GF provenance by DI0rR5B

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									                                  General Fusion
General Fusion is a Vancouver-based company which believes it can achieve Net Gain
from fusion in a relatively quick time and sufficiently small equity dollars to make it an
attractive investment.

GF believes it can
    achieve Net Gain
    do this within 5 years at a cost which at $50 million is a small fraction of the major
       international projects
    build reactors which are combined with standard steam turbines to enable 100
       MWe generating plants, with a capital cost in the order of $1,700/kWe, enabling
       the production of electricity at less than 4 cents /kWh
    for fuels use i) deuterium, a normal isotope of hydrogen in sea water, meaning
       there is limitless fuel which will not change in price & will be available everywhere,
       and ii) lithium, also widely available.
    Build generating stations which have “normal” fusion characteristics: no radioactive
       waste, produce no Greenhouse gases or other gases which impact local air
       quality, have no attraction for terrorists, will not explode in the “runaway” type of
       reaction as feared in fission machines (all of which = lower barriers to permitting
       than fission plants, and most coal-fired plants)
    can be built in small-ish sizes (e.g. 100MWe) so the capital bite for utilities will be
       smaller, & there can be assembly-line production
    do this with a minimum of invention or physics breakthroughs (but some very
       difficult engineering feats will be required).

The typical first reaction that GF gets is disbelief because of the assumption that fusion
must be expensive and take a long time, and because a lot of very smart people have
been trying to get Net Gain, and none has succeeded. If it succeeds, GF will be another
example of how breakthroughs are accomplished in the small-company private sector, not
in either government labs, or academia, or even big companies. Perhaps a little of the
provenance can dispel some of the credibility issues.

General Fusion is adapting a form of fusion known as “Magnetized Target Fusion”, or
MTF, conceived by the Naval Weapons Research Lab in Washington DC, about 30 years
ago. MTF cuts a middle path between Magnetic Confinement Fusion (“MF”) and Inertial
Confinement Fusion (“ICF”). MF is the technology in the $20B international “ITER”
project being built in southern France. An ICF machine is being built at Livermore. Even
if they can produce Net Gain, they are decades from making electricity, and might never
make it within a competitive cost envelope.

The MTF ideas were patented, a machine was designed but never built. There is
seemingly no dispute among physicists that MTF ought to work, as it meets the conditions
of Lawson’s Criterion. MTF is a standard 150M deg C deuterium-tritium reaction, except
that it is to happen at plasma densities between MF and ICF, and at confinement times
shorter than the former but longer than the latter.

The plans for this MTF design, nicknamed “LINUS”, called for a hot plasma of
1017ions/cm3 magnetically trapped in a toroid shape to be compressed by a factor of about
1000 inside a cylinder of liquid lead. The compression was to be obtained by using fast-
acting steam-operated pistons to compress the liquid lead. This would produce the
correct temperatures and densities and if it could be held for a few microseconds, would


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produce a thermonuclear reaction in which the neutrons would heat up the lead, which
would then be run through a heat exchanger to produce steam. It would also “breed” the
required tritium through a reaction between some of the neutrons and liquid lithium
contained in the liquid lead. The amount of tritium would be about 1gr. at any time.

LINUS was designed to be a “pulse” machine, whereby the heat generated would appear
to the turbine to be continuous because of the absorption by the liquid lead. It, would have
produced no greenhouse gases, there would have been no chance of an explosion or
meltdown (each “pulse” would need a positive signal to proceed).

LINUS wasn’t built for three apparent reasons:
   a) no-one had ever built a spheromak capable of generating pre-compression
      plasma densities of 1017/cm3
   b) the compression by multiple air pressurized pistons would only act in
      milliseconds, too long to ensure that the plasma did not disperse and lose its
      temperature
   c) the very fast DSP and servo controls needed to synchronize such piston actions
      to a few microseconds were not available

So, LINUS was shelved. I believe it was inevitable that someone would have realized that
LINUS concepts could now be built, given advances in spheromaks and DSP & servo
technology. We have had confirmation of the first.

