NCI: How to bet on Uranium & Nuclear Renaissance

NCI: How to bet on Uranium & Nuclear Renaissance w/ Paul Mann, CEO of ASP Isotopes (Nasdaq: $ASPI)

Ram: [00:00:00] Welcome to Non Consensus Investing. I'm Ram Ahluwalia, your host and CIO at Lumida Wealth, where we specialize in the craft of alternative investments. At Lumida, we help guide clients through the intricacies of managing substantial wealth so they don't have to shoulder the burden alone. Through this podcast, we draw back the curtain to reveal the strategies employed by the best in the business for their high net worth clients so that you too can invest beyond the ordinary.

Welcome to our next edition of Lumida Non Consensus Investing. I'm pleased to be joined by Paul Mann, the Chairman and CEO of ASP. Isotopes, there are quite a few different trends and forces in the world. You've got the rise of semiconductors, the Renaissance for nuclear energy. You've got geopolitics, you've got lasers as well.

And all of these forces come in one unique story, which is this rapidly growing micro cap [00:01:00] called ASP isotopes. Paul has had a career. In the biotech category he was at at Highbridged as well before and SRO. So Paul, thank you for joining us. 

Paul: Thank you for inviting me to speak with you. So as you said, it's an interesting time for the industry.

Ram: And I should also know that there may be forward looking comments here. Check out the website for disclaimers. You can check out ASP Isotopes for that. Any other disclaimers you want to convey, Paul? 

Paul: Yeah, no, we're not a listed company, so just review our disclaimers, which are published in our 10 K and 10 Qs and all the other filings we have with the SEC.

So yeah, thank you. 

Ram: Terrific. Let's start with the big secular trends. We've got semiconductors and uranium. So on the semiconductor side, you look at the share price of Nvidia or the ETF for semiconductors are all on a tear and the world needs GPU compute yesterday. So help me understand, what is Silicon 28?

And I know that you play a special role in developing this [00:02:00] isotope and we'll unpack what isotopes are, later, but what application might Silicon 28 have for the semiconductor industry and why are firms reaching out to you to learn more about it? 

Paul: Yeah so silicon has three isotopes, one with a mass of 28, another with a mass of 29, and another with a mass of 30.

And, when you look at a semiconductor, you wouldn't, you can't obviously see the isotopes, all is silicon laid down, that's all the conductivity for the semiconductor. But the 29 isotope doesn't conduct, it actually is a negative conductor. So you think about 28 facing this way, 29 facing that way, the current's flowing this way, 29 blocks, the current flowing. If we can remove that 29 isotope, And enrich it, really highly enriched in the 28 995 percent enriched in the 28 isotope. The conductivity goes up thousands of fold, and your heat transfer capability [00:03:00] increases multiple folds as well. And there's a lot of good data emerging, showing that. We recognized very early that in order to enable quantum computing, one is going to require a highly enriched silicon 28, so we initially started thinking silicon 28 would be useful for quantum computing and but obviously, as you mentioned earlier, there's a huge demand for high processing capabilities in these data centers and these new microchips and semiconductors and there's a belief that if people use silicon 28, highly enriched silicon 28, then the performance of the semiconductor will increase thousands of fold.

And that will obviously bring down the size of the semiconductor, the amount of heat you generate, the amount of power it draws, all those associated benefits with it. So we've got a lot of interest from a number of semiconductor companies, a number of industrial gas companies. Who are desperate to get this highly enriched Silicon 28.

That [00:04:00] desperation wasn't there 6 or 12 months ago. 12 months ago we were talking to most of the semiconductor companies about enriched Silicon 28 and there was an interest in it. But I think that interest suddenly became more of an urgent need for it as we got into the first quarter of this year.

So yeah. 

Ram: So silicon 29, is that the primary silicon isotope used in semiconductors today? 

Paul: No, so right now a semiconductor just contains normal silicon, so it's going to be 92 percent of the 28 isotopes, about 3 percent of the 29, and 4 percent of the 30. If we can strip out that 3%, then it's much, much faster.

Ram: Oh, I see. So it's really purifying the silicon that's used in the semiconductor application to improve the conductivity as well as the energy efficiency, the heat transfer. That's the basic idea and improving that purity drives this efficiency. That's what the belief is. Yes. Correct. Yeah. Yeah. Got it.

[00:05:00] Got it. And so you, you have a large semiconductor firm. I know you can't name them and they've paid you they've signed a commercial agreement with you to help produce Silicon 28 and they're going to go test whether or not this thesis is true, that you can generate, higher efficacy.

That's the basic idea. 

Paul: Yeah, that's the basic idea. Yeah. Correct. It's been a lot of research done. In this area. So you can find a lot of research papers on the web about highly enriched silicon 28, quantum computing, processing qubits, faster semiconductors. It's not that easy to, it's not easy to enrich.

