Westwater Resources continues to move forward with each of its three energy mineral assets – uranium, lithium and graphite. Tests are underway to add vanadium as a fourth metal to the mix. When the Company eventually begins to mine graphite at the Company’s Coosa County project in Alabama in 2026 as planned, it may be possible to exploit the vanadium deposits as a by-product, thereby increasing potential revenue and improving profit margins.
Development of battery-grade graphite has been made top priority. Plans for a pilot plant to produce Purified Micronized Graphite (PMG) for the battery market are well underway and appear to be on schedule for completion by the end of 2019. Initial production of PMG is planned in 2020, with volume production to follow in 2021 to deliver the Company’s first revenue in several years. Initial production will be accomplished using outsourced graphite materials. At least two potential customers are testing PMG materials in their battery products and another two dozen possible customers have signed non-disclosure agreements to receive samples of Westwater’s battery-grade graphite materials.
We continue to rate WWR share at Speculative Buy with a $1.50 price target. Our view is informed by a mix of factors that favor a value greater than the current stock price. Opportunity in the energy minerals market remains robust with sales values totaling over $1.0 billion. Demand conditions and pricing in each of the markets for the Company’s mineral products remain favorable. Despite constrained capital resources, management has moved the ball forward for each of its mineral assets, adding value and moving closer to commercial stage for its graphite asset in particular.
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