Lightbridge Corp (LTBR) 2010 Q4 法說會逐字稿

Good morning and welcome to the Lightbridge fourth-quarter earnings conference call. All participants will be in listen-only mode. (Operator Instructions). After today's presentation, there will be an opportunity to ask questions. (Operator Instructions).

Please note this event is being recorded. I would now like to turn the conference over to Robert Cavosi. Please go ahead, sir.

Thank you, Operator. Good morning, ladies and gentlemen, and welcome to the Lightbridge Corporation 2010 fourth-quarter and full-year earnings conference call. A copy of the fourth-quarter and full-year earnings press release can be found under the Investor Relations heading on the Lightbridge website at ltbridge.com.

Seth Grae, President and Chief Executive Officer, will lead the call today. In addition, the following executives are also on the call to answer any questions you may have. Jim Guerra, our COO, and Andrey Mushakov, Lightbridge's Executive Vice President of International Nuclear Operations and Larry Goldman, Chief Accounting Officer.

Before Seth begins, let me remind you this conference call may contain forward-looking statements concerning our business which are intended to be covered by the Safe Harbor for forward-looking statements under the Private Securities Litigation Reform Act. Actual results may differ materially from the forward-looking statements depending on the number of risks, uncertainties and various other factors beyond the Company's control. All forward-looking statements are expressly qualified in their entirety by the Cautionary Statements and Risk factors detailed in the Company's filings with the SEC and we take no duty to revise or update any forward-looking statements except as required by applicable law.

With that, I will turn the call to Seth Grae, Chief Executive Officer of Lightbridge Corporation.

Thank you very much, Bob. Good morning, everyone, and thank you for joining us today for our 2010 fourth-quarter and full-year earnings conference call.

At Lightbridge, we continue to make strides in both our business segments. On last quarter's call, we spoke about our all metal fuel technology designed for new build nuclear reactors, which we expect will provide up to a 30% increase in power output per reactor and could potentially extend the lifecycle length up to 24 months.

Since then, we have expanded our metallic fuel technology product line by adding two all-uranium seed and blanket fuel product families for power upgrades of 10% and 17% and a longer fuel cycle of up to 24 month in existing types of pressurized water reactors currently in operation around the world.

As established nuclear markets are facing challenges contributing to the slow pace of new build reactor activity, increasing power output from the existing reactor through power uprates and longer fuel cycles has become an attractive low-cost alternative to new build in these established markets. However, taking full advantage of power uprate and longer fuel cycle opportunities requires next-generation fuel designs capable of operating at higher power density than conventional oxide fuels.

Industry experts anticipate that most of the new build activity over the next two decades will occur in the emerging nuclear markets. Nuclear power in those markets is perceived as an attractive low carbon energy option that enables them to diversify their domestic energy base.

The key priority in those markets is to make the most efficient use of available capital and existing supply chain infrastructure; and doing that requires next-generation fuel designs capable of higher power density.

The Lightbridge metallic fuel technology that is at the core of the four product families within our metallic fuel product line is the next-generation high-power density fuel that the industry needs. The underlying premise of the Lightbridge fuel technology value proposition is to enable nuclear power plants to produce more power per dollar invested and to improve their financial operating margins.

Furthermore, the Lightbridge fuel technology enables the existing reactor component supply chain to deliver more power from the same capacity. This fuel also has backend benefits such as reduced used fuel volumes, shorter cooling time before transferring used fuel to dry storage and enhanced proliferation resistance.

We believe higher power uprates and longer fuel cycles at both existing and new build reactors we'll be able to achieve using our metallic fuel technology will further increase the competitiveness of nuclear power versus other forms of electricity generation, while contributing to a significant reduction of CO2 emissions.

Moving on to the nuclear consulting and advisory services business. This quarter, we are pleased to report on additional nuclear advisory assignments. We were able to end the year on a strong note by entering into a contract with the Gulf Cooperation Council member states to establish a blueprint for regional standards of nuclear power generation.

We have deep ties with states in the Gulf region and we continue to work with them on many levels, including the development of a renewable energy platform that will meet the growing demands for energy in this part of the world, while advancing their nuclear energy objectives.

