is a really good agreement for GLE and for Silex. We are very happy to have Cameco handling sales and marketing for GLE because ultimately, GLE's customers are already Cameco's customers. Technology demonstration. Finishing TRL-6 last year, now well and truly charging ahead with TRL-7. U.S. government funding. We received a $28.5 million package, of which I think around $10 million has already been received by GLE. Also a very attractive package from Kentucky State and McCracken County of nearly $100 million U.S. that will come into play through construction and then into operations.
Not long ago, November 24th, GLE bought 700 acres right next to the Department of Energy first-generation gas diffusion site, which we will see shortly. That is why we are in Kentucky, because our feedstock is located right next door to our future plant. TRL-7, as we have said, is a 100% full-scale demonstration of commercial-ready equipment. Right now, GLE and Silex are taking components to full scale, building full-scale equipment, optimizing equipment. GLE is due to start some preliminary testing in the next few weeks, and that will continue into the new year. Then we will be undertaking the construction of the final full-scale equipment during next year. We hope to be able to test that equipment towards the end of next year, and hopefully finishing TRL-7 by the end of next year, calendar year 2027.
In parallel, there is a whole range of activities that relate to manufacturing. This is the twin to TRL- 7, manufacturing readiness level, MRL-7. This focuses on in-house and external manufacturing of full-scale equipment. Right now, GLE's in-house fabrication facility, I will show you some pictures shortly, is very busy building our TRL- 7 equipment. It is a fantastic resource that GLE has in-house. We will need help. Contract manufacturers for things like various laser systems and components, and some of the mechanical equipment and, of course, the gas handling systems, which are pretty similar to the gas handling systems that you find in a centrifuge plant. In addition, establishing a fully U.S. domesticated supply chain. For example, some of the gas handling equipment companies moved offshore from the U.S. in the 2000s and the 2010s.
Right now, GLE is busy working with those gas handling system manufacturers currently based in Europe to set up operations again in the U.S. The NRC license for the PLEF is in its final stages. Right now, the US Nuclear Regulatory Commission is undertaking its final legal review, slightly delayed by two or three weeks, but we expect the environmental impact statement, that is the first part of the license. Two reports, that is the first one to be released in the next two or three weeks. Then the second part of the license, the safety evaluation report, to be released in the weeks following that, certainly before the end of the year. Then there is a 45-day period for final examination and assessment. After that, the US Nuclear Regulatory Commission actually stamps the approval and releases the license to GLE.
We anticipate that to happen in the first quarter of next year, 2027. There are some ongoing marketing and feasibility activities that will increase through next year, 2027. Of course, Cameco will take charge of offtake arrangements with customers. Looking at the technology, first-generation gas diffusion, the last plant to operate was in Paducah, Kentucky, operated by Department of Energy and in its later years, USEC. This is a very inefficient technology, very costly, massive energy consumption, and is obsolete today. What came out the back door of that plant is what GLE has under the agreement with the Department of Energy from 2016, and I will come to explain that in a few minutes. Diffusion has been replaced completely by gas centrifuge. There are some very large gas centrifuge plants operating in Europe by Urenco and Orano and also in Russia by Tenex.
There is one plant in the U.S. operated by Urenco and owned by Urenco. Centrifuge is higher efficiency than diffusion, but still not and comes with very high capital costs. In comparison, SILEX technology has a much higher enrichment efficiency. It is a multiple of the enrichment efficiency of centrifuge technology. That means we have less steps in our cascades, our enrichment cascades. Perhaps the biggest difference is the throughput through our machinery. The throughput through a centrifuge machine is extremely low, less than 10 millibars. It is nearly vacuum. That is the nature of centrifuge. You cannot overload with gas. Centrifuge plants typically have hundreds of parallel cascades to get the plant capacity up. In the case of Silex, our machinery has throughput around three orders of magnitude, 1,000 times the throughput of centrifuge technology.
We will have far fewer parallel cascades to achieve the same capacity as a centrifuge plant. All in all, with less process stages and less cascades, we have a much smaller footprint, a much lower CapEx, and a lower OpEx. We believe that we will be in a good position to compete in the market when our first plant becomes operational. The nuclear fuel supply chain shown here starts with uranium production, traditionally from mining operations around the world. The fact of the age of the universe that all uranium in its natural state has about 0.7% assay of uranium-235, the active isotope, and 99.3% uranium-238. First, next step in making fuel is conversion from the oxide that the miners produce to the fluoride that is required for enrichment. That is a separate industry that trades under kilograms.
