Good day ladies and gentlemen and welcome to the Lightbridge Corporation 2012 and fourth quarter business update and financial results call. At this time all participants will be in listen-only mode. (Operator Instructions). I would now to introduce your host for today's conference Gary Sharpe, Head of Investor Relations.

Thanks Bethany. Good morning ladies and gentlemen and welcome to the Lightbridge 2012 business update. By now, you should have received our earnings and update news release which was distributed after the market closed yesterday. You can view that on the investor relations page at Lightbridge website at ltbridge.com. Seth Grae, President and Chief Executive Officer will lead today’s call and in addition, the following executives are available to answer your questions. Jim Guerra, our Chief Operating Officer and CFO; Jim Malone, the company’s Chief Nuclear Fuel Development Officer; and Andrey Mushakov, Lightbridge’s Executive Vice President for International Nuclear Operations. Before Seth begins, let me 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 such estimates. The risks include that are not limited to the degree of market adoption of the company’s product and services 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. The company does not assume any obligation to update or revise these forward-looking statements whether as the result of new development or otherwise. You can participate in today's call two ways. First, you can submit questions for management in writing to ir@ltbridge.com. We’ll read your questions aloud and senior management will answer them. If you have already submitted a question, thank you. If not or if you have more questions, you can submit them at any time during the prepared remarks or doing the Q&A period. Next, after the prepared remarks, we'll open the lines for live questions. Telephone numbers and other details were distributed in two news releases that are posted on the Lightbridge Investor Relations website. Now, here is Seth Grae, President and Chief Executive Officer of Lightbridge.

Thank you Gary. Good morning everyone. And thank you for joining our conference call for our 2012 business update. Lightbridge advanced strategically and tactically on every business front in 2012. We believe the stage is set for continued achievement in 2013 because of the compelling value of our patented fuel technology and growing demand for the proven expertise of our consulting services. Lightbridge is well positioned as global recognition increases of nuclear energy as a source of long-term, efficient, base-load and carbon-free electric power. In our fuel technology business segment, achievement of strategic and technical milestones in 2012, support the momentum behind commercialization of Lightbridge's next generation fuel design. We summarized the company's progress in a news release that was distributed yesterday. We are most encouraged by two independent and respected third parties that validate the benefit of the company' fuel technology. First, a study by Siemens Industry Inc. a whole owned subsidiary of Siemens showed that our metallic fuel for 10% operate and a 24 month fuel cycle at existing pressurized water reactors can deliver highly attractive returns on invested capital to nuclear utilities even with conservative assumption on reactor conversion and regulatory licensing costs. Next, a peer reviewed article in the company's fuel technology was also published in December 2012 in the prestigious Nuclear Technology. The article highlights how our fuel is capable of increasing the power output and extending the cycle length of current generation light water reactors. The paper also reviews the unique geometry and composition of our metallic fuel and its application to power upgrades in light water reactors. Submitted in 2011, the paper was subject to rigorous peer review by top technical experts before publication this December. The company also made significant progress on key technical milestones related to upcoming tests and demonstrations of…

There have been a few questions that have come in over the interest. First one, how much equity or capital or shares do you anticipate issuing if you go forward with the proposed capital raise that you mentioned in your remarks?

Well we may or may not forward eventually with a capital raise. What we would be looking for between now and the end of the year is in the neighborhood of about $4million of extra cash in the company. We've got our only R&D expenditures, to commercialize the nuclear fuel technology. This is because the consulting division of the company is profitable at about 40% gross margin to the revenues from that division. So the new cash would be to commercializing the R&D technology. As I said in the remarks, there are three main categories for how we would arrange that approximately $4 million. One is we are working towards new consulting contract. If you say those are at about 40% gross margin overall, if we had $10 million in new consulting contracts this year that would provide the $4 million. We don’t know how those will work out, if we might get all or some of that $4 million, we'll know in the next few months due to consulting contracts. The second as I said is, transactions with one or more strategic partners, we began these discussions in 2012, they are ongoing. They could include cost sharing. They could include potentially forming some sort of JV entity that would take cost off our books for the R&D expenditures which is just as good as receiving money into us. Potentially they could include one or more of these large companies taking a small equity stake in Lightbridge and having an expiry shelf filing could help with that because large companies prefer to get registered stock If the combination of new consulting contract and the transactions with one or more strategic partners doesn't collectively meet the goal, then we could contemplate an equity raise which is something we are not working on right now. But that could be filling the gap there.

