Our coverage of Westwater Resources is updated following two material announcements: 1) vanadium deposits have been identified at the Coosa graphite project in Alabama and 2) the Company has filed an arbitration request with the recognized international investment panel, seeking relief from Turkey’s revocation of the Company’s uranium mining licenses. In our view, both announcements bring new clarity and potentially greater certainty to Westwater’s financial position and auger well for the Company’s value.
We continue to rate Westwater Resources shares at Speculative Buy. In our view, the Company has continued to create value with its portfolio of energy resource assets. The acquisition of Alabama Graphite added battery-grade graphite to Westwater’s energy resource portfolio. Recently the discovery of vanadium at the project could improve the economics of the project with the addition of a valuable by-product to the planned output. Unfortunately, investors have not recognized the progress. Instead, we believe investors have focused on capital requirements and the threat of dilution through common stock issuance that has been Westwater’s favored capital raising vehicle. Additionally, investors have taken a particularly pessimistic view on revocation of uranium mining licenses by Turkey. In our view, this pessimistic view has left Westwater shares deeply undervalued.
Click on the image below to read additional details are included in a nine-page report dated December 20, 2018.
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