Westwater Resources Inc (NYSE-A:WWR) (WWR) is trading at a significant discount to its pre-revenue graphite peers providing a compelling investment opportunity, according to analysts at Water Tower Research.
WWR’s NYSE American-listed stock is currently trading at about US$1.25, with the broker setting a 52-week price range between US$1 and US$4.19.
The analysts noted that with the question of capital financing and quantification of the company’s Coosa graphite deposit in Alabama set to be resolved in the next two to three months that the company’s risks are diminishing as its valuation remains compelling.
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“Obtaining the funds necessary to complete Phase 1 and issuing a resource model for its Coosa graphite deposit before the end of 2022 should place WWR on a solid capital footing and provide investors with more information on the company’s mine economics, with a positive impact on valuation that currently trails those of its graphite peers,” analysts wrote in a note to clients.
They added that WWR should enjoy a first-mover advantage in customer acquisition while making the plant’s output of graphite materials more desirable, given the company’s more environmentally sustainable production process and the provisions of the recently enacted Inflation Reduction Act.
“Domestic production and a more environmentally friendly purification process should make WWR a preferred supplier for battery manufacturers and EV OEMs, driving a rapid increase in the utilization of its Phase 1 plant and likely enabling timely expansion of Phase 2 and beyond,” they wrote.
Exploring the potential to market vanadium
The analysts further noted that WWR was exploring the potential to market vanadium found at its graphite deposit which could generate additional revenues in the mid-term once the Coosa mine is operational, with the pending resource model quantifying the opportunity.
Westwater Resources is focused on developing battery-grade natural graphite products.
The company’s primary project is the Kellyton graphite processing plant under construction in east-central Alabama and its Coosa graphite deposit located in Coosa County, Alabama, is the most advanced natural flake graphite deposit in the contiguous United States.
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