ASP Isotopes Technology Is Proven... Now What?

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We officially have news that Ytterbium-176 is in commercial production. This means that the technology to enrich Uranium has officially been proven. The United States most prominent Nuclear Physicist, Jeff Eerkins, has said: “If they knew how to enrich ytterbium, then they could enrich uranium.”

With this news, it is implied that the Quantum Leap Energy (QLE) spin-off will be imminent. Due to the upcoming structure change, I will value both the ASP Isotopes part of the business and the Quantum Leaps Energy part of the business independently. The stock price should reflect a sum of these two parts.

This will most likely be my last public post (outside of Fund Letters), that will address ASP Isotopes and their future. I have written 3 other posts on ASP Isotopes. I believe all three are must reads for a complete understanding for the company.

This article was written before the enrichment was announced, so I will be using the stock price comparison to the current stock price at the time of writing (~$4.10).

The Current Layout for 2025-2026 Cash Flows and Business Timeline

First lets track where the cash flows for the entire business will be coming from by looking at managements expected plant build-out. I would suggest clicking on the photo to see more of the details.

Pink = Quantum Enrichment Plant Commissioning (Roughly 5 months)

Yellow = Quantum Leap Energy Commissioning (Roughly 5 months)

Blue = ASP Plant Commissioning (Roughly 3 months)

Orange = Construction (3 months for QE and 12 months for ASP)

Green = Producing Product/Revenue

* The above model is for adjusted EBITDA not including SBC. Because the company will be giving 2% of stock to Paul plus other SBC which will be hard to predict because it will depend on the company’s valuation.

**The company has made it very clear it will be easy to ramp new vessels to the Ytterbium facility when it moves to a dedicated QE building later this year.

***Capex does not include uranium as this will be partially funded by a prepayment from Terrapower so it does not seem appropriate to estimate. The total plant cost not including a prepayment would be ~$100mm.

Isotope Production Summaries

Before I begin, I want to make the following comment: The prices for each isotope are researched and estimated to be the price I believe they will charge, not the price at which the market sits at currently. This is because management has made clear they do not want to get overly greedy and allow other competitors to come in. They want to operate in environments where there are only one or two competitors for each isotope. For example I believe the current market for Ni-64 is $40,000+/g and Gd-161 is $30,000/g but I think ASPI will stick to selling each isotope in the $20,000-$25,000 range. Also, outside of the first Yb-176 plant, ASPI can build much larger QE plants as it will be in its own dedicated building so I could be massively underselling the size of the plants going forward.

• Ytterbium-176

  • 1 kg to be produced initially with ramp up to 2 kgs produced annually (two+ vessels cascading). This will be ramped up to 2 kgs with 1 kg being the baseline but I do not believe it will take any meaningful amount of time to get to 2 kgs.

  • $20,000/gram ($20mm per kg)

  • 85% gross margin

  • $40mm ARR

  • $34mm Gross Profit annually

  • TAM would increase significantly upon new supply allowing for another more scalable Ytterbium facility in late 2026. (More discussion on this later)

  • End Product: Used to create Yb-177 via adding a neutron in a research reactor. Yb-177 decays into Lu-177 in 2 hours. Lu-177 has a half life of 6-7 days.

  • Industrial Potential: Lu-177 is able to attach itself to tumors that release hormones and it is able to leach beta emissions into the tumor leading to a very targeted attack on the tumor. Where as chemo therapy is kind of like hitting the body with a shotgun, Lu-177 therapy is closer to a rifle with precision. This makes Lu-177 as effective (or more) than chemotherapy with almost no serious side effects. Its main target are larger tumors.

  • The company is expecting to move the plant into a new dedicated building at which point it will be very easy (per Dr. Hendrick Strydom) to scale up the vessels. We can see a massive ramp rate in late 2025.

  • The second Ytterbium Plant will probably also be used to produce Ytterbium-171 which is used for quantum computing purposes.

