WWR - Earnings call transcript Q2 2022 | Westwater Resources, Inc.

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources, Inc.

Second Quarter 2022 Results and Business Update Conference Call.

As a reminder, all participants are in a listen-only mode and the conference is being recorded. will opportunity there ask presentation, the be to an questions. After to I and conference would Instructions] turn CEO. now President [Operator Potter, like the Chad over to Please go ahead, sir.

Chad Potter

your XXXX for and Cryan, Terence Chief retirement President Chairman ongoing Jeff our facility August. you and for you, Board; of Officer the Executive With and all the our Slide you've Thank to second today thank and our a President positioned success quarter planned for Vigil, like results We this of is in for We Chief financial call. Financial us Officer; of upon Jeff. all attending processing construction Vice you to at more to Officer-elect. than the congratulate election Cates Westwater our graphite Cates, beginning, leadership seamless to Steve wish from Steve the financial Prior retirement, Westwater years X. Chief retirement Alabama. and nine healthy appreciate Financial Jeff's after planned Vigil and end of Jeff to prepare the would and in on transition. Vice his happy like operation and I would efforts Steve Financial Jeff's done Kellyton

within on $XXX Kellyton our our in of patent-pending X certain to We're and of our Coosa Slide description investment? today. focused Westwater On total presentation, for statements constructing management's States forward-looking from subject energy which be projections materially the limited differ Why the These be risks may advanced and uncertainties Westwater to graphite presentation, based the found will are using Kellyton Phase an SEC materials on off graphite processing producing capital is plant, X. to related this has During Slide company I statements an the cost cost may discussed deposit. which a be projected our technology are as the results and other million. judgment, of can making purification not but graphite a currently Actual United XXXX filings. what scheduled including process. this we to, and Graphite Plant XX-K

We to first the Alabama also chose and graphite call acres hold graphite processing develop We our of XX,XXX are belt, our we advantages graphite our we approach. approximately Coosa Coosa deposit. deposit this a plant to mineral of which there and believe number second, strategic across rights

the and to us lowers sooner. revenue it flow First, cash gets and capital cost positive

of supply along shortage for As many energy published storage supply sources the natural supply growing online the preparation graphite us vehicles in will source, our the future. this market, of This foreseeable deposit non-Chinese shortage a approach, derisking of material being to the for electric shown, permitting allow have of graphite markets, process and while flake XXXX. increasing take Coosa there's continue advantage brought in will the that projections processed securing with with from

Slide safety our beginning like where members number contractors than the members. Since no of environment continue there contractors is important keep our Turning to project, all I is team been to that safety contract team Westwater members This at and Westwater, we the incidents their of significant live priority. and X. team accomplishment, to by and There more of protection and the would or members and nothing have operate. one safety our team a of thank recordable

of year. utilities, drilling in permits July the to the our buildings. we receipt of graphite and foundations manufacturing Phase the components deposit, and I earthwork exploration Construction In now included our the the was the construction of April, the the moved. cubic Graphite Coosa by the has of from completed Environmental of site and in June, XX,XXX Department our beginning long-lead-time activity and and end completed company permit quarter continued necessary contractor, quarter, with Alabama in During program grading general mobilization equipment first during Kellyton Also our received also plant second the of its yards the the of all of of and regards expect second Management and complete the Plant. air the model to continue resource underground

like to I'd to Now Steve over Chief turn Financial Mr. it Officer-elect, our Cates.

Steve Cates

Thank morning, you, good Chad, and everyone.

with to position, His at instrumental. discuss I and day. has we miss been you thank Westwater during mentorship our Before capital my will I Vigil. guidance time want working Jeff, every Jeff

only of a have Julie long extraordinary retirement. model but example a of an not healthy professionalism and and wish leadership. been and You servant you integrity I

at on look Slide let's X. position our Now capital

call approximately closing price was first X, which shares investor our outstanding, quarter Our unchanged on Tuesday, XX.X on May share with August $X.XX is XX. million since and

stands market our capitalization $XX per million. X, approximately volume XXX,XXX as And of at daily average trading was Our day. three-month August shares approximately

those additional a and at of working more million of Westwater, pre-revenue a of Our cash at environment by to million. investors need balance cautious however, and $XXX with approach current and quarter believe in an share price companies, the $X.XX balance ended capital second the began in finished environment, market the funding companies $X.XX. $XXX quarter a in taken have rising marked rates. second approximately We

at of million related related XX% second second we sales, of facility stock ATM sales stock its not since with related the has cash our cash were until the but The active April. first did did we quarter, proceeds executed from and of the quarter, cash settle week quarter, that April. received to During not proceeds trades the net ATM been the received company the end the first of receive not using to during facility. $X

