Gary Sharpe - Head, Investor Relations Seth Grae - Chief Executive Officer Linda Zwobota - Chief Financial Officer Jim Malone - Chief Nuclear Fuel Development Officer Andrey Mushakov - Executive Vice President, International Nuclear Operations

Welcome to the Lightbridge Corporation Business Update and 2014 Financial Results Conference Call. My name is Vanessa and I will be your operator for today’s call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. I will now turn the call over to Mr. Gary Sharpe, Head of Investor Relations. Sir, you may begin.

Thank you, Vanessa and good morning everyone. Welcome to the conference call for Lightbridge’s business update and 2014 financial results. Our earnings news release was distributed after the market close yesterday and can be viewed on the Investor Relations page of the Lightbridge website at ltbridge.com. We also filed the company’s Form 10-K with the Securities and Exchange Commission. Seth Grae, our CEO, will lead today’s call. In addition, the following executives are available to answer your questions, Linda Zwobota, our Chief Financial Officer; Jim Malone, Chief Nuclear Fuel Development Officer; and Andrey Mushakov, Lightbridge’s Executive Vice President for International Nuclear Operations. 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 the discussion of our goals and 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, but are not limited to the degree of market adoption of the company’s product and service offerings, market competition, dependence on strategic partners, and the company’s ability to manage its business effectively in a rapidly evolving market. These and other risks are set forth in more detail in Lightbridge’s filings with the Securities and Exchange Commission. Lightbridge does not assume any obligation to update or revise any such forward-looking statements whether as a result of new developments or otherwise. You can participate in today’s call two ways. First, you can submit questions for management in writing to ir@ltbridge.com, let me say that again, its ir@ltbridge.com. If you have already submitted a question and we do have several, we thank you. You can submit them at anytime during the prepared remarks or during the Q&A period. And then secondly, after the prepared remarks, the telephone lines will be opened for live questions. Now, let’s get started. Here is Lightbridge CEO, Seth Grae.

Thank you, Gary and good morning everybody. Lightbridge’s success in 2014 and now in early 2015 in achieving strategic milestones is keeping development of our proprietary metallic nuclear fuel technologies squarely on track. By addressing the most important safety and economic issues facing the commercial nuclear energy issue, Lightbridge is well-positioned to realize high margin revenue streams from technology licensing fees and royalties from the large international market for nuclear field. The company is entering the seminal 3-year period in its development with technology-driven competitive advantages, strong interest from key potential customers, financial stability and liquidity from a November 2014 equity offering and accelerating momentum as pre-Fukushima activity resumes throughout the commercial nuclear energy industry. We believe that Lightbridge with our patented metallic nuclear fuel design is much closer to commercialization than new reactor technologies and is far superior to field concepts involving some safety related adjustments to conventional uranium oxide fuel rods. Lightbridge’s unique fuel design addresses the key challenges facing the nuclear utility industry today by one, improving reactor operating economics; two, increasing power output from existing and new build reactors; three, advancing reactor safety due to dramatically lower operating temperatures which increases safety margins; and four, enhancing proliferation resistance. I urge all of you to visit Lightbridge website ltbridge.com for more details including information on U.S. and international patents that protect our intellectual property, our projected future cash flows from licensing of our nuclear fuel and the published independent validation of our technology as well as other sustainable competitive advantages of our innovative metallic fuel design. The Lightbridge team is keenly focused on building on these advantages and momentum. Here is how we expect the process to advance in the near-term. Our fuel technology continues to attract strong interest from its initial customers, U.S. nuclear utilities. At…

Thanks Seth. In November 2014, we raised $5 million in gross proceeds from the sale of about 2.9 million units of common stock and warrants to a single institutional investor. In 2015, we will continue implementing a cost reduction program that we began in late 2014 aimed at significantly reducing our corporate overheads. We intend to use the results in cost savings for investment in our research and development operations that are expected to increase over the next 12 months to 18 months. Among the cuts was the closing of our Moscow office, domestic and international staff also were reduced. In addition, we have reduced cash compensation and replaced equity compensation. We believe these initiatives underscore the alignment of Lightbridge’s interest with our Board of Directors, management, and staff and for those of our shareholders. For the quarter ended December 21, 2014, Lightbridge’s net loss was $1.0 million or a loss of $0.05 per share on revenue of $0.4 million compared to a net loss of $1.2 million or a loss of $0.12 per share on revenue of $0.6 million in the fourth quarter 2013. For the year, the company’s net loss was $4.8 million or a loss of $0.31 per share on revenue of $1.3 million. In 2013 the net loss was $4.9 million or a loss of $0.37 per share on revenue of $1.9 million. Lightbridge’s revenues are derived from the consulting and strategic advisory services for foreign governments planning to create or expand electricity generation capability using nuclear power plant. We successfully accessed equity capital market in 2014 and we anticipate that additional equity capital will be needed to propel Lightbridge’s fuel technology to commercialization. Back to Seth to wrap up.

