Silex Systems Limited · ASX:SLX
Silex Systems — Investor Presentation (September 2021)
56 slides from Silex Systems's investor presentation, Sep 27, 2021
Slide 1: Commercialising the SILEX Technology - Equity Raising Presentation
Commercialising the SILEX Technology Equity Raising Presentation (ASX: SLX) (OTCQX: SILXY) Dr Michael Goldsworthy CEO/Managing Director 27 September 2021 Not for distribution or release in the United States www.silex.com.au 1
Slide 2: Important Notice and Disclaimer
Important Notice and Disclaimer 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 Presentation. By accep
Slide 3: Important Notice and Disclaimer
Important Notice and Disclaimer Not financial advice 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 enquiries and investigations regarding
Slide 4: Important Notice and Disclaimer
Important Notice and Disclaimer 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, each of the Company,
Slide 5: Forward Looking Statements and Risk Factors
Forward Looking Statements and Risk Factors About Silex Systems Limited (ASX: SLX) (OTCQX: SILXY) Silex Systems Limited ABN 69 003 372 067 (Silex or Company) is a research and development company whose primary asset is the SILEX laser enrichment technology, originally developed at the Company’s tech
Slide 6: Table of Contents
Table of Contents Introduction 7 Equity Raising Overview 12 Additional Silex Information: 18 Uranium Production and Enrichment for Nuclear Fuel 19 Nuclear Power and the Nuclear Fuel Market Opportunity 25 Zero-Spin Silicon for Quantum Computing 30 SILEX Technology Summary 34 Key Investment Risks 36 F
Slide 7: Our Mission
Our Mission: to commercialise the unique SILEX laser enrichment technology for application to: Uranium production and Silicon enrichment (silicon Other potential markets (e.g. enrichment (nuclear power) quantum computing) medical isotopes) Our strategy is focused on extracting maximum value from our
Slide 8: Silex - Positioning for Commercialisation
Silex - Positioning for Commercialisation • Acquisition of 51% interest in SILEX uranium enrichment technology commercialisation vehicle GLE • US-based GLE now owned 51% by Silex and 49% by Cameco Corporation • Cameco is one of the world’s leading uranium and nuclear fuel suppliers • GLE has recruit
Slide 9: SILEX Technology Commercialisation Overview
SILEX Technology Commercialisation Overview 51% Owned 100% Owned Other Potential Markets SILEX Uranium Production via GLE SILEX Zero-Spin Silicon Production E.g. Medical Isotopes Technology SILEX laser enrichment Technology SILEX laser enrichment SILEX laser enrichment Licensed to Global Laser Enric
Slide 10: Investment Highlights and ESG
Investment Highlights and ESG Investment in three key growth industries with strong ESG credentials: 1) Clean Energy: Nuclear Power – potential to support Net-Zero 2050 targets 2) Next Generation Quantum Computing – expected to help solve global social and environmental issues 3) Advanced Nuclear Me
Slide 11: Silex Overview
Silex Overview Period: 1 year (22 Sep 2020 - 22 Sep 2021) Price (AUD) $1.91 $1.71 $1.51 $1.31 $1.11 $0.91 $0.71 $0.51 22/09/20 2/11/20 11/12/20 21/01/21 3/03/21 13/04/21 24/05/21 2/07/21 12/08/21 22/09/21 Pre-equity Offer Top 5 Shareholders Pre-equity Offer Capital Structure Jardvan Pty Ltd 17.21% S
Slide 12: Equity Raising Overview
Equity Raising Overview www.silex.com.au 12
Slide 13: Equity Raise to Position Silex for Commercialisation
Equity Raise to Position Silex for Commercialisation • GLE’s planned Paducah uranium production opportunity (~5 Mlbs pa for ~30 years) primary commercial focus • Silex commercialising SILEX technology for potential production of Zero-Spin Silicon for silicon quantum computing Current Position • Asse
Slide 14: Uses of Funds
Uses of Funds Proceeds from the Offer, together with existing cash, will be used to advance the Company’s technologies toward commercialisation and strengthen the Company’s balance sheet: 1) Advance the commercial pilot demonstration of the SILEX uranium enrichment technology in the US via GLE • Ena
Slide 15: Equity Raise Details
Equity Raise Details • Institutional Placement (Placement) to sophisticated, professional and institutional investors of ~26 million ordinary shares1 to raise ~$33 million • Share Purchase Plan (SPP) – eligible shareholders will be invited to invest to up to $30,000 per shareholder in the SPP, subje
Slide 16: Equity Raising - Indicative Timetable
Equity Raising - Indicative Timetable Indicative Placement Timetable1 Event Date Silex enters Trading Halt Thursday, 23 September 2021 Announcement of completion of the Placement Monday, 27 September 2021 Trading Halt is lifted and existing Silex shares resume trading Monday, 27 September 2021 Settl
