Lightbridge Corporation (NASDAQ:LTBR) Seth Grae, Chairman of the Board & CEO Gabelli Waste Symposium

Yeah, sure. So, Lightbridge is different from a lot of other advanced nuclear companies you hear about. What many companies are doing is developing new advanced reactor ideas around old nuclear fuel concepts. Lightbridge is developing completely new nuclear fuel, and this fuel can work in existing reactors as well as many new ones. We started by talking with major utilities that own and operate large reactors, which provide almost all nuclear power in the world, and heard they would like to increase capacity factors and power output while enhancing safety further, which they cannot do with current fuel. So, we are the only company that has really reimaged and redesigned fuel for reactors. We have made tremendous progress, with fuel samples in testing at Idaho National Laboratory in the advanced test reactor. We are advised by utilities and in contact with those wanting these advantages. We have grown with many new engineers, and we think we are rendezvousing at the right time, when the world needs more reliable power and lower cost per unit of electricity generated. That is what we are doing as a company.

Right. Well, we believe it applies to both. Our work focuses more on the larger reactors, but there are two Department of Energy funded grants through their Nuclear Energy University program, one at MIT and one at Texas A&M University, looking at the Lightbridge fuel for NuScale's SMR. We have also done preliminary work for other SMRs. From what we have seen, we believe it would apply to pressurized water reactor SMRs like NuScale's or Rolls-Royce's or Holtec's, or boiling water type SMRs like GE Vernova or Hitachi's. But our focus is on large pressurized water reactors, which comprise the overwhelming majority of all nuclear power in the world and virtually all reactors under construction or on order, and I think will for a long time. In terms of how much power outbreak, some testing is ongoing, and we think for existing reactors, for many, we could do up to a 10% power increase while lengthening the fuel cycle from 18 to 24 months, so reactors shut down less often and produce power more often. That is without changing the steam generator.

Now, a lot of reactors are changing steam generators, particularly as licenses are extended. They are getting 20-year license extensions, and it looks like many reactors will run for 80 to 100 years, and I think new ones will too. When you change a steam generator, I think we will be able to get more than a 30% increase from switching to this fuel with a steam generator that can handle that capacity. So, possibly around a third more power. What we are seeing in executive orders from last May and the recent initiative from the US Department of Energy is a big focus on power increases to existing reactors. I do not think anything can come close to what Lightbridge's fuel technology could do to achieve those goals. We are also seeing a focus on reopening closed reactors, finishing partly built reactors, and I think Lightbridge fuel will help justify economics for those things and make projects more powerful. Particularly, as the US has a shared goal with many countries to triple nuclear power by 2050, and domestically to quadruple by 2050, the lower hanging fruit starts with reopening closed reactors, finishing unbuilt reactors. But for all, including operating reactors, significant power uprates are needed. There is a real focus here in the US, and I think it will spread worldwide, with Lightbridge at the center.

Well, you know, we have always said that our competition is anything that can provide power. And I use the word power and not energy deliberately in that power is available at the full amount all the time. Energy can vary in the amount of how much is available at any given time, like from wind or solar, or not be available at all at times. So for example, an Uber that arrives at a random time or might not arrive at all is less valuable to you than an Uber that you know will arrive at a certain time. And it is like that with power. Reshoring of industry, building out data centers, especially for AI that need massive amounts of power, can only happen if you know the power will be available or no one will make that investment. We used to see things like competition for Amazon's supposedly called HQ2, where states and counties would compete by giving tax breaks and other incentives. Now it starts with do you have the power? If you do not have the power, the company is not coming if it cannot be guaranteed for a long time. If you do have the power, then you can compete for incentives. We are seeing a lot of companies, including with data centers, going offshore where they are being guaranteed power. And I am in California today for a series of meetings, and I have been in nearby states in Arizona, Nevada, that actually provide a lot of California's power. Not because that was the business plan of their utilities, but because they have excess capacity.

