Westwater Resources(US:WWR)2022-05-12 01:35Financial Data and Key Metrics Changes - The company finished Q1 2022 with a cash balance of $116 million and a working capital balance of approximately $109 million, with zero debt [8][15] - Net cash used in operating activities was $2.7 million for Q1 2022, a decrease from $4.8 million in the same period in 2021, primarily due to reduced product development expenses [11] - Net loss from continuing operations for Q1 2022 was $2.8 million or $0.08 per share, compared to a net loss of $5.4 million or $0.19 per share for the same period in 2021 [13] Business Line Data and Key Metrics Changes - The company incurred $17.8 million in costs related to the construction of the Kellyton graphite plant, with an estimated total cost of $202 million [9] - Capital expenditures reported in Q1 2022 were $12.1 million, all related to the Kellyton processing facility [35] Market Data and Key Metrics Changes - The EV sector is expected to grow at a 24% compound annual growth rate, driving demand for lithium-ion batteries and consequently for graphite [18] - The U.S. government has defined graphite as critical to national security, with significant funding allocated to expand battery manufacturing capabilities [16] Company Strategy and Development Direction - The company is focused on producing battery-grade natural graphite materials for advanced batteries in the U.S., utilizing a proprietary purification process [4] - The Kellyton Graphite Processing plant is scheduled for completion in 2023, with the Coosa Graphite mining project anticipated to begin in 2028, aiming for a lower upfront capital cost and faster revenue generation [19] - The company is actively seeking additional low-cost capital sources to support its business plan, including project-level debt and government funding opportunities [10][49] Management's Comments on Operating Environment and Future Outlook - Management emphasized the importance of ensuring financial liquidity to support key operations and business activities, highlighting a cash balance of $116 million and zero debt [15] - The company is committed to environmental stewardship and aims for an industry-leading low carbon footprint in its manufacturing processes [26] Other Important Information - The company completed exploration drilling at the Coosa graphite deposit, with geological modeling expected by the end of 2022 [24] - The company has filed a provisional patent application for its proprietary graphite purification technology, which is more sustainable than existing methods [22] Q&A Session Summary Question: Clarification on construction costs and capital expenditures - The difference between the $17.1 million added to construction in progress and the $17.8 million incurred relates to year-end accruals for engineering work and administrative office build-out [34] - The $12.1 million capital expenditure reported in Q1 was all related to the Kellyton processing facility [35] Question: Concerns about share dilution from ATM sales - Management acknowledged the concern about dilution and stated they are seeking additional low-cost capital sources while monitoring market conditions [44][45] Question: Future plans for raising funds - The company is exploring traditional project debt financing and government funding opportunities to support its operations and project completion [49]