All right. Good morning, everyone, and thank you all so much for taking the time to be here today with our team. We're extremely excited to take you through General Fusion's technology, our strategy, path to commercialization. My name's Josh Nycholat. I'm Manager of Investor Relations at the company, and happy to be here with our executive team who's going to present to you today. Just before we get started, I'm going to just flash up the legal disclaimers as required. Not investment solicitation, here to tell you all about the company and answer your questions. Just a few housekeeping items while we get going. We'll do question periods. We'll have a slide up to call on the questions. When we pass the mic around, or just put up your hand. We'll come around, pass you the mic.
Just state your name and company name so that we know who's asking the question, and for those online. We'll get going. I'll kick things off by introducing our agenda. We'll first start off with a speaker introduction. We'll then do a founder presentation from Dr. Michel Laberge, our founder. We'll give you an overview of the company, a dive into our technical approach, and how we're doing fusion. We'll then pause for a Q&A on that technology section specifically, because there's lots of things we're going to discuss about the company and the technology.
After lunch, we're going to get into our path to commercialization and the financial profile and the de-SPAC transaction that we're working on at the moment. Save your questions for those two areas and topics for after lunch. We'll have a final Q&A just to wrap things up at the end. To get things going, I'll pass it off to Greg Twinney to introduce himself.
All right. Thanks, Josh. Some familiar faces. Good to see a lot of you again. Share the story, share the progress, where we're at. Great to see some newcomers, people who are starting to learn about fusion, learn about General Fusion. I'm excited. For those of you who know me, this will be a repeat. I'm Greg Twinney, I'm the CEO of the company, of General Fusion, and I am a serial entrepreneur. Most of you who know me have seen me throughout this journey turn disruptive technologies from an idea into a business, commercialize, scale up, and ultimately build successful businesses that turn into long-term businesses, and also good shareholder return through IPOs and M&A.
I come at this from the perspective of enabling an incredible technology and an incredible team, and putting all the pieces together in order to take what we have here at General Fusion from the lab through to commercialization and do that first. Prior to coming to General Fusion six years ago, I was doing this in many other industries, assembling teams around industry-leading technologies to disrupt them, and own a category. I did this sort of over and over again for a couple of decades. Six years ago, when I jumped into General Fusion, I looked at the opportunity in two ways. One, the ability to take all of that experience and apply it to fusion and basically transform the world's energy supply and leave the world in a much, much better place for my four kids, incredibly exciting.
I jumped in for that reason. A lso I am still very, very attracted to the fact that I know that the company that commercializes fusion first and owns that market will have huge financial returns and rewards. The opportunity is massive. I come at this from two perspectives. To leave the world in a better place and also go after the large opportunity that fusion is going to offer. I have spent the last five years at the company setting us up to win. That means getting the technology advanced to a point where we are today, as we have a 50% scale machine that is going to demonstrate our uniquely commercializable approach to fusion in the next couple of years with some really industry game-changing milestones, and the team will talk about those.
Also, setting us up to take advantage of the public markets, where I am seeing that companies like ours that have milestones that are achievable, incremental, are getting valuation and capital for doing that. That is where we are today, we are excited to share everything. I am going to introduce Megan next to come up, she is one of the members of our team. As you see the team and see all the people that are working on this, you will see a bit of a difference from some of the other fusion companies.
Of course, we have deep science and technical and engineering capabilities, but we also have commercial knowhow and entrepreneurship, and that is very different in this industry, and that is one of the reasons why we are leading the race with such a small amount of capital that we have raised to date. Megan, you are one of those members. Come on up and introduce yourself.
Thanks, Greg. Hello, everyone. Great to see you all here and see some of you again. As Greg said, my name is Megan Wilson. I am General Fusion's Chief Strategy Officer. I have been with the company four years this week, actually. I am an engineer by training, and I have spent my career in nuclear power and commercial power generation. I started out as a U.S. Navy nuclear officer, so operating nuclear fission reactors at sea for several years. I know what it is to operate a nuclear power plant. After the Navy, I spent just shy of 15 years at the Babcock & Wilcox Company, a company some of you may know, working on defense nuclear, commercial nuclear, Small Modular Reactor policy and funding and development.
Then shifted over to the B&W side and spent some time in corporate development, mergers and acquisitions, investor relations, and corporate strategy, really focusing on clean tech development, demonstration, and strategy. Fundamentally, though, I am a fission geek, and for most of my career I have been a fusion skeptic because there are significant challenges to taking fusion science and making it a power plant. General Fusion and this team at General Fusion is the first company and the first technology that convinced me that practical fusion power is possible, and that is why I am here. Today I am responsible for our long-term strategy development, working with the folks you see sitting here, as well as all of our external relations, including strategic partnerships. Looking forward to telling you our story. First, I will hand it over to Mike Donaldson.
Thanks, Megan. Hi, everybody. Welcome today. My name is Mike Donaldson. I am General Fusion's Senior Vice President of Technology Development. I have a couple of degrees in engineering physics, and I have spent my career developing early-stage technologies through testing and physical prototypes. I have also spent a lot of time building and leading the teams that do that type of work. I joined General Fusion in 2009 as employee number five, and I have helped develop the technology that you will see today, as well as enabling the team that is delivering the results that we are happy to talk to you about today. With that, I will introduce our finance guy, Rob Crystal.
Thanks, Mike. I am Rob Crystal. I am the Senior VP of Finance. I have spent my career over 20 years helping companies commercialize new technologies, mostly in the clean tech space. Started out with KPMG, and I was working on a lot of their renewable energy clients when they were building their first production assets and then moving into operations. Then I spent close to 10 years with a water technology company that was in the R&D phase, and we built a couple of First-of-a-Kinds or FOAKs, and then built operating plants and then scaled globally.
I joined General Fusion about six years ago, and I lead the finance function. In that time, I have been very focused on getting the company public-ready, so I am pretty excited about being here today. O verall, just excited about our path moving forward, that not just there's the financial opportunity, but also the opportunity to leave the world in a better place. Thanks for having me. I will now pass over to our founder, Dr. Michel Laberge.
Thank you, Rob. Well, good morning, everybody. I'm Michel Laberge. I'm the founder and the Chief Scientist at General Fusion. Fusion is heating up. The lab, the big lab, the national lab, they've been working on fusion for 60 years. During those 60 years, it improved, got better slowly and slowly. About three years ago, they passed the big threshold, the threshold where they make more energy out than the energy they put in. Nowadays, they can actually do four times more energy out than in. Seeing those fantastic results, there are a huge pile of companies that are jumping in the fray and that are trying to turn that into a real machine. Well, there's a bit of a problem. The big lab, what they were trying to build is very complex, very difficult, very touchy, and not very practical.
Those machines, they were designed to show that fusion can be done. At that, they're good, they succeed. T o make a power plant, it sucks. At General Fusion, we took a different approach. We say, "Okay, what would be good for making a power plant?" We're going to do a machine that's more practical. All this fusion has been a pipe dream for a long time. There's lots of bad jokes about this, but fusion is a happening thing. I started my work as a degree in physics and a master in physics at Université Laval in Quebec. I'm a Quebecois. You may notice a little French Quebecois accent here. After that, I went to Vancouver in Canada, and I did a PhD in fusion-related work. This is where I get my little fusion bug.
Now, when you start to look at fusion, you will notice there's two big ways of doing fusion. The first way is magnetic fusion. You make a big magnetic field, you put a very hot gas, which is called a plasma, in the middle, and the magnetic field kind of levitates it in the middle and doesn't touch the wall. This is very important because if the hot gas touches the wall, it cools down, fusion stops. All right, there's somebody stealing the clicker because I forgot to click. Anyway, in magnetic fusion, you need big, big coil making very, very strong magnetic field. For that, you need to pass a lot of electrical current to make a very big magnetic field.
If you use normal copper wire, you will dissipate so much energy in making the magnetic field that you will burn all the energy that the fusion makes. So those people are using something called a superconducting coil. A superconducting coil is a very weird material that if you freeze it to near zero, -273 degrees Celsius, it becomes a superconductor, and it does not dissipate any electricity. So this is why it can make very big magnetic field without burning all the energy required. However, those coils are a nightmare. Trying to keep them at -273 when over there there is a gas at 100 million degrees Celsius, there is a little issue with doing that. So this is usually, there is lots of machines using magnetic field. The most popular machine is called a tokamak. The tokamak has been invented in the 1960s by the Russians.
The tokamak means toroidal chamber with magnetic coil, something like that. It is a Russian term. So it was invented in the 1960s. In the 1960s. That is a long time ago. Now we are trying to make power plant after using this very old technology. Very hard to do. The other method to do fusion, which is what I worked on my PhD, is laser fusion. Laser fusion, you take a little pellet, then you take two football fields full of high-power laser, and you focus all the energy on this little pellet, and then you crush it. Now, if you crush something, it gets hotter and denser. If you crush something really fast and really hot, then it makes fusion. However, those lasers, they are also very finicky and very expensive.
Now, I did my PhD on this thing, and I passed most of my PhD twisting little mirror to align the beam through the lab so it hit where I want. Very finicky. All the time was thinking about that. How the hell are we going to turn that into a practical power plant? Now, after my PhD, I started to look for a job. P hysicist is kind of hard to find a job. I think actually there is quite a few taxi driver that have PhD in physics.
But the academic have invented something to deal with their PhD. It is called a postdoctorate. So I did two postdoc. The first one, I had an offer in Northern Ontario in a nuclear lab, a bit like Los Alamos, and another offer in Paris, France. My girlfriend, now wife, selected Paris. Go figure out why she prefer Paris over Chalk River.
Anyway, after a few postdoc, I did manage to find a real job. I find a job at Creo Inc. in Vancouver. Creo Inc. was a big company that make laser printer for the printing industry. Big laser printer, not what you have on your desk there. I worked there for 10 years, it is quite interesting. There I learned to be a little bit more practical. You know, in the academia, you drink coffee, you go to conference, you write the old paper. It is a pretty nice life. In the private, there is something very, very annoying. It is called a customer. The damn customer wants his machine now, and he want it to work. It has to be cheap. This is a little bit different than the usual academic career, so I learned to be a little bit more practical there.
Now, after 10 years of that, between 1990 and 2000, I look at what I was doing. I was cutting the forest, and I was covering you all with junk mail. That was what my big effort was providing. I knew that the energy situation was a bit of a disaster. It is even more of a disaster today. As most physicists know, fusion will eventually fix all that. They do not all agree when, but they kind of agree that fusion will do it.
I decided something a little crazy. I decided to make a fusion company. This was my midlife crisis, by the way, like, some people get Porsche, and some people do dubious life choice, I decided to just start a company. General Fusion, started it. My wife, tell you what, my wife was not very pleased with that. She said, "What? You are dumping your nice paid job and you are going to start, what? A fusion company?"
Anyway, that was quite interesting. So the first couple of months, I sat on the sofa and I look at the literature. My wife said, "This is starting a company? Like, reading paper on a sofa?" Anyway, I went through eventually, and I hit something called Magnetized Target Fusion, MTF. This is something that was working a little bit in the 1970s at the Naval Research Laboratory in the U.S. So I look at that and you say, "You know what? This is a good idea. This could actually produce a real power plant, something more practical." How does it work? In Magnetized Target Fusion, you take a big vat of liquid metal, you spin the vat, the liquid metal get pushed on the side.
You shove in the center some plasma, this hot gas, with magnetic field, a bit like the magnetic confinement fusion people with magnetic field, which keep the plasma in the center. Then you use big piston, you squash the liquid, compress the plasma. When you compress it gets denser, it gets hotter, makes fusion. The fusion emits its energy as neutrons. The neutron get absorbed by the liquid metal that is spinning around it, the liquid metal gets hot. You pump that into a steam generator, a kettle, essentially. Make some steam, spin a turbine, make electricity the normal way. So this is actually quite a good idea. Now, one of the biggest problem with fusion is those fast neutron. When you make fusion, neutron comes out. If you do that in a metal chamber, the neutron hit the wall and it destroy the steel.
If you have laser, the neutron will hit the lens, and it will destroy the lens. This is a very big problem. The people in the business say, "N o problem. We will invent some non-activating material that will resist the neutron." Now, inventing new material, if at all possible, will take a long time. However, for Magnetized Target Fusion, when the fusion happen, you add the middle all compressed, and it is covered with liquid metal in all direction, and the metal absorb the neutron. The liquid, you cannot break it. The liquid, the atom are all kind of loose in there. So when you hit it with a neutron, well, they stay loose. A solid, there is a crystal, and the atom are different place, and you hit that, the neutron, the atom move and the metal fall apart.
This is the biggest advantage of Magnetized Target Fusion. That is not the only one. Also, in fusion, most fusion anyway, you have to make your own fuels, a process called rebreeding. In Magnetized Target Fusion, the liquid is chosen, so when the neutron hit it makes the fuel, and that makes enough fuel to make the machine go around and round in circle. Other machine, they will catch neutron and try to make some fuel, but because they lose a lot of neutron around, it is very difficult for them to make enough fuel to run the machine. We have four pi coverage, four pi in all direction. Four pi is a technical term. Anyway, all direction, we can catch the neutron and make a fusion. This is very good. Finally, it is cheap. This is one of the big advantage.
