Lightbridge Corp (LTBR) 2011 Q4 法說會逐字稿

Good morning and welcome to the Lightbridge Corp. 2011 business update and quarterly financial results conference call. (Operator Instructions). Lightbridge management will accept questions at any time throughout this call. You may submit your question in writing to the e-mail address, ir@ltbridge.com. Please note this event is being recorded.

I would now like to turn the conference over to Gary Sharpe, Head of IR. Please go ahead, sir.

Thank you, Denise, and good morning, ladies and gentlemen. Welcome to the Lightbridge Corporation 2011 business update. Our fourth-quarter earnings news release was distributed earlier today and can be viewed on the Investor Relations page of the Lightbridge website at ltbridge.com.

Seth Grae, President and Chief Executive Officer, will lead today's call. In addition, the following executives will be available to answer your questions -- Jim Guerra, our Chief Operating Officer, and Andrey Mushakov, Lightbridge's Executive Vice President for International Nuclear Operations. In route from home from Asia is Jim Malone, the Company's Chief Nuclear Fuel Development Officer, and as such, he will not be able to join us for today's call.

Before Seth begins, I must remind you that today's presentation includes forward-looking statements about the Company's competitive position and product and service offerings. During the course of today's call, words such as expect, anticipate, believe and intend will be used in our discussion of goals or events in the future. These statements are based on our current expectations and involve certain risks and uncertainties that may cause actual results to differ significantly from the estimates. The risks include, but are not limited to, the degree of market adoption of the Company's product and service offerings; market competition; dependence on strategic partners and the Company's ability to manage its business effectively in a rapidly evolving market. Certain of these and other risks are set forth in more detail in Lightbridge's filings with the Securities and Exchange Commission. Lightbridge does not assume any obligation to update or revise any such forward-looking statements whether as the result of new developments or otherwise.

As operator Denise indicated, please submit your questions in writing to ir@ltbridge.com. Your questions will be read aloud and answered by senior management. If you have already submitted a question, we thank you. If not or if you have more questions, you can submit them at any time during the prepared remarks or during the Q&A session.

Now, here is Seth Grae, President and CEO of Lightbridge.

Thank you, Gary. Good morning, everyone, and thank you for joining us for our 2011 fourth-quarter conference call. We have much to share with you about our progress toward developing and commercializing Lightbridge's patented next-generation nuclear fuel technology and the growing industry awareness in support of our technology's indicated benefits. Ongoing tests, analyses and demonstrations remain on track and continue to corroborate that our advanced fuel designs can deliver meaningful power upgrades from existing and new build nuclear power plants, improved plant efficiencies and increased operating safety. In short, Lightbridge is poised to deliver value-adding solutions to the global nuclear power industry.

For any newcomers on today's call, I will summarize the indicated benefits of the nuclear fuel technologies being developed by Lightbridge. First, our patented technologies can help utilities generate more electricity from the same power plants for longer periods before refueling. We believe that our fuel will allow currently operating and new build light water reactors to generate up to 17% and 30% of increased electricity output respectively.

Next, our fuel can dramatically improve the life cycle economics of existing and new build nuclear power generation through power upgrades and by extending the operating cycles from 18 months to 24 months in existing plants. This means that the plants will be shut down for refueling less frequently.

In addition, Lightbridge's fuel technology can reduce the volume of nuclear waste per unit of electricity generated.

Finally, we believe our fuel designs will enhance operating safety through improved heat transfer and structural integrity of the metallic fuel rods, as well as reduced operating temperatures. For example, the average operating temperature of Lightbridge designed metallic fuel rods in a 1600 megawatt EPR with a 30% power increase, which would bring it to over 2000 MW, is approximately 380 degrees Celsius, about 1000 degrees cooler than the average operating temperature of conventional uranium oxide fuel rods. We believe that the lower operating temperature for our metallic fuel will reduce the amount of heat that must be dissipated into the coolant at reactor shutdown, shortening the time required for shutdown.

Now let's move on to a progress report on our fuel development operations. I will cover eight main areas. First, in the fourth quarter, negotiations began with potential US fuel fabrication partners to develop metal fuel fabrication processes and demonstrations in the United States. We expect negotiations to conclude later in 2012. Second, during the quarter, detailed experimental design began for a radiation testing of Lightbridge design metallic fuel samples in the Advanced Test Reactor at Idaho National Laboratory, the US Department of Energy's lead nuclear energy research and development facility. This detailed analysis is expected to provide input into a 2012 safety analysis report necessary for the irradiation experiments.

