Silex Systems Stock

Good morning, everyone, and welcome to Silex Systems Limited 2026 Annual General Meeting. I'm Julie Russell, Silex's CFO and Company Secretary. And I'm pleased to advise that we have a quorum present here at Dentons in Sydney. I declare that our 2026 AGM is now open.

We also welcome those shareholders who are joining us virtually today and encourage you to participate in the meeting from wherever you are located. The online platform that we are using today allows shareholders, proxies and guests to watch the live webcast of the meeting and eligible attendees can vote in real time.

The minutes of last year's AGM held here at Dentons on the 17th of October are also tabled and are available for inspection by shareholders at the conclusion of the meeting. We'll take those minutes as read. Our Notice of Meeting has also been distributed, and we will also take that as having been read.

I'd now like to introduce your Board to you. Here, we've got Craig Roy, our Chair. To his left, we've got our Founder and CEO and Managing Director; Dr. Michael Goldsworthy; and our Non-Executive Directors, Chris Wilks and Susan Corlett. As per our Notice of Meeting, Craig is standing for reelection today. Joining us is our auditor, Ash Chandran, from PwC.

Craig will shortly provide his opening address and following that, Michael will provide a presentation reviewing our highlights for the year together with a business update. Shareholders joining virtually have been provided with instructions on how to participate and vote in today's meeting with details available in the Notice of Meeting. Michael's presentation, Craig's address and the Notice of Meeting are all available on our website.

So with regard to questions, we have received a good number of questions in advance of today's meeting. And Craig and Michael have attempted to address these in their respective remarks and presentation. Questions can also now be submitted online at any time. [Operator Instructions]. Subject to the time available, the questions that we receive will be addressed later in the meeting and after Michael's presentation and we'll moderate them as necessary to avoid repetition or in the interest of time. Should you wish to ask a verbal question, please follow the instructions below the broadcast window. For those of you in the room today, you'll also have the opportunity to ask questions following Michael's presentation.

So for online attendees, how to vote. So all items of business today will be decided via a poll. For online attendees, if you correctly registered for the meeting and are eligible to vote, the vote icon will shortly appear on the screen. Selecting this icon will bring up the list of resolutions and present you with voting options. To cast your vote, simply select one of the options, no need to hit submit or enter, the vote is automatically recorded, and you can change your vote right up until the time that Craig declares voting closed.

Shareholders, proxy holders and corporate representatives attending in person today and who are eligible to vote have received a blue voting card on entry. We now declare voting open on all items of business. For those shareholders attending virtually, a poll icon will soon appear, please submit your votes at any time. Craig will give you a warning before moving to close voting.

So with that, I'm now very pleased to welcome your Chair, Craig Roy, to provide his opening remarks.

Thanks, Julie. So a little bit different sitting upfront. You might remember here for those who were here last year. We're up to the right. It's great to welcome you all to the meeting. It was great to have the chance to speak to a few of you before the meeting and we look forward to doing that with others following the discussion today. So can I welcome you as Julie did to the Silex Systems Limited 2026 AGM.

I think it's very fair to say that year ending June '26 was another important year in the commercialization of our Silex technology and saw solid progress made together with our U.S. exclusive licensee and joint venture of which we own 51% of the joint venture, Global Laser Enrichment. I'll refer that as GLE for the rest of the presentation. So GLE's progress has been remarkable across the last financial year in the commercialization of the technology plant through the technology maturation, licensing, site clearing. We'll say a little bit more about these as we go through, securing U.S.-centric supply chain for the technology, in-house world-class fabrication facility and securing U.S. government funding and some quite material economic incentives from the Commonwealth of Kentucky and also the local Paducah county. Progress we've seen in the last 12 months, all of us on the table here have visited and [ selected ] both Kentucky and Paducah delegates.

Progress on these matters support the commercialization of the technology, and I'm very proud of the work that both Silex and GLE teams have done over the course of that year. As I said last year, and I'll repeat again this year, very pleased to be working alongside Cameco Corporation. They're our joint venture partner. As many of you would know, we own 51% of the JV, Cameco owns 49% of the JV. You probably also know they're one of the largest global providers of uranium and nuclear fuel, and they've now invested in Westinghouse Electricity Company (sic) [ Westinghouse Electric Company ]. They're 49% owners of Westinghouse, which adds more value to their whole supply chain across the nuclear power reactors.

I think one of the most significant technology milestones over the course of the year, and it seems a long time ago, back in October 2025 now, but that was the achievement of TRL-6. This was the first time a third-generation laser enrichment technology has been demonstrated at large scale, pilot plant level and full independent validation by a top-tier, third-party engineering consultancy. So we, GLE and our partners in Cameco, all very important to get that third-party validation from the top-tier engineering company.

That represents a key derisking event and sets Silex and GLE on solid path to commercial deployment at the planned Paducah Laser Enrichment Facility. We refer to that as the PLEF, and that's how I refer to it for the rest of the discussion. That's in Kentucky and by 2030. So the PLEF offers a unique single-site solution for U.S. domestic production of uranium, conversion, most importantly or equally importantly, and enrichment services. With significantly higher efficiency and orders of magnitude increase in process throughput, the Silex technology potentially places GLE in a strong position to help satisfy in the global growing demand for nuclear fuel. GLE remains on track with the time lines we put out around the NRC license, and we anticipate that in CY '27.

GLE owners, Silex and Cameco continue to support activities focused on 2 key areas: final design, detailed sign demonstration of Silex technology at full-scale commercial system performance under plant-like conditions that's what we refer to as TRL-7. So that's a step-up, obviously, in TRL-6 and planning for disciplined commercial deployment of the PLEF and that obviously has a subject to the feasibility assessment and final investment decision, which we're all leading towards.

Since the end of the year, and you would have seen a market announcement around this recently, GLE has achieved another milestone, signing an offtake agreement with Cameco to purchase all future nuclear fuel production from the PLEF. And I should add, the main of the partnership is obviously with GLE, but Silex was very comfortable with the arrangements and we're a party to bringing that transaction together. We're now keenly focused on the final design, detailed design and demonstration at full-scale commercial performance of the Silex technology and preparations for feasibility and assessment of the PLEF, which I mentioned before.