Superconducting coil, big football field of laser, those are very expensive technology. Pump, bearing, seals, piston ring, you get that in your car. Well, maybe not anymore. Now you have electric car. It used to be the thing. More broadly, fusion with MTF is designed from the ground up to make a power plant, not an experiment to show that fusion is doable. Now, making fusion is not that easy. When I started my company, I started my company in a garage, like good company should start it. At the time, I live on Bowen Island. It is a little island off Vancouver. On the street corner there, when you get off the ferry, there is a street corner and there were an abandoned garage there. I rented that. I built my first machine there, which was the previous picture.
Anyway, the people on Bowen Island were looking at this and say, "What is this guy doing in this garage?" That was quite interesting. Anyway, after three years of work between about 2000 and 2003, I managed to squeeze a plasma with magnetic fields, small machine about yea big, and extract a few neutron out of this thing. We put detector around it, and you detect the neutron. I call that my marketing neutrons. Now with my marketing neutron, I have decided to start this company and grow it a little bit bigger than a guy in a garage. I needed a CEO because I am pretty good in the lab with a wrench. That is my cup of tea. This business thing that you guys are into is, A, I do not like it, nothing personal. Anyway, I decided I needed a CEO.
I hired my ex-boss at Creo Inc. for zero money, zero bonus, and zero hope of anything. He said, "What a great deal," and he went for it. Anyway, between the two of us, we managed to convince some local VC in Vancouver to invest in General Fusion. That VC, they knew us personally from the time at Creo. Actually, they made a bit of money when Creo sells to Kodak. So they say, "Ah, those guy are not totally crazy. Perhaps we should invest in that." When you get a VC, other VC are a little bit easier to get. You get more VC, you get more in it. For the next 20 years, we managed to raise enough money and build all sorts of bits and pieces for this big power plant. Different tests to test this and that.
I am an experimental physicist. I like to build gear. The General Fusion approach is you design something, you build it, you test it usually does not work for the first time, so you modify it a bit until you make it work. I do not like passing all my time designing on a computer. There is rather a lot of PowerPoint company out there on fusion. We actually build some real gear. After 20 years of work, of practical approach, we managed to get some result, some of different piece and pieces. We got patents on that, which quite useful. Then we managed to go to some conference and drink some coffee. Then we published a couple of peer review paper in scientific magazine.
We also built an ecosystem of different people to help us out, like the national lab, the other university, other company are making bits and pieces for us and helping us solving some of the problem in fusion. Which bring us to today. Today at General Fusion, we have this big machine called LM26. LM26 is a two-meter diameter plasma crushing machine. We built that in about 1.5 years . We started operating that in 2025.
Since then, the plasma that we crush got better and better and better. Nowadays, we got all those nice results from us. There is not a big result from the national lab. There is company producing all sort of result. Fusion is having a huge amount of momentum, and it has never been such an exciting time to work on fusion. I am quite excited with my job right now. Thank you very much. Over to Greg, our CEO, that will talk in bit more detail about those things. Thank you.
Thank you, Michel. That was the story generally that sucked me in six years ago. Very inspiring. Hopefully you feel the same as I did six years ago. Even every time I hear that story today, I feel the same. I am excited. I am like, "Wow, I am a part of this team. This is incredible." If you took anything away from Michel's introduction, at least, I think I want to just hit on a few things before I dive into this. Really, obviously the promise of fusion has been out there for quite some time, and the progress that has been made since the beginning, up until today has really, really accelerated. It has put fusion at an inflection point right now where demonstrations at scale, including our own, are going to demonstrate these fusion conditions are achievable, and in our approach, also commercializable ultimately.
There's been a lot of progress around an inflection point. What's really, really important if you leave today with anything, it's think about not just that we can create fusion conditions, but how you create those fusion conditions and how you execute really, really matters. The how really matters. While there could be many demonstrations of fusion, achieving milestones in all sorts of different ways over the next couple of years, including our own, you need to ask yourself, are they climbing the right mountain? Are they climbing the mountain to commercialization?
As Michel described, we started this company with the end in mind for a power plant. You start with the end in mind of a power plant design, then step by step, we've de-risked the pieces, the components of the technology to that end goal. This is not a science experiment that we're going to try and convert into a power plant. It's exactly the opposite approach. Think about the how in terms of the technology. Also think about the how in terms of the investibility. There's different ways to build a company.
Especially in fusion, you can see people could raise billions of dollars, then say, "Give me five years, I'm going to build a machine." Or in some cases, the ITER machine that Michel described, "Give me decades and I'll build a machine, then we'll flip a switch, hopefully we'll do exactly what we expect." Or you can take the General Fusion approach, which is you know what your end in mind is, you decouple the technology, and step by step, as cheap as possible, as fast as possible, you de-risk that power plant design so that ultimately when you do go build your FOAK in the mid 2030s, you have de-risked all the major components and done it in a way that's investible. Milestone by milestone. Investors can follow along, and can see the milestones being hit.
That's how we've built the technology roadmap here at General Fusion. It's unique in the industry. It's a unique technology, and this is all designed with commercialization at the end of the road. We'll just jump into a little bit more around the investibility, why General Fusion is so investible and why we're making this move to the public markets today. I probably don't need to convince this group about the incredible demand for energy. This almost insatiable demand really. You're talking about electrification of everything, data centers, AI, all of these things. It was all stacking on top of an already growing demand for energy, nearly insatiable. When we look at coal and fission, solar, other renewables, gas, all these things, going to be an important part of the mix, but will not be enough to satiate this demand, especially in time.
We believe the only way that demand gets satiated is through fusion, and that is why we are doing what we are doing. Next, what Michel described was taking this engineering approach to fusion. That is what I was alluding to before. The end in mind is a power plant, and a power plant needs to be able to run for 40 years in order to get the return on the CapEx.
You need to be able to make sure that the machine is going to be able to produce energy, last that time, produce its own fuel, do this all at a cost that is going to be economically competitive. Start with an engineering approach, and then de-risk it step by step, and that is what we have done at General Fusion. Step by step, Mike will talk a lot about the development we have done, hands-on, our own results.
After we get the results from our machines, as the fusion industry should, you put your results out for peer review and you have your peers look at what you have done and criticize and validate, and we have done that in a huge way. In fact, we are probably one of the leading companies when it comes to published results of our own fusion results. So not designs, not concepts, not PowerPoints, not simulations, our own results from our machines, peer review. We have 34 + peer-reviewed papers today. As we have been doing that, we have also been capturing the IP. We have over 200 patents, so a very big patent portfolio, which allows us to monetize that work and protect that work for the ultimate goal.
We have got this engineering approach, and it allows us also to decouple a lot of the systems in a way that we can invest and build, invest and build, and keep doing that step by step. Michel talked about the newest machine we have got, a machine called LM26. It is built. It is in Vancouver. It is running, it is operating. It is shooting plasmas, compressing plasmas. It is licensed to do all of that.
All of that happened in a couple of years here, and it is a 50% scale plasma inside this machine. This machine is designed to achieve three incredibly important milestones in the fusion industry, well-recognized as being important milestones, and make us first to achieve those milestones, and at a cost that is a fraction of what I am seeing others do. Mike and Megan will talk a little bit about this machine in more detail.
We are an entrepreneurial company, we drive the pace. We are not out of a lab, so we are moving at an entrepreneur's pace. Of course, but we are not doing it on our own. We have a lot of partners, as Michel talked about, that we lean on for validation and support. National labs, UKAEA, as a gold standard national lab, is somebody we work very closely with. We work with other partners and suppliers and whatnot, and we are bringing the industry together around our unique approach to fusion. Along the way, we have gathered a lot of investors that have helped us to get to this important stage. We are a leader in the technology front with CAD 400 million of capital invested to do it, which is incredible.
It is an order of magnitude less capital than many of our peers in the fusion industry have spent to get not nearly as far as we are. We are really a capital-efficient group. As we move forward, that is going to be in mind. The lesson that Michel learned from those first customers continues to be a thread that is pulled throughout this organization, and we do everything with purpose and capital efficiency. Lastly, of course, we have got a huge group of scientists and engineers that are, I believe, world-class in fusion. We have also got entrepreneurs and people like these people here that know how to take an idea and a technology and turn it into a business and grow it. That is also unique, especially in the fusion industry. It is expected in a business. This is a business, not a science project.
This is the team that is assembled that knows how to do all of that. I will dive a little bit more into some of the details around General Fusion. As Michel stated, we were founded in 2002. That makes us the second longest-tenured fusion company in the world. It gives us a head start. It gives us the 20-year head start on doing the work necessary to prove out a commercial design. If somebody tells you that they can flip a switch in a couple of years and be at the front of the pack in fusion, they probably are either naive or not telling you the truth. It takes time. We have taken the time, and it has brought us to this moment, which is a really incredible time for us. We are headquartered in Vancouver, Canada.
It is way more exciting to tell this story in front of our fusion machine. I would invite all of you have invitations to come anytime for a tour and stand in front of our LM26 fusion machine, meet the team, everything else, and right at the end of the runway. We love to have people come in. We were going to do this event there, but we thought let us do the first one here and then invite you all to come sometime later to come see the machine. We are a fairly lean team, 115 employees. As you would expect, most of those very technical, PhDs, engineers, etc. You do not often see retention on a screen like this for a menu of sort of highlights, but this is a team that has got 93% retention of our employees. Fusion is hard. This is not easy.
This is not come to work 9:00 A.M. to 5:00 P.M. and put your feet on the desk. This is hard work. We have a team that is so committed and has stuck through this through the years. People like Mike that have been with this company for a long time. There are many people like that, and that is confidence and commitment to the mission. Funding, I talked about. We have raised CAD 400 million so far to get us to where we are, which is incredibly efficient. The market size is massive. McKinsey or whoever you ask, it is CAD 1 trillion are the numbers that get thrown around. Of course, that is the opportunity that we are going after. We can see in the top center here is a small picture of our machine that is more recently commissioned and now operating, LM26.
It sits inside of our 100,000 sq ft licensed facility at the end of the runway in Vancouver. At the far side, I talked about investors, but we've also had the Canadian federal government be a strong supporter of the company. About a quarter of the capital that has come into the company has come from the Canadian federal government. There is a global race happening in fusion, and we are proud to be Canada's horse in that race. We are moving forward onto the global stage in fusion and leading the pack, and we've got the Canadian government that's been supporting us right from the beginning. We also work with and collaborate with other governments, U.S. DOE, UK Atomic Energy Authority, different collaborations, and engagements on that front as well.
Bottom left, you can probably recognize some of the investors that have helped us along this way, get to this part in the journey. Some of those investors also have become technology partners. Hatch is a great example. A Canadian engineering success story that is on the global stage doing engineering, invested and then wanted to become a partner, and so we've got some of these people making transitions between investor and strategic partners. I talked about our big patent portfolio that's global, 210 of those. Peer-review publications, again, science basis that is important to establish first. Even if your end point is not science, you've got to establish the science basis, and we've done that very, very strong way with the peer-review publications. When you hear about fusion, we generally show up in the news for anything that's in and around fusion. All right.
You've got most of the team here that's on the exec side. A couple of members who aren't here, Jan and Grace and David and Kelly back in Vancouver. These are people that again, have commercialized technology, have worked in clean tech, know what it takes to build the team, the technology, the roadmap, and to execute. These are people that have been with the company for quite some time doing this execution. As we move through each milestone, we know we've got the team that's needed in order to do that. Beside our employees, we've also got a Science and Technology Advisory Committee. These are individuals led by our chair, Tony Donné, who's the former CEO of EUROfusion. These individuals have spent their career in fusion, running national labs, big programs in fusion, etc. We meet with this group on a regular basis.
They keep us between the rails. They give us validation for what we're doing. They help us to plan out what's next. This is an incredibly important group to us, and we work very closely, especially with Mike. When he talks, he'll probably weave in some of this. We spend a lot of time with the Scientific Technology and Advisory Committee. Beside them, we have recently, fairly recently, I guess last year, brought on Bob Smith. He's the former CEO of Blue Origin. Bob has been incredibly valuable in the business and technology side because he knows what it takes to go from small scale to large scale commercialization in a challenging, deep tech industry. He's done that before working for Jeff Bezos.
I spend a lot of time with Bob on business and technology and team and roadmap, and he's been a really, really valuable resource to bring on as an advisor. In terms of our board of directors, many of these members have been really valuable in supporting the company financially through investment, but also some independents that we've recently brought on. Adding to the mix, we recently added Wendy Kei, who's our new chair of the audit committee in going public. She is the chair of Ontario Power Generation, and so we're really excited to have her join the board. We also have Mark Little, who's the prior president and CEO of Suncor Energy, on our board. Lastly, as a highlight, I talked about our relationship with the UK Atomic Energy Authority, the sort of gold standard in fusion.
Their ex-CEO sits on our board, Norman Harrison, so we're pretty excited to have him on the board as well. With the Spring Valley team and this go-public motion, we'll be looking at different changes to augment and change the board up to be public-ready. There's a bunch of stuff happening there as well. I'll move on. The demand case. Like I said, I probably don't need to convince you guys about this. You probably know this better than even we do. You've got your finger on the pulse in terms of demand. McKinsey estimates, I think, a doubling of energy demand by 2050 or something like that. I see other estimates that are even higher. Our belief is that the existing technologies for delivering energy, coal, fission, renewables, natural gas, aren't going to cut it. There's a big gap.
