®
Lightbridge Corporation (NASDAQ: LTBR)
Investor Presentation - May 2012
®
Safe Harbor Statement
This presentation includes or incorporates by reference statements that constitute forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Act of 1934, as amended. These statements relate to future events
or to our future financial performance, and involve known and unknown risks, uncertainties and
other factors that may cause our actual results, levels of activity, performance, or achievements to
be materially different from any future results, levels of activity, performance or achievements
expressed or implied by these forward-looking statements. These statements include, but are not
limited to, information or assumptions about revenues, gross profit, expenses, income, capital and
other expenditures, financing plans, capital structure, cash flow, liquidity, management’s plans,
goals and objectives for future operations and growth. In some cases, you can identify forwardlooking statements by the use of words such as “may,” “could,” “expect,” “intend,” “plan,” “seek,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,” “project,” “continue,” or the negative of
these terms or other comparable terminology. You should not place undue reliance on forwardlooking statements since they involve known and unknown risks, uncertainties, and others factors
which are, in some cases, beyond our control and which could materially affect actual results,
levels of activity, performance or achievements. These risks and uncertainties include, but are not
limited to, the factors mentioned in the “Risk Factors” section of our Annual Report on Form 10-K
for the year ended December 31, 2011, and other risks mentioned in our other reports filed with
the Commission.
The forward-looking statements contained in this presentation are made only of this date, and
Lightbridge Corporation is under no obligation to revise or update these forward-looking
statements.
®
2
Lightbridge Overview
Moscow
Nuclear
fuel
designs
Washington DC
London
Abu Dhabi
NASDAQ: LTBR
®
®
Nuclear
advisory
services
3
Why Invest in Lightbridge?
Limited competition – LTBR Fuel Designs
Increased
power
Enhanced
output/
Plug & play proliferation
Improved
resistance
economics
Advisory
services
Reduced
spent fuel
quantities
Increased
safety
Superior
investment
returns
Proprietary technology – Strong patent portfolio
Highly experienced management team,
strategic advisors and technical teams
®
4
Nuclear Energy Forecast & Market Drivers
73%
The estimated increase in nuclear power
generation globally by 2035. Nukes’ share
of total power generated is projected to be
13%, the same as in 2009.
New market
Capital cost per MWe
Fuel supply diversity
63
The number of nuclear reactors under
construction today. China is building 26
while India has six under way.
435
Existing market
Power uprates
Longer fuel cycles
The number of reactors in operation
worldwide.
Source – Fortune Mag., IAEA, WNA, NRC, IAEA World Energy Outlook 2011
®
5
Lightbridge: Advancing Nuclear Energy
Levelized Costs1
($/MWh)
250
Solar
200
150
Wind
100
Nuclear
Natural Gas
Coal
50
10% uprate with
Lightbridge metallic fuel2
0
1,200
2,500
Environmental
(CO2 lbs/MWh)
1. Levelized Cost of Electricity for new generation sources in 2015.
Source EIA “Annual Energy Outlook 2011” and EPRI “Program on Technology Innovation”
2. Operating nuclear power plant uprate with Lightbridge fuel can provide approximately 23 $/MWh electricity generation costs
®
6
Limitation of Renewables
770 SQ. Miles – Rhode Island
To generate an equivalent amount of electricity as a typical nuclear plant, you’d need to cover
about 770 square miles of land with wind turbines, an area slightly smaller than Rhode Island.
37 Million Acres – Illinois
Replace one-tenth of U.S. oil consumption with fuel derived from switch grass would require
cultivating some 37 million acres of land, an area roughly the size of Illinois.
130 Million tons of Coal Ash
American commercial nuclear-power has produced 62,000 tons of high-level waste over its
entire history. Roughly the size of a football field 20 feet deep. U.S. coal fired plants generate
about 130 million tons of coal ash per year.
