Earnings call transcript Q2 2023

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Operator

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources Inc Second Quarter 2023 Results and Business Update Conference Call.

As a remainder, all participants are in a listen-only mode. And the conference is being recorded. there opportunity presentation ask speakers the will to be questions. After Instructions] [Operator

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

Frank Bakker

quarter With me Financial is Thanks attending to the Thank Chairman our Officer. today update Cates, Board; you, call. our and Terence moderator. Steve second results and XXXX Executive those of Cryan, business Chief our

and estimated on within XXXX presentation, and to, Kellyton are can in a management's graphite other statements the description for including related certain are forecasts; demand this judgments, future activities. our activities, found XX-K of but forward-looking we expectations During and of the deposit cost similar subject Slide on presentation based this which These graphite and be statements filings. and limited including, X not graphite economic Coosa projections; and risks timing price our schedule make capital-raising those plant, and to the and the SEC other uncertainties, to

Please actual from results read may realize that and discussed today. materially what's differ cautionary statement our

technology an our our company proprietary purification including on natural graphite producing energy materials States in technology, is Westwater patent-pending process. using advanced the United focused

Kellyton Plant in of Processing the growing market. the the energy support operations the U.S. graphite Slide X. remain to completed, U.S. in Central, based necessary location transition. heart our the Plant East focused battery on place supplier. provide of vertically integrated the We Graphite natural Also domestic anode to Alabama, that first becoming When anode will believe continue we material our Kellyton EV

number by according over demand electric their is Mineral vehicles or have rectify lineup. expected Many to for auto commitments increase the targets, next produced EPA the electric increase to which the years, either Recently, critical to new Benchmark announced manufacturers of Intelligence. completely X emission material XX% vehicles announced

X. to Turning Slide

demand double through for of at annual plant of to for expected lithium-ion CSPG. the around increased growth Westwater's product, Spherical or global Graphite grow result in Demand electrical also is globe primary batteries the a batteries in digits government the Purified production to XXXX. a and expected increased vehicles, for is As legislation Coated drive lithium-ion demand compounded U.S. and rate

America The growth tonnes expected per XXX,XXX is North by in to XXX,XXX XXXX. to for XXXX to CSPG demand tonnes grow and by year over approximately

plant. a Our plant within in or that's a construction Giga within is prime factories the Kellyton XX Plant under existing X-day delivery location of

XXX A the foreign graphite accounts on a On by minerals Slide as weight. importance U.S. is of critical battery high-end X illustrates typical lithium Currently, pounds XX% approximately vehicle in electrical battery graphite has dependent the products. of it XXX% of for around graphite. of the XXX imports to

for growing of to the materials U.S. critical lithium-ion led Slide mineral. supply demand to the government transition support has the secure batteries, for energy need and the graphite X. The government designate key a as

catalyst the have when IRA CSPG continues important to in we with requirement. in because Reduction contained our meet previously, the manufacturers content it Inflation domestic has the requirements mentioned helps the be to battery customers As EV U.S., Act. potential content and and been domestic engagement is of an produced

here will Westwater be non-Chinese CSPG a plan of compliant. of Resources, we from to secured feedstock the and conversion perform the at Kellyton concentrate Since produced has graphite source, Syrah process XXX% we its IRA domestically, expect

Moving to Slide X.

positioned based graphite in on of to vertically focus project become source future is Westwater well a U.S. IRA-compliant proposition market-mover to natural our as We and integrated the XXX% CSPG, advantages first the domestic continue the first believe value

purification acid. plan addition, standards continue to to process doesn't In focus, SASB our hydrofluoric including use the we ESG follow stewardship, commitment environmental and that

Coosa the graphite both the deposit. Kellyton business, our side Our of at expansion potential the business significant and plan includes for also future

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

First, conversion graphite multiplier CSPG a into flow of concentrate The it approximately X of to and results in revenue sooner. flake positive gets cash times. value us

approach, this flake along to will for securing source, Second, a near-term allow a from our non-Chinese natural with battery us materials. of supply of market take advantages graphite growing

battery joint announced in the a battery Slide venture X to On in operates global Tier plants with X joint Georgia development that XX. is Ford. EV SK battery and building with Earlier the on X its a EV year, On, BlueOval currently plants we in manufacturer additional agreement U.S.