• Carbon-14

  • 100 grams to be produced at least (Paul has hinted at more to make up for delays from last year)

  • $25,000 per gram

  • 90% margins

  • $2.5mm ARR

  • $2.25mm Gross Profit Annually

  • Industrial Potential: Drug metabolism studies use C-14 to track how compounds break down in the body, supporting industrial-scale drug development. It has also been recently shown to be useful in very small batteries with thousands of years of battery life (a good use case would be for implantable electronics).

• Silicon-28/Germanium-79/72/74

  • 50 kgs to be produced

  • $500,000 per kg

  • $25mm Opportunity, but some will be given away to universities to allow for ease of access to ensure public studies are released on the benefits of the isotope on chip manufacturing and efficiency.

  • Adjusted for give aways, I expect $17.5mm ARR for at least the first year. The plant can also substitute Germanium which is used for the chip industry as well.

  • 70%-80% gross margin

  • Industrial Use: It has shown signs of increased thermal conductivity properties at the nano scale. This would allow for cooler chips. Its zero spin characteristics and ability to operate in cooler climates is ideal for quantum computing.

• Nickel-64

  • 1 kg - 2 kgs to be produced annually

  • $25,000/gram ($25mm per kg)

  • $50mm ARR

  • $45mm Gross Profit annually

  • Will be the first Isotope built in a building dedicated to QE plants.

  • End Product: Nickel-64 allows for Copper-64 to be produced via cyclotron where an additional proton is added and a neutron is emitted (This could be entirely vertically integrated with PET Labs). This isotope is in extremely high demand.

  • Industrial Use: Copper-64 has a low positron energy, which make it an extremely useful isotope for PET scanning to create detailed images of metabolic processes in the body. It’s often attached to biologically active molecules (e.g., peptides, antibodies) to target specific tissues, like cancer cells. While it can be used for cancer treatment it is considered the world class isotope for PET scanning. It isn’t fantastic for SPECT scanning.

• Zinc-68/67

  • It’s hard to guess how much Zinc will be needed, but seeing that the first ASP plant was expected to be Zinc (until they saw how successful QE was with Ytterbium), I expect the ARR to be near the $40mm I have guessed for Xenon.

  • Zinc-68 (which will be used to convert to Copper-67 and Gallium-68) is expensive near $2000/g. This is speculative.

  • End Product:

    • Zinc- 68 allows for Copper-67 to be produced via cyclotron and a chemical reaction, honestly one of the more complex conversions I have seen.

    • Zinc-68 allows for Gallium-68 to be produced via cyclotron where an additional proton is added and a neutron is emitted (This could be entirely vertically integrated with PET Labs). This isotope is in extremely high demand for PET scanning.

    • Zinc-67 can be used to produce Gallium-67 via cyclotron where an additional proton is added and a neutron is emitted (This could be entirely vertically integrated with PET Labs).

  • Industrial Use:

    • Copper-67, Therapeutics (cancer) is a less efficient version than Copper-64.

    • Gallium-68 is used for medical imaging in PET and SPECT scanners with a prioritization on SPECT scanning. Gallium-68 actually produces a lower positron energy than Cu-64.

    • Gallium-67 is used for the gold standard of nuclear imaging called gallium-67 citrate scintigraphy.

• Xenon-129

  • ~105,000 liters to be produced annually.

  • First Isotope to be produced in Iceland.

  • $200-$800 per liter. This is an extremely speculative price as ASP Isotopes has not commented on this price and I cannot find much data on the pricing of it.

  • $42mm ARR at $400/Liter

  • $33.6mm in Gross Profit

  • Industrial Use: Hyperpolarized Xe-129 is a magnetic resonance imaging (MRI) contrast agent used to help create a clear 3-D picture of the body during an MRI scan.

• Gd-160

  • 1 kg - 2 kgs to be produced annually

  • $20,000/gram ($20mm per kg)

  • $40mm ARR

  • $36mm Gross Profit annually

  • End Product: Used to create Gd-161 via adding a neutron in a research reactor. Gd-161 decays into Tb-161 in 4 minutes. Tb-161 has a half life of 6-7 days.

  • Industrial Usage: Tb-161 is able to attach itself to tumors that release proteins (such as PSMA) and it is able to leach beta emissions into the tumor leading to a very targeted attack on the tumor.