Of course, most of you know, uranium is traded as pounds. Why they use different units, nobody really knows. That is how it trades. Today, the uranium price is around $100 a pound. Conversion is around $50-$60 a kg. That in itself is a valuable market. Enrichment is undertaken by the centrifuge companies that I just mentioned around the world. That takes it from natural assay up to low enriched uranium grade, which is the grade that most reactors use today. Some are starting to use a slightly higher grade, LEU+. For future reactors, small modular reactors, there will be a need for assays up to 20% of uranium-235. Enrichment is the critical step in making nuclear fuel, but you do need the uranium to start with and the converted hexafluoride.
Interestingly, Cameco now with 49% of Westinghouse are major players in the last two steps, fuel fabrication and nuclear power plants. Of course, Westinghouse is the global leader in nuclear power plant technology with their AP1000. They have extensive fuel fabrication facilities in the U.S. Our partner Cameco has the whole nuclear fuel supply chain covered, except for enrichment today, which is hopefully where GLE will fill that gap in a few years' time. This supply chain has been disrupted since the Russian invasion of Ukraine. There is an act of Congress in the U.S. that will ban the import of Russian-produced uranium conversion and enrichment from the 1st of January 2028. We will see a lot of effort to replace that imported fuel. I will come to that shortly. But I want to finish on our summary of GLE.
GLE operates in two places now, two locations in the U.S. Wilmington, North Carolina, on the East Coast. Great. Very nice spot there. Great spot. That is where we have our pilot facility, the test loop, and the headquarters and the manufacturing facility. Then a 700-acre site in Paducah, in the heartland of America, where we will hopefully build our aboveground uranium mine in the next few years. We are not just talking about producing natural-grade uranium at this site in Paducah. We have got a triple opportunity. On the left, first project, we produce natural-grade uranium from the Department of Energy's depleted tails under the 2016 agreement. There is over 200,000 tons of this material, and we will use our laser technology to enrich it from below natural back up to natural grade.
The same grade the miners produce at a rate of around a mine producing 5 million pounds of uranium a year for 30 years. This is a huge project and it is very strategically important. I will come to it in a moment, but the U.S. does not have great uranium reserves. The second opportunity is to produce low enriched uranium with uranium-235 assays of around 3%-5% and LEU+ from 5%-10%. Some of the utilities in the U.S. are now trialing LEU+ because it gives them better economics. That all requires more enrichment capacity. The amount of enrichment we would need to take the DOE tails material from natural grade to LEU grade is about 2 million units of enrichment.
If you look at the total potential revenues from that Department of Energy material, we have the revenue potential from the uranium, revenue potential from the conversion because our feedstock is already converted. As I mentioned, that trades for AUD 50, AUD 60 a kg. Thirdly, we have our potential revenue from enrichment to LEU grade. If you add all that up at today's prices, market prices, it is in the order of billions of dollars of revenue just from the Department of Energy tails material. The important point here is we have a single-site solution to produce all these different grades of uranium, which is quite unique in the world. Hopefully, we can realize that in a few short years. I will not spend much time on this chart. We have already talked about what we are doing in TRL-7, but we are making great progress.
The team in Geleen, as I mentioned, are about to start some important preliminary trials. That will take us into the new year before we start building the final or finish building the final full-scale equipment and commission that for the full-scale demonstration. Once that production module has been demonstrated and finalized, there is no more engineering, no more tinkering, no more adjustments. Maybe a little bit of optimization over the coming years. But the engineering is essentially finished in TRL-7 and then we would turn our attention to the Paducah plant, and we would replicate those modules and build out a full production cascade, which would be installed in our first plant in Paducah, Kentucky. That plant would represent the activities of TRL-8, the first production cascade. Then when that plant is up and running, TRL-9 has essentially been reached with commercial production.
