Circular T336, Idaho’s “Wonder Vein” and the $2 Company Leading the “New Era of American Power”

Soliving Christian DeHaemer's Thorium Teaser Pitch

Christian DeHaemer has a new ad out about a revolutionary new form of energy that he says will net you massive gains thanks to a “wonder vein” energy discovery in Idaho.

It’s really not about this “wonder vein,” though — the discovery of this fuel in Idaho is perhaps a big deal for other companies who might develop mines in the future if demand for the material increases, but it’s about the potential customers for this fuel.

Which is a lot of talking around the point, right? Sorry, the short version is that DeHaemer is pitching a thorium company but not a thorium miner or anyone who actually owns any of that “wonder vein” in Idaho. Thorium is a potential nuclear fuel that is often touted as a way to reduce or eliminate problems of nuclear proliferation, waste disposal, and meltdown risk.

We’ll give you a little taste of the ad here to get you started:

“Classified report known as Circular T336 reveals new energy source that could net you $110,850 in two years’ time

“Idaho’s game-changing “Wonder Vein” has remained buried for over 200 years… Now this confidential brief reveals the truth about the energy discovery that’s sending shock waves through the market

“Most residents of the U.S. Northwest only think of the Lemhi Pass as a pristine hiking destination.

“Yet what the residents of Idaho — and most folks in America — don’t realize is that the Lemhi Pass has actually become a foothold in a billion-dollar energy initiative that could make you $110,850 richer over the next two years.

“And mind you, this has nothing to do with wind, solar, or geothermal energy… and it doesn’t involve coal, natural gas, or even oil.

“Instead, American geologists and scientists have been hard at work on what amounts to the ‘Holy Grail’ of energy: clean, abundant, inexpensive, oil-less power.”

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The ad is accompanied by lots of photos of the Idaho mountains that hide this store of thorium, but no one is currently trying to mine it as far as I can tell.

The thorium story has been an appealing one for a long time, and Orrin Hatch and Harry Reid tried a couple times to push through bills that would have pushed for more thorium reactor testing — both bills, in 2008 and 2010, died in committee, despite the fact that many enthusiasts continue to say we’re on the verge of the real “age of thorium” — the story was well summed up by rare earth elements guru Jack Lifton here, but that article is from 2009 and not a lot has changed to move thorium forward. At least in the US.

Here’s more from Christian DeHaemer, in case we lose our lust for the magic of thorium…

“Put simply, it’s an element, first discovered in 1828 by a Norwegian priest who named it ‘thorium’ — after the old-world god of thunder.

“One of the largest deposits of this element sits in America, right underneath the Lemhi Pass in Idaho.

“And as Circular T336 recently revealed, this thorium-rich plot of land has been dubbed the ‘Wonder Vein.’

“…. that’s exactly what this land holds — in plentitude. 185,000 metric tons of it, to be exact.

“And the “Wonder Vein” isn’t the only Idaho plot that holds excessive amounts of thorium, either.

“In fact, there are 218 other easily accessible veins spread across the Northern part of the state.”

Thorium has been talked up a lot, and for years, as a safer nuclear power source than uranium… and DeHaemer quotes a few of the fans who have mentioned it:

“Utah Senator Orrin Hatch recently weighed in on this matter, saying, ‘We have abundant domestic supplies of thorium… We certainly want to make sure it is a viable option in our nation’s energy mix.’

“Ed Cowle, an expert in the mineral field, stated, ‘Thorium will prove beneficial to the future of nuclear energy, and through our work we know that the U.S. has a high-quality thorium reserve fully capable of meeting demand.’

“And Bruce Blair of Global Zero (an initiative aimed at the elimination of nuclear weapons) labeled this new thorium surge as ‘the most promising innovation on the horizon for reducing the proliferation risk of a flourishing nuclear power industry.'”

The Hatch quote is from the most recent time he proposed legislation to push thorium, in 2010. Ed Cowle is the CEO of U.S. Rare Earths, one company trying to explore and possibly develop the reserves in the Lemhi Pass (more on them in a bit — no, that’s not the stock DeHaemer is teasing). DeHaemer also cited these quotes in a free article he wrote a few days ago about thorium.

And the big picture argument from the teaser pitch is this:

“And since it takes 200 tons of uranium to produce the same amount of energy as just a single ton of thorium… the cost implications are enormous.

“If you do the math, you’ll find it takes nearly $2 million worth of uranium to produce the same energy that $72,560 of thorium can produce.

“Bottom line: thorium is 99.9% cheaper to mine than uranium.

“But perhaps the most staggering fact of all is this: Scientists have found that due to its vast availability, there’s enough thorium (as I mentioned earlier) to produce more energy than all of the world’s coal, oil, and power plants combined.”

No, there hasn’t been a global hunt for thorium reserves, nor a lot of bulk mining of the stuff — as far as I can tell few folks are spending money on finding or producing thorium at all, frankly, because no one has (as yet) been clamoring to buy it in mass quantities.

So perhaps it’s good that DeHaemer isn’t pitching a miner — here’s more on what he thinks you should buy:

“However, the big-time payouts won’t come courtesy of miners, exploration companies, or refiners like you’re probably thinking…

“Actually, thanks to a just-awarded patent, there’s one small company that’s primed to pay out bigger gains than anyone — up to $110,850 (if you get in early enough)….

“Patent #8XXXXX917
“A New Era of American Power

“Just recently — in February of 2014 — the U.S. government approved what has been described as ‘the single most important patent.’

“The patent in question was given the number 8XXXXX917, and it holds the key to changing how we view energy around the globe….