Here is a follow-up question from (inaudible) Investor. What's changed in your thinking? Because earlier you had said that you don’t plan an equity raise and now there is a potential. And then this investor is also asking for updated guidance on consulting projects that we've mentioned in the past.

We have been earning enough revenue through our consulting business before Fukushima that we clearly were not contemplating a raise. Now there are a lot of signs of the effective Fukushima are going behind us, the reactors are starting to be turned on in Japan. As I said, there are actually more reactors under construction and on order in plans now than the day before Fukushima around the world. In the United States there are reactors under construction which was not the case the day before Fukushima and countries that we had been working with Fukushima that went away that decided to put on hold their plans to look at nuclear power are now back. And that’s why we expect to know around the middle of this year on new consulting contracts. So when we look at that, the answer might be the things haven't changed. That there is enough consulting (inaudible) Fukushima and we don’t need to do a raise. What also has changed is that big companies in nuclear also pauses after Fukushima but now are back and engage in all this new growth and nuclear power and some of them might be entering into strategic arrangements with us, this year as well. So, don’t take it that I am saying we're doing an equity raise. I am saying, we're going seek about $4 million of new capital this year through a combination of new consulting contracts, work with major parties and strategic transaction and if there is a shortfall between those two, then we could look at other options that could include an equity raise, but we're not working on when now we may or may not get to that. And on the update on the consulting contract. As I said, parties that we were taking to before Fukushima are now back and engaged with us. Again in ways we think could lead to a contracts we have (inaudible) under their own schedules are supposed to hear back by about the middle of this year. The only country that’s not back, that we have talked to is Italy. We had been informed by Italy we would be the regulatory advisor, never got to a contract but have been told we were getting to the contract before Fukushima. They then had a referendum that canceled the nuclear power, so that one's not that, all the others are, plus the new ones. And even in Italy, we're now having some overtures that with the new government forming, there might even be possibility there in the future although not in the immediate term.

There was a question, it was a two part question from the same investor. Can you give any updated guidance as to the consulting revenue projections that we've talked about today and in the past.

I think the consulting in these last couple of quarters have been pretty flat and I think we have the confidence of at least that continuing out into the future with our contracts to renew and extend it until the end of 2014 in the UAE and under the terms of those contracts, the ability of the party is to continue extending those for a year or two at a time beyond that. The question will be the dealt on half of that with new contracts that we'll hear from in the middle of this year, we're dealing with very responsible governments, very responsible parties in those governments. I don’t think there will be much delay beyond the middle of this year. So, in around the June timeframe, we'll be able to give you a better answer on that but some of these contracts can be quite significant.

(Operator Instructions).

Does it make sense to slow capital expenditures in R&D until consulting revenue might be high enough to fund R&D organically.

If that’s a possibility, we're clearly not going to spend ourselves into oblivion. We control our spending. So what we would do is, our preference is because we haven't slowed the R&D program, is to continue it. Our preference is to bring n the revenue to continue it. If we need to slow anything, we can, but that’s not our plan. And I think $4 million among these multiple ways of getting the money including with new commercial contracts with consulting clients and with strategic partners is reasonable for us to achieve. And we have quite a bit of time. So, no, I don’t plan on doing that but that’s certainly something we could consider as well in addition to these three categories that we've talked about category and the money.

Our first question comes from the line of Marcus Perez with Great Western LLC. Your line is open.

I need to understand in chronological order here, exactly what the R&D is that the company has to do? My understanding is of course that you’ve been testing the fuel technology for the past several years, so, based on that, what further R&D needs to be done that’s going to require all these millions of dollars. I would think by now, with all the money that we spent that most of that fuel technology should be pretty much perfected. I mean this is what I am trying to get my mind wrapped around as to what further R&D needs to be done especially since it's my understanding that the manufacturers themselves are the ones that have to manufacture the fuel rod technology to sell it to the providers. So, if you could expand on that, I'd appreciate it.

And I think those comments are right, Marcus. The 10-K that we filed has four bullets discussing those expenditures. One is demonstrating the full scale fabrication process of our metallic fuel rods. We demonstrated making meter long rides, we made three plus long meter rods, and we'll be doing that. The second is performing in-reactor and outer reactor experiments starting this year that we've talked about it, the advance test reactor which is partly paid for by the US government as well as the mere reactor in Russia. The third is developing analytical models in 2013 to 2016 for our metallic fuel technology that can be used for regulatory licensing purposes. And the fourth is beginning the lead test assembly operations in the commercial reactors which if used at that stage would be paid for by the commercial parties. Let me for a put a little more color on this. I'll ask Jim Malone our Chief Nuclear Fuel Development Officer to jump in here as well.