Earlier in 2011, Idaho National Laboratory concluded its skipping capsule irradiation testing, and going directly to loop irradiation testing is feasible.

Thirdly, we have recently received a letter from the US Department of Energy confirming that our proposed collaborative project with a Russian State Atomic Energy Corporation known as ROSATOM fall under the 123 agreement for civil nuclear cooperation between the US and Russia. This letter from the US Department of Energy was one of the key prerequisites for ROSATOM before commercial relations relating to our proposed collaboration could commence. The letter has now been accepted by ROSATOM, and ROSATOM has now authorized contract negotiations between Lightbridge and the relevant ROSATOM entities.

Fourth, in a related development, planning and preparation began for loop irradiation testing of Lightbridge designed fuel samples in the MIR research reactor at the Research Institute of Atomic Reactors in Dimitrovgrad, Russia. During the first half of 2012, commercial negotiations of a specific agreement for the testing are expected to begin.

Fifth, during 2011 Lightbridge completed preliminary design to the core and fuel assembly of our 17% upgrade fuel for use in our reference plant design, an 1100 megawatt pressurized water reactor similar to many presently in operation in the United States. The results of this important work provide an early indication of anticipated operating conditions for a reactor core prior to more detailed safety analysis.

Sixth, a technical paper on Lightbridge metallic fuel technology and its application in pressurized water reactors was prepared and submitted for publication in a peer-reviewed journal. The article discusses how our fuel technology could improve fuel performance. We expect to hear at the end of this month the exact publication date of this peer-reviewed article.

Seventh, the Company's portfolio of patented intellectual property continues to expand. In the quarter, Lightbridge received a notice of allowance from the Ukrainian patent office for a patent application covering a thorium-based seed and blanket fuel assembly design for Russian type VVER reactors. The patent is expected to be issued in several months and will provide protection in the Ukraine from its issuance until December 2027.

In addition to the Ukrainian patent, Lightbridge received patents during 2011 in the United States and from the nine-nation European Patent Convention for a specific locking mechanism for the seed and blanket fuel assemblies.

And eight, in early 2012 we expanded the Lightbridge Nuclear Utility Fuel Advisory Board, which was established during the fourth quarter. We expect to make more additions during 2012, possibly from international nuclear utilities.

Today top fuel managers from four of the six largest nuclear utilities in the US are providing input into Lightbridge's nuclear fuel development and commercialization efforts. Fuel managers from Dominion Resources, Duke Energy, Exelon and Southern Company are anxious to understand the benefits and applicability of our fuel designs. These nuclear utilities operate 38 of the 104 nuclear utility reactors in the United States.

Let's move on to recent developments in our advisory services business segment. Newcomers on today's call should know that Lightbridge is a highly regarded advisor to numerous global, commercial and governmental entities, providing detailed counsel for safe, secure, efficient and cost-effective nuclear power. We engage only with enterprises and governments that are dedicated to non-proliferation and transparent nuclear programs. We provide integrated strategic advice, including regulatory development, nuclear reactor site selection, procurement and deployment, reactor and fuel technology and international relations and regulatory affairs.

In general, we are seeing renewed interest in our nuclear power advisory services. Now that the causes and lessons from the Fukushima incident in March 2011 are better understood, government and commercial entities are reaching out to Lightbridge for guidance in deploying reactors. There is a heightened awareness of the role of nuclear power in delivering base load power. Our pipeline of consulting opportunities now includes proposals for entities in the early stages of adopting nuclear power programs from several regions of the world.

Now let's move on to the Company's financial performance. Our financial results were summarized in the news release that we distributed earlier. The results are also posted on the Lightbridge website, ltbridge.com, and, of course, in the 10-K that we just filed. I will not recite the details now, but here is a key takeaway message. Lightbridge is fundamentally sound with no long-term debt and adequate liquidity to continue to develop our fuel designs and deliver high-value advisory services. At December 31, Lightbridge had $9.3 million in cash and cash equivalents and $8.1 million in working capital.

That concludes the prepared remarks for today's conference call. Now let's open the call to your questions. Remember if you want to ask a question, please submit it to ir@ltbridge.com. Gary Sharpe, who is in charge of our Investor Relations, has collected several questions already. Gary?

Thanks, Seth. In real-time, Lightbridge received dozens of questions for today's call. I stopped counting at about 50. Some of the questions were duplicative, and some were accompanied by long contextual preambles and even attachments. In the interest of time and to keep the focus on your questions, I will consolidate the duplicate questions and abbreviate the preambles.

