Silex Systems Ltd (formerly Australian Nuclear Enterprises Pty Ltd) was established in 1988 by Dr Michael Goldsworthy as the research subsidiary of Sonic Healthcare Ltd, a publicly listed Australian company. Using ANSTO staff and facilities under contract, Silex began researching laser enrichment at the Lucas Heights laboratories in 1990. In 1992 they developed a new and unique laser-based isotope separation technology known as "SILEX" - Separation of Isotopes by Laser EXcitation. The technology was proven on a laboratory scale in 1994, and is mainly being targetted for uranium enrichment, to replace the aging plants in the USA and Europe. In April 1995, Silex announced to the Stock Exchange the results of two favourable external reviews of the SILEX process, including the separation of uranium, chlorine and molybdenum. The separation factors were claimed to be better than those attainable in gas centrifuges.
Silex was divested from Sonic in February 1996, and immediately sought investor funding from uranium enrichment companies for research and development of the technology to commercial scale. In November 1996, an exclusive Licence and Development Agreement for the application of SILEX Technology to uranium enrichment was signed with the United States Enrichment Corporation (USEC), the largest supplier of enrichment services in the world. The deal involved an immediate payment of US$7.5 million to Silex.
Formerly part of the US Department of Energy (to keep uranium enrichment under government control), USEC was recently privatised in July 1998 - one of the largest in the US in the last 10 years.
The USEC plants - Paducah in Kentucky and Portsmouth in Ohio - are old and very expensive to operate. The unit costs for enrichment are believed to be about US$110, compared to expected SILEX unit costs of US$30-40. It is expected that these plants will need to be replaced within the next decade. The Paducah plant has recently been under intense criticism due to alleged excessive plutonium and uranium exposure of workers and cancer clusters among workers and their families. Both plants are now under detailed investigation by the US Nuclear Regulatory Commission. USEC recently announced the planned closure of the Portsmouth plant, due to high operating costs and poor financial performance.
It is worth noting that several large research programs around the global nuclear industry have investigated the use of lasers for enrichment, spending several billions of dollars each in the USA, Europe and Japan. All have failed and these programs are apparently being closed down or are already closed. Silex hope to develop and commercialise their technology for just several million dollars of funding by USEC - and (hopefully) earn substantial royalties IF the old USEC plants are replaced early next century.
The SILEX process - the full technical details are kept highly confidential - is based on the current industry feedstock of uranium fluoride, and is described as very low energy and low overall capital costs. It can also be applied to the enrichment of other isotopes, such as carbon, silicon, molybdenum, boron, zirconium, xenon, palladium, thallium, gadolinium and zinc. Thus it could provide a significant breakthrough in many fields of science, medicine and high technology - at the risk of making uranium enrichment for nuclear weapons cheaper and easier. The legal and political detail on how Silex plan to prevent use of the technology for military purposes is unknown. In fairness it should be pointed out they say they are developing the technology for the commercial nuclear industry - although this is quite the 'faustian bargain' given the history of 'peaceful' nuclear technology being diverted for secret nuclear weapons programs (eg. India, Iran, Pakistan......).
Development of Silex Enrichment Technology (ASNO, 2000)
In order to facilitate the joint Silex-USEC development of SILEX technology, a new Australia-USA Bilateral Treaty for Nuclear Co-operation has had to be negotiated and enacted. The process took over 2 years, but was finally ratified by the Australian and US-governments and just recently signed by President Clinton on Oct. 25, 1999.
The 1996 deal with USEC gave Silex the commercial muscle to get on with and increase its R&D efforts and fast track the technology - if they could make it work on a large scale. Through a series of payments, USEC is funding the R&D program in return for exclusive rights to the SILEX process. The pilot study and engineering program is due for completion by the end of 2002.
Silex Systems Ltd floated on the Australian Stock Exchange on May 7, 1998, and have been an outstanding success in terms of share price and market capitalisation. A graph of their share price is given below - not bad indeed. Silex's current market value is around $350 million - in less than 2 years. After a major dive in their share price in early 2000, as of July 2000, its making a good comeback from oblivion.
Is there good reason for a comeback in the share price ? Apparently not. Despite announcing the confirmation of the technical and commercial potential of SILEX several times in early-to-mid 2000, USEC have recently announced (Sept. 2000) that they are funding continued development of older gas centrifuge enrichment technology from the US Department of Energy (of which USEC was formerly part). The optimism and confidence of Silex company folks would appear misplaced if USEC are now looking to fund other technologies.
Recently, Silex announced a feasibility study on the application of the SILEX technology to silicon and carbon enrichment, for potential use in the semi-conductor industry. This is being undertaken in conjunction with Isonics Corporation from Colorado, USA, and SDI Pty Ltd from South Africa.
