Greetings and welcome to the Deep Fission Inc. business update call. At this time, all participants are in a listen-only mode. A question and answer session will follow a formal presentation. If anyone should require operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Jen Stakich, Investor Relations Manager. Please go ahead.
Good morning and welcome to Deep Fission's October 2026 business update call. I'm Jen Stakich. Thank you to our shareholders, analysts, and everyone for joining us. Today, we will focus on our business, our technology, recent progress, and the milestones ahead. Deep Fission is developing its first commercial power projects, so this call will have a different emphasis compared to a traditional quarterly earnings review. Our CEO and Co-Founder, Liz Muller, will begin with the market opportunity and technology. COO, Mike Brasel, will address the development and regulatory roadmap. David Nelson will cover borehole drilling and construction. And CFO Mark Schmitz will discuss the build, own, operate business model. Liz will then summarize the next key milestones before we open the call for questions. You may follow our presentation by navigating to the Events page on our website at deepfission.com.
We expect to make a replay available on the investor relations website shortly after the call concludes. Before we begin, please note that today's call, including our remarks and responses to questions, may contain forward-looking statements regarding Deep Fission's technology, regulatory approvals, deployment timelines, commercialization plans, financing, and future performance. These statements are based on current expectations and involve risks and uncertainties that could cause actual results to differ materially. For a discussion of these risks, please refer to the risk factors and other disclosures in our SEC filings, including our most recent Form 10-K and Form 10-Q, available at sec.gov. Forward-looking statements speak only as of today, and we undertake no obligation to update them except as required by law. With that, I'll turn it over to Liz.
Thank you, Jen, and thank you all for joining us. This is our first opportunity to bring together the full Deep Fission story for investors and show where we stand on regulation, siting, fuel and construction, and what comes next on our path to commercial nuclear power. Our goal is to deliver reliable commercial nuclear power using proven technology in a radically different deployment approach. Our design combines established pressurized water reactor technology, standard low-enriched uranium fuel, and well-documented industrial drilling methods to place our reactor roughly one mile underground. On slide three, you will see that we've organized our work around five areas that ultimately need to come together before customers can receive electricity: regulatory approvals, commercial siting, fuel, construction, and of course, customers. Starting with regulatory. The Department of Energy approved our Nuclear Safety Design Agreement, or NSDA, in August.
That is an important early step as it established the safety framework for the DOE pilot program. On commercial siting, the Great Plains Industrial Park in southeast Kansas has several thousand acres for data center and industrial development, requiring up to 2 GW of power. Deep Fission controls a 100-acre site at the park for the DOE demonstration reactor and the first gigawatts of electricity, with more land available for expansion. For fuel, we have an announced uranium purchase agreement with Urenco for standard low-enriched uranium, or LEU, an established fuel type that is already used in commercial pressurized water reactors. With respect to construction, we have completed a 6,000-foot data acquisition borehole, demonstrated prototype canister handling at shallow depth, and are advancing the next phase of large-diameter drilling and non-nuclear testing. Finally, customers.
We have signed our Master Energy Purchase Agreement with Great Plains Industrial Park in Parsons, Kansas. We intend to be judged against our progress in each of these areas. Throughout today's discussion, we will highlight the progress in each of these areas and fill you in on the next steps we are targeting towards commercial execution. Moving to slide four. Demand for reliable power is increasing, particularly among industrial parks, utilities, and data centers, as we all know. The forecast on this slide illustrates the gap between expected demand and the pace at which new generation can be brought online. For these customers, cost and timing both matter. Our design is intended to support smaller increments of generation located near demand, allowing development to proceed in stages as customer needs grow.
On slide five, we are targeting an initial pilot and commercial power milestone in December 2027, followed by the beginning of repeatable deployments in 2028. That is about four years from concept to commercial power, with pilot construction targeted to begin in March 2027, and speed to market is central to our strategy. Those are our targets. We believe that they are realistic, and their achievement depends on the regulatory authorization, construction results, supply chain, financing, and customer agreements that Mike will discuss. In Parsons, Kansas, we've executed on the first application of that approach by signing a Master Energy Purchase Agreement, our first energy offtake agreement with the Great Plains Industrial Park. Our proposed development at Great Plains begins with a pilot-sized reactor for the available interconnection, currently targeted for up to 5 MW electric.
