Silex Systems Limited · ASX:SLX
Silex Systems — Investor Presentation (February 2023)
68 slides from Silex Systems's investor presentation, Feb 27, 2023
Slide 1: Accelerating SILEX Technology Commercialisation: Equity Raising Presentation
For personal use only Accelerating SILEX Technology Commercialisation Equity Raising Presentation (ASX: SLX) (OTCQX: SILXY) Dr Michael Goldsworthy Julie Russell CEO/Managing Director CFO/Company Secretary 27 February 2023 Not for distribution or release in the United States www.silex.com.au 1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer For personal use only The following notice and disclaimer applies to this capital raising presentation (Presentation) and you are therefore advised to read this carefully before reading or making any other use of this Presentation or any information contained in this
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Not financial product advice For personal use only This Presentation does not constitute financial product or investment advice or any recommendation to acquire shares or accounting, legal or tax advice. Each recipient of this Presentation should make its own enquirie
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer For personal use only No liability Silex has prepared this Presentation based on information available to it at the time of preparation, from sources believed to be reliable and subject to the qualifications in this Presentation. To the maximum extent permitted by law
Slide 5: Forward Looking Statements and Risk Factors
Forward Looking Statements and Risk Factors For personal use only About Silex Systems Limited (ASX: SLX) (OTCQX: SILXY) Silex Systems Limited ABN 69 003 372 067 (Silex or Company) is a technology commercialisation company whose primary asset is the SILEX laser enrichment technology, originally devel
Slide 6: Table of Contents
Table of Contents For personal use only # Introduction 7 Equity Raising Overview 16 Additional Silex Information: 21 Nuclear Power Outlook – Key Drivers for Growth of Enrichment for Nuclear Fuel 22 Nuclear Fuel Supply Chain – Emerging Threats lead to Opportunities 26 Nuclear Fuel Supply Chain – Trip
Slide 7: Our Mission: commercialise the SILEX laser enrichment technology
Our Mission: to commercialise the unique SILEX laser enrichment technology for application to: For personal use only Uranium production Silicon enrichment Other potential markets and enrichment (silicon quantum computing) (e.g. medical isotopes) (nuclear power) Our strategy is focused on extracting
Slide 8: Investment Focus – Strong ESG Credentials
Investment Focus – Strong ESG Credentials For personal use only Investment in three key growth industries with strong ESG credentials: 1) Nuclear Power for Clean Energy – potential to support Net-Zero 2050 targets with carbon-free electricity production 2) Next Generation Quantum Computing – expecte
Slide 9: Focus on Commercialisation
Focus on Commercialisation For personal use only Uranium production and enrichment (nuclear power) • SILEX uranium technology licencee Global Laser Enrichment (GLE) is actively progressing towards commercialisation • US-based GLE under JV ownership since 2021: 51% by Silex and 49% by Cameco Corporat
Slide 10: GLE Value Proposition for Silex
GLE Value Proposition for Silex* For personal use only 1) GLE Equity – Minimum 25%: • Currently 51% - potentially 25% post-Cameco Option, with payment for 26% at fair market value • Significant equity stake in GLE as a potential major nuclear fuel supplier • Attractive business case with Triple Oppo
Slide 11: Nuclear Fuel Production and Emerging Threats
Nuclear Fuel Production and Emerging Threats For personal use only The Nuclear Fuel Supply Chain Emerging Threats to the Global Nuclear Fuel Supply Chain: - Supply chain risks exposed by over-dependence on Russian-sourced nuclear fuel - Western supply - curtailments and under-investment in resources
Slide 12: CY2023 GLE Acceleration Opportunity for Silex
CY2023 GLE Acceleration Opportunity for Silex For personal use only Significant Support Emerging from the US Government and Industry: • US Government passed ‘Inflation Reduction Act’ in August 2022 - includes US$700 million support for the HALEU1 Availability Program • New Nuclear Fuel Security Act
