Lightbridge's CEO Discusses Q2 2012 Results - Earnings Call Transcript

| About: Lightbridge Corp (LTBR)
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Lightbridge Corp. (NASDAQ:LTBR)

Q2 2012 Business Update Call

August 3, 2012 11:00 a.m. ET


Gary Sharpe – Head of IR

Seth Grae – President & CEO

James Malone –Chief Nuclear Fuel Development Officer

Andrey Mushakov – EVP for International Nuclear Operations


Good morning everyone and welcome to the 2012 Second Quarter Business Update for Lightbridge Corporation Conference Call. All participants will be in a listen-only mode. (Operator Instructions) Throughout today’s presentation you may submit written questions to, again that address is Question will be read aloud and answered during today’s question-and-answer session. Please also note that today’s event is being recorded.

At this time I would like to turn the conference call over to Mr. Gary Sharpe, Head of Investor Relations at Lightbridge. Mr. Sharpe, please go ahead.

Gary Sharpe

Thank you, Jamie. Good morning ladies and gentlemen and welcome to our conference call for the second quarter. The year earnings release was distributed after the market closed yesterday and you can of course see that on our investor relations page at Lightbridge, at

Seth Grae, our President and Chief Executive Officer will lead today’s call and we also will be joined by Jim Guerra, our Chief Operating Officer and CFO, Jim Malone, the Company’s Chief Nuclear Fuel Development Officer and Andrey Mushakov, Lightbridge’s Executive VP for International Nuclear Operations.

I have to remind you about today’s presentation which includes forward-looking statements about our 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 to 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 those estimates.

The risks include that 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.

Certainties and other risks are set forth in more detail in our filings with the Securities and Exchange Commission and you know where to find those. We don’t assume any obligation to update or revise those forward-looking statements whether as a result of new development or otherwise.

As our operator indicated, please submit your questions in writing to Questions will be read aloud and answered by our senior team. If you’ve already submitted a question, we thank you. But if not or if you have more questions, you can submit them at anytime during the prepared remarks or doing the Q&A period.

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

Seth Grae

Thank you, Gary. Good morning everyone and thank you for joining us for our 2012 second quarter conference call. Lightbridge continues to log steady incremental progress toward bringing next generation nuclear fuel designs to market. Demonstrations of our fuel technology support the indicated benefits of meaningful power uprates, longer fuel cycles and increased safety.

In addition, our advisory services division has been active in pursuit of new consulting opportunities as global interest ramps up in nuclear energy as a source of long-term, efficient, base-load and carbon-free electric power.

Contract negotiations continue to advance with the Bochvar Institute in Moscow on fabrication of Lightbridge-designed metal fuel samples for irradiation in the MIR research reactor in Dimitrovgrad, Russia, and the Advanced Test Reactor at Idaho National Laboratory.

We remain on schedule to begin irradiation testing of fuel samples in 2013 in the MIR research reactor. Irradiated samples from this program will be used for additional out-of-reactor tests to demonstrate the metallic fuel’s behavior during severe accident scenarios and to provide quantitative verification of the safety benefits of the Lightbridge-designed fuel. We are also on track with our irradiation program at the Advanced Test Reactor working in collaboration with Texas A&M University and Idaho National Laboratory.

We continue to educate key stakeholders including nuclear utilities in our potential fuel vendor partners about the benefits of our next generation nuclear fuel designs. We expect to enter into commercial arrangements with major nuclear fuel fabricator companies by 2015.

We anticipate that we will be able to begin lead test assembly operation in a full-sized commercial light water reactor by the end of 2017. This involves testing a limited number of our full-scale fuel assemblies in the core of a commercial nuclear power plant over three 18-months cycles. Lead assemblies are approximately 12 to 14 feet along.

Lightbridge also has been pursuing advisory service contracts primarily in Europe and the Middle East. Our focus is on consulting arrangements with governmental entities, planning to create or expand nuclear generation.

