Silex Systems welcomes progress with US Government approvals for GLE restructure

Silex Systems Ltd (ASX:SLX) (OTCMKTS:SILXY) has welcomed progress with the US Government’s approvals process for the restructure of GE-Hitachi Global Laser Enrichment (GLE). GLE has received notice from the US Nuclear Regulatory Commission (NRC) that it will be granted a standalone Facility Clearance. This will enable it to continue to operate under new ownership as a foreign-owned entity, in line with closing of a Membership Interest Purchase Agreement (MIPA) executed in December 2019 between Silex, Cameco Corporation and GE-Hitachi Nuclear Energy (GEH). The application for a standalone facility clearance was submitted to the NRC in February 2020. Key step in gaining approval Silex CEO Michael Goldsworthy said: “The granting of the GLE Facility Clearance is the key step in gaining full US Government approvals for the transaction.” “We anticipate the remainder of this process to be concluded in the coming weeks. “The GLE restructure has been a lengthy and challenging process, but we are now cautiously excited to be within reach of the finish line.” Technology background SILEX laser enrichment technology was originally developed at the company’s technology facility in Sydney, Australia. The technology was licensed exclusively in 2006 to GE-Hitachi Global Laser Enrichment LLC (GLE) in the USA for application to uranium enrichment. GLE has been undergoing a restructure for a number of years after GE-Hitachi disclosed it was seeking to exit the venture. In view of the time the GLE restructure has taken to date and the dependency of the closing of the restructure on obtaining US Government approvals, combined with the continuing depressed nuclear fuel market conditions, plans for commercial deployment of the SILEX technology have been delayed. Termination of old licence Upon the granting of the new facility clearance, the NRC will terminate the old licence under which GLE would have operated in Wilmington, North Carolina (known as the SNM-2019 License). The termination in part reflects GLE’s intention to base all commercial operations in Paducah, Kentucky, with the Paducah tails enrichment plant being the first planned commercial plant. A separate NRC licence for commercial operations at Paducah will be applied for at a future date. Closing of the MIPA, which remains subject to finalisation of US Government approvals and other factors, would result in Silex acquiring a 51% interest in GLE and Cameco increasing its interest from 24% to 49%. Following a positive outcome of the US Government approvals process in the coming weeks, the closing of the transaction would occur shortly thereafter.