Apparently the first person is Dr. Michel Laberge, the founder & technology visionary of
General Fusion. Dr. Laberge obtained his doctorate in laser fusion, but his first – and only
- job was as a design engineer for a local start-up, Creo Products. Creo, founded in the
mid-80s by a brilliant engineer, designed and built advanced laser-based computer-to-
plate printing processes. Dr. Laberge became the most important conceptual designer, &
(together with Doug Richardson, now the CEO of GF), they became the most prolific team
at Creo. Over about 13 years, they were responsible for Creo products with >$1B in
revenues. (Creo was sold to Kodak for about $1B last year.)

Laberge (who left Creo in 2002) took his fairly unique skill & experience & applied it to
revisiting MTF. Over the last 4 years, at a cost of about $800k, he built a small version of
his reactor to test whether his compression concepts would work. The funds came from
local angels and IRAP (a Canadian federal agency). The experiment succeeded, and is
still the only complete MTF trial.

The Laberge concept is to replace the LINUS cylinder with a steel-walled sphere. Liquid
lead (& lithium) rotates inside a 4-metre diameter shell fast enough to create a vortex into
which is injected (from each end) plasmas of 1017/cm3. They meet at the centre. At the
same time, steam-operated pistons strike the outside of the shell with sufficient force that
a focused acoustic (shock) wave compresses the plasma by 1,000 for the required
confinement times. These pulses (at the rate of about one hertz) heat up the liquid metal
enough to generate steam, which both refreshes the pressure in the pistons and operates
the turbine. Given all the heat and mechanical losses, a Q factor of about 60 is needed to
provide 100 MW.

The primary invention is the use of the pistons transferring their energy in a very short
time by striking the external shell. The main engineering feat will be to make ~250 of
them, weighing ~100kg, and traveling at ~100m/sec, hit the external shell within ~ a
microsecond of one another. GF is hiring experts and hoping to work with various


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universities and US government labs to design and build the spheromak plasma
generators.

There is a very rational two-year $10MM step-by-step plan to eliminate technical risks.
The objective of the next phase would be to know enough to enable the design of a test
reactor. Building that would be a $30 million cost and take about two years; if that goes
well, then towards the end of the build period, there would be a $10 million test period in
which tritium would be introduced to the reactor and it would be tested to see if Net Gain
results. Total program costs: about $50 million; total time to Net Gain: 4 years to 5 years.

The management team has a pedigree ideally suited to such a project, are totally
determined to succeed, are very practical & down to earth. We have some excellent
references.

Parallel with the first part of the technical development, GF will conduct a thorough
marketing program through which it would hope to sign up industrial partners. There
appears to be a long list of such partners, ranging from equipment suppliers, to the
makers of electrical generating equipment, systems integrators, to progressive utilities in
many different parts of the world, and large energy companies. We hope that GF can
find partners to: raise equity, or have joint R&D programs, or early test orders - a whole
suite of arrangements could be helpful. At issue will be doing this soon enough to have
injections of equity or non-dilutive R&D funding after two years’ work, but late enough to
improve the bargaining power of GF.

Chrysalix, has injected some seed, walking-around money, and two other local VCs (both
quite sizeable) have as well to total $650K, and angel funders have committed or invested
a further $350K in 2007. This funding was based on a fully-diluted $6.4MM pre-money.
 IRAP (a Canadian government program) has committed $410K. At year end, between
cash & commitments the company will have ~$900,000 available, to which can be added
a further $180,000 in receivable tax credit refunds. This permits GF to operate through
June, 2007.

The two other Vancouver funds are Growthworks Capital ($150K) and Business
Development Bank ($250K). Each has indicated an interest in between $1.5 and $2M in
the “A” round, so the company is seeking a further $4 to $5M in equity. The terms of this
issue have not been set.

The company website has a lot of information, and the CEO, Doug Richardson, would
welcome phone calls. He can be reached at 604-551-1893. The website is
www.generalfusion.com.




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