  • How is it different to Lu-177? It also releases auger electrons which can allow for extremely high density targeting of Tumors. This allows for targeting microtumors, higher efficacy, and more accuracy. Studies suggest Tb-161 can deliver 2–3 times higher energy transfer in small volumes (10–100 μm) compared to Lu-177, enhancing its ability to kill cancer cells, especially in minimal residual disease or disseminated cancers. It can allow for treatment for both large tumors and micro tumors.

  • Both Lu-177 and Tb-161 have strong SPECT capabilities.

I believe this gives a good summary for what we will see going forward. Now it is time to understand the two branches of the business and the valuations for each at the end of the article.

ASP Isotopes

The Pharmaceutical side of ASP Isotopes

The pharma business will easily be their highest margin and highest cashflow producing segment for the next 3 years and it won’t be particularly close. The growth will continue well beyond 2026 and I will explain the dynamics that will push this growth. First there is Isotope TAM expansion, then vertical integration, then monopolistic position in high growth economies. Lets go through the list one by one.

TAM Expansion

This is the most interesting part of the list in my opinion. Lets take Ytterbium-176 and discuss the dynamics of that industry. As explained earlier, Lu-177 (end product for Yb-176) is used for cancer treatment and shows effectiveness similar to chemotherapy with extremely minor side effects in comparison. Currently it is only approved for Prostate Cancer via PSMA attachment and the current TAM is roughly 3 kgs at the moment ($60mm TAM). Now lets look forward a little bit.

Currently Lu-177 is only approved for prostate cancer that has spread beyond the prostate and progressed after other therapies (including hormonal therapies and at least one chemotherapy). Aka it’s essentially a comfort care drug for more advanced stage Prostate Cancer despite the benefits and efficacy. The main reason for this is the FDA does not believe there a supply chain in place to use it as a first line of defense against PSMA heavy tumors. Read that sentence again and process it.

This means merely by ASP Isotopes providing a supply chain they will expand the TAM… and that’s just for prostate cancer. Similarly, there is no commercial supply chain for tb-161, and only a small amount for Cu-64.

*Interrupting this paragraph, yesterday (03/28/2025), the FDA released approval for Pluvecto to be used as first line of defense, BEFORE chemotherapy. My prediction above is now already occurring and we should see RAPID TAM expansion from here.

Essentially the TAM just 3x’d, it is better than chemo, they expect supply to be able to meet demand. Do you think this is coincidence with this Ytterbium-176 news? Click here to read the entire Novartis announcement.

Lu-177 is currently showing extremely high efficacy for neuroendocrine tumors (just released incredible phase III results). Let me break that down, this implies pancreatic cancer and GI tract cancer. To put in perspective how brutal neuroendocrine tumors are, over 60% of patients die within 5 years after they are diagnosed. Lets see what that efficacy is:

All participants in the trial, called NETTER-2, had advanced neuroendocrine tumors in the gastrointestinal tract or pancreas that had not yet been treated.

Those who received Lu 177-dotatate plus octreotide (Sandostatin) lived almost three times as long without their cancer getting worse (progression-free survival) as those who received octreotide alone—a median of nearly 23 months, versus 8.5 months. And the number of people whose tumors shrank, sometimes completely, was nearly five times greater in those who received both drugs compared to those who only received octreotide.

For a drug like this I would expect streamlined approval processes ESPECIALLY if there is a supply chain in place. This is an incredible therapy. It also is showing extremely great indications for the below and is in Phase II or III for the below studies as well:

• Lung Cancer

• Neuroblastoma

• Ovarian Cancer

• Thyroid Cancer

• Breast Cancer

• Gliomas

Rogue Funds internal estimates see a TAM increase from the current 3 kgs for Lu-177 to something as large as 15kgs for Yb-176/Gd-160 in 3 years (it seems this is already happening with the news I posted above) and possibly 40-100 kgs in the next 5 years by 2030 (2029/2030 is when a lot of drugs should be approved to use Tb-161 and most indications should have approval for Lu-177), and that will continue to grow as it gains global prominence and first line defense. This expansion would be due to both supply expansion creating greater demand and indication expansion. I believe there will be some cannibalization of Yb-176 from Gd-160 over time but that would be well made up for in overall TAM expansion.

