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GUE: Uranium enrichment technology achieves 3x “separation factor” in enrichment process


Published 11-JUN-2024 12:54 P.M.


11 minute read

Disclosure: S3 Consortium Pty Ltd (the Company) and Associated Entities own 2,771,598 GUE shares and 500,000 GUE options and the Company’s staff own 35,000 GUE shares at the time of publishing this article. The Company has been engaged by GUE to share our commentary on the progress of our Investment in GUE over time.

A rare update on secret uranium enrichment technology this morning...

“Enriched” uranium is what is used to generate nuclear power.

And this fuel is fast becoming a source of friction between major global powers.

Last month, the US government banned Russian uranium imports.

(and Russia controls ~50% of the world’s supply of enriched uranium - Source)

The spot price for enriched uranium is moving up in the wake of the US ban on Russian uranium:



Our Investment, Global Uranium and Enrichment (ASX:GUE) has a number of uranium projects in the US including its ~50Mlb JORC resource uranium project in Colorado, USA.

One of the key reasons we are Invested in for GUE is for its ownership in a uranium enrichment technology.

Uranium enrichment is a process which brings uranium ore from the ground to a state where it is suitable as fuel for reactors.

(the only other ASX company with exposure to uranium enrichment tech is Silex Systems which delivered an epic re-rate of more than 3,000% in the last 5 years and looks to still be rising)

GUE has a 21.9% stake in a uranium enrichment company, which achieved a major milestone in the development of its technology today.

Today GUE announced that its enrichment technology had achieved “a separation factor approximately three times higher than the enrichment factor.”

An “important measure for commercialisation.”

We are not nuclear physicists - but this is definitely a good sign.

We have taken a view that GUE’s major stake in uranium enrichment technology will eventually catch the attention of the market if nuclear power continues to increase in strategic importance globally.

Again, the only other uranium enrichment peer on the ASX is Silex Systems, which is currently capped at ~$1.4BN and has a 51% interest in its enrichment technology:


The past performance is not and should not be taken as an indication of future performance. Caution should be exercised in assessing past performance. This product, like all other financial products, is subject to market forces and unpredictable events that may adversely affect future performance.

While Silex has become a much loved stock - some market participants might not actually know what the word “Silex” stands for.

Silex stands for Separation of Isotopes by Laser Excitation.

We’re interested in the “S” of that acronym today - which is a key step to being able to enrich uranium.

This is top-secret stuff of course - but by achieving this separation factor, we think GUE could well be setting itself up for much larger things going forward.

Without the need for Silex’s “fancy lasers” - which we understand are shot into uranium to achieve what’s called “3rd generation” enrichment.

Could GUE’s enrichment technology company advance a “4th generation” enrichment tech?

And potentially in the market quicker than Silex?

GUE has indicated previously that if this enrichment tech is successfully scaled up - it could be safer, cheaper and more efficient than other competing methods of enrichment.

We’ll hopefully know more over the coming months - aware that scientific progress doesn’t happen in a straight line.

Meanwhile, GUE has recently delivered very high grade infill/metwork drill results to support a scoping study due next quarter.

And the company is about to start exploration drilling at another Colorado project where we hope there will be some high grade uranium hits and eventually a JORC of up to ~13Mlbs of additional uranium resources.

So there’s lots to look forward to across BOTH uranium drilling and uranium enrichment for us as GUE Investors.

And today’s announcement on uranium enrichment moves GUE closer to achieving our Big Bet, which is our ultimate upside scenario for our Investment:

Our GUE Big Bet:

“GUE re-rates to a +$250M market cap by achieving a major technological breakthrough with its uranium enrichment technology and/or is acquired at multiples of our Entry Price by a US focussed uranium major looking to gain access to its assets and technology”

NOTE: our “Big Bet” is what we HOPE the ultimate success scenario looks like for this particular Investment over the long term (3+ years). There is a lot of work to be done, many risks involved, and it will require a significant amount of luck. There is no guarantee that it will ever come true. Some of these risks we list in our GUE Investment Memo.

Global Uranium Enrichment

Reminder: Enriched uranium matters that much more...

The uranium price is now at ~15 year highs and the primary concern in the market is just how fragile uranium supply chains all over the world are:



But a bigger part of the uranium story is how fragile the enriched uranium supply chain is.

First, a quick science lesson, followed by some geopolitics:

Enrichment is a key step that takes raw uranium (yellow cake) and turns it into nuclear fuel.

Uranium found in nature contains only a small percentage (around 0.7%) of the isotope Uranium-235 which can undergo nuclear fission to produce energy.

For uranium to be useful as a fuel in nuclear reactors, it needs to have a higher concentration (3-5%) of the fissile U-235 isotope.

This process of increasing the concentration of U-235 is called uranium enrichment.

Without enrichment, there is no nuclear fuel and nuclear power plants can't produce electricity.

(most uranium companies on the ASX are exploring for or mining the “raw material” uranium - GUE actually has exposure to the critical uranium enrichment stage too)

Now, for the geopolitics:

The US has the world’s biggest nuclear reactor fleet (responsible for producing ~20% of US electricity) BUT it produces almost no uranium domestically.

