Westwater Resources, Inc. (AMEX:WWR) Q4 2022 Earnings Call Transcript

Frank Bakker: Yeah. So we have the option actually to also make purified fines, but it really depends on the economics if we’re going to do it. Because most likely, the CSPG product will have a higher margin. So we’ll focus on the CSPG production.

Debra Fiakas: Okay. And I don’t mean to monopolize the call, I just have one last question. This is in regard to the new development agreement that you announced today with a battery manufacturer that’s producing EV batteries. Is this — and again, I know that you can’t name them. I understand that. Is this entity been discussed? Is it among the five LOIs that have been previously announced? Or is it an entirely new entity that you’ve not discussed before in any press release or conference call?

Frank Bakker: Yeah. We are planning to make a joint announcement with our partner later this month. And at that time, we are in a position to provide further details.

Debra Fiakas: Do those details include a name?

Frank Bakker: Yes. Then, it will include a name. That’s correct.

Debra Fiakas: All right. Very good. I do have additional questions, but I’m going to bow out and just get back in the queue and allow others to ask additional questions. Thank you for your answers. I appreciate it.

Frank Bakker: Thank you.

Operator: Dmitry Silversteyn, Water Tower Research.

Dmitry Silversteyn: Good morning, gentlemen. Thank you for taking my call. Congratulations on the very positive developments here, with both increased production of Phase I and Phase II and the signing of the agreement with a Tier 1 battery manufacturer. Just a couple of questions to clarify. When you talk about this new agreement and your potential customer taking, potentially, all of CSPG, are you — by all, do you mean the 3,700 hundred metric tons that was originally targeted as Phase I production or the 7,500 metric tons that will be the CSPG production run rate once you complete the improvements by the end of ’24?

Frank Bakker: Yeah. Those details will be provided in the joint announcement that we will make with our partner.

Dmitry Silversteyn: Okay. Thanks. Fair enough. But I mean — okay. So at least 3,700 metric tons and maybe more, sounds like. Okay. Secondly, on the increase in the production of Phase I — so it sounds like your Phase I, basically, is now going to be — produce as much material or process as material — produce as much material as you originally targeted for your Phase II. So you’ve more than doubled, as you mentioned, your Phase I production. It does not look like a significantly higher incremental cost versus the original budget of a little bit over $200 million. So I guess the question is, if it’s that — I wouldn’t say easy. But if you could double the production by just adding a little bit more of CapEx for Phase I, can your Phase II become much bigger if needed, given what we learned about Phase I and how much production capacity could increase by adding a little bit more capital?

Frank Bakker: Yes. I think you’re correct. Because Phase II is — if you look at the IRR of Phase II, what we calculated, it’s around 35%, 36%. And the capacity in Phase II, total capacity of the facility, will be 40,500 metric ton per year. And the approach we took is a modular approach. So for a lot of different units in the facility, it’s a copy paste. That is one unit that we need to optimize when we go to Phase II. But for a big part of the facility, it’s modular. So it’s really like a copy paste. So it makes life pretty easy actually.