Westwater Resources(WWR) - 2023 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The net loss for 2023 was approximately $7.8 million or $0.15 per share, compared to a net loss of $11.1 million or $0.25 per share in 2022, indicating a decrease in net loss primarily due to a gain of $3.1 million from a settlement [47][44] - Cash used in operating activities decreased by approximately $1.7 million compared to the prior year, attributed to cash received from the settlement and higher interest income [44] - The company finished the year with a cash balance of approximately $10.9 million and no debt [39] Business Line Data and Key Metrics Changes - The Kellyton Graphite Plant is expected to produce 12,500 metric tons per annum of Coated Spherical Purified Graphite (CSPG) in Phase I, a 67% increase from the previously planned 7,500 metric tons [8][50] - The feasibility study for Phase II aims to increase combined production to 50,000 metric tons per annum of CSPG [9][31] Market Data and Key Metrics Changes - The projected demand for natural graphite anode material is expected to grow significantly, with a forecast of approximately 1.2 million metric tons in 2030 and over 2 million metric tons by 2035 [21] - Approximately 90% of today's battery anode materials come from China, highlighting the critical need for a domestic supply chain in the U.S. [14][12] Company Strategy and Development Direction - Westwater aims to become the first vertically integrated U.S.-based natural graphite anode supplier, focusing on domestic production to meet the growing demand for battery-grade graphite [10][12] - The company has signed its first multiyear offtake agreement with SK On, allowing for sales to ramp up to 10,000 metric tons per year in the final year of the agreement [26][25] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of establishing a reliable graphite supply chain in the U.S. due to recent Chinese export restrictions on graphite [14][12] - The company remains optimistic about the future demand for graphite anode materials, driven by the growth of electric vehicles and government support for energy transition [18][13] Other Important Information - The initial economic analysis for the Coosa deposit indicates a pre-tax NPV of approximately $229 million and an estimated pre-tax IRR of 26.7% [10][34] - The company has incurred total costs of approximately $119 million related to Phase I construction, with an estimated $152 million remaining [39] Q&A Session Summary Question: Concerns about securing financing for Phase I construction - Management acknowledged that while significant milestones have been achieved, securing debt financing has taken longer due to the need for lenders to understand the graphite market dynamics [55][56] Question: Current status of financing requirements - Management indicated that multiple term sheets are on the table and they are working towards finalizing a debt transaction while maintaining flexibility for the best terms [56][57]