Lu-177, Ac-225 (this will not be produced by ASPI due to the rampant competition but is not a direct competitor with Lu-177 or Tb-161 due to its Alpha Particle emission), Tb-161, and other radiopharmaceuticals can all be using in combination with each other and so there should not be an overwhelming amount of cannibalization from each other. Each one has slightly different characteristics that could benefit patients. It is highly likely that Ac-225 and Lu-177 (and in the future, Tb-161) will be used in combination with each other as the field progresses.

Copper-64 is considered a world class PET isotope and can be fully vertically integrated into PET labs. The same can be said for Gallium-68 as well. Each one has different strengths with Copper-64 having a long half life but lower positron energy there are use cases for both isotopes. Gallium-67 is an extremely high demand isotope for scanning. None of these are even included in my TAM expansion above and the PET and SPECT fields are rapidly expanding for nuclear imaging for both cancer and other ailments.

The best part of this company is incremental capex growth will be minimal as QE plants cost between $2.5mm-$5mm for these small production amounts and they will eventually be able to produce probably close to 5kgs-10kgs per plant once they are able to appropriately cascade their vessels (Vessels are $20,000 each that could theoretically go for 100 meters which would indicate 8-9 vessels, 90cm each, being cascaded) along with operating two vessel rooms per plant. The goal for each “module” for pharmaceuticals with QE is to have one laser room and two vessels rooms which will allow for the lasers to operate in a more temperature controlled environment while also allowing for constant enrichment while one vessel room is being unloaded/loaded of product/feedstock.

It should also be noted there are many other radiopharma isotopes that can now be studied due to their rapid ability to scale up isotope production. So who knows what else they will be able to produce in the future. The sky is the limit for the radiopharma side of the business.

Pet Labs

Currently Pet Labs has a 90%+ market share of the South African radiopharmacy market. They will be able to entirely vertically integrate their isotope business in South Africa with access to the SAFARI-1 research reactor and their cyclotron and current radiopharma logistical infrastructure. This will lead to a strong increase of margins in South Africa along with a moat against other isotope competitors.

As far as growth goes, outside of South Africa they will be targeting a cyclotron and radiopharma build out in key US states as well as capturing monopoly positions in burgeoning middle class economies that are ripe for a full market capture as what occurred in South Africa.

This buildout will allow them to operate with a nearly fully integrated radiopharmacy along with unique market positioning and pricing power. They currently plan on adding 2 cyclotrons a year ($3mm in revenue from each cyclotron) which doesn’t include the vertical integration effects. This cyclotron build out will ramp as cash flow ramps and they are able to increase their contract size with General Electric.

They also focus on PET and SPECT scanning which utilizes these critical isotopes and they also work hand in hand with ASP Isotopes for testing the purity to extreme precision. The cheap price of Pet Labs ($4mm when it’s all said and done), Paul’s expertise as a pharma investor, and Gerdus Kemp’s (PETLabs CEO) vision and adept management makes a situation of very strong growth for the Pharma side of their business where they can rapidly build extremely entrenched and high margins businesses around the world. Pet Labs isn’t integrated into our model above and will be a dark horse along with Silicon in additional revenue impacts that I am not accounting for in my valuation although they will be extremely valuable to the company in the long run.

In conclusion the Pharma side of the business will easily be able to stay up on its own as highly accretive revenue and cash flow come into the company.

Pharma Enrichment Competitors

• Shine

  • Shine is a Fusion company based out of Wisconsin, USA. They are using Ion Beam enrichment to enrich pharmaceuticals. This is a very energy intensive form of enrichment and only makes sense on highly priced isotopes. They will eventually have the capability to vertically integrate the production of Lu-177 and Tb-161 and then sell it to the radiopharmacies due to the neutron flux of of their fusion reactor.

  • Their reported future gross margins are around 50% which might be overstated based on the fact that they receive many government grants. Assuming this is correct this is nearly half of the gross margins ASPI can produce for Ytterbium-176.