Let me go back a minute to the offtake agreement because there's been a little bit of chatter on this. I just want to clear that up. The agreement provides a key commercial pillar to support a future FID. It's something we need to have in place before final investment decision, and is structured to ensure that GLE benefits from Cameco's future contracting efforts. Future contracting efforts is probably what is underlying there and what we believe to be a tightening market.

During the business -- during the year, we also continued to strengthen and diversify the business case for some of Silex technology, including the recent completion of construction of the world's first laser-based enrichment plan for commercial production of Quantum Silicon at the company's Sydney facility out at Lucas Heights. We are continuing to see great interest in our path to supply a key enabling material for silicon quantum computing and look forward to commencing commercial production in CY '27. I know when I was circling the floor before, there's a number of questions around that. And if you had any further questions, then let's pick them up in discussion points at the end.

Despite our achievements over the last year and the unprecedented positive fundamentals for the global nuclear fuel industry, we believe our share price has not reflected the enormous potential value of the company, particularly, in recent months. We see big swings across the whole sector day-to-day, some days up 5%, some days down 5-plus percent. It moves around. What we do as a company is we focus on what we can control. We can control the work that I've outlined before in terms of building the best capability in the world to deploy uranium enrichment and conversion services to the U.S. market stuff that's happening around us, yes, disappointing, but it's not something we can control.

After 3 decades of decline in the nuclear industry, the U.S. has moved decisively to reverse this trend and reestablish itself as the global leader in civilian nuclear power. U.S.-based GLE and it is U.S. based for an important reason, is positioning itself to be a leading enrichment company to operate in a sector with very strong tailwinds that are set to be with us for the foreseeable future as clean energy demands continue to grow and the world inevitably transitions towards net zero. This megatrend is not dissipating and we're a potential beneficiary of this trend. We continue to work diligently with GLE towards deployment of this very unique technology that potentially offers significant benefits to you, our shareholders.

Our growth and opportunities are made possible by the utility of the technology, our strategic investment in GLE and the further exploitation of our core strengths in building the world's first laser-based enrichment plan for Quantum Silicon, as I mentioned above. Our progress towards commercialization in these projects has been underpinned by the exceptionally talented Silex and GLE team members, which are at the core of our activities and achievements, and who tirelessly work to maximize value from the opportunities available today. I must say whenever the Board -- and again, we've all visited -- we went to the -- we've been to the Paducah site. As I mentioned, we've spoken to the folks in Kentucky and also the Paducah Council. We've also been to the Wilmington site in the last 12 months and just the level of energy in that site and what's -- there's 2 sites there and what's been built up on those 2 sites is [indiscernible] the energy of the staff there is absolutely powerful. They are focused on our mission of getting this technology to market, so it's actually producing enriched product, baseline uranium product and tapping the conversion services. And equally, when we visit Lucas Heights, we get the same mood and approach from Lucas Heights of the expertise of the staff and passionate staff to make the Silex vision a reality.

I'm going to move to governance briefly. It's terrific working with this Board, highly committed, focused, we work to ensure we continually try to drive high levels of governance performance with the right breadth of skills and competencies, including having the expertise to evaluate and respond to the various opportunities and risks that confront us from day to day, week to week. It's not necessarily a straightforward company, we operate in a classified space. As many of you know, we operate cross-borders. We operate in deep technology first of its kind but the Board's been very, very diligent in approaching all of those.

Now before handing over to Michael, I'd like to thank my fellow directors, Chris, Susie, and obviously, our Managing Director, Michael as well too and the whole talented Silex team. I'd also like to acknowledge, I don't know how many you have met Steve Long, our CEO of GLE, but Steve's outstanding, and I'd like to thank him. He comes out of the GE-Hitachi. He was there while they were still partial owners of previous nuclear submariner, doing a great job, leading the operations on the ground with approximately 120 staff in the U.S., representing our interest and representing the interest of Cameco, [indiscernible], but he's doing a great job. I just want to acknowledge that.

In closing, obviously, our shareholders, I would like to thank you very -- a number of very, very patient shareholders in Silex, which we're all very grateful for your continued loyalty and support. In closing, and in accordance with the Notice of Meeting, as Julie mentioned before, I'm standing for reelection today with the support of my fellow directors. I wouldn't be doing this if I wasn't passionate. I am very passionate about the company going well over the last 6 or 7 years. Many of you have been on the journey for longer than that, but all of us at this table are helping company to wherever its potential to take it.

So I'm now going to hand over to Michael. Yes, we're going to move to seats that were not to the back of [indiscernible].

Good morning, everyone. Welcome to the AGM. My voice is a little froggy. I've come off a big trip and caught a bug at the end of it, but I'm 99% back on track now. So hopefully, my voice holds up. Forward-looking statements to read at your own leisure. But I'm here to update you on progress that we've had last year and highlight what will happen over the next 12 or so months.

As you're all aware, we're focused on commercializing our innovative Silex laser enrichment technology, the leading third-generation laser technology for uranium enrichment in the world. We're now at the final stage of engineering, which is a very important point that I want to emphasize today, TRL-7 is the last stage of engineering. I'll talk about that in a little more detail shortly. But our primary focus is on uranium enrichment with GLE as Craig has just detailed. And our secondary focus is on silicon enrichment, firstly for silicon quantum computing, and secondly an emerging application in conventional chips for thermal management of those big GPUs and TPUs that are now housed in our massive data centers around the world.

We have a third program in early stages for additional semiconductor isotopes and medical isotopes. And hopefully, we can bring some more information and news on that project as we move forward over the next 12 months.

So enrichment highlights. Unique third-generation laser enrichment technology being commercialized in the U.S. under the auspices of a treaty, government treaty between the Australian and U.S. governments, which was signed in 2000 by President Clinton and Prime Minister Howard, that still provides the overarching framework for the cooperation between us here in Australia with our Australian team and GLE's team in Wilmington, North Carolina and Paducah with the U.S. citizens working on the project.

