- Earnings call transcript Q3 2022

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources, Incorporated Third Quarter 2022 Results and Business Update Conference Call.

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

Chad Potter

us Cryan, moderator. for Board; Slide quarter With X. attending you, and our is Thank And Chief third XXXX thank Steve Cates, results Financial of Executive Chairman our you our all today the Terence Officer. call.

Kellyton company XXXX projections maybe During based and and an future patent including, scheduled raising pending other you and realize within judgment, Coosa subject today. On limited to, to in deposit activities. our upon graphite uncertainties, States Please our our cost proprietary the and related but statements differ for including forecast, be may discussed graphite will These we risks are can to technology which the what results certain Graphite technology, statements found XX-K forward-looking our presentation, the materially in graphite Plant cautionary X using and management's read and this on a description and be are capital other price demand making to presentation Slide the from producing Slide not and is and our United with purification X. that energy statement natural materials filings. SEC advanced focused Westwater this process. actual on similar

continue $XXX to Samples our for processing sent which plant, customers million. projected be have of cost graphite Phase Kellyton evaluation. are I of constructing potential We currently has a produced XX total been to and

in LOIs we executed working four put actively place more operations have to-date before and begin. are We LOIs to

natural the X. as materials. we our rights are our Today, mineral Coosa source grade to graphite graphite proposition across Alabama Belt, Graphite which Slide hold call domestic battery value also we reaffirming of deposit. a approximately XX,XXX We acres

believe that Industry we On demand will that focus, markets and of Slide graphite experience market. the will X. significant that growth electric graphite the the believe and at produced continue plan materials other support We the business. our Kellyton our number vehicles, including for Plant to transition and a future includes business graphite the advanced in present addition, energy for tailwinds the ESG to experts battery the for the stewardship foreseeable our environmental potential there graphite expansion are of In future. Graphite

passed firm. should graphite for electric pointed electric and legislation third vehicles shortage supply identified resources, weight critical XXXX, by to the materials. trillion As $X.X for Inflation August, includes that content clean materials Governments important for storage the and have this have in hold legislation by materials an advantage threshold. experts even the transition been domestic for the result battery regulating to EV buyers many electric take business demand. met on engine on it because number in battery many vehicle batteries, Act that the is dependent further as we piece of believe the US of automakers industry including US in recently material a is have increase that battery industry IRA. global currently vehicles, to is the batteries around graphite The such lithium-ion passed energy In be for must to reported the out, from credit. battery of news plan which internal one imports US increase projections foreign Minerals combustion Benchmark tax by or the of vehicles in spending the mineral. the already Reduction This related Therefore, an Related party world Government to channel raw

typical XX% than battery lithium-ion It's that belief electric to of battery, up as of the the in in worth graphite. that plan. noting graphite a importance perhaps XXX for lithium-ion minerals of firm of X Slide we underlie tailwinds, remain lithium battery less has graphite lithium-ion as weight. in approximately battery. makes A refer depicts our these our critical the around the better vehicle Given fundamentals it by XX% the business to nickel XXX pounds it amyloid to would be accounts

to companies we took processing a number X. believe of Coosa different a first developing are and there Turning planning our second, plant Slide strategic metal to approach approach. We advantage by and our this deposits other than with graphite deposit

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

advantage to Second, supply vehicles. this graphite batteries the our flake a will near electric growing along term of market of natural for approach take us with from and source allow securing non-Chinese

Lastly, of the preparation being XXXX. Coosa to deposit online approach de-risks in X. On Slide the the permitting brought in process

in the created material an value of the ahead into see value this feedstock times. we’re able chose approximately concentrate Coosa we The can the of active natural graphite plant to processing non-Chinese creating until into we source slate graphite in put graphite and source is a CSPG of Kellyton developed at CSPG. the advantage for an deposit additional processing concentrate results Namely, conversion plant. concentrate batteries of reason to is Here quicker X or a deposit. multiplier CSPG producing we the value This take anode graphite

