WWR - AMEX

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources Inc., Business Update and Investor Call. As a reminder, all participants are in listen-only mode. The conference is being recorded. [Operator Instructions]. I would now like to turn the conference over to Frank Bakker, President and CEO. Please go ahead, sir.

Thank you, moderator, and thanks to those attending this business update call. With me today is Terence Cryan, our Executive Chairman of the Board and Steve Cates, our Chief Financial Officer. During this presentation, the forward-looking statements we make are based on management judgments, including, but not limited to, our planned sales of graphite anode materials from our Kellyton Graphite Plant, future demand and price forecasts for graphite flake and CSPG, projections and economic expectations related to the Kellyton Graphite Plant and the Coosa Graphite Deposit, and capital-raising activities, including the estimated timing of those activities. These and other similar statements are subject to certain risks and uncertainties, of which a description can be found on Slide 2 within this presentation, and in our 10-K for 2023 and our other SEC filings. Please read our cautionary statement and realize that actual results may differ materially from what is discussed today. Turning to Slide 3, today we are excited to announce the signing of our second multi-year offtake agreement with Fiat Chrysler Automobiles, or FCA, which is part of the Stellantis Group of Companies. As required by SEC rules, we have filed a Form S-8-K disclosing this agreement. Stellantis is a multinational automotive manufacturing corporation that owns multiple brands, such as Dodge, Chrysler, Fiat Jeep, Maserati, Opel, Peugeot and others. Under the terms of the agreement, Westwater will sell CSPG that will be produced at our Kellyton plant to FCA. With this agreement in place, along with our agreement with SK ON announced in February, our production volume of phase one is completely sold out during the term of the agreements. This agreement is significant for Westwater, as we have now contracted to complete planned phase one production in 2026, and we contracted 100% of our planned phase one volumes from 2027 until 2031, and we have begun contracting phase two volumes as well. We are excited to partner with one of the world's leading manufacturers of electrical vehicles, and to assist Stellantis in securing a U.S.-based supply of anode material. And now I would like to turn the call over to our Chief Financial Officer, Steve Cates to provide an update on finance.

Thank you, Frank. Moving to Slide 4, this agreement with Stellantis is not only a significant achievement for Westwater from a contracted volume standpoint, but it is also a critical step in securing debt financing to complete phase one construction at Kellyton. It's important to emphasize that the FCA agreement is a multi-year contract and includes indexation for flake and CSPG pricing that should provide downside protection related to the changing graphite prices. We believe this indexation will limit exposure to commodity prices, which is attractive to lenders as well. Since both graphite flake and CSPG products do not have established markets to hedge price fluctuations, securing indexation in the FCA agreement provides a hedging element within the contract. While we are still planning to be vertically integrated through the development of our Coosa graphite deposit, this indexation also reduces commodity price risk for Westwater until the Coosa graphite deposit is developed. In addition, we believe the long-term nature of this contract is beneficial and attractive to lenders. The multi-year agreements with Stellantis and SK ON mean that 100% of the planned phase one volume is under contract through 2031. Regarding debt financing to complete construction of phase one, as previously stated, we have been in discussions with multiple lenders over the past six to nine months, and securing offtake agreements for plant capacity is critical in moving those discussions forward. As we move forward, we will be looking to select a lender, sign a binding term sheet, and thus go exclusive with a preferred lender. From there, we will enter the formal diligence and loan documentation processes. We plan to keep the market updated as we move through and complete those processes. With that, I will turn the call back to you, Frank.

Thank you, Steve. Signing this second multi-year offtake agreement with phase one volumes contracted through 2031 is a significant accomplishment for the Westwater team. I want to acknowledge our sales and technical teams for the hard work in achieving this significant milestone. To our knowledge, this is the first offtake agreement for natural graphite anode material executed by a 100% U.S.-based company with a tier 1 automotive manufacturer. Before turning the call over for questions, I want to thank the entire Westwater team for their continued dedication and excellent work. With that, I will turn the call back to you, operator, for questions. Thank you.

[Operator Instructions] First question comes from Michael Pierce with Gene Lockworm [ph]. Please go ahead.

Hey, guys. How are you doing?

Doing well, Michael. How are you?