As Craig pointed out, we have unprecedented positive tailwinds in the nuclear industry. And I was just looking at our report from Andrew Hines from Shaw and Partners that was released only half an hour ago. He's probably a world authority on all things in nuclear, particularly the uranium industry. And he's pointing out how perilous the uranium supply situation is going forward over the next 5 to 10 years with expansion of nuclear around the world and not enough uranium being produced today or in the pipeline, resources being developed. So there is enormous momentum in nuclear around the world today, but not enough fuel is being made or can be made in the near future if the industry does not pick up its game. Craig detailed our JV with Cameco, Global Laser Enrichment, 51% owned by Silex, 49% by Cameco. But apart from our equity ownership, we also have a very attractive royalty through our technology license to GLE, which I'll come to shortly.

We did complete TRL-6 this time last year. We're now charging ahead with TRL-7, which is the full-scale demonstration of commercial scaling equipment. So we'll be operating that new pilot plant in Wilmington, North Carolina under plant-like conditions in about a year from now.

Our path forward with GLE is underpinned by a very important agreement between GLE and the Department of Energy, which was signed in 2016 and amended in 2020. And that gives GLE access to 30 years of feedstock for our first project, come to that shortly, but we call that the world's largest above-ground uranium mine, because that project will produce huge amounts of natural grade uranium for the nuclear industry. From a feedstock, which is not in the ground, it's above-ground stored in cylinders. And also, as Craig just mentioned, we have recently signed an offtake agreement between GLE and Cameco that will see all of GLE's products purchased by Cameco going forward at Cameco's average realized price, less costs. So that's a very important pillar for FID, final investment decision, which we will be focusing on more so towards the end of next year.

So our 2 distinct value propositions. Firstly, our equity in Global Laser Enrichment, 51%. When we restructured GLE back in the late teens, Cameco requested the option to acquire an additional 26% to take their stake to 75%, and we would drop to 25% and that would be transacted at what we call fair market value. So that would be a negotiated fair market value. Hopefully, if Cameco exercised that option, we can agree on that, but there's some terms of arbitration if we can't. That option is open at Cameco's call until April 2028. So that's not far away, little more than a year.

The second part of our value proposition is our royalty, minimum 7% on GLE's enrichment SWU revenues. So we have plans to have a multipurpose plant, single-site multipurpose plant to produce natural grade uranium LEU that's reactive grade, enriched uranium, LEU+ and ultimately, potentially, HALEU, high assay low enriched uranium, for small modular reactors. But any of those activities using our technology, our laser enrichment technology would result in a calculation being done at the end of each year's operations, all the SWU revenues and then a 7% royalty applied, and that's perpetual because our technology has been classified by the U.S. and Australian governments for many years now. And we cannot publish patents. So the technology is held in trade secret with military grade security in perpetuity. So as long as GLE is using our technology, there's no sunset on the IP because patents will not drop off. And so the license is perpetual and the royalty is potentially perpetual. I don't think there's many royalties at a 7% rate. In any case, it's very high royalty rate. But we have the chance to lift that up to a cap of 12%, and that is leveraged to reducing capital costs over time as we build out expansion of capacity at our Paducah site.

Right now, we're at the bottom end, as you would expect, with first of a kind technology. But I repeat, 7% is a very good royalty rate in anyone's language. The license that GLE is applying for is for 8 million SWUs of operations. So we give an example based on 8 million SWUs of operations at today's enrichment price around $180 a unit, that would equate to a royalty each year of USD 100 million coming back from GLE to Silex. So that's something to look forward to.

So recent highlights, the offtake agreement that we've talked about on all of GLE's products to be purchased by Cameco, this does underpin FID and allows GLE to avoid the cost of starting up a full sales and marketing team and all the resources that go with that. So this is a really good agreement for GLE and for Silex. We're very happy to have Cameco handling sales and marketing for GLE because ultimately GLE's customers are already Cameco's customers.

Technology demonstration, finishing TRL-6 last year, now well and truly charging ahead with TRL-7. U.S. government funding, we received USD 28.5 million package, of which I think around USD 10 million has already been received by GLE and also a very attractive package from Kentucky State and McCracken County of nearly USD 100 million that will come into play through construction and into operations. Not long ago, November 24, GLE bought 700 acres right next to the Department of Energy first-generation gas diffusion site, which we'll see shortly. So that is why we are in Kentucky because our feedstock is located right next door to our future plant.

TRL-7, as we've said, is a full-scale -- 100% full-scale demonstration of commercial-ready equipment. So right now, GLE and Silex taking components to full scale, building full-scale equipment, optimizing equipment, GLE is due to start some preliminary testing in the next few weeks, and that will continue into the new year. And then we will be undertaking the construction of the final full-scale equipment during next year, and we hope to be able to test that equipment towards the end of next year, and hopefully, finishing TRL-7 by the end of next year, calendar year 2027.

In parallel, there is a whole range of activities that relate to manufacturing. And this is the twin TRL-7 manufacturing readiness level, MRL-7. So this focuses on in-house and external manufacturing of full-scale equipment. And right now, GLE's in-house fabrication facility, show you some pictures shortly, is very busy building our TRL-7 equipment. So it's a fantastic resource that GLE has in-house. But we'll need help contract manufacturers for things like various laser systems and components and some of the mechanical equipment and of course, the gas handling systems, which are pretty similar to the gas handling systems that you find in a centrifuge plant.

And in addition, establishing a fully U.S. domesticated supply chain. So for example, some of the gas handling equipment companies moved offshore from the U.S. in the 2000s and 2010s. So right now, GLE is busy working with those gas handling system manufacturers currently based in Europe to set up operations again in the U.S.

The NRC license for the PLEF is in its final stages. Right now the U.S. NRC is undertaking its final legal review, slightly delayed by 2 or 3 weeks, but we expect the environmental impact statement, that's the first half of the license, 2 reports, that's the first one to be released in the next 2 or 3 weeks. And then the second part of the license, the safety evaluation report to be released in the weeks following that, certainly before the end of the year. And there's a 45-day period for final examination and assessment. And after that, the U.S. Nuclear Regulatory Commission actually stamps the approved and releases the license to GLE. So we anticipate that to happen in the first quarter of next year 2027. There are some ongoing marketing and feasibility activities that will increase through next year 2027. But of course, Cameco will take charge of offtake arrangements with customers.