Since 2008, Lightbridge has served as an independent advisor to the Emirates Nuclear Energy Corporation and the Federal Authority for Nuclear Regulations in the United Arab Emirates. We have also provided advisory services in Kuwait and to the Gulf Cooperation Council Member States.

During the quarter, our agreement with the Federal Authority for Nuclear Regulation in the United Arab Emirates was renewed and extended through 2014. We believe that in the second half of 2012, we may obtain contracts from other governments interested in deploying nuclear power in their countries. The prospect for increased consulting revenues is real even though the sales cycles for these multi million dollar contracts takes time.

Lightbridge progress during the second quarter comes at a time when electricity generation from nuclear power worldwide has reached a record level. World Nuclear Association estimate that at least 73 gigawatts in net new capacity will be added by 2020, bringing global operating capacity to about 450 gigawatts up from 372 gigawatts of electricity before the Fukushima incident.

Nearly 18 months after damage to the Fukushima reactors caused by human error and earthquake and a Tsunami, Japan has brought other nuclear reactors back online. The economies of long-term, efficient, base-load and carbon-free electricity from nuclear power are compelling. The Japanese utility industry has incurred billions of dollars of losses from importing the fossil fuel to keep the lights on.

According to the Nuclear Energy Agency, there are more nuclear reactors under construction now than before the Fukushima accident and 100s more are planned to go into operation by 2035.

Today, there are approximately 435 active nuclear power reactors operating in 30 countries based on data compiled by the World Nuclear Association. That number is expected to grow steadily with more than 80 reactors under construction or being upgraded around the world, China, Russia and South Korea have 26, 10 and five reactors under construction respectively. Most of these are expected to be completed this year.

In all, more than 150 new reactors will be completed by the end of 2016 with another 330 proposals pending approval mostly in China and India. In the United States, 20 proposals for reactors are pending and four are planned in the United Kingdom. The Czech Republic, Poland, Slovakia, Romania and Ukraine, each have plans to build new reactors within the next decade. Finland and Sweden also planned to expand their existing nuclear generation capacity.

Momentum is building globally throughout the commercial nuclear power market and Lightbridge is well positioned to serve this growth with next generation fuel designs and expert advisory services.

For any new comers on today’s call, let me bring you up to speed of the indicated benefits of Lightbridge’s nuclear fuel technologies.

First, our patented technologies can help nuclear utilities generate more electricity from the same power plants for longer periods before refueling. We believe that our fuel will allow currently operated a 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 economic to existing and new build nuclear power generation through power upgrades and extending operating cycles from 18 months to 24 months in existing plans. This means that the plants will be shutdown 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 on one hands operating safety to improve key transfer and structural integrity of the metallic fuel rods as well as reduced operating temperatures. For example, the average operating temperature of Lightbridge design in metallic fuel roads in 1,600 megawatt EPR reactor with a 30% power increase in electrical output will be approximately 380 degree Celsius, nearly 1000 degrees cooler than the average operating temperature of conventional uranium oxide fuels.

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 for required shutdown, shortening the time required for shutdown.

Our projected timeline for testing our fuel for western pressurized water reactors has four primary components. First, irradiation testing in test reactors from 2013 to 2016, second, additional testing on irradiated fuel samples in 2016 and 2017, third, out of reactor testing from 2013 to 2015, and fourth, lead test assembly demonstration in a full-sized commercial pressurized water reactor beginning in 2017.

New comers on today’s call should know that Lightbridge has a highly regarded advisor to commercial and governmental entities providing detailed counsel for safe, secured, efficient and cost effective nuclear power. We engage only with enterprises and governments that are dedicated to safe, non-proliferative and transparent nuclear programs.

We provide integrated strategic advice including regulatory developments, nuclear reactor site selection, procurement and deployment, reactor and fuel technology and international relations and regulatory affairs. Our pipeline of consulting opportunities includes proposals for entities in the early stages of adapting nuclear power programs.

Now, let’s move on to the Company’s financial performance. Our financial results were summarized in the news release that was distributed after the markets closed yesterday. The results are also posted on the Lightbridge website along reside all the details now. At June 30, 2012 Lightbridge had $6.4 million in cash, cash equivalents and marketable securities, working capital totaled $6.7 million with no long-term debt.

