With its first quarter 2022 financial report, Westwater Resources revealed lower than expected cash usage by operations, totaling $2.7 million. During the earnings conference call management confirmed the construction project is proceeding as scheduled to build a battery-grade graphite processing facility near the Company’s natural flake graphite resource in Coosa County, Alabama. A total of 8.8% of the total project budget has been expended, nearly all of which has been capitalized as a new fixed asset called ‘construction in progress’ on the Company’s balance sheet.
We continue to rate WWR at Speculative Buy with a $20.00 price target. In our view, priced at 0.38 times net assets, the shares are even more deeply undervalued than ever. Despite considerable progress toward commercializing Westwater’s proprietary graphite materials, the stock has met aggressive short-selling and limited bullish interest. The Company has perfected four graphite products and has in hand at least one indication of interest for commercial volumes from a battery or electric vehicle manufacturer. Additionally, the Company has applied for patent protection of its proprietary graphite materials purification process and commenced construction of a production facility with name plate capacity of 6,000 metric tons per year. In our view, those accomplishments should garner valuations closer to industry peers with similar objectives to build out an integrated graphite mining and processing operations.
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