So looking at the technology, first-generation gas diffusion last plant to operate was in Paducah, Kentucky, operated by Department of Energy and in its latter years, USEC. So this is a very inefficient technology, very costly, massive energy consumption and is obsolete today. But what came out the backdoor of that plant is what GLE has under the agreement with the Department of Energy from 2016, and I'll come to explain that in a few minutes. Diffusion has been replaced completely by gas centrifuge. There's some very large gas centrifuge plants operating in Europe by Urenco and Orano and also in Russia by TENEX. And there's one plant in the U.S. operated by Urenco and owned by Urenco.

Centrifuge is higher efficiency than diffusion, but still [ more ] and comes with very high capital costs. In comparison, Silex laser technology has a much higher enrichment efficiency. It's a multiple of the enrichment efficiency of centrifuge technology. So that means we have less steps in our cascades, our enrichment cascades. But perhaps the biggest difference is the throughput through our machinery. The throughput through a centrifuge machine is extremely low. It's less than 10 [indiscernible]. That's the nature of centrifuge. You can't overload with gas. So centrifuge plants typically have hundreds of parallel cascades to get the plant capacity up.

Well, in the case of Silex, our machinery has throughput around 3 orders of magnitude, 1,000x throughput of centrifuge technology. So we will have far fewer parallel cascades to achieve the same capacity as a centrifuge plant. So all in all, with less process stages and less cascades, we have a much smaller footprint, a much lower CapEx and lower OpEx and we believe that we will be in a good position to compete in the market when our first plant becomes operational.

The nuclear fuel supply chain shown here starts with uranium production traditionally from mining operations around the world. It's a fact of the age of the universe that all uranium in its natural state has about 0.7% assay of Uranium-235, the active isotope and 99.3% Uranium-238.

First, next step in making fuel is conversion from the oxide that the miners produce to the fluoride that is required for enrichment. That's a separate industry that trades under kilograms. Of course, most of you know, uranium is traded as pounds. Why they use different units, nobody really knows, but that's how it trades. Today, the uranium price is around $100 a pound, conversion is around $50, $60 a kilogram. That in itself is a valuable market, and then enrichment is undertaken by the centrifuge companies that I just mentioned around the world, and that takes it from natural assay up to low enriched uranium grade, which is the grade that most reactors use today. Some are starting to use a slightly higher grade, LEU+. And then for future reactors, small modular reactors, there will be a need for assays up to 20% of Uranium-235.

So enrichment is the critical step in making nuclear fuel, but you do need the uranium to start with and the converted hexafluoride. And interestingly, Cameco now with 49% of Westinghouse are major players in the last 2 steps, fuel fabrication and nuclear power plants. Of course, Westinghouse is the global leader in nuclear power plant technology with the AP1000 and they have extensive fuel fabrication facilities in the U.S. So our partner, Cameco, has the whole nuclear fuel supply chain covered, except for enrichment today, which is hopefully where GLE will fill that gap in a few years' time.

This supply chain has been disrupted since the Russian invasion of Ukraine. There is an act of Congress in the U.S. that will ban the import of Russian-produced uranium, conversion and enrichment from the 1st of January 2028. And we will see a lot of effort to replace that import of fuel. I'll come to that shortly.

But I want to finish on our summary of GLE. GLE operates in 2 places now, 2 locations in the U.S. Moving to North Carolina on the East Coast, great -- very nice spot there, great spot. And that's where we have our pilot facility, Test Loop, and the headquarters and the manufacturing facility and then a 700-acre site in Paducah in the heartland of America where we will hopefully build our above-ground uranium mine in the next few years. We're not just talking about producing natural grade uranium at this site in Paducah. We've got a triple opportunity. So on the left, first project will produce natural grade uranium from the Department of Energy's depleted tails under the 2016 agreement. There's over 200,000 tonnes of this material and we will use our laser technology to enrich it from below natural back up to natural grade. So the same grade the mine has produced at a rate of around a mine producing 5 million pounds of uranium a year for 30 years. So this is a huge project. It's very strategically important, which I'll come to in a moment, but U.S. does not have great uranium reserves.

The second opportunity is to produce the low enriched uranium with Uranium-235 assays of around 3% to 5% and LEU+ of 5% to 10%. Some of the utilities in the U.S. are now trialing LEU+ because it gives them better economics. So that all requires more enrichment capacity. The amount of enrichment we would need to take DOE tails material from natural grade to LEU grade is about 2 million units of enrichment. So if you look at the total potential revenues from that Department of Energy material, we have the revenue potential from the uranium, revenue potential from the conversion because our feedstock is already converted. And as I mentioned, that trades for $50, $60 a kilogram.

And thirdly, we have our potential revenue from enrichment to LEU grade. And if you add all that up at today's prices, market prices, it's in the order of [ billion ] dollars of revenue just from the Department of Energy tails material. But the important point here is we have a single site solution to produce all these different grades of uranium, which is quite unique in the world. So hopefully, we can realize that in a few short years.

I won't spend much time on this chart. We've already talked about what we're doing in TRL-7. But we're making great progress. The teams in GLE, as I mentioned, are about to start some important preliminary trials. So that will take us into the new year before we start building the final or finish building the final full-scale equipment and commission that for the full-scale demonstration.

Once that production module has been demonstrated and finalized, there's no more engineering, no more tinkering, no more adjustments, maybe a little bit of optimization over the coming years, but the engineering is essentially finished in TRL-7. And then we would turn our attention to the Paducah plant, and we would replicate those margins and build out a full production cascade, which would be installed in our first plant in Paducah, Kentucky. And that plant would represent the activities of TRL-8, first production cascade. And then when that plant is up and running, TRL-9 has essentially been reached with commercial production.

