Shares of Oklo Inc (NYSE:OKLO) fell in early trading on Wednesday, reversing Tuesday's gains. The dip comes as the company engages in advanced negotiations with the U.S. Department of Energy (DOE) under the Surplus Plutonium Utilization Program.
The California-based nuclear power company is one of the main recipients of the initial tranche of plutonium. The allocation timing remains uncertain, according to Goldman Sachs analyst Brian Lee
The Oklo Analyst: Lee maintained a Neutral rating, while raising the price target from $63 to $66.
The Oklo Thesis: The DOE's Surplus Plutonium Utilization Program aims to make around 20 metric tons (MTs) of surplus plutonium available to be converted into advanced reactor fuel, Lee said in the note.
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Oklo plans to advance the utilization of the surplus plutonium through its partnership with Newcleo, a developer of advanced nuclear reactors and nuclear fuel, he added.
The full 20 MTs of plutonium could be converted into 180 MTs of reactor fuel, the analyst wrote. That’s enough for 24 reactors based on our estimates.
He mentioned other takeaways:
- There are four other advanced reactor companies that have been selected for the advanced negotiations, although no other company has made an official announcement yet.
- Oklo will lead the utilization of the surplus plutonium, while its partner newcleo will provide "fuel expertise and potential project capital, subject to approvals."
- The partnership includes plans to support advanced fuel fabrication and manufacturing infrastructure in the US, subject to customer approvals.
- The actual timing and quantities of fuel being awarded to Oklo are still unknown.
- The required investment and project scope also remain uncertain.
- If awarded, this fuel could prove important in supporting the company's fuel fabrication efforts by 2030.
Price Action: Shares of Oklo had declined by 3.39% to $66.34 at the time of publication on Wednesday.
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