Turning X. to Slide

take the near producing develop created and plant of due price relationships advantage in graphite Kellyton CSPG market, when shortage Plant the in believe a environment supply natural putting our flake from We the customers, to and to projected XX. term supply the the Given the Kellyton forecasted grade allows the for in Slide tailwinds Coosa first deposit is for value process future. foreseeable potential fundamentals shortage. battery materials us with already demand the strong higher graphite from the resulting significantly, mentioned to battery Graphite

our the sell Inflation our the XX% before graphite US auto cost a Government. provided customers already tax third mineral Along been in potential clean mentioned, the by credit eliminated. critical credit designated the out of aware can are a the removed the is has refundable and requirement mentioned, manufacturer this Based quarter electric IRA that of Reduction minerals domestic with vehicles to phased passed on battery the limit As Act vehicle legislation. discussions, the on an produce or

interest priority. teammates. As has advantage and requirement, of of provide the our future nothing domestic more teammates this as Westwater the legislation, value continue the competitive is safety, important a the customers legislation. a to remains our passing significant potential work domestic the will producer strong by of contractors number intensified the safety like protection us of core keeping including that piece We since believe than all significant thank with to and to and one of CSPG. incidents result, our Since construction of the on-site teammates, safety of the There of beginning live responders officials. Furthering of a to is On hosted look the in accomplishment community. contractors Kellyton our we in where XXX the and of engage project recordable a and the or We had to I no our our XXXX, Kellyton of Slide a over graphite operate. commitment safety, XX. we've safety forward continue our environment October, Westwater would local This our late for to tour first graphite local and with we to contractors site

pouring completed cubic foundation yards complete square out During earthwork over XX,XXX XXX,XXX of and began soil for building drilling We with substantially moved. of which the feet are today, when site will five three completed. we foundations, and we as of total quarter,

the and of underground Pri-fabrication October erecting began primary nearing utilities. completion our quarter of progressed of also buildings our in are buildings. we our We during one

those Additionally, in begun equipment. multiple equipment that receiving our manufacturing vendors time of we’ve are visited long and technical some prior teammates shipments, Europe lead our to

XXXX, construction strong make to midyear the of chain and progress testing second continue We begin expect into challenges amidst XXXX. half expect of and commissioning to and commissioning supply

We we of work year. Kellyton will testing, commissioning through to Plant as a provide related look update the more construction to operational Graphite and startup the definitive next

Coosa and resource completed exploration our April on is XX. Slide model and Regarding which In report, a XXXX, nearing deposit therefore completion. technical program began graphite drilling our we preparing

We advance significant expect is model their the end have and and once to team report look at update the We we resource the to our Westwater graphite future by the extremely year work proud the of hard an contributions technical I'm Coosa finalized. business. to progress resource the forward the and provide deposit of made. on

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

Steve Cates

morning, Chad, a Westwater XX. $XXX quarter no Thank and cash debt. million and everyone. Slide with balance finished the third of good you,

graphite Our incurred costs sources construction capital beginning strong financial including the seek to the million. our of continue $XXX to million of aggressively funding. business, the construction of Since have additional position estimated Kellyton Phase of I of has I, Management advance to allowed we over $XX plant. out us processing of continues graphite Phase

previously, we funding form the not for are stated have limiting not or potential of source I. and currently Phase As

number a and discussions of parties executing to on focus is to having continue our plan, NDAs under financing. with currently management business third We related

inflation, of volatility year debt work markets equity an has construction in continue by markets interest the in additional by environment our and funding of experience the marked While uncertainty high the capital raising the I to rising of to Kellyton we the close gap for and Market plant. Phase and diligently end. tightening to continue rates capital impacted target

months. evaluate potential debt lowest However, we position are to of and that provides the Westwater's cost diligently funding towards on the cash next funding capital. focusing within the securing no few still us working flexibility securing opportunities

quarter these items filed our Slide well yesterday, discussion in financial Turning our of third on as XX-Q press release. the to as summary XX. Detailed is Form included