Looking at that first project, this is the gas diffusion plant that was operated by the Department of Energy from 1952 to 2013. We still get a lot of questions about what this above-ground uranium mine is all about. What are depleted tails? I will try to explain in this picture. The operations of this plant over those decades was fed natural-grade uranium that was produced by miners and converted by the conversion companies, and produced LEU at assays of 3%-5%. But because of the inefficiency and the abundance of uranium those days, they did not fully deplete. So there is still appreciable assays of uranium-235 in what came out the back door of this plant, and we call that high assay depleted tails. It is a bit of a mouthful, but it is high-value material that came out the back door of this plant in Paducah.
That is material that is the subject of the agreement between the DOE and GLE. Our first plant, shown here in blue, will take those tails material, cylinder by cylinder. They are stored in the yards around that plant, around the buildings, which you see at the top left. 25,000 cylinders of depleted tails will be taken one by one to the plant and processed using our SILEX technology to produce natural-grade uranium. If utilities want that taken up to reactor grade, then we can do that next door in the gray building, again, with the same laser enrichment technology, enriching it from natural grade to LEU grade, reactor grade. As I mentioned, there is capacity for expansion across this site. This is only about 150 acres of a 700-acre site.
We have shown here some expansion in LEU on the left-hand side and the right-hand side, and ultimately some HALEU capacity if that market emerges in the green building there. Some flow diagrams on the right. Hopefully, they clarify what we are doing in the blue building and then the gray building with that material. As I mentioned, the revenue potential just from the DOE material at full scale, full operation, would be around $1 billion a year on today's market prices. We have done some economics of our technologies. Pretty good numbers for CapEx and OpEx now. They are continually revised and reviewed by independent experts. We have had a review year before last. Right now, we believe our costs for producing the uranium in that first phase, Silex plant, is less than $30 a pound, comparing to mining costs.
This is like a tier 1 uranium resource. Not many resources coming online today that are less than $30 a pound. In fact, the Kazakhs, Kazakhstan recently announced that they are coming to the end of their cheap uranium. Their costs were even less than maybe $20. That is all coming to an end. Uranium will get more expensive as less quality resources are brought online, and so the price must go up. Uranium price has to go up to incentivize new production around the world. The good news is this is an extremely valuable uranium resource in the U.S. It is the largest uranium resource in the U.S. by a long U.S. nuclear enterprise. We did mention the offtake agreement. I just like to add that the pricing is determined by average realized price on a forward-going basis from start of construction of the commercial plant.
The ARP that will be used to assess the pricing on GLE's product will not include legacy contracts that Cameco is still playing out. Of course, one of the most important aspects of this agreement is that GLE now has completely finished with sales and marketing, and this is a very important pillar for a final investment decision as we move close to that point. Timeline. TRL-7 hopefully finishing by the end of next year, calendar year. Then our attention turns to the commercial plant. Before we start constructing the commercial plant, we hopefully will have the NRC license in hand the first half of next year, possibly the first quarter. As I mentioned, that will encompass a commercial plant of up to 8 million SWU and up to 8% enrichment.
So with TRL-7 finished and the NRC license in hand, we can then undertake a feasibility assessment for the PLEF, future laser enrichment facility, and be in a position to make a final investment decision, if not late next year, then first half of 2028, early 2028. It is not far away. It is nearly 15, 16 months away. So we are getting to the pointy end. After that, the focus would switch to engineering, procurement, and construction of the first plant at PLEF for the processing of the tails. Hopefully, commencing commercial operations before the end of 2030. So we are on track. Lot to do. Very busy teams in the U.S. and here in Sydney, but we are in pretty good shape right now. This is the site that GLE has purchased next to the gas diffusion plant. Undergoing some preliminary clearing activities.
This is the headquarters site in Wilmington, North Carolina, where GLE has its offices and a very large manufacturing facility at the rear of this building, taking up the majority of the 70,000 sq ft . So this manufacturing facility, as I mentioned, is very busily operating to construct the TRL-7 equipment today. It is quite a sight. Every time we go there it changes quite significantly. Up and ready for operations. To turn briefly to the market sector now. The thesis for nuclear energy could not be stronger. You are all aware of this, and the various attributes of nuclear in terms of clean energy. SMRs coming down the pipeline, 24/7 reliability of nuclear. Highest capacity factors of any technology, over 90% in the U.S. Compare that to solar, wind, maybe mid-30% availability factor. Nuclear over 90%.