Our broader plan contemplates potential phased development of approximately 150 MW electric in 2028, and over time, up to 2 GW electric development opportunities. We are also developing relationships with infrastructure and commercial partners, including those shown here with Blue Owl, which has a real assets platform relationship with us and made a $20 million equity investment, and Endeavour for up to 2 GW electric across cloud provider projects. These discussions help connect potential customers, sites, and project capital for future operations. The important question then is why we believe our design could help bring that power to market differently from a conventional nuclear power plant. On slide six, our approach brings together three technologies with long industrial track records. First is a conventional pressurized water reactor, or PWR, using standard low-enriched uranium. Second is deep borehole drilling, where industries have decades of experience drilling, casing, and sealing boreholes.
Third is a heat transfer approach informed by geothermal engineering. In a conventional above-ground PWR, substantial pressure management and containment infrastructure surrounds the reactor. Our approach, however, means that our reactors won't need a containment dome, pressurizer, or an additional emergency core cooling system. The rock provides containment, and the mile-deep water column provides the pressure and the emergency cooling. The innovation is in how these technologies work together. We plan to place a PWR in a purpose-built cased and cemented borehole roughly one mile underground, requiring minimal surface infrastructure. We benefit from existing fuel, industrial equipment, and specialized expertise as we advance the design. Moving to slide seven. At a depth of roughly one mile, a column of water produces the pressure in the neighborhood of 160 atmospheres.
Our reactor concept is designed so that the water pressure outside the canister is comparable with the pressure inside the primary reactor system. The reactor uses conventional PWR fuel, and heat is transferred from the reactor through a downhole heat exchanger, then towards the surface, where the power generation equipment can turn into electricity. The surrounding rock, cemented casing, and water column contribute to our proposed containment and safety approach, including removing loss of coolant as a credible accident scenario. On slide eight, our work progresses through a sequence of three phases. Each phase is intended to reduce a different development risk. Phase I, we drilled an approximately 6,000-foot data acquisition borehole in Kansas. That gave us direct information about the rock, drilling behavior, fluids, and conditions encountered at depth. Those lessons inform how we plan the more demanding boreholes.
Phase II, our next major construction step is a program of large-diameter drilling and testing. Since we laid out our initial plans, we have identified drillers with the capability to do much of this work. We now see phase II as a program rather than a single borehole, and part of it is already complete. The program is intended to test how we cut and remove rock, hold the borehole straight, install casing, place cement, and support the thermal and instrumentation equipment. As part of that program, we have already completed a separate shallow demonstration in Florida in which a full-size non-nuclear canister was installed and retrieved. We gained experience in handling and retrieval processes which will inform future deep borehole installations.
For phase III, our plan is to move from non-nuclear construction work towards the first nuclear pilot reactor, subject to the necessary Department of Energy authorizations, fuel and component readiness, and later, NRC commercial licensing. This phased program will help us develop a safe and repeatable construction and operations methodology. Moving to slides nine and 10. For a repeat deployment or Nth-of-a-Kind reactor, our current planning assumption is 15-MW electric output per unit. 10 such units would represent about 150 MW electric, and 100 units would represent approximately 1.5 GW electric of generation capacity. Put simply, we have a modular system, so our customers can add capacity as demand grows. The illustration shows what a site could look like. Actual deployments will depend on customer commitments, engineering, and permits.
At scale, we are targeting months, not years, from the start of drilling to the delivery of power, with a six-month objective shown here. Getting there will take demonstrated drilling, equipment fabrication, permitting, and construction coordination. The economic advantage is easy to describe. A conventional PWR needs a great deal of above-ground infrastructure for pressure management, containment, cooling, and safety. A mile underground, the rock and the water column do much of that work for us. We still need an engineered reactor and pressure boundary, control systems, surface generation equipment, and regulatory approvals. The savings come from how much less we have to build above ground, and from building the same unit again and again. Deep Fission is designed for roughly 100 acres per gigawatt, compared with about 700 for the most recent conventional PWR and about 7,000 for utility-scale solar.
With that technology background, I'd like Mike Brasel to explain how we are moving through our demonstration and commercial licensing milestones. Mike?
