By Mackenzie Tatananni

Nuclear start-up Oklo said Wednesday that its isotope test facility had passed its final safety analysis, capping off months of uncertainty over whether the company would get a reactor running in line with the government's timeline.

Oklo was selected last year for an Energy Department initiative to deploy at least three test reactors at national laboratories by July 4. With its safety analysis complete, the company confirmed it was on track to achieve first criticality for the Groves nuclear reactor this month.

Moving forward, Oklo aims to use its Groves facility to lay the groundwork for a steady supply of high-value radioisotopes, which can be used in medicine and manufacturing. The U.S. historically has relied on aging facilities overseas to supply the bulk of its isotopes.

Still, the biggest challenge remains: bringing a commercial reactor online fast enough to satisfy investors. Unlike Oklo's larger Aurora designs, the Groves reactor doesn't generate electricity. The start-up has been laying the groundwork for its first Aurora powerhouse on the grounds of Idaho National Laboratory, where it is also building a fuel fabrication facility.

For now, a test reactor is a start. Wall Street was cheering the progress, lifting shares 1.8% on Wednesday. The stock pared back its sharp premarket gains as the market turned lower after the opening bell, dragging all three major U.S. indexes into the red.

Beyond building out a domestic supply of isotopes, Oklo aims to bolster the nation's nuclear fuel reserves. Until the U.S. can establish domestic supply chains for traditional fuels like high-assay low-enriched uranium (HALEU), Oklo is exploring the use of plutonium as a temporary "bridge fuel."

To that end, the start-up may have already found a near-term answer to its fuel needs. Oklo signed a letter of intent with Centrus Energy last month for a multiyear supply of HALEU, which will power up to five Aurora reactors starting in 2029. Before then, the flagship powerhouse is slated to run on fuel recovered from the Experimental Breeder Reactor II, which was decommissioned in 1994.

Write to Mackenzie Tatananni at mackenzie.tatananni@barrons.com

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