Westwater Resources (AMEX:WWR) reported first-quarter financial results on Wednesday. The transcript from the company's first-quarter earnings call has been provided below.

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The full earnings call is available at https://events.q4inc.com/attendee/265765325

Summary

Westwater Resources Inc reported a net loss of approximately $4.7 million for the quarter, an increase from the previous year's $2.7 million, attributed to increased permitting costs and product development at Kellyton.

The company is advancing its vertically integrated graphite platform in Alabama, focusing on the Kooza graphite deposit and the Kellyton graphite plant, and has invested $29.6 million in the project to date.

Westwater Resources Inc is actively seeking non-dilutive financing options, including government funding, to complete the $245 million Phase 1 capital estimate for Kellyton, with $41.5 million of cash on hand and additional undrawn capital available.

The company received FAST41 designation for CUSA, which improves federal permitting coordination, and expects the permitting process to take 12-24 months.

Despite the termination of a procurement agreement with SKL, the company continues to engage with prospective customers across various sectors and remains optimistic about domestic demand for battery-grade graphite.

Full Transcript

OPERATOR

Hello everyone. Thank you for joining us and welcome to Westwater Resources Inc Q1 2026 conference call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. I will now hand the conference over to Steve Cates. CFO Steve, please go ahead.

Steve Cates (Chief Financial Officer)

Thank you Operator and good morning everyone. Thank you for joining us today for Westwater Resources first quarter 2026 business update. Our Form 10Q was filed and issued yesterday after market close and is available in the Investors section of our website at westwaterresources.com joining me on the call today are Terence Krein, our Executive Chairman, and Frank Bakker, our President and Chief Executive Officer. Both will be available to answer questions following our prepared remarks. As a reminder, today's discussion will include forward looking statements regarding future events and expectations, including projected demand for graphite products, expected timelines and costs related to the Kellyton graphite plant in Coosa graphite deposit financing activities, permitting timelines and customer qualification efforts. These statements are subject to risks and uncertainties that could cause actual results to differ materially from management's current expectations. Please refer to our SEC filings and the cautionary statements included in our press release for additional detail. With that, I'll turn the call over to our Executive Chairman, Terence Krein.

Terence Krein (Executive Chairman)

Thank you Steve and good morning everyone. Over the past several months, the battery materials industry has continued to evolve rapidly. Customers across the supply chain are adjusting procurement strategies and development timelines in response to shifting policies, tariffs, evolving end market demand, broader geopolitical uncertainty. At the same time, the strategic importance of establishing a domestic supply chain for critical minerals like graphite has only become clearer. Today, the United States remains almost entirely dependent on foreign sources of natural graphite, principally from China. Despite graphite being essential to lithium ion batteries, battery energy storage systems, and increasingly defense and advanced industrial applications such as SMR nuclear reactors. Against this backdrop, Westwater continues to advance a vertically integrated mine to market graphite platform in Alabama designed to deliver secure domestic battery grade graphite in the United States. Our strategy connects two complementary assets. The first is the Coosa graphite deposit, the largest and most advanced natural flake graphite deposit in the contiguous United States. The second is the Kellyton graphite plant where graphite concentrate will be processed into CSPG, the active anode material used in lithium ion batteries. Importantly, we continue to believe Westwater has a multi year first mover advantage as the most advanced American developer of battery grade natural graphite in the United States. During the quarter, we advanced permitting efforts at Coosa, including receiving FAST-41 designation during the quarter, continued advancing construction and operational readiness at Kellyton, and progressed customer qualification activities through our operational qualification line. FAST 41 is an important milestone for the project because it improves coordination and visibility across federal permitting activities. We view this as another step in accelerating progress and de-risking the long term development pathway for cusa. While market conditions remain dynamic, our focus continues to be on execution and advancing our two core projects. And we're doing just that. Steve will talk further about our active engagement on capital formation, including our engagement with various government agencies on funding. With that, I'll turn the call over to Frank for an operational update.

Frank Bakker (President and Chief Executive Officer)

