CENTENNIAL, Colo. - Westwater Resources, Inc. (NYSE American: WWR), a company engaged in the development of battery-grade natural graphite, has entered into a binding off-take agreement with Hiller Carbon. This deal ensures the sale of 100% of the natural graphite Fines material produced at its Phase I Kellyton Graphite Plant, Alabama.
The agreement specifies that Hiller Carbon, a supplier to the steel and foundry industries, will purchase approximately 14,000 metric tons of Fines material annually, which is a byproduct of the battery anode material production process. This commitment, along with previous agreements with Stellantis (NYSE:STLA) and SK On for the Coated Spherical Purified Graphite (CSPG) output, means Westwater has now fully contracted its Phase I production capacity.
Marty Hiller, Executive Chairman of Hiller Carbon, expressed the significance of securing a domestic source of graphite for their operations, highlighting the importance of this agreement for both companies' long-term success. Jon Jacobs, Chief Commercial Officer of Westwater, echoed this sentiment, stating the deal completes purchase commitments for their initial production phase and aids in finalizing the remaining construction financing.
Westwater's Kellyton Graphite Processing Plant is currently under construction and is poised to become a significant U.S. producer of natural graphite. The Coosa Graphite Deposit, part of Westwater's portfolio, is recognized as the most developed natural flake graphite deposit in the contiguous United States, spanning over 41,965 acres in Coosa County, Alabama.
Hiller Carbon, established in 1975, serves Electric Arc Furnace (EAF) steel, foundry, and specialty industrial markets with products like anthracite coal, petroleum coke, and graphite.
The news release, while containing forward-looking statements, cautions readers about potential variables that could affect the anticipated outcomes. The company emphasizes that the forward-looking information provided should not be overly relied upon, as it is not a guaranteed predictor of future performance and is subject to uncertainties and factors largely outside of Westwater's control.
This announcement is based on a press release statement from Westwater Resources, Inc. and does not imply endorsement of the company's claims. The factual content of this article aims to provide a balanced and clear view of the recent business developments concerning Westwater's graphite production and sales.
In other recent news, Westwater Resources Inc (NYSE:WWR). has made notable progress in its operations. The company has entered into an exclusivity agreement with a global financial institution for a $150 million secured debt facility. This capital is set aside for the completion of Phase I of the Kellyton Graphite Plant in Alabama. In addition, Westwater has secured a second multi-year offtake agreement with Fiat Chrysler Automobiles, part of the Stellantis Group. This ensures that all of the plant's phase one production is contracted through 2031, with some phase two volumes also under contract.
In terms of financial guidance, Westwater has engaged Cantor Fitzgerald as its investment banker. On the legal front, the company has enlisted services from McDermott Will & Emery. These recent developments indicate that Westwater is in discussions with multiple lenders to secure debt financing for the completion of phase one construction. The company anticipates phase one volumes to be in production by the end of 2026. It's important to note that these forward-looking statements are subject to various risks and uncertainties, including market conditions, competition, regulatory hurdles, and operational challenges.
InvestingPro Insights
As Westwater Resources, Inc. (NYSE American: WWR) forges ahead with its off-take agreement with Hiller Carbon, certain financial metrics and InvestingPro Tips offer additional context for investors monitoring the company's performance. According to InvestingPro data, Westwater Resources currently has a market capitalization of approximately $29.61 million. Despite the optimism surrounding its graphite production capacity, the company's financials reflect some challenges. The Price / Book ratio, as of the last twelve months leading up to Q2 2024, stands at a low 0.22, which could indicate that the stock is potentially undervalued relative to its assets.
However, the company's financial health is not without its concerns. Westwater Resources has not been profitable over the last twelve months and has a negative P/E ratio of -3.37, which worsened to -2.66 in the same period. Additionally, the company's gross profit margin has been weak, with a reported gross profit of -$0.04 million. These figures suggest that while the company holds more cash than debt on its balance sheet—an InvestingPro Tip that may provide some reassurance—the path to profitability remains a significant hurdle.
Investors should also be aware of the stock's volatility, as Westwater's stock price movements have been quite erratic, with a 1-year price total return of -25.12%. This volatility is a critical factor to consider, especially for those looking for stable investment opportunities. On a more positive note, the company's share price has seen an increase of 11.53% over the past six months, indicating some recent investor confidence.
For those seeking a deeper dive into Westwater Resources' financials and strategic positioning, InvestingPro offers additional insights. There are currently 9 more InvestingPro Tips available for Westwater Resources, accessible through the InvestingPro platform at https://www.investing.com/pro/WWR. These tips could provide valuable guidance for investors trying to navigate the complexities of the graphite market and Westwater's role within it.
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