Here is the first category. We received several questions about Lightbridge Nuclear Utility Fuel Advisory Board and Southern Company's participation on the board, as well as the potential use of our fuel in Southern's new Vogtle plants that are scheduled for construction.

Seth, would you like to take that question?

Sure. Well, basically the two reactor units that are about to be built in Georgia are Westinghouse designed AP1000 pressurized water reactors. The AP1000 reactor utilizes fuel assemblies that are essentially similar to the standard what is called 17 x 17 fuel assembly design used in most of the currently operating pressurized water reactors in the United States today. That is what we are designing our fuel to meet. So, as a result, our fuel designs are fully compatible, and we can certainly adapt them for use in those new reactors that will be built in South Carolina. They will be usable there.

All right. The next set of questions focuses on progress and milestones in Lightbridge's fuel development. The first question here is, do you have enough money to complete the research and development of the Lightbridge proprietary nuclear fuel designs?

In today's 10-K filing, at the end of December, we had approximately $9.3 million in cash and cash equivalents. Our cash position largely depends on revenue and associated profit margins we are able to generate from our consulting business that can vary on a quarter by quarter basis depending on our consulting engagements and required R&D expenditures. We anticipate entering into new consulting and technology agreements with our existing and new potential clients that will generate additional revenues for us in 2012 and beyond. If we do not for any reason enter into such new agreements, we anticipate that our cash position will still meet our working capital needs to sustain our current operation at their current operating levels into 2013.

We may also enter into a strategic alliance with another entity such as a major nuclear fuel fabrication company that could perform some of the engineering and testing relieving us of those expenditures. If we do not realize sufficient additional revenue from consulting work or enter into such a strategic alliance, we may need to raise additional capital later. Currently we are working on revenue opportunities with the overall goal of increasing our profitability and cash flow.

All right. Next question. Can you give us an update on the status of the loop irradiation experiment design and how much longer before the testing is complete?

Andrey, why don't you take that one?

Sure. In 2010 we began working with Texas A&M University and Idaho National Laboratory on the continued development of our nuclear fuel technology. Following an extensive independent technical evaluation by Idaho National Laboratory of the Texas A&M University lab gen proposal for capsular irradiation based on our metallic fuel samples in Advanced Test Reactor in Idaho. The amount of energy -- the United States Department of Energy approved the project in June 2010.

During the second quarter of 2011, we were informed by Idaho National Laboratory that there might be able to skip capsule irradiation testing for metallic fuel samples and proceed with loop irradiation.

In the third quarter of last year, the team completed a preliminary scoping study, confirming in principle the feasibility of the former irradiation of our metallic fuel samples in the Advanced Test Reactor.

Right now Idaho National Laboratory is performing the safety analysis with input from both Lightbridge and Texas A&M University. The safety analysis is progressing, and no technical reasons that could stop the test from proceeding have been identified nor are they anticipated by the team. The current target for beginning the irradiation program is in the first half of 2013, and Lightbridge expects irradiation testing to be completed in approximately two years thereafter.

Okay. In this category on fuel development, here is another question. Have the test results been positive at the Russian test reactor, and what additional testing do you plan to conduct?

I will start and then Andrey can add more detail. Yes, the testing done thus far in Russia has been positive, and the results have helped lead to the US Department of Energy's decision to allow the testing in the Advanced Test Reactor in Idaho. Andrey, why don't you address the upcoming testing?

Yes. We are in the process of early planning and preparations for loop irradiation testing in the MIR research reactor in Dimitrovgrad, Russia. Detailed experiment design work and fabrication of fuel samples in irradiation rigs will commence as soon as we complete negotiations and enter into an agreement relating to this work with the Russian fuel fabricator, TVEL, and/or the Research Institute of Atomic Reactors, which is based in Dimitrovgrad. We expect this to happen later this year.

We expect the total time for irradiation to be approximately two to two and a half years. At the completion of the irradiation program, we intend to perform a series of additional tests on the irradiated fuel to confirm its performance during various both normal reactor ramps. The additional tests will be used to confirm the performance limits of the fuel and the conservative performance requirements.

Okay. Moving on, what kind of results have you received from the preliminary core design of your 17% metallic fuel technology at a reference plant?

The results from this ongoing effort are positive, and no technical problems that could stop the work are expected. The reactor core receiver is consistent behavior of standard uranium dioxide fuel reactors. We will continue to optimize the fuel design for power operates in this specific reactor type as most of these results are also applicable to the fuel variant for 10% power upgrades.