The countries in the Middle East where we are working are stable and their governments are willing to pursue nuclear power under the highest of international standards. The Middle East and North Africa region is experiencing a period of dramatic change, with some countries in open revolt and opportunities for new democratic systems.

We will only pursue work in stable countries with responsible governments. We also are in advanced discussions elsewhere to provide our advisory services, including in Europe.

I am going to provide a brief overview of our financial results and then review some of the key activities that were completed this quarter and update you on our discussions of certain countries about their nuclear energy programs.

Revenue for the full year 2010 was $7.6 million compared to $10.5 million for the full-year 2009. Revenue for the fourth-quarter 2010 was $1.2 million compared to $2.1 million for the fourth quarter of 2009. The operating loss for the full-year 2010 was $7.6 million compared to an operating loss of $7.2 million for the prior year. The operating loss for the fourth-quarter 2010 was $2.2 million compared to an operating loss of $2.1 million for the comparable period a year ago.

Operating revenues are derived primarily from the Company's consulting and strategic advisory services for foreign governments planning to create or expand electricity generation capabilities using nuclear power plants. These revenues are used to help fund the continued development of the Company's nuclear fuel design technology.

Since 2008, revenues have been generated from the five-year consulting contracts in place in the United Arab Emirates with two separate entities. The Emirates Nuclear Energy Corporation and the Federal Authority for Nuclear Regulation.

Turning to the balance sheet, as of December 31, 2010, the Company had approximately $2.4 million of cash and cash equivalents; $10.5 million in marketable securities; and approximately $12.5 million of working capital. As of December 31, 2009, the Company had $4.5 million of working capital. The increase in working capital is primarily due to $13.7 million offering that Lightbridge completed on July 28, 2010.

Here is a brief update on seven key activities that were conducted during the fourth quarter.

First, as I mentioned in my opening remarks, we entered into a contract with the Gulf Cooperation Council member state to assess regional cooperation in the development of civil power programs for electricity generation and water desalination in the six member countries. The study is taking place over a six-month period and will be completed by the second quarter of 2011.

Second, we continue to strengthen our ties with the state in the Gulf Region. Subsequent to quarter-end, we entered into a consulting contract in Kuwait to provide expertise as the country looks to establish a renewable energy platform that will meet the growing demand for energy and water in this key market.

Third, we continue operating under the five-year agreements to provide strategic advice in planning and implementation of the nuclear energy program within the United Arab Emirates.

Fourth, we continue to have substantive discussion with countries around the world about their nuclear energy programs. We continue to have active discussions with governments and other institutions to exploit new opportunities for our Nuclear Advisory Services and we anticipate the result will be further growth in this business over the next several months.

Fifth, we have expanded our metallic fuel technology product line by adding two all-uranium seed and blanket fuel product families for power operates of 10 and 17% and a longer fuel cycle of up to 24 months in existing types of pressurized water reactors.

Sixth, we have filed additional patent applications to expand our patent portfolio and protect key intellectual property relating to our metallic fuel product line.

Seventh, we are pursuing a commercialization strategy aimed at generating interest in our nuclear fuel designs from one or more major nuclear fuel fabricators that could lead to a technology licensing or other teaming arrangement over the next two to three years. As part of this strategy, we have pursued a multipronged approach including, one, reaching out to major fuel fabricators; two, reaching out to nuclear power plants; and three, generating public industry and government awareness of fuel technologies.

And here are eight trends we see continuing. First, legislative activity in the US and overseas will provide opportunities for Lightbridge. Second, given the expected 40% increase in global energy demand predicted over the next two decades, massive infrastructure investment will be necessary to meet this demand in all regions of the world. Third, securing additional key advisory roles in additional countries, seeking to develop nuclear power for the first time.

As mentioned earlier, we continue to have ongoing discussions with potential governmental and other institutional partners. Our nuclear consulting business has provided us needed incremental capital to fund our nuclear fuel research and development.