has billion On Work Hyundai. and On was under manufacturing have feedback facility positive. the by preparation and announced collaboration, a testing of extremely product involves On sample $X evaluated in Additionally, and samples build plans continues EV The with development. we SK SK with battery ongoing additional a latest regarding received to SK Georgia JDA

as While not cell On, of This some few at to large can progress sometimes a testing, Westwater with large-format only also the able highly move companies before get but to iterations testing abilities skilled is SK as battery the R&D requiring many XX On sizes, positive SK to sample in was stuck basic small result with team collaboration technical testing they the iterations. of format cell after team. sample Westwater's with the

agreement Kellyton are made and currently Westwater a of an terms under CSPG significant sell JDA, Plant. result offtake the for progress from SK to As On negotiating the the

XX. Slide

to Westwater's the Dainen expansion automotive of potential In We We Phase continue LOI as manufacturers market. could announced continuous believe this them well. natural Dainen in our We of work signing with subsequent high-performance we entrance customers the engagement customers for Japanese with Plant. Japanese CSPG. with that accelerate an for important with Kellyton with anode Dainen the LOI offers battery and lithium-ion engagement purchase June, of our automated of and potential the batteries. is supply other materials leading believe II graphite

customers strong. as in interest future to From samples remains production potential May July, have we product spent through our XX

We continue samples. to on our receive positive feedback

had record Safety under for safety our and be environment XX operate. of is one well been contractors we of an core live teammates. number a value year. We've construction bio Turning while And continue update. beginning where I as Phase the Plant for to have since Kellyton the over of a for construction, construction our we Westwater protection to and as the and excellent Slide

later begun and call, internal are equipment in As installed I the our closing year completed the Kellyton completed of targeting of of to and Lab; we processing the micronized additional installing overhead the date are run and construction we our buildings; mills an other this financing, cranes; X building. of the additional a Plant shaping and of X,XXX have Phase plan by end of annual operating to additional SPG Subject and primary equipment of on receipt metric R&D equipment CSPG have to of ton rate XXXX. produce to ready install this optimized internal

potential. is at Kellyton allows which Phase definitive for Our expected is expansion The XX later significant begin pre-feasibility a footprint. $XXX a on site year. in estimated approximately expansion capital to million, for Phase has to Phase cost II produce The requirements we want study, expansion feasibility of manufacturing the domestic at of subject current a II level intend II acres be And or under The year in the States. supply graphite plans. CSPG. of that plants metric United content be the built to construction Westwater to tons battery graphite solution planned per either Currently, meets the for All the plans are XX significant a the XX,XXX IRA. plants approximately there battery these these part to

XX. to Turning Slide

deposit Alabama significant across the rights belt. hold company battery-grade the the Coosa given approximately We domestic graphite mineral also requirements vertically processing acres previously graphite operations, provide in fully to U.S. the XX,XXX advantages, We integrated mentioned. content the in graphite represents the competitive will first this the Kellyton plant in IRA and believe domestic Once

quarter In XXXX, requirements technical for our drilling geological program to model April report the tons feedstock XXXX, graphite supply million graphite and X.X a the Kellyton years. which completed short processing we estimated in XX fourth for and our about over enough completed identified exploration the of of plant published

based approximately on than drilling technical It is we XX% less noting of was hold rights. worth to acres that report which mineral completed

During the this and to the assessment calendar year. on second for expect quarter, the by this economic complete began of work preliminary we end assessment Coosa deposit

the plan Chief the and are at turning for team of to We creating to team this Westwater the execute business I plan, value work reiterate flexibility in times been has that extremely I and hard proud and Officer, over call dedication, exciting these want involved Financial business have I'm long-term our of the our advancing to and remain shareholders. Before we our our Westwater. diligent believe contractors, exceptional. all

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

Steven Cates

approximately totaled a $XXX balance approximately cash cash XX. Westwater and inclusive debt. Slide everyone. estimate greetings, of related and I we Frank, the Since remaining, cash million. you, to million million expenditures Phase have with construction, no $XX.X quarter beginning finished approximately And of spend contingency. of Thank $XXX

are balance towards a significant Phase cost transaction the debt to making the I. fund of We finalizing progress to complete estimated

battery interested to that with are multiple in lenders related transition energy engaged projects materials. We're the and

those currently are term subset of negotiating a We sheets with lenders.