And we're probably the only company in the world that can actually enrich silane. So when you make a, when you make a semiconductor, the semiconductor companies buy a gas called silane, which is silicon and 4 hydrogen atoms attached to it. And that's a very light gas, it's got a mass of 32. And traditional enrichers like, like Losatom in Russia and UNESCO in Europe, they have to enrich really heavy atoms, so they have to turn their [00:06:00] silane into a much heavier molecule in order to be able to enrich it in their centrifuges.

What's unique about our technology is that we can enrich light isotopes as well as heavy isotopes. The Russians enrich silicon tetrafluoride, and then they've got to convert that silicon tetrafluoride into something that a semiconductor company can actually use, which is silane. And when you look at the purity, the chemical purity of the silane that these companies use, it's 6N pure, it's 99.

9999 percent pure in silane. And you can't remove enough fluorine atoms to get it that pure, and so they're struggling to, to use other suppliers. We can actually just enrich silane as it is and supply it I think it's a guest, so it should be a lot cleaner and a lot easier to use. 

Ram: So there's a geopolitical story here and a technology story, geopolitically, we saw that the U S Congress passed a law a few weeks ago saying that they don't want to [00:07:00] import a highly enriched uranium.

And it turns out Russia state owned agencies, one of the leading producers of that. And it turns out that same technology that the Russians are using to enrich uranium is what they're using to enrich silicon. So that plays to, your advantage and, you've got a technology that you've developed.

Could you walk us through, high level what that entails? 

Paul: Yeah, so we actually have two technologies we're using to enrich isotopes. The first is the ASP process, and that's where the name ASP isotopes came from. I lost imagination. I couldn't think of another name for the company when we started it up three years ago.

So ASP is called the aerodynamic separation process. So when you think about a centrifuge that Russia will use, it's a big vertical tube. It's very heavy. It spins around in a circle on its vertical axis. And the heavier items have moved to the outside of the tube. And the lighter ones move to the inside.

That's just [00:08:00] centrifugal forces and forces of gravity. These centrifuges are huge, typically the size of a football field. They draw a huge amount of power. Often you see a power station next to them. And they cost billions of dollars to build and take years to build. And that process is, we use a stationary wall centrifuge.

So rather than spinning the tube, we actually keep the tube stationary. And inject the gas at a certain angle, which allows it to, to spin round. And yes, there's a picture of a traditional centrifuge and you can see, that's a fairly, there'll be lots of those rooms together. And the each stage enriches the process by a tiny amount. But we keep the tube stationary separated much smaller than those. And we spin the gas inside the tube and that allows us to create a vortex inside the tube and that allows us to separate heavy from light in a similar way just using gravitational forces. We have some flow directors and specially [00:09:00] engineered valves, nozzles and what have you.

And again, that allows us to separate heavy from light. So our plants are much smaller, they're much cheaper to build tens of millions of dollars rather than billions of dollars. There's no moving components other than the compressor. So rather than having to find a zone that has no seismic activity, putting the plant on 10 feet of concrete, it has been much easier to put just like a clean room inside a much smaller facility, a much smaller building as well as heavy isotopes.

Ram: So a traditional centrifuge, we've got a large industrial facility, billions of dollars, a lot of moving parts. In these traditional centrifuges, you have a cascade or an array or sequence. We've got these spinning centrifuges to separate the heavier from the lighter isotopes and then you use that sequence to then take the output from centrifuge one, apply the same process in centrifuge two, so on and so forth for a hundred centrifuges later until you get highly enriched uranium.

So your approach, [00:10:00] you don't have those moving parts you create a spinning vortex and you're using technology. To separate the two. Now, I imagine it's hard to get a patent for that because you might be giving up some IP. Yeah, 

Paul: so we're not, we wouldn't be allowed to have patents on our process. The IAEA have classified our subject, that's the International Atomic Energy Agency, have classified our process as being dual use technology, and so our plants are protected by comprehensive safeguard.

So what does that mean from a protection standpoint? We have trade secrets and a lot of know how. If you were to come to one of our facilities, you'll find there's no computer lines or phone lines in or out of the control area. There's, you're not allowed to take laptops in or phones in.

Only certain people have access to the technology, about nine people. There's metal bars and protection around the buildings so cars can't break in or drive through. Every car and every bag is searched on the way in and on the [00:11:00] way out. And actually I'm not allowed access to the technology. Only South African citizens have been cleared by the non proliferation councils of Africa are allowed to have access to technology.

I'm not allowed in the research center by myself. I have to be accompanied by one of those nine people. There's exceptional scrutiny and controls over who's allowed to see the technology and have access to it. 

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