Good. First thing I want to do is clarify, Frank said something about contracting phase two volumes as well. Was he saying that part of that has been contracted or that you're anticipating that?

Michael, this is Steve. With the two contracts, the SK ON contract and the now Stellantis contract, when we look at those volumes put together, and we get into the out years, some of phase two volumes are already under contract with those two contracts combined.

Okay. I understand that. So phase one, I know you guys have done a number of updates on the amount that can be produced in phase one. What is the amount now that can be produced in phase one based on your technical working?

Yeah, Michael, as you recall, I believe it was probably our yearend update, I believe, if I remember correctly, we had increased our planned volumes to 12,500 metric tons per annum in phase one. And that's still the design capacity right now.

Okay. So, and those volumes at this point are all locked up. You don't have to worry about contracting for those anymore.

Yes, that's correct. Everything is locked up with those two agreements that we have.

Do you guys have a construction timeline or anything that you can share with the market?

Yeah, we've been updating our schedule. And the way the schedule looks is that we are able to supply volume according to the offtake agreements we signed in 2026.

So, you anticipate being in production with phase one volumes by the end of next year?

Yes, correct. That's what the schedule looks like.

Okay. Do you guys have any sort of an economic update on where that would put you guys, being able to sell that kind of volume on this new plant you're building?

Economic update, you mean economic update on phase two or phase one?

Well, either. I know it was being discussed that you all were working on your feasibility study for phase two.

Correct, yeah. So we put a lot of effort in our feasibility study for phase two. And we'll provide an update with the outcome of the feasibility study during our August call.

During your August call. Okay.

Yes.

With these contracts in place, do you anticipate being a profitable company once this plant is up and running?

Hi, Michael. This is Steve. Yeah, we've spent a lot of work in negotiating and really holding firm to align to make sure we have profitability with these contracts in place. And not only profitability, but that we have the ability to service a debt financing.

Okay. Well, I look forward to hearing more from you guys. I appreciate it.

All right. Thank you, Michael.

Thank you.

The next question comes from Nigel Smith [ph], private investor. Please go ahead.

Yes. Good morning to you all. I have a couple of questions. One being that the -- in this critical mineral space, many junior miners have applied for and received not only federal funding, so throughout the U.S. and Canada, state funding as well. Could you detail which of these grants you have applied for and what the status of those grants are? And if not, why not? Thank you.

Good morning. And thanks for your question. This is Terence Cryan. We have maintained a very regular dialogue with a number of different government entities here in the U.S., including the Department of Energy for the last number of years. It's not our policy that we would comment on any applications we may have made, or negotiations we may be having with those entities in advance of any awards that might be made. But as fiduciaries, I think you can be very confident that we are exploring all options. And if there's an opportunity for us to access a lower cost of capital, we will do so.

Okay. Thank you. That's very helpful. The other thing I'm wondering is minimum bid price. You've been at $0.50 for the last six months. Many of these junior mining companies are all on the OTC. Many of them are Canadian. Some are American. They're on the OTC. You envisage going to the OTC since your share price isn't going to affect your ability to receive any loans. That's going to be fiduciary. So if you were to go to the OTC, we wouldn't have a diminishment of shares. But if you do a reverse split, it's really going to tank our portfolio values. Could you give some comment on what you plan to do when you run out of time with your minimum share price? Thank you.

So Westwater is listed on and trades on the New York Stock Exchange, American exchange, not the over-the-counter market. We think being on the New York Stock Exchange American provides significant benefits to investors, being arguably the preeminent trading platform in the world. Westwater has no plans at this time to consider a reverse split. We're fully in compliance with all of the listing regulations of the New York Stock Exchange American. And so we look forward as shareholders ourselves to an appreciation in the stock price and a revaluation of our company as people begin to realize the value that we're creating at Westwater.

Okay. Just with your share price being so low, have you received any notices of compliance or non-compliance from the NYSE? Thank you.

We have not. And as I previously mentioned, we're fully in compliance with all of the listing requirements for the New York Stock Exchange American.

Okay. All right. I appreciate it. Thank you, gentlemen. Good day.

This concludes the question-and-answer session. I would like to turn the conference back over to Frank Bakker for any closing remarks. Please go ahead.

Thank you, operator. I want to thank you for the interest in our company, and I look forward to our next call. Thank you.