Earning Date, Transcript Summary & Report

Positive Point: Westwater reached several significant milestones in the past 12 months, including signing a multi-year offtake agreement with SK On, a Tier 1 lithium-ion battery manufacturer.

• Signed a first multi-year offtake agreement with SK On
• Completed full debottlenecking study, increasing CSPG production by 67% to 12,500 metric tons per annum in Phase I
• Started feasibility study on Phase II, anticipating an increase to 50,000 metric tons per annum of CSPG

Positive Point: Westwater is well-positioned to provide IRA compliant supply to battery plants in the U.S., with early market mover advantages.

• Positioned to become the first vertical producer of CSPG 100% based in the U.S.
• Addressing the critical need for domestic battery-grade graphite production in the U.S.
• Engaging with customers concerned with sourcing IRA compliant CSPG for U.S. battery manufacturing plants

Positive Point: U.S. government support for the energy transition designating graphite as a critical mineral is a positive step for the U.S. graphite market.

• Graphite designated as a critical mineral by the U.S. government
• Recent Chinese export restrictions highlight the need for a reliable graphite supply chain in the U.S.
• U.S. Department of Energy proposed guidance on foreign entities of concern, including China, driving the need for IRA compliant graphite anode material

Positive Point: Company progress and achievements were significant in maintaining early market mover advantages in the dynamic graphite anode market.

• Significant achievement in maintaining early market mover advantages
• Positive feedback on construction progress from customers and lenders
• Securing first multi-year offtake agreement a significant step in finalizing debt transaction
• Development plan and customer engagement give Westwater competitive advantages

Positive Point: Westwater completed several 2023 accomplishments that created value for the company and its shareholders.

• Increased Phase I CSPG production by 67% to 12,500 metric tons per annum
• Completed initial economic analysis for Coosa with a pretax NPV of $229 million
• Signed first multi-year offtake agreement, positioning as an early market mover in the domestic graphite anode space

Negative

• Despite the progress made in developing the product and securing the first multiyear offtake agreement, the company reported a net loss of $7.8 million in 2023.
• The company experienced a decrease in cash flow from operating activities in 2023 compared to the previous year, primarily due to higher product development costs.
• The global demand for natural graphite anode material is expected to grow significantly, leading to a potential supply imbalance. This imbalance could pose challenges for the company in meeting customer demand and maintaining market competitiveness.
• The delay in finalizing a debt transaction to fund the remaining Phase I costs for the construction of the Kellyton Plant has taken longer than expected, impacting the company's ability to secure necessary funding.
• While the company has ambitious plans for expansion, including a feasibility study for Phase II of the Kellyton Plant and advancements in the Coosa deposit, there is a need to seek strategic investment to progress further, potentially impacting the timeline and the overall growth strategy.