Fourth, new incremental work in the United Arab Emirates. Fifth, the addition of nuclear consulting fuel technology design work of talented people who can do this, and new people to help support our growth initiatives. Sixth, presentation of our metallic fuel technology at major industry conferences, and publication of multiple papers and technical journals. Seven, continued progress on the project with Idaho National Laboratory and, eighth, continued discussions with nuclear fuel users and manufacturers to establish a supply chain and enter into a commercial arrangement for our metallic fuel technology.

We appreciate your support, and we look forward to speaking with you again on our first-quarter earnings call. We will continue to update you on important new developments and with that, we will now open up the call to questions.

Maureen, please go ahead.

(Operator Instructions). Paulenne Kirschenbaum, Chapin Associates.

Good morning. These have to be difficult times, given the geopolitical unrest. But my question is, when do you expect that these new metallic technologies will produce revenue? And are they available should somebody order them to be delivered in a timely fashion and what will that timeline be?

I will start and then I will turn over to Andrey for further answer. We've designed these fuel rods. We have manufactured them in Russia. We have tested them in a reactor and in other facilities in Russia. We now have approvals based on that to manufacture and test them at Idaho National Laboratory here in the United States. As I said a few minutes ago, we anticipate having a major arrangement with at least one major nuclear fuel fabricator and vendor within the next two to three years. That would be a revenue event to Lightbridge including a technology access fee.

And with that, let me turn it to Andrey for more detail.

Thank you, Seth. I just want to add that basically based on our current LTA program schedule, as Seth mentioned, we expect to enter into a commercial arrangement with one or more major fuel vendors within the next two to 3 years that will start generating technology license and revenue for Lightbridge.

And then, additional revenues will come from fuel cells once the fuel becomes available to -- for sale to nuclear power plants; and based on our current projections, we expect that to happen basically within 2018 to '19 timeframe. So additional ongoing royalty fees we project will be within the timeframe.

Sean [Mulherman]. He is a private investor.

Good morning. Two quick questions, Seth. First is, where does the relationship with currently and activities related to work with that Lightbridge has done with [Ariba] stand at this current point in time? And secondly, does the movement and the push for the metallic fuel rods, how does that coincide or surpass or supplant the work done on the thorium seed and blanket technology, or are they both going to come out at the same time? Or is metallic fuel going to override the thorium seed blanket technology?

Let me start by referring anyone who hasn't seen it yet to the presentation we made at the Jefferies Global Clean Technology Conference yesterday in New York which is available at the IR portion of the Lightbridge website and contains information on the metal fuel and on the thorium fuel and on the timetables on both.

When we started with the thorium seed and blanket fuel design which has a thorium oxide ceramic blanket, which are pellets inside tubes and a uranium or plutonium oxide or ceramic seed, we weren't getting the commercial performance out of the seed that we wanted for the commercial marketplace. And in the late '90s we started to design the metal fuel rods to become the seed of that fuel of the seed and blanket thorium fuel assembly.

As the metal fuel was perfected and tested, it met and surpassed our expectations; and we started to work with it and adapt it as a stand-alone fuel product in addition to serving as the seed with the thorium. And we have now further adapted it into these 10% power upgrade fuels, 17% power upgrade fuels for existing reactors and 30% for new reactors.

So the answer is what that gives us is a product line of metal fuel products that have four product families under them in a sense -- the 10% power uprate the 17% power uprate the 30% power uprate and the thorium-based seed and blanket fuel.

So all four of those are going forward and all four use the metal fuel technology. So with that let me turn it over to Andrey for further answer and also the answer on Ariba.

Yes, I just wanted to add on the topic of the metallic fuel technology that it is at the core of all of our various fuel product families. As Seth mentioned, there are significant synergies demand in various fuel product families within our metallic fuel product line. They all utilize the metallic fuel rods in some fashion in their design; and fundamentally, what we are focusing on right now in our lead test assembly program is a demonstration in a commercial pressurized water reactor of full scale lead test assemblies for 17% power uprate and the 18 months' fuel cycle, which is going to be what we call the old uranium seed and blanket design which means it will have the metallic fuel rods in the seed region and it will have one row of uranium oxide [metallicized] fuel rods in the blanket region.

By doing that and by focusing on that particular fuel design within our metallic fuel product family, product line, we are covering from the [mantle] the 10% upgrade product family, as well as we had also mentioned the thorium-based seed and blanket design as well as doing a significant amount of work towards demonstrating the all-metal fuel design for 30% power upgrade in new build.