Thank you, Liz, and good morning, everyone. Moving to slide 11. Our near-term program has three distinct phases. Demonstrate the non-nuclear construction and handling process, move through the nuclear authorization and licensing steps, and then demonstrate that we can repeat the process at commercial scale. In 2026, our focus is the non-nuclear work. Borehole engineering, large-diameter drilling, casing and cementing, instrumentation, thermal testing, and the equipment and procedures required to install and retrieve the downhole components. This is where we answer practical questions that determine whether the design can move from drawings to repeatable construction. We are using those results to refine the next borehole and the overall schedule. For the initial pilot, we are targeting up to 5 MW of electric with a December 2027 commercial operation objective. That output reflects the pilot design and available grid interconnection path.
Once we have obtained the needed authorizations and demonstrated the initial installation, we expect to use the operating data to support the Nth-of-a-Kind design. On slide 12, you will see our path from today to commercial power across four core work streams. Regulatory, siting, fuel, and construction. For context, other nuclear SMR programs target first deployment in 2029 and beyond. On the regulatory side, the DOE approved our Nuclear Safety Design Agreement on August 6th, and we released it publicly to provide transparency into our safety methodology. We are continuing the DOE pilot program design and regulatory engagement, including the Preliminary Documented Safety Analysis, or PDSA review. Nuclear operation will only begin after the appropriate safety and readiness authorizations have been obtained. In parallel, we are engaging with the Nuclear Regulatory Commission on the path to commercial licensing.
We are targeting the NRC's new Part 57 framework designed for the rapid licensing and high volume, standardized deployment on low-consequence nuclear reactor designs. We expect the pilot program technical work to inform our application. The NRC will independently approve the commercial license. Our milestone chart shows the steps we currently expect to complete across the remainder of 2026, 2027, and 2028. We will update those estimates as our engineering, regulatory engagement, and construction progress. Fuel is another work stream we are advancing in parallel. We have announced an arrangement to purchase standard low-enriched uranium from Urenco and currently working on a longer-term low-enriched uranium supply agreements. Fuel and core analysis are underway with fabrication scheduled for mid-year 2027.
In the coming months, we expect to provide updates, including results from large-diameter borehole construction, thermal and mechanical demonstrations, advancement of the safety review, and readiness of the fuel and reactor supply chain. David Nelson is our Vice President of Drilling and Completion. He is leading a key part of that program. I'll turn the call to David to explain what we are learning about the boreholes themselves. David?
Thanks, Mike. Many people ask, can these boreholes be drilled? To which we can unequivocally answer yes. Large-diameter borehole drilling is routine in the water disposal industry. Boreholes 60 inches and wider were drilled decades ago at a Nevada test site. We announced a collaboration with Youngquist Brothers, a company with decades of experience in large-diameter drilling. The value to us is the opportunity to apply established drilling practices to the specific geometry and operating requirements of our design. We are evaluating approaches such as reverse circulation drilling to remove cuttings, project-specific large-diameter bits, electrically powered equipment, and carefully managed cement placement and monitoring. Each addresses a practical part of constructing a reliable deep borehole. Our initial work with Youngquist is a technical collaboration. We expect field results to provide a better basis for evaluating future drilling costs.
The objective is to leave each step with better field data and a more repeatable construction plan. Moving to slide 14. The next question is, can these large-diameter boreholes be drilled economically? Our work today is focused on proving they can be drilled, and our collaboration with Youngquist takes us a long way towards that answer. On cost, the framing to keep in mind is the path from a single pilot reactor of up to 5 MW electric to a phased deployment of approximately 150 MW electric in 2028. We are not putting a per borehole cost estimate on the table today. The large diameter program will give us the field data to do that with confidence. What we can tell you is where we are focused to bring that cost down as you reach that scale.
Our phase I borehole gave us firsthand data on the formations in Kansas and on the tools and the procedures that worked at depth. We are now using those observations to design the more demanding, large diameter work. There are four areas that have the greatest practical effect on the construction process. First, location customization. We will drill where our customers need power, and every site will differ from Kansas. We have made significant progress in understanding how we drill, and we expect each subsequent site to be largely similar to the one before it. This will get easier with time. Second is design evolution. Each borehole we construct refines the design of the next. The borehole architecture, the casing program, the cementing procedure, and the materials. A streamlined design drives cost down. The third is rig management.
