Westwater Resources(US:WWR)2023-05-11 17:18Financial Data and Key Metrics Changes - The company finished Q1 2023 with a cash balance of approximately $40 million and no debt [18] - Net loss for Q1 was approximately $2.4 million or $0.05 per share, compared to a net loss of $2.8 million or $0.08 per share in Q1 2022, reflecting a $400,000 reduction in net loss [22] Business Line Data and Key Metrics Changes - Cash used in investing activities for Q1 totaled approximately $34 million, primarily related to the ongoing construction of Phase 1 of the Kellyton plant [20] - Product development costs for Q1 increased by approximately $260,000 compared to Q1 of last year, due to additional sample production for customers [21] Market Data and Key Metrics Changes - The EPA announced new emission targets, expected to increase critical material demand for electric vehicles by 78% over the next 9 years [5] - There are approximately 15 battery manufacturing plants either under construction or planned in the U.S., all requiring graphite that meets domestic content requirements of the Inflation Reduction Act [14] Company Strategy and Development Direction - The company aims to become the first U.S.-based vertically integrated anode graphite supplier, with the Kellyton plant positioned in the heart of the growing U.S. EV battery market [5] - A joint development agreement with SK On was announced, allowing for the potential sale of all anode material from the Kellyton plant for their batteries [8] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the progress towards closing a $150 million debt transaction, which is expected to fully fund Phase 1 construction [24] - The company plans to begin installation of equipment later in 2023 and targets to have Phase 1 ready to produce at an optimized annual run rate of 7,500 metric tons of CSPG per year in the second half of 2024 [12] Other Important Information - The company holds mineral rights to approximately 42,000 acres across the Alabama graphite belt, which is expected to provide significant competitive advantages [15] - The estimated capital cost for Phase 2 expansion is $465 million, with plans to begin a definitive feasibility study in the second half of 2023 [13] Q&A Session Summary Question: How much more funding will the company need to operate until it becomes profitable? - Management indicated that closing the $150 million debt transaction would fully fund Phase 1 construction and they aim to manage costs to avoid significant additional raises [24] Question: Is the debt transaction still on track to potentially close this quarter? - Management confirmed that they are working towards closing the debt transaction this quarter, while also keeping options open for other interested parties [25] Question: Regarding the SK On deal, does the development agreement refer to Phase 1 or both Phase 1 and Phase 2? - The agreement currently refers to Phase 1, with potential for Phase 2 later on [27] Question: Is the timeline for the completion of the plant still on track? - Management confirmed that they plan to start ramping up production in the second half of 2024, consistent with previous communications [29][30]