Slide 13: GLE's CY2023 Pilot Demonstration Program for the SILEX technology
GLE’s CY2023 Pilot Demonstration Program for the SILEX technology For personal use only www.silex.com.au 13
Slide 14: Significant Additional Opportunities
Significant Additional Opportunities For personal use only Silicon enrichment Other potential markets (silicon quantum computing) (e.g. medical isotopes) • SILEX technology proven capable of producing highly enriched silicon • Newly commenced Medical Isotope project aiming to develop and in the form
Slide 15: Silex Overview
Silex Overview For personal use only Board and Executive Management Period: 1 month (22 Jan 2023 - 22 Feb 2023) Price (AUD) Craig Roy Non-executive Chair $5.16 $5.13 $5.06 Michael Goldsworthy CEO/Managing Director $4.96 Helen Cook Non-executive Director $4.86 $4.76 Chris Wilks Non-executive Director
Slide 16: Equity Raising Overview
For personal use only Equity Raising Overview www.silex.com.au 16
Slide 17: Equity Raise Details
Equity Raise Details For personal use only • Institutional Placement (Placement) to sophisticated, professional and institutional investors of ~24.7 million ordinary shares1 to raise up to $100 million2 Offer Structure • Share Purchase Plan (SPP) – eligible shareholders will be invited to invest to
Slide 18: Uses of Funds
Uses of Funds For personal use only Proceeds from the Offer, together with existing cash (~$34m1), will be used to accelerate SILEX technology commercialisation opportunities and strengthen the Company’s balance sheet: 1) Acceleration of CY2023 activities in the commercial-scale pilot demonstration
Slide 19: Sources and Uses of Funds
Sources and Uses of Funds For personal use only Sources of Funds A$m Placement proceeds1 100 Share Purchase Plan proceeds2 20 Existing cash and cash equivalents3 34 Total 154 Uses of Funds4 A$m GLE funding (51% share) of SILEX technology commercial-scale pilot demonstration program5 40 (provides opp
Slide 20: Equity Raising - Indicative Timetable
Equity Raising - Indicative Timetable For personal use only Indicative Placement Timetable1 Event Date Silex enters Trading Halt Thursday, 23 February 2023 Announcement of completion of the Placement Monday, 27 February 2023 Trading Halt is lifted and existing Silex shares resume trading Monday, 27
Slide 21: Additional Silex Information
For personal use only Additional Silex Information www.silex.com.au 21
Slide 22: Nuclear Power Outlook – Key Drivers for Growth of Enrichment of Nuclear Fuel
For personal use only Nuclear Power Outlook – Key Drivers for Growth of Enrichment of Nuclear Fuel www.silex.com.au 22
Slide 23: Nuclear Power Imperatives
Nuclear Power Imperatives For personal use only Response to Climate Change: • Population growth and industrialisation surging increase in energy demand • Urgent climate action (Net-Zero 2050) driving rapid global energy transition • De-carbonisation and electrification increasing importance of nucle
Slide 24: Why Nuclear Power is important to achieving Net-Zero
Why Nuclear Power is important to achieving Net-Zero Nuclear power is currently the only economic source of zero-emissions base load electricity For personal use only Clean Energy Net-Zero 2050 Low Cost 24/7 Reliability LCOE1 ~ US$70/MWHr Base Load Stability Nuclear Power Highest Capacity Factors Cl
Slide 25: Significant Nuclear Power Growth to achieve Net-Zero 2050
Significant Nuclear Power Growth to achieve Net-Zero 2050 For personal use only Nuclear Generation Growth Scenarios Conventional Large-Scale Reactor Population TWh 7,000 Net Zero 226% 6,000 Accelerated 5,000 New Momentum 186% 4,000 127% 3,000 2,000 2000 2005 2010 2015 2020 2025 2030 2035 2040 2045 2
Slide 26: Nuclear Fuel Supply Chain – Emerging Threats lead to Opportunities
For personal use only Nuclear Fuel Supply Chain – Emerging Threats lead to Opportunities www.silex.com.au 26
Slide 27: US and EU Nuclear Fuel Requirements Supplied by Russia
US and EU Nuclear Fuel Requirements Supplied by Russia For personal use only Russian Share of Global EU Nuclear Fuel US Nuclear Fuel Production Capacity1 Supplied by Russia2 Supplied by Russia1,3 Uranium (U308) ~14% ~20% ~14% Conversion ~27% ~24% ~18% Enrichment (SWU) ~45% ~31% ~20% 1. WNA and UxC v