How we procure and manage rigs and crews across a program of boreholes rather than one at a time is a meaningful lever on cost. How we do that is still to be determined, but we know the efficiencies are there. Fourth, high volume procurement. Buying casing, cement, and equipment in volume and sufficiently in advance rather than one borehole at a time. Once we are operating at scale, we expect significant supply chain efficiencies. A key milestone for investors will be a successfully constructed cased and tested borehole of the required diameter and depth, followed by the evidence that we can repeat the process. The additional work we have done on large diameter drilling over the past few months has allowed us to project significant savings in our development program compared with the plan we shared at the time of our IPO.
That brings us to the business model. Mark Schmitz will explain how we intend to participate in the long-term value of the power assets we develop.
Thanks, David. Fundamentally, our plan is to operate on a build, own, operate business model outlined on slide 15, whereby we retain an ownership interest in project companies and benefit from project-level cash flows from electricity generation over the operating life of the facility. We will have ancillary sources of revenue and profit, including licensing of intellectual property, upfront site-specific engineering, and ongoing operations and maintenance services. Our goal is to maintain flexibility tailored to customer requirements while accessing the largest economic returns from each project, and in many cases, that will be returns flowing from long-term power purchase agreements. On slide 16, to reemphasize what we have said in our public disclosures, we believe our Nth-of-a-Kind project economics are fully sufficient to support project financing and provide an attractive return to equity investors.
That is based on achieving up to 15 MW electric of power output per reactor, which is different from the approximately 5 MW in the pilot, with a refueling cycle of 7-10 years and a targeted upfront capital cost per Nth-of-a-Kind reactor of about $84 million at 2024 economics, including the initial fuel load. Specific categories of upfront spend will change as engineering progresses and supplier quotes are obtained, but $84 million remains our target, and each 15-MW Nth-of-a-Kind reactor is expected to generate approximately $600 million of operating cash flow over its projected 40-year life. Capital costs will be met in part by judicious use of project finance, and we will avail ourselves of investment tax credits, either by bringing in tax equity partners or through outright sales of the tax credits.
We are often asked for an estimate of our levelized cost of electricity, our LCOE, and while we do not wish to publicize a point estimate, we are confident that with a middle-of-the-road sale price of $110 per megawatt hour at 2024 economics, these project returns can be realized. We believe that a project ownership model gives us an opportunity to align our economics with the delivery of power over many years. The milestones that Liz and the team have outlined are the steps that have to come first. Turning to our balance sheet, Deep Fission has a healthy cash position. When we file our Quarter three 10-Q in early November, we expect to report a cash balance as of September 30th of $71.7 million. We expect to end the year with a cash balance of approximately $40 million, assuming no financings before then.
We have been judicious in our spending, continuing to execute our programs with a view towards achieving milestones with economical use of capital. Our intent is to be opportunistic on the timing and amounts of additional capital raises. I'll now turn it back over to Liz.
Thanks, Mark. One reason we believe our approach is practical is that much of the industrial expertise and equipment already exists. Our job is to integrate those capabilities into a reliable nuclear construction and operating program. As highlighted on slide 17, the key point on fuel is that we are able to use commercially available fuel assemblies, a fuel type that are already licensed and in use today. Our Urenco arrangement, which Mike covered, gives us access to that established supply chain, and the enriched uranium product for our pilot has already been procured. On construction and engineering, we have been working with organizations including Day & Zimmermann, Halliburton, Youngquist Brothers, and RV Industries, which delivered our prototype reactor, and Sparks Engineering, which is designing the instrument hub and electronics that monitor the reactor.
Their roles differ from construction planning and engineering to announced collaboration, procurement arrangements, and equipment delivery, and we will continue to update investors as the particular agreements and deliverables are finalized. This ecosystem allows us to draw on industries that have performed many of these individual tasks before, even as we work through the challenge of bringing them together in a new deployment program. Turning to slide 18. Stepping back, we believe the opportunity rests on a combination of strengths, familiar PWR technology and fuel, an underground design intended to simplify above-ground infrastructure, work already underway in Kansas, a modular design that can be deployed at scale, a defined regulatory and commercialization program. Our central point of differentiation is how we combine familiar technologies in an underground configuration and the opportunity to demonstrate safe, cost-effective repeat deployments.
