Terrestrial Energy Inc. Common Stock TD Nuclear Roundtable

Thank you for having me, Esteban.

Well, yes. I think our sort of market position is in part defined by our ability to use standard nuclear fuel, low enriched uranium, enriched no more than 5%. In fact, our level enrichment is significantly less than that. It is not 5%, it is significantly less. We are in the Generation IV camp, and we are really quite unique in using standard nuclear fuel. The reason that we are using it is probably twofold. The first point is that we recognized early on, about 10 years ago, that it is critically important if you are to achieve your foundational mission as a company, namely fleet deployment. It is not about the first one, you have to have a scalable supply chain. Fuel supply is such a critical central pillar of presenting a scalable supply chain.

At the time, this is about 10 years ago, a time we recognized that if you weren't using standard nuclear fuel, you have some pretty severe bottlenecks. Now, we were able to use standard nuclear fuel because our reactor system would work with uranium enriched no more than 5%. The reason is this is a thermal spectrum reactor system, and you've got a superb moderator in the form of graphite. It's also quite a big system as well. So with a thermal spectrum graphite moderated system with quite a big core, you have the ingredients to use a low level of enrichment. You start being pushed out of that point if you have a small core, and you start definitely being pushed out of that point if you've got a reactor system that operates in a fast spectrum, that requires higher octane nuclear fuel.

A lot of Generation IV systems, particularly anyone who operates a fast reactor, requires. They will not work with LEU. Technically, just from a physics perspective, you just can't get the thing to work. So a lot of Generation IV systems operate in the fast spectrum. They will not work. If you start making your reactor system too small, you start having to use higher octane fuel. So we were able to use it because we could, but we also, nearly 10 years ago, foresaw, quite uniquely, the problems that we would face if you're using higher LEU. Perhaps at the margin, it may be a slightly better technology for us. We're not looking to come up with a perfect molten salt reactor. We're looking to come up with a commercially successful one. So in that reference point, we use standard nuclear fuel.

On material supply, it is not just about supplying the materials. Graphite is well supplied. It is a well-known nuclear material. Steels are well supplied. They have got nuclear grade steels as well. From a supply chain perspective, in terms of developing your supply chain, you need to be what is called qualifying, not just selecting the vendor, but also qualifying your fuel. This is just the part of the regulatory process. Qualifying means you have collected the data for that component, and you have collected it in a regime which is compliant, from a QA perspective, quality assurance perspective, with the regulatory needs. Therefore, the regulator will say, "I will accept that data in a license application." So with respect to qualifying, which is almost the same thing as developing your supply chain. Qualifying, in our case, I have mentioned we are a graphite moderated system. You need to start early when you are qualifying graphite.

To qualify graphite means you need to demonstrate that you understand its performance in the conditions it is going to experience in the reactor core. You need to be putting in a test reactor. You cannot accelerate that because the test rate is limited by the power of the test reactor, and test reactors only have a certain level of power. So you need to put this stuff in early, graphite in early. We are, I think, quite well known in the Generation IV front of having started our graphite program, in our case, one of the most powerful test reactors in the world in the Netherlands. We have been testing our graphite in there, collecting the data on its performance, and we have been doing that for quite a few years now. That is true for other components as well, such as alloys.

That is an important part of your R&D schedule, collecting the data, demonstrating the performance of the materials that go into your reactor system. It includes systems as well, and components. But that is just what everyone has to do when developing a reactor system, collecting the data, and preparing for that operating license submission. You have to collect data, and you have to test systems.

Well, the number of topical reports that you may wish to submit to the NRC is, to some extent, perhaps as much as you want. Theoretically, you could. Each topical report discharges a particular element of the end license application. As you're preparing for that operating license application to the NRC, you probably intelligently want to start removing some uncertainty from your licensing strategy by asking the regulator to agree a particular element of it. Okay, we agreed on that. Let's move forward. We agree an element of that, and that's how you build up your license application. You could theoretically, I suppose, do the whole thing through topical reports. I suppose that's theoretical. We're intending to, like many others in the sector, to use topical reports, to establish that very solid foundation for a regulatory strategy.

We've been establishing that solid foundation for some time now, but in terms of topical reports, we submitted one last year called Principal Design Criteria. I think that gives the game away. It's fundamental to the entire design, is the Principal Design Criteria. Another one called Postulated Initiating Events. Again, foundational to safety analysis. You want that to be agreed first, okay, before you move on. Yes, you have. You agree that with the regulator, let's move on with other topical reports. We submitted another recent topical report on our methodology to qualify graphite. We're doing this testing in our test reactor, not our test reactor, but a test reactor in the Netherlands.