Thanks Terence and good morning everyone. I will begin with an update on the Kellyton graphite plant which remains central to our mine to market strategy. During the first quarter, we continued construction and operational readiness activities at the site while also advancing customer qualification efforts. The qualification line was operational during the quarter and produced aggregate CSPG sample volumes exceeding 1 metric ton for customer evaluation and testing. This capability remains an important differentiator for Westwater and positions us ahead of many non-North American peers who remain several years away from providing qualification scale material. We also continued operating our R and D laboratory to support product optimization, customer qualification activities and internal quality control processes at quarter end. Approximately on the 29.6 million had been invested into Kellyton since inception of the project. Importantly, we continue to maintain our Phase 1 capital estimate at approximately 245 million, including approximately 19 million of untouched contingency. Assuming financing is secured, we continue to expect initial production within approximately 12 months. We continue to engage with prospective customers across the battery, automotive, industrial and defence sectors. During the quarter, SKL notified us of its decision to terminate the Products Procurement Agreement originally executed in 2024. While market conditions remain dynamic, we believe this reflects the evolving environment customers are navigating across the broader battery supply chain. Both SKION as well as FCA want to put new agreements in place with wwr. Importantly, our commercial strategy remains unchanged. We continue to provide product samples to prospective customers as part of ongoing qualification processes and we continue to receive inbound interest from companies evaluating domestic sources of battery grade graphite amid evolving trade policy, tariff considerations and supply chain security concerns. Turning to cusa, we continued advancing permitting and development activities during the quarter. Most notably, CUSA received designation under FAST 41 federal permitting program during the quarter. This designation supports improved coordination and transparency across federal agencies. As permitting activities continue to advance during the second quarter we anticipate a permitting timeline to be established and agreed to by the participating federal agencies. In addition, we continue geotechnical analysis, hydrologic monitoring, environmental studies and preparation activities associated with the Section 404 permit application and Alabama Air Permitting. We expect the permitting process to take approximately 12 to 24 months, after which we would look toward a decision on constructing and mine development. Overall, we continue to make meaningful progress across our vertically integrated graphite platform and believe Westwater remains well positioned within the evolving domestic battery materials landscape. Steve, over to you.

Steve Cates (Chief Financial Officer)

Thanks Frank. At the end of the first quarter, the company had approximately $41.5 million of cash on hand. During the quarter we raised approximately 1.2 million from the At-The-Market offering which has approximately 71 million available under the facility. We also have approximately 26 million of undrawn committed capital on our Equity Line of Credit facility. We remain confident in our ability to secure the remaining financing needed to complete Phase one of Kellyton and move toward initial production. As we continue to advance the project and operate our qualification line, we are focused on securing the right capital solution while preserving long term shareholder value. We are prioritizing non dilutive and lower cost sources of capital including potential government funding programs. To support these efforts. We have engaged a Tier 1 group of advisors and are actively evaluating the most efficient funding pathways available to us. We and our advisors are spending quality time in Washington D.C. and we are pursuing multiple funding opportunities across various Federal agencies. These activities have included in person meetings, submitting certain proposals and or applications and establishing data rooms for diligence. While we cannot comment on specific opportunities or provide an estimate as to the ultimate outcome of these efforts, we and our advisors continue to believe we are in the middle of the domestic critical mineral fairway that has been a strategic focus of this administration. We are also maintaining flexibility to evaluate other funding alternatives and project level financing structures including equipment based financing and other structured solutions. Our existing equity financing tools provide additional flexibility and we will remain disciplined and thoughtful in how we utilize them as we work to secure the remaining financing. We will continue managing liquidity carefully and aligning construction activity with available capital. For the quarter, the Company reported a net loss of approximately 4.7 million or $0.04 per share compared to approximately 2.7 million or $0. Per share during the same period last year. The increase in net loss was primarily related to increased permitting activities at cusa, increased product development costs at Kellyton and higher stock based compensation expense. Overall, we believe our current liquidity position, disciplined capital management approach and ongoing financing efforts in Washington D.C. and beyond provide a solid foundation as we continue advancing our mine to market strategy. Frank, back to you.

Frank Bakker (President and Chief Executive Officer)

Thanks Steve. To close, our priorities remain clear. We are advancing a vertically integrated mine to market graphite platform designed to support a growing need for domestic battery materials in the United States. During the quarter, we continued progress in construction and qualification activities at Kellyton, advanced permitting efforts at Coosa, and strengthened our position as one of the most advanced domestic graphite developers in the US the broader market environment continues to evolve, but we believe the long term need for secure domestic sources of battery grade graphite is becoming increasingly important. We are focused on execution, disciplined capital allocation and advancing our projects toward production. We appreciate your continued interest and support. Operator we would now be happy to take questions.

OPERATOR

We will now begin the question and answer session. Please limit yourself to one question and one follow up. If you would like to ask a question, please press Star one to raise your hand. To withdraw your question, press Star one. Again. We ask that you pick up your handset when asking a question to allow for optimum sound quality if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q and A roster. Your first question comes from the line of Heiko Ihle with H.C. Wainwright. Heiko, your line is open. Please go ahead.

Heiko Ihle

Hi there. Thank you guys so much for taking my questions. You're obviously quite a bit closer to the Pulse than I am and so maybe if you could provide callers a little bit of additional context in addition to what you already brought up in your prepared remarks of what you're seeing with prospective graphite customers, government agencies, the timelines that they're seeking, sizing, the avoidance of geopolitical risk factors. And you hinted at this a little bit more in your prepared remarks and just other things that may not be as obvious from your release or presentation or, you know, things that maybe we could elaborate on a little bit to the clients as well.

