Lightbridge (LTBR) Posts Narrower Q2 Loss

Lightbridge (NASDAQ: LTBR) reported Q2 EPS of ($0.08), versus ($0.11) reported last year. Revenue for the quarter came in at $300 thousand, versus $300 thousand reported last year.

2015 Second Quarter Business Update

• Lightbridge expects increased demand for its advanced metallic nuclear fuel, due to incentives in the U.S. Environmental Protection Agency Clean Power Plan, which was published in early August. The plan offers credits to utilities for reducing greenhouse gas emissions by boosting generation from existing nuclear power plants. The Clean Power Plan calls for a 32% reduction from 2005 levels in carbon pollution from the utility power industry by 2030. Depending on fuel cycle length, Lightbridge's proprietary metallic fuel can provide 10% to 17% more power from existing pressurized water reactors (PWRs)."Compared with conventional nuclear fuel, only Lightbridge metallic fuel can offer meaningful power uprates and longer fuel cycles that will provide the lowest levelized cost per megawatt hour on the grid," Grae said.

• In April, nuclear fuel managers at Dominion Generation (NYSE: D), Duke Energy (NYSE: DUK), Exelon Generation (NYSE: EXC) and Southern Company (NYSE: SO) asked the U.S. Nuclear Regulatory Commission (NRC) to prepare to review Lightbridge’s patented fuel design, in advance of an expected application in 2017 to use the Company’s fuel in a U.S. commercial reactor as early as 2020 (http://pbadupws.nrc.gov/docs/ML1513/ML15134A092.pdf). The NRC relies on communications from U.S. utilities to adjust Commission staffing levels and budgets in anticipation of regulatory review of licensing applications.“The importance of this milestone cannot be overstated because without support from utility customers, the NRC will not allocate resources to a regulatory review,” Grae said.

• During the second quarter, the Company completed negotiations on a binding, 10-year service agreement with the Institute for Energy Technology, operator of the 25MW Halden research reactor, southeast of Oslo, Norway. The agreement was signed in early July. Beginning in 2017, Lightbridge expects its fabricated fuel samples to undergo full irradiation under prototypic commercial reactor operating conditions in a pressurized water loop of the Halden reactor. The project’s pre-irradiation scope includes irradiation-rig mechanical design, detailed neutronic and thermal-hydraulic calculations, and safety analyses with necessary regulatory approvals. The initial phase of irradiation testing is expected to continue for about three years to reach the burnup necessary for insertion of lead test assemblies (LTAs) in a commercial power reactor. The final phase of irradiation testing necessary for batch reloads and full cores operating with a 10% power uprate and a 24-month cycle is expected to take an additional two years and be completed while LTAs have begun operating in the core of a commercial power reactor. Post-irradiation examination of Lightbridge’s partially irradiated fuel samples also is planned to begin at Halden in 2018.“Our agreement with IFE completes one of the key critical path milestones we have set for 2015 and represents a major step toward on-schedule, lead test assembly demonstration of Lightbridge’s advanced metallic nuclear fuel in a commercial power reactor in 2020 to 2021,” Grae said. “These irradiation tests will generate quantifiable data needed to support licensing of Lightbridge fuel by the NRC and ultimate deployment by nuclear utilities in commercial reactors around the world.”

• Meetings have been held with large companies that fabricate nuclear fuel for the global market. “We planned to have a teaming agreement in place with one of these companies in 2017 or 2018 but current progress may lead to such an arrangement sooner than expected,” Grae said. “These meetings are an important facet of the Company’s market strategy, whereby fuel fabricators prepare to supply Lightbridge’s fuel to the global market, while utilities continue to validate the demand for our fuel for use in their reactors.”
• Negotiations have advanced to the final stage on a comprehensive agreement between Lightbridge and Canadian Nuclear Laboratories (CNL), a wholly owned subsidiary of Atomic Energy of Canada Limited, for fabrication of Lightbridge fuel samples at CNL’s Chalk River, Ontario facilities. An initial cooperation agreement was signed with CNL in October 2014. The comprehensive agreement involves development of a fabrication plan in 2015, fabrication and characterization in early 2016 of prototype fuel rods using depleted uranium, to be followed by fabrication in late 2016 of irradiation fuel samples using enriched uranium.“This agreement is the last key contract for critical-path work scope relating to research reactor irradiation under prototypic commercial reactor operating conditions and keeps us on our development timeline,” Grae said.

• The Korean Intellectual Property Office approved and issued to Lightbridge a key patent covering the Company's multi-lobed metallic fuel rod design and fuel assemblies. Patent No. 10-151116 – “Nuclear Reactor (Variants), Fuel Assembly Consisting of Driver-Breeding Modules for a Nuclear Reactor (Variants) and a Fuel Cell for a Fuel Assembly” - expands international protection of Lightbridge's proprietary fuel technology.“The South Korean patent is another important milestone in the development of our fuel assembly designs for existing and new build pressurized water reactors," Grae said. "Korea represents a significant potential market for Lightbridge metallic fuel with 24 operating commercial reactors and an additional eight reactors either under construction or planned by 2035. South Korea also is an active exporter of nuclear power reactors, marketing its units in the Middle East, North Africa and Southeast Asia. The South Korean Ministry of Trade, Industry and Energy aims to export 80 reactors worth $400 billion by 2030.”

• The Company entered into an at-the-market issuance sales agreement (ATM) with agent MLV & Co. LLC to sell up to $0.5 million of shares of common stock from time to time.“The ATM program is one element of our initiative to secure new financing or additional sources of capital, depending on the capital market conditions, over the next 12 months,” Grae said. “Other primary potential sources of cash available to us are strategic investments through alliances with major fuel vendors, fuel fabricators or other strategic parties during the next three years.”

For earnings history and earnings-related data on Lightbridge (LTBR) click here.

You May Also Be Interested In

• Philip Morris (PM) beats Q1 earnings, revenue estimates; issues upbeat guidance
• NVR, Inc. (NVR) Tops Q1 EPS by 1244c
• Fisker (FSR) files form 10-K, sees more job cuts, reiterates going concern doubts