Slide 28: PLEF Opportunity may help address US Uranium Vulnerability
PLEF Opportunity may help address US Uranium Vulnerability For personal use only Uranium purchased for US nuclear power reactors, 2011 - 2021 Million pounds U3O8 equivalent US imported ~95% of Uranium purchased in 2021 Source: 2021 EIA Uranium Marketing Annual Report (Released May 2022) www.silex.co
Slide 29: Recent Nuclear Fuel Market Price Trends
Recent Nuclear Fuel Market Price Trends For personal use only Uranium (U308) Price Conversion Price Enrichment (SWU) Price US$lb US$KgU US$SWU $70.00 $45.00 $160.00 U3O8 LT U3O8 NA NA LT Spot LT SWU Spot $40.00 Conv Conv SWU $60.00 $140.00 $35.00 $120.00 $50.00 $30.00 $100.00 $40.00 $25.00 $80.00 $2
Slide 30: Nuclear Fuel Supply Chain – Triple Opportunity for GLE and SILEX Technology
For personal use only Nuclear Fuel Supply Chain – Triple Opportunity for GLE and SILEX Technology www.silex.com.au 30
Slide 31: Nuclear Fuel Opportunities for GLE and the SILEX Technology
Nuclear Fuel Opportunities for GLE and the SILEX Technology For personal use only www.silex.com.au 31
Slide 32: GLE's Multi-Purpose PLEF Production Plant Opportunity
GLE’s Multi-Purpose PLEF Production Plant Opportunity For personal use only The PLEF Triple Opportunity Paducah Laser Enrichment Facility (PLEF) commercial project to deploy the SILEX technology in the US: • PLEF UF6 Production: Production of up to 5 million pounds natural grade uranium (as UF6) ann
Slide 33: Nuclear Fuel Opportunities for GLE and the SILEX Technology
Nuclear Fuel Opportunities for GLE and the SILEX Technology For personal use only Potential U production ~ 5 million lbs/yr Potential SWU production Potential conversion ~ 2 million kgs/yr at least 2MSWU/yr Potential production TBD www.silex.com.au 33
Slide 34: PLEF UF6 Production Opportunity
PLEF UF6 Production Opportunity (Natural UF6 production from tails) For personal use only Target Commercial Akin to a ‘Tier 1’ Uranium Resource* Equivalent U3O8 Operation Date Based on low cost and Production Baseline: c. 2030 longevity of production Up to 5 million lbs p.a. for (with potential acce
Slide 35: GLE / SILEX Technology Commercialisation Timelines
GLE / SILEX Technology Commercialisation Timelines1 For personal use only Baseline - GLE Commercialisation Timeline: PLEF Commercial Commercial Pilot Demonstration2 PLEF3 Feasibility and Licensing PLEF EPC4 Operations c. 2025 c. 2027 c. 2030 Potential Acceleration - GLE Commercialisation Timeline5:
Slide 36: Cameco Equity Option and Perpetual SILEX Technology Licence
Cameco Equity Option and Perpetual SILEX Technology Licence For personal use only Cameco Equity Option: • Current GLE JV ownership is Silex 51% and Cameco 49% • Cameco holds an option to purchase an additional 26% of GLE equity from Silex at fair market value • Window for option exercise open Februa
Slide 37: Zero-Spin Silicon for Quantum Computing – scaling for commercial production
For personal use only Zero-Spin Silicon for Quantum Computing – scaling for commercial production www.silex.com.au 37
Slide 38: SILEX Zero-Spin Silicon Opportunity
SILEX Zero-Spin Silicon Opportunity For personal use only Global race to develop world’s first Quantum Computers (QCs) • QCs expected to be many times more powerful than today’s conventional computers • QCs will create new opportunities in medicine, AI, defence, cybersecurity, finance, logistics, et
Slide 39: Original SILEX Project for ZS-Si Production
Original SILEX Project for ZS-Si Production For personal use only • Project partners SQC and UNSW part of the Federally funded ‘CQC2T Centre of Excellence’ – a world leader in silicon-based QC technology development • 3-year project cost ~$8m (incl. pilot plant capex), supported by $3m Federal CRC-P
Slide 40: Scaling for Initial Commercial ZS-Si Production
Scaling for Initial Commercial ZS-Si Production For personal use only • SQC and UNSW Sydney first offtake customers as ZS-Si production scaled • Commercial production targeting two product formats: • solid elemental silicon (Polysilicon and Monosilicon) – for SQC/UNSW and other customers • gaseous s