Now let’s open the call for your questions. Remember if you want to ask a question, please submit it in writing now to Gary Sharpe, who is in-charge of Investor Relations has been collecting several questions already and will read the first question.

Question-and-Answer Session

Gary Sharpe

Thanks Seth. All right, we have a call or a question here. Let me try to paraphrase it in case it’s duplicate as some of the wording is redundant. Are there any current plans for Lightbridge fuel testing at Idaho National Laboratory? And if not, why did that change and how much did it respect the commercialization timeline?

Seth Grae

Well there are. Let me turn to the leader of that effort at our company, Jim Malone, our Chief Nuclear Fuel Development Officer. Jim?

James Malone

Thanks, Seth. Response to the question is that we have not changed our plans for irradiation of samples at the Idaho Advanced Test Reactor. We’re still on track to get that started probably in 2014. In addition to that we’ve made sure that due to the nature of the program at Idaho, we are prepared to provide samples that maybe run in capsules or in the irradiation loops of that reactor. So we have covered our best on both sides there.

As a backup to that we also have an ongoing relationship where we will be irradiating fuel samples at the MIR test reactor as Seth pointed out in Russia at Dimitrovgrad and we will get very good results from that which will be a loop test of our fuel samples.

So we have an ongoing problem, we do not anticipate competition from other fuel technologies related to getting into the reactors and we expect that we will still remain on our current commercialization timeline.

Gary Sharpe

Okay. Let’s move on to the next question from the same shareholder. Do you anticipate that Lightbridge’s consulting business will supply the cash needed for all metal fuel testing for the perceivable future?

Seth Grae

Well it depends on how longer future we’re looking out to certainly for the immediate future and for this year and well into next year. Beyond that, it will depend on the new revenues we’re anticipating from potential new consulting clients. Some of these are with countries that have not yet officially made the determination to begin their nuclear power programs. We did list the countries during my earlier remarks and there are several in which we seem to have very good prospects for new contracts.

Also as we’ve mentioned, we expect to enter into significant commercial arrangements in 2015 with major nuclear fuel fabricating companies and we expect that those contracts would come with revenue to Lightbridge in the form of technology access fees. So it won’t only be from consulting revenues that will also be starting we expect by 2015 revenue from the technology division of the company.

That being said, the revenues we’re anticipating in new consulting agreements come a little later than we thought. We might do a financial race at some point, but that is not in the perceivable future.

Gary Sharpe

And then the last asset of this investors question relates to a recent announcement that Australia will provide uranium for your reactors in the UAE. Does that suggest any near term activity for the consulting unit?

Seth Grae

Well as we’ve mentioned we’re very active in the UAE both with the Emirates Nuclear Energy Corporation and at the Federal Authority for Nuclear Regulation. However, we are not involved with that agreement with Australia. So yes, we are quite active in the UAE and as we mentioned recently our contract with the Federal Authority for Nuclear Regulation was renewed and extended to expire at the end of 2014 and we expect it will be extended again. But we’re not involved with the Australian uranium supply directly. We do advice on these issues a bit.

Gary Sharpe

There is a call – question that just came in, this investor wants to know why does it take so long to start and complete nuclear fuel tests so that you’ll begin selling fuel rods, what can be done to contract that timeline?

Seth Grae

Well, let me turn it to Jim Malone again, our Chief Nuclear Fuel Development Officer for that answer.

James Malone

Thanks Seth. Gary, this is a common question and its well rooted in the investor’s interest. However, the reason it take time is got a couple of important points. First and foremost is that, we must be in compliance with the regulations of the Nuclear Regulatory Commission that proves that the fuel can be operated safely under the conditions that we propose at the operator. That’s first.

In order to prove that, we have to go through the steps that we are going through at the test reactors stage to irradiate samples that maybe subsequently tested to prove that the anticipated performance that is calculated is matched by the actual performance in the reactor.