Slide 17: Sources and Uses of Funds
Sources and Uses of Funds Sources of Funds A$m Placement proceeds 33 Share Purchase Plan proceeds 7 Existing cash and cash equivalents1 14 Total 54 Uses of Funds2 A$m GLE funding (51% share) of SILEX technology program and potential HALEU opportunity 37 Zero-Spin Silicon commercial production capaci
Slide 18: Additional Silex Information
Additional Silex Information www.silex.com.au 18
Slide 19: Uranium Production and Enrichment for Nuclear Fuel
Uranium Production and Enrichment for Nuclear Fuel www.silex.com.au 19
Slide 20: SILEX Uranium Production Opportunity
SILEX Uranium Production Opportunity Global demand for Uranium is set to rise: A significant potential uranium supply shortage is forecast • Structural supply deficit could occur without a timely increase in production • Demand could grow significantly as zero-emissions nuclear is embraced • There a
Slide 21: Paducah Uranium Production Opportunity
Paducah Uranium Production Opportunity Akin to a ‘Tier 1’ Target Commercial Uranium Resource* Equivalent U3O8 Operation Date based on low cost and Production longevity of production Planning for ~5 million lbs p.a. Anticipated to be late 2020’s (Silex estimate of all-in cost for approximately 30 yea
Slide 22: The Paducah Opportunity Potential Value Chain
The Paducah Opportunity Potential Value Chain ‘Full Service’ Nuclear Fuel Materials Concept SILEX Technology Depleted UF6 Tails Uranium Production LEU Production HALEU Production GLE-DOE Agreement ~5M lbs/yr for 30 years ~2 MSWU1/yr Enrichment 100+ Tons/yr – by 20302 Conventional Nuclear Advanced Sm
Slide 23: Emerging Opportunity - Small Modular Reactors
Emerging Opportunity - Small Modular Reactors (SMR’s) • Several next generation SMR designs use High Assay Low Enriched Uranium (HALEU) • SILEX technology may provide a flexible low cost alternative to produce HALEU for SMR’s • SMR’s are modular, smaller size (50 MWe to 300 MWe) allows greater flexi
Slide 24: SILEX Commercialisation and Royalty Agreement
SILEX Commercialisation and Royalty Agreement • GLE holds exclusive worldwide license for use of SILEX laser technology for uranium Paducah, KY Enrichment Plant Site • License agreement includes US$20 million in payments to Silex triggered by commercial development milestones: o US$5 million: Commer
Slide 25: Nuclear Power and the Nuclear Fuel Market Opportunity
Nuclear Power and the Nuclear Fuel Market Opportunity www.silex.com.au 25
Slide 26: 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 Clean Energy Zero-Emissions Low Cost 24/7 Reliability LCOE1 ~ US$70/MWHr Base Load Stability Nuclear Power Highest Capacity Factor Clean Electricity for (>
Slide 27: US Uranium Market Outlook – Supply Shortage Forecast
US Uranium Market Outlook – Supply Shortage Forecast Mid-Case Uranium Supply and Demand Forecast Million pounds U3O8 © UxC World Market Demand Range 300 275 250 225 200 175 150 125 100 75 50 25 0 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 Source: UxC Uranium
Slide 28: Uranium Price – Price Recovery Underway
Uranium Price – Price Recovery Underway Uranium Long-Term Base Price Forecast Then-Current US$/lb U3O8 © UxC $100 Ux LT U3O8 High $90 Ux LT U3O8 Midpoint $80 Ux LT U3O8 Low Mid Long-Term Base $70 Low Long-Term Base $60 High Long-Term Base $50 Composite LT Base Historical High and Low Annual $40 Ux L
Slide 29: Paducah Opportunity may help address US Uranium Vulnerability
Paducah Opportunity may help address US Uranium Vulnerability Uranium purchased for U.S. nuclear power reactors, 2010 - 2020 Million pounds U3O8 equivalent 60 US Imports ~90% (avg.) of Uranium purchased 50 40 30 20 10 - 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 U.S.-origin uranium Forei
Slide 30: Zero-Spin Silicon for Quantum Computing
Zero-Spin Silicon for Quantum Computing www.silex.com.au 30
Slide 31: SILEX Zero-Spin Silicon Opportunity
SILEX Zero-Spin Silicon Opportunity Global race to develop world’s first Quantum Computers • QC’s expected to be 1000’s of times more powerful than today’s conventional computers • QC anticipated to create new opportunities in medicine, AI, cybersecurity, finance, logistics etc • Governments around
Slide 32: SILEX Project for ZS-Si production gathering momentum
SILEX Project for ZS-Si production gathering momentum • Project partners SQC and UNSW part of the Federally funded ‘CQC2T Centre of Excellence’ ZS-Si for Silicon Quantum Computing – a world leader in silicon-based QC technology development • 3-year project cost ~$8m (includes pilot plant capex) supp
Slide 33: SILEX Zero-Spin Silicon Production Opportunity