That gap needs to be filled, and we believe fusion can fill the gap. Why? Because fusion is the holy grail for base load energy, often talked about as the last source of energy humanity will ever need. That's why for decades, labs and academia and companies, physicists been working on this. The promise of fusion is not because of how you do the fusion, it's the actual physics of fusion can deliver the promise. You need to be able to obviously execute it with the proper how, but it's not like fission, where you have an amazing amount of benefits, but a whole bunch of negatives that you're trying to engineer around, you're trying to engineer safety. Fusion, that's not the case. It is inherently safe. Clean energy, reliable, dispatchable, zero carbon emissions, no long-term radioactive waste. Again, no long-term radioactive waste in fusion.
It's efficient, scalable, minimal land use, cost competitive if you do it the right way, and a limited expected regulatory burden and export controls. That is a key to a massive market versus fission, is a limited regulatory burden and export controls. We can talk a bit about that later. From a fuel perspective, we're using deuterium and tritium to fuse. Deuterium can easily be sourced from seawater, and tritium can be bred with lithium using our machine, as Michel described. All of this amounts to owning the fuel cycle, and therefore, energy security for those that have fusion at their access. Lastly, safety. When fusion fails, it fails safe. No chain reaction, can't be weaponized, the fuel can't be weaponized, and there's no high levels of radiation. This all amounts to an incredibly huge market. That's that trillion-dollar market opportunity, and that's what makes it real.
The industry's shifting from experimentation to big demonstrations, and the regulatory frameworks are starting to come together. In the U.K., the U.S., Canada, all lining up and understanding that the regulations for fusion are very different than fission, and therefore, this market opportunity is going to open up. I talked about a global race, I don't think a day goes by that there's not a new release of somebody raising capital, milestone in fusion, a government laying down a policy. There is a real race going on around the world. The race involves scientific achievement, capital, policies, regulations, and as this stuff is happening, we are at the front of the pack. As I mentioned before, we are Canada's horse in this global race, and we have been very nicely embraced by the Canadian government.
Our market is global, so we can develop at home and sell global. With this, I'm going to hand it over to Megan, take you through a little bit around the commercialization pathway, how we're going to do all of this, and then, yeah. Then I think we break for lunch after you.
All right, let's talk about fusion. I know Michel gave us all a 10-minute master class in the history of fusion, the technology options, General Fusion's history, and our technology approach. Now we're going to try to break it down. I'm going to start with the basics of fusion and try to create a common framework of language so you can understand how our technology works and how it's differentiated from other fusion technologies out there. At its very basic level, fusion is a natural process where two atoms are forced by their environment to combine and release massive amounts of energy in the form of neutrons. I just started the lesson. I'm going to pause the lesson to talk about fission for a second. I know a lot of you in this room and online follow fission or cover fission companies.
I think it's important to draw a distinction between what's happening in a fusion reaction versus what's happening in a fission reaction. It's really unfortunate that the words sound really similar. I will try to keep them straight. In fission, you basically have an atom that is bombarded with a neutron and is forced to split. In that reaction, in that split, you have energy in the form of neutrons, and you have highly radioactive, long-lived fission products. That's fission. The neutrons that are released go on to then split the next atom and the next and the next, and it's a chain reaction. That's the very oversimplified definition of fission. Fusion, back to fusion now, is completely different.
I said it before, we are trying to take two atoms and force them to combine through a specialized environment, and when they are combined, they again release neutrons as the energy. T he byproduct is helium, which Michel always says is party balloons. We all love party balloons. That is the fundamental difference. There is also no chain reaction. Those neutrons are not going on to cause the next process, and then the next, and the next. Fusion, we have to keep maintaining that environment so that the atoms can continue to fuse and release energy. Going back to the natural process, for those of you who are in the back, if you can see the sun, you are watching fusion in action. We see it happen every day in the sun and the stars.
To make fusion happen here on Earth, there are a few things we have to do. First, we have to make a plasma, and with all apologies to the plasma physicists in the room, this is basically a special hot cloud of ionized gas. We make that plasma, and then, as I said, we have to create the environment that forces the particles in that plasma to combine. To create that environment, which is essentially the environment of the sun, there are really only three levers we can work with to produce those fusion conditions.
It is temperature, it is density, and it is what we call energy confinement time, which is how long that cloud of ionized gas holds its energy. Remember that, I am going to come back to it a few times. We have got temperature, we have got density, and we have got energy confinement time.
Okay, t hat is what we need to do for fusion science. T o then take that process and turn it into a power plant, as we have touched on, we have got to do it in a way that we can capture the energy from that fusion process and then put it to work to produce electricity and power the world.
As Michel touched on, academia and government facilities and research institutions have really been focused for the last several decades on the first two steps, and they have been incredibly successful in proving that fusion science works. W hat differentiates General Fusion's technology is the fact that we are achieving this process in a way that can then efficiently and practically capture that energy and put it to work. That is what we are about at General Fusion. Now, I want to take it one layer deeper.
Hold on to what I talked about those three levers. As I said, research institutions and academic facilities have achieved really incredible results. They have done that by operating at the extremes of those physic parameters. First, let us talk about temperature for a second. Everyone has got to get to really, really hot temperatures, and that temperature varies depending upon the fuel you are using. Most in the industry are using deuterium and tritium. We are just going to stick with deuterium-tritium. Within the confines of deuterium-tritium fusion, where you have got to get to about 100 million degrees Celsius for sustainable fusion, then you can vary the other two levers, the energy confinement time and the plasma density. Those traditional academic approaches have achieved those results by going to extreme levels on one of those two levers, either extreme energy confinement time or extreme density.
If you Google fusion or you have been poking around in different fusion approaches out there, you probably first found what looks like a glowing donut. That is the tokamaks of the world, and that donut might be twisted, and those are the stellarators of the world. That is magnetic confinement fusion. In that approach to fusion, you are using extreme magnetic fields. That is where those superconducting magnets that Michel talked about comes in. An extremely strong magnetic field to force the plasma to hold its energy a long time to give those atoms the opportunity to combine and release energy. Pretty successful from a scientific perspective, but not appropriate for a power plant. We will talk about why in a second. On the other end of the spectrum, on plasma density, you have got what I call the laser guys.
You have got inertial confinement fusion, and Michel talked about this as well, where you are basically taking a very small plasma. You do not care about how long it holds its energy, a nanosecond. Y ou basically crush it with a huge array of lasers to increase the density, try to approach the density of the sun, and make those particles fuse. Again, this has been even more successful than the tokamak and magnetic confinement approaches.
I am sure you have all heard of the National Ignition Facility about three years ago at Lawrence Livermore National Laboratory. They achieved scientific breakeven. They achieved the conditions where they could produce more energy out of the plasma than they put into it. That was laser fusion. That was inertial confinement fusion. V ery successful from a scientific perspective. We know it can be done, but not practical from a power plant perspective.
At General Fusion, we are taking the best of both worlds, and we are operating in what we call a sweet spot of parameters. We are working with moderate plasma density and moderate energy confinement time. Our plasma has to hold its energy a little while, on the order of milliseconds, long enough for us to increase the density a moderate amount through mechanical compression. We will talk a little bit more about what that means. Michel gave you the, I do not know if I can recreate the hands, but I got the first tour back in 2017, and it sort of made sense then, but it makes a lot more sense now. I am going to walk you through how it works, and then I will show you an animation to hopefully put it all together.
Our approach is called magnetized target fusion, and we like to call this the diesel engine of fusion. We are essentially combining fuel injection with compression, but in a fusion context. First, we are forming a liquid metal cavity inside our fusion vessel, and this is essentially our compression chamber. We are taking a big vat of liquid lithium and we spin it, and that forces the liquid metal up against the wall, and we form a liquid metal wall compression chamber. Then we have got to form our fuel. Our plasma is our fuel. We form that plasma and inject it into that liquid metal cavity. Fuel into the compression chamber.
Then we have an array of pistons that surrounds that liquid metal wall and pushes on that liquid metal wall to both compress it and reshape it, completely encase the plasma, increasing its density and forcing fusion to happen. The fusion happens. Those neutrons that represent the energy radiate outward into the liquid metal wall. The entire system resets, and we repeat it once per second or 1 Hz in a commercial machine. Let's look at how this works in motion. This gives you a bit of a sense of scale for a 150 MW fusion machine. You can see as we peel away the layers, we've got that rotor full of pistons that's spinning. Those arms in the machine, that's compressed gas. It's not the pistons. The liquid metal wall is spinning, forming a wall. We inject the plasma into that liquid metal wall.
The compressed air pushes the pistons, which are the red dots you see inward, compresses that liquid metal wall to completely encase that plasma. Fusion happens. The system resets. We repeat it. This gives you a sense of the timing in a commercial plant. Compress, fusion. Compress, fusion. Over and over again, just like a diesel engine. That liquid metal wall then is run on a continuous basis to a heat exchanger to produce steam, turn a turbine, produce electricity, and we'll show you what that looks like more in a little bit. Why do we want to do it this way instead of the glowing donuts or the laser approaches, which have had such great results from a scientific perspective?
Well, I said in my intro that I'm a fission geek and a former fusion skeptic, and General Fusion converted me, and this is really why. There are a number of barriers to commercializing fusion that have made it nearly impossible for those other technologies to translate to a power plant. The way we see it, there are really four major challenges. The first is that the neutrons from fusion are much higher energy than the neutrons from fission. Those neutrons will essentially destroy any fusion machine over a matter of months. In fact, we've heard some of our more traditional competitors talk about the need to plan for rebuilding the machine every three or four months. Well, if you've ever visited or worked in a power plant, you know that that's incredibly impractical for our utility customers.
That's problem number one, t he neutrons destroy the machine. The next is that the fuel we're using, deuterium and tritium. Well, deuterium's easy. We can get that out of seawater, but tritium does not naturally exist on Earth. We've got to breed it. Those traditional approaches that we talked about don't have an efficient way to produce more fuel than they consume on an ongoing basis. That is a challenge. Then we've got to find a way to actually capture that energy and put it to work, or we're all wasting our time. Those traditional approaches don't yet have an efficient and effective way to capture that energy and put it to work. Then we've got to do this in a way that's cost competitive so that it can be scalable, and we can deploy fusion around the world.
When you think about high temperature, superconducting magnets, or football fields worth of delicate lasers, we believe that all adds up to potentially astronomical costs for fusion power, which would ultimately limit its addressable market. What do we do? General Fusion's approach is designed to solve for all of these challenges. That liquid metal wall that I talked about that squeezes and encases the plasma is really the secret sauce to it all. First, the liquid metal wall that surrounds the plasma captures 99.9% of the neutrons before they can reach the outer solid wall of the machine. Effectively, shielding the machine from any neutron damage. That means we can build our machine with existing stainless steel alloys, and it will last the 40+ years lifetime of the power plant.
This is a big deal. Approaches that do not have this type of solution are looking at developing materials that do not yet exist to be able to withstand this neutron interaction. The liquid metal wall absorbs the neutrons, protects the machine. Next, that liquid metal wall is 100% natural lithium. When neutrons interact with the lithium, they produce tritium. Because we completely surround the fusion and are so efficient and effective at capturing the neutrons, we can produce more fuel than we consume on a continuous basis. Our current estimates, and this is backed up by analysis from the UK Atomic Energy Authority, is that we can achieve what we call a breeding ratio of 1.5. For every tritium that we consume as fuel, we can produce 1.5 .
That means an individual plant, wherever it is located, can be self-sustaining from a fuel supply perspective, from an energy security perspective, and we can use the excess fuel generated to provide start-up fuel for the next General Fusion plant and the next and the next, and essentially own the fuel cycle for the broad fleet. We want to capture all that energy. I said it, and I will say it again, because we are capturing all the neutrons, we are capturing the energy very effectively. We can then send that liquid metal to a heat exchange system, produce steam, turn a turbine, make electricity. Because we are doing this without superconducting magnets, without high-powered lasers, without having to frequently rebuild the machine or use materials that do not yet exist, we believe we can achieve cost-competitive fusion power on an LCOE basis.
This is the General Fusion value proposition. This is why I am here. Okay, now let us take this framework and apply it to the broad ecosystem of the fusion industry. Michel touched on this. In the last handful of years, the industry has grown incredibly. There are more than 50 private fusion companies in the world. The majority of those have been founded in the last handful of years and are still very much in the start-up phase. Some are much more mature. General Fusion is, we believe, the second oldest private fusion company in the world. Regardless of when they started, the majority of fusion companies out there are focusing here in the more academic approach, right? The magnetic confinement we talked about, the donuts or the twisted donuts, or inertial confinement, the laser guys. I have walked through it before, but it is worth stressing.
While we expect those companies to achieve meaningful scientific results because it has been done in government institutions, ultimately, those approaches don't have a solution to the neutron damage. They might be able to reverse engineer and add on some sort of energy extraction, but because it's not inherent and within the machine, will not be effective or efficient at extracting that energy. The estimated breeding ratios that they can achieve, they're struggling to get above one. Still working out how to approach that. Then I mentioned the cost before and the use of existing materials. Those are major challenges for those approaches. Now, we are taking an engineering approach. I would say we're not alone in that. There are other companies out there who are trying to take creative approaches to fusion because these challenges that I've described, they're not a secret.
