Successful tests of Westwater Resources proprietary battery-grade graphite materials appear to validate the Company’s processing design, at least at a laboratory scale. During the conference call to discuss financial performance in the second quarter ending June 2020, management provided assurances that the Company and its contracted engineering firm are on track to complete design work needed to construct and begin operation of a larger-scale pilot plant by the end of 2020. The pilot plant is needed to produce testing samples for prospective customers. At least one such prospect has asked for one metric ton of the Company’s Purified Micronized Graphite (PMG) for large-volume qualification testing. The Company has claimed a consistent but small business pipeline. However, that pipeline could become more active as newly hired marketing and sales personnel begin promoting the Westwater graphite materials among battery manufacturers.
We continue to rate WWR at Speculative Buy and view the stock as undervalued even after recent price appreciation. With improving liquidity characterized by increasing trade volume and narrowing bid-ask spread, we expect more investors to be attracted to the stock. There is also the potential for upside catalysts for the stock price in the form of progress reports from the Company on its planned graphite materials pilot plant. Even the recently initiated sales and marketing effort could yield accomplishments of sufficient importance for public announcement.
Click on the image below for additional details are available in the full ten-page report dated August 18, 2020.
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