Workflow
Westwater Resources(WWR) - 2024 Q2 - Quarterly Report
WWRWestwater Resources(WWR)2024-08-14 20:15

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 120.4millioninconstructioncostsforPhaseIoftheKellytonGraphitePlant,withanestimated120.4 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 48.6millionforthesixmonthsendedJune30,2024,asthecompanyreducedconstructionactivityfortheKellytonGraphitePlant[90]FinancialPerformanceandExpenses−Westwaterreportedanetlossof48.6 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 6.0millioninthesameperiodin2023[84]−Productdevelopmentexpensesdecreasedby6.0 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 1.4millionto1.4 million to 1.0 million for the three months ended June 30, 2024, and by 1.9millionto1.9 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 3.7millionto3.7 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 2.2millionforthesixmonthsendedJune30,2024,duetofewersharessoldundertheATMOfferingAgreementandlowertradingvolumes[91]−Thecompany′scashbalancewas2.2 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 0.8millionraisedfromselling1.8millionsharesundertheATMOfferingAgreement[95]−ThecompanyexpectstocontinueincurringlossesuntiloperationscommenceattheKellytonGraphitePlant,relyingondebtandequityfinancingtofundconstruction[96]−Thecompanymayofferandsellsharesofcommonstockwithanaggregateofferingpriceofupto0.8 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 1.0millionfromsalesofrawmaterialgraphiteconcentrateand1.0 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 3.2millionasofAugust12,2024[95]−Thecompanyisconsideringalternativefinancingoptions,includingprojectdebt,convertibledebt,orpartnerships,tofundtheKellytonGraphitePlantconstruction[96]−Thecompanyfacesrisksrelatedtosecuringadditionalfunding,whichcouldimpacttheconstructiontimelineandoperationsoftheKellytonGraphitePlant[92]MineralRightsandRegulatoryEnvironment−TheCompanyholdsmineralrightsacross41,965acresoftheAlabamagraphitebeltthroughitssubsidiary,AlabamaGraphite[73]−WestwaterbelievestheInflationReductionAct′sdomesticcontentrequirementscouldprovideindirectfuturebenefitstotheCompany[77]ShareIssuanceandCapital−TheCompanysold1.8millionsharesofcommonstockfornetproceedsof3.2 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]