Supporting the future of data centers, AI, crypto, electric vehicles, hydrogen production, a massive The current and plans. We are seeing exponential growth in electricity demand from the data center pushing the nuclear power around the world. The WNA, World Nuclear Association, says that to hit 2050 net zero, we will need thousands of reactors. The situation in the U.S. where GLE is located is quite dire. As I mentioned, they do not have good uranium reserves. They only provide 1% of their own uranium requirements. So a lot of that was coming from Russia and the rest of the world, including Australia and Canada. To put that in perspective, GLE's uranium-producing project will provide about 10 times what it produces today in the U.S. It will provide about 10% of current U.S. requirements, not the future, which will be larger, but just current.
Conversion, the U.S. only supplies about a third of its own conversion. We are going to bring 2 million kilograms of conversion capacity to the market from that first project, because remember, our feed is already converted. So that is a significant addition to the 19,000 tons of conversion, or 19 million units, kilograms. We are bringing 2 million. That is another 10% conversion capacity to the U.S. market. Enrichment, similar story, 30% supplied by the one plant in New Mexico run by Urenco. About 25%-30% being supplied by Russia today under waivers, but the waivers will finish on January 1st, 2028. So there will be a need for new enrichment capacity 2028 onwards. This slide simply notes how much of the market is still available for uncommitted demand. In terms of uranium, 25 million pounds annually from early 2030s.
In terms of enrichment, 10 million units of enrichment required from the mid-2030s. The potential for GLE in the U.S. alone is quite huge. We have seen uranium conversion and enrichment prices rise, but not enough to incentivize further expansion. I think we will see these prices rise further over the coming years. The situation is extremely healthy. The prices are at near record levels for all three commodities, uranium, conversion, and enrichment. We anticipate this situation to get even stronger over the coming years. That is our review of the uranium project, uranium enrichment technology. I would just like to spend a couple of minutes talking about our silicon project. We have finished construction of the world's first laser enrichment plant for silicon on June this year. They have been busy commissioning and integrating the equipment, the plant.
We anticipate first production later this year. Into the first half of next year, we will be producing samples for our potential customers. This material will first be going to quantum computer developers, quantum chip developers. They will not allow a new material in their fabrication plants unless it has gone through exhaustive testing. We will be producing, initially, samples for our potential customers to take to their plants and test in their devices. Our first plant, our module as we call it, the modular technology like as is in uranium, will be able to produce up to 20 kg of highly enriched uranium. That is probably around half or a bit less of the current known market. Not a big market yet, but we expect that market to grow rapidly over the coming five to seven years.
We are producing two types of product, one gaseous, silane, and another solid for different customers. The current project has been supported by the federal government's Defence Trailblazer program to the tune of AUD 5.1 million. There is actually another, I think, AUD 1.6 million coming through under that program. That is quite a sizable contribution from the federal government and over AUD 4 million from our offtake partner, first offtake partner, Silicon Quantum Computing, who are one of the world leaders in developing silicon quantum chips. As I mentioned at the beginning of the presentation, there is another emerging application to use enriched silicon in conventional chips. The very large chips, the GPUs and the TPUs, that are being used and developed today for data centers and AI. They are running into heat dissipation problems.
There is over a billion transistors on a small piece of silicon. Some labs are now testing enriched silicon nanowires, which are like heat pipes, super conducting thermal conductors that dissipate heat much more efficiently. We will keep a keen eye on that application because that could become quite a decent market in itself. We are very excited to be getting this equipment, this plant, up and running. Over the next few weeks, we are going to go live with real silicon enrichment. We are doing dry commissioning at the moment, but we will be actually processing our first samples in the next few weeks. In summary, we have a unique leverage into the nuclear fuel industry. Not just as an enrichment technology, but also able to produce natural-grade uranium and provide around 2 million kg of conversion capacity into the U.S. nuclear fuel supply chain.