third of of to or the is graphite million to capital I, processing strategic I million. a zero combination construction continue Since year. or seek $XXX additional parties loan the Phase by Management grants, plant. beginning potentially Our funding, could have we or the and balance are out a multiple of project-level to subject working the traditional availability, incurred offtake the alternative raise construction Phase partner the sources estimated which thereof. debt, support capital and of end $XX with market needed looking Management of we cost aggressively debt Kellyton to discussions continues include more additional capital total of agreements, capital of having

product graphite the Cash since stock the XXXX development ATM, to processing the same $X.X on product development quarter million first XXXX. the provided financial all activities to quarter of X. Turning summary in The Phase by already half $XX costs related mentioned, million six for Product the related of Turkey. compared first against XXXX sales of first The was $X on to totaled decreased of XXXX used for during the operating development is related activities and costs. second compared Product for the due approximately was construction decrease active $X approximately to the six in in Republic and used first months activities week our in was the I development which, financing mentioned been ongoing million of and to arbitration first costs to Kellyton reduced in second the to April. $XX.X used the of and of quarter $X continued with months the investing optimization not related operations as in cash has plant. our Slide Net of of as expenses the XXXX. primarily months million totaled XXXX costs six approximately million cash for million cash

development quarter definitive Kellyton to pilot Second for Plant both the our XXXX. product XXXX I and Phase of company's costs completed of study related half in feasibility the the program, second

as the $XXX,XXX Westwater XXXX. that partially to XXXX to fourth net $X.XX product already expenses the personnel of mentioned by securities the build by payroll customers. produce G&A in in XXXX. reduction however, share uranium a the received recorded compared April our XXXX. samples loss was we Net $X.XX to by quarter team business. the by and gain quarter due those company continues to second costs of of cash potential quarter-over-quarter quarter program expenses to unrealized loss per additional quarter for were program of in run or absence is second XXXX continue second during was costs $X.X in higher the offset quarter to needed, increased battery-grade Kellyton, primarily and $X.X in our expenses million pilot or due These completed of the drilling compared million as the development to for increase held proceeds We to the exploration the equity share and approximately shipment of General higher loss we final sold $XXX,XXX XXXX. in out per The net quarter administrative its same We lower products and with equity decreases for Alabama. related as our and to evaluation the lower second in The XXXX of primarily of former securities for our subsequently of sale

Slide to turning X. Now

Phase Kellyton advance to continue I the plant. We graphite of processing

As has Coosa Phase at on mentioned, drilling approximately exploration was inception, $XXX the since mentioned deposit. cost million X,XXX Also, previously of acres of The drilling its of the we acres I. completed $XX estimated in incurred program previously, at deposit. million April, XX,XXX the Westwater as the Coosa executed

financial and work With to we liquidity, I'll to cash of turn million it June balance that, had ensure Chad. XX, back a continue adequate and debt. to We at no XXXX, $XXX you,

Chad Potter

you, Steve. Thank

our on you thank new included questions questions, graphite are Westwater, and that may this information our we've market, that take and Operator, you back much. the now The today, us to core will values joining and I in very those team For to to appendix Westwater, you have. presentation. for team the additional

Operator

Silversteyn question Dmitry first Our of Instructions] comes [Operator Water Research. from Tower

Dmitry Silversteyn

In a intent of a Quick manufacturer with you batteries. letter question. about release, your of executing global consumer talked press

batteries, A, you be assuming for but manufacturer whatever your waiting submit consumer evaluating plant? B, for from that plant? that they of Kellyton I'm pilot the EV sort battery AA, is of is more produced the this go the D, Or for market, into electronics. the AAA, is operating the correct? at your samples will So not samples And to kind

Terence Cryan

This is Terence Good morning, Cryan. Dmitry.

as correct first testing provided your process, we and entity. this question have is that a qualification You our in entity. ongoing samples of are battery to pilot-plant terms consumer global that And regards

manufacturer, lengthy As but we for of number this not active potential forward with a technical to to particular on call through knows, process, this that process probably I discussions look with everyone think customers. one. large only a the fairly in graphite we're battery-grade and And qualification go qualification continuing is

Dmitry Silversteyn

Terry. Okay,

far provide -- details or Just guys Can as to follow-up for, this to provide any you commit? are manufacturer a that. there quick any for on as looking what volumes you is

Terence Cryan

we're agreement with nondisclosure a under particular Dmitry, this party.

advance in not construction the customers process we through commissioning information. in for plant. our goal overall all to work that of our at for are position output will as we is a this Kellyton, provide of find It additional point So we the that

Dmitry Silversteyn

Got you. a Got you. Then bit. little gears switching

you're Kind You've some presentation. on bit the second work working of plant, hear to you're described report in expect the done we progress put to in on the quarter? to from words, What the when a from as in of you quite other third utilities, up made things the of plant? on are that in looking now you've In quarter what your your slides do you should the you're on that months underground starting you walls. Kellyton three

