Silex : GLE Restructure Update

Level 8, Suite 8.01 56 Clarence Street Sydney NSW 2000 Australia

PO Box 364

Sydney NSW 2001

Tel: + 61 2 9704 8888

Fax: +61 2 9704 8851www.silex.com.au

SILEX Uranium Enrichment Project

GLE Restructure Update

22 December 2017

Intended acquisition by Silex of a majority interest in GLE

As announced on 1 September 2017, Silex Systems Limited (Silex) (ASX:SLX) (OTCQX:SILXY) and GE-Hitachi Nuclear Energy (GEH) reached agreement to amend and extend the Term Sheet announced on 2 May 2016 to allow the parties additional time to work towards a mutually acceptable restructure of GE-Hitachi Global Laser Enrichment LLC (GLE), the exclusive Licensee of the SILEX technology.

The amended Term Sheet, which will remain in force until either execution of a Purchase and Sale Agreement (PSA) or the termination of negotiations, contemplates Silex acquiring all of GEH's 76% interest in GLE subject to the satisfactory finalization of transaction documentation. The acquisition will also be conditional on obtaining the necessary US Government approvals. Silex and GEH continue to work diligently on the PSA, ancillary transaction documentation and the US Government filings. Subject to the above, we are targeting execution of a binding agreement in Q1, 2018.

Improvement in the global uranium market

In recent weeks the uranium spot price has appreciated by ~20%. This is largely in response to the announcement on 4 December by NAC KazAtomProm, the world's largest uranium producer, that it was reducing its uranium production by 20% for the next three years to better align output with lower demand. This follows the announcement on 8 November by Cameco Corporation, the world's second largest uranium producer, to suspend production from its MacArthur River uranium mine for the next 10 months in response to market conditions. The combined effect of these cuts is the most significant reduction in global uranium production for many years, and is expected to accelerate the depletion of uranium stockpiles currently overhanging the market, helping to balance supply and demand in the uranium market over the next few years.

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The Paducah opportunity

As disclosed to the ASX on 11 November 2016, GLE signed an agreement with the US Department of Energy (DOE) for the purchase of approximately 300,000 metric tons of high assay uranium tails inventories for the purpose of re-enrichment using the SILEX technology to produce natural grade uranium which can be sold into the global uranium market. The anticipated commencement date for these operations is around the mid 2020's at a time when third party analysts forecast market conditions will have improved. The net result of this potential project (the 'Paducah Project') is equivalent to a 'Tier 1' low cost uranium mine producing approximately 5 million pounds of uranium annually for at least 40 years.

Subject to a positive outcome with respect to the acquisition of the 76% interest in GLE, and a continuing improvement in the uranium and enrichment markets over the next few years, Silex remains optimistic with regard to the commercial prospects for GLE and the SILEX laser enrichment technology.

Further information on the Company's activities can be found on the Silex website:www.silex.com.au or by calling +61 2 9704 8888.

Forward Looking Statements and Business Risks:

Silex Systems is a research and development Company whose primary asset is the SILEX laser uranium enrichment technology, originally developed at the Company's technology facility in Sydney, Australia. The SILEX technology, licensed exclusively to GE-Hitachi Global Laser Enrichment LLC (GLE) in the USA, is currently in the engineering development stage and plans for commercial deployment remain speculative and uncertain.

The commercial potential of the SILEX technology remains to be determined. Accordingly, the statements in this presentation regarding the future of the SILEX technology, and any associated commercial prospects are forward looking and actual results could be materially different from those expressed or implied by such forward looking statements as a result of various risk factors.

Risk factors that could affect future results and commercial prospects include, but are not limited to: the outcome of the GLE restructure, results from the SILEX uranium enrichment engineering development program being conducted jointly by the Company and GLE; the demand for natural uranium and enriched uranium; the time taken to develop the SILEX technology; the potential development of competing technologies; the potential for third party claims against the Company's ownership of Intellectual Property; the potential impact of government regulations or policies in the USA, Australia or elsewhere; and the outcomes of various commercialisation strategies undertaken by the Company and/or its Licensee GLE.

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