10% Reduction in Estimated Construction
Costs of Kellyton Graphite Plant
Graphite Fines Offtake Agreement with Hiller
Carbon
Qualification Line Update
Westwater Resources, Inc. (NYSE American: WWR), an energy
technology and battery-grade natural graphite development company
(“Westwater” or the “Company”), is pleased to announce its updates
for the third quarter ended September 30, 2024.
2024 Third Quarter Highlights
During the third quarter, Westwater continued to evaluate its
plant design, construction schedule and cost for Phase I of the
Kellyton Graphite Plant. As a result, Westwater has lowered the
estimated cost of Phase I to $245 million, down from the previous
estimate of $271 million. This represents a decrease in estimated
costs of $26 million, or 9.6%. The decrease in estimated costs
primarily relates to further design optimization and savings in
steel, piping and equipment installation. The revised estimate of
$245 million includes an 11% contingency and 2% escalation factor
on the remaining uncommitted spend.
“Westwater’s management team continues to perform at a
high-level, and the downward revision to Phase I estimated costs is
another significant step toward closing the Kellyton debt
financing,” said Terence J. Cryan, Westwater’s Executive
Chairman.
As previously announced in September, Westwater entered into a
binding off-take agreement for the supply of the Company’s graphite
fines material (“Graphite Fines”) with Hiller Carbon, LLC (the
“Fines Offtake Agreement”), a leading supplier of pelletized
materials to the steel and foundry industries. Pursuant to the
terms of the Fines Offtake Agreement, the Company will supply
natural Graphite Fines material from its Kellyton Graphite Plant to
Hiller Carbon’s plants located within the U.S. Graphite Fines are
produced as a byproduct during the CSPG spherodizing process, one
of the processing steps related to producing the Company’s battery
anode natural graphite, which remains the Company’s main focus. The
Company expects the Graphite Fines production to be approximately
14,000 mt per year, based on the anticipated annual Phase I CSPG
production of 12,500 mt per year, and delivery of the Graphite
Fines to Hiller Carbon to occur when the Kellyton Graphite Plant
begins production.
During the quarter ended September 30, 2024, Westwater continued
to receive and install equipment for its qualification line at the
Kellyton Graphite Plant. The qualification line is expected to be
operational in the fourth quarter of 2024 and will be utilized to
prepare larger bulk samples of CSPG for customer qualification. The
qualification line is expected to produce approximately 1 mt per
day of CSPG and the samples produced on it will be representative
of CSPG mass production. The Company expects that the operation of
the qualification line will allow Westwater to supply its customers
with bulk samples of CSPG in 1 to 10 mt batches for qualification
activities while the Company completes the construction of Phase I
of the Kellyton Graphite Plant. The line will also be used to train
Westwater’s operations team, which the Company expects will
expedite the commissioning and startup of the Kellyton Graphite
Plant.
Financial Update
The Company is working through due diligence and loan
documentation for a debt financing to fund the completion of Phase
I construction. The Company estimates approximately $124 million in
remaining capital costs to complete construction of Phase I.
Westwater is targeting the closing of the debt transaction in the
fourth quarter of 2024, which is subject to customary agreement on
final terms, final due diligence, and loan conditions.
While working to put into place the debt financing to fund the
construction of Phase I of the Kellyton Graphite Plant, we are
carefully managing our liquidity position, and have an At The
Market (ATM) facility and an Equity Line of Credit (ELOC) facility
available to help the Company maintain sufficient liquidity going
forward.
As of September 30, 2024, Westwater had a cash balance of $4.5
million.
Further discussion of our financial results for the third
quarter can be found in Westwater’s Form 10-Q filed on November 14,
2024.
Conference Call
Management plans to make additional announcements and host a
conference call if or when the Company closes a debt transaction.
Conference call date, time, and other details will be provided in
advance of such call.
About Westwater Resources, Inc.
Westwater Resources, Inc. (NYSE American: WWR), an energy
technology company, is focused on developing battery-grade natural
graphite. The Company’s primary project is the Kellyton Graphite
Plant that is under construction in east-central Alabama. In
addition, the Company’s Coosa Graphite Deposit is the most advanced
natural flake graphite deposit in the contiguous United States and
located across 41,965 acres (~17,000 hectares) in Coosa County,
Alabama. For more information, visit
www.westwaterresources.net.
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," “future,” “planned,” “intends,” "projects,"
"anticipates," "believes," "could," “scheduled,” “targets” and
other similar words. Forward looking statements include, among
other things, statements concerning: off-take agreements with
customers; Westwater’s future sales of CSPG products to customers,
including the amounts, timing, and types of products included
within those sales; possible off-take agreements with other
customers; potential debt financing arrangements, including the
amount and type of debt and the schedule for closing; the
anticipated annual production from Phase I of Kellyton Graphite
Plan; the construction and operation of the Kellyton Graphite Plant
and its qualification line, the Company’s Coosa Graphite Deposit;
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 December
31, 2023, and subsequent securities filings, could cause actual
results to differ materially from management expectations as
suggested by such forward-looking information: (a) the spot price
and long‑term contract price of graphite (both flake graphite
feedstock and purified graphite products) and vanadium, and the
world-wide supply and demand of graphite and vanadium; (b) the
effects, extent and timing of the entry of additional competition
in the markets in which we operate; (c) our ability to obtain and
to manage our contracts or other agreements with customers; (d)
available sources and transportation of graphite feedstock; (e) the
ability to control costs and avoid cost and schedule overruns
during the development, construction and operation of the Kellyton
Graphite Plant; (f) the ability to construct and operate the
Kellyton Graphite Plant in accordance with the requirements of
permits and licenses and the requirements of tax credits and other
incentives; (g) effects of inflation, including labor shortages and
supply chain disruptions; (h) rising interest rates and the
associated impact on the availability and cost of financing
sources; (i) uncertainty in debt and equity capital markets and the
associated impact on the availability and cost of financing
sources; (j) the availability and supply of equipment and materials
needed to construct the Kellyton Graphite Plant; (k) stock price
volatility; (l) government regulation of the mining and
manufacturing industries in the United States; (m) unanticipated
geological, processing, regulatory and legal or other problems we
may encounter; (n) the results of our exploration activities at the
Coosa Graphite Deposit, and the possibility that future exploration
results may be materially less promising than initial exploration
results; (o) any graphite or vanadium discoveries at the Coosa
Graphite Deposit not being in high enough concentration to make it
economic to extract the minerals; (p) our ability to finance growth
plans; (q) our ability to obtain and maintain rights of ownership
or access to our mining properties; (r) currently pending or new
litigation or arbitration; (s) our ability to maintain and timely
receive mining, manufacturing, and other permits from regulatory
agencies; and (s) other factors which are more fully described in
our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and
other filings with the SEC.
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version on businesswire.com: https://www.businesswire.com/news/home/20241114432526/en/
Westwater Resources, Inc. Email:
Info@WestwaterResources.net
Investor Relations Email:
Investorrelations@westwaterresources.net
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