And when it comes to enriched uranium... the US gets ~24% of its supply from Russia.


After the Ukraine/Russia conflict broke out, the US was quick to put sanctions on Russia for things like oil and natural gas, partially, we think, because the US is a net exporter of those products.

For a few months after the war in Ukraine started the US did nothing about the uranium sector...

Then late last year, the US government started talking about sanctions on Russian supply.

Almost like clockwork, the uranium price and enriched uranium price started running.

1) In late December last year the US House Of Representatives approved a bill that would ban Russian Uranium imports - note the coverage from Bloomberg below mentioned the ban could increase the cost of enriched uranium...



2) Then at COP28 late last year a pledge was made to triple nuclear energy capacity by 2050.



3) Coinciding with all of that news, the uranium price really started to run, and enriched uranium prices started to run even harder....


Russia controls almost 50% of the global supply of enriched uranium.

Today, GUE updated us with a new chart detailing the current state of the spot price for enriching uranium moving up sharply in the wake of the US ban on Russian uranium:



For a long time, the world has been dependent on Russian supply to meet domestic demands.

Western governments are looking to mitigate this supply risk with the US government announcing a US$700M package through the US Department of Energy (DOE) led HALEU program...


This is a US government attempt to give private enrichment service providers incentives to start building out their own capacity.

Obviously the US government wants the industry to build out capacity, and quickly...

A large part of the reason we are Invested in GUE is because it is one of only two companies developing uranium enrichment technology on the ASX.

The other being $1.4BN capped Silex.

GUE gives us exposure to both uranium exploration and development AND uranium enrichment technology - which we think will be a bigger beneficiary of the macro thematics at play...


The latest from GUE’s CEO

We were at the RIU conference last month in Sydney and got to catch up with GUE’s CEO Andrew Ferrier.

Check out Andrew’s presentation here:



We caught up with GUE Managing Director Andrew Ferrier, who gave us a quick update on what to expect over the next 6-9 months.

First for GUE was the metwork drilling at the company's most advanced Tallahassee project in Colorado.


At Tallahassee, GUE has a JORC resource of 49.8m lbs uranium and GUE expects to put out a Scoping Study on the project in Q3 2024.

GUE has been putting out drill results from that project over the last few weeks with grades coming back above projects current JORC resource.

Some of the intercepts so far showed grades up to 0.56% uranium whereas the current JORC resource is based on a 0.05% uranium grade.


Andrew was pretty clear on the focus for Tallahassee being on getting that Scoping Study completed - the company expects it will be ready next quarter.

He also talked about how the next drill program would be at the company’s other asset in Colorado (Maybell) - drilling is expected in August.


What’s next for GUE?

Drilling at Tallahassee project (advanced JORC resource) 🔄

Drilling is ongoing at the Tallahassee project (~50Mlb JORC Resource), with GUE currently 6 holes into their 10 hole drill program.

Results from the drill program will then be incorporated into the Scoping Study which will be completed in Q3 2024.

Drilling at Maybell project in the US 🔲

Drilling is expected to commence at this brownfields uranium project in August 2024, where GUE has an exploration target of 4.3 - 13.3Mlbs.

Historical grades and intercepts at this project are high and we think large enough to warrant a significant drill program (one hit was 7.3m at 2,200ppm).

GUE is planning for a 40 hole program at Maybell.

Good hits from this project shape as a potential catalyst for GUE and may catch the market off guard, if positive.

Further updates on uranium enrichment technology (Ubaryon) 🔄

At the fundamental level we want to see Ubaryon de-risk its enrichment technology both operationally and from a regulatory perspective :

🔄 Further validation and extend the enrichment performance (show how well it works)

🔲 Achieve continuous operation at bench scale (scale up process)

🔲 Regulatory approvals

At the same time we are hoping Ubaryon is successful in getting funding either from the Australian Federal government grant or through the US$700M program made available by the US Department Of Energy (DOE) .

What could go wrong?

With their $6M raise in Q1 2024, GUE put themselves in a relatively healthy position for their upcoming drilling projects at Tallahassee and Maybell.

As such we see the main risks for GUE to be “Exploration Risk” and “Technology Risk”.

In terms of exploration risk - the holes at the advanced JORC resource are vertical and we don’t expect too many surprises here.

But the July drilling at the other brownfields Colorado project (Maybell) could hit the low end of the exploration target, or fail to find any economic mineralisation.

While today’s update was a de-risking event in terms of the enrichment technology - it's still possible that GUE’s stake in its technology partner doesn’t work out.

GUE could fail to secure regulatory approvals, the technology could struggle to scale up, or the technology partner fails to validate the efficiency improvements it brings at scale.

Our GUE Investment Memo:

Click this link to see our GUE Investment Memo where you can find a short, high level summary of our reasons for Investing.

In our GUE Investment Memo you’ll find:

  • Key objectives for GUE
  • Why we Invested in GUE
  • What the key risks to our Investment thesis are
  • Our Investment plan



General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.