The way we see the various fuel product families are allowed into the marketplace is going to be by demonstrating the LTA fuel assembly design first and then we will have a 10% uprate, an 18 months' fuel cycle rollout and partial cores and then full cores.

Then we will have a 24-month cycle with a 10% uprate; and in parallel, we also project that in certain places and certain plants there will be conversion from a 10% uprate to a 17% uprate in existing plans. So you'll see we project that this 17% uprate and an 18 months' fuel cycle will be rolled out at that point.

Then it will be extended to a 17% uprate in the 24-month cycle. Then that will be extended to the new build plants that will come to maturation after 2018 and then we will see a 30% uprate using our all-metal fuel design. And then also in parallel, you'll see a rollout to thorium-based seed and blanket technology in certain markets where thorium fuel cycle makes sense.

As far as our work with Ariba is concerned, currently continuing our discussion with respect to the various fuel designs based on our metallic fuel product line. And as those discussions move forward, we will update you. But at this point, we are still in discussions.

Seth?

Yes?

Quick question regarding the revenue stream generated from the consulting works done in the GCC and other clients. Is it possible or is it -- because what happened with the UAE, first original consulting deal, was when revenue started kicking in the first year they weren't reflective on the first, on the final quarter. Is it possible that some of the revenues that were generated from these consulting deals were now reflective on these fourth-quarter numbers? Or is that an assumption that is not true?

No, it's correct, but it is not a great deal. We started under that contract late in the fourth quarter and it is only about $100,000 from the fourth quarter that has not been reflected yet. And for the work we have done so far, that work is ramping up. Of what we've done this quarter, it is about another $0.5 million that is not reflected. So at $600,000 total.

But that is probably not going to be reflected in the first quarter either, given when we recognize it under the terms of the contract. That will be reflected in the second-quarter revenue and there will be more thin as well as that ramps up.

Do you expect it, I mean the way (technical difficulty) dramatically was the regulatory stuff and all that work that was required there was a substantial amount of revenues. We are talking multimillion dollars for just one country. Do you anticipate ever getting to anywhere near those levels for the -- each six individual GCC countries?

It wouldn't be for all six. Some of them are very small countries that probably won't have their own nuclear power programs but would like to have regional aspects of nuclear programs based in them, like training facilities or emergency response centers, work with simulators, other things. But some of them certainly will go forward with nuclear programs and yes, in those countries, you could see patterns like in the UAE.

They haven't yet made those decisions, but part of the work we are doing is under the six-month phase and the Gulf Cooperation Council that will end in the second quarter, it provides them with the information they need to make those decisions to go forward. And we are in discussions with at least one that we think is pretty likely to go forward. And a second one that I think soon thereafter might also.

And those were the extended contracts made possibly similar to the five-year or two -- two- to five-year range for the UAE that you guys have currently with the United Arab Emirates, right?

That is how we propose it. Right now, we are still at this initial six-month phase so those contracts have not been written or agreed to yet. But that is how we would like to see it.

And last thing, I know I am monopolizing the time, but people always ask me any traction whatsoever in Congress that you are hearing from your side of the fence? I know the political world is kind of crazy. But regarding the Reid-Hatch bill, is that a dead issue or is that something that still has a possibility for revival?

You know, the Reid-Hatch bill I thought was going to get passed late last year except the Senate decided not to pass anything virtually the entire last part of the year. There was virtually nothing at all that got passed in the United States Senate. But both senators are planning to reintroduce the bill. We are working with others in the House and Senate to support the bill and there are many. We don't have any opponents that we know of in either the House or Senate in either party.

We have rewritten the bill, and it's been changed to reflect the metallic fuel technology as well. So I do expect that the revised version of the bill will be introduced, will be referred to the Energy Committee which has already considered it from when it was referred to it last year. And I do think that there is a very good chance it will pass and certainly having the Senate majority leader as the sponsor in Harry Reid and a bipartisan introduction with a Republican, I think, bodes well.