So looking at that first project, this is the gas diffusion plant that is operated by the Department of Energy from 1952 to 2013. We still got a lot of questions about what this uranium -- above-ground uranium mine is all about? What are depleted tails? Well, try to explain in this picture, the operations at this plant over those decades was fed natural grade uranium that was produced by miners and converted by the conversion companies and produced LEU assays of 3% to 5%. But because of the inefficiency and the abundance of uranium those days, they did not fully deplete. So there's still appreciable assays of Uranium-235 in what came out the back door of this plant and we call that high-assay depleted tails. It's a bit of a mouthful, but it's high-value material became out the back door of this plant in Paducah. So that's material that is a subject of [indiscernible] agreement between the DOE and GLE.

And our first plant, shown here in blue, will take those tails material cylinder by cylinder. They're stored in the yards around that plant around the buildings. You can see at the top left, 25,000 cylinders of depleted tails will be taken one by one to the plant and process using our laser enrichment technology to produce natural grade uranium and if utilities want that taken up to reactor grade, then we could do that next door in the gray building, again, with the same laser enrichment technology, enriching it from natural grade to LEU grade -- reactor grade. And as I mentioned, there's capacity for expansion across this site, this is only about 150 acres of a 700-acre site. So we have shown here some expansion in LEU on the left-hand side and the right-hand side and ultimately, some HALEU capacity if that market emerges in the green building there. Some flow diagrams on the right hopefully clarify what we are doing in the blue building and then the gray building with that material.

As I mentioned, the revenue potential just from the DOE material at full scale, full operation would be around a [ 1$ billion ] a year on today's market prices. We have done some economics of our technologies, pretty good numbers for CapEx and OpEx now. They're continually revised and reviewed by independent experts. We've had a review the year before last. Right now, we believe our costs are reducing the uranium in that first phase PLEF plant is less than $30 a pound, comparing it to mining costs. So this is like a Tier 1 uranium resource. Not many resources coming online today that are less than $30 a pound. In fact, the Kazakhstan recently announced that they're coming to the end of their cheap uranium. Their costs were even less than maybe $20, but that's all coming to an end. Uranium will get more expensive as less quality resources are brought online. And so the price must go up. Uranium price has to go up to incentivize new production around the world. But the good news is this is an extremely valuable uranium resource in the U.S. It's the largest uranium resource in the U.S. by [indiscernible] U.S. enterprise.

We did mention the offtake agreement. And I just would like to add that the pricing is determined by average realized price on a forward going basis from start of construction of the commercial plant. So the ARP that will be used to assess the pricing on GLE's product will not include legacy contracts that Cameco is still playing out. And of course, one of the most important aspects of this agreement is that GLE now has completely finished with sales and marketing and this is a very important pillar for a final investment decision as we move closer to that point.

Time line, TRL-7, hopefully, finishing by the end of next year, calendar year. And then our attention turns to the commercial plant. Before we start constructing the commercial plant, we hopefully will have the NRC license in hand the first half of next year, possibly the first quarter. As I mentioned, that will encompass commercial plant of up to 8 million SWU and up to 8% enrichment. So with TRL-7 finished and the NRC license in hand, we can then undertake a feasibility assessment for the PLEF to utilize enrichment facility and be in a position to make a final investment decision if not late next year, than first half 2028, early 2028. It's not far away. It's only 15, 16 months away.

So we are getting to the point end. And after that, the focus would switch to engineering, procurement and construction of the first plant at PLEF for the processing of the tails. And hopefully, commencing commercial operations before the end of 2030. So we are on track, a lot to do, very busy times in the U.S. and here in Sydney, but we are in pretty good shape right now. This is the site that GLE has purchased next to the gas diffusion plant, undergoing some preliminary clearing activities. And this is the headquarter site in Wilmington, North Carolina, where GLE has its offices and a very large manufacturing facility at the rear of this building, taking up the majority of the 70,000 square feet.

So this manufacturing facility, as I mentioned, is very busily operating to construct the TRL-7 equipment today. It's quite a sight every time we go there [Audio Gap] it changes quite significantly, up and ready for operations. So turn briefly to the market sector now. The thesis for nuclear energy couldn't be stronger. You're all aware of this and the various attributes of nuclear in terms of clean energy, SMRs coming down the pipeline, 24/7 reliability of nuclear, highest capacity factors of any technology, over 90% in the U.S. back to solar, wind, maybe mid-30% availability factor, nuclear over 90% and supporting the future of data centers, AI, crypto, electric vehicles, hydrogen production, a massive [Audio Gap] plans. We're seeing exponential growth in electricity demand from the data center [Audio Gap] around the world. And the WNA, World Nuclear Association, says that to hit 2050 net zero will need thousands of reactors. The situation in the U.S. where GLE is located is quite dire.

As I mentioned, they do not have good uranium reserves. They only provide 1% of their own uranium requirements. So a lot of that was coming from Russia and the rest of the world, including Australia and Canada. So to put that in perspective, GLE's uranium-producing project will provide about 10x what it produces today in the U.S. that provide about 10% of current U.S. requirements, not the future, which will be larger, but just current.

Conversion, the U.S. only supplies about 1/3 of its own conversion. We're going to bring 2 million kilograms of conversion capacity to the market from that first project because remember, our feed is already converted. So that's a significant addition to the 19,000 tonnes of conversion or 19 million unit kilograms, we're bringing 2 million, about another 10% conversion capacity to the U.S. market. And enrichment, similar story, 30% supplied by the one plant in New Mexico run by Urenco. About 25% to 30% being supplied by Russia today under waivers, but the waivers will finish on 1st January '28, and so there will be a need for new enrichment capacity '28 onwards.

This slide simply notes how much of the market is still available for uncommitted demand. And in terms of uranium, 25 million pounds annually from early 2030s. And in terms of enrichment, 10 million units of enrichment required from the mid-2030s. So the potential for GLE in the U.S. alone is quite huge. We've seen uranium conversion and enrichment prices rise, but not enough to incentivize further expansion. So I think we will see these prices rise further over the coming years. But the situation is extremely healthy. The prices are at new record levels of all 3 commodities, uranium, conversion and enrichment. And so we anticipate this situation to get even stronger over the coming years.

