Westwater Resources Announces Second Quarter 2021 Results And Update On First-of-its-kind Graphite Processing Plant In Alabama
Westwater Resources, Inc. (NYSE American: WWR), an explorer and developer of U.S.-based mineral resources essential to green energy production, today announced an update on its first-of-its-kind graphite processing plant in Alabama and its second quarter results for the period ended June 30, 2021.
On June 22, 2021 Westwater entered into an incentive package with the State of Alabama and local municipalities to locate the site of the Company’s graphite processing facility in Coosa County, Alabama. The agreement provides certain tax credits and incentives which are estimated by the State of Alabama to be valued at $36M. Westwater has also entered into a land lease agreement for approximately 70 acres to construct its commercial graphite processing facility, with an option to purchase the land during the term of the lease.
As previously reported, Westwater has entered into an agreement with Samuel Engineering, Inc. for a Definitive Feasibility Study on the Coosa Graphite Processing Facility. The study will address location, raw material, product quality and infrastructure, and will provide cost estimates for the Coosa facility. Samuel Engineering, Inc. will also provide design and drawings. Westwater anticipates receipt of the report by the end of the third quarter.
Westwater’s graphite and vanadium exploration program began in April 2021 and is expected to continue throughout the remainder of the year. The scope of this program includes core drilling, the evaluation of extractive techniques and the expansion of general knowledge of the minerals on the property.
“The second quarter of 2021 has been extremely successful for our Company, and we reached a number of key goals required to produce our battery-grade graphite products for an energy-dependent world,” said Chris Jones, CEO of Westwater. “During the quarter we continued and are nearing completion of our pilot program in various locations in Germany and the USA, and the combined effort has produced approximately 13 metric tonnes of our three battery-grade graphite products.”
“We are now listed on the NYSE American and we were added to the Russell Microcap Index,” Mr. Jones added. “Our Russell membership remains in place for one year and gives us automatic inclusion in the appropriate growth and value style indexes.”
After a comprehensive search process, Westwater hired Chad Potter as Chief Operating Officer, who began working with the Westwater team on August 2, 2021. Mr. Potter will lead Westwater’s construction, development and future operations of its commercial graphite processing facility and mine.
“With the addition of Chad Potter to our roster, I believe we have one of the strongest management teams in the industry,” Mr. Jones concluded.
Product Development Expenses
Product development expenditures for the second quarter 2021 were $2.1 million, an increase of $1.9 million compared to the prior-year quarter. Approximately $0.7 million of the period-over-period increase was related to Westwater’s graphite processing pilot program, with the remaining increase due primarily to product testing, other lab work and other auxiliary costs associated with the Coosa Graphite Project.
General and Administrative Expenses
General and Administrative expenses for the second quarter 2021 increased by $0.5 million compared to the prior year-quarter, due primarily to higher costs related to shareholder meetings, an increase in stock compensation and higher costs related to Westwater’s sales and marketing efforts.
Net Cash Used in Consolidated Operations
Net cash used in operating activities for the first half of 2021 was $9.1 million, an increase of $3.1 million compared to the same period in the prior year, due primarily to higher graphite product development, exploration, and general, administrative and arbitration costs in 2021.
Net Loss
Net Loss for the three months ended June 30, 2021, was $3.5 million, or $0.11 per share, as compared with a consolidated net loss of $2.5 million, or $0.43 per share, for the same 2020 period. The $1.0 million increase in Westwater’s consolidated net loss was due to an increase in product development, and exploration, general and administrative costs in 2021; offset partially by the elimination of costs from discontinued operations, and an unrealized gain related to the enCore common stock.
Cash and Working Capital
The Company’s cash balance at June 30, 2021, was approximately $119 million.
About Westwater Resources
Westwater Resources (NYSE American: WWR) is focused on developing battery-grade graphite. The Company’s projects include the Coosa Graphite Project — the most advanced natural flake graphite project in the contiguous United States — and the associated Coosa Graphite Deposit located across 41,900 acres (~17,000 hectares) in east-central Alabama
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