are the While are a transaction. of that securing the our key transition debt We and encouraged agreement looking lenders is the to believe in over to a tight we by sales invest specifically, definitive credit markets energy group project. the past have year, been finalizing

customers. we've made the with Our potential lenders potential SK have On by been other progress and encouraged positive

is balance. the by development administrative in financial for used on XX. Slide compared quarter approximately months is costs these first product in the operating higher as included cash XXXX purchases recently as These second increase discussion feedstock, higher increased in cash Net our increases the XXXX. interest summary used operating items by and partially activities and to well of filed general Detailed half X to in of release. due XX-Q Form higher half income Turning on were of of $X cash our expenses. offset earned our to all million additional first the press first This primarily

are approximately quarter of second additional On. Cash This ongoing with used compared $XXX,XXX the and for the million for to to the costs of JDA Phase to of SK year. customers year Product in by to of the production investing $XX last approximately I first work QX and related plant. increase for relates sample development increased construction the activities half totaled Kellyton the pursuant

operations our process volumes construction. securing with market-mover maintain remainder the sample during commencing development costs to qualification early contracts work of needed the goal We to expect put and work prior important to to Phase I Kellyton Plant reaching the XXXX, additional complete and we through believe of incur LOIs continuing customer We to having the in is contract as place. to related to advantages, financing production customer customers additional under product

costs. overhead quarter administrative of QX the General remained last for to and year compared our expenses flat to due second essentially managing

for million quarter in $X.X interest loss or share was higher compared loss The share net to product due second net was $X.X the $X.XX Lastly, a of loss costs, per in offset to during primarily by development partially approximately QX higher quarter. of increase per million earned the the or income $X.XX net XXXX.

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

Operator

question Law [Operator Instructions] Pierce Our first comes Michael Firm. Gene from of

Michael Pierce

you're more you and explain So true? go On. I release now. that a your to to to meet get it necessary can you in to Would get a to at a want specifications that through scale what sample you've just sample be level be SK to and able a larger Can SK, would bit for of providing you that have in understanding qualifications it's saw that do order to size? mass been if My see they that little the

Frank Bakker

Yes, completely you're is correct. Yes, Michael. Frank. This

specification. our to produce we're So a and about positive was end when And month, Korea completely of On I last year the sample, meets for it mass On. SK targeting sample production was SK very in this

Michael Pierce

something indicated is You've to that's company of in a being finalize this to going anticipating longer? for that agreement. that Is year? Or able is a negotiations also take active you're finalization something supply that the that

Frank Bakker

The is this year. No. anticipation that that we finalize

final in negotiation. Our opinion we are the of the stages is that

at this stand we where that's moment. So

Michael Pierce

this on able come terms? at the together being point, it's all So just to different

Frank Bakker

Yes. correct. That's

Michael Pierce

value of PEA do deposit? and the that's something to that that to deposit that going value year. on can nature on the Is of you're graphite prices a stated later this projected can based release project we that at also look net a -- You've the things the of company Coosa and shareholders to present have going

Steven Cates

we with will to Steve. a with that include have is the well we and follow that as that we have to analysis, mine will the a And is we based us follow. this we with upon following it analysis, into reporting the the SEC a familiar deposit design. full that help on rules economic rules preliminary pre-fees Michael, Then estimate flow feasibility start but very Yes, qualified study. definitive contracted need moving -- expert an as our more that, this, cash

Michael Pierce

to say, is let's On can complete, how agreement the sales sales agreement be are lastly, confident And or company another SK with end complete that completed? that is you financing the able user, the once

Steven Cates

Michael, Steve is again. this

think I a to critical milestone that's reach.

a States. dominates X a a trying to soft But this couple a closing China market or the us them of has landing Fed capital is market. than mind. United to The things actually been is financing couple new due everybody to keep anticipated, markets think taken able in the in to execute months, past X importantly, of if the as The have I for longer the see the things. not. rising environment; rate debt of to tight here over mainly the more is

