CENTENNIAL, Colo. - Westwater Resources, Inc. (NYSE American: WWR), a company focused on developing battery-grade natural graphite, announced today that it has entered into exclusivity with a global financial institution for a $150 million secured debt facility. This capital is earmarked for completing the construction of Phase I of the Kellyton Graphite Plant in east-central Alabama.
Terence J. Cryan, Westwater’s Executive Chairman, expressed optimism about the agreement, stating, "Following our second offtake agreement in July, we've achieved another significant milestone. We anticipate a busy fall as we finalize the loan details, aiming for a fourth-quarter closing."
The progression to a loan closing is contingent upon the parties reaching agreement on final terms, successful due diligence, and fulfillment of loan conditions. To support the closing of this debt financing, Westwater has enlisted legal services from McDermott Will & Emery and financial guidance from Cantor Fitzgerald as its investment banker.
In addition to this financial development, Westwater has updated investors at the 2024 Annual Gateway Conference on Wednesday. The live webcast presentation was made by Cryan and Steve Cates, Chief Financial Officer, who were also available for individual meetings during the conference.
Westwater Resources is developing the Kellyton Graphite Plant to produce natural graphite products, with the Coosa graphite deposit being the largest of its kind in the contiguous United States. The company has been working towards establishing a robust infrastructure for the production and sale of its graphite products, which are essential components in various energy technologies.
The company's forward-looking statements, including anticipated production, sales, and financing, are subject to various risks and uncertainties. These include market conditions, competition, regulatory hurdles, and operational challenges that could impact the actual results and performance.
This news is based on a press release statement from Westwater Resources, Inc. and does not include any promotional content or subjective assessments. The information presented is a factual representation of the company's announcement regarding its financial and operational developments.
In other recent news, Westwater Resources Inc (NYSE:WWR). has secured a second multi-year offtake agreement with Fiat Chrysler Automobiles, part of the Stellantis (NYSE:STLA) Group. This agreement guarantees that all of the Kellyton Graphite Plant's phase one production is contracted through 2031, and some phase two volumes are also under contract. Westwater is now 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.
In a recent Q&A session, Westwater confirmed its full compliance with NYSE American listing requirements and clarified that it has no plans to move to the OTC markets. The company also expressed confidence in its profitability and ability to service debt financing once the Kellyton plant is operational. Further updates on Westwater's progress, including the feasibility study for phase two, are expected in the August earnings call.
InvestingPro Insights
As Westwater Resources, Inc. (NYSE American: WWR) progresses with its plans for the Kellyton Graphite Plant, a look at the company's financial health and market performance can offer investors additional context. According to InvestingPro data, Westwater Resources holds a market capitalization of approximately $30.86 million. Despite the challenges, the company's stock is trading at a low Price / Book multiple of 0.23 as of the last twelve months leading up to Q2 2024, which could indicate that the stock is potentially undervalued relative to its book value.
InvestingPro Tips highlight that Westwater Resources holds more cash than debt on its balance sheet, which can be a positive sign for investors looking for companies with a lower risk of financial distress. Additionally, the company does not pay a dividend to shareholders, which is common for companies that are still in the development stage and may be reinvesting profits into growth opportunities.
However, it's important to note that Westwater Resources is not profitable over the last twelve months, with an adjusted P/E ratio of -2.78, and it has been quickly burning through cash. The company also suffers from weak gross profit margins, which is reflected in a gross profit of -$0.04 million over the same period. Investors should consider these factors when evaluating the potential risks and rewards associated with Westwater Resources' stock.
For those interested in further insights, InvestingPro provides additional InvestingPro Tips that can help investors make more informed decisions. There are currently 8 additional tips available on the InvestingPro platform for Westwater Resources, Inc., which can be accessed at https://www.investing.com/pro/WWR.
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