So we have to get that step done and unfortunately these things take time. We have to burn the fuel to an equivalent number of burn update that would see in a power reactor and simply take time. We can’t accelerate the pace at which neutrons are impinging on the fuels in these test reactors as a finite number and that’s the best we can do.

We are going as quickly as we can keeping in mind that the Nuclear Regulatory Commission is also preparing to understand based on our experimental results, the differences between the oxide fuel is as common for them to look at now and our fuel which has some difference performance parameters.

So, in a nutshell basically, that’s why it takes longer or it takes some time to complete the development and commercialization of a new usual product.

Gary Sharpe

Okay. Next question. We’ve gotten this question few times also, does the currently cheap price of natural gas represent a long-term threat to Lightbridge’s fuel technology?

Seth Grae

Well again let me start with Jim Malone on that and then some of us may add to that as well. Why don’t you start Jim?

James Malone

Okay. Sure. The decision as to which fuel to select for power plants to be built is complex and looking at the very near-term market condition for a particular fuel may not be representative of a long term prospects for a nuclear power plant. If you look at the power plant being built today around the world, they’re looking at a typical 60 year life and perhaps as long as 80 years and I don’t believe anyone would suspect that the low natural gas prices that we see currently in North America will sustain for such an extended period of time. Much more reasonable to expect that the market price for natural gas will kind of rationalize around the world, just ask yourself, for example, if I had a lot of natural gas to sell, I might want to sell it in Japan where I can get $18 per million BTU versus selling it in the U.S. at $2.

So by taking rational thinking into the market, we’ll see that prices probably will moderate in Japan and in East Asia and they will increase somewhat in North America. Therefore, the comparative price of fuel in the long-term would favor the stability of nuclear fuel as a matter of fact the people at Southern Company in Georgia at the new construction at Vogtle and in South Carolina at BT Summer have pointed out that the decision on a nuclear power plant is a 60 to 80 year decision and the daily fluctuations in the market price of natural gas are irrelevant to that decision making process.

Gary Sharpe

Okay. Here’s another question that just came in. Outside of the Middle East and Asia, or Europe, Middle East, Asia, where are you looking at other consulting opportunities? Does it include India or South Africa because these seem to be potential short-term opportunities for this investor?

Seth Grae

Well if we take out Europe and Asia and the Middle East, we’re taking out a lot of the biggest market that we’re ever going after right now. I will say that we are pursuing some opportunities in Africa although that the clients want to maintain confidentiality right now, not have accidently announce certain programs for them. So I’ll leave it at that.

India is on the Asian Continent. We’re not pursuing consulting work in India now. India has expertise of deploying and operating reactors and at regulating reactors, but we are talking with fuel fabricators about potentially supplying fuel to India at some point. We’re also pursuing some consulting opportunities in some other regions of the world including some smaller contracts here in the United States with some people who needs some help.

Gary Sharpe

Okay. Here’s a question that we came in last week. It’s involved question. It says, in September, at the IAEA Meeting, the Department of Energy and Rosatom, the Russian Agency, are going to sign agreements for the exchange of nuclear inverse information between the U.S. and Russia. What are the benefits of this for Lightbridge and what is the timing for executing these benefits?

Seth Grae

Right. Andrey has been working on these issues, our Executive Vice President for International Nuclear Operations. Andrey?

Andrey Mushakov

Yes, filamentary into 123 Agreement on peaceful nuclear cooperation between the United States and Russia in January of last year the U.S. Department of Energy and Russian State Corporation Rosatom, already taken important steps to further commercial nuclear cooperation between the two nations.

In particular, in September of 2011, the U.S. Department of Energy and Rosatom signed a joint statement on strategic directions of U.S. Russian nuclear cooperation. This statement outlines four key areas of mutual interest for collaboration including the research and development for innovative nuclear energy technology options, which is relevant to our collaboration with Rosatom and its subsidiary companies.