The way these things would normally work is that the bill would be introduced in about the first half of this year, the first year of a new Congress; it would be referred to the appropriate committee which will be the Energy Committee and the subcommittees. There will be a parallel bill in the House. There would be hearings if need be and the bills would normally pass in the second year of the Congress, which would be 2012 in this case.

However, things are not normal in the energy area right now; and there's a lot of discussion of passing energy feel bills later this year. So I think that there's a reasonable chance that this could be part of that.

I mean, Obama has talked about the technology and research and so forth and this is right down the marrow of what we are trying to accomplish here energywise, yes.

It's the best thing he could do.

[Aaron Lieben], a private investor.

I have a very elementary question. I'm trying to understand how the all-metal fuel increase power output -- and I guess the question basically is are they getting more output per volume of fuel so that they are saving in fuel costs? Or does it actually increase the output that a standard reactor normally generates?

I will start and then I'll turn it over to Andrey again. But I think the answer is both. That the fuel rod has superior heat transfer capability. Normally when you have standard nuclear fuel, these pellets -- stacked in tubes, the ceramic pellets in a zirconium metal alloy tube -- the rod is hottest in the middle of the rod, down the center of the rod. And that is kind of a waste. All of that energy is in the rod and it has to get out through the pellets and through the tube into the water to heat the tube -- to heat the water and then make steam and spin a turbine.

And that is pretty inefficient, and those rods have reached pretty much the limit of what can be done with them on efficiency. So with our metal fuel technology, there is far greater heat conductivity, heat transfer from the middle of the rod out to the edge of the rod. It's not hotter in the middle of the rod.

Secondly, because this rod which is shaped kind of like [licorice], it is solid metal with a curve going up the side of the rod, has a lot more surface area and the heat transfers to the water where the rod touches the water. That also helps with heat transfer having the increased surface area.

I will also mention that this fuel actually runs at a lower temperature than current fuel because of that efficiency. And we don't need that high heat in the rod, which is part of the reason why there is significant safety advantages of this fuel. In an accident scenario, you have to get the energy out of the core. You have to get the heat out of the core.

And this fuel has much less heat you have to get out of the core and it's a lot easier and quicker to get it out of the core. Let me turn it over to Andrey on the reasons for the power increases.

I think you explained it pretty well. The only thing I want to add here is as far as standard conventional uranium oxide fuel, why can't you just go and increase the bar output using that fuel by say the same 30% that we're talking about? As Seth explained briefly, there are several factors why you can't do that.

Number one is the fuel currently -- first of all, the conventional uranium oxide fuel has been optimized over the past several decades; and they have been increasing sort of power output. They have been increasing the enrichment, etc., etc. So right now the fuel is pretty optimized and is nearing its limits on what it can do in terms of additional power output.

So what utilities in the United States and other countries have been doing recently is they have been trying to operate the existing reactors by 3% to 4% and sometimes up to 6% or 7%. I'm thinking about pressurized water reactors using conventional uranium oxide fuel.

Technical experts, fuel experts believe that there may be the maximum limit with conventional uranium oxide fuel, maybe up to 10% uprate. But it's pushing it.

So the reason for that is, number one, the fuel is -- because it is cylindrical, the fuel rod has cylindrical shape. So you're limited as far as your surface area by the surface area that is a cylindrical fuel rod shape.

Number two, as Seth pointed out, as far as thermal conductivity of [fore side] is significant lower than the thermal conduct committee of metallic fuel that we use. As a result you have a very significant temperature gradient that will be in the center of the fuel rod and the surface where the fuel rods transfers the heat into the coolant.

As a result if you try to increase power output, if you try to increase the enrichment of the fuel pellets, you would have even greater temperature-gradient and you would have some technical issues with pellets. They can start cracking. They can start -- basically there's going to be significant demand of fusion gas buildup, etc., etc. As a result, there are limits on what we can do with conventional uranium oxide fuel.

And our metallic fuel overcomes those constraints by, number one, using a different fuel form, metal, which has significantly high thermal conductivity that helps transfer the heat from the fuel rod into the coolant. And number two, the surface area which is significantly increased, it is increased by 35 -- 35% to 40% compared to standard [UO2] fuel rods. Again increased surface area helps transfer the heat into the coolant more efficiently without creating any, what is called departure from nuclear pulling situation with the coolant.