Marcus that’s a good question and as I said, to capture the essence of it, but bringing a new fuel to market that some of our competitors are potential partners if you will have spent upwards of a $100 million trying to develop new fuel products and I have always been skeptical, I don’t know if you are aware that I have previously been (inaudible) responsible for fuels that have been in nuclear power plant. I think the Lightbridge estimates are somewhere around 30-35 million perhaps to get the fuel in place with a large portion of that being covered by our potential partners, is reasonable. The time is reasonable. We are looking to be able to complete our sample irradiation program by 2016. That will give us a wealth of information to support anything we need to do with respect to providing data to the nuclear regulatory commission, and also to tune if you will, the analytical model that are necessary to analyze the fuel from a point of view of (inaudible) and a thermal hydraulic performance, in other words how well it handles this transfer and how well it behaves in upset or off normal conditions inside the reactor. Getting through those pieces is key to getting the approval for a lead test assembly operation and I believe that we have a rational target for LTA operations in 2017-2018 and by the end of the second cycle of that irradiation, we believe that we'll have a clear opportunity to be talking with the utilities that are part of our nuclear utility fuel advisory board and each one of them to go ahead begin to order (inaudible) quantity of fuel from the fuel manufacturers that we are working with. I hope that I have clarified this for you.

Yes it does. One follow-up question if I can. You mentioned that in the worst case scenario that the United States with the sequester May not fund it well or whether it will or whether they don’t, Lightbridge is going to go ahead, has already made plans to have it tested in the mirror reactor in Russia. My question is, will the US assuming that, the tests are successful, will the US allow or recognize those positive tests and allow US reactors or companies to purchase the fuel based on those test results?

Part of the plan if you will, the project plan to irradiate samples in the MIR reactor is a detailed procedure that gives a step by step guide to how to prepare the fuels, how to irradiate the fuels and how to examine the fuels post the radiation. We will do destructive and non-destructive examination of the fuel post irradiation. We'll actually do some destructive examination prior to irradiation to make sure that the samples are exactly what we expected them to be, that they do truly represent the fuel that will be manufactured commercially. and in that way and having the rigorous quality assured procedures, stably and solid, we believe the NRC will have no trouble accepting the data especially when we can show them the experimental results and the results that have used by the cancellation package and analytical models showing that they are in disagreements with the NRC focus and assurance that they need to go ahead and allow us to proceed with the LTA program.

Yes, Marcus, I'll just add a couple quick points also on why we're confident the answer to that question is yes, and why that actually was our plan before the US government approved us adding the advance test reactor to the irradiation program we already had planned at that point at the MIR reactor in Russia. Why is that the Russian nuclear entities actually do sell nuclear fuel to pressurized water reactors in Europe, in major global pressurized water reactor markets already approved by major western regulators. The second thing is that Idaho National Laboratory itself which has the advance test reactor where we'll be doing testing, Idaho National at itself does radiation testing in the MIR reactor in Russia in addition to its own advance test reactor in Idaho. And the third is that, major western nuclear fuel companies like the US' Westinghouse do nuclear fuel testing in Russia and get NRC licenses based on the data we actually we involved in helping to introduce Westinghouse to (inaudible) institute in Moscow where they then started doing their own thermal hydraulic testing on their PWR fuels.

One last question if I can. Do you have any concern about China somehow getting a hold of the technology because China obviously is just a huge country that is expanding probably more rapidly than any other country in the world right now. And they have a history of taking technology and doing their own thing. How secure do you think our patents are going to be against China trying to take that technology and use it themselves without paying us royalty.

Yes, China is a huge market for us Marcus and we have very strong patent protection through our patent corporation treaty filing in China and worldwide. China is not known for cheating on intellectual property in the nuclear power area. In fact, it’s a major priority of Chinese leadership to further enter international nuclear markets, to enter nuclear fuel, nuclear reactor manufacturing in China for export. They’ve been very clear about this. So all of a sudden, they are becoming big proponents around the world of protecting intellectual property rights and nuclear, they’ve identified this as a major export market for China. Westinghouse as you know is deploying two AP1000 reactors right now at the Sanmen site in China, two AP1000 reactors at the Haiyang site in China, it looks like they'll add two more of each of those sites plus others around China and they are working quite well with China on intellectual property rights in nuclear. But finally, I'll say that our plant has into China right now, and there are many. But the main nuclear fuel supplier into China right now is the Russian nuclear fuel entities. And by partnering with the Russian nuclear fuel entities and having them sell fuel into China is a major pass with us and the Russians tend to be pretty strong on protecting their contractual rights when they sell anywhere. So, those are good friends to have for that.