All with a very attractive royalty under the SILEX technology license to GLE. Our very important first project at the PLEF, underpinned by the agreement with the Department of Energy for access to those depleted tails. Again, just to repeat, potentially at full production level, at today's prices, AUD 1 billion of revenue, ballpark, just from that material. So triple opportunity, which includes the natural, the LEU, and the HALEU, all fuel grades, quite uniquely on a single site. One technology, one company, GLE. Rapidly moving forward with TRL-7 and an offtake agreement now done for all of GLE's future production. With the quantum silicon project now reaching commercial and progress we are making in the uranium enrichment project, I think this is a very exciting time for this company and for GLE. We are well-positioned with over AUD 180 million in the bank at June 30 and no debt.
That brings us to the end of my presentation. I hope that gives you a good sense of what we have achieved and where we are heading over the next 12 months. Again, just to say, I could not be more excited about our future. It is disappointing to see what is happening in the market today, but that is beyond our control. We just work on what we can control and between our team here in Sydney and the team at GLE in the U.S., we are making great progress in controlling our destiny. Thank you very much. At this time, I open the floor for questions or if Julie, if any have come online.
We have got a couple online, but it is going to be from the floor first. Mm-hmm. Nothing. Good.
Thank you, Michael. Just a question and other misinformation out in the marketplace. How long does it actually take to build a nuclear power plant from when you physically start first works until operational, roughly?
That's a vast question.
Oh.
If you make them every year, it's going to be less time than if you make one every 10 years.
On average.
The Chinese are making them in four to five years.
Okay.
China's speed is 4 to 5 years. I do not know if the West can achieve that. Maybe seven or eight years is my guess.
Starting from first works, not approvals.
Right. Cost wise.
Yeah.
I am not an expert on power plant construction, but that is my guess. It is a lot less than what some of our politicians are saying.
Yeah, exactly.
It is probably a lot less than Snowy 2.0.
Just a question around the CapEx required for the Paducah Laser Enrichment Facility. The Kentucky Governor's office publicly referenced a $1.76 billion investment. Can you give me any comments about how that number was coupled together and does that represent what investment needs to be?
Yeah, so that number has been flexed up to include some infrastructure for future potential expansion. The plant itself, shown in blue in that slide, current estimate is around $1.3 billion plus or minus standalone. The agreement with Kentucky and the counties scoped out beyond that, so anticipating expansion.
With the plant, the construction of the plant, will there be anything happening there in the next 12 months? We have been clearing the site now for 12 months or so. Is there any concrete going to be poured, and are we going to work in parallel with the other stuff, or is that not a critical item?
We need the license before we start pouring concrete.
You need the license?
Yeah. If you start pouring concrete before you have an NRC license, then
Right
you are taking a big risk.
Okay. We should get the license beginning of next year then.
It was the first half of next year, hopefully first quarter.
We can then expect some physical work.
Well, the next step will be a feasibility study.
Right.
Finishing TRL 7.
Ultimately, with license, TRL- 7, and feasibility, FID.
Cool.
Until we get FID, we are here.
Yeah. Right.
We're not there, we're here.
Interesting.
But there's a few steps to undertake before we actually start engineering, procurement, construction. But that's a discussion that we'll ramp up next year internally with our partners, Cameco. There may be some things we can do at risk with a license in hand.
Yeah.
I think there will be some activities.
Yeah
happening next year. But certainly, until we get those key steps finished and FID completed, there won't be large-scale EPC.
The cylinders at Paducah are quite old, and UF6 is pretty nasty. You have done enough sampling that you'll be okay with them?
Yeah. You're referring to the legacy materials stored around this plant. We know what's in every cylinder. When the agreement was being negotiated, there were samples taken to check the purity. Ultimately, over time, impurities form, but there will be a process to make sure that the purity of the feed is at the required standard, ASTM standard, and that can be cleaned up if needed. But generally speaking, they found the material was in very good shape.
Where will you be getting your silicon from? You talk about where you're getting uranium, depleted tails, et cetera. Silicon in Australia.
Right.
Where would your plant be? At Lucas Heights or somewhere else?
The silicon can come from any chemical company. There are quite a few that produce silicon gas. You have to remember, there is a very large industry already in existence for decades now to produce silicon chips that are in all of our devices. The silicon gas industry is very mature, and it is vast. It produces hundreds of thousands of tons a year. What we need for our process comes from companies that supply those gases. We tweak it so that it matches what our lasers can do. That is all done on the front end of our process in-house, and then that is what we use to produce our rich silicon. In terms of where we do it, we have our first production module at Lucas Heights in Sydney. That will be operating very shortly, producing commercial enriched silicon.