All right. Next question. Where can we find the results in the peer-reviewed journal article that you've mentioned on your website?

Well, first I will say that several white papers are available in the fuel technology section of our corporate website, ltbridge.com, and the results for the thermal hydraulic experiment for the VVER seed and blanket fuel assembly are still being analyzed. And those will come out, and we will put those on the website when they do. And we expect to have this information ready for publication this year.

As I said in the prepared remarks, the first peer-reviewed article we are going to hear later this month the exact publication date, which we expect to be not too soon -- not too far thereafter. We expect it fairly soon, but we will know for sure at a date later this month.

Okay. This is a question about fuel fabrication. How much longer before negotiations with potential US fuel fabrication partners are concluded? Can you divulge any of the names of these potential partners, and have you started negotiations with any additional fuel fabricators?

Well, I will say that we expected the negotiations to conclude later this year, and due to the restrictions imposed by nondisclosure agreements, we cannot publicly disclose anything further. Once the negotiations are concluded, we will enter into a collaborative agreement, and we will be able to make a public announcement of who these companies are. As a group, I think it is fairly well-known.

This is a related question. With representatives of the largest nuclear utilities on your advisory board, have you started negotiations with additional fuel fabricators?

There are four major fuel fabricators that control 95% of the global commercial nuclear fuel market. There is Westinghouse; there is Areva; there is Global Nuclear Fuel, which is a consortium of GE, Hitachi and Toshiba; and fourthly, there is [Expel], which is the Russian fuel fabricator. We are focusing our outreach efforts on targeting these key market players. Having utility interests, including the members of our advisory board, certainly increases our credibility and discussions with these fuel fabricators.

Okay. While we are on the subject of fuel, let me -- here is a question that has just come in. Let me read it. This is in the category of our fuel development and testing that is underway. What are the differences between a Russian reactor and a Western reactor that require additional testing?

Well, I will start and Andrey can add more detail. The reactors are quite similar. They are both light water reactors. They are both pressurized water reactors. The fuel rods in the pressurized water reactors in the West are arranged into fuel assemblies that are square in shape that have 17 rods on each side. They are about a foot long on each side. And then the Russian reactors, they have a hexagonal shape. They are six sided, about 7 inches long on each of the six sides. So actually just that shaping of the configuration of the fuel is the biggest difference. Other than that, they are quite similar, and that is one reason why the testing done in each country is relatively -- (technical difficulty). The rods themselves are almost the same thing. Andrey?

Yes, there are some other differences such as water chemistry can be different. There are some differences associated with the space grid design and the top and lower and bottom nozzle designs. But, as Seth pointed out, the main difference is in the cross-section of the shape of those fuel assemblies, and also there are differences in terms of the codes that are used for modeling each of those reactors that the Russians use their own codes, whereas Western PW are reactors that use their own codes. So, as a result, you will have to demonstrate fuel performance in both reactor types in order for that fuel to be acceptable for commercial operation.

A related question. Barring any setbacks, how long will the testing take before your product can be approved for use in the United States?

Well, I will start. Based on the discussions we had with US Nuclear Regulatory Commission and the utilities, we are expecting lead test assemblies, which is full-sized fuel and full-sized commercial reactors filling parts of those cores in 2017.

Andrey, do you want to add to that?

Yes. Basically that is the key major final technical milestone before fuel can be used in partial and full course of multiple reactor units. Basically a lead test assembly is the final technical step, and it takes typically -- you want to run those lead test assemblies for three full cycles of operation. But you can start with partial core potentially after two full cycles of lead test assembly operation. So, as a result, we are talking about closer to 2020, 2021 once you start having partial cores and full cores of our fuels being used in multiple reactor units.

At the same time, we also have a strategy of entering into commercial agreements with one or multiple major fuel fabricators that could generate early revenue of technology revenue for us much sooner than those dates indicated here.

Yes, I will also say that there is procurement lead times in nuclear fuel. So we would expect commercial activity orders revenue coming before those dates as much as a few years before. And it is also very important to remember the work starting this year, and then with the fuel in the reactor next year at Idaho National Laboratory at the Advanced Test Reactor, mimicking the conditions of the commercial reactor, that gives us such confidence in the 2017 date that we will see the fuel perform in prototypical pressurized water reactor conditions.

Here is another related question on the timing of the use of the fuel. What does the potential revenue stream look like, and is it only royalty feed?

