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

Dmitry Silversteyn: Okay. So it’s possible then that, for not much more than $736 million that you’re looking to spend for Phase I and Phase II, you can actually — you have the ability in your current footprint to increase the Phase II production if demand continues to remain strong and customer interest continues to remain strong?

Frank Bakker: Yes, that’s correct. Yes. We have enough footprint over there to increase our capacity.

Dmitry Silversteyn: Okay, great. And then just one final question, just to make sure I understand. So you complete the construction and testing and ramp up by the end of ’23. You get into production at the beginning of ’24. And then you talk about finishing the optimization by the end of ’24. So does that mean that your initial production will be at the 15,000 metric ton run rate — I’m sorry, 7,500 metric ton run rate? And then by the end of 2024, you’re going to get to a 16,000 metric ton run rate. Is that the way to think about it?

Frank Bakker: Yeah. So we’re going to continue — well, we’re going to start commissioning end of this year. That commissioning effort will continue in the beginning of next year, 2024. Then during the first half, we’ll start producing graphite. And then slowly, over the year, we’ll ramp up to our full capacity.

Dmitry Silversteyn: Okay. Okay. That’s all the questions I have. Thank you for your time.

Frank Bakker: Okay. Thank you.

Operator: Debra Fiakas, Crystal Equity Research.

Debra Fiakas: Thank you. I didn’t expect to come around on the queue quite so quickly. This question might be more for Steve Cates, if you will, Steve. You talked about the financing agreement or the non-binding term sheet. And I just wondered if you could give us a little bit of color on how far along you are in these negotiations? Have you gotten enough details so that you, for example, can model an interest rate? Is it fixed? Is it variable? Have you discussed repayment terms? And do you have an idea, then, of what the cash flow impact would be of the interest and principal repayments?

Steve Cates: Yes, Debra. So it is an indicative term sheet, so there are of those aspects in that as far as coupon rate, repayment terms. But all that’s still subject to going through the process, as you’re probably well aware, until we get to closing and negotiating kind of the final terms and seeing if pricing moves at all. So while we do have that and have modeled that in, we’re not in a position yet until we actually sign the definitive agreement, closing the transaction, and communicate that to the market. But we’ll do so when we close.

Debra Fiakas: Okay then. Certainly. And when the — you mentioned an investment bank is involved. Are they intending to make the loan themselves or are they acting as an intermediary and putting a syndicate together? Can you just clarify what their role is?

Steve Cates: Yeah. I don’t believe we ever said that it’s an investment bank, but this is a third party that has closed billions of dollars of transactions over the past couple of decades within the energy sector of debt. And that’s who we’re working with and going through the process to close. And so, there’ll be a lot more to update once we’re able to close this.

Debra Fiakas: So they’re making the loan themselves, this third party?

Steve Cates: It will remain to be seen when we get to the final negotiation, whether it ends up being a single party or a couple of parties involved. And so we’re working through that right now.