  • They do have a large valuation due to their research into the fusion reactor environment (which, as most know, is a hot space right now).

  • They are hoping to begin ramping up production capacity for Ytterbium-176 to 1 kg by early next year. Their ability to scale and compete on price seems extremely hindered compared to ASPI but their main goal is to use funding from their medical isotopes to fund their fusion project.

  • This will be the most serious competitor in this space.

• Kinetrics/BWXT

  • This company is only producing extremely small amount of Yb-176 and is not a huge threat in this field.

  • They are utilizing a very high energy method called electromagnetic isotope separation (EMIS)

  • Sold for a valuation of $525mm to BWX Technologies.

    EDIT: Changed valuation to $25mm.

• Silex claims they will eventually be a competitor in this field but there are zero concrete plans in place to attack this segment.

The Silicon Side of ASP Isotopes

We should all know the story by now but I’ll go through it again.

Silicon Semi-Conductor Opportunity:

It was recently found that Silicon-28 semi-conductor nano-wires are able to conduct heat nearly 150% more efficiently. This is because the phonons in the wire don’t get stuck in the impurities from Silicon-29 and Silicon-30, allowing for the wire to easily move the phonons and disperse the heat. This effect seems to get more pronounced the smaller transistors/nano-wires get. The smaller this gets the more impurities will be an issue.

Pure Silicon-28 is completely plug and play and it requires no substantial changes to current foundries. This means that any benefits could lead to immediate purchase orders and scaling of facilities. Future Silicon Facilities are going to be built in Iceland which could drive the price down.

If ASP Isotopes is able to get the cost of Silicon down to $20/g as they claim, then we could begin to see entire wafers get built from pure silicon (this would imply a price of $60/g) and their TAM would explode as it would be able to be used in almost any application at that price. We would also begin to see funding from Fabs to get this scaled up faster as the cost to produce ASP facilities are relatively capital intensive (although the maintenance capex is not extreme).

Quantum Computing Opportunity:

All silicon wafers for quantum computing will have to be made via pure silicon or some sort of pure isotope (to ensure zero spin and longer held qubits). The quantum computer chip market is roughly $150mm right now and growing at 43% per year.

The ease of access to pure Silicon-28 could also solve a bottle neck for the quantum computing industry and release much higher growth. But, who knows. Lets assume this doesn’t drive much growth to their Silicon production or top-line in the foreseeable future.

So what’s the opportunity?

We know there are heat efficiency gains for pure silicon-28 but we don’t know how much. We also don’t know what other positive impacts could come from pure Silicon-28. We don’t even know how much more useful this could be in quantum computing when they actually have access to this stuff (remember in the pharma section when I said their supply could actually create more demand?).

This is where Paul and Co. have become extremely proactive in ensuring they get maximum understanding of Silicon-28 as quickly as possible to as many individuals as possible. They will be giving away their Silicon-28 to various colleges/universities for intensive study and public release of findings. This is extremely important because it stops the scenario where their MOU partners find the benefits of pure silicon-28 in secrecy and close off barriers to entry. By giving away the silicon we should see immediate scientific studies on the benefits of Silicon-28 come out over the next 6 months - 24 months. By overproducing (to 50kgs from the previously planned 10kgs) their customers now have plenty of Silicon to play around with and we should see more MOUs pop up as foundries try their hand at the benefits of pure silicon.

While we wait for those results I think it would be pre-mature to try forecasting this into any serious valuation. But it allows for a ton of upside that’s not remotely baked into the current price.

Competitors

• Silex

  • Silex has proven an ability to enrich Silicon in the form of Halo-Silane at lab scale. They then have to convert it to more usable forms which is the exact problem Russia has experienced. (For reference ASPI enriches directly in the usable form of Silane).

  • They are in the middle of a 3.5 year project (began in August 2023 and they have never been on time for a project) to produce 20 kgs of Halo Silane.

  • If ASPI can drive the price of Silane down to $20/g, I don’t think Silex would be able to compete.