Those benefits still need to be supported by field demonstrations, licensing outcomes, and repeat unit economics. We expect future updates to give investors increasingly concrete evidence that the design is delivering the advantages we are targeting. In closing, we see a significant opportunity to bring reliable nuclear power to market differently by using established technologies in a new underground design. What matters now is execution. Investors should watch our progress as we work towards DOE and NRC approval, progress at Parsons, and on commercial agreements, as well as results from our large-diameter drilling program. We are targeting initial commercial power in December 2027 and the start of broader deployments in 2028. We set those targets deliberately, and we believe that they are achievable. They remain dependent on regulatory approvals, technical results, financing, and customer commitments. We will report meaningful progress through our public communications as we reach those milestones.
Finally, on a personal note, I, along with other members of our management team and board, plan to buy Deep Fission stock when our trading window opens in the coming weeks. We appreciate your interest in Deep Fission, and we look forward to updating you as we move through these next steps. Operator, please open the line for questions.
Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up the handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question is from George Gianarikas with Canaccord Genuity.
Hi, everyone. Thank you for taking my questions, and good morning. Maybe first around this 25-year Master Energy Purchase Agreement that you announced. There weren't details around the power price assumptions that you have in there, but is it fair to say, based on Mark's presentation, that they fit within this long-term project parameter around $110 a megawatt hour?
Yeah. Great question, George, and good to hear from you. What I can say is that the Master Energy Purchase Agreement is a binding agreement, and it supports the planned development at Great Plains Industrial Park. The up to 2 GW electric figure describes the longer-term opportunity, and the first opportunity is 150 MW electric in 2028. We are not disclosing the terms at this time, but I will ask either Mike or Mark if they want to jump in with any additional details that we can provide.
No, Liz, that's all the details we can provide this time.
Okay. All right. Thanks, Mike.
Maybe just a couple of follow-ups. Actually, that was a really good blog post you put out several weeks ago around deep borehole drilling. With regard to the progress you've made with Youngquist, I'm wondering, you didn't share any financial details around what the economics there would be. I did notice again in Mark's presentation that he did mention that the economics of your project should fit within this $84 million construction number. Is it fair to say that the learning so far from working with Youngquist implies that the borehole drilling estimates are coming in inline or maybe even less than what you had assumed previously and around that $84 million number?
Yeah, I think it's still really too early to say with confidence what the cost estimates are going to look like. What I can say is, you may remember we had a research and development program that we were planning on in order to develop 60-inch diameter boreholes. The cost of that has come down thanks to this collaboration and additional learnings over the previous months. So we can say that with confidence. In terms of the specifics for each project, I would say that that's still something that we are actively looking at, and we will provide additional details when we have that. Dave, I don't know if you want to jump in with anything else on that.
No, I think you covered it, Liz. Yeah, that's all for me.
Liz, could I just add that there's an important note here that the Youngquist technology involves something called reverse flow or cuttings removal, and that really is a key to being able to drill the larger boreholes at a satisfactory speed. We're really happy about the way this is progressing.
Yes. Thanks, Mark. Agreed.
I remember from reading your blog post, that's like cleaning your teeth, not to get too technical, but it sounds like that's what the technology covers. Last, last question from me, just with regard to the commercial deployments in 2028. It sounds like they're contingent upon approval under Part 57. Any sort of smoke signals that you're receiving from the administration as to how quickly we can see that particular regulatory framework codified? Thank you.
Yeah, it sounds like Part 57 is still tracking. At the same time, we are also in discussions with the Nuclear Regulatory Commission about options to use other pathways if need be. We remain very hopeful, optimistic about the ability to meet the licensing in the time frames that we have described.
Thank you.
Our next question is from Craig Irwin with Roth Capital Partners.
Hi, good morning, and thanks for taking my questions. Firstly, I wanted to ask about the recognition of expenses related to the Parsons, Kansas project. In Mark's prepared comments, he indicated that the cash at the year-end will be roughly $40 million. That's about a $50 million burn from the middle of the year. Over this period, you've communicated that you're going to do substantially, most if not all of the deep borehole drilling there, and then a portion of the preparation and pre-purchases of equipment for the surface structures at the site. That seems to be quite a lot less cash need than the $152 million you said for your first project. Can you maybe just talk us through how much of the $152 million you see as sort of being complete at that point?
It seems that you could be tracking for quite a lot less than that as far as the actual cash need for this first project.
Yeah. Thanks, Craig. Great question. I will actually let Mark answer that.
