Lightbridge Corporation

Thank you for standing by, and welcome to the Lightbridge Corporation Business Update and Fiscal Year 2020 Conference Call. Please note that today's call is being recorded. It is now my pleasure to introduce Matthew Abinanti, Director of Investor Relations for Lightbridge Corporation. Please go ahead, sir.

Thank you, Sarah, and thanks to all of you for joining us today. The company's earnings press release was distributed after the market closed yesterday and can be viewed on the investor relations page of the Lightbridge website at www.ltbridge.com. Joining us on the call today is Seth Gray, Chief Executive Officer, along with Larry Goldman, Chief Financial Officer, Sherry Holloway, Accounting Manager, Andrei Mushikov, Executive Vice President for Nuclear Operations, and Jim Fornoff, Vice President for Nuclear Program Management. I would like to remind our listeners that any statements on this call that are not historical facts are forward-looking statements. Today's presentation includes forward-looking statements about the company's competitive position and product and service offerings. During today's call, words such as expect, anticipate, believe, and intend will be used in our discussion of goals or events in the future. This presentation is based on current expectations and involves certain risks and uncertainties that may cause actual results to differ significantly from such estimates. These and other risks are set forth in more detail in Lybridge's filings with the Securities and Exchange Commission. Lybridge does not assume any obligation to update or revise any such forward-looking statements, whether as a result of new developments or otherwise. And with that, I would like to turn the call over to our first speaker, Seth Gray, Chief Executive Officer of Lightbridge. Hello, Seth.

