Westwater Resources Expects Kellyton Debt Financing to Close in January 2025

Rhea-AI Summary

Westwater Resources (NYSE: WWR) has announced that the debt financing for completing the construction of its Kellyton Graphite Plant is expected to close in January 2025. During Q4, the company progressed through diligence and loan documentation processes, including hosting lenders at the Alabama site, completing technical due diligence with an independent engineering firm, and finalizing legal and insurance requirements. The company notes that the closing remains subject to customary terms, final due diligence, and loan conditions.

Positive

• Company is advancing toward securing debt financing for Kellyton Graphite Plant completion
• Technical due diligence has been completed with independent third-party validation

Negative

• Financing closing delayed to January 2025
• Deal remains subject to final terms and conditions, indicating uncertainty
• Being a 'first of its kind facility' has led to substantial due diligence requirements, potentially causing delays

Insights

Financial Analyst

<p>The anticipated debt financing for Westwater Resources' Kellyton Graphite Plant represents a critical milestone for this <money>$33M</money> market cap company. The extended timeline to January 2025 for closing the debt financing suggests complex due diligence requirements, which is typical for first-of-kind facilities in the battery materials sector. The extensive due diligence process, including technical, legal and insurance reviews, indicates significant scrutiny from potential lenders.</p><p>The delay in securing financing could present near-term liquidity challenges, potentially requiring bridge financing or equity raises to maintain operations until the debt closing. As of their last filing, WWR's cash position and burn rate will be important metrics to monitor. For a company of this size, successful debt financing could significantly de-risk the project's completion but also increase financial leverage. The market's reaction will likely depend on the terms of the debt package and the company's ability to meet interim funding needs.</p>

Industry Analyst

<p>The Kellyton Graphite Plant's positioning as a first-of-its-kind facility in the U.S. graphite processing space carries strategic importance amid growing domestic battery supply chain initiatives. The extensive due diligence by third-party engineering firms suggests lenders are carefully evaluating the technical viability of the project. The domestic graphite processing capability could become increasingly valuable as automakers and battery manufacturers seek to comply with IRA requirements and reduce dependence on Chinese supply chains.</p><p>However, the extended timeline to secure financing might indicate technical complexities or risk factors that require additional validation. The graphite market's evolving dynamics, including potential overcapacity in global processing and price volatility, could be factors in the lengthy due diligence process. The success of this facility could set important precedents for future domestic graphite processing projects.</p>

CENTENNIAL, Colo.--(BUSINESS WIRE)-- Westwater Resources, Inc. (NYSE American: WWR), an energy technology and battery-grade natural graphite development company (“Westwater” or the “Company”), announces that the closing on a debt financing to fund the remaining construction costs of the Kellyton Graphite Plant is anticipated in January 2025.

During the fourth quarter, Westwater continued to move through the diligence and loan documentation processes related to the transaction. This process included hosting lenders at the Kellyton site in Alabama, completing technical due diligence using an independent third-party engineering firm, completing legal and insurance due diligence, and working with counsel to prepare and review loan documents.

“Being the first of its kind facility, the diligence performed regarding our Kellyton Graphite Plant has understandably been substantial,” said Steve Cates, Westwater’s SVP-Finance and CFO. “We anticipate closing the loan in January of 2025.”

Westwater notes the closing of the debt transaction is subject to customary agreement on final terms, final due diligence, and loan conditions.

About Westwater Resources, Inc.

Westwater Resources, Inc. (NYSE American: WWR), an energy technology company, is focused on developing battery-grade natural graphite. The Company’s primary project is the Kellyton Graphite Plant that is under construction in east-central Alabama. In addition, the Company’s Coosa Graphite Deposit is the most advanced natural flake graphite deposit in the contiguous United States and located across 41,965 acres (~17,000 hectares) in Coosa County, Alabama. For more information, visit www.westwaterresources.net.

Cautionary Statement Regarding Forward-Looking Statements

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as "anticipated,” “developing,” "expects," and other similar words. Forward-looking statements include, among other things, statements concerning: off-take agreements with customers; Westwater’s future sales of CSPG products to customers, including the amounts, timing, and types of products included within those sales; possible off-take agreements with other customers; potential debt financing arrangements, including the amount and type of debt and the schedule for closing; the anticipated annual production from Phase I of Kellyton Graphite Plan; the construction and operation of the Kellyton Graphite Plant and its qualification line, the Company’s Coosa Graphite Deposit; and the costs, schedules, production and economic projections associated with them. The Company cautions that there are factors that could cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of the Company; accordingly, there can be no assurance that such suggested results will be realized. Those uncertainties and other factors are discussed in Westwater’s Annual Report on Form 10-K for the year ended December 31, 2023, and subsequent securities filings, and they could cause actual results to differ materially from management expectations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241223799953/en/

Westwater Resources, Inc.

Email: Info@WestwaterResources.net



Investor Relations

Email: Investorrelations@westwaterresources.net

Source: Westwater Resources, Inc.

FAQ

When is Westwater Resources (WWR) expected to close the Kellyton Graphite Plant debt financing?

Westwater Resources expects to close the debt financing for the Kellyton Graphite Plant in January 2025.

What due diligence steps has WWR completed for the Kellyton financing?

WWR has completed technical due diligence with an independent engineering firm, hosted lenders at the Kellyton site in Alabama, and completed legal and insurance due diligence.

What conditions remain for WWR's Kellyton plant financing to close?

The closing remains subject to customary agreement on final terms, final due diligence, and loan conditions.

Why has the due diligence process for WWR's Kellyton plant been substantial?

According to the company, the substantial due diligence is due to the Kellyton Graphite Plant being a first-of-its-kind facility.