Source – Wall Street Journal
®
7
Comparison to Standard Fuel Rod
D1 9.50 mm
D
R
D2 8.36 mm
D3 8.19 mm
a
r
d
D
Standard Cylindrical Oxide Fuel Rod Cross-Section
Current
- Uranium Oxide
®
Lightbridge® metallic fuel rod cross-section
Next Generation
- Metallic Fuels
- Thorium
8
Fuel Design Evolution – Seed & Blanket to All-Metal
Seed
Seed
AllMetal
Metallic
Metallic
Metallic
Uranium
Uranium
Uranium
Blanket
Blanket
Oxide
Oxide
Uranium
Uranium
Thoriumbased seed
& blanket
®
Uraniumbased seed &
blanket
All-metal fuel
9
LTBR Fuel Technology Value Proposition
Increased Power
Output from
Plant
Improved Plant
Economics
• 10-17% power uprate and 24 month fuel cycles for existing PWRs
• Up to 30% power uprate for new build PWRs
• Applicable to light water based SMRs and BWRs
• Increased revenue and improved operating margins of
existing nuclear power plants
• Reduced total levelized cost per kilowatt-hour for new build
reactors
• Increased competitiveness of nuclear power versus other
energy sources
Increased Supply
Chain Efficiency
Improved Spent
Fuel
Management
®
• Fuel enables the supply chain to deliver more power from the
same capacity
• Reduced fuel fabrication costs
• Reduced volume of spent fuel
• Enhanced proliferation resistance of spent fuel
10
LTBR Fuels - Key Safety Benefits
Increased
Heat
Transfer
• Higher thermal conductivity improves the rate at which heat from the
fuel can be transferred to the coolant
• Increased fuel rod surface area (~35-40% greater) provides
increased safety margin
• Improved coolant mixing due to helical twist
Lower
Operating
Temperature
Improved
Fuel Rod
Integrity
®
• Average operating temperature of ~ 370 oC, i.e. “cold fuel”
• Reduces the amount of sensible heat that must be removed at
reactor shutdown
• Improves fission product retention and mitigates fuel swelling
• Metallurgical bonding of fuel to cladding improves strength
• Fuel rod integrity substantially reduces radioactive source term in
the event of cladding breach
11
LTBR Metallic Fuel - Safety Benefits
Structural
integrity
Reduced
operating
temperature
1200°C 1300°C
Conventional
Fuels
340°C –
380°C
LTBR Fuels
Improved
heat transfer
®
12
Nuclear Power Market Size and Growth Projections
World Nuclear Association’s Reference Scenario
Global Market by Reactor Type
6%
GWe
5%
800
8%
CAGR of 2.8% for 2011-2030
700
614
554
600
21%
59%
500
400
364
300
200
Pressurized Water Reactors
Boiling Water Reactors
Russian-designed Pressurized Water Reactors
Heavy Water Reactors
Other
Source – World Nuclear Association’s Reactor Database
®
100
220
237
2025
2030
130
0
2011
Global Market Size (All Reactor Types)
Target Market for 10% Power Uprate
Source – The Global Nuclear Fuel Market. Supply and Demand 2011-2030,
World Nuclear Association, August 2011
13
Revenue Model for 10% Power Uprate Fuel Variant
Incremental Annual Revenue for an 1,100-MWe Plant with a 10% Power Uprate and 24-Month Cycle
Wholesale Electricity
Price of $55/MWh
Incremental revenue from a 10% power uprate
$48M
Incremental revenue from switching to a 24-month cycle
$8M
Estimated cost savings from having fewer outages
$4M
Total incremental annual gross revenue and cost savings to utility
$60M
Lightbridge’s Royalty Fee as a Percentage Annual Revenue to Lightbridge
of Incremental Gross Revenue
per 1,100-MWe Plant
®
5%
$3.0M
8%
$4.8M
10%
$6.0M
14
Licensing Revenue Projections for 10% Power Uprate Fuel
$800M
LTBR Projected Annual Revenue
$700M
$141M
$600M
$500M
10% Royalty Fee of
Incremental Gross
Revenue to Utility
$106M
$212M
$400M
$71M
$300M
5% Royalty Fee of
Incremental Gross
Revenue to Utility
$530M
$106M
$200M
$706M
$159M
$353M
8% Royalty Fee of
Incremental Gross
Revenue to Utility
$353M
$265M
$100M
$176M
$0M
20%
30%
40%
Captured Share of Target Market for 10% Power Uprates
Wholesale
Electricity
Price of
$55/MWh
Note: The above revenue numbers include an escalation factor of 3% per year. The 20-40% market share of the PWR target market for
10% power uprates represents approximately 8-16% of the entire projected global market size in 2025.
