Key developments at ASP Isotopes

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SIMON BROWN: I’m chatting now with Paul Mann, CEO of ASP Isotopes [ASPI]. Disclaimer upfront: I hold shares in ASP Isotopes. Paul, you had the business update for the investor community earlier in the week. I want to delve into some of it.

Let’s start with Renergen, which I think is what a lot of my listeners will know. That is the Virginia Gas Project. You have Phase 1 ahead of schedule and your helium – you’re looking at nameplate capacity in the third quarter of this year, both of those bigger steps in the project.

PAUL MANN: Yes. That’s right. We acquired the assets properly in January this year, although we started investing and funding and controlling the assets back in May last year. And we’ve put some of our engineers down there. We’ve recruited some incredible drilling experts from the United States, and just kind of accelerated the project and put more manpower behind it – and we’re ahead of schedule now.

We’ve drilled all the wells required for nameplate capacity in Phase1; the plant is complete. We’re going to connect the wells now to the plant, and that plant should start producing liquid helium – which the world is desperate for right now, given what’s going on in the Middle East.

Read: Renergen firms as Free State plant finally starts helium production

SIMON BROWN: Of course, a lot of helium is not going through the Strait of Hormuz. So we desperately need it.

Quantum Leap Energy, which is your nuclear [company] – you are looking at a spinoff here. A couple of questions. Where is that process and what does the structure look like post-spinoff?

PAUL MANN: Yes. We’ve always said that nuclear fuels and nuclear medicine are very different businesses. We have to sign energy certificates in our nuclear-medicine business stating we’re not enriching uranium. The goal has always been to separate the two businesses – same technologies, just different end-markets.

So we filed what’s called an S-1 with the SEC, the US Securities and Exchange Commission, in November last year. Normally that would be a 30-day process but, given the government shutdown in the US last year, there’s a bit of a backlog – so it’s taking a bit longer than one would have hoped to go through that process.

Read: Trump sons back ASP Isotopes Inc’s uranium unit Quantum Leap Energy

Then on February 14th the financials went stale. We’ve just filed our 10-K so we can now put the new financials into the US1. The financials are no longer stale. So that’s good.

So we’re aiming for a first-half, second-quarter public market listing, public market debut. They are likely to take the form of an IPO. Other structures we can look at, such as the reverse merger – and then all the convertible notes will convert into equity.

And I’d have thought at some point shortly after that, we’d like to distribute some shares to the … shareholders who may benefit from this as well.

So you should expect to have both a US and a South African listing. That will happen between now and the end of the year. But the main IPO, the main market listing, should happen or will hopefully happen during the second quarter. Obviously that is much dependent upon certain things that are out of our control.

Read: Renergen approved to become a fully owned subsidiary of ASP Isotopes
Renergen ASP Isotopes deal is offering great opportunity

SIMON BROWN: Yes, I take the point. I’d forgotten about the shutdowns, which of course create all sorts of complications.

Silicon 28, your electronics – you’ve got commercial production that is running at your facility up here in Pretoria. You have some purchase agreements signed. You shipped samples to customers late last year; you’re going to be shipping finished product this quarter. That is really full steam ahead there.

PAUL MANN: Yes. So right now we’re just changing some O-rings in the compressors. An O-ring is something that seals the compressor from the outside air. What we found was our compressors were only helium-tight to a vacuum of 10 to the minus five, and we really need 10 to the minus six, or 10 to the minus seven.

And we decided that the O-rings were faulty. What that would have meant was that the plant wouldn’t have lasted very long. The O-rings would have got stiff, brittle, and broken.

Read: Renergen finally produces liquid helium

So we’re changing the O-rings right now. Actually, two of our customers came down to South Africa from the United States to look at the plant and give us advice. These two customers are probably some of the world’s leading experts in xylene, which is what we process. They recommended making those changes and we’re making those changes now. Once that’s finished the plant should start up and we’ll start producing product.

SIMON BROWN: Your radiopharmacy? You’ve been doing a fair bit of acquisition in that space, a couple of sort of bolt-on maybe acquisitions last year. The plan is essentially to double revenue in 2026, and I imagine to grow significantly from there as well – targeting what, about $10 million for this year?

PAUL MANN: Yes, that’s right. There’s an opportunity here to acquire many small sub-scale radiopharmacies, add what we’ve built in South Africa into those radiopharmacies, essentially a Control C and Control V, to what we have here and turn this into a really impressive global radiopharmacy in many geographies – and we have the expertise and capabilities to do it. So let’s get on and do it.

The capital for this project is off the charts. It’s an incredible ton of capital. So we are keen to deploy capital in this.

Read: Renergen shares rocket on US buyout offer

SIMON BROWN: You mentioned capital. You have just about $333 million – and these are dollars in cash. Is that enough for now? What is your sort of runway with that, because you’re at the point where you are actually starting to get revenue from some of the projects?

PAUL MANN: Yes, that’s plenty for now. Hopefully we won’t need any more equity capital again. When you think about our uses of capital, we need to put about $170 million into Renergen, and that will unlock the three quarters of a billion dollars of funding from the US government and from Standard Bank.

Now that money won’t get spent immediately. That money will get spent over the 44-month build process. We had to put that $170 into the project to draw down the $750.

And then we’re going to build a couple more isotope plants – a couple in South Africa, and one in the UK, and then some more in South Africa. That will use the balance of the funds.

Read: Renergen secures funding but springs a leak

But, as you said, we should start to generate revenues now and that should allow us to come cash flow break-even towards the back half of this year. That puts the company in a very different position from where it has been for the last five years.

SIMON BROWN: Absolutely. It’s sort of that tipping point. And your target is the … million Ebitda for 2031. So that’s about five years off.

PAUL MANN: I suspect the exit rate from 2030 will be over $300 million. But obviously the first full year to realise that will be 2031. In the investor update call last week we gave a breakdown of where those respective Ebitdas come from – which division, which part of the business.

You’ll see it’s a broad mix of industries not reliant on any one particular subsector.

SIMON BROWN: That is perhaps the key point around ASP Isotopes. There is maybe some overlap in the broader level but, in essence, you are in different industries – in some cases vastly different. You have cancer treatments as well.

PAUL MANN: Correct. Actually, we’ve got four candidates going into human clinical trials later on this year, and we’ll run those Phase 1 trials in South Africa.

The clinical … looks incredible. My background is more in biotech than it is in other stuff, and so this is [something] that I love. It’s great to see some of the most incredible oncology scientists here in South Africa running these trials.

SIMON BROWN: How long are trials? It’s almost a curiosity. My sense is that these are sort of multi-, multi-years. Am I correct?

PAUL MANN: No, actually they are very fast trials to run. So in Phase 1 clinical trial we should have initial results within the first few months.

SIMON BROWN: Oh, wow!

PAUL MANN: So you can see the tumour responding to treatment straight away. And if the tumour starts to shrink then you absolutely see it. Now obviously the final endpoint, the overall survival progression, free survival, is several months to years away. But wherever the drug works you start to see what’s called a ‘response’ almost immediately, and that’s what we’re looking for. That’s the important signal we’re looking for.

SIMON BROWN: Yes, I hadn’t thought of that. Of course, as you said, the response is almost immediate.

We’ll leave it there. Paul Mann, CEO, ASP Isotopes, appreciate the time.

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