Westwater Resources Inc (NYSE-A:WWR) booked a net loss of $3.5 million in the third quarter to end September 2023, in line with the $3.5 million loss booked in the corresponding period a year earlier.
The loss per share was $0.07, as it was in the third quarter of 2022.
As at 30 September, 2023, Westwater had a cash balance of $11.7 million.
During the period, the energy technology and battery-grade natural graphite development company completed a debottlenecking study with its third-party engineering firm.
This resulted in design changes that are expected to lead to an anticipated 33% increase in coated spherical purified graphite (CSPG) production from Phase I of the Kellyton graphite processing plant in Alabama.
“Increasing expected CSPG production by 33%, while maintaining our estimated budget, is another significant step in improving the economics of the Kellyton plant,” said Frank Bakker, Westwater’s chief executive.
“Customer engagement and market demand for domestic CSPG remains strong, and we believe moving to 10,000 MT in response to this market demand enhances Westwater’s position as a domestic source of CSPG.”
The progress comes against a backdrop of new Chinese export restrictions.
Nearly all of the battery-grade natural graphite materials produced today involve some amount of processing in China.
“This recent announcement by China further exposes the need for the United States to establish a reliable battery-grade supply chain,” said Terence J. Cryan, Westwater’s executive chairman.
“With the Kellyton plant, Westwater is committed to leading the domestic solution for a reliable supply of battery-grade graphite materials for the EV market.”
Westwater has a Joint Development Agreement with SK On, a leading electric vehicle battery manufacturer. SK On has provided testing feedback for samples produced by Westwater under the JDA.
If a supply agreement is executed between the parties, Westwater would then supply a mass production sample to SK On as part of its formal qualification process.
During the third quarter of 2023, Westwater continued construction activities at the Kellyton plant, including the receipt of additional long-lead equipment components, completing the construction of five of six primary plant buildings, and installation of overhead cranes ahead of equipment installation.
Westwater has constructed and is currently operating its research and development laboratory.
The R&D Lab allows Westwater to continue product development and optimization under the JDA with SK On and other potential customers, and to perform additional quality control tests. It also affords greater flexibility to optimize future samples in accordance with customer specifications.
Further, in August, Westwater began installing micronizers, shaping mills and steel in its shaping building.
While construction has continued during the quarter, Westwater has reduced the level of construction activities from anticipated levels, including adjusting the timing of future work, until off-take and financing agreements are secured.
Reducing the level of construction activity until financing is secured is expected to impact the overall construction schedule of Phase I of the Kellyton plant. Westwater expects to provide an update to investors regarding the construction timeline of the Kellyton plant when, and if, the requisite financing is secured.
Meanwhile, Westwater continued its third-party consultant’s work on the preliminary economic assessment for the Coosa graphite deposit.