Steve Cates (Chief Financial Officer)

Hi Iko, this is Steve. Thanks for the question. Thanks for joining. I think what we're seeing in the broader Are you able to hear me? Yes, I said of course. Oh, I think what we're seeing in the broader market when it just comes to graphite, you know, we're seeing obviously, you know, we talked about our prepared remarks. There's been some uncertainty in the market conditions related to the fluctuations in tariffs and certain trade policies. However, the long term story really hasn't changed. You know, what we're seeing by likes of Benchmark Mineral Intelligence and others is that the demand for North American graphite still outweighs the forecast of supply by a significant margin. And I think one of the things that's really driving that is you've got the AI data centers, battery energy storage systems behind there, whether that's nuclear and industrial applications, as well as some of the traditional markets that our investors have been familiar with as far as EVs and those they're still forecasted to grow, they're growing globally. And so while the near term market has faced some uncertainty with some of these tariff policies, the long term prospect is still strong. And from a Westwater perspective, and what we're positioning ourselves also as we talk to government agencies and look for funding is if someone's looking for anode material in 27, 28 and 29, Westwater is really your only viable source right now. Most of these other companies maybe are at lab scale, maybe PowerPoint. We have our buildings built, we've got a qualification line running in one ton batches. And so we're in a very significant advantage from a timing perspective. And we have capacity to be able to sell. And so we're looking across a lot of markets. And I think that is intriguing to a lot of potential customers as well as potential funders as well.

Heiko Ihle

Fair enough. Okay. And then just for our modeling needs, can you give a bit of color on the capital spend at site on a quarterly basis for the remainder of 26? And maybe if I gave you a blank check today, how much would you like to spend?

Steve Cates (Chief Financial Officer)

Well, that depends. Those numbers are not necessarily the same. Right. Well, I think if, you know, the funding that we're looking for today. Right. The whole project we still believe is 245 million. That includes almost a 20 million untouched contingency. We put 130 million into the ground. So, you know, we're under 100 million over 40 million on the balance sheet. So I think, you know, like we said in our last call, we're still near, you know, somewhere around $50 million and we're substantially complete with funding having that in place. We're 12 months from commercial production and so that's still our focus. Now from a capital spend perspective going forward, I think what you can expect is taking a moderate approach. I think we announced in the fourth quarter, we talked about putting some long lead equipment orders in for some additional stuff we need in our coding process and a couple processes there that probably you'll see kind of come out in the next couple quarters, but it's not really significant. So we're going to be measured with our spend and I like to say kind of Move at the speed of cash.

Heiko Ihle

I'll follow this up with one more. I mean, you know, I look at companies like Caterpillar that just have very long lead times. Other capital goods due to. What are you seeing in regards to waiting periods now versus I don't call it six, nine, 12 months ago.

Frank Bakker (President and Chief Executive Officer)

Yeah, so. Hi, Ko, this is Frank. So what I see is that. Hey, morning. So what we see is that the lead time, manufacturing time for the equipment we need to order is about 3, 4 months and then you need to include shipping. So in about six months we can have, we can have all the remaining equipment outside.

Heiko Ihle

Perfect. I'll get back in the queue and stop hogging the queue. Thank you very much. Thank you.

OPERATOR

Your next question comes from the line of Matthew Satello with Maxim Group. Matthew, your line is open. Please go ahead.

Matthew Satello

Hey, Terrence, Frank and Steve, this is Matt on for Tate. Thank you for taking my question. I was wondering if you can give us some more detail on the customer qualification pipeline. I guess specifically how far along is your most advanced customer process going and where do the others stand relative to that?

Frank Bakker (President and Chief Executive Officer)

Yeah, so we're working with different customers. We send 1 kg samples, 10 kilogram samples to customers, large scale samples, so we receive positive feedback. Some customers are pretty far along in their qualification process and I think the last step for the qualification will be when we have the production plant finished and then provide the mass production sample to the customer and then they can do the final qualification. So overall we are positive in working with our customers and we get positive feedback.

Matthew Satello

Thank you for that. And to follow up, just in terms of the step up process at Kellyton, given production begins on time and there is off-take agreements in place potentially, how long does it take to get near capacity?

Frank Bakker (President and Chief Executive Officer)

Yeah, so we anticipate once financing is in place that we need another 12 months to start the initial production. If you look at where we are now, all the buildings are finished, so that will help on the construction efforts. So there will be no weather impact. We can do the construction in parallel in the different buildings. We already installed a part of the equipment, so I think looking at the risk of delays, that's minimal if the way we approach it. And then the other thing is that we've put storage silos in between the different process units so we can commissioning and start up one unit while we're still constructing the other unit. So we can have a phased approach on our construction and our commissioning and startup efforts. And next to that we have our qualification line which has similar equipment and we're running our qualification line with the team at site. And that, I think, will also reduce the risk of any commissioning or startup issues that we might encounter.

Matthew Satello

That's great. Super helpful. Thank you for taking my questions.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.