The broad industry recognizes that these are challenges that need to be solved, and there are others out there doing some interesting things, I would say, approaching that sweet spot of parameters that we're working in. N one of them address these challenges as comprehensively as General Fusion's Magnetized Target Fusion. Then if you layer on, and we talk about our peer-reviewed articles a lot, we're quite proud of our library. Y ou layer on, among those companies, those who have actually built fusion machines, achieved results, and put those results up for public scrutiny, you can quickly see that the funnel of fusion companies narrows to a very small group of companies who both have real fusion results and are pursuing approaches that could address some of these challenges. W e believe we float to the top because we have done both.
Okay, so what does this look like in a power plant? As I mentioned, our machine is designed to be one machine, 150 MW electric. We anticipate that a sweet spot of size would be two 150 MW machines for 300 MW total, sharing a balance of plant. What you see here is one fusion machine. I f you're in the energy industry, this would be a very recognizable schematic to you. We are very focused on the fusion machine, the Fusion Island, which is meant to replace the heat source in the plant. B ecause we're using this practical approach, we have the opportunity to use existing balance of plant and power generation equipment, existing infrastructure, and in some cases, to actually repower old, retired, or retiring power plants, including coal-fired power plants.
As you can see, this looks fairly predictable, and this is important to our potential early adopters. Y ou see this blue loop is the liquid metal coming from the center of the machine, going to a heat exchanger, passing off that energy, and returning to the machine. What's a little different from what you'd see in a normal or a conventional power plant is the green loop, which is related to the fuel cycle to be self-sustaining. So extracting that tritium from the liquid metal before it goes to the heat exchanger, processing it, and then reusing it to close that loop on the fuel cycle. Okay, so let's talk a little bit about cost.
You can have the best technology out there, as we've said, but if you can't provide it to customers in a cost-competitive way that can be scalable, your addressable market's going to be quite small. Because of our approach, because we are using existing materials, we're using technologies like pistons that have been around for a little bit, and so on, we believe we have a good line of sight today and are able to estimate our costs on a levelized cost of electricity basis. We currently estimate that our 300 MW plant LCOE will be between CAD 64 and CAD 73 per MW h on an Nth-of-a-kind basis, which makes our technology quite competitive as compared to both legacy nuclear and what leading SMR companies are putting out as their LCOE targets, as well as non-nuclear technologies and non-dispatchable renewables.
This is, we believe, very important for any fusion technology, not only to be able to make the fusion happen, do it in a practical way, but also do it in a cost-competitive, scalable way. This is underpinned by. Greg mentioned that we're always quite capitally efficient, and that capital efficiency has not only informed the way we have put our investors' and shareholders' funds to use but also the way we think about our technology. From the beginning, it's been about a power plant that can be deployed widely, and that means keeping cost reasonable. Now, I will hand it over to Mike. He'll talk us through what we've done, how we got there, where we're going.
Thanks, Megan. General Fusion, as one of the longest-tenured fusion companies out there, has a very strong history of milestones towards commercial fusion. The timeline shown behind me here shows two decades of test beds and machines that have de-risked our technology and scaled up key systems step by step. Each machine that we show here has demonstrated and answered a specific question to get us the results that got us to where we are today. This program of testing and demonstrating really solidifies the foundation of our approach to commercial fusion, and that foundation really has three things. One, we have demonstrated that we can form and inject the plasmas that have the parameters for our approach at scale. Two, we can form a liquid wall, and we can compress it and shape it with the characteristics that we need.
Three, we validated that MTF works at small scale by compressing a plasma with a solid wall and seeing the fusion reaction rate, the neutrons, increase throughout that compression. We've laid this foundation over 20 years by designing, building, iterating, and testing machines. You might have gotten that feel from Michel. He likes to say that I'm an experimental physicist. That's our culture. We go build machines, and we test them. We've used those machines to deliver results that are peer-reviewed and published. Megan mentioned this. We are one of only four private fusion companies in the world to have published, peer-reviewed, meaningful fusion results. What I want to do with my time today is I want to dive into a little bit more of the detail on how we got those results. This is a picture of PI3. PI3 is our large-scale plasma injector.
Remember that plasma is an ionized gas. It is the fuel that gets injected. That fuel is compressed by a liquid metal, and when you compress a gas, it heats up. We need this to heat up to fusion temperatures. Fusion temperatures are about 100 million degrees centigrade. You cannot just compress any old gas and get it to those temperatures. The first thing you need to do is you need to be able to form it into a plasma. The reason for that is hot things like to cool down, and what a plasma has is the ability to hold in its energy as it is compressed. That is what we mentioned by energy confinement. In a plasma, that energy confinement, that ability to hold onto its energy, is achieved by the currents and magnetic fields that get trapped in the plasma when we form it.
The plasma injector that we show here that forms that plasma is called PI3, and it formed plasmas that are 2 meters in diameter, or about 50% of the scale that we would see in a power plant. I like to think about a plasma as a smoke ring or a bubble. It has got a structure, and it has got a shape to it, and it is that structure and that shape that helps it hold in its energy. In a smoke ring, that structure is supported by forces like air currents that are swirling around the smoke ring. In a bubble, that structure is held together by forces in the surface tension of the film. All of us that have seen a smoke ring or seen a bubble know that those forces eventually dissipate and the smoke ring disappears, and the bubble pops.
In our plasma, as long as the plasma has that shape to it, as long as it has that structure, that is an indicator to us that it is holding in its energy and holding it in well enough for MTF. With PI3, we have demonstrated at 50% power plant scale that we can make plasmas that have the starting temperature, can confine their energy, and last long enough to be able to be compressed by MTF. The graphs on this slide are from a paper that we produced on PI3, and it shows some of the currents, the temperatures, the density associated with our plasma. I recognize that there is a lot of technical detail here, but there is a key takeaway that you want to take from this slide, and that is the time scale.
You can see that all these parameters last much longer than the time scale of the graph. We have also overlaid what we call the compression window. The compression window is the time that it takes to compress that plasma, and you can see that these metrics last much longer than the time that it is going to take to compress. Put another way, the plasma lasts and holds in its energy much longer than it takes to compress it, and that is a key requirement for heating it up.
What this shows is that we can make the initial plasma that we need before we compress it, but then we need to compress it. All right. We have had a couple of people explain to you that we inject the plasma into a cavity of liquid metal, and then we collapse that cavity with pistons to compress the plasma.
And as we said, the plasma has to stay together as you compress it. The compression can't destroy the plasma when we're doing that compression. That means that as we compress it, the surface of the cavity has to remain smooth, and if it has a rough surface or if the cavity just explodes into a series of droplets, that's going to totally snuff out the plasma. The cavity collapse also has to have a shape to it, as Megan talked about. It has to totally encase that plasma. Go back to my bubble analogy. Picture that you're compressing a bubble, and you're just bringing your hands in together to compress the bubble. What the bubble's going to do is the bubble's going to adjust. It's going to stretch, it's going to elongate, and it's going to come out the top.
And as it does that, it's eventually going to pop. Rather than just coming in with the walls straight like that, they need to come in shaped. You need to cup it and totally encase that plasma. The way that we've demonstrated that is this is a machine. It's another test bed. It's called the cylindrical water compressor, or the CWC, and it's a prototype cavity formation and compression test bed. With the CWC, we demonstrated that we can form a smooth liquid cavity, and we can compress it while keeping the shape smooth and shaped as we come in. W e show a video of this on the slide. Does it go? No, I guess not.
It was going. Okay, good. Did everybody pick up on it? All right. This is an actual video from inside the CWC, and if you'd taken a look at that video, you would've seen that it remains symmetric as it came in and it remains smooth. How do we know that it's smooth and symmetrical? Well, we measured it. In these videos. Okay. These videos were going to show you how we did that measurement. The video on the left is actually another video, lot of technical detail again, but is actual another video of a real cavity collapse. It's one that we filmed with a fish-eye lens as we looked down into the cavity.
Then what we did is we took some rings of lasers and we projected those rings of lasers onto the surface of the cavity, and as the cavity collapsed, we could measure the reflection of those lasers, and by measuring the reflection of lasers, we could see the shape. We then sent some machine vision. We took that video and we asked the machine vision, "Please find the laser shape," the laser rings. T hose colors on the video on the left represent what the machine vision found. Now we've captured a video of the cavity collapse. Now remember, it's a fish-eye lens, and you probably don't have to be a physicist to remember that a fish-eye lens is going to distort the image. We do a little bit of back-calculating to see what the actual shape is.
The video on the right is when we project that onto sort of the real-world coordinates of what the shape of that cavity collapse is. Pick up a couple of things from the video on the right. First, you can see that they are all round and symmetric as you do the collapse. That indicates that the wall is smooth. That indicates that it's a symmetric collapse as we want. The other thing that you're going to notice is all of the lines start out lined up on top of each other. That means they have the same width, the same diameter. Then as we compress, you're going to see the blue line and the green line coming in earlier, before the red and the orange lines. That means that the cavity's shaping as we collapse it. This was a great test.
The other thing that we did with it is we lined it up with some computational fluid dynamic simulations, which essentially means that the experiment lined up very well with what the computer predicted it would do. What we've got is we've got a physical demonstration of our fundamental approach to compressing plasmas, and it lines up very well with computational modeling, and I'm very proud to say that we got a very good peer-reviewed paper out of this one. Okay, let's use my notes here. We can make a plasma. We know how to compress it, but then, the big question is what happens when we actually compress it? This is a slide from our plasma compression program.
In our PCS program, we injected sub-scale plasmas, about 40 cm in diameter, into a cavity, that cavity down there, and then we rapidly compressed that plasma to compress it. We mentioned that the plasma has to have the right starting conditions to stay together through the compression. If we don't start with the right plasma, it will dissipate when we compress it. If we don't compress it with the right shape or a smooth wall, it will dissipate then, too. In this test, we demonstrated that we can successfully compress these plasmas. We started with good plasma conditions and compressed it smoothly. The plasma stays together. The bubble doesn't pop throughout the compression. W hen this happened, we saw the neutron production rate increase during the compression, and that's what's on this graph.
These crosshairs show the neutron production rate in the plasma as a function of time, and that dashed line is when we started to compress it. When we started it, we had some neutron production rate at the beginning, and when we started to compress it, that neutron production rate went up and to the right. You can probably guess, we got a good paper on this one, too. As we've said, we spent 20 years demonstrating MTF technologies and scaling up our key systems. We validated that MTF works at sub-scale by compressing plasma with a solid metal wall and observing the expected increase in the rate of neutron production as it goes up and to the right. We've also scaled up two key systems to commercially relevant scale. We can form and inject those initial plasmas with the right parameters at large scale.
We can form a liquid metal wall and compress it and reshape it with the characteristics that we need. All these results are peer-reviewed and published, and as I said, we're one of only four companies in the world with meaningful peer-reviewed fusion results, and we're the only one that's doing it in this practical way. All of these steps have prepared us for our current program, which is called LM26. What is LM26? LM26 is a First-of-a-Kind machine that creates the fusion conditions of our approach at 50% power plant scale. LM26 is going to validate our MTF approach with industry-changing milestones. Three milestones. First, we're going to compress the plasma and heat it to 1 keV or 10 million degrees centigrade. Two, we are then going to heat to 10 keV or 100 million degrees centigrade.
And three, we aim to be the first company in the world to achieve the Lawson criterion. The Lawson criterion is the combination of plasma parameters that can produce net fusion energy in the plasma, and we aim to do that with the machine that we have built and are operating today. As you might have guessed from Michel and Megan, we move very fast. We've designed and built LM26 in 18 months. It was fully assembled and under vacuum and licensed, well, not licensed by that point, and under vacuum by December 2024. Then we got the license, and in 2025, we achieved our first plasma and our first set of plasma compressions. I'm going to tell you a little bit about how LM26 works. In LM26, we form and inject a plasma that is, again, 50% power plant scale, into a solid lithium cavity.
With the plasma in the cavity, we use a pulse magnetic field to push on that lithium and collapse the cavity and compress the plasma and heat it up. Now, this does not look like a power plant. It has a solid lithium liner. It doesn't repeat one time per second. W hat it does do is it compresses plasmas with a moving metal wall at 50% of the power plant scale. This is the machine that allows us to rapidly demonstrate the fusion part of MTF and achieve those milestones that we discussed. Now, that's an animation, but as I said to you, the machine is actually operating today, forming and compressing plasma. I'd like to show it to you. We have a video, which is a wrap-up of our work in 2025.
Video really gives you a strong sense of our machine and the milestones that we achieved. In the video, you're going to see the team working on the machine, and you're also going to see the control room where we operate it. When we form and compress plasmas, the whole team is in the control room. Everybody's looking at the monitor of their individual system, watching the data that comes off the machine, seeing whether or not everything works. You're going to see a picture of everybody putting on their hearing protection as we charge up the machine to take a plasma shot and do a compression. Then when we hit the fire button, the fire button initiates that reaction. You're going to see real videos of the plasmas that we've already compressed. Let's take a look, and hopefully, this'll work.
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Okay. I hope you enjoyed that, but I have to tell you, it is way better in person. I want to make sure that I invite you all to come visit us, and we will give you the full tour. It really gives you a good sense of who we are and what we are doing in real-time. Thank you very much. With that, I will pass it back to Greg, who will lead some Q&A. Thank you.
