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In reply to: kofi on Sunday 21/05/06 11:13am



Uranium enrichment debate stirred

By Sandra O'Malley

May 21, 2006

FOREIGN Minister Alexander Downer has opened a new front in the nuclear debate, saying Australia needed to consider to whether it should enrich uranium.

His comments will add fuel to the perception that the Government was considering nuclear power generation in Australia.


Prime Minister John Howard has called for a "full-blooded" debate on nuclear power and uranium mining.


Mr Howard was discussing nuclear issues during a visit to Canada, which, like Australia, holds vast stores of uranium.


Today, Mr Downer said Australia, with between 30 and 40 per cent of the world's known uranium reserves, needed to properly examine nuclear issues.


"There's the question of whether Australia itself would eventually, some time, no doubt in the far distant future, build nuclear power stations," he told ABC Television.


He canvassed the prospect of uranium enrichment as a way to add value to the fuel resource.


"There's a question of whether Australia would ever enrich uranium ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ in other words, we go up the processing chain, rather than just dig it out," Mr Downer said.


"There needs to be at least a debate and some consideration about that."


He did not make clear whether the debate needed to include whether Australia might export the enriched uranium.


Western nations are currently trying to stop Iran from pursuing uranium enrichment, which can be a precursor to nuclear arms.


The Northern Territory Government said Australia doesn't have the capacity to even consider uranium enrichment because it lacks the necessary cheap power for the process.


"We've got nothing in place," NT energy minister Kon Vatskalis told ABC radio.


"Let's not forget that everything that has to be established of that magnitude in that kind of facility has to go through a lot of processes, a lot of environmental processes.


"I bet you you'd get a lot of reaction from people in Australia if they tried to do something like that, especially if they still insist to re-import everyone's nuclear waste back to Australia."


Labor was set to debate at its national conference next year a push by some of its senior figures led by frontbencher Martin Ferguson for a change to its current policy which allows uranium mining on only three mines.


However, Labor environment spokesman Anthony Albanese yesterday said no one in the ALP was arguing for nuclear power in Australia.


Australian Greens leader Bob Brown warned uranium enrichment could encourage Indonesia to become a nuclear power.


"They're really moving Australia into being a nuclear country and that of course will encourage Indonesia to follow suit," he said.


Senator Brown said the Government's position was at odds with its strong stand against terrorism.


"We are now in an age of handbag-sized nuclear weapons and the spread of technology means the inevitable increased danger of terrorists ... getting hold of nuclear technology," he said.


Australian Democrats leader Lyn Allison said the Government was pursuing a debate about nuclear power because it was floundering on energy policy.


"What we need is a debate about climate change and the best way to reduce emissions by looking at our whole energy sector," she said.




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Silex signs up with GE, the biggest company in the world (I think). Royalty rate of 7-12% which compares very favourably with the old USEC one of 5.5-8%. Upfronts of US$20 mil, plus milestones. Let the games begin.





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In reply to: areu486 on Monday 22/05/06 09:22am

Up to $200 million per year if GE holds a current 30% of market share. This would be on a royalty of about 9%. The 12% figure, and of course if GE can stitch up more of the market due using a more efficient technology could be higher again.


Great news.



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SLX have previously said they are addressing growth in the uranium enrichment market that is currently unmet. This is about 15 million SWU over the next decade. The current price of a SWU is ~US$120. At a 12% royalty rate this is US$220 million or A$300 million. This is obviously the potential several years out though.




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In reply to: areu486 on Monday 22/05/06 09:22am

Key point:

If final US Government approval is not obtained, the initial US$5M converts to SLX shares @$4.00 (ie: ~1.35M shares, or 1%).


So, not only is GE an upfront (US$20M) commercialisation partner with US$55M in total staged payments, they will also build the Test Loop facility (US$15M), and the Lead Cascade (US$20M) facility.


Given previous estimates of the costs of both facilities being built, the total GE commitment exceeds US$100M, plus a royalty regime of 7% (base) and 12% (maximum, dependent upon total cost of deployment - the lower this cost, the higher the royalty payment).

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In reply to: saf on Monday 22/05/06 09:36am

At a 12% royalty rate this is US$220 million or A$300 million. This is obviously the potential several years out though


Ah, yes, but do a DCF or NPV calculation assuming a low risk factor and you get a very high current share price valuation. As risk reduces so does the share price of course, but then I think all here understand (so far as possible) and believe in the science behind the technology.



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Congratulations to Messrs. Goldsworthy and Wilks, they seem to have stitched up a great deal which the product deserves.

Pity about the timing but perhaps investors disenchanted with commodities may ride this one. Insto's should be into SLX now.

Interesting that there was no trading halt.


Hurray hurray,




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