Yes, these are going to be royalty-based -- these are going to be royalty-based where Lightbridge will license the technology to the major nuclear fuel fabricator companies that will make the fuel and sell it to the utility customers, and we will receive the royalty from the fuel fabrication customers.

All right. Here is another question about the potential for Lightbridge's new fuel to stimulate job creation. And what do you hope to see from this and whoever is in leading the next administration?

Do you want to take that, Jim?

Yes. We believe deployment of our next generation nuclear fuel designs and US nuclear power plants could generate significant opportunities for creating sustainable higher-quality jobs domestically. Implementing power upgrades of 10% to 17% existing US commercial reactors is one area that could generate jobs for the US industrial sector.

What we hope to see from this in the next administration led by President Obama or someone else is political and funding support for research and development of high-powered density nuclear fuel technologies for ultrahigh power upgrades 10% or greater and longer fuel cycles in existing and next generation light water reactors.

Okay. We have received some questions about Lightbridge advisory services, the other business segment of the Company. What additional countries or companies have been added to your consulting services since the last 10-Q was filed, and what is the profitability of these contracts?

We are in discussions, as I said earlier, with several countries in several regions of the world, none of which yet want us publicly speaking about their consideration of nuclear power programs other than the countries we have already announced. Following Fukushima, many of the countries we were in discussions with regarding advisory services stopped exploring the possibility of nuclear power. But recently and really a lot quite just in the last few weeks, many of them have gotten back in contact with us and are actively looking into it again and talking with us about new advisory services that we see in our pipeline.

Here is another related question for our advisory services. Will you be involved with any consulting services during the construction of the nuclear plants in Georgia for Southern?

We are not involved in consulting services to Southern. I think they know everything they need to do to deploy their own reactor, and they are working with Westinghouse, which designed their reactor with Shaw Group, which is taking the lead at the architect, engineering and construction firm to build the reactor. The consulting is actually going in the other direction. Ron Cocherell, the head fuel manager of Southern, is advising Lightbridge as a member of our Nuclear Utility Fuel Advisory Board. We don't pay him or any of the other advisory members. They are paid by their utilities that are doing that work as part of their work for their utilities, and that advice has great meaning to us.

Now we have gotten a number of questions about small modular reactors. So what is our position on the use of our fuel in small modular reactors?

Well, you know, we have been designing the fuel work in all sorts of light water reactors, including these small modular reactors. And, Andrey, why don't you give some more detail?

Yes, our metallic fuel is applicable to all types of light water cooled reactors, including small modular reactors that are light water cooled reactors. All the -- some of each, of course, are different type of reactors, but any reactor, any small modular reactor that is a light water cold reactor can potentially use our fuel. Although our current fuel assembly design efforts are focused on pressurized water reactors, a major component of our current fuel development program is to qualify the performance of the metallic fuel such that most of the results can be applicable to various types of light water reactors. Application of the metallic fuel to light water cooled small modular reactors is a possibility once those reactor designs secure regulatory approvals and the initial units are deployed. We expect regulatory licensing and deployment of initial small modular reactors to take many years. As our metallic fuel technology has demonstrated for existing pressurized water reactors, we will be well positioned to develop fuel assembly designs for those small modular reactors when they are eventually built and go into commercial operation.

We have got a question from an investor who is asking about our London office and the Company's ongoing relationship with Areva.

Well, we maintain our office and presence in London, and much of our advisory services are based out of the UK, particularly into the Middle East. We are continuing our discussions with Areva on the benefits of our fuel designs. We are in active discussions with Areva and with others, and we will report on those developments if they happen.

Okay. Here is another question. What are the advantages of Lightbridge's fuel and its behavior in I guess you would call them "off-normal events"?

Right. Well, our fuel has significant safety advantages over standard nuclear fuel. This has been detailed in the information we have posted in a white paper in the technical article section at ltbridge.com, and I commend you to go look at that article, that white paper. Many of these advantages stem from the fact that our fuel runs 1000 degrees cooler in the reactor. Lightbridge's fuel development program utilizes data from various irradiation demonstrations to develop fuel performance models that provide an accurate description of the fuel behavior. Data will be developed during post-irradiation examination of fuel samples at both the advanced test reactor in Idaho and at our Russian reactor irradiations. This step is necessary to ensure safe operation of the fuel during normal, and it is called off-normal or accident events. We have begun discussions with our development partners and the US Nuclear Regulatory Commission about the safety performance aspects of the metallic fuel.

Andrey, can you add more specific points on the safety advantages?