The anticipated signing of a new agreement relating to an exchange of nuclear information between the United States and Russia, of course, is a welcome step forward that we believe will further facilitate research and development cooperation in the field of nuclear energy. And of course it’s going to make it easier for our own collaborative projects that we are planning going forward over the next few years with Russian impetus including Rosatom subsidiary companies will make it easier to transfer information back and forth and hopefully will expedite a lot of the process.

Gary Sharpe

Andrey, has that 123 Agreement been signed by the Russian Agency yet?

Andrey Mushakov

Yeah, the 123 Agreement on peaceful nuclear cooperation between the United States and Russia was approved and signed and entered into force as of January of 2011. So it’s been on force for over a year now and they’ve taken couple of steps and they’ve signed a couple of additional sort of follow-on agreements that fall under the framework of the 123 Agreement outlining specific areas of nuclear cooperation that the United States Department of Energy and Rosatom think are of mutual interest and as I mentioned, one of them includes cooperation in the area of research and development for innovative nuclear energy technology options which deals with what we are doing.

Gary Sharpe

Okay. Here is another question about Lightbridge and the NRC, the Nuclear Regulatory Commission. It refers to recent meeting. What’s happening between the NRC and Lightbridge as a result of that meeting?

Seth Grae

And Jim Malone has been leading those efforts. So Jim, why don’t you take that?

James Malone

Happy to take it, Seth. Response really is that part of our fuel commercialization program is to identify current NRC regulations that are not relevant for the metallic fuel. The reason is that some of the current regulations is specifically written for conventional oxide fuel and other referred to fuel phenomena that did not occur in our fuel.

So we’re working with the NRC and the nuclear industry around the world to create regulations for the metallic fuel that will assure that we meet the highest standards of nuclear safety to paraphrase what the NRC referred back to us from their perspective as long as we are going down this path and we check off each of the items required. There are no showstoppers in their eyes that would say that this fuel could not receive an operation and a license to be operated in the United States.

In addition to the work with the NRC, we formed as many of you may be aware, the Nuclear Fuel Advisory Board and we’re working with that board of utilities is basically representatives from Exelon, Duke Energy, Dominion and Southern Company to kind of look over our shoulder and make sure that we are not missing something that they see as obvious with respect to developing a new field. And the gentleman that are on that board are all very much aware of what is required to get a license to operate a new fuel from the NRC. So in addition to the NRC, we’re working with the industry to make sure that we satisfy the regulations that would be put in place for our fuel.

Gary Sharpe

All right. Another question. Is there any update on when to expect the peer reviewed article on Lightbridge fuel technology?

Seth Grae

Yeah. Andrey?

Andrey Mushakov

As we previously communicated in the last quarter of last year of 2011, we submitted a technical overview article for publication in a peer-reviewed journal. This is the first in the series of technical articles we’ve planned to publish within the next one to two years.

In the first quarter of this year, we were notified by the journal that the peer review process had been completed and that the articles had been accepted for publication and they gave us a date publication no later than March of 2013, so March of next year. We are seeking a near-term publication date but at this point the final decision is in the hands of the journal and we have no influence over that process. So our hope is to have that article published before the end of this year but the latest as they mentioned before March of 2013. We will provide an update once we know or we’ll be notified by the journal of the specific publication date, and sometimes those articles become available online sooner than in a printer form. So as soon as we know once it’s available online we’ll provide an update at that point.

Gary Sharpe

All right, here is a question that came in few minutes ago. It says, does Lightbridge have any plans to advertise its fuel technology in order to make the American general public aware during the election campaign.

Seth Grae

We don’t have any plans to advertise or to be involved in the election campaign in anyway. We do participate in industry conferences, we do publish in journals, we do participate actively in both US and international nuclear organizations. Our fuel will be licensed to major corporations that that fabricate fuel for reactors and will be sold to utilities that operator reactors not to the general public.

That said, as this process goes forward and we have the independent peer-reviewed published, we have the fuel manufactured for these tests in Idaho and in Russia and we update it from those test and as it’s coming out publicly with the independent validation we do anticipate making that more widely known publicly, but that will not be much cheering the election cycle between now in November.

