On Friday, Silex reported a FY24 net loss of A$23m, which was to be expected. As a refresher, Silex, in conjunction with Cameco (CCJ US), is developing a laser technology to enrich uranium at a facility in Kentucky, US. The primary commercial application of the technology is the production of different grades of fuel for the nuclear power industry, which is licensed exclusively to Global Laser Enrichment (GLE), a joint venture comprising Silex (51%) and Cameco (49%).
- Obviously, whether or not the technology works effectively is the key here, and we think the main factor holding investors back from an investment in Silex which has seen the share price track all the way back to the levels we originally bought in.
A successful pilot plant trial will significantly de-risk the technology and it’s also a potential catalyst for Cameco to exercise its option to acquire an additional 26% of the GLE JV, and for government funding to become available. As it stands, a full-scale pilot demonstration plant is currently being operated in Wilmington, NC in the US, with enrichment tests to commence shortly. The results from the pilot plant enrichment tests are expected to be known by the end of CY2024, and a declaration of successful demonstration of Technology Readiness Level 6 (TRL-6) is the key positive catalyst that we’re after.
- SLX is a high-risk play; however, they are close to producing some firm data on the validity of the technology and how it may transform the nuclear industry. Big risk, big upside, now with a more defined timeline.
MM is cautiously bullish SLX
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