Slide 41: SILEX Zero-Spin Silicon Production Opportunity
SILEX Zero-Spin Silicon Production Opportunity For personal use only Aim 2023 - Commercial 2024 - Commercial Establish scaled, reliable and Pilot Operation Production Scale-up economic production of high To produce initial commercial Commercial production of up purity ZS-Si in two product quantities
Slide 42: Medical Isotope Separation Technology (MIST) Project
For personal use only Medical Isotope Separation Technology (MIST) Project www.silex.com.au 42
Slide 43: Medical Isotope Separation Technology (MIST) Opportunity
Medical Isotope Separation Technology (MIST) Opportunity For personal use only Opportunity to become a vital cog in a revolution in nuclear medicine • Lutetium (Lu-177) is a breakthrough development for the diagnosis and treatment of aggressive metastatic cancers • Lu-177 has been approved in the UK
Slide 44: The Importance of Lutetium-177 in Nuclear Medicine
The Importance of Lutetium-177 in Nuclear Medicine For personal use only How Lu-177 is utilised in nuclear medicine procedures: • Lu-177 is an important radioisotope introduced only recently – now approved for several cancer treatments • Lu-177 is expected to become one of the most widely used thera
Slide 45: MIST Project for Enriched Yb-176 (Precursor to Lu-177)
MIST Project for Enriched Yb-176 (Precursor to Lu-177) For personal use only 3-year, stage-gated project aims to to develop production technology to produce enriched Yb-176: • Stage 1 – Proof-of-Concept (CY2023) – TRL-3 Lab-scale verification of ‘proof-of-concept’ in a custom built test reactor • St
Slide 46: Medical Isotope Separation Technology Project: Yb-176
Medical Isotope Separation Technology Project: Yb-176 For personal use only Aim Project Outline Initial Commercial To establish process viability Stage 1: Proof of Concept - 2023 Production and production capability for Stage 2: Prototype validation - 2024 Enriched Yb-176 (~99%) in 2026 economic pro
Slide 47: SILEX Technology Summary
For personal use only SILEX Technology Summary www.silex.com.au 47
Slide 48: SILEX Technology Summary
SILEX Technology Summary For personal use only GLE’s path to market underpinned by the PLEF UF6 project for cost effective production of natural uranium (in the form of UF6) and significant value of the contained conversion component Acceleration of CY2023 activities in the pilot demonstration proje
Slide 49: Key Investment Risks
For personal use only Key Investment Risks www.silex.com.au 49
Slide 50: Key Investment Risks
Key Investment Risks For personal use only Introduction This section describes the key risks of investing in Silex Systems Limited (Silex) and the risks relating to participation in the Equity Raise. The risks identified in this section do not describe all of the risks of an investment or that may h
Slide 51: Key Investment Risks: General Business Risks
Key Investment Risks For personal use only 1. General Business Risks Silex’s general business risks include but are not limited to: • results from Silex's uranium enrichment development program for the SILEX laser uranium enrichment technology being conducted in collaboration with Global Laser Enric
Slide 52: Key Investment Risks: Technology Commercialisation Risks
Key Investment Risks For personal use only 2. Technology Commercialisation Risks (a) Commercialisation Delays The nature of research and development projects is such that delays can occur in the development process which may impact on the timing of the commercial deployment of any of Silex's technol
Slide 53: Key Investment Risks: Nuclear Industry Risks
Key Investment Risks For personal use only 3. Nuclear Industry Risks – SILEX Technology for Uranium Enrichment (a) Changes in market prices or decreasing demand Changes in the market price or demand for uranium (measured in pounds of uranium oxide or ‘yellowcake’), Separative Work Units (SWU‘s) or o
Slide 54: Key Investment Risks
Key Investment Risks For personal use only (c) Contractual and Regulatory Risks – SILEX Uranium Enrichment Technology In 2006, Silex signed an agreement with GE to develop and commercialise the SILEX Process for uranium enrichment. In January 2021, a restructure of GLE was completed resulting in Sil