As for expansion, if that market grows and we start building a contract book with customers, we will need to expand. I do not think it will be at Lucas Heights. There is a bit of an issue there with space. We are looking at that potential expansion already, and it could be in Australia, it could even be in the U.S. That is about all I can say at this point in time.
I see it says University of Adelaide working with UNSW.
Yeah, that is the Defence Trailblazer program. That is the funding that the federal government gave us to help build that plant. That program is administered by University of Adelaide and UNSW.
On the capital plans for this Paducah facility, it is a fair bit of money to come up with. Is Silex still looking at accessing government loan facilities to finance that or
Yeah.
something else?
Well, it is early days. From a Silex point of view, I think all options are on the table. There is traditional commercial debt. The project finance will be at GLE level. So it will be a debt facility of some sort, I believe. There is a facility that is offered by the U.S. Department of Energy that used to be called the Loan Programs Office, now called Energy Dominance Financing Office. They have a $2 billion debt facility specifically for new technology on the front end of the nuclear industry, like laser enrichment. Solicitation documents actually call out laser enrichment. So $2 billion would be available under that program, and we would not need its $2 billion for the first plant in debt. 1.3, 70%. We would not even use half of that. But look, that is just one option of many.
We need to talk that through next year with our partners, Cameco. They probably have different options to us, especially in terms of the equity. It is early days and all I can say is I wouldn't think anything's off the table at this point in time.
Who's got a question?
Yeah.
We've got one to still, and then we'll go to the back and then up the front.
There's one particular new entrant who is going to be our neighbor at Paducah, who's been making a lot of noise, and making what seems to be quite outlandish statements about what their capability is going to be. Saying that they will be creating enough fuel to take care of all of the required LEU+ and HALEU that the U.S. will need into the future and beyond, and also be the lowest cost producer and be up and running by 2029, 2030. They've recently also asked for the DOE and the NRC to allow them to begin, I think, pouring concrete and laying foundations now, where they could have even. I think they've only just lodged their license. What is our position on that, knowing that they are our neighbor?
Do we have any insight into what their technology is, and do you have any perspective on their aggressive stance?
Yeah. It's an interesting question, to say the least. General Matter is who we're talking about. General Matter is backed by Founders Fund, which is Peter Thiel, Scott Nolan, SpaceX connections. Also very well connected to JD Vance. I think they were funding some of his campaigns. All that aside, nobody knows what technology they're going to use. We don't believe it's laser. It's taken us over 20 years to get to here. Centrifuge is probably the most likely. It's rumored they might use an old Department of Energy centrifuge design, but I can't comment on that really. In terms of investing at risk with concrete or whatever, that's up to them. They are very aggressive and they're very noisy. I'd be interested to see what happens in reality rather than what they say in words.
This is a very highly regulated industry, and you cannot get ahead of the U.S. NRC on any front. It can become very expensive. There have been cases where plants have got ahead of the NRC process. Even with a license, you need to keep the NRC abreast of progress and making sure things that are on the way, the NRC has approved. All I can say is that we believe we're way ahead of General Matter on all fronts. Just on the license application, they cut and pasted a lot of GLE's application.
Yep. And we've noticed.
Yes. They're beyond aggressive, and we'll just have to wait and see whether their actions match their words.
I think my question has partly been answered, but what I was going to ask you was, with the passage of time, the massive passage of time, do we see any competing technologies or like technologies to SILEX technology coming over the horizon?
There are two startups that have come onto the scene in the last two or three years. One U.S.-based, LIS Technologies. They're going down a path that we looked at in the lab in the 1990s. We decided that that path was a stretch. It looks like it might work in the lab, but we weren't convinced that it would work at scale. There are some key fundamental issues with that approach, technology approach. They're, I think TRL- 3. They might frame their TRL- 4 or whatever, but they're a few years behind us, to say the least.