So that is our review of the uranium project, uranium enrichment technology. I'd just like to spend a couple of minutes talking about our silicon project. We've finished construction of the world's first laser enrichment plant for silicon June this year, and they have been busy commissioning and integrating the equipment, the plant. And we anticipate first production later this year. And into the first half of next year, we'll be producing samples for our potential customers. So this material will first be going to quantum computer developers, quantum chip developers, and they will not allow a new material in their fabrication plants and that's just gone through exhaustive testing. So we will be producing initially samples for our potential customers to take to their plants and test in their devices.

Our first plant module, as we call it, the modular technology like as is in uranium. We'll be able to produce up to 20 kilograms of highly enriched uranium. That's probably around half or a bit less of the current [ loan ] market, not a big market yet, but we expect that market to grow rapidly over the coming 5 to 7 years. Producing 2 types of product, one gaseous silane and another solid for different customers.

The current project has been supported by the federal government's Defense Trailblazer Program to the tune of $5.1 million. There's actually another $1.6 million coming through under that program. So that's quite a sizable contribution from the federal government and over $4 million from our offtake partner, first offtake partner, Silicon Quantum Computing, who are one of the world leaders in developing silicon quantum chips.

And as I mentioned at the beginning of the presentation, there is another emerging application to use enriched silicon in conventional chips, the very large chips, the GPUs and the TPUs that are being used and developed today with data centers and AI. They're running into heat dissipation problems. There's over 1 billion transistors on a small piece of silicon. And some labs are now testing enriched silicon nano-wires, which are like heat pipes, super conducting thermal conductors that dissipate heat much more efficiently. So we'll keep a keen eye on that application because that could become quite a decent market in itself. So we're very excited to be getting this equipment, this plant up and running. Over the next few weeks, we're going to go live with real silicon enrichment. We're doing dry commissioning at the moment, but we'll be actually processing our first samples in the next few weeks.

So in summary, we have a unique leverage into the nuclear fuel industry, not just as an enrichment technology, but also able to produce natural grade uranium and provide around 2 million kilograms of conversion capacity into the U.S. nuclear fuel supply chain, all with a very attractive royalty under the Silex technology license to GLE. A very important first project underpinned by the agreement with the Department of Energy for access to those depleted tails.

Again, just to repeat, potentially at full production level at today's prices, $1 billion of revenue ballpark just from that material. So triple opportunity, which includes the natural, the LEU and the HALEU, all fuel grades, quite uniquely on a single site, one technology, one company, GLE. Rapidly moving forward with TRL-7 and an offtake agreement now done for all of GLE's future production.

With the Quantum Silicon project now reaching commercial and progress we are making in the uranium enrichment project, I think this is a very exciting time for this company and for GLE. We're well positioned with over $180 million in the bank at June 30 and no debt.

So that brings to the end of my presentation. I hope that gives you a good sense of what we've achieved and where we're heading over the next 12 months. But again, just to say I'm -- I couldn't be more excited about our future. It's disappointing to see what's happening in the market today, but that's beyond our control. We just work on what we can control. And between our team here in Sydney and the team at GLE in the U.S., we are making great progress in controlling our destiny. Thank you very much.

It's time to open the floor for questions or, Julie, if any have come online.

We've got a couple online, but from the floor first.

Just a question, another misinformation out in the marketplace. How long does it actually take to build a nuclear power plant from when physically start earthworks until operational roughly.

That's the next question. If you make them every year, it's going to be less time than if you make one every 10 years on average. The Chinese are making them in 4 to 5 years. So China speed is 4 to 5 years. I don't know if the West can achieve that. Maybe 7 or 8 years is my guess. Starting from earthworks, not post license. But that's -- I'm not an expert on power plant construction, but that's my guess. It's a lot less than what some of our politicians are saying here, and it's probably a lot less than Snowy 2.0.

Just a question around the CapEx required for the laser enrichment facility. The Kentucky governor's office publicly referenced a $1.76 billion investment. Any comments about how that number was cut together and does that represent what investment needs to be?

Yes. So that number is -- it's been flexed up to include some infrastructure for future potential expansion. The plant itself shown in blue in that slide, current estimate is around $1.3 billion plus or minus stand-alone. But the agreement with Kentucky and the counties scoped out beyond that. So anticipating expansion.

With the plant, the construction of the plant, will that be anything happening there in the next 12 months? Like we've been clearing the site now for 12 months or so. Is there any concrete going to be? Are we going to work in parallel with the other stuff? Or is that not a critical item?

We need the license before we start pouring concrete.

You need the license.

Yes. I mean, if you start pouring concrete before you have an NRC license, then you're taking a big risk.

Okay. So we should get the license beginning of next year then.

It was the first half of next year, hopefully first quarter. And we can then expect some...

Physical work.

Well, the next step will be a feasibility study, finishing TRL-7. And then ultimately, with license, TRL-7 and feasibility, FID. And until we get FID, we're here. We're not there, we're here. But there's a few steps to undertake before we actually start engineering, procurement, construction, but that's a discussion that will ramp up next year internally with our partners, Cameco. There may be some things we can do at risk with license in hand. I think there will be some activities happening next year. But certainly, until we get those key steps finished and FID completed, then there won't be large-scale EPC.

So the cylinders at Paducah are quite old and UF6 is pretty dusty. Have you done enough sampling that you'll be okay with them?

Yes. So you're referring to the legacy materials stored around this plant. We know what's in every cylinder. And when the agreement was being negotiated, there were samples taken to check the purity. Ultimately, over time, impurities form, but there will be a process to make sure that the purity of the feed is at the required standard, ASTM standard. And that can be cleaned up if needed. But generally speaking, they found the material was in very good shape.

Where will you be getting your silicon from? You talk about where you're getting uranium depleted tails, et cetera, silicon in Australia, and where would your plant be at Lucas Heights or somewhere else?

So the silicon can come from any chemical company. There's quite a few that produce silicon gases. You got to remember, there's a very large industry already in existence for decades now to produce silicon chips that are in all of our devices. So the silicon gas industry is very mature, and it's vast. It produces hundreds of thousands of tonnes a year. So what we need for our process comes from companies that supply those gases, we tweak it so that it matches what our lasers can do but that's all done on the front end of our process in-house. And then that's what we use to produce our enriched silicon.

