Exhibit
      10.12


Notice
      of termination of Cleburne,
      Alabama property mineral property lease agreement




**Thorium
        Power, Ltd.**
 
 **www.** **ThoriumPower** **.com** **Seth
          Grae**
 President
          & CEO


November
        8, 2006
 
 
 VIA
        FAX
        AND FEDEX
 
 Mr.
        Charles Merchant
 CM
        Properties
 3189
        County Road 10
 Heflin,
        AL 36264
 
 Re:
              Notice
                  of Termination - Assignment of Minerals
                  Lease
 
 Dear
        Mr.
        Merchant,
 
 Reference
        is made to the Assignment of Minerals Lease Agreement, dated as of December
        31,
        2005, between your sole proprietorship, CM Properties and Thorium Power,
        Ltd.
        (formerly, Novastar Resources Ltd.) (the “Company’), as amended by Amendment No.
        1 to Assignment of Minerals Lease, dated March 5, 2006, between such parties
        (the “Mineral Lease”).
 
 Section
        1
        of the amendment referred to above provides that notwithstanding any other
        provision of the Mineral Lease, the sole remedy available to you for a breach
        of
        the Agreement by the Company is the termination of the Agreement and that
        no
        further relief or recourse, whether at law, in equity, or otherwise, will
        be
        available to you.
 
 The
        Company has determined, based on independent core drilling sample test results
        regarding the mineral content of the Cleburne County District of Alabama
        properties that are the subject of the Mineral Lease (the “Properties”), that it
        is not economically feasible for us to mine the Properties and provide a
        satisfactory rate of return on investment to our stockholders. Accordingly,
        the
        Company intends to cease performance of its obligations under the Mineral
        Lease
        and to forfeit any rights that it has to the Properties and re-vest in you
        those
        rights. The Company will pay the outstanding invoice in the amount of $6,671.00
        that you submitted that covers payroll for your two employees for the period
        from October 30 through December 1, 2006 and fuel charges from October 4
        through
        October 24, 2006. The Company, however, will make no further payments to
        you in
        cash or equity and it is the Company’s position that if you believe any amounts
        in cash or equity are due to you, your sole recourse for the Company’s failure
        to pay such amounts would be termination of the Mineral Lease as per the
        provision in Section 1 of the amendment to the Mineral Lease described above.
 
 The
        Company will take any reasonable action that you deem necessary to re-vest
        in
        you any interest in the Properties that the Company holds as a result of
        the
        Mineral Lease.
  Please note that this termination is specific to the Properties covered
          by the
          Mineral Lease and in no way affects the thorium/monazite mineral properties
          located in Clay County, Alabama that were assigned to the Company by American
          Graphite Holdings pursuant to that certain Assignment of Specific Mineral
          Rights
          Agreement dated September 14, 2005, as amended March 5, 2006.
    Very
            truly yours,
 Thorium
            Power, Ltd.
  
 /s/
              Seth
              Grae
 By:
 Seth
              Grae
 Chief
              Executive Officer,
 President
              and Director
  Thorium
              Power, Ltd., 8300 Greensboro Drive, Suite 800, McLean, VA 22102 USA
 Tel
              703-918-4918 Fax 202-318-2502 E-Mail sgrae@ThoriumPower.com