Gary Sharpe

Okay. Here is another question that came in from a long-term individual investor. Seth, perhaps you could talk about this. He says, in today’s investment environment when a long-term investment is considered to be one year, why should investors tie up capital in Lightbridge with timelines through commercialization running five to seven years. And perhaps you could talk about how we intend to add value sooner than that.

Seth Grae

Well I can tell you that I certainly have done that as in fact remember management and our board and many people involved with the company and sophisticated investors. We obviously develop the business plan, the strategy, execute on it, make that information available and investors make their own decisions. We’re very confident in the value of this technology and that that value will be recognized as this project moves forward.

We’ve put out some major milestones we’re expecting to hit starting this year with independent peer-review with agreements to fabricate and then actually fabricate fuel for the testing in a large test reactors in the US and Russia, fabricating full sized fuel samples, all sorts of out of reactor testing in addition to internal reactor testing, leading up to commercial arrangements with major nuclear fuel fabricator and vendor companies over the next three years.

So I think that as we hit these major milestones investors will be making their decisions and that will be reflected in the stock price. I can tell you also many people at the company choose to take parts of our compensation in equity and not cash because of our belief now and not just for the addition in future.

Gary Sharpe

Here is another fresh question, a follow-up question from an earlier questionnaire. It says, how sensitive is Lightbridge’s development timeline to political developments in the wake of the recent rank or at the NRC?

Seth Grae

Well I don’t think that affects Lightbridge’s timeline at all, in terms of the recent rank core at the NRC the chairman of the NRC Gregory Jaczko did resign and he left the commission and the other four commissioners stayed. A new commissioner Allison Macfarlane was nominated by President Obama and confirmed by the senate. And has taken the position and he is now the chair of the NRC, as it has been publically disclosed Allison Macfarlane actually has worked as a contractor for Lightbridge in the past and our work in the Middle East and we do know the commissioners and many of the staff members at the NRC and as we’ve discussed in the past many of Lightbridge’s most senior experts do come from top leadership positions at the NRC before they joined Lightbridge.

But mostly the NRC consists of over 4,000 export regulators and five commissioners. One of those commissioners has recently changed in a way that I think makes the NRC if anything operate better. And Jim is our leader of the efforts with the NRC I’ve just see it through if anything to add to that.

Gary Sharpe

Well I really felt that that I think you’ve summed up quite well. Chairman Jaczko was not very collegial apparently with the other four commissioners and that’s where the activity that gains a lot of publicity has occurred but it has not had any impacts on the commissioner’s ability to continue with their regulatory responsibilities, they deliver that quite capably.

Seth Grae

Yeah I’ll just end by saying is, someone who works with in our work around the world with many regulatory agencies, I firmly believe the NRC is the finest nuclear regulator in the world with the highest safety standards and most qualified experts in the world. We’ve seen nothing that reduces that at all and anything I think recent actions strengthen it. Gary, any other questions?

Gary Sharpe

There is one more question at the moment that came in just a few minutes ago from a buy side analyst who is asking, what are we doing to enhance the company’s profile, he recognizes that we’ve presented the company’s prospects at a number of investment conferences, are there any new conferences on the horizon and are there plans to get self side analyst coverage for Lightbridge?

Seth Grae

Well, I’ll turn this over to Jim Malone to answer as well but I’ll start by saying that Jim is the chairman of the nuclear fuel technology working group at the World Nuclear Association and he’ll be sharing that group at their annual symposium in London next month where we will be interacting with people from around the industry. There are other conferences coming up, we will presenting at I’ve been invited and I’ve accepted to present at a major European Nuclear Conference in Warsaw later this year and others in the company are writing articles and presenting at conferences as well.

We are having many meetings with the US government as well as other governments around the world relating to the nuclear fuel technology as well as our advisory services business. So we are quite active even if it’s not alertly public and Jim, let me just see what you’d like to add to that.