In terms of where we do it, we have our first production module at Lucas Heights, so that will be operating very shortly, producing commercial enriched silicon. As for expansion, if that market grows and we start building a contract book with customers, we'll need to expand. I don't think it will be at Lucas Heights. There's a bit of an issue there with space. But we are looking at that potential expansion already. And it could be in Australia, it could even be in the U.S. But that's about all I can say at this point in time.

[indiscernible] University of Adelaide working with New South Wales.

Yes, that's the Defense Trailblazer Program. So that's the funding that the federal government gave us to help build that plant. And that program is administered by The University of Adelaide and UNSW.

Back on the capital plans for this Paducah facility. It's a fair bit of money to come up with. Is Silex still looking at accessing government loan facilities to finance that or doing something else?

Well, it's early days. From a Silex point of view, I think all options are on the table. There's traditional commercial debt. Project finance will be at the GLE level. So there'll be a debt facility of some sort, I believe. There is a facility that is offered by the U.S. Department of Energy that used to be called the Loan Program Office. It's now called Energy Dominance Financing Office. They have a $2 billion debt facility specifically for new technology on the front end of the nuclear industry like laser enrichment, solicitation documents actually call out laser enrichment.

So $2 billion will be available under that program, and we wouldn't need $2 billion for the first plant in debt, [ $1.3 billion ], 70%. We wouldn't even use half of that. But look, that's just one option of many. We need to talk that through next year with our partners, Cameco. They probably have different options to us, especially in terms of the equity, but it's early days. And all I could say is I wouldn't think anything is off the table at this point in time.

Do you want to say a question? Yes. So we've got front still and then we'll go to the back.

Yes. There's one particular new entrant who is going to be our neighbor at Paducah who has been making a lot of noise and making what seems to be quite outlandish statements about what their capabilities are going to be saying that they will be creating enough fuel to take care of all of the required LEU, LEU+, and HALEU that the U.S. would need into the future and beyond and also be the lowest cost producer and be up and running by 2029, 2030. They recently also asked for the DOE and the NRC to allow them to begin, I think, pouring concrete and laying foundations now well ahead of even I think they've only just launched their license. What is our position on that, knowing that they are our neighbor, do we have any insight into what their technology is? And do you have any perspective on their aggressive stance?

Yes. It's an interesting question to say the least. General Matter is who we're talking about. General Matter is backed by Founders Fund, which is Peter Thiel, Scott Nolan, SpaceX connections, also very well connected to JD Vance, who helped funding some of these campaigns. All that aside, nobody knows what technology they're going to use. We don't believe it's laser. It's taken us over 20 years to get here. Centrifuge is probably the most likely. It's a rumor that they might use an old Department of Energy centrifuge design, but I can't comment on that really.

In terms of investing at risk with concrete or whatever, that's up to them. They are very aggressive, but -- and they're very noisy. So I would be interested to see what happens in reality rather than what they say in words. This is a very highly regulated industry. And you cannot get ahead of the U.S. NRC on any front, become very expensive. There have been cases where plants have got ahead of the NRC process. Even with the license, you need to keep the NRC abreast of the progress and making sure things are done the way NRC has approved. So all I can say is that we believe we're way ahead of General Matter on all fronts. And just on the license application, they cut and pasted a lot of GLE's application.

Yes, that was noticed.

So they're beyond aggressive, and we'll just have to wait and see whether their actions match their words.

I think my question has partly been answered, but what I was going to ask you was, do we see any -- with the passage of time, the massive passage of time, do we see any competing technologies or like technologies to Silex technology coming over the horizon?

So there are 2 start-ups that have come on to the scene in the last 2 or 3 years, one U.S.-based LIS Technologies. They're going down a path that we looked at in the lab in the 1990s. We decided that, that path was a stretch. It looks like it might work in the lab, but we weren't convinced that it would work at scale. There are some key fundamental issues with that approach, technology approach. And there, I think TRL-3, they might claim the TRL-4 or whatever, but they are a few years behind us to say the least. And I think that pathway has some very big challenges.

The other is a company called ASP Isotopes, South African based. And they're going down yet another path. But this path was a favored path that governments generally spend billions on in the 1970s, '80s and '90s and into 2000s. This is called AVLIS. ASP call it quantum enrichment. It's essentially AVLIS, Atomic Vapour Laser Isotope Separation. And that -- those programs all folded because of the materials handling issues. The process worked great for 200 or 300 hours. But after that, the internals of all the separation equipment had to be replaced because of the corrosiveness of atomic vapour of uranium.

So they're also at TRL 3 or 4 years behind us. I know for a fact we know both groups. I know for a fact the South African group got reasonable results with AVLIS for lithium enrichment. But lithium has a melting point, quite a low melting point, less than 1,000 degrees. Uranium has a melting point over 2,000 degrees. So it's really a different ball game trying to handle a uranium vapour compared to the lithium vapour. So I'm not here to cast aspersion on any potential competitors, but they've got some work ahead of them, and it will take years to catch up to where we are.

We also had a question about TRL-7. Will that be independently verified [indiscernible]?

Yes, it will be. Yes. We're lining up the same engineering consultant top tier for the -- Yes. You would know they all know that they want to remain anonymous, so they can do their work in peace and quiet.

Michael, we're told that or we know Cameco has [indiscernible] until April 2028. I guess the question is, do we have any view as to whether they will excite. And if so, when will be in advance of 2028. And if they don't, I assume, therefore, that [indiscernible] 51%, does that impact on our working capital requirements?

So [ Phil ], your first question, you'd have to ask Cameco. I can't speak for Cameco. I have said in recent disclosures, their webcast that they're not ready to exercise yet. So that's up to them. And if they did not exercise, we'd be still comfortable carrying out 51%. As I mentioned, there's that Department of Energy loan facility that Silex is certainly interested in. And as far as the debt component, we believe we will be able to manage that going forward.

In parallel, should Silex be looking at an IPO [indiscernible] to keep Cameco honest?

Well, I'm glad you said keep Cameco honest, because we have a good relationship with them, and they're generally very good and honest to work with. We -- all I can say is, as far as Silex is concerned, no option is off the table. So I'd make a comment that right now, Cameco recently released a statement saying they're going to prepare for an IPO for Westinghouse. So anything is possible. That's happening with Westinghouse, whether it's the right thing for GLE, we'll have to wait and see, but it's obviously going to have to be a joint decision by the joint venture partners.

