Earnings call transcript Q4 2022

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources, Inc. full-year 2022 results and business update conference call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. Instructions]. [Operator

like CEO. conference Please now Bakker, to turn and President go to would over the Frank I ahead, sir.

Frank Bakker

Financial and Cates, and is our the excited CEO of moderator, year-end Terence first earnings and Cryan, you, thanks Resources. our becoming attending this and Officer. those Board; Thank the since our to business have update of lead With results Executive to I'm Westwater Chief Chairman call call. Steve the company to XXXX me today

During future presentation, we schedule are and raising this plant, economic forward-looking the make graphite Coosa but forecasts, Kellyton and the based statements capital including, activities. judgments, graphite expectations not on the and related and price graphite management cost projections, limited to to, demand deposit,

similar for certain this These other and which differ today. on statements uncertainties of be to results discussed actual XX-K description within SEC materially slide and Please X our are may from our and XXXX subject a what's in cautionary risks can statement found read realize our that filings. and and presentation other

of anode Phase support energy construction the over strong, is transition. to requested. graphite graphite from continue completed be our will year. of been to ongoing X, Slide for processing plant a plant processing customers potential Kellyton material When Kellyton necessary provide has I Interest the and samples

anode an batteries. CSPG two Kellyton as entered with electric producer. for high-performance expected an into our produced Resources agreement work ensure be at be will plant companies the Recently, together their used that the to Westwater agreement, a vehicle battery can to Under the

significant a be of, plant agreement, be a agreement efforts anode time, from announcement potentially, business and this expect allows batteries. graphite to another At engagement terms for advancement Kellyton are details. to negotiated further our a in future sale those this those that is month. our our to we Subject we joint provide partner position with our all material This anticipating the And in potential for and and conditions with customers. making to yet later in

XX,XXX the Graphite We processing Once battery-grade vertically represents approximately graphite operations, to also hold will first in mineral requirements across Kellyton rights domestic the US. the fully battery Reduction passing advantages We the vehicle Belt. deposit graphite integrated the believe plant domestic Coosa acres the company significant and for its Act competitive electric content in the provide XXXX this Alabama of with materials. given in Inflation

to production to slide economics X, are we demand believe processing improve and pleased we which the we have growing the of completed optimization Kellyton an capacity, increase customer Turning announce plant, in graphite will the our significantly to response that of planned feedback to project. study

now metric annum, we I than CSPG year. to our per expect estimated to production in result, doubling a approximately tons double throughput As capacity Phase XX,XXX metric to our X,XXX more per tons

an XX.X%. throughput compared estimated three flow and higher increase in pre-tax pre-tax XX% increase an in in to original expected times, increase results cumulative $XXX and estimated in The to $X.X over of of to an million the IRR cash the pre-tax DFS estimated to the billion NPV,

the the estimate be to Phase With optimization, $XXX million. approximately we total cost now of I

the occur of production XXXX, and first first We to commissioning subject expect in XXXX, funding a construction. Phase additional to closing testing in of to I begin to half late the complete

I XXXX. spend targeting the second XXXX throughput are for the Phase the completion in and capital of to optimization expect we in half of increasing this optimization and additional the Additionally, necessary

pre-tax I nearly metric and definitive is cumulative the $X.X XXXX the flow cash feasibility Phase Phase to estimated tons IRR expansion will estimated million. have currently plan the $XX.X begin per at tripling and $XXX incorporated estimated of and we increasing the billion Phase approximately Phase an expected The II on X, We NPV provide a level, pre-feasibility completed. cost a II of II study also CSPG the production once XX.X%. in to combined to total to update optimization at increasing billion, planned pre-tax year, to Slide the and XX,XXX

to we Slide update, project at for beginning Turning and progress significant accomplishment. core as This as teammates. safety Westwater late the well value our graphite X we environment since continue a had operate. in the to protection our contractors Kellyton is zero number a will where and Safety one recordable of our construction live construction is of and XXXX, by the have incidents be

in the other underground the in equipment building And buildings major buildings. finished, the utilities. XXXX, majority equipment close Long and buildings Significant foundations, of year. the been the to site. completed During on arrive and has to April are the start be progress putting March, of made the will we earthwork, start of completed lead the place we March this year. Two will this three of in at being

we Coosa slide technical fourth which our exploration program XXXX, in approximately geological to the mineral short acres to about technical processing over X,XXX noting plant for a worth the X, our feedstock years. published hold identified our XX million estimated Kellyton completed acres approximately X.X of was based completed rights. which of supply that and tons completed for on we graphite in enough XX,XXX model deposit graphite April Regarding on and quarter, report drilling report It's the the requirements drilling graphite,

and expect make of definitive financing. the We I to deposit Westwater work feasibility come involved Westwater end the by the extremely of permits, and XXXX, am Resources required to Coosa its successful. our proud the the continue to contractors, own subject dedication to hard all obtaining of study, team, online