Thank you both. A very quick follow-up. Has there been any analysis on cost savings? A very general sense for a standard reactor after licensing or additional costs that might accrue for these fuels?

Yes. Let me again just start with three areas of savings. The first is that this fuel costs less to produce than the current uranium oxide fuels. And we are not going to seek to capture those economics; those will be to the benefit of the nuclear fuel fabricator, the nuclear fuel vendor.

This fuel also makes less waste, less toxic waste, easier handling waste. That goes to the benefit of the utility that uses the fuel and its reactor and a government that ultimately handles the waste be it at Yucca Mountain or some other type of facility.

And a main economic benefit, as Andrey was talking about, is from increasing the power and lengthening the fuel cycles of the reactor. And that benefit will split one third to us, one third to the nuclear fuel fabricator and one third to the utility that has the reactor. And in the Jefferies presentation from yesterday we have some exact calculations and numbers on those.

But, Andrey, if you want to comment on those?

Yes. Sure. I think, yes, if you look at slides 28, 29 and 31 in the Appendix of the Jefferies conference presentation show some of the results of our preliminary economic analysis for existing as well as new build pressurized water reactors using our fuel technology. And they're, in general as you can see, for say a 10% power uprate case the estimated incremental world you created, [pure one] cells and megawatt type pressurized water reactor is $20 million to $40 million per year depending on the -- whether you use the peak or off-peak wholesale price of electricity.

For a 17% uprate and the 24-month cycle, the number is $25 million to $55 million per year and then for a 30% uprate and an 18-month cycle and a new build PWR of the estimated cost savings are, they mount up to $90 million per year.

Right, and our Company would get one third of each of that per reactor per year. What's also interesting if you get a chance to look at those slides, again they are on the IR part of our website and if you could look at the 8-K that's listed there that was filed yesterday with the PowerPoint attached. For example, on slide 28 there, the incremental capital cost of plant modifications to get this power uprate is 98% lower cost than the cost of generating electricity with new build of reactors.

So this is a tremendous economic savings for utilities to generate more electricity without the capital cost of building new reactors.

And I will just ask. Operator, our time is getting near the end here if there are any last questions?

(Operator Instructions). [Robert McGann], a private investor.

In the 10K they came out, the -- there was a line in there referring to the transferability of the operating experience with the Russian icebreakers in the rollout of the metallic fuel. If the experience of the Russian icebreakers isn't found to be applicable, how much longer do you think that would add to the rollout of the metal fuels?

Well, first of all, I think most of the value we are going to get from that we already have. The Russian icebreakers have used metallic fuel for well over four decades, and we've had access to data on thousands of fuel rods used in those icebreakers as well as in research and test reactors and some removed from the icebreakers and put into test reactors.

We have used that in the design of our fuel. We've then, based on the results of that and finishing the design, tested that in a reactor in Russia already and in other facilities like thermohydraulic facilities under high-pressure, high-temperature testing. And based on that, have the approvals from the US to test them in the US now at Idaho National Laboratory at the advanced test reactor.

So most of the benefit we would get from that, Robert, we already have received. But again let me turn it over to Andrey for further detail.

Yes, I just want to add here that basically what the trend to do right now is to generate our own data using our own fuel rods that will be fabricated, both in Russia and in the United States. And then basically irradiate and do additional thermohydraulic mechanical and other types of experience on those fuel rods.

And then what we'd like to do is we would like to compare the results that come out of our own tests and experiments with the results that we know the Russians have seen in the icebreaker program. And so, that's the main sort of objective of utilizing that existing database and that is the main benefit.

We expect the results to be comparable and, fundamentally, just need to do those tests to confirm that the assumption is correct. If, for some reason, we get different results, we would have to tweak and redesign the fuel depending on what the differences are and why we see a difference. And again until we know the outcome, it's difficult to predict. But it could add probably additional several years, depending on what kind of testing would be -- additional testing would be required and what kind of modifications would be required if that ever happened.

But at this point, based on what we know, we expect to see similar results with our fuel.