Just on your potential new silicon opportunity, does that in any way back to the old program 20 years ago with the [ Japanese ]?

Yes. We learned a lot from that. We tweaked and the best things we learned is how to improve it and make it more efficient and achieve higher purity of enrichment. So we took the learnings from that program and applied them to the new -- it's a different process, but there are some similarities, and we learned from the previous program. That program suffered from the fact that the enriched silicon was being used as a bulk platform heat dissipation material. And the new emerging heat dissipation application is not a bulk platform. It's various small nano-wires, which behave very differently to a bulk material.

So we've learned from some of the most recent developments in chip structures as well. And that... no, the nano-wires actually are like literally heat pipes laid between transistor architecture. And so they literally act like heat pipes. And because they're not bulk, they're nano scale, they have a lot of contact with the surrounding atoms, the heat dissipation is much higher. In fact, Lawrence Berkeley Labs measured heat dissipation at 250% of natural silicon using enriched silicon, 2.5x. So we only saw 10% to 20% increase in thermal conductivity in the old project with the Japanese partners, and that didn't fly.

Correct me if I'm wrong, [indiscernible].

Correct.

So it's obviously a saving because they're already in that form. But at the same time, there's extra cost because they're depleted below natural level. What's the overall balance, is it better than natural uranium in terms of cost savings or is it in [indiscernible]

I gave the ballpark number for the costs as less than $30 a pound. So we converted our costs, which includes CapEx, sustaining CapEx, OpEx, payments to the Department of Energy for the feed material and royalty payments from GLE back to Silex. Put all that in our cost model, and we compared it to a mining operation. So they quote dollars per pound. So ours is less than $30 a pound, which is very competitive in today's market.

So we're a lot better off despite the fact that [indiscernible] better off.

That's the economics of enriching depleted uranium back to natural grade. It's a great opportunity. Economics is there. It's hopefully good margins. If the uranium price stays where it is or even rises, very good margins.

Why don't we check with Julie, any online that we can answer.

Most of the questions have been covered from the room, but there is one here. If you could just clarify, Michael, what the capital cost is and to build what capacity? So you talked about $1.3 billion?

Yes. So the -- talking about the blue building, the first project, which will take the tails, prices them back to natural at less than $30 a pound equivalent to a mining operation. So the CapEx that we've assessed in quite some detail now from the bill of materials into the engineering cost model and into the plant cost model, I said about $1.3 billion plus or minus, that's the ballpark. It could be more, it could be less. But that $1.3 billion is for the capital cost of that first plant shown here in blue, and that's what went into the economic modeling. The amount of SWU in the building on the left to take it from natural grade to LEU grade, reactor grade, the amount of SWU that material would require once it came out from the blue building would be about 2 million units of enrichment. And that has a similar capital cost to the blue building. So that's just ballpark numbers, but that's where we are today.

I think we've exhausted the room.

I've got one more for you. It's actually for you, Craig. It's a governance question and it's regarding PwC.

Did you say, it's them?

No, it's about PwC. There's a comment here that PwC have been our auditor for a number of years. And do we have any plans to go out for competitive tender? And for example, do you see PwC being our auditor in 2030?

Look, thanks for the question. The answer is we've been very happy with PwC. Ash has been a great lead partner. This will be her final meeting. So we're covering best practice, and we're going to rotate partners within PwC. And in fact, our incoming partner is in the room as well, too. So in terms of governance practice, Julie, we are doing a rotation. We have no plans at the moment to shift from PwC because we're getting a good service from PwC.

Can I shift to one other topic and a number of the questions that Michael spoke about was -- or questions that came around options that people have around capital costs, around IPO and the like. We've got one big event that leaves the value of the company substantially before we should be thinking too much around those, and that's TRL-7. So the company would not be -- there would have to be something extraordinary to do any of those capital events for TRL-7 because as Michael's labored on over his words, it just changes the total construct of the company once TRL-7 is achieved. So we'd be giving away value, would be our sense. Yes, we are open to a whole bunch of things, but we don't want to give away value.

Thanks, Michael, for that most comprehensive presentation again. Thanks for taking those questions. We now move to the formal part of the business of the meeting. I remind shareholders there's only a short time left in which you can vote for any resolution. Those in the room actually, they will come around and pick up your forms, and you don't need to worry about that [indiscernible] and that's more a signal to those folks online.

I propose the Notice of Meeting, which was circulated beforehand and taken as read. The first item of business and given the question regarding PwC is consideration of financial report, the directors' report and the auditor's report of the company for the last financial year ending 30 June 2026. As we mentioned, Ash is in the room present. Are there any questions or Ash, Susie is our Chair of the Audit and Risk Committee. Anyone else can ask. Any questions for those folks? You have a question for me, Michael.

He's asked [indiscernible].

I do this every year. I just ignore this screen every year, and I get called out every year. Thank you. All right. Thank you for that. Any questions for PwC at all or any online, Julie?

No. [indiscernible]

Sorry, what's that? No, and look, thanks Ash for your service over the 5 years. It's been delightful working with you. So thank you very much. So there's no questions there. We will turn over the page.

I now move to the resolutions, and you can see the results as we've got them in hand today. There are 3 items of resolution. Can I stop and pause and ask if there's any questions from the room around any of those resolutions before you cast your vote.

So I'm going to give a short pause now because voting is about to close. So those attending in person can vote, obviously, as per the little blue slip you've got as well, too. Please cast your vote on all resolutions, even if you put an abstain in there. I'm now going to pause for about 15 seconds to give those online a final chance.

[Voting]

That seems pretty close to 15 seconds. So our voting's now closed. The voting results will be released to the ASX, hopefully later today, share them all. And we have a nice pink box going around the room to put ballots into that.

So I think that closes the formal meeting of the business. We always look forward to interacting with you as shareholders following that meeting as well, too. I know there's a nice plate of sandwiches and a few other things up the back as well, too.

So thanks again for your attendance and support, and we look forward to seeing you again next year. So thank you very much.