However, to couple items point I on want out slide. of this a

in $X.X decrease the first compared was expenses same million absence First, related period of cash net operating to development the activities cash costs approximate product was in $X.X to our and XXXX. for used any XXXX reduced for million used of arbitration nine the with for due of million The Republic operations $XX months against in primarily all Turkey. as the approximately

of of XXXX Kellyton plant. activities processing used nine to the million I Second, cash months graphite of for in was ongoing $XX investing Phase totaling first construction the related the the

definitive million third XXXX. to during our pilot costs Third, compared costs to for I Phase quarter the in product and program. study Last quarter decreased our we the development year, incurred complete had same feasibility $X.X

expenses of to on in potential grade of to the lower XXXX. quarter lower XXXX customers. costs Fourth, products evaluation decreases costs. primarily G&A partially the of XXXX turn as our for offset net As $X.X for mentioned $X.XX the fourth in to and Chad. quarter it recorded compared million to and back equity the XXXX by sold in by shipment $X.X subsequently absence We third The the were out arbitration of loss provide received gain loss earlier share the was we business. uranium for unrealized higher the These product quarter securities we quarter per and in to third share held build a continue samples million related or continue loss by securities Westwater team battery of call, reduction development to I'll or that the With for third we our of those XXXX. with proceeds per former $X.XX you, sale net due to final $X.X was million that, of net our of cash

Chad Potter

Thank you, Steve.

XX. slide to Now

pillars joined our project Bakker operation values governance. and Vice variety of financial XX. of grateful to responsibility set team of management We am Simply for leadership Products. as and leadership core construction, experience continue produce In the Kellyton and has safety, corporate facilities Westwater Graphite the the strong Bakker to wide I team. put Frank to Graphite scale our brings have to Westwater operations management and On products. Alabama plant in team him Plant. and stewardship, assumed October, around Slide Manager large add environmental Westwater. to a and engineering, General his our Mr. extensive at for of He that President commissioning industrial

teammates operate conducting with our to keeping where business environment we our committed live. protecting are safe integrity, the We and and

questions, opening I at materials the market battery reiterate call the to are that Before to the strong. fundamentals want

growing makers the for are auto of of and the batteries. is customers directive addition, meet graphite US a to secure vehicles growth electric In now demand for the working that IRA's supported by supply to domestic

of potential of received customer construction are committed thank The that progress We and questions time and are much. an our and feedback to of business positive result for encouraged As Phase minerals battery strong and take Thank by Kellyton X We're IRA. now a the Plant. we for today. back very in Graphite Westwater the made believe seeing at will battery we a on plan. products the your have. and in the intensified Operator, continued to our result, may in produced the as and you interest you questions team you your US I customers you interest

Operator

Capital. comes from Signia [Operator Instructions] Our question Rich first Beaven from

Rich Beaven

can there? And process of know, I what about, Syrah result curious building facility curious in relates Just for to give concerns are us or thoughts as possible just bit that Louisiana. oversupply any graphite as you plant, little about color a of to a is a your as it

Terence Cryan

at plant, going we benchmark demand announced forward we for giga out to materials XX I the accurate. plants a to addition for think in as existing anode look Tesla be States the shortage to United market be think is anode of significant expected proved forecast materials that the -- the in with

fully we other be while the we demand there here So expect going to don't the supply see States, is in changing United equation. that producers fundamental

Rich Beaven

graphite, other graphite would you critical in consider any moving And that towards, business? the also any metals addition consideration besides to

Terence Cryan

is our focused speculate what we on plant. as are future hold, to that's time, focus might where present our Can't the fully the At processing developing graphite today. Kellyton but

Rich Beaven

it you good permitted ready thoughts because relates your for likely material after time -- where of plant? on deposit period to Coosa when is sourcing as Any the to up and plant mentioned won't fully plant the run be operational, think you'd your processing through a And running. I is and source

Terence Cryan

have an supplies Kellyton. we NDA But information disclose we have flat natural of as concentrate for additional We place with able so we party have we non-Chinese for graphite previously source to feel contract in said, a Kellyton. that that do concentrate any confident that. So about third under have adequate entity, are not we

Rich Beaven

accurate? Africa. us assuming American Can that I'm be would you that probably an it's be wouldn't so I'm give be Would North -- assuming it source, idea,

Terence Cryan

We're unable comment. to

Operator

comes Dmitry question from Water Silversteyn from Tower Research. next The

Dmitry Silversteyn

Quick for you. question

the before your it, the takes? the are can of about we of typically terms in any sort You announcements that it talked end currently. get process Can at where call evaluation how products positive of XX point about evaluating potential let's you evaluations three year some next, these are customers talk two, And long the what or is of the the months?