®
15
IRR - Power Uprate Fuel
70%
LTBR Projected Internal Rate of Return
60%
+4%
+7%
+3%
50%
+3%
10% Royalty Fee of
Incremental Gross
Revenue to Utility
+7%
+7%
40%
30%
49%
20%
39%
60%
54%
44%
49%
10%
0%
20%
30%
40%
Captured Share of Target Market for 10% Power Uprates
8% Royalty Fee of
Incremental Gross
Revenue to Utility
5% Royalty Fee of
Incremental Gross
Revenue to Utility
Wholesale
Electricity
Price of
$55/MWh
Note: The above internal rate of return numbers are based on projected technology licensing revenue, R&D expenditures and allocated
corporate overhead expenses from 2012 to 2030. An escalation factor of 3% per year is applied to all revenue and cost figures.
®
16
Fuel Development & Commercialization Timeline
Begin test
reactor
irradiation
Complete
test reactor
irradiations
2014
2012
Demonstrate
full-length
rod
fabrication
®
Begin
lead test
assembly
(LTA)
operation
2016
Commercialization of
Fuel Designs
Complete regulatory
licensing of lead test
assemblies
Complete
1st cycle
of LTA
operation
2018
Complete
2nd cycle
of LTA
operation
2020
2022
Begin
commercial
operation
17
Nuclear Fuel – Commercialization Strategies “Push, Pull & Government”
Economics
®
Fabricator
Demand
Power
producers
Commercialize
Safety, nonproliferation,
waste
®
18
Our Place In The Nuclear Space – Advisory Services
®
World class experience
Generation
New Program
Strategy and
Planning
®
National
Infrastructure
Development
Government
Regulations
Nuclear Power
Plant
Construction
Nuclear Power
Plant
Operation
Site
Decommissioning
19
Advisory Services – Client Success Stories
Kuwait
Qatar
Bahrain
U.A.E
Saudi
Arabia
Oman
®
20
Advisory Services – Market Penetration & Teaming Approach
®
®
21
LTBR - Management Team
Ambassador Thomas
Graham, Jr.
Seth Grae
James D. Guerra, CPA
Chairman of the Board
Chief Executive Office &
President
Chief Operating &
Financial Officer
James Malone
Andrey Mushakov, PhD
Jon Johnson
Chief Nuclear Fuel
Development Officer
Executive VP/ International
Nuclear Operations
Senior Vice President,
Nuclear Regulatory Expert
®
22
LTBR - Strategic Advisors
Sir Ronald
Grierson
Kathleen Kennedy
Townsend
®
Hans Blix, PhD
Sam Vaidyanathan,
PhD
Simon Murray,
CBE
Norton Shapiro,
PhD
23
LTBR - Nuclear Utility Fuel Advisory Board (NUFAB)
• Lightbridge recently announced the formation of a Nuclear Utility Fuel
Advisory Board (NUFAB) composed of leading nuclear utilities.
• The objective and purpose of the board is to further strengthen
dialogue with global nuclear utilities and provide their input into
Lightbridge's nuclear fuel development and commercialization efforts.
• The initial members of NUFAB include top fuel managers from Exelon
Generation Co., Dominion, Duke Energy, and Southern Company.
• Lightbridge plans to expand NUFAB to include representatives from
additional nuclear utilities in the future.
