Company: LEU
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001065059-25-000024
Chunk: 68

Company: CENTRUS ENERGY CORP
Filing Date: 2025-05-08
Form: 10-Q
Item: Item 1
Chunk 68
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 activities on the HALEU Demonstration Contract are ongoing. In 2022, the DOE elected to change the scope of the HALEU Demonstration Contract and moved the operational portion of the contract to the new, competitively-awarded HALEU Operation Contract that would provide for a longer period of operation and HALEU production than would have been possible under the HALEU Demonstration Contract.

On November 10, 2022, the DOE notified Centrus that the Company had been awarded the HALEU Operation Contract and work began on December 1, 2022. The base contract value was approximately $150.0 million with two phases through 2024. Phase 1 included an approximately $30.0 million cost-share contribution from Centrus matched by approximately $30.0 million from the DOE to complete construction of the cascade, begin operations and produce the initial 20 kilograms of HALEU UF6 by no later than December 31, 2023. On November 7, 2023, the Company announced that it made its first delivery of HALEU to the DOE, completing Phase 1 by successfully demonstrating its HALEU production process. 

During November 2023, the Company transitioned to Phase 2 of the HALEU Operation Contract which includes production of 900 kilograms of HALEU UF6 per year as well as continued operations and maintenance. The DOE owns the HALEU produced from the demonstration cascade, and Centrus is being 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 $152.3 million. The HALEU Operation Contract also gives DOE options to pay 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.

1 International Atomic Energy Agency, “Global Inventories of Secondary Uranium Supplies” (IAEA-TECDOC-2030), p. 54 (2023).

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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