Steve Cates

earlier about that that's graphite value reason thing customer is, pay to flake I created in there our each converting talked because it created think presentation, little X approximately we customers willing natural bit has of The CSPG the interesting in for the is and value unique into a is, it's and are times. spec.

to maybe different density, work work we different our we an select And with and application. different the additional through size, provide And evaluation so their as customers they'll have. that products sample, process, we will for a come that back tap want things

to iterative process, it And time, for. an takes that so product an value really that that is process final it is engineered pay they are multiplier willing

is going timeline can each and evaluating And product the the so different. Their of bit little different process customer. testing be in with a through

legislation be to think hard And say is because domestic that shortages, the how going requirement, with shifted forecast or so the to IRA going demand it's really changed of timeline I forward.

comment can't in we more work really dates coming definitive online than LOIs So into on having towards, other place exactly of continue plant the ahead operations. to

Dmitry Silversteyn

that model plan your I should or building say. Coosa resource, your question for regarding second resource then you're Coosa And your

being done end evaluating the you about and sort of year. still results, published and data the this still in or actually are the Is target You you before of being of are the that drilling the the in phase? or collection the talked process

Chad Potter

get by still We've have on we more year, completed the we put We're a and into gathered definitive model. that drilling completed this track that completed as in. and all last the our the expect resource year model of or that that to early all data year, update resource to was provide early to end

Dmitry Silversteyn

decision. won to I final then and you where know acid expenditures you call the international areas can sort to in future? the the want question, of related update however, nationalization. sort Turkey near court to you in [graphite] guys attributed us if materialize litigations it, you the But your the process seizure, And mentioned on is of can currently the what, midterm anything, to being

Chad Potter

was not met. year. been a a Dmitry, of of Court decision clarification, XXXX. that International final hearings their has and point the it Arbitration just putting The out in of final decision third in goal done quarter There had on one of a

awaiting not once final update. have have not yet. decision now. more still right -- on we But do an provide a are that some of do that, we'll definitive And We we they

Dmitry Silversteyn

the this from a once year was So is of the it of I into the year steps? next think or but year, year sometime, next last rendered decision end and before early be would what

Chad Potter

upon or more next could be would on to And that is. everybody there dependent steps decision that The be come updating the that be final decision. could obviously what

Operator

next The Miller Stanley. from Dale question Morgan from comes

Dale Miller

figure cost how you question the that's questions. production? of what it So segment out Do and to production it's trying into just have here couple costs, actually plant there. of A final kind get to and actually, you build you I'll from get to I'm out. one. to Well revenue going

how you more to of does into capital here do company to operations? the be there, cost much get need So to the able get from how much

Chad Potter

So we million complete Difficulty]. is million $XXX that in [Technical a over had to totality. I with Phase of Through X/XX, budget incurred million, $XXX the estimated currently $XX million $XX.X

that So working secure there's financing. there a we're to delta that

Dale Miller

to And grant you're getting kind package last specific technology. in of specifically obtain battery decisions et was there any other pointed handed out, on company year been to the the some to Has of cetera? how able it's I that, there, doing and any know funding what

Chad Potter

really here in Westwater, think, up. participate industry I the trying is an US market, So emerging to stood process being graphite in In is that that. in the natural of we're

industry, help legislation up of. government or that this are support anything of And so stand very any out agencies that we comes

they this don't I have can really that the execute the of have and the their those our sheet any programs, business plan is grants comment awarding at Energy, are to the and of continue say of excited we on Department no any What about or we $XXX million how on programs balance on we time. administer their Regarding timing. or debt

Dale Miller

that So have debt sheet. I'm been any not out, handed seeing the grants balance your on

the grants correct? are out, that That's that the of Is in $XXX not your million… receive did not yet. So already any company included

Chad Potter

you're the secure definitive. at additional when funding some investors we we When definitely update we need, Correct. to will that But, time more have we an provide correct.