Yes. We have a very high degree of confidence of that and wouldn't have had the approvals we've received from the US government to put it in the reactor here if they weren't confident as well, based on what they have seen of our results.

Just a follow-up to that. When do you expect to physically put something into the Idaho reactor?

Andrey?

It all depends on several factors. Number one is the availability of a core position is in the test reactor for our particular experiment. Number two is we'd like to get some samples fabricated both in Russia as well as here in the US. We are currently in discussions with Idaho National Laboratory about a fuel fabrication demonstration project at the Idaho National Laboratory.

Since they are focusing on doing a lead test assembly based in that Western type 17 by 17 square type fuel assembly geometry pressurized water reactor, we need to have the fuel rods for the lead test assembly fabricated by a Western-fueled vendor. So this demonstration of the fuel fabrication process at Idaho National Laboratory is going to be very important. And that also plays into the timing of when we can have those samples available for irradiation testing at the Idaho National Laboratory test reactor.

At this point, we expect to start the irradiation, capsule irradiation testing within the 2012 to 2013 timeframe, as well as lubrication testing within the same timeframe 2012 to 2013.

[David Cornwall]. A private investor.

Good morning. I have a couple of quick questions. Hopefully you can answer them quickly, we're running out of time here. The first question is the India 123 deal complete now or are there more issues to be resolved? Does that India nuclear liability law -- does that present any problems to Lightbridge to operate in India? And what is the status of the Indian effort or the Punj Lloyd deal?

And the second question if you get time is I recently read that Lightbridge was part of a delegation to Slovakia and Poland and the Czech Republic. If you could just briefly touch on that.

Sure. First on India. No, that is not in place. The 123 agreement is dependent on having first of all that agreement ratified by India's Parliament as well as having the reprocessing agreement agreed to as well as what is called an 810 agreement which is under part 810 of the US Department of Energy Export Control Regulations, whereby any technology exported to India, India would agree not to reexport to anyone else without approval of the US government and also have their subcontractors bound by that.

And also, they need to have their liability law and ratification of an appropriate liability convention in place, which is not done.

So when that will be done, I don't know. I don't think they are in any particular rush to get it done. They are working with Russia and then French entities on deploying reactors there, although there is movement and GE and Westinghouse seem pretty confident that they will be able to deploy reactors to India. But the answer is, it is not done yet.

I think for Lightbridge there are many opportunities in India, including not dealing directly in India. But with the entities that are deploying the reactors and that will be deploying the fuels into India of having our fuel technology used in India. And India is very interested in using its own thorium to reduce the amount of uranium it would need to import to run its reactors.

What we had discussed with Punj Lloyd is dependent on having the 123 agreement done. We also have opportunities with other companies there.

On the delegation in Central and Eastern Europe you mentioned, that was organized by the US Department of Commerce and with the US Embassies in those countries and we are in discussions in those countries about their possible interest in nuclear power. And the US government has been helpful to us in those discussions. We are also on some discussions in Western Europe as well.

Thank you.

Thank you, David.

[Andy Schulman], a private investor.

I've been an investor since 2007 when you had your annual conference in New York. Quick question regarding share price.

We obviously took a pretty big hit with the shelf and not much has happened since. If you're talking 2017, 2018 for revenue streams on metallic fuel, what should the individual investor be looking at for the next seven years in share price? And why do we stick around? Why not just bail now and jump back in later when we are closer to revenue streams?

Well, first of all, we are expecting a major revenue event with an arrangement with a major fuel fabricator or vendor in the next two to three years. Secondly, I think you'll see several major milestones in that in the near term and leading up to that two- to three-year milestone that are spelled out in the Jefferies presentation you can see in our website that include getting the fuel in the reactor in the United States and the demonstrations here.

Also, I think you'll see on the consulting side additional clients.

Now I think the share price will reflect what the market thinks. And with those milestones that will be hitting some soon and some over the next couple of years, I think that will demonstrate to the market that this fuel will be the new fuel for the reactors of the world, the existing and the new reactors.

The market needs power uprates. It needs more efficient fuels. They are looking for ways to do it. There is no other viable way to do it other than this technology that we have been working on for some time.