®
24
Why Invest in Lightbridge
Limited competition – LTBR Fuel Designs
Increased
power
Enhanced
output/
Plug & play proliferation
Improved
resistance
economics
Advisory
services
Reduced
spent fuel
quantities
Increased
safety
Superior
investment
returns
Proprietary technology – Strong patent portfolio
Highly experienced management team,
strategic advisors and technical teams
®
25
Lightbridge Corporation – Key Contacts
Lightbridge Key Contact Information
US Headquarters
1600 Tysons Blvd.
Suite 550
McLean, VA 22102
USA
+1.571.730.1200
Seth Grae
President & Chief Executive Officer
+1.571.730.1200
sgrae@ltbridge.com
James D. Guerra
Chief Operating and Financial Officer
+1.571.730.1203
jguerra@ltbridge.com
Andrey Mushakov
Executive Vice President, International Nuclear
Operations
+1.571.730.1204
amushakov@ltbridge.com
®
Jon Johnson
Senior Vice President Advisory Services
+1.571.730.1211
jjohnson@ltbridge.com
Gary Sharpe
Investor Relations
+1.571.730.1213
ir@ltbridge.com
26
®
LTBR - Key Technical Milestones in 2012-2013
Technical milestone
Fabrication of
semi-scale fuel
samples for
irradiation in test
reactors
Provides fuel
samples for
irradiation testing
Short-term
irradiation of
samples in the
Advanced Test
Reactor at Idaho
National
Laboratory
Begin long-term
loop irradiation in
prototypic PWR
operating
conditions
Fabrication of
full-length fuel
rods
Confirm US fuel
fabrication
process for the
metallic fuel
technology
(MFT)
Demonstrate the
performance of
MFT under
prototypic
operating
conditions of
Western-type
PWRs.
Full-length fuel
rods will be
manufactured for
fabrication
process
demonstration
and out-ofreactor tests
Milestone significance
®
28
Lightbridge Management Team
•
Seth Grae
Chief Executive Office & President
Lightbridge Corporation
Ambassador Thomas Graham, Jr.
Executive Chairman of the Board
Lightbridge Corporation
Member of the Civil Nuclear Trade Advisory Committee to the US Secretary of
Commerce
Member of the Suppliers Advisory Committee of the Nuclear Energy Institute
Member of the Governing Board of the Bulletin of the Atomic Scientists
Former Co-Chair of the American Bar Association’s Committee on Arms Control
& Disarmament
•
•
•
•
•
•
•
James D. Guerra, CPA
Chief Operating & Financial Officer
Lightbridge Corporation
®
•
•
•
•
Chairman of the Board of the Cypress Fund for Peace and Security
Former senior U.S. diplomat, world-renowned expert on nuclear nonproliferation
Involved in every major arms control/non-proliferation agreement for the past
35 years
Advisor to five US presidents on nuclear non-proliferation
Former Vice President of Finance for Exelon Nuclear
Former Vice President of Finance and CFO of Exelon Business Services
Company
Former Vice President of Finance, Treasurer and Controller of Grupo Dina
Senior management positions with AT&T, Citigroup, and Beatrice Companies
5
29
Lightbridge Senior Advisors
Sir Ronald Grierson,
Chairman of the Committee
•
•
•
Co-Chairman of the Blackstone Group’s International Advisory Board
Former Chairman of the General Electric Company plc (UK) 1968 -1996
Served on the Boards of Chrysler Corp., R.J. Reynolds, Nabisco, W.R. Grace &
Co., British Aircraft Corp., International Computers Ltd.
Former Managing Director of S. G. Warburg
•
Simon Murray, CBE
•
•
•
Kathleen Kennedy Townsend
Hans Blix, PhD
•
•
Former Lieutenant Governor of Maryland
Past deputy assistant attorney general in the Clinton Administration’s
Department of Justice
•
•
Former Foreign Minister of Sweden
Served for sixteen years as the Director General of the International Atomic
Energy Agency
Former chief weapons inspector and executive chair of the U.N. Monitoring,
Verification, and Inspection Commission in Iraq
•
®
Non-Executive Chairman of Glencore, the world's largest diversified
commodities trader
Chairman and founder of the General Enterprise Management Services
(GEMS) a private equity firm in Hong Kong, former Executive Chairman of the
Asia Pacific Division of Deutsche Bank, Former CEO of Hutchison Whampoa
Board member – Vodafone, Richemont and Cheung Kong Holdings, Ltd.
5
30
Advisory Services - Leadership
•
Ernie Kennedy
Senior Vice President, Nuclear
Deployment & Program Manager
Generation Consulting
•
•
Jon Johnson
•
Senior Vice President, Nuclear
Safety and Regulatory Expert
Regulatory Consulting
•
Kevin Yessian
•
Vice President, Consulting
•
Sandy McWhirter
•
Vice President, Consulting
•
®
33-year veteran of Westinghouse Electric Co. where he was Vice President for
New Plants and was in charge of the successful construction and installation of
nuclear power plants in numerous countries.