Yes, as Seth pointed out, Lightbridge's metallic fuel technology operates at a much lower average temperature, over 1000 degrees Celsius less than that of the conventional oxide fuel. This results in improved fuel behavior, and we expect to provide safety advantages in any off-normal reactor scenarios.

Preliminary modeling during accident scenarios has shown that Lightbridge's metallic fuel will perform safely during design basis accident scenarios. These preliminary models will be adjusted to ensure they incorporate the most accurate radiation-dependent fuel properties derived from experimental data. We believe the recent founding of our Nuclear Utility Fuel Advisory Board with senior fuel managers from Duke, Dominion, Exelon and Southern Company is further evidence that industry is taking an interest in this technology, and their preliminary review of its capabilities is consistent with our own.

Andrey, I want to pick up on what you were just saying about the utilities and utilities in general. I want to go back to the revenue question from earlier, which I answered in regard to revenue to us. But I would like to say something about revenue to utilities, which is driving some of the interest in discussions we are having. We have fuels that can operate reactors like 10% or 17% for new build -- for existing reactors or 30% for newly built reactor.

Let's take our 10% power upgrade fuel where using this fuel, the reactor can generate 10% more electricity. If you take a typical 1100 megawatt pressurized water reactor, the only thing you have to do to that reactor to be able to start using our fuel and get all the benefits of it, is adjust the nozzle block on the turbine, and this is the kind of thing that many utilities have done many times. It can be done during the normal refueling outage. It does not lengthen the outage at all. And our estimates are that it cost about $10 million to do that. It is a one-time cost, and we know utilities that have done this kind of thing.

At a $55 wholesale electricity price, which I think is kind of low now and our numbers improve as that wholesale electricity price goes up, but its $55 electricity price using our fuel for a 10% power upgrade costing $10 million, the utility will make a 161% return on that $10 million investment year on year for as long as they run that reactor, a 161% ROI. And those numbers improve to way over 200% as you get to higher wholesale electricity prices, which we see coming.

In addition, there is additional benefit to the utility from going from an 18-month fuel cycle to a 24-month fuel cycle by using our fuel. So they are selling electricity more days per year, too. And there are hundreds of existing reactors that can use the fuel. Plus, there are new reactors being built in large numbers in many countries around the world that could use our fuel, including, as we said, new reactors are starting to be built for the first time in over 30 years in the United States.

All right. It looks like we have come to the last question in the queue. This question reads, please discuss the current status of the part A-10 export license, part 810 export license.

Right. A-10 is a US Air Force fighter plane with a Gatlin gun that shoots multiple targets on the ground at once, and 810 is an export license in nuclear power, 810. It is named for part 810 of the US Department of Energy regulations, which are the nuclear export control regulations. Lightbridge has applied for several authorizations to the Department of Energy. We have never been denied for a license application on anything we have requested, and we don't expect ever to be denied either.

There are only a few of these issued by the Department of Energy overall each year, and ours are in very good shape. Right now this 810 application of ours, the current one, is in the final stages of the Department of Energy's review and approval in Washington. The Department of Energy sent the standard request to the Russian government regarding nonproliferation assurances, which happens on every 810 application, and there is a standard package of non-proliferation assurances that comes back from the overseas country to Washington stating they will not re-export technology without following the guidelines of the original license, etc. This is standard procedure. We have heard back from Russia that this is being handled in a normal way.

As we understand from both Moscow and Washington, this is the only outstanding issue, and it is a standard issue. It has nothing directly to do with our technology or any, I aspect, of our application, which have already been passed on by DOE. And when that package comes back from Russia, which will be I think in the relatively near future, a timing when Russia replies I think on more than one package of information request that came from Washington, when that comes back from Russia and we are totally confident it will come, the 810 approval will go to the desk of the Secretary of Energy, Steven Chu, who hand-signed our last approval that we received, and we expect that he will also personally hand-sign this approval.

As I mentioned in the earlier remarks, there is also a separate approval process between the US and Russia that has been completed. And that was that Russia requested a letter from the Department of Energy confirming that our work in Russia is under the 123 agreement for civil nuclear cooperation that was recently entered into between the two countries. The Department of Energy did issue that letter. It was accepted by Russia, and this has elevated our work within the US and Russian systems to work that is under that approval process of the government.

So bottom line, Gary, is that process is going well, there are no delays, and we are expecting that 810 approval, we are expecting it to be signed by Secretary of Energy, Steven Chu.

Okay, operator Denise, that is the last question we have here.

Thank you. The conference has now concluded. We thank you for attending today's presentation. You may now disconnect your phone lines.