Well, thank you Linda. Momentum is building in the commercial nuclear energy industry, including at Lightbridge. On a weekly basis, more nuclear power plant construction projects and plans are announced around the world. Nuclear developments in China, India and Europe, is particularly robust. The global commercial nuclear energy industry is projected to grow rapidly as demand for reliable carbon-free base load electric power increases. There are currently 435 operating civil nuclear reactors in 32 countries around the world, with more than 70 reactors under construction according to the World Nuclear Association. By 2035, the International Energy Agency of the Organization for Economic Cooperation and Development projects a 60% increase in nuclear capacity from a combination of power operates and reactor construction. Increased activity in the commercial nuclear power industry coincides with high-end awareness of nuclear’s role in addressing global climate change. Unlike fossil fuel energy resources, nuclear is the only clean, sustainable and reliable source that addresses increasing demand for base load power. Lightbridge’s fuel technology remains well positioned domestically and internationally for more progress in 2015. Our near-term catalyst and long-term growth opportunities are clearly identified. We believe that our progress with these milestones will create tremendous value for Lightbridge shareholders and help solve key economic and safety challenges that the – that face the commercial nuclear energy industry. Now, let’s open the call to your questions. Remember, in addition to asking live questions by telephone, you can submit questions in writing to ir@ltbridge.com. We will pause while the operator reviews the procedures for asking live questions. Vanessa?

Thank you. [Operator Instructions]

Thanks, Vanessa. And while we are waiting for the queue to build, there have been several questions that have come in via e-mail to ir@ltbridge.com. Several investors have asked about industry support for Lightbridge fuel technology, I will paraphrase it. So, how is industry interest or support likely to manifest itself at this point in the fuel technology’s development?

I will ask Jim Malone, Lightbridge’s Chief Nuclear Fuel Development Officer to take the question.

Thanks, Seth. As you said in the opening remarks, the nuclear utility fuel advisory board comprising Duke Energy, Dominion Resources, Exelon and Southern Company has taken a very active role in working with us to support the fuel. They represent collectively 47% of the nuclear generation in the United States. That’s a very significant number. They are actively engaged with us suggesting things that might improve the fuel from their perspective, which we always appreciate. And they are willing to take the time, spend the money and efforts to do things like attend meetings with us as indicated with the Nuclear Regulatory Commission and with the Department of Energy. The Department of Energy meeting will be coming up next month and we keep an eye out on our investor page to see the summary of that meeting, which is going to be significant.

Thanks, Jim. Alright, the next question that’s come in via e-mail, Lightbridge has acknowledged that its fuel technology is valuable and that M&A overtures are probable at some point in the future. How can the company signal to the industry that Lightbridge is ready? How would that such a transaction be structured?

The nuclear power industry is a relatively small industry in terms of the numbers of companies. I don’t think Lightbridge or any other participant in this industry needs to do much to signal to let everyone else in the industry know what we are doing. They do know and many of us serve on advisory boards and other committees around the industry that bring us in direct contact with pretty much every major player in the world in nuclear power. What we are doing is going through our plan where we are going to have a letter from utilities to the NRC that we believe will be made public by the NRC showing industry support and interest in our technology that the NRC will begin licensing activities. Department of Energy is also showing interest in becoming involved with us, which would be very public. And we expect as we said that with the first commercial hype results of our fuel samples at the reactor and hauled in Norway operating under prototypical pressurized water reactor conditions coming out in 2017 to 2018 and at that point where the industry can seek confirmation of results of fuel operating under those conditions will be a triggering event for when we will have a major commercial arrangement with at least one major global player in the nuclear industry. Now, that might not be the M&A overture as alluded to in your question, that could be a cost-sharing arrangement that could be some other type arrangement with Lightbridge that ultimately potentially could lead to M&A type activity. But in the end, we are preparing to be a licensing company, we do intend to operate this company and bring in very large recurring annual revenues from licensing this technology to the reactors around the world.

Okay. Here is a question that’s just come in from an institutional investor. It’s related to that last question is this what is the status of potential financial support from a nuclear fuel fabricator?