Past Vice President for Engineering at Westinghouse, where he directed all
design, analysis and safety evaluation for new nuclear power plants and new
product development
Former Deputy Director of the Nuclear Regulatory Commission’s (NRC) Office
of Nuclear Reactor Regulation
Oversaw inspection, licensing, assessment, and event response at all 104
commercial and 26 research nuclear reactor facilities in the United States
Regulatory agencies around the world have looked to Mr. Johnson for advice
on reactor safety design, operation, and oversight matters, including the United
Arab Emirates' Federal Authority for Nuclear Regulation, the Canadian Nuclear
Safety Commission, and the Japanese Nuclear Safety Institute
Former President and Chief Operating Officer of Holtec Manufacturing – Dry
cask nuclear waste container manufacturer
Former Vice President for nuclear supply management at Exelon Nuclear
Former UKAEA (United Kingdom Atomic Energy Authority) International
Marketing Director
Developed nuclear projects in locations such as Russia, Ukraine, South
Korea, and Romania
5
31
Nuclear Fuels Management Team
•
•
Primary liaison between Lightbridge and the Russian nuclear organizations
10+ years with Lightbridge
•
•
Four decades of high-level experience in the nuclear industry
Former Vice President, Nuclear Fuel, Exelon Generation where he was
responsible for procurement (uranium, conversion, enrichment and fuel
fabrication) for seventeen operating nuclear reactors - PWRs and BWRs
•
•
PhD candidate in nuclear engineering at Texas A&M University
Expertise in material aspects of the nuclear fuel cycle including fuel design,
fabrication, performance analysis and reprocessing technology
Norton Shapiro, PhD
•
30+ years of nuclear experience at Westinghouse and ABB Combustion
Engineering, including former Chairman of Westinghouse’s Technical
Review Committee
Sam Vaidyanathan, PhD
•
30+ years of nuclear fuel research and development experience at GE
Nuclear Energy
Russian Federation Office
•
•
Russian employees of Lightbridge International Holding, LLC - Moscow
2 PhD’s, 1 Master Degree In Nuclear Engineering from the Kurchatov
Institute
90+ Years combined experience in the Russian nuclear program
Experts in neutronics, thermal hydraulics, nuclear fuel performance and
advanced reactor and fuel designs
Andrey Mushakov, PhD
EVP, International Nuclear Operations
James Malone
Chief Nuclear Fuel Development Officer
Aaron Totemeier
Director of Fuel Cycle Technology & Fuel Fabrication
Alexei Morozov, PhD – Managing Director
Senior Nuclear Engineers
Valeri Kevrolev, PhD
Sergei Bashkirtsev
®
•
•
5
32
Advisory Services – Regulatory
Key Lightbridge Regulatory Expertise
• Regulatory Processes
• Inspection Processes and Practices
• Safety/Security Analyses Review
• Regulatory Organization
• Safety Culture
• Cyber and Physical Security
• International Nuclear Law and IAEA
Conventions
• International Cooperation
Agreements
• Regulatory Management and Quality
Requirements
• Operator License Requirements
• Proliferation Considerations
• Nuclear Licensing Issues
• Training and Qualifications
• Siting Characterization
• Import/Export Requirements
• Legal Considerations
• Design Certification Reviews and
Assessments
Lightbridge has unique international nuclear talent and experience to meet the
specific needs of clients
®
33
Advisory Services – Nuclear Generation
Key Lightbridge Nuclear Generation Expertise
• Project Development
• Supply Management
• Project Management
• Cost Analyses and Estimating
• Schedule Development
• Contracting
• Technology Assessment
• Nuclear Liability
• Quality Programs
• Export Controls
• Safety Analyses
• Commercial Licensing
• Organization Definition
• Safety Culture
• Risk Analyses
• Root Cause Analyses
• Licensing Engineering
• Site Assessments
• Construction Management
• Waste Management
• Operations Assessment
• Training
Lightbridge has unique international nuclear talent and experience to meet the
specific needs of clients
®
34
+1.571.730.1200
ir@ltbridge.com www.ltbridge.com
®