Well, and hello, and thank you very much, Matt. Thank all of you for joining us. Despite the challenges of the past year because of the COVID-19 pandemic, I'm pleased to report that Lightbridge is continuing to make progress on our fuel development initiatives. while taking steps to ensure that we have the necessary resources to dedicate to these efforts. At the same time, based on current industry developments, 2021 could be a breakout year for advanced nuclear technologies. In fact, President Biden's energy platform includes advanced nuclear as part of what he has referred to as critical clean energy technologies, The administration has recognized nuclear power as part of the transition away from fossil fuels. Today, LightBridge achieved a significant milestone as we secured our second funding award from the U.S. Department of Energy, a voucher from DOE's Gateway for Accelerated Innovation in Nuclear, or GAIN program, to support development of LightBridge fuel in collaboration with Pacific Northwest National Laboratory in Richland, Washington. The scope of this project is to demonstrate LightBridge's nuclear fuel casting process using depleted uranium, a key step in the manufacture of our fuel. The total value of the project is approximately $664,000, with three-quarters of this amount funded by DOE. The next step will be to sign a CRADA agreement relating to the project. From there, LightBridge will work with Pacific Northwest National Laboratory on the process of casting depleted uranium zirconium ingots that will be submitted to a battery of testing and analysis. We expect the project will begin later in the first half of 2021. This new gain voucher is part of our focus to partner more closely with the U.S. government. Earlier this week, we announced our settlement agreement with Framatome that dissolves our Envision joint venture in its entirety and terminates all agreements associated with the JV. Under the terms of the agreement, Lightbridge has paid Framatome approximately $4.2 million for outstanding invoices for work performed and other expenses that were incurred by Framatome. which destroyed all documents and content related to Lightbridge's intellectual property. The settlement agreement allows Lightbridge to pursue the numerous emerging opportunities in the nuclear sector, such as our new gain voucher, completely unencumbered by any constraints while securing all our pre-existing intellectual property rights without restrictions. Importantly, we will avoid the significant multi-million dollar costs of ongoing arbitration proceedings in Switzerland, along with the litigation in Delaware, that our attorneys expected to continue for at least another year. By reaching this settlement, we are eliminating any uncertainty of the outcome of international arbitration. I believe, along with our Board of Directors, that this settlement agreement is the best result for all sides. Turning to our ongoing efforts at Idaho National Laboratory under our first funding voucher from DOE, we are designing an experiment for testing our fuel samples in the advanced test reactor at Idaho National Lab. Our initial understanding was that we would have full access to a government-funded pressurized water reactor test loop in the advanced test reactor. to generate sufficient data to support our lead test assembly testing and eliminate the need for lead test rod testing in a large commercial reactor. However, while the advanced test reactor has enough space for four of these loops where fuel rods can be irradiated, the reactor currently has only one such loop that is shared with our experiments, which limits how much fuel rod material we can get in the reactor and its duration in the reactor. We understand that Idaho National Lab would be willing to add up to all three additional loops at a cost of about $10 to $15 million each. We have determined such capital investment to be an unmanageable cost for LightBridge. We plan to work with the government and industry to have these loops added without LightBridge paying for them. We believe we have strong arguments for the U.S. government to pay most of the cost for these new loops. The foundation of our fuel development efforts is to position Lightbridge Fuel and our company as essential for the world to meet climate goals. As such, we have viewed the existing large pressurized water reactors as our initial market because these reactors represent a large market segment for which Lightbridge Fuel could provide significant economic and safety benefits. There are approximately 400 reactors worldwide that average about 1,000 megawatts of electricity generation each. We calculate that to produce with nuclear power all the clean energy that the world will need in 2050, which is the seminal year for climate change according to the IPCC, would take the equivalent of about an additional 20,000 reactors generating about 1,000 megawatts of electricity each. Realistically, that is not going to happen. At most, we anticipate a net increase of 200 large reactors will be built by then, with most of them deployed by China and Russia, and more difficult for Lightbridge to reach commercially. While these large reactors present a market opportunity for Lightbridge, one that we will continue to pursue, it's clear that these reactors will not have a meaningful effect on climate change. Instead, We are recognizing the emerging technology in small modular reactors, or SMRs, that are now in development and licensing. They have the potential collectively to generate massive amounts of power with the versatility to deliver upon climate goals. We believe that light bridge fuel can provide SMRs all the benefits that our technology brings to large reactors, but with a more significant and meaningful economic case for deploying SMRs, including greater power up rates, up to 30% increase in power output with light-bridge fuel, and added economic benefits from the safety enhancements that we would bring. We expect light-bridge fuel to generate more power that will help decarbonize certain sectors by powering them with electricity and produce hydrogen for liquid non-carbon fuels for use in hard to decarbonize sectors such as aviation and shipping. Our ongoing R&D initiatives are entirely compatible with light-rich fuel powering SMRs for multiple purposes, which are already included in our existing patents and trade secrets. We believe what we are seeing is part of an overall shift in focus in government and the private sector from large pressurized water reactors to SMRs and advanced technologies. This shift in focus is at least partly driven by the need to prevent catastrophic climate change. We understand that the Biden administration will prioritize advanced nuclear technologies, including advanced fuels and SMRs, as part of its nuclear energy policy. President Biden has brought the US back into the Paris Agreement on climate change with the goal that the US electricity sector be carbon neutral by 2035, just 14 years from now. We believe that powering SMRs with light-bridge fuel can enhance the already strong case for SMRs and attract more private and government investment. Recently, the US and Russia extended the New START Treaty for an additional five years. The New START Treaty will prevent an increase in the number of certain types of nuclear weapons in the U.S. and Russian arsenals. We understand that the Biden administration will seek to use this opportunity to enter into negotiations with Russia and perhaps China to reduce the number of weapons and eliminate plutonium from the weapons that would be dismantled. making it harder to replace the weapons in the future. While there would still be careful analysis ahead of us, we believe that a zirconium-plutonium version of light-rich fuel could be an ideal solution in disposing of the plutonium from weapons, using it to generate energy. In addition, the United Kingdom and Japan have large quantities of separated reactor-grade plutonium from reprocessing spent fuel from power reactors. Both countries are interested in exploring how best to explore and how to dispose of that plutonium. We believe our technology can be used for this purpose. Our patent portfolio includes zirconium plutonium fuel. We will explore these opportunities over the coming months for potential government interest and funding support. And with that, I will turn the call over to Andrei Mushikov, Executive VP for Nuclear Operations, who will review our near-term research and development opportunities. Andrei.