Dale Miller

that to offering markets growth past obviously to kind just So increase huge which environment in an are over capital that And months. ATM any here, at this count the ongoing not to continuing share in selling is you are time company. at selling noticed this Is going I a environment, given that which basis? are what market you XX ATM, stock actually before sounds happened you the an and like this are it least?

Chad Potter

markets balance we a a is to different to to raising [prerequisite] where but low Obviously, to equity ways the take have cash were get high at the in markets revenue the company, there can we The in our it past advantage capital today. stock advantage able in business as of we had, take money was an try the the liquidity opportunity. cost in are

earlier said I on that not we limiting funding right are a now. of the As source call,

be a tightening I by think with environment it would the Fed.

I wouldn't off take think table. to it prudent anything be the

sources. really with balance sheet the on we flexibility $XXX time some financing to debt, the no it However, evaluate comprises and million potential think and

Operator

Crystal Instructions] [Operator Fiakas next from comes Equity Debra Research. Our question from

Debra Fiakas

and on So fantastic always I've the calls and a these first, safety of congratulate everyone Westwater me that let isn't been at record. case. for else you few your

that. there Sometimes one no to hear is likes and accidents

preferences meticulous could just based as in you I give the have have little research you they Department the also be loans. if the for conversations bit order what's could Do us was update on really time to doing you Energy, your we maybe discussion current it on the earlier that on of a what financing, everybody safe. their mentioned thinking color And it? keep versus I equity was bit wondering, the extend in have best and the on congratulations been you a or little construction make on But thoughts management So some any maybe must what grants. wondering on comes loans? of is course when sort an been of having, and

Steve Cates

Yes, potential we are of I before not we said any think ourselves have to financing. source limiting

the just the lot So balance million on debt thirds $XXX sheet think balance sense. be need But beyond is and can rising on beneficial all million arrangement that a that effectively of makes process that I. incurred, at of the of table. we future in something in some $XX to the but not are sheet with project financing of the of beneficial are plans future or rate environment, have we the two shy sure make only also so the Phase of already the of spent not in a today project terms form that X/XX, the probably we We be and impair on our growth do diligent

holistic take a a there's happy flexibility that sheet to that that process. in that we And to diligent so balance process. strong are have need be approach through we the and And go still us allows

Debra Fiakas

course a other spending. speed in about third quarter, spending, let's in saw side up spending pace will report the your or We pace in of cash talk operating of bit? then, Will same usage see the quarter. we spending of the fourth the CapEx So and about CapEx the the it it the quarterly of

Steve Cates

I the non-Phase money, control, to growth plan very focusing plan business need spend. on diligent use how an the being capital and what do on usage, that's online. we bringing risk of putting cash now executing team without is The we From our right spend cash, operating do on

diligent So be we'll we're so. continue very that and process in to

spending, Regarding where the and construction lot project payments. progress ebbs was of early a a it in on there's capital flows

earth completed work, that's we've some going and ebb and to Now flow.

additional and and as look there after next next that. size what obviously to indicative be year closer commissioning. and historical or don't And that into spent going flow. think of move construction can at It's and at So quarter of quarter will look operations testing we say and a project be I ebb that's to you will spending this cash the be

Debra Fiakas

vantage look at different a it from take just let's a point. maybe So

there building, three pace, something to started there's near be up that would foundations, What ground for rising are completion. or the moment out are and just in on on the the construction construction see and the let's of would and the pretend probably or that one a timing and of above works foundations start You the so the fourth other fifth it favorable. what Alabama, of construction would weather foundation? pace be those pace remains What holds and be seeing two the the

Chad Potter

The answer basis. when of of can pace, I flow on going as will daily it schedules as to every like it's and markets and you, be go, to looking flow But and if tell just bluntly. fast we the at regards Steve ebb we're said the single in not constantly ebb week, them

erection So pick building foundation pace we quarter. and expect over the next the to up pace

