Westwater Resources(WWR) - 2022 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - The closing share price on August 9 was $1.36, down from $1.92 at the beginning of the second quarter, resulting in a market capitalization of approximately $64 million [12] - Net loss for Q2 2022 was $3.2 million or $0.07 per share, compared to a net loss of $3.5 million or $0.11 per share in Q2 2021, reflecting a $300,000 reduction in net loss [17] - Cash balance at the end of Q2 2022 was $109 million with zero debt, supporting the construction of the Kellyton graphite processing plant [14][18] Business Line Data and Key Metrics Changes - The company has incurred $30 million of the estimated total cost of $202 million for Phase I of the Kellyton graphite processing plant [18] - Product development costs decreased by $1.7 million in Q2 2022 compared to Q2 2021, primarily due to the completion of the feasibility study and pilot program [16] Market Data and Key Metrics Changes - There is an increasing supply shortage of processed graphite material for electric vehicles and energy storage markets, which is expected to continue for the foreseeable future [6] - The company holds mineral rights to approximately 41,900 acres across the Alabama graphite belt, known as the Coosa graphite deposit [5] Company Strategy and Development Direction - The company is focused on producing advanced graphite materials in the U.S. using a patent-pending purification process, with a strategic approach to develop the graphite processing plant first and the Coosa deposit second [6] - Management is actively seeking additional or alternative sources of capital funding to support the construction of the Kellyton plant [14] Management's Comments on Operating Environment and Future Outlook - Management noted that investors are currently cautious towards pre-revenue companies, particularly in a rising interest rate environment [13] - The company is optimistic about securing customers for all output from the Kellyton plant before commissioning [24][34] Other Important Information - The company received its air permit from the Alabama Department of Environmental Management, allowing construction to proceed [9] - There have been no recordable safety incidents during the construction process, highlighting the company's commitment to safety [7] Q&A Session Summary Question: Clarification on the Letter of Intent with a global manufacturer - The manufacturer is indeed a global consumer battery entity, and pilot-plant samples have been provided for qualification [24] Question: Updates on construction progress for the Kellyton plant - Regular updates will be provided in quarterly reports, with ongoing development of the resource model for the Coosa graphite deposit [28] Question: Status of arbitration process regarding assets in Turkey - The arbitration process is complete, and a response is expected in the coming months [29] Question: Details on testing and qualification with the manufacturer - The manufacturer has conducted some testing, but specific volume details cannot be disclosed due to a nondisclosure agreement [32][35] Question: Update on potential funding from the Department of Energy - The Department of Energy is expected to announce awards for the grant program in October, and the company is actively pursuing various funding opportunities [38] Question: Impact of purchasing graphite on domestic production status - The company believes it will qualify as a domestic producer despite sourcing graphite from third parties before bringing the Coosa deposit online [41] Question: Potential benefits from the pending Inflation Reduction Act - The final version of the legislation is still pending, and the company is hopeful for additional funding opportunities [43]