Westwater Resources(WWR) - 2024 Q2 - Quarterly Report

Offtake and Procurement Agreements - Westwater entered into an Offtake Agreement with FCA, committing to supply 10,000 mt of CSPG natural graphite anode products in 2026 and 15,000 mt annually from 2027 to 2031[64] - The Company signed a Procurement Agreement with SK On, with a forecasted volume of 10,000 mt of CSPG in the final year of the agreement[65] Kellyton Graphite Plant Production and Costs - Westwater expects the Kellyton Graphite Plant to produce 12,500 mt per year of CSPG in Phase I, a 67% increase from previous estimates[72] - The Company has incurred $120.4 million in construction costs for Phase I of the Kellyton Graphite Plant, with an estimated $150 million required to complete construction[70] - Westwater anticipates beginning production in 2026, subject to securing additional financing[70] - Net cash used in investing activities decreased by $48.6 million for the six months ended June 30, 2024, as the company reduced construction activity for the Kellyton Graphite Plant[90] Financial Performance and Expenses - Westwater reported a net loss of $6.7 million for the six months ended June 30, 2024, compared to a net loss of $6.0 million in the same period in 2023[84] - Product development expenses decreased by $1.1 million for the six months ended June 30, 2024, due to the use of the in-house R&D Lab for sample processing[85] - Other expense, net increased by $1.4 million to $1.0 million for the three months ended June 30, 2024, and by $1.9 million to $0.9 million for the six months ended June 30, 2024, due to lower interest income and higher expenses related to inventory sales and write-downs[88] Cash Flow and Financing - Net cash used in operating activities decreased by $3.7 million to $5.2 million for the six months ended June 30, 2024, primarily due to reduced raw material inventory purchases and third-party service expenses[89] - Net cash provided by financing activities decreased by $2.2 million for the six months ended June 30, 2024, due to fewer shares sold under the ATM Offering Agreement and lower trading volumes[91] - The company's cash balance was $3.2 million as of June 30, 2024, with $0.8 million raised from selling 1.8 million shares under the ATM Offering Agreement[95] - The company expects to continue incurring losses until operations commence at the Kellyton Graphite Plant, relying on debt and equity financing to fund construction[96] - The company may offer and sell shares of common stock with an aggregate offering price of up to $7.0 million under the ATM Offering Agreement as of June 30, 2024[97] - The company received $1.0 million from sales of raw material graphite concentrate and $0.5 million from capital cost recoupment after June 30, 2024, maintaining a cash balance of $3.2 million as of August 12, 2024[95] - The company is considering alternative financing options, including project debt, convertible debt, or partnerships, to fund the Kellyton Graphite Plant construction[96] - The company faces risks related to securing additional funding, which could impact the construction timeline and operations of the Kellyton Graphite Plant[92] Mineral Rights and Regulatory Environment - The Company holds mineral rights across 41,965 acres of the Alabama graphite belt through its subsidiary, Alabama Graphite[73] - Westwater believes the Inflation Reduction Act's domestic content requirements could provide indirect future benefits to the Company[77] Share Issuance and Capital - The Company sold 1.8 million shares of common stock for net proceeds of $0.8 million during the six months ended June 30, 2024[83]