Okay, great. After lunch, we have got some commercialization and pathway and a finance section as well. I wanted to pause here. You have had the opportunity to hear a lot, especially on the technical side of things. I wanted to pause and allow for some questions. Please bring it on, and I will look to facilitate, field some of the questions, but also be inviting the team to make sure that we all have a chance to respond. Yeah, please. Maybe if you could just maybe state your name and where you are from when you ask the question.
Thank you all for the presentation. This is Mark Shooter from William Blair. Congrats on all the progress, and look forward to seeing more. What I did not hear is the regulatory pathway, and when we think of nuclear, we think of, okay, well, the U.S. Nuclear Regulatory Commission, the U.S. Department of Energy. How can we get to the burdensome regulatory process? Is that a factor here? Is there something different with fusion? Is there not a regulatory process set up yet because fusion is still new? Can you walk us through what that may look like? Or what are the differences between what we have gotten used to from AP1000 large-scale reactors or even the new advanced SMRs?
It is a great question, and I am going to hand it to Megan. B efore I do that, why it is a great question is because the opportunity for fusion is all about making sure that the safety profile of fusion is recognized in those regulations. If fusion were to be regulated in the same way that fission is regulated, the market size would be much smaller, like the size of fission. That would destroy the huge opportunity that. Fusion fail safe. The regulators are making progress and do recognize the difference.
As Megan said, the biggest challenge we are going to have in this regard is that fusion sounds like fission. I actually think that the bigger hurdle, Megan will update on the regulatory, is the market perception, the marketing perception with the everyday people to understand that fusion is safe, not because it has been engineered, but because of inherently what it is. T he regulators are already well up the curve. Megan, do you want to maybe talk a bit about that?
Yeah. It is a great question, and there has been some really great progress in multiple jurisdictions related to the regulatory framework. The U.K. actually took the lead, and I think it was more than three years ago now, put out their regulatory framework and essentially said, "We recognize that fusion is fundamentally different from fission. We are going to take a risk-informed approach."
They determined that their nuclear regulatory body that regulates fission actually would not have a role in regulating fusion, that fusion power plants would be regulated by their existing industrial safety regulations and environmental health and safety regulations. So, the U.K. came out with a very clear leadership position that fusion is different from fission, we are going to regulate it differently. The U.S. Nuclear Regulatory Commission, followed very quickly. A couple of years ago, the commission voted unanimously to separate the regulation of fusion from fission.
At the same time, when Congress passed the ADVANCE Act, which I know has a great deal related to fission, it also directed the NRC to develop the regulatory framework for fusion on a specific timeframe. The NRC has been moving forward with that, again, taking a very risk-informed approach. Fusion in the U.S. will be regulated like a particle accelerator, medical isotopes and so on. So you have fission in 10 CFR Part 50 and fusion in 10 CFR Part 30, so completely separate. They actually just, this month, put out their proposed rulemaking for review. So the U.S. NRC has been moving quite expeditiously to create the framework for regulating fusion. In Canada, where we are, the CNSC, of course, LM26 that you just saw is licensed by the CNSC, so we have been through that process for this machine.
The CNSC is a little bit behind the U.S. in terms of timing, but they are working through their public process, have been holding workshops and public comment and so on, and we are working with them as well as various industry associations to work towards an approach that is harmonized with the U.S. and the U.K. The UN has efforts related to fusion regulation, G7 working group on fusion, Agile Nations. There is a significant effort underway to ensure that we have globally harmonized fusion regulation that recognizes the fundamental differences. We are very pleased with where it is right now.
Thank you both. This administration seemingly is receptive to business input on regulation. Is there anything that you got? Are you currently engaged with both the DOE and NRC? If you are, is there something that you think we should go for? Is there regulations or something that you see that you would like to change or to input?
On the NRC, we are founding members of the Fusion Industry Association, and Greg sits on the board. The Fusion Industry Association has been representing all of the players in the industry, and working with the NRC. I would say, broadly speaking, we are quite pleased with the approach they have taken, and there is nothing significant that we would look to change as it relates to those regulations. On the DOE side, and I will talk about this a little bit after lunch as well, but happy to talk about it now. We have worked over the years with a number of U.S. DOE labs through their INFUSE program within the Department of Science. There is a growing effort within the DOE. They recently stood up a standalone fusion office within the U.S. DOE, which didn't exist until recently.
There is a milestone program that does some cost-sharing for U.S. fusion companies, which is quite interesting, and we are of course, seeing the current administration is very pro-nuclear and pro-fusion. I will say, Canada as well, as Greg touched on, has been a huge supporter of General Fusion, and has quietly provided a significant amount of capital for our efforts over the years. They have recently announced the creation of a Centre for Fusion Energy, and we are seeing a real effort within the current government to support the fusion industry as well.
Hi, George Gianarikas from Canaccord Genuity. I was wondering if you could explain the technical requirements you need for 100% Lawson to achieve that. Maybe second, related to the pistons that you're using, it sounds like you need to get them to fire once every second. What happens to the structural integrity of those pistons over a 40-year period? Thank you.
Can you take that?
Yeah, sure. Okay. First question, what do we need to get to Lawson, I think was the question?
Yes.
Right. Three levers, temperature, density, and confinement time. The step through step that we're going through, the milestones that we've laid out is we're going to get to temperature and confinement time first. So when we hit 10 keV, 100 million degrees centigrade, we will have demonstrated that we have the confinement time and the temperature that we need. In order to get to Lawson, we need to increase the density to, I can't remember. It's about 10 times than what it is for the 10 keV milestone. That's the Lawson question, and the other question is about the pistons?
Yeah.
Can you repeat the question just to make sure that I got it?
If I understood correctly, you need them to fire once every second.
Yep.
What happens to the structural integrity of the pistons over a 40-year period?
Certainly nothing from the neutrons. Because the reaction is surrounded by a thick blanket, in a power plant, it is going to be about 2 meters of liquid metal. There is no damage from the neutrons or the radiation. We will need to demonstrate that they can have the reliability required over 40 years. With that being said, it is technology that exists, right? General Fusion is not going to become a piston expert. We will partner with people that are experts in moving metal pieces, in moving metal cylinders, like, for example, car manufacturers, to hit those requirements. There is engineering that needs to be done, but we haven't identified any fundamental reason why we can't do that.
The only thing I would add, if I could-
Please. [crosstalk]
The only thing that I would add to that, George, would be that as part of our levelized cost of electricity over the lifetime of the plant, we have included in replacement, repair of these pistons in the capacity factor and in the cost, all of this as well. Many of the components don't need to last the entire 40 years on their own. We've built in all of this into the LCOE as well. Yeah.
Thank you. Hey, thanks. Marc Bianchi with TD Cowen. Following up on the timeline here to get to Lawson, can you help us understand how long it's going to take to get to each of those milestones? Related to that, I'm probably going to butcher this because I'm not a technical person, but the LM26 looks different than what the power plant's going to look like. Why is that the case, and how should we think about the mechanical or technical complexity of making the step from the test device into the power plant device?
I'll start and then invite the team to jump in. In terms of the timing for the milestones with LM26, we aim to achieve these milestones between now and the end of 2028. We're not providing sort of guidance and outlooks on the exact timing within that range. However, what's important to think about in terms of our confidence levels around that is the machine's built, it's licensed, it's operating.
This team knows how to build, operate machines. Through this transaction, we fund it. We fund that program. The PIPE capital we're raising, which we'll get into later this afternoon, will fund that program through to the end of 2028. S ort of all the right ingredients in place on the other side of this transaction will be there, and then we'll execute the plan. That was the first question on the timeline. The second question, if you could repeat that for me?
Yeah. It was that the design of the LM26 looks different than what the power plant's going to look like.
Yeah, I'm going to get Mike to answer on the technical components of that. R eally what we're talking about here is we are proving out the fusion at 50% power plant scale works when we compress it using our Magnetized Target Fusion approach. Mechanical compression of a plasma heats up and ultimately achieves these Lawson conditions. We need to prove that at the right scale. As Mike talked about, we've done a lot of other smaller scale tests and peer-reviewed papers.
This is 50% scale. We want to prove that, and how we wanted to prove it was as fast as we possibly could, as capital efficient as we possibly could with the capabilities that this team has to do all of that, which would allow us to do it first. That's what this machine's designed to do, is just test that centripete. It's not going to test our ability to repeat it many, many times. That comes later, and we'll talk a bit about that path. I t's really that core compression of a plasma and those attributes that come from that compression mechanically. Mike, do you want to talk a little bit more about-
Yeah, I think Greg explained it really well. The best way that I like to think about LM26 is it's the fusion part of our fusion machine. So it's got a moving metal wall compressing a plasma. Another way to think about it is that if you were on the inside of that machine with the plasma, you couldn't do that by the way, but if you were, from that perspective, all you see is a moving metal wall coming at you.
You don't care whether or not it's a liquid metal wall or a solid metal wall, and you don't care about how it's being driven with pistons or not. What you care about is that you're being compressed by a moving metal wall. As Greg said, by doing it in this format, it's cheaper than going to the full machine with the liquid metal and the pistons.
It's faster, and it allowed us to do it at our facility in Vancouver, where we're really good at building machines of this scale and executing on them. It really addresses the core plasma physics of MTF. It's not just that we're doing fusion, but we're doing fusion in the way that we would do it in the power plant. The rest of the power plant stuff has to come after that. You had questions about the technical complexity of the other components. We're going to get into a little bit of that after lunch.
Thank you.
Sameer Joshi from H.C. Wainwright. Congratulations on all the progress that you have made, and it's really impressive.
Thank you.
On slide 25, you had the schematic, and there was a green loop and a blue loop, and it was lithium and gas plasma. Have you done any work on the engineering materials that will be used there. Also, have you done any work on extraction of the heat from the plasma or from the metal into the heat exchanger?
Yeah. I will let Mike. You can take that on. We have done a lot of work with liquid metal, working with liquid metal. Some of the testbeds you saw were regarding that. In terms of the extraction of the tritium, we have not yet crossed that bridge. It is in our roadmap. We will talk a bit about that this afternoon.
Yeah, w hat I guess I would say is, General Fusion's expertise is going to be on the stuff that was on the left of that side, the core fusion engine. Tritium extraction is not something that. All fusion approaches out there will need a way to extract tritium from liquid metal, so we will partner with somebody on that. Heat exchangers, liquid metal heat exchangers exist, and General Fusion does not want to be an expert on heat exchangers. So we will partner with somebody on that. Our core focus as a company and in terms of creating value has been on the stuff that we are really good at, which is the integrated machine.
Okay, understood. We understand that tritium is generated in the process, but lithium is probably depleted. Is there a mechanism to inject lithium into the process and make sure it is a continuous process?
Yeah. To put it into perspective, there will need to be a lithium loop just to keep everything pure and clean. W e are talking about tons, if not tens of tons of lithium in the reactor, and we will consume about 30 kg of lithium in a year. So fusion is very highly energy-dense. So in all intents and purposes, we are using a very little bit of fuel and material. So on the list of things that we think about, it is on the list, but it is not very high. We should be able to take care of that.
And just one more.
Yep?
The energy, I do not know the exact technical term, but you have to contain the energy for some time?
Yep.
Is the energy contained in the lithium or in the plasma when it comes out?
Right. So when we talk about energy confinement, what we are really talking about is the plasma. So in order to get more energy out than you get in, so the energy that goes out comes out as neutrons, but in order to get enough neutrons to come out and more energy out than you put in, when we talk about energy confinement, it is the plasma's ability to hold that energy. Okay? Hold its own energy. Again, think of it like a bubble. Just think about the bubbles sitting there in space. The bubble has some energy in it, some tension in that film. The minute the bubble disappears, that energy is gone. So when we talk about energy confinement, it is all about the energy that is being stored in that plasma. It is the liquid metal that extracts the results of the reaction.
Very impressive. Congratulations.
Thank you guys for all the information. Carter Goman from Needham & Company. I think Tokamak's been around for a while. It sounds like they would say the superconducting magnet is a key reason why we're at this inflection point today where the technology's viable. I think Michel mentioned that MTF was tried in the 1970s, maybe by the Navy. Is there a corollary here to that superconducting magnet that makes MTF more viable today, or is this gradual learning over time? Is there a key piece of IP or two, I know you guys said you have 200 patents or something like that prevents others from taking a similar approach to MTF if they wanted to do that?
Yeah, go for it.
My microphone's falling out. First part of the question, we do not use superconducting magnet for MTF. That's one of our big advantage. All this progress that Commonwealth Fusion Systems say that they have like this new HTS superconductor, we don't need that. By the way, those superconductors are quite difficult to achieve also. They can produce bigger magnetic field, which actually create more neutron problem. No, we are not using those components. This improvement technology does not affect us. As for improvement in technology that allows us to do things compared to the Navy in the 1970s, yes. There's large amount of technology that are better now than they were in the 1970s. When the Naval Research Laboratory was trying to make MTF, they had some issues, and now with the new technology, we can fix that. One of the big things is actually computer.
We have to synchronize all those pistons. All those piston is electronic that monitor where they are, and then we try to synchronize that with fancy computer closed-loop system. They didn't have that in the 1970s. The material is better, the understanding of the plasma, the plasma target in the middle, much better than in the 1970s. The idea was good, but it was a little bit premature. Now with the new technology, we can do it.