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

Steve Cates

and finished you, the $XX.X debt. Frank, of morning, year Slide Westwater and good X, a balance everyone. cash with Thank no million

to Phase plant. including Our business, Kellyton of of strong allowed construction has continue to the our graphite us advance financial the position I graphite processing

balance estimated debt, Phase term indicative million for of a private we non-exclusive Regarding requirements. that we $XXX the financing, current are capital sheet non-binding, of to announce the cover I will pleased signed have which

are We second quarter on transaction this year. in to of targeting close the this

Phase million approximately cash construction, construction. beginning the which now totaled total million, we includes $XXX the Phase Since remaining I And the $XXX spend million expenditures approximately optimization. estimate I cash to of of estimated costs of related $XX

expenses for Turkey. million $XX.X slide to Net The for detailed as compared was cash Republic $XX.X for in due to our summary these development is $X.X arbitration as recently our lower costs discussion the our of primarily million, of approximately in with XXXX XX-K used used financial related included product the XXXX as decrease X, on million Form release. well and items Turning operating in against reduced all year-end to our press filed operations was XXXX. activities cash

in the decreases in samples Those graphite later produce this year of for XXXX Phase million partially sale offset by Cash used inventory quarter, and were recognized the feedstock the investing processing of plant. related ongoing of purchase ahead customers. of and fourth equity was on securities construction and our activities in to the beginning totaled commissioning gain the of additional XXXX and product $XX.X Kellyton I for to testing the

and cost incurred In definitive mentioned study the decreased Phase our our million I pilot to we costs product during $X.X As feasibility program. complete current XXXX, for year. previously, development

provide shipment of products continue battery-grade pilot additional to program our to evaluation for and We our to customers. by samples operate potential

of share, net million, $X.XX product by on G&A of interest due offset earned uranium securities in loss costs $X cash million held partially XXXX. with per the the net the absence was continue our sale higher lower were in $XX.X per loss was and to our our fourth These balances. Lastly, a net out as compared in or we XXXX to loss primarily and expenses final income to by or that of arbitration XXXX share, $X.XX quarter $XX.X to gain of million, The in the recognized build team reduction Westwater related XXXX development former higher business. and for we received equity

I'll turn that, you. the back questions. Thank to With you, operator, for call

Operator

[Operator you. Instructions]. Thank

Research. We question-and-answer Fiakas, the Equity Debra will now begin Crystal session.

Debra Fiakas

Thank you, operator.

you to to Bakker the was twinges first that ask I his in to optimize today. me your the disclosed the make and to plan First, study about new to some the plant? impetus process? new optimization for triggered congratulations offer Frank I, this position. wanted let What tweaks off, role. wish you well What

Frank Bakker

Thank Yeah. question. for the Debra, you,

think two reasons. I were there main So

there And the close an US. The in increased first we that second of made after was XX%. to increased demand that XX% reason CSPG domestic to you reason from the market is look this and is optimization, if IRR material IRR the before in the optimization the at

the also that's why the optimization. other So did we reasons

to the the didn't we optimization, the We facility. and removed that actually. good it's flows And only on technology, the rerouted the bottlenecks in know process change

Debra Fiakas

the just on to Do have with the next that equipment? set that question my still Excellent. of the part of That If you is had is. same using? flows, increase? actually the be add means optimization? it's planned is Is to previously What of you going are cost working the equipment you what process

Frank Bakker

Yes, you're correct.

going the equipment And That's additional only capacity. use existing to to going to need equipment. We're we're going that -- reroute process we're to to the reuse So correct. add flows. we reach

Debra Fiakas

Then I wanted to increase. cost the to move on

part, added the some the increases delays from, as to and hint arise You maybe as a -- filing in there cost was annual price in the optimization really overruns costs changes due and mentioned inflation. that at well

three on could did you contribution bit the just color cost each what of principally it give optimization cost play? those if the and little Are sources. the the wondered delays plan? I a of part us Or overruns increases of relative of

Frank Bakker

Yeah.

