ASP Isotopes Inc. (ASPI:NASDAQ) entered into definitive agreements with two companies, regarding uranium with TerraPower and helium with Renergen Ltd., all in a 24-hour period, reported Canaccord Genuity Analyst George Gianarikas in a May 20 research note. Canaccord raised its target price on the isotope producer, distributor, and seller to reflect its increased estimates.
"Management appears to be attempting to create a global supplier of critical materials," wrote Gianarikas.
57% Return Implied
Canaccord Genuity raised its target price on ASP Isotopes to US$11 per share from US$8.50, the analyst noted and wrote, "We see room for further upside as we get more comfortable with today's transaction and management's ability to execute."
In comparison, ASP was trading at US$7 per share at the time of Gianarikas' report. From this price, the return to target represents 57%. The advanced materials company remains a Buy.
It has 72.1 million shares outstanding, a market cap of US$504.5 million (US$504.5M), and a 52-week range of US$1.86–9.33 per share.
To Supply Uranium
Gianarikas reported that ASP Isotopes and TerraPower, a nuclear reactor development company backed by Bill Gates, entered into three agreements. One is for TerraPower to provide ASP with a term loan to help finance construction of a uranium enrichment facility in Pelindaba, South Africa, capable of producing high-assay, low-enriched uranium (HALEU). The facility will be able to produce an estimated 15 metric tons of HALEU per year, enough for one reactor, and production is expected to start in 2027. Also for its new facility, ASP Isotopes recently entered into a term sheet loan for up to US$30M of debt.
Via two other agreements, ASP agreed to supply TerraPower with HALEU. ASP is to supply the first fuel cores for the initial loading of TerraPower's Natrium project in Wyoming. Longer term, it is to supply up to 150 metric tons of HALEU to TerraPower for 10 years, starting in 2028 and running through the end of 2037.
"We are quite positive on today's announcement with TerraPower," the analyst commented. For ASP, "[this is] a technology validating agreement that has the potential to add over US$100M-plus in annual EBITDA for a decade."
Canaccord Genuity estimates that by 2037, HALEU demand will reach US$40.5 billion (US$40.5B) in the U.S. and US$438.8B globally.
Entering the Helium Market
In what Gianarikas described as a bold, risky and potentially highly profitable move, ASP Isotopes entered an agreement to acquire Renergen Ltd., a South African liquefied natural gas (LNG) and helium producer, in an all-stock deal worth about US$107.3M. The transaction is expected to close in early to mid-August, before ASP's Quantum Leap Energy (QLE) spinout, on track for H2/25. QLE is ASP's subsidiary focused on isotopic enrichment for nuclear fuels such as HALEU, lithium-6 and lithium-7.
"This acquisition changes the profile of ASP as it attempts to scale up its post-QLE spin enterprise," wrote the analyst.
ASP is interested is Renergen for its helium because of the gas' increasing importance to the growing energy, semiconductor, medical and space exploration industries and because of its current supply-demand fundamentals. Global supply, noted Gianarikas, is "fragile and fragmented." Renergen made its first helium sale on March 13.
"[ASP] management expects the combination [of the companies] will create a vertically and horizontally integrated isotope and critical mineral supply chain, benefiting from several synergies," Gianarikas wrote.
Post acquisition, Renergen will become an operating subsidiary of ASP, and all debt will be secured on the company's American assets. The combined company will be headquartered in Austin, Texas. Shares of ASPI will trade on the NASDAQ as well as the Johannesburg Stock Exchange. ASP Chief Executive Officer (CEO) Paul Mann will be the CEO and executive chairman of the combined entity, and Renergen CEO Stefano Marani will be the CEO of ASPI's electronics and space division.
Management's goal for the combined company, excluding QLE, is to achieve more than US$300M of EBITDA.
"There appears to be much upside if the company can execute on its plan," wrote Gianarikas. "Combined with HALEU, we estimate ASPI's guidance implies greater than US$400M of EBITDA in 2030."
