Westwater announces update on debt financing, feasibility results for Phase II of Kellyton graphite processing plant
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Westwater Resources Inc. announced last week that it has received final investment committee approval from the lead lender and that Westwater is working with Cantor Fitzgerald to finalize the overall syndication and closing of the debt financing for the Kellyton Plant.
As a result of this, however, the estimated timing to close a debt financing transaction has been delayed.
“Given the ‘first of its kind’ nature of the Kellyton Plant, the due diligence process undertaken by the lead lender has been significant, and we are pleased to have approval from the lead lender,” said Steve Cates, Westwater’s SVP-finance and CFO. “We are focused on getting the other interested lenders through their diligence and approval process and will provide further updates on timing once we have a better line of sight to closing.”
Westwater notes the closing of the debt transaction is also subject to customary agreement on final terms, completion of the syndication, final due diligence, and loan conditions.
Kellyton Graphite Processing Plant – Phase II Definitive Feasibility Study
Westwater is also announcing the results of its completed Definitive Feasibility Study, or DFS, for Phase II and reminds investors that a portion of the Phase II capacity is already committed via the previously announced offtake agreements.
The estimated Phase II amounts below exclude contribution from Phase I of the Kellyton Graphite Processing Plant.
- Estimated capital costs for Phase II is $453 million, including a 20% contingency.
- Estimated pre-tax NPV of $1.4 billion (at an 8% discount rate).
- Total estimated cumulative pre-tax cash flows of $6.3 billion over an estimated operating life of 35 years.
- Estimated pre-tax IRR of approximately 31.8%.
- Estimated annual pre-tax, cash flow of $192.6 million.
- Planned annual production of CSPG to 37,500 metric tons (Total Kellyton capacity projected as 50,000 MT including Phase I and II).
Note the above amounts do not include any potential cost savings or synergies from Westwater’s Coosa Graphite Deposit. As previously disclosed, the Coosa Graphite Deposit Initial Assessment has a stand-alone estimated pre-tax NPV-8% of $229 million and an estimated pre-tax free cash flow of $714 million.
According to recent reports, Westwater hopes to have Phase I completed and in operation by next January.
Westwater Resources Inc., an energy technology company, is focused on developing battery-grade natural graphite. The company’s primary project is the Kellyton Graphite Processing Plant that is under construction in east-central Alabama in Coosa County.
In addition, Westwater’s Coosa Graphite Deposit is the most advanced natural flake graphite deposit in the contiguous United States and located across 41,965 acres (approximately 17,000 hectares) in Coosa County. For more information, visit www.westwaterresources.net.