Hey, Chris Souther, Truist. Thanks so much for the presentation and education here. Maybe just for the LM26, the big difference here seems like is the liquid metal wall versus using a solid wall as you're kind of testing. Can you talk through differences in the compression? Presumably it's kind of a one time for each wall that you'd be getting a shot with. Just as you're progressing, how many walls are we going through to reach each one of these? I'm just kind of curious from a practical standpoint, and if you could walk through some of those differences. Thanks.
Yeah. I'll start with that and Mike, who really runs the LM26 program, you can jump in to help me out if we've got some more detailed questions. LM26 is designed to achieve these conditions on a sort of one pulse basis. As a power plant, it's once per second. Using the solid metal wall means that when you compress that solid metal wall, it's destroyed. T hat's part of the design in this, is that you can measure all the results and then you replace the wall and you can do it again. It's never going to reach once per second. We need to move to liquid in order to do that, and there's a whole commercial systems development program that's in place beside all this, and we'll talk about it after lunch, that's designed to do the repeatability.
In terms of the existing machine and the cadence, it depends on so many different things. How quickly we can get that initial starting plasma to be where we want it to be before we do the collapse. How quickly we can produce the liners and do the swap outs and that. We're working with lithium. Lithium, you need to contain it inside argon. It's a bit of a complex process to do this in sort of changing of the liner on a regular basis. That's part of the design and why we're able to do this for an order of magnitude. Even cheaper than that. Do it at this rapid pace, is that not dealing with the pistons and the liquid metal just to prove out the plasma performance isn't necessary.
We're not currently publishing any sort of forward-looking how often we're doing compression shots and all of that. As we achieve results, look forward to sharing those with the group.
Got it. Then maybe just separate, you gave a little bit of color on the LCOE as ongoing, I guess replacements of pistons, different things. Could you give kind of general buckets of how you got to the number as far as CapEx operating expenses? Kind of what are the big buckets that went into those LCOE targets for the Nth-of-a-kind?
Yeah. Currently, I hate to dodge a question on that one, but we have not yet published and put out there all of the inputs into our levelized cost of electricity. We'll say we're not doing it alone. We're doing it with partners that understand how to build these types of models. There are also no sort of anything super unique about our LCOE. We're not factoring the fact that helium is a byproduct. We're not bringing that in to reduce the cost. We're not looking to sell tritium to others or anything like that. It is strictly CapEx amortized over the lifetime of a 40-year plant that's really making up the bulk of this because the regulatory burden, the OpEx, the fuel costs, extremely low when compared to fission. So it's really all about the CapEx of the machine and the power output over that 40-year lifetime.
And of course, taking into account the maintenance cycles and whatnot. I am not sure what the plan is overall, when to start talking about what that LCOE looks like and the various components, but we have yet to sort of put that out there.
Hey, guys. Thanks for having us. Ryan Pfingst with B. Riley. Just to follow up on a question from earlier, are there other companies taking a similar approach, taking this MTF approach or using similar technology? And what are the key pieces of your technology or approach that are protected by your patents?
Sure. Start with broadly speaking, we do not see anyone else using this approach, the MTF approach. Michel can talk to this much better than I can. People that are trying to work in this sweet spot that Megan described. We do see some other companies that are working in that space, but nobody else directly competing on the approach that we have got. We have got 209 or something patents that are really all around the core technologies in the Fusion Island that you would expect. Compression systems, plasma injector systems, our ability to create these cavities and whatnot. Because we publish our papers, so we put the results out there for peer review, but we want to make sure that when we do that, we do not lose the value of the company, so we protect that in the form of IP.
We have done all of the sort of wrapping around those key technologies and we are going to have a license model ultimately for a lot of these technologies. W e have a permanent person on staff that that is all they do, is wrap these various outputs and ideas and everything else in IP protection through patents. T hat patent person sits in almost all of our meetings. So, I feel pretty well-protected there.
Thanks.
Yeah?
Tim Moore from Clear Street. I might be jumping the gun on the panel after lunch for commercialization, but I was just curious, maybe you kind of hinted at this just now. How are you thinking about the revenue model for partnering maybe with an EPC to stay asset light versus licensing? Will that depend on whether it is 300 MW or 150 MW, or just the scale of maybe the customer purchase orders for larger utility customers?
Yeah, I think that is maybe the first section right after lunch. However, yeah, asset light model to getting to market, and we have a Market Development Advisory Committee that we work with now in order to shape, of course, our results and our timeline and bring them along with us, but also to shape, on the other side of all of this work, we want to commercialize and we want to make sure that what we are doing, what we are bringing to market is something that they are going to be able to work with and become customers of. When we think about the model, we do not want to own finance, operate power plants ourselves.
We are going to stay focused on the Fusion Island, the licensing of those major components, providing those major components, and then over the lifetime, the maintenance and the technical support in and around that. Yeah, use a partnership model, EPCs to build and work with partners that are going to operate it over the lifetime, but we will stay involved. We can talk about this a bit more after lunch.
Thanks.
Yeah.
Yeah. Hey, everyone. Thanks for doing this. Derek Soderberg from Cantor Fitzgerald. It seems like a pretty simple system. A lot of similarities to a combustion engine. You will have some moving parts, liquid metal. My understanding is there are certain ways that that metal can interact with the magnetic fields, right?
Yeah.
How much variation are you guys seeing in the plasma bubble? What's the tolerance level before you sort of get a total loss in the system? Do you have anything baked into the technology that helps manage maybe some of the natural variation in that bubble over time?
Yeah. M aybe I'll ask one of the team to come up. The liquid metal we work with most is lithium. The good news is that plasma and lithium like each other, and the interaction can be often helpful, and we use it in that purpose. I don't know, if someone wants to come up and talk a little bit about the interaction, maybe the tests we've done already with lithium and whatnot.
Yeah. I think your question was primarily around the interaction of the lithium with the magnetic field?
Yeah, just how consistent is the plasma bubble?
Sure.
Do you see a ton of variation just from test to test, and how important is that kind of coming back to energy efficiency? How much do you really need to manage that to keep the smoothness, to make sure you're getting the full energy out of it?
There's no doubt it will need to be repeatable. We are not a power plant company right now. We are demonstrating that we can make those plasmas. It will need to be repeatable, but I don't see any challenge associated with that when we get to the power plant. If we think about it being a technology development spectrum, I don't see any fundamental reasons on the reliability or the repeatability or anything, as you say, that need to be baked into it to be able to control that, but you will definitely need to demonstrate that reliability and repeatability. As I said today, it's reliable enough for the way that it needs to be right now, and I don't see any fundamental barriers to that going forward.
As to when we put it into a power plant, we have big integrated system models where all the different components come together. The interaction of the plasma, the magnetic field, and the liquid metal is all accounted for in our models.
Got it. Thanks.
Any additional questions before we break for lunch?
We will have some time after lunch, after the presentations here for some more questions. We will do this again. Awesome, let's eat.
All right. Great. Hopefully everybody had a chance to enjoy a little bit of lunch. Get fueled up for the second half here. As I described earlier, we will have some time out at the end for questions. We are going to talk a little bit about, now, the path to commercialization. We have talked a lot about where we want to go ultimately.
We have talked about what we have done so far with LM26 and how important that test bed and the next couple of years are with those milestones. W e are going to advance a little bit further along the journey technology roadmap. We will start with, this was a question that came at the end in the last question period, was how are we going to go to market? What is the business model for making money, right? That is the end goal here.
This is, again, not a science project. This is all about many General Fusion power plants deployed all over the world. In order to do that, we are taking the business model approach that the industry, and the players in the power industry, which Megan's going to talk about shortly, are very, very familiar with. This is an asset-light, scalable, technology-centric business model. What that means is we are, again, not going to finance, own, operate power plants ourselves. We are going to enable others who know how to do this, who have those capabilities to do it. We will play in the high margin, high growth, scalable area of the power plant.
That means, in the construction phase, this sort of 3.5 year construction phase, we will scope the sale, the engineering, installation, commissioning of our Fusion Island, which are 150 MW machines. The reference configuration for us is two of those machines, so a 300 MW fusion power plant, and would have the sort of two islands and one balance of plant. We will play the role of all of those things working closely with the EPC to build the plant, construct it. Post-construction, our role will switch into these services annuity. None of this is new. This is a very typical model going to market, working on the replacement of the pistons, the components, and all of those various services, and the technical support. Again, this is the high margin component of a power plant.
For us to participate in that area and be able to do it with partners means high margins at scale. Many power plants enabled around the world. Think about the types of technologies that are involved in a General Fusion power plant. Again, we are talking about mostly existing technologies, different scales and whatnot, pistons, bearings, seals, these types of things. The ability for partners to play a meaningful role in power plant is pretty high with the General Fusion design, and that is all part of the plan right from the beginning. There is work to do to get there, and I am going to pass it over to Megan to talk us through sort of what that path looks like to get from where we are today to ultimately a FOAK by the mid-2030s.
Thanks, Greg. All right, this is why we're all here, right? We want to put power on the grid. Let's talk about how we get there. You heard this morning, Mike walked us through the LM26 program and the really meaningful milestones that we're aiming for. A lot of your questions, I think, got to, well, okay, what's next? How do you get from there, what LM26 is designed to demonstrate, to a plant that actually produces electricity? What you hopefully also took away is a little bit about how we think about retiring risk at General Fusion.
If you think back to the slide that Mike showed with all the bubbles, all the machines we've built over the years, we like to take meaningful but manageable bites out of risk at a time so we can progress the technology, be capital efficient, and demonstrate progress and value as we move along our development path. That philosophy is really built into our plan to get from where we are today to a power plant. LM26 is ongoing right now. The program is expected to run into 2028, which is the timeline we aim to achieve these milestones. If we think about it from a risk perspective, to some of your questions earlier, across the top of this slide in black, you can see how we think about our transition through different types of risk over this pathway.
LM26 is very much focused on the remaining science risk of Magnetized Target Fusion at large scale. We've demonstrated Magnetized Target Fusion at small scale. We are now scaling up and demonstrating that we can achieve these really meaningful milestones at large scale. As we think about what comes next then, if you remember the power plant schematic, this is the Fusion Island that we're focused on in terms of our offering to customers or to an EPC developing a power plant. Very focused on the Fusion Island. What we've called out here are a number of systems that take the fusion itself, the core fusion process, and translate it into a power plant. We're calling out here things like the plasma injector repetition rate. Mike talked about, we talked about how LM26 is not high rep rate.
We've got to get to 1 Hz, and that's a key technology area. Seals and valves. The seals and valves, there's a lot of folks out there who know how to make seals and valves. These seals and valves need to be compatible with lithium and tritium fuel and so on. The center shaft in the machine needs to be regenerative. It needs to function with the 1 Hz repetition rate. The compression itself has to repeat at that 1 Hz rate. We've got an energy recovery system built in, and then the tritium extraction and the heat exchange system. We've got a very clear view of the key systems that will require development, design, and demonstration to take these results and translate them to the final design of an energy-producing power plant.
We think about this effort as what we call our commercial systems demonstration program, and this is a defined program to develop, design, demonstrate these technologies so that we can take the LM26 results and wrap those support systems around it and complete the final design of the First-of-a-Kind plant. Rob is going to talk in a minute about the financials and capital and so on. I think we mentioned earlier that the PIPE commitment that came with this transaction with Spring Valley fully funds the LM26 program into 2028. We are well-positioned with the capital we have on hand, without any trust capital, to achieve those milestones and demonstrate that value. As we think about the commercial systems demonstration program, we would like to start executing this program in the 2027 timeframe.
What we are doing today is taking the long-term strategy that we have developed that takes these technology development needs and splits them into those bite-size, manageable programs. We are working to take that strategy and refine it into the actual tactics of what are we going to do, where, what facilities, with what partners. What is the resource loading need to look like for that? Where are our gaps? The make or buy analysis around what are we good at, what are others good at, and then working to translate that into the dialogue with the partners who we want to bring to the table. 2026, where we are today as it relates to this program, is very focused on the detailed planning for execution of this program. I will talk a little bit more in the next couple slides about partners.
Again, this is a program, spans 2027 into 2030, that is designed to address a lot of the challenges and questions that were raised in our earlier Q&A session that are all things we recognize that need to be done. We have designed this program so that it is very decoupled, and it is suitable to working with partners, and it is suitable to being flexible in terms of availability of capital while still demonstrating progress and demonstrating value on that path to commercialization. The First-of-a-Kind plant then is intended to be a 150 MW engineering breakeven plant. When we talk about engineering breakeven, that tends to be a fusion term. When we talk about Lawson, we are talking about the conditions that can produce net fusion energy out of the plasma.
When we talk about engineering breakeven, that means net energy in a power plant, so across the entire plant, which no one in the world has yet achieved, but we have got a path to get there. This would be a First-of-a-Kind, and it would aim to demonstrate that we can produce that 150 MW worth of energy in that plant. I will talk a little bit more about siting and other efforts related to that in a moment. Backing up, just trying to connect this to what we talked about this morning in terms of our differentiation and the way our technology addresses those barriers to commercialization that other fusion approaches face. We believe this timeline is made possible, our timeline is made possible because of the engineering approach to fusion that we are taking.
