Company: LEU
Filing Date: 2025-02-07
Form Type: 10-K
Source: 0001065059-25-000006
Chunk: 72

Company: CENTRUS ENERGY CORP
Filing Date: 2025-02-07
Form: 10-K
Item: Item 7
Chunk 72
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 completing Phase 1 by successfully demonstrating its HALEU production process. During November 2023, the Company transitioned to Phase 2 of the HALEU Operation Contract.

Phase 2 of the HALEU Operation Contract includes continued operations and maintenance, and production for a full year at an annual production rate of 900 kilograms of HALEU UF6. The DOE will own the HALEU produced from the demonstration cascade and Centrus will be compensated on a cost-plus-incentive-fee basis, with an initial Phase 2 contract value of approximately $90.0 million, subject to Congressional appropriations. 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 the base contract; those options are at the DOE’s sole discretion and subject to the availability of Congressional appropriations. Concurrently, pursuant to an amendment to our lease for the Piketon facility, the DOE assumed all D&D liabilities arising out of the HALEU Operation Contract.

Under the HALEU Operation Contract, DOE is contractually required to provide the 5B Cylinders necessary to collect the output of the cascade, but ongoing supply chain challenges had created difficulties for DOE in securing enough 5B Cylinders for the entire production year under Phase 2. 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. During the 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. Due to these delays, Centrus was unable to achieve delivery of the 900 kilograms of HALEU UF6 for Phase 2 by November 2024. On November 5, 2024, the HALEU Operation Contract was modified to extend the Phase 2 period of performance to June 30, 2025. Centrus began to receive deliveries of additional 5B Cylinders in October 2024 and currently expects to have adequate cylinders to complete Phase 2. In accordance with the HALEU