Yeah, sure. First of all, we should mention that we're expensing everything that's related to the pilot turning commercial project. It's not being capitalized. I just want to make sure you're aware of that. So we've disclosed in our public filings that we're going to spend about $200 million in total to complete our pilot to commercial program, and we have spent, at this point, about $40 million of that. The $200 million, there's a range of uncertainty around that, but it remains our best estimate at this time. And we've got cash on hand of about $70 million today. $40 million already spent on the project, so that leaves about $90 million yet to spend on that pilot to commercial project. And in addition, we've got to fund our basic corporate overhead, which is running about $3 million a month.
So maybe that provides the right perspective you're looking for on the rate of spend. It does vary significantly quarter to quarter based on our development activity and supplier payments.
That makes complete sense. Is there an opportunity to capitalize project costs in the future? Is this something you can do on this initial project, or is that not available to you at this stage?
Oh, absolutely. In the future, we will capitalize, but for this first project, it is all being expensed.
Okay, excellent. Previously, the company had communicated that there was a potential event where you could energize maybe before the end of this calendar year. Is that still within the range of something feasible, or should we expect that mid to late 2027 at this point?
Yeah. Energize, we are targeting end of 2027.
Energize, you mean producing electricity, not just lighting the reactor, correct?
Correct.
Yes.
Okay. Excellent. As you address technical capabilities, one of the questions that has come up with different investors is the ability to control a vessel a mile away at the bottom of a borehole. Can you maybe just talk us through the design maturity at this point, what you see as the feasibility of some of these control cables, the physical manipulation at the bottom of the borehole? What experience is there in adjacent industries that gives you confidence that this is an engineering problem to be easily solved?
Yeah, great question. I will ask Mike to take that one.
Yes. Well, obviously, we are using pressurized water reactors, and those pressurized water reactors are very proven of seven decades of operation behind them. The core aspects and core neutronics are very straightforward and well understood. From a control perspective, at a mile deep, we are using boron, which is a typical control mechanism used in pressurized water reactors. The loop time is a little bit longer, but otherwise, it is the same process. We are using oil and gas technology from fiber optics to pressure and temperature monitoring that they do typically right now to monitor the reactor walls down in the hole. There is no power requirements running down there, so no power cables, just instrumentation cables that run down there. It is actually very quite easy to control the reactor from a mile deep. The feasibility of it is part of our demonstration program.
Even though we have got established technologies, it is the application of putting those together and showing that we can do it from that mile underground, and that is what our development, our phased approach, as we talked about in our presentation, to show through a non-nuclear borehole to the pilot reactor being done under the DOE authorization program to have a test program to demonstrate and show those. It is a phased development process to commercialization.
Excellent. Then just last one is another one we've got many times from investors. Refueling of the units. Can you maybe just discuss the design of how you plan to refuel the units and what the practical considerations are there?
Yeah, I'll start, and then I'll invite Mike to jump in if he wants to add anything. The general approach is that rather than refueling each reactor canister, we are going to use the fuel inside the canister until it's no longer useful, and then we are going to replace the entire canister. The reason that we can do that is because of some of the safety advantages that Mike has touched on. We are able to get the cost of our reactor canisters down significantly lower than you would see for a typical above-ground reactor. So the intent is to use the fuel in the reactor for the lifetime, which we expect to be between seven and ten years, and then to replace the entire reactor.
Now, we are also expecting to lower the used reactor deeper into the borehole, and that is going to be our spent fuel storage pool. This is, again, similar to what you do with above ground reactors, when you put the used fuel into a pool for cooling and temporary storage. The difference is that our spent fuel pool is going to be at the bottom of the borehole.
Excellent. Thanks for taking my questions, and I'll hop back in the queue.
Yeah. Thank you, Craig.
Our next question is from Tate Sullivan with the Maxim Group.
Hi. Thank you. Actually following up that last question on the seven- to 10-year refueling life, but then I think the economic slide indicated a total useful life. Is it of the borehole itself of 40 years, or is that implying four canisters, then plugging the hole, please?
Yes. I'll let Mike jump in on that one.
Yes. Each reactor right now is planned to operate from 7- 10 years, then the borehole design life is 40 years. So we can put upwards of four or five reactors per borehole. If borehole integrity, which we monitor continuously and make sure that it's solid and integrity is there, we could go possibly longer if that's the case, and potentially use more reactors per borehole.