Slide 55: Key Investment Risks
Key Investment Risks For personal use only Silex is reliant on these various agreements and contracted parties for the successful commercialisation of the SILEX uranium enrichment technology. Problems arising or caused through these contracts or agreements or by, or with the counterparties and other
Slide 56: Key Investment Risks
Key Investment Risks For personal use only (f) Release of uranium stockpiles The US and foreign governments have stockpiles of natural uranium and LEU that they could sell in the market. In addition, LEU and HALEU may be produced by down-blending stockpiles of highly enriched uranium owned by the US
Slide 57: Key Investment Risks: Quantum Computing Risks
Key Investment Risks For personal use only 4. Quantum Computing Risks – SILEX Technology for Zero-Spin Silicon The application of the SILEX Laser Isotope Separation technology to the enrichment of silicon for the production of Zero-Spin Silicon (ZS-Si) is in the early stages, with the current three-
Slide 58: Key Investment Risks
Key Investment Risks For personal use only (b) Ability to produce sufficiently pure ZS-Si economically and at affordable pricing Silex has already demonstrated the ability of the SILEX technology to produce small quantities of ZS-Si at around 99.995% enrichment of silicon-28. and this level of purit
Slide 59: Key Investment Risks: General and Miscellaneous Risks
Key Investment Risks For personal use only 5. General and Miscellaneous Risks (a) Intellectual property As with any intellectual property, potential exists for a third party to dispute the Silex's rights to the SILEX technology or any other technologies it develops, uses or relies upon, including th
Slide 60: Key Investment Risks
Key Investment Risks For personal use only (d) Environmental and Regulatory risks Silex’s and GLE’s operations are subject to extensive Federal, State and local environmental laws and regulations in both Australia and the US. These laws and regulations set various standards regulating certain aspect
Slide 61: Key Investment Risks
Key Investment Risks For personal use only (h) General market risks There are business and market risks inherent in any listed security, which could materially affect Silex’s earnings and the pricing of its shares, including: • changes in law and regulation affecting Silex and its operations, includ
Slide 62: Foreign Selling Restrictions
For personal use only Foreign Selling Restrictions www.silex.com.au 62
Slide 63: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only This document does not constitute an offer of New Shares under the Placement in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares under the Placement may not be offe
Slide 64: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only United Kingdom Neither this document nor any other document relating to the offer has been delivered for approval to the Financial Conduct Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services
Slide 65: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only Canada (British Columbia and Ontario Provinces) This document constitutes an offering of New Shares only in the Provinces of British Columbia and Ontario (the Provinces), only to persons to whom New Shares may be lawfully distributed in the Province
Slide 66: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only Two Day Cancellation Right - You can cancel your agreement to purchase the New Shares. To do so, you must send a notice to the Company by midnight on the second business day after you sign the agreement to buy New Shares. Statutory Rights of Action
Slide 67: Foreign Selling Restrictions
Foreign Selling Restrictions For personal use only This document is being delivered in reliance on the exemption from the prospectus requirements contained under section 2.3 of NI 45-106 or subsection 73.3(1) of the Securities Act (Ontario) (the “accredited investor exemption”). The rights referred
Slide 68: Thank you
For personal use only Thank you 68
Silex Systems — Investor Presentation (February 2023) on 6ix