I think that pathway has some very big challenges. The other is a company called ASP Isotopes, South African-based, and they're going down yet another path. This path was the favored path that governments generally spent billions on in the 1970s, 1980s, and 1990s and into 2000s. This is called AVLIS. ASP call it quantum enrichment. It's essentially AVLIS. Only made by laser isotope separation. Those programs all folded because of the materials handling. The process worked great for two or 300 hours. After that, the internals of all the separation equipment had to be replaced because of the corrosiveness of atomic vapor of uranium. They're also at TRL- 3 or TRL-4 years behind us. I know for a fact, who knows both of us.
I know for a fact the South African group got reasonable results with AVLIS for lithium enrichment, but lithium has a melting point, quite a low melting point, less than 1,000 degrees. Uranium has a melting point over 2,000 degrees. It is really a different ballgame trying to handle a uranium vapor compared to a lithium vapor. I am not here to cast aspersion on any potential competitors, but they have got some work ahead of them, and it will take years to catch up to where we are.
That is good.
We also had a question about TRL-7. Will that be independently verified by engineer like TRL-6 was?
Yes.
Yeah, it will be? Yeah.
Yes. Lining up the same engineering consultant.
Yeah.
Top tier firm.
Yeah. Excellent.
Yeah. You would know their name. They are well-known, but they want to remain anonymous so they can do their work in peace and quiet.
Michael, we are told that, or we know Cameco has its exercise, its score until April 2028. I guess the question is, do we have any view as to whether they will exercise, and if so, when? Will it be in advance of 2028? If they do not, I assume therefore they would still need to be supported 51%. Does that impact on our working capital requirements?
Phil, your first question you would have to ask Cameco. I cannot speak for Cameco.
Yeah.
They have said in recent disclosures, their webcast, that they are not ready to exercise yet. That is up to them. If they did not exercise, we would be still comfortable carrying our 51%. As I mentioned, there is a Department of Energy loan facility that ties us over the interest then. As far as the debt component, we believe we will be able to manage that going forward.
Paul, in parallel, should Silex be looking at an IPO or a GLE just to keep Cameco honest?
Well, I am glad you said keep Cameco honest, because we have a good relationship with them and they are generally very good and honest to work with. All I can say is, as far as Silex is concerned, no option is off the table. I would make a comment that right now, Cameco recently released a statement saying they are going to prepare for an IPO for Westinghouse. Anything is possible. That is happening with Westinghouse. Whether it is the right thing for GLE, we will have to wait to see. It is obviously going to have to be a joint decision by the joint venture partners.
Just on your potential new silicon opportunity. Has that in any way harked back to the old program that existed 20 years ago with the Japanese?
Yeah. We learned a lot from that. We tweaked. The best things we learned is how to improve it and make it more efficient and achieve higher purity of enrichment. We took the learnings from that program and applied them to the new. It is a different process, but there are some similarities and we learned from the previous program. That program suffered from the fact that the enriched silicon was being used as a bulk platform heat dissipation material. The new emerging heat dissipation application is not a bulk platform. It is very small nanowires, which behave very differently to a bulk material. We have learned from the most recent developments in chip structures as well. And that-
Still bulk material.
No, the nanowires actually are like literally heat pipes laid between transistor architecture. They literally act like heat pipes. Because they are not bulk, they are nanoscale, they have a lot of contact with the surrounding atoms. The heat dissipation is much higher. In fact, Lawrence Berkeley Labs measured the heat dissipation at 250% of natural silicon using enriched silicon through our pipes. We only saw 10%-20% increase in thermal conductivity in the old project with the Japanese partners, and that didn't fly.
Correct me if I am wrong, but tailings are uranium, which is like gas, is that correct?
Correct.
There is obviously a saving because they are already in that form. At the same time, there is an extra cost because there is depletion below natural levels. What is the overall balance? Is it better than natural uranium in terms of cost savings or is it anywhere near?
I gave the ballpark number for the cost as less than AUD 30 a pound. We converted our costs, which includes CapEx, sustaining CapEx, OpEx, payments to the Department of Energy for the feed material, and royalty payments from GLE back to Silex. We put all that in our cost model, and we compared it to a mining operation. They quote dollars per pound. Ours is less than AUD 30 a pound, which is very competitive in today's market.
We are a lot better off despite the fact that it is depleted.
Yeah, better off. That is the economics of enriching depleted uranium back to natural grade.