Terence Cryan

So quarterly reporting we'll Kellyton. of providing our part updates progress regular in of as be at terms

of we resource will have balance developing graphite about say mentioned, and more the to the for process we Mr. in our also deposit, the that Potter of are the As Coosa year. in model

Dmitry Silversteyn

then And if last Okay. enough. I Fair question, may.

quick a Just update.

those constituent on, international to your to as updates court assets your mentioned and ability to recoup there. pressure anything of the as going or Turkey on costs? nationalization Any want the respect share of that far front? you with Anything some You in

Terence Cryan

and So process we for is arbitration response. waiting a that complete, are

of are a outside will the is do you, a and as can soon hopeful control. in that We result, assure months, timeline But response but our have we I that process we we'll announce as that get coming somewhat it.

Operator

comes Equity Our Research. next from Debra Crystal with Fiakas question

Debra Fiakas

you you particular And on Intent. they in any unfortunately be little a earlier a once color was would during wondered a redundant. of might Have this production maybe if disconnected about what the of us be give could begin they the manufacturer. you more questions Letter for indication bit caller's ultimately kind volumes Kellyton? I bit of bit that little I given This looking

Terence Cryan

Debra. question. This Terence your for much Cryan. very morning, Thanks Good is

As I under particular with mentioned earlier, we are a this agreement nondisclosure Dmitry manufacturer. to

in a not as volume you And so provide I'm any unfortunately, can this where guidance at to I regards position time. with

Debra Fiakas

more then it they doing Fair press some work. also Okay. enough. description from in And the qualification your sounds on and testing plan like release,

with hints as I testing give working have must to be how they They wondered they them us in order would if you intent, You're far? already they've done transpired you could go as in that I has some going work determine if maybe done. a much What to words? along. of But us think, also just And so to other to of to up description with led could you. want what this maybe give something, letter

Terence Cryan

I'll as can. Right. I try be Debra, as well, helpful to

currently a are specifications this manufacturer, and produce in some only of produced but continues have a are from range We which specific our potential customer. to cases, pilot broad working the with pilot plant. samples, That not who with customers, to operate, plant received of we continue given samples to

our of earlier, potential end Kellyton for and goal output we through and to construction the conversations And are phase the all So qualification that range we by have be with customers I range a a in process is as and as the testing we're of a mentioned broad position customers. commissioning our the of of Kellyton. having going plant, broad of

the So time closer as we of with say, range to a that, active are potential at have present more know but customers. to we'll I we very whole get

Debra Fiakas

particular that this testing? already a done some is that manufacturer has yes So

Terence Cryan

Yes.

Debra Fiakas

And least that At then wanted Okay. far. we ask to another question. got I

to source that the the support funding hired of part and mentioned this would or helping once advisors of It in some production that Is a us use was production? of And legislation users? the of you the particular it on in May opportunity year of Is you there along past, that that have possibility for wondered only how producers these you? and federal not, materials. for it you of you critical financing been learned a capital that to to was is might favors And Or an domestic sell And You've could potential pursuant update companies working funding action had it it look lines. some the I is, end suggested phase? on earlier current it also Department -- course, year. was this give in for construction -- get whether domestic or this that government -- the to domestic participating there if had the government Energy. by into be announced

Terence Cryan

we're lot and X the is for from a Debra, on. eagerly question awaiting that a covers terrific that and DoE guidance really of that areas looking

Phase We to but sources are of those expect be sources advance might what speculate of practice that all of the conversations to funding, about having our would potential beyond. only you in of us to Kellyton, of or for be funding them. could having It's not receiving I not relative

as about as the that's far time. I go can So at present

Debra Fiakas

Okay.

that? have got they was then it of that funding Does announced on yet? So process opportunity I running May, just working that Or it hasn't take course, really this in are yet? still an and up set application

Terence Cryan

that in regards program for they're grant with to regard this awards October is to understanding year. that that make to an targeting with program announcement Our DoE of the

Debra Fiakas

But Okay. not to confirm whether not or ready you've you applied? are

Terence Cryan

Debra, We're anxious to funding have that cost And with of active on capital available bunch news be our different of we'll goal you. as Steve achieve that, the is a we to whole lowest to mentioned, done successfully complete once share Kellyton. opportunities.

