Q3 2023 Westwater Resources Inc Earnings Call
Speaker Change: [music].
Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources Inc. Business Update Conference call. As a reminder, all participants are in listen only mode and the conference is being recorded. I would now like to turn the conference over to Frank Bacher, President and CEO . Please go ahead, sir.
Thank you for standing by this is the conference operator, welcome to divest of water Resources, Inc. Business update conference call. As a reminder, all participants are in listen only mode and the conference is being recorded I would now like to turn the conference over to Frank Volker.
Frank Volker: President and C E O.
Frank Volker: Please go ahead Sir.
Thank you, moderator, and thanks to those attending this investigable. With me today is Terence Crayon, our executive chairman of the board, and Steve Gates, our chief financial officer.
Thank you moderator and thanks to those attending this investor call with me today is Terence Cryan jamming.
As chairman of the board and Steve <unk>, our Chief Financial Officer.
During this presentation, the forward-looking statements we make are based on management judgments on a variety of issues, including, but not limited to future graphite demand and price forecasts, construction schedule, and cost projections, economic expectations related to the skeleton graphite plant and the goose-eye graphite deposit, and capable raising activities, including the estimated timing of those activities.
During this presentation. The forward looking statements we make are based on management's judgments on it.
Frank Volker: A variety of issues, including but not limited to future gratify demand and price forecasts construction schedule of course predictions economic expectations related to the skeleton gratified plant and the Goose I could ask my deposits and capital raising activities, including the estimated timing.
Of those activities.
These and other similar statements are subject to certain risks and uncertainties of which the description can be found on slide 2 if in the presentation.
Frank Volker: These and other similar statements are subject to certain risks and uncertainties officially prescription can be found on slide two in the presentation.
and in our 10K for 2022 and our other S&C filing.
Frank Volker: And in our 10-K for 2022 and our other SEC filings. Please read our cautionary statement realized actual results may differ materially from what is discussed today.
Please read our cautionary statement and realize that actual results may differ materially from what is discussed today. Please read our evidence.
Frank Volker: Turning to slide three.
Westwater Olds Mineral Rides to approximately 42,000 acres across the Alabama Crafat Dell.
Frank Volker: First of all the old mineral rights to approximately 42000 acres across the Alabama L. B.
We believe that the Kusata Posit is the largest, most developed, US-based graphite deposit in the lower 48.
Frank Volker: We believe that of course have to push it is the largest most developed U S based because that's how you push it in the lower 48 to date data has been collected from approximately 46000 feet of daily across 246 drill holes. This bidding activity is good and less than 10%.
Today data has been collected from approximately 46,000 feet of drilling across 246 drill holes.
This drilling activity has occurred on less than 10% of the total acreage.
Of the total acreage.
So that is obviously substantial scope for expansion and the potential to supply not only westward, a specified concentrate needs for many years, but also that of the broader North American battery-grade graphite and materials industry that is under development.
Frank Volker: So that is obviously substantial scope for expansion and the potential to supply not only westwater stratified concentrate needs for many years, but also that of the broader North American battery grade graphite.
Frank Volker: Materials industry.
Frank Volker: On the development.
Penadium has also been discovered as a decouser to poss it and remains to be evaluated for potential economic benefits which we believe could be substantial.
Frank Volker: Vanadium is also being discussed with the Coosa bullshit and remains to be elevated for potential economic benefits, which we believe could be substantial.
Frank Volker: Slide four earlier this year, we started updating the technical resource report different economic analysis, we are pleased to share everything fastest it yourself of this analysis, which was Japan pursuant to SEC regulations and filed.
Slide 4. Earlier this year we started updating the technical resource report with an economic analysis.
We are pleased to share with investors the results of this analysis, which was prepared, pursuant to SEC regulations and filed with the SEC yesterday, which we referred to as...
Frank Volker: Yesterday.
Frank Volker: Which we refer to as a P.
The results of the PEA indicate that the COOSER deposit has an estimated P-TECH cash flow of $714 million, an anticipated P-TECH's MPV of approximately $229 million, and an estimated P-TECH's IERR of 26.7% and an estimated mine life of over 20 years.
Frank Volker: The results of the DEA indicate that <unk> deposit has an estimated pretax cash flow of $714 million and anticipated pretax MPC.
Frank Volker: <unk> $229 million and an estimated pretax INR 26, 7% and an estimated mine life of 20 years.
It's worth noting that the PEA does not include data from all of the holes drilled to date, but was completed based on 205 drills, totaling a little over 39,000 feet.
Frank Volker: It's worth noting that the P. A.
Frank Volker: Not include data from all of the holes drilled to date, but was completed based on 215 drill holes totaling a little over 39000 feet.
Data from the remaining drill holes is positive. More drilling is needed in those areas prior to including these in the overall men and all resource estimate of COSA.
Frank Volker: From the remaining Dave <unk> Buster's.
Frank Volker: Drilling is needed in those areas prior to including DS and your overall mineral resource estimate or push out.
Frank Volker: Turning to slide five the initial mine plan for the Coosa deposit anticipates using conventional small scale open pit mining methods, if capital shallow pits less than on the free deep utilizing small conventional loading and hauling equipment.
The PIA assumes that that full scale production, the mining rate will be approximately 3.3 million short on PIA.