Jim Malone

Thanks, but I think it is important to recognize that the World Nuclear Association fuel technology working group efforts do get a lot of attention within the fuel industry worldwide. We have experts from virtually every country to have the significant nuclear power program participating in that working group and that does give Lightbridge a fair amount of visibility with the people who are kind of the key decision makers with go-no-go approach to a new technology does evolve. So I’m very pleased and honored actually that the WNA asked me to share that group.

As Seth has pointed out, we pick and choose our spots to participate in conferences most recently I was able to make a presentation on our fuel technology as a flat European Nuclear Conference held in London in July and that was a very gratifying experience also because again we had people who are influential and who are on both sides of the industry basically asking questions and getting more updates to what they already knew about our fuel.

We also had an opportunity back in April where I was in Scandinavia and met with the Chief Nuclear Officer of (inaudible) who is now responsible for building the sixth nuclear plant in Finland and had an opportunity to meet with him again at the London Conference and answered some of his questions. And after our discussion, he was quite comfortable with the concept of metallic fuel replaced in the oxide fuel in the potential power plant that he is getting ready to construct.

So I think we are using our Lightbridge resources of time and finance quite logically and reasonably to get the word out to those people who are most important in the decision-making process within the industry.

Gary Sharpe

Now with respect to the analyst enquiry about sell-side coverage Lightbridge, I mean, we do what we can to communicate regularly with sell-side investment brokerages. However, their decisions to cover us initiate coverage are really come out of our control. We try to keep the doors open and the lines open so that anybody who has questions can, knows that we’re available and ready to talk but again there is some things that are out of our direct control.

Last couple of questions looks like, can Lightbridge fuel be used integral fast reactors in small modular reactors. So there has been quite a bit of new coverage about those alternative approaches to nuclear power. What’s the answer Jim?

James Malone

Well the metal fuel is adaptable especially for all water-cooled reactors. And the reference to water cool is important because the integral fast reactor is not water cool. It is typically a liquid metal tools reactor which is a very different operating environment. With respect to small modular reactors, those which are water cool would again be easily adaptable to our fuel technology. So understanding that difference between the nature of recruitment and the integral fast reactor and the small reactors that are also fast spectrum would separate them from the water cool and our focus right now is on water-cooled reactors.

Seth Grae

Yeah and let me just add that the focus is on water-cooled reactors because that’s the global market. There actually are no integral fast reactors putting electricity out on to the grid anywhere in the world. There are some experimental ones being designed in build, if and when they ever have any commercial significance that would be many, many decades from now in terms of any significant share of global nuclear power whereas the water-cooled reactors, our fuels are being designed for our essentially the entire nuclear power markets that exist in the world and the new reactors that are being built and planned.

Gary Sharpe

Okay. Here is the last question gentlemen. Is Lightbridge’s competitive position threatened by proposals to use spent conventional fuel in integrated fast reactors?

Seth Grae

Well let me start again and then turn it over to Jim which is that because we don’t see any integral fast reactors being used commercially in any significant way for a very long time, the answer is no. Our competitive position is not threatened by that, but Jim let me ask you to add to that.

James Malone

Sure. As Seth pointed out in his previous response, the integral fast reactors are not going to be ready today or tomorrow. They’re going to be ready in a few decades. And when they become ready, they’re not going to magically appear in large numbers, they’re going to take time to build in so that the light water reactors that we’re focusing right now will continue to have a large demand for fuel and the fact that the IFRS may use some of that spent fuel doesn’t have any real impact on our technology being used in the light water units because, the light water units are going to be operating, so very long time into the future. And we see stuff being built today in this some of the numbers of reactors that are being built going forward. They’re all going to be awkward and many, many of them are going to be candidates to use our fuels. So I don’t see our competitive position being threatened by the proposals to use spent conventional fuel in IFRS at all.

Gary Sharpe

Okay. That’s the last question in the queue. Seth, you have any final remarks?

Seth Grae

Well, yes. I want to thank everybody for joining us on this conference call. We’ll look forward to speaking with you on our third quarter business update call as well. And we will be, of course, putting out any new news in the interim and thank you again.


Ladies and gentlemen, we thank you for joining today’s conference call. It has now concluded. You may now disconnect your telephone lines.

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