But we are also seeing that a lot of data centers are going to be deployed in these nearby states, including Arizona and Nevada. And I think that excess capacity will be reduced and ultimately disappear. I do not see California making plans for how it is going to make up for that. I think that is going to be a big problem here in California eventually. But I also think one reason why the data centers are going to those states is they are being guaranteed the power, particularly with large nuclear reactors in Arizona that are now powering the Los Angeles area to a good extent. And really, it is AI more than anything that is just adding these tremendous power needs fairly rapidly. And will. People I talk to at utilities in the US and around the world are really under pressure to figure out how they will increase the supply of power and they are under pressure not to increase the price of power. And those two things can go together, particularly with increases of supply at a lower cost point and where you have hyperscalers and data center companies willing to pay a premium for power they know they will get for a long time. Like Microsoft is paying about a 40% premium over wholesale power prices to lock in 20 years of supply from reopening the Three Mile Island unit one reactor in Pennsylvania to power data centers in the northeastern US in what is called the PJM area. And that 40% premium they are paying to Constellation that operates that site can be used to help provide more power. This kind of virtuous cycle that Constellation can use that added revenue, that higher price point. And I think that states that are adding more power will end up doing better. It is the lifeblood of all modern industry.

And Lightbridge again, I think, will be at a big center of this because you just cannot get to that level of reliable power in a massive amount of it without significantly increasing the percentage of nuclear within the diversified energy mix. We will have hydro that can vary in power, wind and solar, and even natural gas and coal have much lower capacity factors than nuclear. Coal plant can shut down and we have seen it a lot with ice on the tracks, etc., and not delivering the daily amounts of coal. And of course there are the emissions issues and natural gas plants have shut down during the polar vortexes and other freezes and issues that stopped the gas from flowing through the pipelines and as soon as the gas stops flowing instantly the power plant shuts down. Nuclear reactors can have years of fuel on site and operate through just about anything. And so, you know, it really is the nuclear reactors that are saving things in that I will give you one quick other example. So, France has the highest percentage of its electricity from nuclear in the world. And had France followed Germany's model and shut down their nuclear and instead relied on Russian natural gas, I think Europe could not have gotten through the winters and could not have stood up to Russia without buckling in supporting Ukraine. And I do not think you would have seen Norway and Sweden join NATO had Europe not had as much nuclear. And you are seeing in the current conflict that one attack from Iran on one site in Qatar shut off 20% of global liquefied natural gas exports for a long time. Again, that cannot happen in nuclear. You could have years of fuel at every single site where reactors are. And fuel lasts years in reactors that is already placed into the core, but you could also store a lot more at the plant. What you cannot do with other fuels. So we are very bullish on nuclear and in particular on Lightbridge's place as nuclear develops.

Well, the installed base is 94 operating large reactors in the US and more to come particularly as three reactors are in the process of reopening before even building new ones. And that is out of over 400 operating large reactors in the world that we believe could use Lightbridge's fuel. And the market if that does triple worldwide in the next 24 years but between now and 2050 and quadruple within the US the market opportunity is very significant. Now, we are taking this one step at a time. We have produced fuel samples. We have samples of this fuel material in the advanced test reactor at Idaho National Laboratory. We expect to have programs demonstrating segments of our fuel rods in the coming next few years in reactors powering cities in the US and then full fuel rods and what is called lead test assemblies which really is the final commercial product being demonstrated in commercial reactors. But unlike a lot of companies that are developing reactors that are really just focusing as we see it on the NRC some of those companies on getting the Nuclear Regulatory Commission licensing. We are of course doing that. But we are really focusing on listening to the voice of the customer, too. The utilities.

And some of the utilities have different requirements than the NRC does in addition to what the NRC requires or something that goes beyond that. The industry has its own group, the Institute of Nuclear Power Operations known as INPO. The utilities belong to and help drive very strong safety and operating results. And so it is very important to us to constantly be listening to the voice of the customer, getting their input, and making sure we are developing something that we think they are really going to use commercially.

Yeah, I think it is a great question. And first of all we have engineered in, we have designed in enhanced safety and non-proliferation by design. So it is like with cars in addition to having speed limits, having anti-lock brakes, having crumple zones, having systems in the car itself that enhance safety. And as nuclear say triples around the world and we add over a thousand new large reactors or thousands of small and micro reactors in that mix to triple nuclear around the world. It is very important that we have enhanced safety and non-proliferation by design in those thousands of reactors around the world. And not only rely on an inspection regime on a safeguards regime, which is a little bit like relying on speed limits. And I think that also there are economic benefits to that. Right now utilities pay a lot of money for nuclear safety grade equipment that could potentially be commercial grade with Lightbridge fuel because of the serious safety benefits of the fuel. That could save the utilities additional money every year and increase their profitability. And we think that one of the things that keeps nuclear acceptable in the US and around the world is its safety and non-proliferation record. So, we are looking to enhance that even more.