• Rosatom

  • Russia can enrich via Silicon Tetra Fluoride. This also requires conversion and is expensive to scale up production. Currently no one is able to use this for commercial purposes (for technical reasons), so I don’t think this is a true competitor in the space.

Quantum Leap Energy (QLE)

In my first blog post on ASPI, I discussed the market possibilities of HALEU intensively. I will utilize some of the things I have already said here along with new information while also trying to keep the scope to the immediate 3-5 year future. Lets bring back the chart I used in that post showing US HALEU demand:

Obviously these numbers are very hard to guess because we don’t actually know what the actual TAM of HALEU is right now. Companies such as Natura and Rolls Royce are using LEU+ to make up for the fact that there is no supply of HALEU but if there were to be a steady supply their commercialization of their reactors, we would most likely see them switch to HALEU. We also don’t know what type of demand we will see outside of the US which makes this even more intriguing.

QLE believes they can be profitable well below $10,000/kg implying gross margins of well above 70% at current prices (these get crunched considerably when considering the structure with ASP Isotopes). QLE will be able to produce enough HALEU to address all global needs. This implies a revenue of $500m at $25k/kg for a 20 MTU plant. This amount will be rapidly ramped up based on additional HALEU facilities in the UK (which should begin working on the license process in 2024/2025), South Africa (which should be licensed this year), and the US (TBA).

The initial facility will be able to process 20 mt of uranium by 2027 but this can be rapidly expanded or reduced due to the modular plant construction model of their facilities. Management is under the impression that they will be able to meet all HALEU demand by 2028 of 100+ mt of uranium per year. Management believes they can produce a 750,000 SWU facility (20 mtu) for $100mm. This blows out current ROC for centrifuges which usually cost $1b per 1mm SWU. Absolutely no one in the industry can compete with this with ROC.

The company believes that due to their high selectivity they will be able to reuse nuclear tails from past enrichment to create HALEU. No other company will have this ability (Silex says at best they will be able to produce LEU from this waste not HALEU) so the odds of others competing on price is unlikely. Most companies will give them this uranium waste for free or might even pay them to take it. This should allow them to produce HALEU at highly competitive prices with extremely large margins. Without depleted tails, operational costs are almost identical with centrifuges.

Competition

• Centrus

  • Need about $4b to produce 4mm SWU worth of HALEU which is roughly 100 MTU of HALEU

  • Will be using centrifuge technology.

  • Haven’t produced contract for 900kgs of HALEU yet.

  • My best estimate is they won’t be producing truly competitive quantities of HALEU until 2032, if ever. They will need quite a lot of debt and if QLE is already supplying the market I am not sure how they will get it.

  • Has to created high risk, highly enriched uranium in the US which means it will be highly regulated.

  • Valuation of $1.4b with inevitable dilution and debt coming.

• Rosatom

  • They can already produce some HALEU but the US and most countries will be looking to diversify away from Russia.

  • Their main focus is LEU and do not have enough HALEU production to supply the current market needs.

  • Centrifuge Technology.

  • Need about $4b to produce 4mm SWU worth of HALEU which is roughly 100 MTU of HALEU

• LIS Technology

  • Will most likely be the only true competitor in ~10 years.

  • CRISLA only has a selectivity of ~2 but stages can be cascaded very easily.

  • $/SWU will be cheap but most likely can’t compete on higher SWU isotopes.

  • Currently at a TRL of 4.

  • Trying to enrich in the US via a new technology that has high proliferation risks will be an up hill battle.

  • Inventor of the technology is wanting to retire and is extremely old (Jeff Eerkins).

  • Tech is nowhere near being proven at a commercial level and then production plants will have to be built out. Production at the earliest will most likely be 2032.

• Urenco

  • Behind schedule for HALEU (so much so that the NRC has publicly called them out for it).

  • Currently building an extremely small plant in Europe for HALEU by 2031 but I question both the timeline and the willingness to commit capital to this.

• Silex

  • I am including Silex here because most individuals believe Silex will be producing HALEU before 2035. Per Silex’s CEO their sole focus will be on LEU before 2035. Silex is NOT a realistic competitor in HALEU.

