South Korea’s SK On was disclosed as Westwater Resources’ new development partner for battery anode materials. SK On is a leading manufacturer of electric vehicle batteries, having been spun off in 2021 from its parent SK Innovation Co. Ltd (096770: KS). SK On claims orders for electric vehicle batteries in excess of 1,000 gigawatts and has set a goal of reaching 500-gigawatt capacity by 2030. In the announcement Westwater Resources reiterated the potential to sell to SK On all of the Company’s planned production of its proprietary Coated Spherical Purified Graphite (CSPG). The two companies are currently working jointly to adjust Westwater’s CSPG to fit the anode requirements of SK On’s batteries. Concurrently, the two are also negotiating final delivery terms and pricing.
During the recent earnings conference call to discuss financial results in the first quarter ending March 2023, Westwater management provided an update on its project to construct and commission a graphite materials processing facility in Alabama. The project continues with completion of planned structures and beginning of interior finishing work. The Company continues to receive long-lead time equipment such as furnaces.
The Company has spent approximately $89 million of the currently estimated cost of $271 million for Phase I of the graphite project. At the end of March 2023, the Company held $39.7 million in cash resources on its balance sheet, leaving a budget shortfall of $142 million. Management also indicated the Company continues to negotiate the terms of a private debt financing for $150 million. The Company currently has no debt on its balance sheet.
We are discontinuing coverage of Westwater Resources for reasons unrelated to the Company’s fundamental developments and without change in our views. However, our estimates of future financial performance, valuation and target price for WWR are withdrawn.
Our final report on Westwater Resources dated May 25, 2023, can be viewed by clicking the image below.
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