Westwater Resources Inc (NYSE-A:WWR) senior vice president and CFO, Steven Cates, talked with Proactive about the exciting new Baltic sales agreement with Fiat Chrysler, part of the Stellantis group. This significant contract marks a major step forward for the company as it seeks to secure debt financing and expand its market presence.
Proactive: Steve, it's good to speak with you again. Thank you for sharing the exciting news about the Baltic sales agreement with Fiat Chrysler, which is now part of Stellantis. This is a significant step forward for the company, isn’t it?
Steven Cates: This is a significant contract for us. We've been telling the market that one of the keys to progressing in our attempts to secure debt financing was to get another offtake agreement in place. We couldn't be happier than to partner with a company like Fiat, which, as you mentioned, is part of the Stellantis group.
Fiat is committed to the energy transition and is very well-recognized and respected. We are excited to have them as a business partner as we move forward.
You will be supplying natural graphite anode material from your Carrollton graphite plant. This brings production from Cowlitz to 100% for Phase One, correct?
Yes, this contract, along with the second contract we announced earlier, brings our total volumes to 100% of our plant capacity for phase one, all the way out to 2031.
Does this put you in a strong position as you’re looking for financing for Kellyton?
A couple of things to remember: the graphite market has been dominated by China for decades, so there's not a lot of technical ability in producing anode material outside of China. There is some production in other countries, but the biggest thing is that this is a new industry trying to establish itself in North America and the United States. For lenders, being able to underwrite a project with 100% committed volumes is a significant benefit compared to underwriting uncommitted capacity that has to be sold in a future spot market.
Under this agreement, Fiat Chrysler will be purchasing products linked to the cost of volumes. Will that give a bit of certainty to both parties?
The contract does specify forecasted volumes. Whether these volumes meet all of their needs, we can't say for certain since we don’t work directly for them. However, we have agreed to forecasted volumes over multiple years, which is very significant and beneficial for our planning as well as for the lenders evaluating the project.
How will this proceed, Steve? Will you be supplying the FCA battery partner plants?
Correct. We will most likely be supplying their battery manufacturing partners. The contract is set to start in 2026.
In the meantime, will you be moving forward with Phase One construction once all the financing is in place?
Correct. We will be taking steps to select a lender, go exclusive, and work through the due diligence and loan documentation process. Once the financing is in place, we will continue construction at a rapid pace to get the plant up and running to deliver the volumes as forecasted in the contract.
Will you then begin looking for additional supply agreements for Phase Two of Kellyton?
The interesting thing about the contract we announced today, along with the one with SK, is that when we look further out a few years and see how these volumes ramp up—especially with the Korea contract—we've actually begun securing part of the phase two volumes with these agreements. However, we still have some remaining capacity for phase two.
Our current focus is on customer engagement, sending samples, and continuing discussions beyond phase one. Right now, our priority is to get phase one up and running, secure financing, and continue creating value for shareholders.
Quotes have been lightly edited for style and clarity