Valuation

Quantum Leap Energy

Lets assume $720mm in revenue by 2029, with a 60% market share of HALEU (probably low seeing that no one else is even close to producing HALEU and they will probably be doing $500mm in revenue by late 2027/early 2028). If we assume 50% gross margins (which is what Paul has said is the expected margins for HALEU), then we’ll assume 20% EBITDA margin (there’s really no sales team required but G&A and minimal costs towards maintaining plant maintenance will be largely due to regulatory requirements) then it would leave us around $144mm. We know ASPI will get $72mm (10% royalty) leaving QLE with with $72mm.

We then have to accommodate for the fact that wherever QLE plans to go they will need to partner with someone. For their first facility, in South Africa, this partner is NECSA. NECSA will probably receive about 30% of the joint venture. When they go to America to build facilities they will probably need to partner with someone like BWXT (this is not my guess for who they partner with, just an example of a company highly integrated into the US regulatory environment) or another company that is very ingrained into the US’s nuclear fuels industry. Essentially, QLE is hoping this will streamline the regulatory process.

This leaves QLE with about $50mm in EBITDA (after the 30% attributable to a JV). At 20x EBITDA due to their 30%+ expected growth ($3b+ in sales in in 2035 years or ~$200mm in EBITDA after royalty and partnership), That would put them around a $1b valuation. Since that’s a few years away this should be discounted to probably $800mm today (especially because I was being very conservative on market share, but we might be generous on total market size).

We know the tech is proven, we know they are in a monopolistic position, we know they are capital light, we know the US will be speeding up the nuclear buildout, and they will be getting purchase agreements shortly.

It should be noted that in the last emerging growth conference call that Paul mentioned conversion, which would be accretive revenue as well as there a mass shortage of conversion capacity in the world. This might be able to be in lower regulated environments where they could end up working without a partner. This will most likely be a part of QLE as well.

Along these lines, it should be noted that NECSA was highly interested in having their own enrichment methods for Low Enriched Uranium (as their current reliance on Russia has been hindered due to policies between Orano and Russia being interrupted. This means they could be enriching Uranium to 4.95% via ASP technology and this would align with the update to their investor presentation where they say Uranium will be enriched via ASP (LEU) and QE (HALEU) technologies.

QLE will also probably be ramping up lithium 6/7 plants via Quantum Enrichment before any HALEU is sold, again, this will likely be low regulation and likely won’t need a partner for lithium plants as well. This would be a high margin part of the business that is needed for fusion.

If we discount for the 2 years of no returns and the rapid growth through 2035 and then we look at competitors such as Centrus ($1.4b market cap) or Silex (whose joint partnership with Cameco, GLE, is essentially valued at $1b), it becomes very easy to get to a valuation of $1b - $1.5b. We will also be receiving income for Lithium, possibly LEU, possibly conversion, and global HALEU Demand (the HALEU chart above only accommodates for US demand) which we haven’t modeled into our valuation at all. This means the final valuation should probably be closer to $1.2b (or higher) especially given the current valuations of competitors (who are much further behind) and adjusting for any South African risk (which gets mitigated as they JV with global partners). This is just for the Quantum Leap Energy side of the business.

ASP Isotopes Valuation

This is where things get interesting, since, ASP Isotopes will have a very unique relationship with QLE. ASP Isotopes gets 10% of all QLE revenue via a Royalty and a 15% gross margin deal to build out their facilities. If QLE is bringing in $720mm in revenue then this means that ASP Isotopes is essentially bringing in an extra $80mm-$90mm in profit. I believe you get about $1.2b of the valuation directly from the QLE US revenue royalty (again this is just assuming US HALEU demand) and US facility construction (using the same 20x multiple discounted back a little bit due to it being a couple years away). To adjust for the additional lithium, LEU, conversion, and global demand this should most likely be closer to $1.6b just for their stake in QLE.

The pharma side along with silicon is worth, based on my model at the beginning of the article, probably about $900mm-$1.1b today with an ability to rapidly scale that valuation with further execution and growth. In three years the valuation for silicon and the medical isotope valuation could be closer to $3b-$5b+ if they execute on their timeline and my expected TAM growth for the radiopharma industry. Silicon is also a dark horse here and 2025 will be very important to watch for the growth of that business.