There are I showed you that slide with all those, the other kind of buckets of competitors. There absolutely are others in the industry who are currently building large-scale fusion machines aiming for the same transformative technical milestones we are aiming for with LM26, and absolutely some of them will succeed. I have very little doubt about that. I will not tell you when, but I think they will. Mostly because they are demonstrating technologies that have already been demonstrated in government institutions. However, and this is worth dwelling on, when we are successful, and if they are successful, at that point, we expect we will diverge from what is already a small group of fusion competitors building real machines because we have front-loaded the solutions to those challenges we talked about into our design.
While we have a fair amount of work to do in that commercial systems demonstration program, we understand what the solutions are to these challenges, and we are working in that program to design, develop, and engineer those technologies. Again, as we think about risk, here right now, we are focused on retiring the remaining science risk with LM26. The commercial systems demonstration is really about that technology engineering risk. Then when we put it all together in the First-of-a-Kind machine, that is when we are addressing the integration risk for that large-scale machine, and then moving into full-scale commercialization and deployment. Okay, I always say we are not doing it alone. We are working with a broad ecosystem of technology partners and commercialization partners, and you can see a number of them listed here. We talked a little bit about the U.S. Department of Energy.
We work with a number of U.S. national labs through the DOE's INFUSE program and gain really valuable insights and sometimes manage to hire some people out of those labs, which is great. We also work with the UK Atomic Energy Authority. I will talk more about that in a second. Y ou also can see names here that are not what you might typically think of as fusion companies or even playing in the nuclear space. That is because our approach draws on technologies from across different industries. You can see aerospace. You can see it is currently confidential, a major automaker.
We have an MOU with a major automaker who is working with us to collaborate on the Compression system, Mike talked about before, the piston technology where they have an interest in diversifying because the industry is moving to electric vehicles, but they have a great deal of expertise in the pistons and combustion engine side of auto making. I will point out just a few before I talk about our potential end users. Greg touched on earlier, Hatch is a great example, who started as a partner and then became an investor. Supporting that commercial system engineering as we progress through this path. Kyoto Fusioneering. I think there was a question earlier about tritium extraction, and I know Mike said everybody needs tritium extraction, so we are not planning to develop that technology. However, we are working with a number of companies.
There are a number of companies out there working to develop these technologies. We are working with a number of them. One is Kyoto Fusioneering. We have an MOU with them related to the liquid metal systems and tritium extraction and so on. We are also working with the Savannah River National Laboratory and others on developing the right solutions for our technology. I want to focus for a minute on the map at the top of the slide. We have what we call our Market Development Advisory Committee. This is a group of 13 utilities, energy developers, industrial steam heat users who have signed agreements with General Fusion to work with us on our technology development efforts and our commercialization efforts.
These are all names that I think you would recognize and with a great geographic span, so four in Canada, three in the U.S., five in Europe, and one in Asia. We are always happy to bring others to the table, although this is quite a lot to manage. These potential early adopters meet with us regularly as a group and individually. They provide us invaluable information as we think about how we stay within the guardrails of our value proposition, which is ultimately developing, designing and deploying a solution that they can buy.
We provide them updates on where we are with our technology, where we are with our commercialization efforts and so on, and they provide feedback, and they provide us insight into how they think about and are thinking about their investments in advanced technology and in fusion in particular. We are now working with what I would call a subset of this group on potential siting of that First-of-a-Kind plant. We are taking our time with this decision and with this process. It is important to us that we find the right site with the right partners, the right regulatory environment, the right access to workforce, financing structure, and so on. W e are happy to be engaged with a number of these partners on that discussion.
I will highlight that Bruce Power in Ontario is one of the earliest, maybe the first member of the Market Development Advisory Committee, and we also have an MOU with Bruce Power along those lines to evaluate a potential fusion power plant in Ontario. N o decision has been made yet in terms of siting of that First-of-a-Kind plant. If we slice and dice these partners a different way, and do not worry, I am not going to go through all of them. P artners work with us on everything from our core fusion technology, but with really great guardrails around the IP and diagnostics, which I think Mike touched on, is a really important part of all of our efforts, understanding what is happening inside the plasma, inside the fusion, so we can continue to improve and optimize the system.
But also those we are working with as we are looking forward into that commercial systems demonstration program and the First-of-a-Kind. You will see a number here, including Kinectrics. Kinectrics helped us through the licensing process for LM26 and has great expertise in that area. I really want to highlight the UK Atomic Energy Authority for a second. There is a lot of fusion expertise around the world, but we are very pleased and very lucky to have a long-standing collaboration with the UK Atomic Energy Authority, with a formal partnership and framework in place. The UK Atomic Energy Authority, for those who do not know, have operated, I think, Michel, the longest running operating?
Fusion.
Yep, fusion machine in the world. The Joint European Torus, JET, at the Culham campus outside of Oxford. They have more than 40 years experience in both building and operating a fusion machine, working with tritium and so on, as well as all the permitting and community engagement and everything else that goes with it. They have thousands of fusion scientists and diagnostic experts and so on. This is a really important collaboration to us. They send scientists to our facility in Vancouver frequently. We just had a few out a week or so ago.
This is a partnership that continues to develop, and I expect that it will continue to be very important to us in the long term, because at the end of the day, not only do they have amazing experience in operating fusion plants, they really are the gold standard in terms of fusion validation and fusion science validation. It is important to us that we work with third parties and peer-reviewed results and so on, so then we stand up here and say, "We did this," that there are others who are validating, "Yes, they did that." That is a really important partnership to us. As we think about the commercial systems demonstration program, one of the things we are working to address, as I said, is that make or buy analysis. What do we do well? What do others do well?
How can we leverage others while we maintain our pace? We are selective in terms of the partners we work with and really thinking ahead about not only who are the right partners, but what does the organization need to look like as we grow to support that effort. Greg mentioned we are 115 strong. We recognize to execute that program, and even if we are working with partners to manage those partners and integrate with them, we will need to grow, and there is a great deal of thought and planning going into what that organization looks like to support that future. Okay, so I get the question a lot, what should we be looking for? How do we know you are making progress given that this is long tech, this is 2035 with your First-of-a-Kind operating.
I cannot say I have a perfect answer, but I have some answers. We believe that the technical milestones we are aiming for with LM26 are value-creating. These are truly transformative milestones in the near term. However, we recognize we have to walk and chew gum at the same time, right? Which is our three-pronged approach, LM26, commercial systems demonstration, First-of-a-Kind, are designed to overlap, feed into each other, but really designed to get us to power on the grid in a timeline that works for the market and can address that market. What we are focused on now really falls into these six buckets. As we think about both the commercial systems demonstration and the First-of-a-Kind, first, of course, I talked about partnerships. There are a lot of technical partnerships.
There are a lot of specific component partnerships that we are exploring, but also, broadly speaking, our business model relies on being essentially an OEM to an EPC, and we need to develop the relationships or relationship with selected EPCs who are the right partners to help us deploy this technology. As it relates to the First-of-a-Kind then, I would expect this effort to progress. I mentioned we are taking our time with selecting that site, but progress through selecting multiple potential sites and then working with those partners, whether they are utilities or hyperscalers or other partners, other hosts, for that potential First-of-a-Kind to work through a real feasibility study to ensure that that project is set up for success, and then make a down selection to ultimately select the site for that First-of-a-Kind. That is something to be looking for.
The agreements that then support deploying that First-of-a-Kind or deploying further follow-on sites, of course, are very important. Again, we have 13 potential end users. There are, of course, other interested parties who are not part of the Market Development Advisory Committee. W e are working to be very thoughtful about the commercial agreements we enter so that those support our long-term deployment strategy. T hat is another work stream in progress that you can keep your ears peeled for. We touched a little bit earlier on government engagement and regulatory engagement. Right now, I think from a regulatory perspective, everything is trending in the right direction. I will not repeat what I said earlier about the U.K. and the U.S. and Canada. R ight now, that is a framework. The U.S. has put out their rules and so on.
This, for us, will progress in conjunction and in parallel with selecting the First-of-a-Kind site. Part of the feasibility studies for the small group of options will include assessing the regulatory framework, doing early analysis of the site, the environmental studies needed, the regulatory process needed, and so on. That will be a key criteria, and that will include necessarily engagement with the regulatory authority in whichever jurisdiction those sites are. That will also necessarily include government engagement, whether that is the U.S. DOE program, the Canadian Centre for Fusion Energy, or others.
There is a great deal of interest in supporting deployment of First-of-a-Kind plants, and so we will be looking to advance that engagement to assess the opportunities out there for supporting that plant, both financially and in other ways with those government entities, a nd we'll see how that will play out over the next few years. That's how we think about the big-ticket items that will progress our progress towards that First-of-a-Kind while we are focused on the LM26 program in the near term. Now, I will turn it over to Rob to talk numbers.
Exciting stuff. Thanks, Megan. Yeah, I'm going to get into a bit of the financial profile of the transaction, and as you know, we're doing this through a de-SPAC with Spring Valley. Just at a high level here, just some highlights of the transaction. I'll get to a bit more detail in the next slides. Megan mentioned before, we have a funded business plan for our LM26 program through 2028 that aims to achieve the three value-enhancing milestones we've talked about. It's funded through the committed and oversubscribed PIPE capital of CAD 108 million. We think we're coming into market with a very attractive valuation. We'll get into that more in the next slide.
The transaction here has been validated, working with a leading SPAC sponsor in Spring Valley, who have deep expertise bringing first movers to market, and by leading institutional PIPE investors that is committed. Last, our interests in the transaction are aligned with the public markets. Shareholders moving forward are going to have a lockup for six months, and then there's an earn-out provision of CAD 135 million to current shareholders that will kick in as the company achieves share price growth targets in the next five years. Lastly, on timing, we've been trying to track for a mid-year close, where we are tracking roughly on there. We announced the deal in January, filed our first registration statement, the F-4, on February 24th. We've done a couple of amendments since, and so we're tracking roughly to that mid-year closing.
A little bit more detail on the transaction, w e're coming to market with a roughly CAD 1 billion pro forma equity valuation. That's built up with a CAD 600 million value to General Fusion, and then there's CAD 108 million of a committed and oversubscribed PIPE from institutional investors and CAD 230 million in the Spring Valley trust account, assuming no redemptions. Most importantly here, again, is the PIPE capital of CAD 108 million will fund the LM26 program through 2028. This puts us in a great position having the committed funding and a predictable path to hitting those milestones and setting us up for the next phase of our commercial development, which is those commercial systems, if you saw that timeline in the middle. We have the milestones to show value and raise more capital as needed to keep funding the commercial systems.
Any excess, any capital we get out of the trust would likely go more towards the commercial systems. Just a couple of data points here. You can see in the bottom right the ownership. General Fusion will own between 58%-74% of the new combined entity, depending on the level of redemption. It is 58% with zero redemptions and 74% on the other extreme. There is up to net CAD 314 million of new cash to the balance sheet in the new entity, which is made up of the committed PIPE, plus up to CAD 230 million out of the trust account. Just on redemptions, again, we do not know that until we close, but working with a partner like Spring Valley, they have had a good history of lower redemption rates relative to SPACs in general.
We do anticipate getting a meaningful portion there, and which would accelerate and give us more flexibility in working on our commercial systems. Last, I would say overall, we think this transaction provides, it rewards General Fusion and Spring Valley shareholders. It is a great deal for both sides and comes to market at a very attractive valuation for new investors to participate with on the journey and potential significant upside. Just a bit on Spring Valley. I mentioned we are going public through the de-SPAC transaction. We are partnered with Spring Valley Acquisition Corp. It is their third one. We actually have Rob Kaplan over here, I think a lot of you know in the audience, who is the COO of Spring Valley.
As we were looking at paths to go public, we were looking at all paths, but Spring Valley presented the most compelling case for us relative to any other path. We view them, they are a differentiated partner. They have deep expertise with taking companies public, especially first movers. They are conservative. They will not take a company public unless there is at least two years of cash runway. Me being the finance guy, that was very high on my checklist. Most importantly, they also focus on first movers, and they have shown through their track record of success creating value for first movers in public markets, and they have worked on many next-generation decarbonization technologies. There is a resume there, but their team has successfully executed many complex transactions, scaled emerging growth businesses, private and public, and they have been involved with 17 different IPOs.
On the right here is some examples of their success, particularly with first movers. There was Renewable Energy Group, IPO'd in 2012, acquired by Chevron in 2022 with a 10x valuation growth. NuScale, which was Spring Valley One, was the first mover in the SMR market and has since doubled in value. Eagle Nuclear Energy Corp. just de-SPAC'd, I think about a month ago or so. Already showing some growth in value. Again, another first mover. From Spring Valley's perspective, it was, again, a good partnership, I think, on their end. They saw General Fusion, they liked our practical, capital-efficient business plan with near-term value creation milestones with the LM26 program, and an experienced team that knows how to iterate, test, and also knows how to commercialize new technologies.
A bit more on the valuation to put it a bit more in context here. When we partnered with Spring Valley, one of the characteristics they look for are first-mover opportunities who can IPO at a valuation that is at least a little bit lower than peers in public markets or in private markets. We are, again, entering the public market with approximate CAD 1 billion pro forma equity value of which CAD 600 million value is attributable to General Fusion.
Historically, you can see some examples here, a lot of companies IPO-ing in a new industry have come to market with 2x- 5x higher valuation than we are coming. NuScale, Oklo, a few other examples here. You can see they came in the CAD 1 billion to CAD 2 billion range and have shown quite a significant increase in value and attraction of a lot of new institutional investors, as you can see on the bottom. X-energy is a new one we just added here.