The analyst pointed out that for ASP to meet its goals, it will need to take on additional debt, which could approach US$1B by the end of this decade, and it will need managerial execution.
Isotope Production Updates
Gianarikas provided updates on ASP's enrichment activities at its three newly built South African facilities. As for ytterbium-176, the company is producing about 300 grams per year. The plan is to transition to continuous processing in July to take production to more than 1 kilogram per year. Commercial shipments are due to start this June or July.
Regarding silicon-28, ASP began commercial production of it on March 27. Initial shipments are expected to go out this June or July.
With respect to carbon-14, the plant is running successfully. Initial deliveries are expected to be made in July. The first two feedstock shipments were received and a third is expected.
"Management also noted ongoing progress supporting the pending, large quantity production of lithium-64, gadolinium-160, zinc-68 and lithium-6/lithium-7 out of incremental South African enrichment facilities," Gianarikas wrote.
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Disclosures for Canaccord Genuity, ASP Isotopes, May 20, 2025
Analyst Certification Each authoring analyst of Canaccord Genuity whose name appears on the front page of this research hereby certifies that (i) the recommendations and opinions expressed in this research accurately reflect the authoring analyst’s personal, independent and objective views about any and all of the designated investments or relevant issuers discussed herein that are within such authoring analyst’s coverage universe and (ii) no part of the authoring analyst’s compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by the authoring analyst in the research, and (iii) to the best of the authoring analyst’s knowledge, she/he is not in receipt of material non-public information about the issuer. Analysts employed outside the US are not registered as research analysts with FINRA. These analysts may not be associated persons of Canaccord Genuity LLC and therefore may not be subject to the FINRA Rule 2241 and NYSE Rule 472 restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account. Sector Coverage Individuals identified as “Sector Coverage” cover a subject company’s industry in the identified jurisdiction, but are not authoring analysts of the report. Investment Recommendation Date and time of first dissemination: May 20, 2025, 23:01 ET Date and time of production: May 20, 2025, 22:57 ET Target Price / Valuation Methodology: ASP Isotopes - ASPI Our $11.00 PT is based on our DCF analysis, which assumes a ~14% discount rate and ~6% terminal growth rate. Risks to achieving Target Price / Valuation: ASP Isotopes - ASPI • Moving beyond the lab. While ASP’s enrichment technology has worked at lab scale, we look to approaching commercial deployments to serve as proof points that the technology can work commercially and at scale. • South Africa political risk. South Africa’s enrichment expertise has been built over decades. Nevertheless, we do have concerns regarding political risk within the country and ASP’s ability to export isotopes (e.g., HALEU) from South Africa to other countries (e.g., USA). • Approvals and permitting. As ASP looks to expand into HALEU production, the company is looking to obtain the proper government approvals and permits in South Africa — which it has not yet procured. This same approval/permitting risk also applies to other countries, including Iceland, and other end markets, including medical and semiconductor. • HALEU-based SMRs need NRC approval. While the excitement and momentum around nuclear are palpable, HALEU-based reactors have yet to be approved by the US NRC. We think approval is likely longer term but does represent the risk to HALEU demand. • Commercial timing for nuclear energy applications remains uncertain as technical feasibility needs to be firmly established. Uranium enrichment is also subject to thorough regulatory approvals and policy considerations. • Balance sheet & additional debt. The company’s ambitious plans likely imply additional capital needs over the medium to long term. To execute on plans, management may raise incremental debt. Distribution of Ratings: Global Stock Ratings (as of 05/20/25) Rating Coverage Universe IB Clients # % % Buy 636 69.06% 26.42% Hold 124 13.46% 12.10% Sell 11 1.19% 0.00% Speculative Buy 141 15.31% 52.48% 921* 100.0% *Total includes stocks that are Under Review Canaccord Genuity Ratings System BUY: The stock is expected to generate returns greater than 10% during the next 12 months. HOLD: The stock is expected to generate returns from -10% to 10% during the next 12 months. SELL: The stock is expected to generate returns less than -10% during the next 12 months.
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