An ASX All-ordinaries, Nuclear energy focused company, up 247% in a year

The new energy buzzword appears to be ‘Nuclear’ while the world walks towards a clean energy future. Nuclear power is back in focus given it is a zero-emission energy source. The Russia-Ukraine war has unsettled global energy supplies and has forced governments to rethink on their energy strategies.

Many countries are considering nuclear energy as an option to attain energy security and net zero ambition. On back of these positive developments, Uranium, the fuel for most nuclear reactors, has seen its prices surge over 40% in a year. Given such strong tail winds, one ASX-listed player has seen its stock price more than doubled in just few months. Not just uranium, this company is also exposed to the silica play. The company in discussion is Silex Systems Limited (ASX:SLX) (OTCQX:SILXY) an ASX-listed technology commercialisation business.

SLX share price beats benchmark index by wide margin

SLX was added to the ASX 200 All Ordinaries Index in March 2022. In comparison to the ASX All Ordinaries Index, which gained about 7.53%, SLX share price have moved up 247% in a year.

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Data Source- Refinitiv, price chart for SLX as at 15 July 2022

Over the last five years, SLX share price has appreciated by over 844%. A major chunk of this gain was seen this year. Silex’s share price has appreciated by over 153% on a YTD basis and over 60% in a month. Now let’s understand SLX in detail.

Silex Systems Limited: Is focuses on commercialisation of its indigenously developed SILEX laser enrichment technology.

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The SILEX technology is currently in the development phase for uranium enrichment utility. The developmental work is with Silex’s US-based exclusive licensee firm-Global Laser Enrichment LLC (GLE).

Silex is also developing additional commercial applications for SILEX technology. One of which is the production of ‘Zero-Spin Silicon’ used in silicon-based quantum computing.

Furthermore, Silex also holds interest in a unique semiconductor technology named ‘cREO®’ through its fully owned subsidiary Translucent Inc. The cREO® technology has been acquired by UK-based IQE Plc. IQE has however paused development of cREO® technology till a commercial opportunity arises. Also, as disclaimed by the company the commercial future of SILEX technology is subject to risks of developmental and application success.

Opportunities and Risks in Silex’s business

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Latest Developments

Recently, on 4 July GLE and Duke Energy have signed Letter of Intent (LOI) to develop areas of mutual interest and cooperation. Duke Energy is one of the largest energy companies in the US. Duke operates eleven nuclear power units.

Though the LOI is non-binding it opens doors to areas in the nuclear fuel supply chain. The LOI identifies numerous key areas of potential cooperation, including deployment of the SILEX laser enrichment technology in the US and a potential acceleration of commercialisation timelines.

Commentary by Michael Goldsworthy, Silex’s CEO/MD

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A scrutiny of Silex’s financials

AS compared to previous half yearly period, in period ending on 31 December 2021, Silex Systems Limited’s

• Revenue from ordinary activities grew 1906.8%
• Other income moved up 101.0%
• Earnings before interest, tax, depreciation, amortisation (EBITDA) were up 12.6%
• However, the company recorded a Net loss from ordinary activities after tax

The net loss from ordinary activities increased mainly due to more activities at GLE. In addition, employee benefits expense increased alongside research and development materials as Silex’s technology development activities increased. Silex completed an equity raise via a placement, followed by a Share Purchase Plan during the half-year. The net proceeds from the issue of shares were AU$38.4m

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Data Source- Refinitiv

The company has been able to increase its revenues in the past five years. Although the company reports a negative operating and net income, both the numbers are improving year on year.