“… not only does this small, $2 company have all the thorium it needs… it also has the patent that secures its right to a leading technology that promises to revamp the way we supply the world with power.

“Thorium Technology = Pay Dirt
“And here’s the company that’s leading the way.”

So who is it? According to the Mighty, Mighty Thinkolator this is Lightbridge (LTBR), which has for a long time been the one company associated with thorium that’s not a miner. They specialize in consulting on nuclear power in general and, at least in the past, on next-era thorium reactors… though the word “thorium” isn’t featured very prominently on their website these days and they don’t usually mention it in their press releases.

Lightbridge is currently not focused on thorium to a great degree, from what I can tell, their commercial focus is on the next generation uranium fuel cell design that they think can feasibly be commercialized by 2020 — the design seems like it might apply both to thorium and to uranium, but presumably the thorium implementation is further off because the word “thorium” doesn’t come up in their latest investor presentation or factsheet.

The “secret” patent they were awarded earlier this year, by the way, is number 8654917 and you can see it here if you like.

Lightbridge’s priority seems to be continuing to renew their consulting agreements and get additional work in support services, they’ve had some success over the last few years in South Korea and in the Middle East in that regard and, more importantly, to keep advancing their materials testing with the goal of getting their fuel designs into a test reactor over the next several years, leading eventually, they hope to wide adoption of their fuel designs in existing reactors, which then would bring in royalties on the use of those designs.

Here’s how they put it in their last quarterly press release:

“As Lightbridge research and development activities increase over the next two to three years, the primary focus will be testing and demonstration of the Company’s metallic fuel technology for Western-type pressurized water reactors (PWR), he said. The main objective of this research and development phase is to prepare for full-scale demonstration of the Company’s fuel technology in an operating commercial PWR beginning in 2020.”

So 2020 is the optimistic take on any hope for future commercial-scale royalties — “research”, “development”, “testing” and “demonstration” are code words for “not making money for a while.” The stock shot up in value in February when their most important patent (according to them) was approved for their core fuel design, but they won’t be making any big revenue on that fuel design for many years as far as I can tell… that’s why it’s just a $40 million company even after the stock climbed recently to near $3 a share.

They don’t lose money all that quickly, with a burn rate of one or two million dollars per quarter these days, so they may not have to do anything super dramatic in the near future… but they don’t have much money in the bank, either — so they’ll need to either sell some more shares (something they’ve excelled at in a decade as a public and profitless company, going from about two million shares outstanding in 2005 to 15 million now without ever posting an operating profit) or make some deals that bring in cash faster than it flows out the door, and that will probably have to happen this year.

So… maybe the actual patent award will help spur things a little bit, and they are talking with Babcock and Wilcox about their joint plans to fabricate the fuel for testing, but it’s pretty hard to look at LTBR shares and see a need for urgency.

The one company really talking up the Lemhi Pass and future mining (or rather, reopening of mines — there were thorium mines in the area that closed down 40 years ago due to the lack of demand) is U.S. Rare Earths (UREE), which also happens to be a near-$2 company and similarly sized with a market cap of about $60 million. Can’t see any reason you’d want to own that one unless you see another bubble in rare earths stocks coming, from my quick glance nothing’s moving very fast with them.

And the company most recently teased as a thorium play (by the Oxford Club last year, which touted the wealth to come from the “junk metal” thorium), which we discussed at some length (and which led to a long debate about thorium among our readers) was MolyCorp (MCP), the one “real” producing rare earths company of any size in the U.S. They do have thorium reserves and can produce it alongside their rare earths, sure, but it seems unlikely that they’ll do so (or make any money at it) until there’s a real market for thorium fuel. Molycorp is a mess right now, with the equity collapsing and the need to raise more cash very soon… and with Leon Black rumored to be moving in to take the company over by buying up their debt.

Molycorp and U.S. Rare Earths are rare earths plays, really, and thorium is often found along with rare earths or uranium, and the prices of all of those commodities are falling — leading to the disastrous performance of MCP stock. So I’m glad DeHaemer isn’t pitching a thorium miner given the long lead time before there’s any real strong chance of people bidding up thorium stocks as a hot “story” and the longer lead time before any of them might make money.

But, frankly, I’m not all that thrilled about Lightbridge either — it’s got a good business model now, aiming to sell a fuel design into the existing U.S. reactor fleet that could turn into a pretty good business as it generates royalties for them… but the nuclear power business moves really, really, really slowly and the fact that they aren’t even hoping to have a commercial scale test of their fuel design for more than five years means it might be tough for them to keep investors happy for the next few years and leads me to say, “why now?”

I imagine lots of Gumshoe readers are rare earths or thorium enthusiasts, and perhaps there are some Lightbridge shareholders or researchers out there as well — so while I’m a bit pessimistic after my brief look, I’ll keep an open mind and wait to hear why folks are excited about LTBR or thorium… just use that happy little comment box below to share your thoughts.


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Paul
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Paul
February 11, 2015 2:49 pm

In the late ’50s Rio Tinto-Dow developed a facility in Elliot Lake, Ontario using solvent extraction to separate thorium from the effluent after ion exchange separation of uranium. I was a chemist there during the pilot plant development of the process.
This was a very cost effective process since the costs of mining ,solution, and separation of uranium had already been done. Unfortunately there was insufficient market for thorium at that time and the plant closed after a short run. There was the potential for much greater production of thorium by this process, since we only extracted about 10% of the thorium available at that site. So, unless there is a huge demand for thorium, it is pointless at this time to mine for it when it can be relatively cheaply extracted from operating uranium processing facilities.

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