Westwater Resources announces third quarter 2024 updates
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Company reports 10% reduction in estimated construction costs of Kellyton Graphite Plant
Special to the News
Westwater Resources Inc., an energy technology and battery-grade natural graphite development company, is pleased to announce its updates for the third quarter ended September 30.
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 chair.
As previously announced in September, Westwater entered into a binding off-take agreement for the supply of the company’s graphite fines material with Hiller Carbon LLC, a leading supplier of pelletized materials to the steel and foundry industries.
Pursuant to the terms of the Fines Offtake Agreement, Westwater 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.
Westwater 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, 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. Westwater expects that the operation of the qualification line will allow the company 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, Westwater is carefully managing its liquidity position, and has 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, Westwater had a cash balance of $4.5 million.
Further discussion of Westwater’s financial results for the third quarter can be found in Westwater’s Form 10-Q filed on November 14.
Westwater Resources 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 Coosa County.
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 (approximately 17,000 hectares) in Coosa County. For more information, visit www.westwaterresources.net.