If we sum the two parts together we get a $2.5b+ valuation. This is just for the ASP Isotopes side of the business.

Sum of Parts

I do not think it is crazy that QLE would IPO on spin off for $1b or greater, per our valuation above, but only if they have a TerraPower prepurchase agreement and proven Ytterbium commercially (which they just did). I think the pharma business is worth nearly as much as the entire current HALEU business since it is already executing (time value of money) and could have a massively growing TAM (also it doesn’t need partners and is much higher margin). But, we have to remember that Paul is now wanting to IPO QLE, so this means quite a few things as to what current ASPI shareholders will experience.

First of all there will be quite a bit of dilution due to the QLE convertible holders and the IPO. The QLE convertible holders have a valuation cap of $80mm so we would experience an 31% dilution from them ($25mm convertible deal / $80mm valuation cap). Then there is the IPO which I would guess we see a further 10%-20% sold at a ~1b valuation on IPO listing (assuming we get a TerraPower prepayment beforehand and being slightly more conservative than my internal valuation). We will assume that by the time it is all said and done that current ASP Isotopes shareholders will receive about 55% of QLE on IPO.

This implies that current ASPI shareholders see about 55% of that $1b valuation or $550mm. Then we know that the current ASPI business (pharma + silicon+QLE royalty) will be worth ~$2.5b after the spin off. To current ASPI shareholders the entire thing should be be valued at about $3b. This is still nearly a 10x upside within the next year (from when this post was written, near $4.10/share). This would be about $42/s.

Now combine the de-risking of technology due to the news released today, the production timeline, the valuation determined above, a ton of catalysts over the next 3-6 months, and add a 37% short interest (which I believe is due to blanket shorting across the entire SMR industry) then you will be surprised what price action can do on extremely positive news over the course of a few months.

This is what the valuation is today, and in three years it could be a much much higher valuation depending on how the team executes on both QLE and ASPI we could see valuations go well above $8b with each entity having possibly valuations of $3b+ (QLE) and $5b+ (ASPI). This is an incredible opportunity that does not come around very often.

Catalyst Schedule

To end this article, I will share the upcoming catalysts that should all come before August 2025:

• Technology proved commercially *Check*

• TerraPower Purchase Agreement in Q2

• Iceland Construction begins in Q2

• Ni-64 Plant construction begins in Q2

• QLE Spin-Off in Q2 or Q3

• Silicon and Ytterbium Purchase Agreements in Q2

• Finalization with NECSA in Q2 or Q3

• Uranium Test Plant begins construction in Q3 after NECSA finalization

Conclusion

Although this valuation seems gaudy at $42/s it’s only because the current market cap is $300mm and it is hard to de-anchor yourself from that price. The risk is massively reduced from the company and its really only a timeline and operational cost (which are both minimal and the company is moving at a blazing speed). When you look logically at how well this company can scale and understand the realistic potential of the company, it makes the current $4 price absolutely ludicrous now that the tech has been proven commercially. Overall this will be a long term hold for the Fund and we remain as confident as ever.

Disclaimer: The author of this idea and his Fund have a position in securities discussed at the time of posting and may trade in and out of this position without informing the reader.

Opinions expressed herein by the author are not an investment recommendation and are not meant to be relied upon in investment decisions. The author is not acting in an investment adviser capacity. This is not an investment research report. The author's opinions expressed herein address only select aspects of potential investment in securities of the companies mentioned and cannot be a substitute for comprehensive investment analysis. Any analysis presented herein is illustrative in nature, limited in scope, based on an incomplete set of information, and has limitations to its accuracy. The author recommends that potential and existing investors conduct thorough investment research of their own, including detailed review of the companies' SEC and CSA filings, and consult a qualified investment adviser. The information upon which this material is based was obtained from sources believed to be reliable, but has not been independently verified. Therefore, the author cannot guarantee its accuracy. Any opinions or estimates constitute the author's best judgment as of the date of publication and are subject to change without notice. The author and funds the author advises may buy or sell shares without any further notice.

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