and project announced start is of year, of the in continue think the what producing mainly second in Because optimization I first the this with the increase year, to and, of then want increase production that project. half that optimization a next the material driven we commissioning it's half. end we has start course, then to

a also -- have optimization. project duration capacity longer your this little takes And to longer. get full that then, also we because related So to to bit drives

of have cost, You course. more

Debra Fiakas

its Certainly. original project that the confirm Can schedule? is on pushed has back still been it Or somewhat? you

Frank Bakker

was last It's with announced call. in the in what line

year. commissioning we of end So start this

steel The as building, one all we have speak. the is For arriving in. equipment we

building the So is finished.

equipment, start that start year. commissioning setting then and this and to we going end we're of testing So

Debra Fiakas

Excellent.

mentions optimization fines. throughput increase Your possible Now, our the that the is? what is with purified mix under optimization fines, I to the with the be amount mix I I also to report graphite confirm through that And product plan, of SPG -- in going new in wanted the end noted the wondered, spherical that's plan? also production where just is CSPG planned possible the CSPG

Frank Bakker

Yeah.

CSPG depends we to most So it likely, have do Because also the on if it. margin. have will actually really the but economics the make purified a to fines, product we're option going higher

production. on focus CSPG the we'll So

Debra Fiakas

you that just monopolize among question. mean today EV battery I been conference new can't agreement to Is producing call? don't them. that that last call, Is with is any the a entirely it Okay. that in -- this the or previously understand that's And press to you been This know I batteries. and before I I announced manufacturer have discussed? regard this entity the development entity one announced? Or have discussed LOIs release is five it name new not that. in you've an Is again,

Frank Bakker

Yeah.

planning a We at to with further we And month. to a joint provide position in make that this details. are are announcement our time, later partner

Debra Fiakas

details those include a Do name?

Frank Bakker

include name. Yes. a will That's Then, it correct.

Debra Fiakas

appreciate Very right. queue back additional just it. you going I'm get questions. I questions, Thank for to additional but and good. I ask others allow and out to have bow All your the in answers. do

Frank Bakker

Thank you.

Operator

Silversteyn, Dmitry Tower Water Research.

Dmitry Silversteyn

you Thank here, battery X on Phase my very with a for Tier the of II agreement with the positive gentlemen. signing morning, call. and and Good increased developments Phase manufacturer. production I both of taking the Congratulations

talk or all, that that end CSPG, this by Just a of clarify. your When the -- all run potentially, 'XX? you of do Phase tons potential be you the agreement and CSPG you the X,XXX customer you couple by production will about complete originally mean was as new tons taking, the questions to targeted hundred production improvements of the I rate once are metric metric X,XXX

Frank Bakker

partner. the we will details our Those make that be provided announcement will in Yeah. joint with

Dmitry Silversteyn

enough. Fair mean I Thanks. -- But okay. Okay.

metric tons more, X,XXX least like. at and So sounds maybe

Okay.

much in you I targeted Phase process it as of produce much going I, the production or material your like your II. -- to for material Phase now the so as increase produce as material sounds be Phase basically, originally as on is Secondly, -- --

the original Phase So does look significantly incremental a your mentioned, not million. little like you've I as doubled, higher production. more versus of you $XXX over a It cost than budget bit

I, bit production say adding a I if we for the become can little more is, Phase the it's So your that learned more and much question you I I increase adding capacity just given if could about could guess if how production Phase much -- by capital? bigger easy. bit CapEx wouldn't Phase little a of double needed, what But II by

Frank Bakker

Yes.

Because is is total the Phase the will we took metric capacity it's think correct. approach. what Phase II, if year. -- around I we a II XX,XXX calculated, And Phase of ton XX%. you're XX%, per of in modular approach be at you II, facility, the look the And IRR capacity

a different paste. a That it's the So Phase we optimize lot we facility, copy of part units for in unit need the modular. big II. of is facility, one go to a But for that when it's to

it's like So really paste. a copy

easy makes actually. pretty So it life

Dmitry Silversteyn

Okay.

current -- actually looking your strong and have continues that, spend II demand remain for more to to for it's to and Phase the Phase ability then So possible the production customer much if II, that strong? remain interest million in footprint $XXX continues can you're I Phase increase not you you to than

Frank Bakker

correct. Yes. that's Yes,

We there capacity. have enough to increase footprint our over

Dmitry Silversteyn

Okay, just final sure question, great. just to And one make I then understand.