Thank you. Separately, you had installing and retrieving the reactor news in September, and that was in Florida. As part of your drilling in Kansas, are you going to conduct any more installing and retrieving the live reactor or a test reactor as well, or will you get to the targeted depth before doing any of that kind of work?
Yeah, Mike, why don't you keep going?
Yeah. I want to make sure I understand the question. Could you repeat that? I'm sorry, I missed the part.
Will you be doing any lowering and retrieving of the reactor deeper than 1,000 ft., similar to what you announced in September?
Yes, we will. In our non-nuclear hole, that borehole that we are using, we will be lowering a test reactor down that will be doing thermal performance testing below 1,000 ft. Then as work up to the actual pilot reactor, before we start up, we will do a full insertion and retrieval just as part of our testing to ensure that we can go down and bring it up before we start the reactor up.
I'll add on top of that.
Sorry.
I think there's a real opportunity to practice with a non-nuclear environment to make sure that we have perfected everything that we're going to need to do before we load our reactor with actual fuel.
Okay, thank you. The last one from me is, you mentioned 2028 broader deployments. Is that referring to within the footprint of the Kansas facility, or are you already talking about other sites with potential customers in different states?
Yes. So both. We are, for now, really focused on the Kansas deployment and with the Great Plains Industrial Park, looking at a deployment of 150 MW electric in 2028. But we are in parallel also looking at additional sites, and there is significant interest in potentially, once the reactor's been proven, moving forward with other sites in parallel.
Thank you.
Our next question is from Subash Chandra with StoneX.
Hi. Hope you can hear me with the background noise. A quick question on whether your agreement with Great Plains, will the demand be mostly from the industrial part, or will it be grid connected and to a broader area?
Yeah, great question. We are looking at both. At the Great Plains Industrial Park, we do expect that there is going to be a significant load and significant load growth over the coming years. We are also looking to deepen our relationship with Evergy, the utility in Kansas. We are looking at, for the first commercial electricity in 2027, we do want to connect to the transmission lines and have that go onto the grid. Beyond that, we are going to have flexibility, and we could potentially sleeve the electricity through Evergy to other parts of the region, in addition to the Great Plains Industrial Park.
Any way to sort of describe the current demand on that grid?
Mike, you want to jump in? It is significant. There is a lot of demand. There is not enough electricity for all of the people who need it and want it.
Yeah. I'll add that in our conversations with Evergy, they have been very positive for the broader area. For the local Great Plains Industrial Park, we cannot comment because that's up to Great Plains Industrial Park and the development authority, and their work.
Understood. Finally, when does the public comment period wrap up on the permit, and when do you expect final approval ahead of the Q2 drilling?
Mike, you can take that, or Dave.
Yes, I'll take it. The public comment period has not started, so we don't have an end date yet of when that public comment period will end at this point.
Thank you.
Our next question is from Stephen Gengaro with Stifel.
Thanks. Good morning, everybody. Two from me. The first is, just so I understand it better, when you talk about the build, own, operate business model, what drove sort of that decision to pros and cons of those two approaches?
Yeah. I think I heard your question. Why are we doing build, own, operate? The real reason is that with the cost expectations that we have for our reactor, together with the faster build time, the economics are attractive, and we want to be able to benefit from those economics, and have that long tail of revenue where we can just keep generating revenue and profit for a long time into the future. Now, we do also recognize that there is room for flexibility, and if there are certain customers who prefer to own and operate our reactor or to own and maybe we operate our reactor, we do expect that we can be flexible. We also expect to be able to be flexible when it comes to the project-level financing for each specific project.
Thanks, Liz. When you think about a contract, I know it's early to talk about this, but when you think about the contracts around that, how much risk of uptime do you take on in the initial deal, for example?
Yeah. Mark Schmitz may want to jump in as well, but I think that we are still determining exactly what the costs are going to be, how much uptime we're going to have. We're going to need to demonstrate that as we prove it out. That said, there is a long operating history for pressurized water reactors, and we understand a lot about the deep underground environment. I will also say that the project economics that we are anticipating are very compelling, and there is room if anything ends up moving a little bit in one direction or the other, it's still going to be compelling.
I think the reason that we are interested in the build-own-operate model is fundamentally because the costs are lower, the revenue generation is sooner, and that makes us more willing to take on that risk than we might be if those risks were significantly higher.
