Candu Energy Inc. (TSX:SNC) said Thursday it has signed an expanded agreement with China National Nuclear Corp.'s subsidiary companies to continue work on using recycled uranium and thorium as alternative fuels for new reactors. The company said the 24-month agreement is expected to result in a detailed conceptual design of an advanced fuel Candu reactor. The deal follows a successful demonstration at Candu reactors at the Qinshan site, about 150 kilometres southwest of Shanghai. The tests demonstrated the feasibility of using natural uranium equivalent fuel, composed of recycled uranium and depleted uranium, the company said. The firms are now working on a project to convert the Qinshan Candu reactor units to full core use of natural uranium equivalent fuel by 2014. SNC-Lavalin, one of the world's largest engineering and construction firms, acquired the Candu reactor division of Atomic Energy of Canada Ltd. from Ottawa last year for $15 million plus future royalties.