SILEX Zero-Spin Silicon Production Opportunity Aim Production Target Commercial Commercial pilot scale establish a reliable and Operation Date production up to 5 kgs per economic supply of high purity 2023 year, anticipated to increase ZS-Si over the next decade Commercial ZS-Si Target Purity Offtak
Slide 34: SILEX Technology Summary
SILEX Technology Summary www.silex.com.au 34
Slide 35: SILEX Technology Summary
SILEX Technology Summary GLE venture (Silex 51% and Cameco 49%) aiming to demonstrate SILEX uranium enrichment technology at pilot commercial scale by the mid 2020’s GLE’s commercial focus - the Paducah opportunity – potentially a large, low cost uranium production project with additional scope for
Slide 36: Key Investment Risks
Key Investment Risks www.silex.com.au 36
Slide 37: Key Investment Risks
Key Investment Risks Introduction This section describes the key risks of investing in 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 have a material impact on the financial perform
Slide 38: Key Investment Risks
Key Investment Risks 1. General business 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. The outcome of this program remains subject to various risks including, but not lim
Slide 39: Key Investment Risks
Key Investment Risks 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 technologies, including its u
Slide 40: Key Investment Risks
Key Investment Risks 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 other forms of uranium
Slide 41: Key Investment Risks
Key Investment Risks (c) Contractual and Regulatory Risks – SILEX Uranium 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 Silex acquiring 51% ownership in GLE
Slide 42: Key Investment Risks
Key Investment Risks 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 contracted parties, m
Slide 43: Key Investment Risks
Key Investment Risks (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 and foreign governmen
Slide 44: Key Investment Risks
Key Investment Risks 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, currently approximately 50% through a three-y
Slide 45: Key Investment Risks
Key Investment Risks (b) Ability to produce sufficiently pure ZS-Si economically and at affordable pricing While Silex has already demonstrated the ability of the SILEX technology to produce small quantities of ZS-Si in the first stage of the ZS-Si project (laboratory-scale), it has to date only dem
Slide 46: Key Investment Risks
Key Investment Risks 5. General and Miscellaneous Risks (a) COVID-19 The ongoing COVID-19 pandemic and any other possible future outbreaks of contagious diseases or pandemics may have a significant adverse effect on Silex. The spread of such diseases amongst Silex’s management, employees, contractor
Slide 47: Key Investment Risks
Key Investment Risks (d) Share price variation and liquidity The New Shares issued pursuant to this equity raising carry no guarantee in respect of profitability, dividends or return of capital. Silex is unlikely to pay a dividend for a number of years. There can be no guarantee that there will cont
Slide 48: Key Investment Risks
Key Investment Risks (i) 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, including taxation laws; • m
Slide 49: Foreign Selling Restrictions
Foreign Selling Restrictions www.silex.com.au 49
Slide 50: Foreign Selling Restrictions
Foreign Selling Restrictions 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 offered or sold, in any co
Slide 51: Foreign Selling Restrictions
Foreign Selling Restrictions 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 and Markets Act 2000,
Slide 52: Foreign Selling Restrictions
Foreign Selling Restrictions 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 Provinces, and only by persons
Slide 53: Foreign Selling Restrictions
Foreign Selling Restrictions 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 in the Event of a Misr
Slide 54: Foreign Selling Restrictions
Foreign Selling Restrictions This document is being delivered in reliance on the exemption from the prospectus requirements contained under section 2.3 of NI 45-106 (the “accredited investor exemption”). The rights referred to in section 130.1 of the Securities Act (Ontario) do not apply in respect
Slide 55: Foreign Selling Restrictions
Foreign Selling Restrictions • a person, other than the Company, will not be liable if the person proves that any part of the offering memorandum not purporting to be made on the authority of an expert, or to be a copy of, or an extract from, a report, an opinion or a statement of an expert, unless
Slide 56: Thank you
Mp Silex Thank you
Silex Systems — Investor Presentation (September 2021) on 6ix