So the and you by testing complete end of and 'XX. the ramp construction up

You 'XX. finishing about end optimization talk the beginning the production of And at into of get then you 'XX. the by

I'm you're production does rate? of to be run going run run then to ton So XXXX, the end get -- at metric way the it? rate. ton ton by to XX,XXX about will the your that that X,XXX mean a initial And metric metric Is XX,XXX think rate that sorry,

Frank Bakker

Yeah.

going will -- capacity. full in year. of And XXXX. we'll we'll commissioning ramp then the half, to Then during of continue to continue end this beginning effort going our the we're start commissioning year, we're That first the over next producing So well, graphite. start up year, to slowly,

Dmitry Silversteyn

Okay.

I the questions Okay. Thank time. you That's for all have. your

Frank Bakker

you. Thank Okay.

Operator

Debra Fiakas, Crystal Equity Research.

Debra Fiakas

be if Thank so on might Cates, come you you. for question Steve to quickly. Steve. quite the I didn't queue This around expect more will,

of And agreement far the financing are how little in non-binding us the you along about term or color just give talked a if You bit could sheet. wondered I you negotiations? these on

enough cash an do model of you Have an of flow Is can Have idea, interest example, that you so it terms? repayment what details discussed for be repayments? Is interest impact And the fixed? you the then, rate? gotten variable? have and you, principal it would

Steve Cates

Yes, Debra.

it terms. we all. far So as going get all and sheet, seeing through that's indicative if as well in there of that still as so an probably of coupon rate, are repayment to to process, moves is you're term those until negotiating closing But at aspects the subject and aware, the kind final terms pricing

So to do while do the have we so until actually sign close. we'll that we the agreement, in modeled we market. transaction, and communicate we're the closing in, not But yet position and that definitive that when have a

Debra Fiakas

bank loan their acting an -- clarify they Okay putting then. Can just you investment is they intending a make is? Certainly. what as role the mentioned intermediary syndicate the involved. together? to when an or are and And you Are themselves

Steve Cates

we third that that's closed of that bank, of a and dollars over party it's an Yeah. going to energy the past I the of said within of debt. has but couple we're the this with ever investment is decades transactions close. through process who don't billions working sector And believe

And more able to so, once close to lot there'll be update we're this. a

Debra Fiakas

party? making this third the loan they're So themselves,

Steve Cates

ends negotiation, up It being involved. or get the couple will we party of parties a to when single it be final remain whether to seen a

working we're so And now. through right that

Debra Fiakas

Okay.

money that awarded next you're walk what to suppose what and is us that could looking you made probable But begin panel makes million. to I in regard. I for would you're will decision I describe the to not reflect dispute And -- going anything you to wondered that be what regard that Okay. on through the this get it if more and than in expect $X.X that the that just more could that the you the you arbitration notice books? could see March. we to and it maybe can be us if in earliest the certain decision final did also to was that Westwater they Turkey by

Terence Cryan

Terence This Debra? Cryan. is

Steve Cates

go Debra. Yeah, -- I ahead, Terry.

Terence Cryan

announced your for tribunal Friday. that. by The question, decision Thanks the on only was arbitration appreciate

little be definitive tribunal the in pleased think think amount found a I the And disappointed the so, I early we're that. would of decision on favor that the that And is it's we're us obviously, and about to while I the non-appealable. for ordered. But our that note merits, binding tribunal

Debra Fiakas

is, been that's deposit. pushed all to in out with final graphite arbitration wondered Frank. what to is last two-year out understood. I jump We increments question the this. XXXX. timeline the then for this if go been Coosa outlined Yes, could That's And you It's maybe for again, now back about.

of Could months to that question. not of out sure strategic pushed if give you all a driving maybe so all it thank strategy recently been then what last out years? thinking of ago, And has do. is my us your this timeline, two in will? you an you was pushing done I the another I'm idea is What's or of it but And that if XXXX. behind couple the answers. for

Frank Bakker

Yeah. you. Thank Yeah.

the pushed out. timeline not has So been

been mine the operational. has So be it always XXXX to for

in in continue to the XXXX. we'll to the the have research, permits things do all get a to all in program we So place, place get all -- it needed operational

Operator

remarks. there As back to like session. conference for concludes further no Bakker the are Frank to closing this the turn questions, over would question-and-answer I any

Frank Bakker

you. Thank

economics project II the metric couple improve of increased year. I Phase doubled tremendous per By made months. last I, we doing of We amount we've our XX,XXX this, significantly. progress the tons capacity a of Phase over to think capacity production our

sheet capital to for requirements. Phase a I Next term this, the executed we

and thank to you. for speaking want call. Resources. the on I the Westwater next looking attention to for to their think forward I you So everybody looks bright future Thank

Operator

This call. today's concludes conference

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

Westwater Resources (WWR) 7 Mar 232022 Q4 Earnings call transcript