So time to there and offtake But speed There's all the lenders positive to it's space. finalize to battery looking lenders materials them in of help definitely deal. towards that that getting also the multiple are get think that. And interested some the to are up steps. used is taken we that

sheets an I best will and/or the possible lenders Also, forward investors. term bring more our negotiate for either offtake perspective, Westwater's help from getting deal us more think to

Michael Pierce

able funding for, company? special just ESG that groups oil say, to are green let's an a regular better terms there for type Are versus loans provide energy, loan

Steven Cates

Yes, this again. Steve is

and for that energy have of So transition the specifically, we're group the most them and aside with to, set materials. lenders money battery engaged of talking

ESG they're so interested looking the component. in space. the And at They're

just sometimes, upon in fund; interested have energy They be infrastructure of that might to, depending kind lender view, definitely each it's within So the they're It depends. different this talking a energy we're on their transition. others, team. their but

Michael Pierce

you -- over I of rest I to the I guys the appreciate a just from year. hear good of bunch it. hope news

Operator

of ahead. [Operator Research. Instructions] next Our question Water go Tower Dmitry comes Silversteyn Please from

Dmitry Silversteyn

A couple of questions, if I may.

looking I all, will you could sort which consume the of production. to going potential just of relationship, have them. most -- First agreement with to your and like was On size the the of SK Phase basically sounded me at of It it or selling

interpretation? So all, correct first of is that a

a demand you're battery other secondly, And coming with other to manufacturers, now work for may at meet way be continue looking to battery with production are really -- you the you do to II that manufacturers? as that negotiating from Phase anode manufacturers

Frank Bakker

other production. Frank. Yes, you're on sheets is this agreements majority sell volume engage volume. Phase And make also the for I II of to the plant. the It's we correct or continue the also Dmitry, customers remaining of with Phase and our Phase I potential term our to of

Dmitry Silversteyn

-- of any the demand, -- the Has and thought to it be construction through seems sort there know place gotten be haven't the I been to that we But relative Have Phase taking you strong any in years mean, and with start-up interest of given I Phase may especially couple expectations, given seems yet. of I to a to that IRA domestic industry, say, a the let's in II to given what of thoughts lot timing ago? be passing the in your the production.

Frank Bakker

last Yes, facility And so lot units based a we discussed our actually, of I design, of because on copy-paste. the modular it week. design, think are it's a

Phase can we our probably, up speed project. somewhat II So it

Dmitry Silversteyn

'XX timing Phase at that be sure you about will just that of Phase out correct II the II, and it the working and stage. And end specs. you'll that thinking that point, Phase looking way I definitive by But then it? at sold of running on be will making more Would basically, and up by the -- you're then of be hopefully, is design

Frank Bakker

want feasibility Yes. have -- the as as this. the also start market place, on soon we on based financing we in But to II we the study Phase for demand

Dmitry Silversteyn

II last the work your I the then start get the to and into related considerations. And to complete Phase financing on production again, Phase question, and securing

at maybe as of some partnership of maybe operations agreements place. with so off-take lenders been sales you're from contingent financing, sorry, financial or and speaking an You agreement -- and of lenders, the but needs? firm of earning I'm your talked the way to you a kind in of agreement a sales looked a about capital sort sort Have type getting institutional asset-level and agreement perhaps strategic not your fund potential more -- with not these

Steven Cates

Dmitry, this is Steve.

We possible have looking can terms turned of on capital and every stone for best cost financing. over the that we

explored avenues. have we so And those some of

we need the and pre-revenue are source the But more have is would with still And talking lenders And best avenues kind of remain. those attractive we the now coverage now, that right considering are capital we to of especially of that amount pretty cost now. what right ABL found, is the pricing. their the on lending, just high. Some debt-to-asset not of we're much cost

Operator

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

Frank Bakker

Thank want you. to Westwater interest in your you I Resources. for thank

to the the agreements our end during for CSPG The I made our progress from Plant. quality based of samples track next of Thank think metric we in are speaking the And you. this, customers equipment, on customers, we progress on our I'm ton offtake negotiating our on installed XXXX. our first positive. significant to the CSPG last product construction quarter. on feedback and very by our made significant with and X,XXX the engagement produce is We from of we our is to call. looking Kellyton you forward

Operator

today's conference concludes call. This

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

Westwater Resources (WWR) 15 Aug 232023 Q2 Earnings call transcript