Liz, I'll just add, as Stephen, you hit on an important point here because one of the advantages we have is a relatively short construction time. We're modeling only a year for an individual reactor. So, the interest during construction is a whole lot less than it would be for a conventional reactor. Helps us a lot in the private.
Yes, in the time to market, clearly that helps. Great. No, thank you both for all the details.
Yeah. Thank you, Stephen.
Our next question is from Jake Sekelsky with Alliance Global Partners.
Hi, guys. Thanks for taking my questions. Just looking at this initial 10-unit phase, can you touch on any additional licenses or permits that would be required to expand beyond this level under future phases at the Kansas site?
Yeah, I can start that, and Mike, I don't know if you want to jump in. But one of the reasons we're so interested in Part 57 under the Nuclear Regulatory Commission is because it's for fleet-wide licensing. Again, details to be confirmed when the final Part 57 comes out, but our expectation is that we would be able to license a number of reactors at the site, and then to add more as needs expand. Mike, do you want to comment on that as well?
Yeah. As Liz covered, the regulatory side from an NRC perspective for commercial operation, we will also have to get drilling permits through the Kansas regulator as well for those boreholes.
Yeah.
We do expect those to be fairly repetitious in the same site, the same boreholes, and look at some way to optimize that process.
Okay. That's helpful. Then just building on the last question a bit, it sounds like the build, own, operate model is the long-term commercial goal. Is that the only model that's being evaluated for the initial phase at the Kansas site, or are you looking at a few different avenues for this first commercial deployment?
I would say that we are very interested in project financing, and if there is significant interest in project equity, then that is something that we would consider. At the time, I don't think anyone else is interested in, other than partial ownership, I'll call it. I don't think anyone that we've spoken to yet has expressed interest in full ownership of the facility. And certainly, the expectation is that we would be the operator at this time.
Fair enough. Okay. That's all for me. Thanks again.
Thanks, Jake.
Our next question is from Noel Parks with Tuohy Brothers.
Hi, good morning. I just wanted to make sure I was clear on the horizons of the different stages of development. I believe there was a mention earlier that there's 5 MW that's permitted or approved for interconnect. I just wanted to understand that versus the 15 MW of the typical reactor, and then how that layers up to the 150 by 2028.
Yeah, great question. I'll start, and then Mike, feel free to jump in. The 5 MW electric is tailored for fast deployment. We know that if you do 5 MW or under, it's significantly faster to get onto the grid than if you have more than 5 MW electric. The first phase of what we're doing, we are really targeting at speed. Speed to deploy, speed to put it on and start generating revenue and electricity. For 2027, we are targeting up to 5 MW electric. In 2028, we are targeting 15 MW electric per borehole. That will require either more significant, larger diameter boreholes is really what it's going to require. We are moving to a larger design of the borehole itself in order to produce 15 MW electric.
Then of course, we're also going to need larger grid interconnection at that time.
Great. Thanks a lot. Just was wondering.
Yeah
I was thinking about the plan as a tool of improving costs and reaching scale for procurement being done at high volume. I just wondered if you have any thoughts on how you envision the working capital for, or I guess, to build up the inventory of what you're going to be needing to do at high volume procurement?
Yeah, maybe I'll start and then invite Mike or even Mark to jump in. I think one of the key points that is really very helpful for us is that we don't need to build a manufacturing plant in order to start producing reactors. So we have a robust supply chain. The manufacturing requirements are things that can be delivered by a number of existing manufacturing facilities. So the ability for us to leverage that and then not need to build a manufacturing plant is very helpful. Now, as we go and as we start to expand, there could be real interest in starting to bring that under our roof. There is potentially benefits, additional cost savings if we own more of the supply chain. So I'll say that initially, it's hugely beneficial to not need to do that.
It is something that we will look at and continue to evaluate as we move forward.
Great. Thanks a lot.
Thank you. There are no further questions at this time. I'd like to hand the floor back over to management for any closing remarks.
I'll just say thank you. I think these were great questions, and really appreciate everyone taking the time to listen in. Of course, we always are interested in continuing the conversation, so please feel free to reach out if you have any additional questions. We're excited to be on this journey together. So thank you so much.
This concludes today's conference call. We thank you again for your participation. You may disconnect your lines at this time.