Company: LEU
Filing Date: 2025-02-07
Form Type: 10-K
Source: 0001065059-25-000006
Chunk: 18

Company: CENTRUS ENERGY CORP
Filing Date: 2025-02-07
Form: 10-K
Item: Item 1
Chunk 18
---
U produced from the demonstration cascade and Centrus will be compensated on a cost-plus-incentive-fee basis. DOE has increased the Phase 2 contract value and related funding to $129.0 million. The HALEU Operation Contract also gives DOE the ability to exercise three optional periods to contract for up to nine additional years of production from the cascade beyond Phase 2; those options are at the DOE’s sole discretion and subject to the availability of Congressional appropriations. In September 2024, we received the NRC’s approval of our license amendment request to increase our possession limit from 900 kilograms to 1,400 kilograms of HALEU UF6. In December 2024, we received NRC approval of a license amendment allowing continued operation through future extensions or option periods of the DOE HALEU Operation Contract. These amendments will support anticipated HALEU production beyond June 2025 under the HALEU Operation Contract.

Under the HALEU Operation Contract, the DOE is contractually required to provide the 5B Cylinders necessary to collect the output of the cascade, but supply chain challenges created difficulties for the DOE in securing enough 5B Cylinders for the entire production year under Phase 2. Centrus’ contractual delivery obligation of 900 kilograms by November 2024, was conditioned on DOE’s ability to provide the 5B Cylinders on a timeline that allowed for continuous production throughout Phase 2 of the contract. During time periods when 5B Cylinders were insufficient, the Company was able to continue operations of the cascade, but did not produce HALEU as it did not have cylinders to store the enriched uranium. To support the DOE in mitigating the risk of further delays in delivery of 5B Cylinders, the Company received technical direction and a contract modification from the DOE to procure compliant 5B Cylinders and components, while the contractual obligation to furnish compliant 5B Cylinders under the HALEU Operation Contract continues to rest with the DOE.

Centrus began to receive deliveries of additional 5B Cylinders from its vendor in October 2024 and expects to receive the adequate number of compliant cylinders to produce the minimum quantity of HALEU for Phase 2. On November 5, 2024, the HALEU Operation Contract Phase 2 period of performance, which was to expire on November 6, 2024, was extended to June 30, 2025. The target fee for Phase 2 of