In September 2000, Silex signed an R&D Agreement with Westinghouse Electric Company to examine the potential of enriched zirconium for in use in nuclear fuel assemblies. It is hoped that this would help to improve the overall efficiency of reactor performance, although Silex do admit that no process has been found previously to economically enrich zirconium and that success is uncertain.
The fact that Silex has signed an exclusive agreement for the use of the uranium enrichment technology with USEC suggests that they have accepted that Australia will never build an enrichment plant. Or perhaps they hope that if it does happen, then USEC will be a partner/investor in the project. Silex have placed all their eggs in one basket - from USEC's point of view, it looks like petty cash well spent.
The AAEC and Laser Enrichment : Hidden Links to Silex ?
Based on C Hardy's 1996 book "Enriching Experiences".
The old AAEC first undertook research on the possibility of using lasers for uranium enrichment in 1970-71. Initially, the work was a theoretical assessment of various processes and enrichment factors, and was not mentioned in AAEC annual reports until 1973/74 (one sentence) and 1975/76 (small section). Small experiments were undertaken at the milligram (mg) scale, proving less than theoretically predicted. The project employed 20 staff by 1974 and the numerous internal reports were only classified as 'Restricted' or 'Confidential' - not 'Secret', and many AAEC staff had concerns about the proliferation risks if the new laser processes proved viable.
In 1977-78, approval was given for a series of papers to be delivered at scientific conferences, firstly at the Conference on Mass Spectrometry in New Zealand and secondly at the 1ST Australian National Laser Conference in Canberra in March 1978 (see Hardy, 1996, for details). They discussed the lasers themselves and the use of lasers for enrichment based on the literature, but did not disclose any of the work being undertaken at the AAEC laboratories.
The AAEC set up a Laser Isotope Separation Project Review Committee, with the main objective of 'development of an economically attractive process of uranium enrichment which was in Australia's national interest' (pp 80). This also included the ability to advise the federal government of non-proliferation risks with the large laser enrichment research programs elsewhere around the world. The work continued on improving various laser designs (carbon dioxide based) and studying the detailed chemistry involved. Although the AAEC process was confirmed experimentally by 1978 as well as in other nuclear research labs, scaling up the process and proving economic viability was still a long way off. Continuing experiments always gave low separation factors. Research was also promising for application to molybdenum, but the use of vanadium gave poor results similar to uranium.
In the early 1980s, after Labour came to power, all of the uranium enrichment research at the AAEC laboratories was closed down according to government policy, including both the centrifuge and laser research. Some staff continued to undertake research on the non-uranium applications of laser enrichment, with others redeployed to the CSIRO.
The laser uranium enrichment project was resurrected from near death less than 2 years after the emergence of ANSTO (which replaced the AAEC) - only one sentence mentions the restart of this work in the 1988-89 ANSTO Annual Report (and later reports). In 1990, Silex Systems began contracting staff and facilities from ANSTO for laser enrichment research, and the rest is outlined previously.
Therefore, it would appear reasonable to assume that Silex has grown out of the former AAEC research program (the involvement of Silex employees in this program remains uncertain at this stage). With the the advent of ANSTO obtaining government approval to reopen laser enrichment research, Silex quickly moved to join in and takeover the work. The degree of subsidies provided to Silex through access to the AAEC/ANSTO research and facilities is also unclear. The money that Sonic Healthcare used to fund Silex during the period from 1988 to 1996 is unclear, or whether the agreement signed with ANSTO provided staff and facilities and Silex provided the expertise and thereby not needing any funds (meaning they were effectively government funded, if this is correct).
Silex's New Emphasis on Silicon and Super-Fast Computer Chips
As part of its broader high-technology development program for their laser technology, Silex have recently been establishing quite a reputation in the prospect of developing super-fast computer chips using a high-purity silicon-28 which can be produced by the Silex process.
The return in the value of Silex's share price to more than $4 suggests that the market is taking their emergence into other isotope production areas more seriously than their early uranium research work. In late October 2000, Silex acquired the worldwide patent rights to Japanese semiconductor technology and in mid December 2000, raised $36 million from institutional clients of UBS Warburg and Wilson HTM. A large part of these funds are for the new silicon project, although funding for the continuation of the uranium enrichment research was not even mentioned in media reports (eg. SMH, Dec. 13).
Although it would appear as if their uranium research has dropped down the corporate priority list, Silex continue to evolve and be seen as a mainstream high-technology research company. Watch this space.