Well, right now what we have as we mentioned in the opening remarks is support from utilities, which buy the fuel from the nuclear fuel fabricators and these utilities are starting to contribute in-kind to the effort, including sending experts to our offices to assist us that we are not paying for, including sending experts to meeting with U.S. government officials, particularly at the Department of Energy next month. We don’t think this is the right time and we don’t have offers from fabricators for financial support of the project. The fabricators will sell fuel to utilities and the more utilities expressed their interest in the fuel, the more of that interest in the fabricators and we are already seeing that in some tangible ways, but in the end, we expect to be in plan to be a nonexclusive licensor to multiple fabricators around the world. So, we need to be careful that we don’t create conflict of interest in how we structure arrangements with any one fabricator.

Alright. Here is a question from an individual investor, has Canadian Nuclear Laboratories signed the Phase 2 agreement?

Canadian Nuclear Laboratories signed the Phase 1 agreement in October and that work has all been completed successfully. What was regarded as the Phase 2 agreement to be followed by the Phase 3 agreement by around the middle of this year are instead being combined into one agreement for that work, which we expect to sign most likely within weeks, but we are very close to the final signature on that. And that will cover the nuclear fuel fabrication in Canada and then we will have the testing in the reactor of that fuel in Norway. And as we said, the Department of Energy in the U.S. has already granted the nuclear export control approvals for all of that work in Canada as well now for that work in Norway.

Alright. The e-mail questions are focused on the work in Canada. Here is another. What can be done to demonstrate progress in Canada preferably sooner than later? And a related question, are there any risks that, that work won’t be finished?

Well, I will start to ask Jim Malone pickup. I think the first sign of progress you will see is the announcement of the signing of the combination of Phase 2 and 3 agreements. Then you will see starting fabrication of fuel without uranium enrichment then with uranium enrichment that will be transported to Norway for irradiation in the reactor. There will be several intravenous steps that will be quite material and quite public. And I will ask Jim to comment on that.

There are several steps as Seth indicated to the entire program of fuel sample fabrication at the Canadian Nuclear Labs they will basically pilot the process to develop the right capability on the right settings if you will to tune their presses and their extrusion processes to make sure that these samples are going to be truly representative of the fuel that would be placed into a power reactor. So that will take some time. In the world of engineering there is a little bit of patience required as you work through the concept to get it to the repeatability stage. And by that I mean the samples will come out consistent with all of the properties as expected and we will be developing some measurement techniques to verify those properties on the pre-irradiated fuels that if we know what’s going into the test reactor is the right stuff and that the – therefore the results we get from the test reactor will be accurate.

Alright. Thank you, Jim. Here is another question from an institutional investor. Please review the status of the prior ongoing and future work in Russia, are any additional Russian scientists being brought on staff by Lightbridge?

The short answer to that last part is no, but I will start and then I will ask Andrey to add more color to the question. Lightbridge over course of many years had a very good and very productive relationship in Russia. And the work that was done in Russia was very valuable to our company. We were originally taken to and guided to Russia by the U.S. government which had programs with Russia to help encourage cooperation in the nuclear energy areas between the two countries. And we have worked with U.S. National Labs and with the Department of Energy and with the State Department to – under their cooperation programs. I would say our work in Russia was a world-class quality, pricing that was superior to that which we could have obtained elsewhere and very much moved forward that the program. When it came time to move to this multi-year commitment to fabricate fuel now not just for research reactors and test in research reactors that we have done in Russia, but for a much of larger research reactor that could operate under commercial reactor conditions, we made a decision to move the project out of Russia and this was before the worst of worsening relations relating to Crimea and Ukraine. This was the decision that we made partly sort of seeing the writing on the wall committing this company to a multiyear, multimillion dollar program and Russia would be too fraught with risk of relations between the countries potentially interrupting it. So, we are going forward in Canada and in Norway, which as we have said have virtually zero political risk including with each other and they worked very well together and with the United States. We have already received the U.S. government approvals. It turns out that had we decided to go forward in Russia, it wouldn’t have worked that our export license application relating to the work in Russia has had all the approvals from the U.S. side except the final signature of the Secretary of Energy, which he cannot give, because Russia for over a year now has not given what’s called the non-proliferation assurances needed from a foreign government for any nuclear export control application relating to Russia from the United States not one from any company at all. And we don’t know when or if those will be forthcoming I think that is the political issue between the countries. So, even had we decided to go forward in Russia we would now becoming to a standstill on the work there. So, let me turn it over to Andrey to comment a little more in detail of what was done in Russia and perhaps what we would have done there and why we shifted the work.

I think – what I want to add here is that the technology that we currently are developing, the metallic fuel designs are derived through our based on the Russian, very successful experience in the Russian icebreaking reactors that use the similar type of metallic fuel for many decades.