Debra Fiakas

In say than now quarter. in it's at was faster right it third other going a pace the words,

Chad Potter

air Steel can it up as as is quickly in going there. the up get we

Debra Fiakas

Well, near long for went to that's you got Did trip watch operation. the see. it's that like kind someone's curious the model? as a you to see to good thing items watch your in that said them them own working very actually a Is to the case? because with ready you or of see just it lead shipment. trip did sounds simply equipment what I you machine or was You and watch your

Chad Potter

to go Europe took team the to time inspect our machines. No, to the

continue as earlier expect pace now, quarter we -- already we receiving question, were well to those as are as was equipment well. of to And but they to parts see to into it run watch our of as and fourth going the your equipment that the pickup So them perform.

Operator

to follow-up Beaven The Signia Rich from next Capital. question is from

Rich Beaven

Just are, once what an I give curious assumptions with you are stride processing our of we Phase completion on Can on is of plant there throughput IRR and idea some I? complete. more us details hitting the Phase your really the once

Chad Potter

was year out I, year, put CSPG last out XX% our we primary that IRR Phase for well DFS about between put product X% the of we results split is approximately metric tons discount. as an when of [SPGX], throughput the and then as X,XXX our on So per

mentioned credit the of one tax include that that Inflation However, things not related XX% the reduction is was Act. does Reduction to the

to is have obviously your a actually that refund being sold reduced not that, out if we So helps. by of but put goods impacts cash cost tax

Rich Beaven

And to we respect product the higher pricing, today assumed a are is bit end that assumptions where extrapolated at to is that around with as or price?

Chad Potter

that forecast. a not they specific third price gold on were It's party based other are used, commodity but say forward not we has commodities. you find a that or assumptions upon those in price will that So oil, I would

sources And average therefore, so we kind upon take based of look an to our those of at product. had multiple and

Rich Beaven

finally… then And

Chad Potter

price it's curve, third forward not necessarily, it's a It's publications. today's but spot upon based party

Rich Beaven

I'm assuming that have a we higher price today. right? be that quoted Would than what

Chad Potter

being the shortage increases. of Benchmark price now by forecasting publications as the lot pricing are like A supply forward prices right stuff Minerals that future up and are put the a higher environment in

Rich Beaven

some on or us life be production? to to be bring us as flakes finally, would Coosa? relates then well? can And you then it that details deposit color just What any potentially give would size, as the the more And purity into give could mine cost of what you

Chad Potter

completed just program. drilling as our we Rich, mentioned, So we

We And that. a those capital market be up start come resource we future. will to putting into are the estimate able the put with develop updating our from exact being and we'll can will And results at to process plan really mine in model, the evaluating paper, the we pen of then -- in that and that, point, design. we

for need then on we then mine through work plan, of the this will process, model. steps need helps out results permits. be step the we which And what just resource developing the First to putting drive permeating

approach really staged through. it's a to And we that need so work

Rich Beaven

that results those maybe get Difficulty] out there? will commentary [Technical take And that in the surrounding

Chad Potter

information on or But So provide model going we're the results year we looking the available forward. guidance it that the process as resource becomes rest to of as put through steps, we'll work by out end.

Operator

The next Porter, Porter LeVay Michael from question from Rose. comes &

Michael Porter

Chad, the timetable as you supply affect you're can and chain about about give us how little weather, as what color plant? for it'll and your worried a far

Chad Potter

-- into of schedule. that We have that and built looked any at into our that

our right of now, track. on tight long they're of As items, lead delivery the

continue As a Europe we to tracking We'll we sent we to mentioned do team earlier, so, but inspections. do it's expected. as to

Operator

no are session. closing Terence concludes queue. more our in any turn the question-and-answer This questions Cryan back remarks. conference There to the like I for to would

Terence Cryan

of in for everyone keeping regular We this appreciate your interest touch with our in company. really look We to all our stakeholders. joining us forward Thanks morning.

we'll Thanks in day. So again. touch be shortly. Good

Operator

today's This call. conference concludes

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

Westwater Resources (WWR) 10 Nov 222022 Q3 Earnings call transcript