(Operator Instructions).

There are some more questions have come in over the internet. This one segways off the question Seth just answered about China. The question says, does Lightbridge anticipate any additional consulting work from China or India given the large market for new build activities that these countries represent.

Do you want to take that?

The question is that, are there consulting opportunities in China or India for Lightbridge considering the size of the market.

Well, the answer is not at this time, those are not countries where we have consulting proposals pending. Those are countries that have deployed and operated reactors and tend not to be the kind of countries looking for outside consulting. So, it could be in the future and especially as those programs get into phases that they haven't been in before, like the decommissioning of their older facilities they already have, like the regulatory regimes to oversee that type of work, but not today.

Are there countries outside the US or Russia that Lightbridge could test its next generation fuel?

Yes.

Yes, the testing capabilities are very across the world. We like the MIR reactor because of its capabilities to be quite a typical PWR condition. However, if that were not available, there is the kind of low reactor in Korea, there are a couple of niche reactors operated by atomic energy Canada Limited as they (inaudible) laboratories, there is the (inaudible) reactor in Norway which is world famous for its capabilities to do the kind of work that we're looking at. The difference between this group and others is that the ones we're working with are relatively lower cost and the timing has also been our favor to deal with MIR and ATR. Dealing with the others, you get into a queue and you have to wait and then you have to wait also for the post irradiation examination. So it would be later progress and we're content right now with the facilities we have selected. However, if definitely we're to go along and we need something else, we have identified backup facilities.

Here is a related question or another question I should say. It appears that Lightbridge fuel will be deployed commercially in 2022 and the patents expire between 2028 and 2030. That’s a short window of protection. Can you elaborate on how Lightbridge plans to protect the revenue stream from competition when or if patents expire?

Well as you’ve heard on this call and previous calls, we keep having new patent filings that keep extending that quite out into the future and we intend to keep doing that as we move forward and get to our finalized design. So I don’t see that period overall shortening as a closing window. I think in fact that might actually be opening as we go forward in time. I'm going to ask Andrey Mushakov to step in on this as well.

I would like to answer is the fact, the idea we need to partner with fuel fabricator and the utility because the fuel fabricator and the utility in the United States will have to basically work together on a license and package for regulatory approval of the lead test assembly demonstration program. (Inaudible) fuel render would keep fabricate our release test assemblies and the utility will have to put those sleep assemblies into one of its hybrid commercial nuclear power plants. So, our current plan is to seek partnership arrangements with a fuel fabricator in the near term over the next two to three years and so those partnerships, our plan is to establish and secure some sort of a approach sharing arrangement or some other arrangement whereby Lightbridge's long term interest will be protected through either (inaudible) or some other sort of partnership arrangement for the fuel render irrespective of when our fuel comes online and becomes commercially available for sales nuclear power plant.

Let me circle back now to another question from an investor on the issue of joint ventures. The question is, are there any joint ventures that you're currently exploring?

Yes, we are. Let me again turn that over to Andrey Mushakov just to give a general comment because these are highly confidential discussions.

As was mentioned in the past, last year basically, we began discussions with fuel fabrication partners with fabrication demonstration for our metallic fuel technology in United States. So those discussions are still ongoing. Those are confidential discussions bond by among disclosure agreements. So we can't disclose in detail (inaudible) what the discussions are all about but, we do believe that we should be able to complete those discussions later this year and (inaudible) will be able to make public announcements, any potential arrangements that might come out of those discussions.

All right ladies and gentlemen, that appears to be the last question over the internet that we've gotten. Bethany?

At this time, I am showing no other phone questions as well. So this does conclude the conference for today. I would like to turn the call back over to Gary for any closing statements.

Well here is Seth Grae with a few closing remarks.

Well thank you again. As I said before and this bears repeating, momentum is building globally throughout the commercial nuclear power market. And Lightbridge is well positioned to serve this growth with a next generation fuel design and expert advisory services. At Lightbridge we're working here every day to translate that opportunity into shareholder value. If we can elaborate on any aspect of Lightbridge's operations, financial performance or strategic direction, our lines are always open at ir@ltbridge.com or telephone 571-730-1234. Until our next quarterly business update, thank you for your continuing support. Good bye.

Ladies and gentlemen this does conclude the conference call. You all may disconnect and have a good day.