Similar composition of the metallic.

Similar composition, but the difference – the designs we currently have and done are different from the ones that they used. But the material composition was very similar. So we have a lot of confidence in the performance of our metallic fuel because of that Russian icebreaking reactor experience that we have seen. The sort of the political and geopolitical risks associated with Russia that started to really manifesting themselves to the fullest extent last year really accelerated our decisions to move away as quickly as possible out of Russia because we couldn’t really risk our entire critical path program on any potential delays, political risks, etcetera associated with deteriorating political relationship between the United States and Russia. So as Seth mentioned we started looking at other sites and facilities before 2014, before all the ramps have unfolded in Crimea and Ukraine, but those ramps really kind of signaled that our strategy was correct and the switch to alternative facilities was the right strategy for Lightbridge moving forward upon searching for critical path activities. In terms of tests in Moscow or in Russia, consultants, etcetera, we still utilize a handful of highly experienced valuable technical consultants, they are just consultants. So we pay them upon deliverables we have paid for a while. They do some fuel performance modeling work for us that’s very valuable that they have actually been doing for the last 5 or 7 years. So, they are still continuing with those individual contractors and that’s the extent of the work that is still ongoing with respect to Russia, do not currently have any plans to do any kind of tests or experiments or any significant amount of R&D work in Russia.

Thank you, Andrey. Alright, here is a question related to ongoing development in fuel from an individual investor is will new or additional licenses or permissions be needed, send or release the first fuel sample to Norway for testing, if so what is the process and timing to achieve these permissions?

The fuel samples will not be sent from the United States. They will be sent from Canada to Norway. And this type of thing is done frequently. You have to remember now with the reactor coming towards the end of its license in Canada, the Chalk River site will be a place that fabricates nuclear fuel samples, but won’t have a reactor. And at Norway they have a reactor, but they don’t fabricate nuclear fuel samples. But – so these two actually go together very well. In terms of U.S. export control under what’s Volume 10 of the code of federal regulations under Part 810 which is the Department of Energy regulations, we have already received all export clearances for everything for both Canada and for Norway. And that’s done. From 10 Code of Federal Regulations Part 110, that’s the Nuclear Regulatory Commission regulations, there is a need for an NRC license under Part 110 for any shipment that includes U.S. content. So the plan in Canada is that they are actually going to be using Canadian content or non-U.S. content in the fuel that would include uranium enrichment from Europe and as a fall back they also have uranium enrichment from Russia in Canada as we do in the United States. There is also a possibility of using U.S. uranium enrichment. So, for that, we are going to go ahead and obtain a license under Part 110 from the NRC just in case by the time they start shipping fuel in late 2016, there is a need to use any U.S. enrichment, but it’s very unlikely that, that will even happen. It will even be required, but we are going to get that, because potentially longer term, it’s a good asset for our company to get.

Okay. Here are some other questions that have come in over the Internet via ir@ltbridge.com. First one, what is the annualized burn rate for your research and development expense?

Okay. Andrey, you want to take that?

Sure. For 2014, our R&D expenditures amounted to $1.5 million. For 2015, as we mentioned earlier, our R&D expenses are expected to increase and right now we estimate those R&D expenses to be over $2 million, somewhere around $2.2 million to $2.5 million.

Which would be more than half of the company’s overall budget.

That’s correct. R&D expenses and that of course would become more than 50% with our overall cash expenditures 2015.

Next question, a similar line, how much have SG&A expenses been reduced in 2015?

Well, that seems like a logical follow-on, Andrey if you want to take that.

Yes. Compared to 2014, the projected amount of corporate overhead expenditures in 2015 is expected to be reduced by at least 35% on a cash basis.

Over $1 million.

Right, over $1 million.

Alright. Operator Vanessa, would you please remind our participants how to ask live questions if they have any, one more time.

Yes, thank you. [Operator Instructions]

Well, Vanessa it doesn’t appear so, there are any additional questions in the queue.

I do not have any questions over the phone either.

Alright. Then let’s turn it back to Seth for a few closing remarks.

Well, thank you. Those were very thorough and excellent questions. We appreciate you are sending them in. Until the next conference call, our lines are always open at ir@ltbridge.com and 1571-730-1213. We hope you share our optimism for Lightbridge’s improving position in the rapidly expanding global nuclear power market and the opportunity to serve that market with our fuel and thank you very much everybody and goodbye.

And thank you, ladies and gentlemen. This concludes today’s conference. We thank you for participating. You may now disconnect.