Westwater Resources (NYSE-A:WWR) Inc has announced its results for the second quarter to June 30, 2022, and provided an update on its Kellyton graphite processing plant currently under construction in east-central Alabama.
The company said it had cash of $109 million and working capital of $102.7 million at the end of June and reiterated its target to begin commissioning the graphite plant within a year.
"Our team not only continues to work diligently and progress the construction of phase I of our Kellyton graphite plant but has done so without a recordable safety incident since the beginning of the project," said Chad Potter, Westwater president and CEO in the results statement.
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"We continue, with the world-class construction management team we've assembled and our team at Westwater, to progress the construction of Phase I despite continued supply chain disruptions and challenges. We continue to work to mitigate the supply chain pressures and are targeting to begin commissioning of phase I by the end of the second quarter in 2023," he added.
Westwater said earthwork and site grading at Kellyton was completed in July 2022, with the company moving approximately 97 thousand cubic yards of dirt.
Construction activity during the second quarter also included the mobilization of the general contractor, receipt of the first components of long-lead equipment, and beginning work on underground utilities, foundations, and the manufacturing of plant buildings.
The company received its air permit from the Alabama Department of Environmental Management in June 2022 and now has all necessary permits to complete the construction of phase I of the Kellyton Graphite Plant.
After the close of the second quarter, Westwater executed a letter of intent with a global manufacturer of consumer batteries under which Westwater committed to support the manufacturer's consumer battery programs by providing its PMG product from the Kellyton graphite processing facility once operational, and the manufacturer committed to evaluate the product in its official qualification programs.
Commenting on the construction costs for the Kellyton plant, outgoing CFO Jeffrey L Vigil said: "Since beginning construction of Phase I of the Kellyton graphite plant in the fourth quarter of 2021, we have incurred approximately $30.0 million of costs, of which $27.5 million represents cash expended with the remainder remaining on the company's balance sheet as liabilities as of June 30, 2022."
As previously announced, Vigil is retiring on August 26, 2022, and will be succeeded by chief accounting officer Steven M Cates.
Net cash used in investing activities increased by $25.1 million in the six months ended June 30, 2022 compared with the year-earlier period, primarily due to capital expenditures related to the construction of phase I of the Kellyton graphite plant, Westwater said.
The second-quarter net loss narrowed to $3.2 million, or $0.07 per share, from $3.5 million, or $0.11 per share, mainly as a result of lower product development and exploration costs.
Westwater is hosting a conference call to discuss its results on August 11, 2022, at 11.00am EDT. A live webcast of the conference call presentation is available here
Westwater Resources is focused on developing battery-grade natural graphite. The company's primary project is the Kellyton graphite processing plant that is under construction in east-central Alabama.
In addition, the company's Coosa graphite deposit is the most advanced natural flake graphite deposit in the contiguous United States and located across 41,900 acres (around 17,000 hectares) in Coosa County, Alabama.
Contact the author at jon.hopkins@proactiveinvestors.com