Exhibit
17.1
Statement
Concerning
Circumstances Surrounding
Cornelius
Milmoe’s
Departure
from Thorium Power, Ltd.
I
have
resigned as a director of Thorium Power, Ltd. CEO Seth Grae advised me on
October 9, 2006 that the Company was going to remove me as Chief Operating
Officer and initiate shareholder action to remove me as a Director. I disagree
with this decision, and other Company decisions, but I do not have the resources
to fight the removal as COO, and do not think it is in the best interests of
the
Company to engage in a proxy solicitation regarding the directorship. This
statement explains my reasons for resigning as a Director.
In
the
Spring of 2005, I first became involved with Thorium Power to help implement
its
plan to commercialize its patented technology to dispose of plutonium. Since
early April, 2006, I have served the Company as a Director and its Chief
Operating Officer. Numerous Company SEC filings, press releases, and
representations to investors have described my years of experience with the
nuclear industry and in non-proliferation projects and emphasized my prospective
role in the commercialization of the Company’s patented nuclear technology. This
technology has great promise for the elimination of weapons grade plutonium,
particularly in cooperation with US and Russian government agencies. The Company
raised $15 million in a May 2006 private placement primarily for that purpose,
as described in SEC filings and meetings with fund managers. Since April, it
has
spent virtually no money in Russia on technology development. I believed the
delay in implementing these projects was attributable to the need for management
to focus on actions required to close
the
merger between Thorium Power, Inc. and Novastar Resources. I looked forward
to
the closing as the date on which the Company and I could begin to focus on
technology development and commercialization. On October 9, the first business
day after the merger, I was told by Grae that I was being removed as COO without
cause unless I resigned and signed a separation agreement containing a release
of claims. I did not resign, and later that evening Grae noticed a Board meeting
for October 16, 2006 for the stated purpose of considering my removal as a
director and from the position of COO. I have not resigned but I consider myself
to have been removed from the COO position without cause.
After
October 9, I tried to determine whether there was a role inside the Company
for
me to continue to lead the technology development and
commercialization effort. Grae has made it clear that this will not be possible
for me as an employee, and that in no case would I be allowed to continue as
COO. I have little confidence that the Company is committed to this key mission.
Instead, the Company has spent or committed investor funds on:
| · |
Overhead
expenses, such as legal fees, investor relations, public relations,
and
staff compensation, including a generous bonus to Grae;
|
| · |
Projects,
such as the Texas HTGR advanced reactor and a possible advanced reactor
in
Poland that offer little hope of financial success or the development
of
proprietary technology; and
|
| · |
Potential
acquisitions of businesses outside its core mission and publicly
announced
plan of developing its patented
technology.
|
For
the
reasons stated and because I disagree with the Company’s apparent new direction,
and its termination of my employment agreement, I have resigned as a
director.