Westwater Resources Announces 2023 Business and Financial Updates
First Contract Executed to Supply Natural Purified Graphite Anode Material to a Leading Manufacturer of EV Batteries
Increase in Anticipated Annual Phase I CSPG Production to 12,500 MT While Maintaining Existing Budget
Over
2023 a Year of Progress
During 2023, Westwater achieved critical milestones and achievements related to its planned natural graphite business, notably:
-
In
May 2023 , Westwater announced the execution of a joint development agreement (“JDA”) withSK On Co, Ltd. (“SK On”). -
On
February 5, 2024 , Westwater announced the execution of its first off-take agreement with SK On for Coated Spherical Purified Graphite (“CSPG”). -
As a result of the completion of a debottlenecking study, Westwater has increased its anticipated Phase I production of CSPG to 12,500 mt per year while maintaining the Phase I construction budget of the Kellyton Graphite Plant at
$271 million . -
Continued Phase I construction at the Kellyton Graphite Plant deploying approximately
$119.2 million since inception of the project. -
In
December 2023 , Westwater announced the completion of its Initial Assessment with an Economic Analysis related to its Coosa Graphite Deposit, and publication of the S-K 1300 Technical Report Summary (“TRS”) disclosing mineral resources, which indicates an estimated pre-tax NPV of$229 million , estimated pre-tax internal rate of return of 26.7%, and estimated free cash flow of$714 million over the 20+ year mine life.
“We believe 2023 was a year of significant progress across our graphite business, which was the result of tremendous hard work by the Westwater team,” said
“Westwater is the only
Recent Government Regulation of Graphite Products
Continuing Customer Engagement
As previously announced, Westwater executed its first off-take agreement for the supply of CSPG from its Kellyton Graphite Plant to SK On battery plants located within the
Additionally, Westwater continues to engage with other potential customers by providing samples of CSPG produced by the Company for testing and evaluation, hosting site visits at its Kellyton Graphite Plant, and having technical product development and commercial discussions.
“Customer interest and market demand for domestic CSPG remains strong, and customer interest in Westwater is due to the combination of our SK On off-take agreement, FEOC-related guidance requiring EV tax credit eligible vehicles to use of IRA-compliant graphite by 2025, and new Chinese export restrictions on graphite that have reduced stability of supply,” said
Construction Financing Update
Westwater continues its efforts to secure debt financing to fund the balance of the estimated capital requirements for completion of construction of Phase I of the Kellyton Graphite Plant. “We are continuing to engage with third parties interested in funding our project, and those parties have indicated they are pleased to see we have our first off-take agreement in place,” said
As of
Financial Summary for The Year Ended
($ in thousands, Except Share and Per Share Amounts) |
2023 |
2022 |
Variance |
|
|
|
(13%) |
|
|
|
10% |
Net Cash Provided by Financing Activities |
|
|
(79%) |
Product Development Expenses |
|
|
156% |
General and Administrative Expenses |
|
|
(1%) |
Net Loss |
|
|
(30%) |
Net Loss Per Share |
|
|
(40%) |
Avg. Weighted Shares Outstanding |
52,037,463 |
44,909,500 |
16% |
-
Net cash used in operations decreased
$1.7 million in 2023 compared to 2022 primarily due to receiving$3.1 million of cash in the fourth quarter related to the settlement of the Company’s arbitration against theRepublic of Turkey ; partially offset by$1.8 million higher product development expenses during 2023 as discussed below. -
Net cash used in investing activities increased
$5.5 million during 2023 compared to 2022. The increase in investing cash outflows is due to continued construction of Phase I of the Kellyton Graphite Plant. -
Net cash provided by financing activities decreased
$20.5 million during 2023, compared to 2022, due to lower sales of shares under our equity financing facilities. -
Product development expenses for 2023 increased by
$1.8 million compared to 2022 primarily due to continued product development, product optimization, and additional sample production for customer evaluation. -
General and administrative expenses decreased
$0.1 million during 2023 compared to 2022, due to a reduction in personnel and overhead costs related to stock award forfeitures and lower hiring fees and relocations costs; offset partially by severance charges related to executive management changes announced in the first quarter of 2023. -
Consolidated net loss was
$7.8 million , or$0.15 per share, for 2023 compared to a consolidated net loss of$11.1 million , or$0.25 per share, in 2022. The decrease in the Company’s net loss from continuing operations was due primarily to the$3.1 million cash settlement from theRepublic of Turkey , a$1.2 million write-off of accrued uranium royalties, a$0.3 million increase in interest income on our investment account, and$0.5 million less exploration expenses; offset partially by$1.8 million higher product development expenses associated with additional sample production. -
Cash and working capital as of
December 31, 2023 , were$10.9 million and$3.8 million , respectively, compared to$75.2 million and$51.0 million as ofDecember 31, 2022 . The decrease in cash was primarily due to capital expenditures of$58.3 million and cash used in operations of$11.4 million ; partially offset by cash provided from financing activities. The decrease in working capital was primarily due to the net cash spend during 2023; partially offset by the lower current liabilities related to Phase I construction costs as ofDecember 31, 2023 , compared toDecember 31, 2022 .
Conference Call
Management will host a conference call to provide a business update to investors on
Live Conference Call
-
1-800-319-4610 (
USA andCanada ) - 1-604-638-5340 (International)
- Conference ID: Westwater Resources Conference Call
- Webcast: westwaterresources.net/investors/presentations-events/
Conference Call Replay
-
1-855-669-9658 (
USA andCanada ) - 1-412-317-0088 (International)
- Access Code: 0646
Going Concern Audit Opinion
Pursuant to Section 610(b) of the NYSE American Company Guide, the Company notes that the audit opinion provided by the Company's independent public accounting firm relating to the Company's audited consolidated financial statements for the year ended
About
Cautionary Statement Regarding Forward-Looking Statements
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "expects," "estimates," “planned,” “intends,” "projects," "anticipates," "believes," "could," “scheduled,” “targets” and other similar words. Forward-looking statements include, among other things, statements concerning: the off-take agreement with SK On; Westwater’s future sales of CSPG products to SK On, including the amounts, timing, and types of products included within those sales; possible off-take agreements with other customers; potential debt financing arrangements; the anticipated annual production from Phase I of Kellyton Graphite Plan; the positive anticipated economic results from the Initial Assessment with Economic Analysis related to its Coosa Graphite Deposit; and the construction and operation of the Kellyton Graphite Plant, the Company’s Coosa Graphite Deposit and its PEA, and the costs, schedules, production and economic projections associated with them. The Company cautions that there are factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of the Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Westwater’s Annual Report on Form 10-K for the year ended
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Investor Relations
Email: Investorrelations@westwaterresources.net
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