Frank Volker: The P. Eight assumes that full scale production the mining rate will be approximately $3 3 million short tons per year.
Frank Volker: Consulting and initial estimated mine life of two years.
Frank Volker: As mentioned.
Less than 10% of the acre or something at Coosa deposit had been export. Therefore, it couldn't be a does not include any upside potential from the umbrella acreage nor does it include any potential contribution from Canadian which can be as elevate later and of course that development cycle.
P. A confirms that our coosa deposit is a highly valuable assets at attractive economics, and we've started the process seeking strategic investment to advance Coosa, which could include strategic investors or partners.
Frank Volker: Moving to the Bama our deposits on slide six.
Frank Volker: Well the Pos it is located in Clinton County, Alabama and consist of approximately 13 acres of mineral rights only.
Frank Volker: And that was particularly strong in mind for gratify decades ago.
Frank Volker: Located less than nine miles from <unk>, 65, and less than one mile.
Frank Volker: From a major railroad had another bullshit has excellent infrastructure already established.
Frank Volker: Our recent focus has been on nekoosa repulsion.
Frank Volker: We believe that another bullshit brings additional upsides totally creation potential for westwater and its shareholders.
Slide seven correct.
Frank Volker: Graphite anode material accounts for approximately 50% of the critical minerals by weight in a lithium ion battery.
Frank Volker: It's a typical electrical vehicle has around on the 75 to 210 pounds of graphite demand drove in North America for she SPG is expected to grow to approximately 200000 metric tons per year by 2030 and to over 400000 metric tons by 2045.
Frank Volker: Representing the largest demand growth of any critical mineral used in lithium ion batteries sung.
Frank Volker: Some U S automakers has seen some softening consumer demand for Evs U.
Frank Volker: U S. EV sales were up 11, 8% in the first quarter compared to the same quarter in 2022, according to benchmark minerals.
Frank Volker: Only the U S is 100% dependent on foreign imports of naturally natural battery grade graphite nearly 100% of today's graphite anode materials process to some degree in China.
Frank Volker: According to benchmark minerals in 2000, 2200% of uncoated spherical purified gratify, what SPG plus process at least in some parts of China.
We believe that the recent gratified export restrictions by China.
Frank Volker: That began on December 1st should serve us another wake up call for the entire battery supply chain.
Frank Volker: I own critical minerals from China.
Frank Volker: In addition on December 1st U S Department of Energy released proposed guidance listing China as a foreign entity have considered them within the bipartisan infrastructure rule and inflation reduction Act.
Frank Volker: On the dish proposed guidance and electric vehicle is disqualified from receiving 75 on the dollar clean fleet vehicle tax credits starting in 2025, if the fee better equal any critical minerals, including graphite extracted process or recycled by China or another.
Frank Volker: Foreign entity of concern.
Frank Volker: Do you believe this is a positive very important step for establishing a unified supply chain here in the United States.
Frank Volker: We believe government support is critical to establishing a domestic source of kind of like products, which includes <unk> proposed guidance.
Frank Volker: Although the current graphite anode supply chain, and well established and sensors and guidance like the Iot the foreign entity of concern and a 25% tariff gratified imports are critical and motivating density any freedman affected us to replace it couldn't source of graphite anode materials if sources located.
Frank Volker: In the U S. We have been active alongside this odyssey in the bedroom materials industry and discussing and educating federal agencies about the need for continued support to establish a domestic battery material supply chain.
Frank Volker: We plan to continue these efforts and will continue to support legislation that's focused on securing reliable and sustainable domestic supply of battery grade graphite products in the U S.
Frank Volker: Our potential customers.
<unk> shaking domestic supply and some have taken a wait and see approach based on the evolving geopolitical climates.
Frank Volker: Two the domestic versus imported graphite.
Frank Volker: <unk> proposed clarification, what constitutes a foreign entity of concern.
Frank Volker: And its potential impacts on the IAA compliant material, the 25% tariff I'm gratified to imports and the recent export restriction city climates, where China should incentivize battery cell makers empty feed manufacturers to replace that couldn't source of graphite materials sourcing them domestically.
Frank Volker: Before ending the call I want to reiterate that the graphite anode market in the U S is in its early stages and Westwood, 30% only U S based and U S publicly traded company that's operating at ground zero of these new domestic market.
Frank Volker: I believe that a strong tailwind for domestic graphite battery market.
Frank Volker: Very pleased with the PDA results for clues out.
Frank Volker: Indicating an estimated pretax NPV that is over six times, our market cap as of market close on December 12.
Frank Volker: Westwater team remains committed and I believe we have the team to execute our business plan and I am extremely proud of the team's performance in this dynamic environment.
Frank Volker: Negotiations on offtake financing agreements with Clinton continues to be very active with multiple parties and we look forward to providing an update soon.
Frank Volker: I want to thank you for your continued interest in Westwood and I want to wish everybody happy holidays, and a happy new year. Thank you.
Frank Volker: This concludes today's conference call you may disconnect. Your lines. Thank you for participating and have a pleasant day.
Yeah.
Frank Volker: Yes.
Frank Volker: Yeah.
Frank Volker: Yeah.
Frank Volker: [music].
Frank Volker: Hum.
Frank Volker: Oh.
Frank Volker: Hum.
Frank Volker: [music].
Frank Volker: Uh huh.