Yeah.
It is a great opportunity. The economics is there. It is hopefully good margins. If the uranium price stays where it is or even rises, very good margins.
Why don't we check with Julie any online that we haven't covered?
Most of the questions have been covered from the room, but there is one here if you could just clarify, Michael, what the PLEF capital cost is and to build what capacity. You talked about AUD 1.3 billion.
Yeah. Talking about the blue building, the first project, which will take the tails, process them back to natural at less than AUD 30 a pound, equivalent to a mining operation. The CapEx that we've assessed in some detail now from the bill of materials into the engineering cost model and into the plant cost model, I said about $ 1.3 billion . That's the ballpark. Could be more, could be less. But that $ 1.3 billion is for the capital cost of that first plant shown here in blue, and that's what went into the economic modeling.
The amount of SWU in the building on the left to take it from natural grade to LEU grade, reactor grade, the amount of SWU that material would require once it came out from the blue building would be about 2 million units of enrichment, and that has a similar capital cost to the blue building. That's just ballpark numbers, but that's where we are today.
I think we've exhausted the room.
One more for you, back to you, Craig Roy. It's a governance question, and it's about PwC.
Did you say it's out of PwC?
No. It's about PwC.
Yeah.
There is a comment here that PwC have been our auditor for a number of years, and do we have any plans to go out for competitive tender? For example, do you see PwC being our auditor in 2030?
Look, thanks for the question. The answer is we have been very happy with PwC. Ash has been a great lead partner. This will be her final meeting, so we are covering best practice and we are going to rotate partners within PwC. In fact, our incoming partner is in the room as well too. In terms of governance practice, Julie, we are doing a rotation. We have no plans at the moment to shift from PwC because we are getting a good service from PwC. Can I shift to one other topic? A number of the questions that Michael spoke about was, or questions that came are around options that people have around capital costs, around IPO and the like. We have got one big event that this will vary the company substantially before we should be thinking too much around those, and that is TRL-7.
It would have to be something extraordinary to do any of those capital events for TRL-7, because as Michael has labored on over his words, it just changes the total construct of the company once TRL-7 is achieved. So we would be giving away value, which would be our sense. Yes, we are open to a whole bunch of things, but we do not want to give away value. Thanks, Michael, for that most comprehensive presentation again. Thanks for taking those questions.
We now move to the formal part of the business of the meeting. I remind shareholders there is only a short time left in which you can vote for any resolution. For those in the room, our people will come around and pick up your forms, so you do not need to worry about that. So patient on that, as it is more a signal to those folks online.
I propose the notice of a meeting which was circulated beforehand be taken as read. The first item of business, and given a question regarding PwC, is consideration of financial reports, the directors report, and also the report of the accountant for the last financial year ending 30th June 2026. As we mentioned, Ash is in the room present. Are there any questions for Ash? Susie is our Chair of the Audit and Risk Committee. Anyone else would like to ask any questions for those two? Have you got a question for me, Michael?
He's asked you already.
I do this every year. I just ignore this screen every year, and I get called out every year. Thank you.
All right.
Thank you for that. Any questions for PwC at all or any online, Julie?
No, they're fine, Dave.
Sorry, what's that?
No, and look, thanks, Ash, for your service over the five years. It's been delightful working with you, so thank you very much. There's no questions there. We will turn over the page. I now move to the resolutions, and you can see the results as we've got them in hand today. There are three items of resolution. Can I stop and pause and ask if there's any questions from the room around any of those resolutions before you cast your vote? Quiet. I'm going to give a short pause now because voting is about to close. Those attending in person can vote, obviously, as per the little blue slips you've got as well, too. Please cast your vote on all resolutions, even if you've got an abstain in there.
I'm now going to pause for about 15 seconds to give those online a final chance.
Let's see if this image can-
All right, that seems pretty close to 15 seconds, so voting is now closed. The voting results will be released to the ASX, hopefully later today. The chair can compile them all. We have a nice pink box going around the room to put ballots into. I think that closes the formal meeting of the business. We always look forward to interacting with you as shareholders following the meeting as well. I note there is a nice plate of sandwiches and other things up for me as well. Thanks again for your attendance and support, and we look forward to seeing you again next year. Thank you very much.