Silex's Stock Skyrocketed On ASX After Signing New Term Sheet With GE-Hitachi

Australian high-tech company, Silex Systems Limited (ASX: SLX) and Canadian uranium miner Cameco Corporation have signed a Term Sheet detailing key terms for the joint purchase from GE-Hitachi Nuclear Energy of its 76 percent interest in SILEX technology licensee GLE. Â Following this news, the share price of the company increased by 41.176 percent.

The Term Sheet outlines the proposed transaction the parties would enter into for the purchase of GEH’s 76% interest in GLE, which upon closing would result in Silex acquiring a 51% interest in GLE and Cameco increasing its stake in GLE from 24% to 49%.

The Term Sheet includes the following binding terms:Â

  • Funding for the continuing Wilmington Test Loop activities of US$300,000 per month, to be paid pro-rata by the Purchasers, that is, 51% for Silex (equating to US$153,000 per month) and 49% for Cameco (equating to US$147,000 per month) retrospectively from 1 September 2018 until Closing or termination of the binding Purchase Agreement should Closing not be attained; and
  • A termination fee of US$500,000 payable by Silex to GEH in the event Silex terminates the Term Sheet (without cause) before execution of the binding Purchase Agreement.

The Term Sheet also provides for a deferred purchase price of US$20 million payable to GEH in four consecutive annual instalments of US$5 million, commencing after the first calendar year in which GLE achieves revenues of US$50 million, to be paid by the Purchasers pro-rata to the interests acquired in GLE.

Silex and Cameco are also working through several ancillary documents which will support the restructure of GLE under the proposed transaction, including a new shareholders’ agreement for the governance of GLE after Closing of a binding Purchase Agreement. Under these documents, Silex and Cameco have negotiated several other key terms, including an option for Cameco to purchase from Silex at fair market value, an additional 26% interest in GLE, increasing their stake to 75%

The parties are aiming to execute the binding Purchase Agreement by 30 April this year. The closing of a binding Purchase Agreement will be conditional, among other things, on obtaining US Government approvals and on the 2016 GLE-DOE Sales Agreement remaining in full force and effect. The availability of the DOE’s tails inventories is critical to the Paducah Commercial Plant project as detailed in prior releases.

In the meantime, a reduced but focused technology commercialisation effort will continue at GLE’s Test Loop facility in Wilmington, North Carolina, together with a parallel effort continuing at Silex’s Lucas Heights facility in Sydney. The timing of the completion of the technology demonstration program by GLE and Silex and the commencement of the Paducah Commercial Plant will be reviewed progressively in conjunction with all stakeholders.

Now let us quickly have a look at the company’s stock performance and the return it has posted over the last few months. The stock is currently trading at a price of $0.240 and is trading up by 41.176% during the day’s trade, with a market capitalisation of $28.98 million. The counter opened the day at $0.255, reached a day’s high of $0.275 & touched a day’s low of $0.240. The stock has yielded a Year Till Date returns of -10.53% and posted returns of -26.09%, -17.07% & -5.56% over the past six months, three months & one-month period respectively. It had a 52-week high price of $0.435 and touched 52 weeks low of $0.150, with an average volume of 71,353 approximately.


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