So, Andy, I do think that the stock will reflect the value as the market sees that. I think the market will see these milestones being hit.

At this burn rate, can you continue through these events without any further dilution through more shelf offerings?

We have, probably, you know a current burn rate a couple of years and we've never had debt in the Company, but there is also a couple things that could happen that could push that couple of year period out quite a bit and maybe not ever need an additional financing event. One is that some of the costs of getting this fuel tested, demonstrated, licensed, and commercially deployed could be picked up by a partner, like a fuel bender, a fuel fabricator. And where they could be paid at a future royalties for example. So that is a possibility within that couple of year timeframe.

Another is that, getting back to some what Sean was mentioning, an uptick in revenue from the consulting business could be in the offing. So for example, in 2008, we had $22.2 million of revenue from our work in the UAE at a 50% gross margin of $[11.1] million. Now we have one or two of those along the way here and that will be quite significant for pushing out this deadline that you are talking about. So we are very confident and I don't think there was anything negative about the shelf offering. It was something we were able to do. As a NASDAQ listed company, we were able to raise the funding, I think, very good terms for the market and for the reality and bring in some excellent institutional investors into the stock. And it provided the capital the Company needs. And it was the only funding the Company has ever done since becoming publicly traded in 2006.

At that time we said we thought the money would last about two years. It ended up lasting for. This time, we're saying maybe another two years and it might be longer.

(Operator Instructions). Having no further questions, this concludes our question-and-answer session. We just have one more question has come in and that is [Jill Birkins], a private investor.

I was just wondering in your assessment of other fuel, renewable fuel energy, the new business that you've been looking into to see which is most affordable, what are your findings? Is nuclear still at your forefront or have you found that solar or wind or geothermal has become more attractive in terms of price?

No. Nuclear is our only area of expertise in this Company, Jill. And what happens when we start working new countries as we look at the current energy-generating capacity and whether that should continue or not. Some countries want to, for example, stop burning crude oil to generate electricity because it is very polluting. It is a very low efficiency use of crude oil and they had rather sell it to the United States or other countries for a lot more money than burning it up domestically. And they would like to replace that and energy generation with new means.

Then we help them analyze their projected future energy needs and what many countries are finding is that actually they are going to need a lot more electricity than they thought. Some of it for water desalination purposes, some of it to power large aluminum smelters they are building. and other reasons why it looks like a hockey stick, the projection of energy growth in the country growing rapidly.

And then we look at the diversified energy base that they have and could have of what is available. We analyzed whether nuclear is appropriate technologically, whether there are sites available for reactors, whether there's the grid capacity in the country, the training capacity for personnel, whether they can afford it with the upfront capital costs.

And then you know, as requested by the country and some have asked us this, we work with other energy experts that work as subs to us that advise on renewable energy and on other energies. So we are fitting it into the overall diversified energy base of the country.

But no, we have not found anything that on a per kilowatt hour basis of generating electricity will come close to nuclear power, and in particular for countries that export their hydrocarbons, export oil and export gas, we have an added economic driver there. That every day that they burn that up domestically instead of selling it is actually a tremendous loss to their country. And they need large-scale energy generating capacity.

So I will leave it at that unless you have a follow-up.

No, thank you.

Let me just add that renewables do not compete with nuclear. They compete with other forms of generation particularly what I would call intermediate and peaking plants. But at this time you remember, nuclear is strictly baseload at this particular time and nuclear -- or renewables don't compete against that technology.

Yes. Nuclear plants basically run 24/7. They are producing the baseload energy of the country. Solar can't run 24/7. Wind can't run 24/7. And many of these plants that they are building have sensitive electronics, need exact reliable amounts of electricity around the clock that renewables just can't provide now. Perhaps in the future, but not at this time.

Having no further questions, this concludes our question-and-answer session. I would like to turn the conference back over to management for any closing remarks.

Well, I just thank everybody. We appreciate your support. We appreciate your joining on the call. We appreciate all these excellent questions.

We will continue to update you on important new developments that we expect during this quarter and then to come further. We will also be seeing some of you at our Annual Meeting we will be preparing to hold and we'll look forward to speaking with you on the first-quarter conference call. Thank you very much.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.