Debra Fiakas

example, kind has as Defense producer?” United it's sensitive Whether about have wondered, States refinement the follows to you're concerned the might produced Is customers domestically your relationship initial impact on not whether of supply who source? commercial market or this a as also, Okay. when on then this other who've domestic a purchasing where process phase, qualify asked U.S. of any as in a as Department domestic particularly your “A investors graphite simply have questions, as say, graphite, for the And that production third-party. far that to the you along. not enough, and production open or be I or is

Terence Cryan

to as based parallels qualifications amount and there's that process of occurs. to industries. a think also I Xx automotive that think producing to think that that active about regard Debra, point and the the And where on we through about question, with U.S. flake can content. you Xx So value the of look draw industry, that could to go graphite we I'd fact we natural anode material, the taking increase there's other

we So period of still advance we U.S.A. of domestic using our going content. believe source online, graphite of Coosa a during the as time deposit we're third-party in Made in that that qualify to be will bringing the

Debra Fiakas

because who was to not funding quite Maybe the domestic does of good. related bit is investor not have this changes sent pending what's shareholder, or renewable a Reduction as another expected legislation Inflation me federal that graphite to of in not Very domestic an that whether the defines been Okay. and by production make specific had Act, a or electric in the question legislation, particular. Whether vehicles, follow-up, any just to particular? what's wondered which and energy how in government a

Terence Cryan

So as or that. There has potentially not the been passed could pending by House you the by President. know, to that signed are changes legislation occur that still

awaiting actively we're of final that version So bill. the

side materials cheering lines. funding support for provide from -- to that government hopeful additional We like We're critical potential graphite. that, advanced will obviously are the the

eagerly I So anticipating think all and we're additional funding watching this availability.

Debra Fiakas

Okay.

for to do Westwater? end it particular think aware your you be your for users, in and Your so funding had it. certain still, it beneficial it's read Congress is does particular, even say, another chance In made of that not might me that comment or anything to in think all just pending course, example, would discussed have of far, you made How benefit have consumers? company? as of people But It I'm customers been question. for the a been offer

Terence Cryan

great this I got on in Obviously, as And given you've to I think that. the only there we're you pending, out, to legislation any going defer that is for and for, not beneficial, reason real to form be not Debra, going this still comment questions. is point, potential but believe a final us, at think is point customers.

So be watching we're this to closely. going

Debra Fiakas

had terms cell Very I'll using but difficulty note, questions a right. a just getting call, the asking get not queue. as of back call, into into the little in terms I getting And into All in phone. of the good. by a

that there it you so queue cell many into questions, are from find And not people a trouble they're phone. getting the having for be if because are could questions, very because dialing

Terence Cryan

Well, right. All thanks for again us. joining

Operator

Our next from of & Rose. Michael comes Porter LeVay Porter, question

Michael Porter

Chad, just of down to you're Can properties. the on give there an discuss your you've what seen accomplished people take do there? quarter? a are you of what and to forward looking who of lot never minute what's sort On out, a going have next or overview over

Chad Potter

for I Thanks Michael. appreciate Sure, your question. that.

really building the started continues. with second management also utilities, expect the team them we of quarter of and XX,XXX expecting at grading erection plant is have to built completed and issues. the of continued permits managing all the construction all April, and well. of and all continue moved In now and Phase wastewater our packages cubic all as supply and the In construction plant two next by to of received We the but underground our this you on the impact buildings earthwork in out foundations year, chain slab completed well. What dirt. at approximately As year, underground year. We've the manufacturing quarter first this continue large half hyper-focused our The due packages site foundations, and have as know, global we permits process, our next of plant we're the that that's existing permit our we've the I yards of June necessary and the in to in Kellyton. to have also buildings is We budget purchased schedule of utilities site. in and the

Michael Porter

the after you with to was I little us the are ask Can question? it? plant. now are more on a trying color you What customers what us the of potential requiring little as pilot up samples? about Can you their bit initial What's they've brought you color customers It earlier more give with please a the one had it? that. to do plan Sort doing of give

Chad Potter

Sure.

potential said graphite, to think we're has continue of Mr. request, their I Cryan A specification aggressively off our customers. as who number their earlier, received to based still purposes. customers, marketing processed for

samples potential addition, customers as In testing new new our well. -- for receiving customers are their

Our on process plant our graphite continues sales a basis when-requested from team. to

on So as-needed we're basis. an continuing running to it

Operator

the would turn Cryan for conference question-and-answer over any I session. the to back concludes remarks. like to Terence This closing

Terence Cryan

Thank you.

also Westwater I'd we to shareholders and So past closing, exemplary States. Board thanks day. their our like graphite of joining look us execute for appreciation in the nine Jeff as the thank to Vigil, for regular CFO to contact. being his producer the years. like become as to forward express continued to strategic service all for Good these our Thanks in I'd battery-grade United plan support in we on premier the and today,

Operator

This today's call. conference concludes

you You Thank a participating, your have lines. pleasant and may disconnect day. for

Chad Potter	President & Chief Executive Officer
Steve Cates	Chief Financial Officer-elect
Terence Cryan	Executive Chairman of the Board
Jeff Vigil	Vice President and Chief Financial Officer
Dmitry Silversteyn	Water Tower Research
Debra Fiakas	Crystal Equity Research
Michael Porter	Porter, LeVay & Rose

Westwater Resources (WWR) 11 Aug 222022 Q2 Earnings call transcript