Subash Chandra

Subash Chandra questioned the extent to which the balance of plant is included in the NRC licensing process and whether addressing various use cases requires further NRC engagement. He also asked if AI and digital twin simulations could materially affect the lengthy licensing process.

Answer

James Walker, CEO of NANO Nuclear Energy, explained that most of the KRONOS MMR's balance of plant is non-nuclear and falls outside direct NRC oversight, though components must meet standards. He noted that after the first reactor is licensed, subsequent deployments will have significantly reduced regulatory engagement. Walker expressed strong hope that AI could substantially reduce human error and identify critical steps in the complex licensing process, leading to faster and cheaper reactor deployments.

Subash Chandra with StoneX sought clarification on the extent to which the balance of plant is included in the NRC licensing process versus the reactor itself, and asked about the potential material effect of AI and digital twins on expediting the lengthy licensing process.

Answer

James Walker, CEO of NANO Nuclear Energy, clarified that the NRC primarily focuses on nuclear safety systems, with most balance of plant components being non-nuclear and outside direct NRC oversight, though they must meet certain standards. He expressed hope that AI systems could substantially reduce human error and identify qualification needs, thereby expediting licensing timelines and reducing costs for the entire industry.

Subash Chandra asked for clarification on the potential for states to receive delegated authority from the NRC for certain nuclear activities, inquiring about specific activities, target states, and whether Illinois is a consideration. He also asked about the differences between the UIUC test reactor and the commercial reactor, specifically regarding components and the balance of plant, and whether NANO Nuclear expects to determine a Levelized Cost of Energy (LCOE) value using the UIUC reactor.

Answer

James Walker, CEO of NANO Nuclear Energy Inc., explained that facilities like conversion plants could potentially be licensed by states, with support from both state and NRC levels for states to reclaim this control. He noted that certain individual components could be qualified at the state level to expedite timelines. Mr. Walker stated that the UIUC reactor will be a full-scale research reactor, matching the commercial design in dimensions and components as closely as possible, with commercial reactors likely having higher power output due to optimized engineering. He confirmed that an LCOE value would be determined, but prefaced that the LCOE for the first-of-a-kind reactor at UIUC would differ significantly from commercial reactors, which would see costs driven down by scale and multiple units.

Subash Chandra asked if NANO Nuclear Energy expects to determine a Levelized Cost of Energy (LCOE) value with the UIUC reactor.

Answer

CEO James Walker confirmed that an LCOE value would be determined, but cautioned that the LCOE for the first-of-a-kind UIUC reactor would differ significantly from commercial reactors deployed at scale. He expressed confidence that KRONOS MMR's LCOE would be cost-competitive with solar, wind, and traditional nuclear, and potentially with gas in the future, given rising gas costs and KRONOS's advantages like co-location and off-grid capability.

Subash Chandra of The Benchmark Company, LLC questioned why Nanonuclear did not apply for the DOE's Advanced Reactor pilot program and asked for an assessment of the graphite supply chain, including its role in the reactor design and sourcing strategy.

Answer

CEO James Walker explained that applying for the DOE program was disadvantageous, citing higher costs, a lack of commercial benefit, and resource diversion from their primary goal. Founder, Executive Chairman & President Jay Jiang Yu added that it did not fit their rapid commercialization model. On the supply chain, Walker identified nuclear-grade graphite and the reactor pressure vessel as critical components that will be outsourced to specialized, experienced global suppliers, while most other components will be assembled at a planned core manufacturing facility.

Subash Chandra asked for an outlook on PDH (Propane Dehydrogenation) demand in China for 2026. He also inquired whether the longer laterals planned for 2026 completions guidance are primarily related to the HG acquisition or if their influence would be more significant in 2027.

Answer

Michael Kennedy, CEO and President, provided details on China's PDH outlook, noting current utilization at 65-70%, 300,000-400,000 barrels per day of available capacity, and two additional plants scheduled for 2026 adding 55,000 barrels per day of demand. He confirmed that the longer laterals in 2026 completions are almost entirely HG-related, with an average lateral length increasing to 15,000 feet from the typical 13,000 feet.

Subash Chandra inquired about the outlook for Propane Dehydrogenation (PDH) in China for 2026. He also asked if the longer laterals planned for 2026 completions, compared to 2025, were primarily related to the HG acquisition or would be more influential in 2027.

Answer

Michael Kennedy, CFO and SVP of Finance, provided an update on China's PDH outlook, noting current infrastructure utilization at 65-70%, 300,000-400,000 barrels per day of available capacity to ramp, and two additional plants scheduled for 2026, adding about 55,000 barrels per day of demand. He confirmed that the longer laterals in 2026 are almost entirely HG-related, increasing average lateral length to 15,000 feet from the typical 13,000 feet, making it accretive.

Asked about the A50 well's cycle time, the value proposition of investing in Haynesville wells versus more Beta wells, and whether a material acceleration of the Beta program would require both organic cash flow and asset monetization proceeds.

Answer

The A50 well's cycle time was as expected. The investment in Haynesville does not preclude accelerating the Beta program, as capital is not the ultimate constraint. A material acceleration at Beta can be funded by organic free cash flow alone, especially after the major infrastructure project is completed in Q3, which will significantly boost free cash flow from Q4 onwards.