As you all know, it went public just last week. It went up. I think it came down a little bit since, but a great opening day of trading. Across the private fusion industry, there are other companies valued around CAD 1 billion and some in the multiples, but they do not have short-term liquidity. We think with our path, with our capital-efficient plan, the LM26 milestones that we are going to deliver in the near term, we have that opportunity to come in and provide investors with that near-term liquidity. We also do not need the billions that many other approaches need to demonstrate these core scientific milestones of 1 keV, 10 keV Lawson that we have talked about. We have a very capital-efficient program, again, and we do it in a capital-efficient way with our Magnetized Target Fusion approach and engineering approach.
Overall, just thinking about these slides, the main things we want you to take away, again, is we have a funded LM26 plan with three value-enhancing milestones we are aiming to achieve by 2028. We have validation from an excellent SPAC, a very experienced partner here, and institutional investors who are putting in the PIPE capital. We are coming to market at a very attractive valuation with meaningful upside. As Greg mentioned a few times, I think we have an experienced team. We have a practical and efficient approach and an execution mindset to commercialize our technology. I am going to pass it back over to Greg now. He is going to take you through final Q&A and wrap-up slides. All right.
Thank you. Great. Good job. This is a wrap. We wanted to take you across all areas of the business, the progress, the work still to be done, what the path looks like. Hopefully, you caught a bit of the energy that we're giving off here. We're a passionate group that is very focused on power plants on the grid. That is the goal here. It's easy to get distracted by vanity metrics or agreements and things like this that don't have the substance.
If there's anything you take away, this team knows how to align on the critical path, deliver results, which it's challenging in fusion. There's work to be done. A ligning on the critical path and making progress step by step. The tailwinds for fusion, I think, are only going to continue to increase. The demand for electricity is just going up and up and up.
Every time I turn around, there's more demand and more gaps in the future for energy. Those tailwinds are going to continue to blow at our back. It's up to us to capture those. It's up to us to bring forward our unique technology. Again, remember, how you do fusion really matters. So demonstrating fusion is only a part of the whole picture. It's how you do it, and doing it in a way that can ultimately commercialize is the only way to do it. Otherwise, you're just a science project. LM26, set up to achieve some incredible milestones in the next couple of years. Invite you all to come, have a look. We'll show you the machine. You can meet some of the team that are working on it every day. It's an incredible team. A small team. Very focused.
But supported by partnerships that will continue to grow as we think about the next stages, Megan pointed out, and Rob touched on it. From a valuation perspective, we are building this step by step. As we achieve milestones and demonstrate de-risking on the path, we expect that we will be able to see valuation increase with those steps. This isn't a raise a massive amount of money up front, hold your breath for five years, and hope that it works. This is a very clear path to milestone by milestone, making progress towards the end goal and being able to share that with investors, make this investable. We're pretty excited about the opportunity now to have a larger set of investors. The public markets participate in this huge, huge opportunity.
All of you paying attention and spending the time with us today, really grateful for that. We are going to open it up for some more questions now that you have sort of heard everything that we wanted to say today. Maybe I will pass it over to the, pass some mics around and get some questions going. Use the same format. I will take what I can, but want the team to lean in and answer questions, too.
Thanks for that. I guess just following up on the financials presentation. So LM26, like a CAD 100 million kind of project. What does the shape of that spend look like, and in what circumstances would we be needing more to complete that project? Maybe talk a little bit more about what is going on. What is the money going towards? Is it just people continuing to do what they are doing, or are there certain things that ramp it up or ramp it down?
Sure. Well, why do I start, Rob, and then if you feel it, you want to lean in with some details. L ook, the overall program that is remaining is over till the end of 2028 is, yeah, you are right, around CAD 100 million of capital to be spent fairly evenly throughout that because of the fact that the machine is already built and paid for. It is operating. The machine is licensed, the facility is there, and we are operating with the team in place already. That is not just the program cost. That is the entire entity, General Fusion's costs over that period of time. So, the expectation is that we would continue to run the program as it is, achieving those milestones at sort of a pretty linear rate of spend across that period of time.
The things that could throw us into. If we aren't able to execute in the way that we believe we can execute, then yeah, things could take a little longer, or it could be faster as well. We've built a lot of gear. This team has put together a lot of large-scale testbeds, gone through this entire process many, many times. Yeah, we've got pretty good confidence in our ability to execute over these next couple of years. With the machine already built, it's pretty smooth sailing. I don't know, Rob, anything you want to add on the finance side?
Yeah, j ust add a little bit. Yeah, because the machine's built, we already de-risked the CapEx. There are operating supplies, and we have to change the liner, certain instrumentation needs to be updated each time, and diagnostics. T he CapEx is not significant on this machine. It's very capital efficient. We build a lot of the parts even in-house. We manufacture the liners. That CAD 100 million-ish covers the whole company's cost, not just LM26. To Craig's point, I think there's not so much risk on the machine CapEx because it's not a very high CapEx machine. There's time, what if it took longer or could be shorter, too, which would save a lot of money.
Yeah. Great. Hopefully, that helped.
What are the most significant learning curve gains you expect to achieve from First-of-a-Kind, Nth-of-a-kind? Thank you.
The learning curve from First-of-a-Kind to Nth-of-a-kind?
Cost.
Oh, yeah. Look, we've designed the power plant with the end in mind to do this over and over again, repeated, and with partners many times in parallel around the world. If you think about the manufacturability of the First-of-a-Kind, and even just the ones between that and the sort of Nth-of-a-kind, it's going to be about just manufacturing capabilities ramping up. As we build the First-of-a-Kind, it's a First-of-a-Kind, an enormous amount of R&D going into that, and repeatability of that process over time. What we've built into our model is really just efficiency in the manufacturability and the repetitiveness of that, not so much efficiencies inside of the FOAK, from the FOAK to the Nth-of-a-kind in terms of what we need in order to build it.
It's really on the manufacturing side of things, and we've considered a lot of these things. If you think about big, large vessels, for example. If you've got a commercial mindset, you recognize that shipping big, large vessels all over the world can be impractical. When you design your vessel, you better do it in a way that maybe it can be broken up into pieces so that you can ship it anywhere much cheaper. You can have it manufactured in many more places.
As we think about building out the sets of suppliers that can provide all the equipment and the manufacturability, that's where we see the big improvements. Of course, the First-of-a-Kind, you're going to have lots of challenges with capacity and that kind of thing. That will also improve. I don't know, a nything you want to add on that in terms of the modeling and how we think about it?
Well, I would just elaborate on the capacity factor, right? Nuclear fusion plants today are operating 85%, 90% capacity factor. A First-of-a-Kind machine is not going to start out operating at 85% capacity factor in any new technology. I think that's the economies of scale and manufacturing improvements from First-of-a-Kind to Nth-of-a-kind are a critical component in the reduction of costs. Conversely, just operational experience for us and for our first customers in terms of improving that capacity factor and getting to that 85% are key.
Great.
Thanks.
Post the de-SPAC, what are the plans for continued investor engagement and providing liquidity to the stock? Part two is, what are the puts and takes on the backstop for the Spring Valley?
Could you just repeat the question? I want to make sure I am answering the right question that I understand.
Sorry. Post de-SPAC engagement with investors and continued liquidity for stockholders.
Right. We plan to kind of run a pretty standard process. I do not know, maybe there is something, a standard process in terms of engagement with investors, and we talk about maybe announcement of milestones and those types of things. Of course, we want to make sure that we are setting an expectation for what investors should expect. This is one of the reasons why we are taking this company public now, is we want to set the narrative and the path clearly out to this new set of investors, public investors, of what that should look like for a fusion company. How should investors think about the progress towards commercial power plants? It might be different than the way that private investors think about it and have been funding private fusion.
Our belief is that this is a capital-efficient process to be able to, milestone by milestone, with flexibility, make progress. As we are making that progress, it is going to be upon us to be able to communicate to the market that we are making progress by announcing milestones and things like that, because we are pre-revenue, right? We are going to be pre-revenue for a handful of years. From a pure financial perspective, cash is going down every year, every quarter.
We need to prove to the investors that the value we are creating is higher than the cash being burned during that same period of time. I believe that we set this program up in the milestones range to be able to do that, but it is going to be on us to be able to communicate it, because it is new. It is new for all of you, and it is going to take some time. I do not know. Anything you want to add to that? Am I hitting the mark with returning on the question?
And then part two of that question was the backstop or any puts and takes on the redemptions.
Oh, I see.
No formal backstop. I think one of the opportunities, and just to tag on to your answer there, one of the opportunities that we see from a SPAC sponsor perspective is we ran the same playbook with NuScale Power. The opportunity to be the first to market and have all eyeballs on you and help define the industry going forward is real. From a liquidity perspective, from an institutional conference perspective, a retail perspective, all those things are built into being a first of its kind out there in the marketplace. Then what was the second part of the question?
The backstop.
The backstop? What I think we did here is we're not everybody's cup of tea on the Spring Valley side. We run a demanding process. We're great partners. We're thoughtful. I think the valuation is intentional here, right? The valuation here, compared to what you're seeing through versus some of the other comps here, is meant to retain capital in the trust. I think we ran that same playbook, which is a private company valuation in the public markets on NuScale, and we retained 70% of the trust, an additional CAD 150 million of capital to the company. I think we feel pretty good compared to what you're seeing out there in the marketplace on the public side, that we've priced this the right way.
Yes.
I would maybe just add again, I know we said it, but there's no backstop on the trust. We don't know where redemptions are going to be. Obviously, we think we'll get a good meaningful portion of it. T he PIPE again, funds the LM26 program, which gives us that ability to achieve these key milestones, irrespective of where the trust lands.
Any more questions?
Thank you. It's Craig Irwin from Roth. Craig. If Rob and Chris from Spring Valley are successful and have a similar redemption rate to what they had on NuScale, you keep 70% of the 230 of cash in trust. Is there an opportunity to use that cash to accelerate the timeline to First-of-a-Kind? Is there something that maybe you could spell out for us as far as specific projects that you think would hit the top of the heap that you would find an exciting opportunity to drive value faster?
The timeline that we've laid out, it's an aggressive but achievable timeline. It's how we operate. As Megan would've talked about, the timeline that we laid out to start the commercial systems piece, the piece that overlaps LM26, it starts in 2027. That's just coming upon us pretty quickly here. We intend to start working on that pretty quickly. If we are able to retain some of the trust capital, then the speed at which we could do some of those things, the risk, the parallel development we could do could be increased, and there could be an opportunity to compress the timeline somewhat. W e haven't run a model to figure out whether we could It's all about risk and speed, right?
We could do everything in parallel and take all the risk, or do this in the sort of thoughtful way that we've done it historically, which is milestone by milestone, informing the next, and put a little bit of overlap. So long-winded way to say we'll see what comes out of the trust, and then we'll, in the way that we do things, apply it to the highest use possible to move forward, right? But I wouldn't make any promises on accelerating the timeline until we have a better view of how the trust shapes out.
Okay. Second question. Off the top, you made a powerful case that this is not a billion-dollar science project that you have been focused for more than 20 years on developing fusion-based power plants t hat the end goal is clear. You showed some pretty compelling economics to us as far as capital costs versus some of the other competing technologies, or all of the other competing technologies. W hen other people in the audience have asked for more detail around how you get to those capital costs, you appropriately were cautious in the amount of detail that you shared.
Do you envision being able to get more specific on that over the course of this next year? Are there specific learnings that will happen that will help you shape that? This really will be about LCOE. Do we have to wait for the mid-2030s to get a crystal clear ball there? Or do you think we will have a much less cloudy view in the relative near term?
Yeah, it is a great question, and while we are very focused on that LCOE, recognizing that that is an important part of the mix. We need to be able to deliver what we are delivering at a cost that is going to be competitive. The beauty of our approach is a lot of existing technologies, and we can estimate now what our capital costs look like in FOAK and Nth-of-a-kind. Because we are not using lasers and superconducting magnets and these type things, or new materials that, if invented, how much would they cost? I do not know. So by using this sort of practical engineering approach, we are able to estimate what the cost could look like, and even though that is 10 years out.
We do not want to put out sort of guidance or estimates that we do not feel we can sort of stand behind in detail. We need to work our way through the process here with the technology development roadmap. As we do that and as we get more information out of LM26, which does inform our First-of-a-Kind design and size and that type of thing as well, then we will start to release some of these details. T he last thing we want to do is put out some numbers today that we do not believe in, we can continue to be standing behind all the way through. That is why we are being a little bit cautious about that. I appreciate the patience in being patient.
But what I can say is that our historical track record of being incredibly capital efficient is going to continue. That is just the thread that is weaved throughout this entire organization. Everything we do is fast and low cost as possible to get things moving to the next stage. We are going to continue that way. Hopefully Craig will be able to share more information in the future as we refine our numbers as well.
Thank you. I think we all appreciate that. Appreciate it. It is a good question.
What else we got? Got a bit more time. There is a bit more food and some drinks, and we can mingle and talk more as well. A ny more questions, please feel free. No? Okay. Well, Josh, I think it is a wrap.
Yeah, I think, yeah. Thank you everybody very much. We have some drinks out on the patio. Please feel free to join us and hang out for another hour if you would like to ask some more questions. Thank you all very much for coming.
Awesome. Thank you.