Directors : Michael Goldsworthy (Managing Director & Founder/Developer), Barry Patterson (Chair), Chris Wilks (Director - Corporate), Colin Goldschmidt, Michael Boyd, Peter Campbell Contacts : Registered Office :
95 Epping Road, North Ryde, NSW 2113
Laboratory / Operations :
Building 64, Lucas Heights Science & Technology Centre
New Illawarra Road, Lucas Heights, NSW 2234
Postal Address :
P.O. Box 436, Rozelle, NSW 2039
Michael Goldsworthy (Managing Director) :
Ph (02) 9717 3589 - Fax (02) 9717 3689 - [email protected]
Chris Wilks (Corporate) :
Ph (02) 9855 5555 Fax (02) 9878 5066 - [email protected]
Website : http://www.silex.com.au/ Email : [email protected] ASX Code : SLX - Home Exchange is Sydney, NSW. ACN : 003-372-067 Registry : Corporate Registry Services, Level 8, Grenfell St, Adelaide, SA 5000 Bankers : ANZ Banking Group
Top 20 Shareholders (12-September-2000)
Company or Entity (%) Company or Entity (%) 1 National Australia Trustees Ltd 32.58 11 Dalran Pty Ltd
(a/c The Smith Family Trust)
1.24 2 Polly Pty Ltd 5.30 12 Commonwealth Custodial 1.10 3 AMP Life Ltd 4.72 13 Perpetual Trustees Nominees Ltd 0.92 4 Quintal Pty Ltd 3.82 14 Dr Andrew Y O Tan 0.81 5 Throvena Pty Ltd 2.91 15 Hapday Holdings Pty Ltd 0.76 6 Chase Manhattan Nominees Ltd 2.60 16 AMP Nominees Ltd 0.71 7 Horst Struve 1.99 17 Elia Castranova 0.61 8 Hamlac Pty Ltd 1.90 18 Invia Custodian Pty Ltd 0.57 9 National Nominees Ltd 1.47 19 UBS Warburg Private Clients
Nominees Pty Ltd
0.48 10 Bow Lane Nominees Ltd 1.32 20 Matrix Investments Pty Ltd
(a/c Matrix Holdings)
0.47 No. of Ordinary Shareholders - 5,673 Total of Ordinary Shares - 66.28%
Directors Info :
- Dr Michael Goldsworthy (Managing Director) - Dr Goldsworthy received his PhD in Physics from The University of New South Wales in 1988. Prior to starting up Silex Systems Ltd, Dr Goldsworthy was a member of the University’s Academic staff and was involved in a number of laser-associated research projects. Dr Goldsworthy is the founder of the Company and has been the driving force behind the SILEX project. Share Interest - 0.217%.
- Barry Patterson (Chair) - Mr Patterson is a major shareholder in Silex through his interest in Polly Pty Ltd. He is a mining engineer by training and has had many years experience in the establishment and management of public mining companies in Australia. Chair of Sonic Healthcare Ltd. Share Interest - 5.304% (through Polly Pty Ltd).
- Christopher Wilks (Corporate Director) - Mr Wilks is responsible for the corporate development of Silex Systems. He has held a number of directorial positions with Australian public companies and has a background in merchant banking. Director of Sonic Healthcare Ltd. Share Interest -0.945%.
- Michael Boyd - Mr Boyd is a chartered accountant by training and has a number of business interests in Western Australia. Director of Sonic Healthcare Ltd and Lifecare Health Ltd. Chair of Foundation Healthcare Ltd. Share Interest - 0.003%.
- Dr Colin Goldschmidt - Dr Goldschmidt is Managing Director of Sonic Healthcare Ltd. He has been a Director of Silex since 1993. Share Interest - 1.896% (through Hamlac Pty Ltd).
- Peter Campbell - Mr Campbell is the principal of the R P Campbell & Associates, chartered accountants. Director of Sonic Healthcare Ltd. Chair of Lifecare Health Ltd. Share Interest - 0.099%.
- Goldsworthy, M, 1999, The Uranium Enrichment Industry and the SILEX Process. Proc. of "ANA 99 - 3RD Conference Nuclear Science and Engineering in Australia", Australian Nuclear Association Inc., Canberra, ACT, October 27-28, 1999, pp 85-88.
- Hardy, C, 1996, Enriching Experiences : Uranium Enrichment in Australia 1963-1996. Glen Haven Publishing, Peakhurst, NSW, 186 p. (order through Glen Haven - P.O. Box 85, Peakhurst, NSW, 2210).
- ANSO, 2000, Annual Report 1999-2000. Australian Safeguards & Non-Proliferation Office (ASNO), Dept. of Foreign Affairs & Trade (DFAT) (see page 25 for Silex photo).
- Share price graph produced by ComputerShare. With thanks.
- Silex System Ltd - Annual Reports 1998 to 2000.
- Recent media stories - email the SEA-US Webmaster for more details.
Last updated January 18, 2001.
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