Westwater Resources Q4 2025 Earnings Call - Kellyton 12 Months From Production if Remaining $50M Secured

Operator: Hello everyone. Thank you for joining us and welcome to the Westwater Resources, Inc. 2025 year-end results. After today’s prepared remarks, we will host a question and answer session. For analysts joining on our call, please press star one on your telephone keypad to ask a question. To withdraw your question, please press star one again. I will now hand the call over to Steve Cates, CFO. Please go ahead.

Steve Cates, Chief Financial Officer, Westwater Resources, Inc.: Thank you, operator, and good morning, everyone. Thank you for joining us today for Westwater Resources’ fourth quarter and full year business update. Our 2025 Form 10-K was filed after market closed yesterday, and you’ll find the press release and investor presentation posted to our website under the Investors section at westwaterresources.com. Joining me today on the call are Terence Cryan, our Executive Chairman, and Frank Bakker, our Chief Executive Officer, both of whom will be available to answer questions after the call. As a reminder, today’s discussion will include forward-looking statements. These statements reflect management’s current expectations regarding a number of factors, including projected demand and pricing for natural graphite, expected timelines and costs related to the development of the Kellyton Graphite Plant and the Coosa Graphite Deposit, as well as potential capital raising activities.

As always, these statements are subject to risks and uncertainties, which are discussed in detail in our annual report on Form 10-K for the year ended December 31, 2025, as well as in our other SEC filings. Please also refer to the cautionary statements included in our press release and presentation. With that, I will turn the call over to our Executive Chairman, Terence J. Cryan, for opening remarks.

Terence J. Cryan, Executive Chairman, Westwater Resources, Inc.: Good morning, everyone, and thank you for joining us today. I’d like to begin by stepping back and discussing the broader market Westwater is currently operating in, and importantly, how we fit into the evolving battery materials supply chain. Over the past year, our sector has experienced a period of rapid regulatory, financial, and commercial change. Near term, EV growth has moderated in the U.S., though EV adoption growth continues in the rest of the world, which bodes well longer term. This has created some near-term pressure across parts of the battery supply chain, including battery materials. Although the thesis remains firmly in place that domestic customers benefit greatly and insulate themselves from price shocks best by establishing a domestic supply chain. As you can see on slide 4, most industry EV forecasts continue to point towards strong longer-term growth.

By 2030, global EV sales are expected to reach 27 million as compared to 14 million in 2025. By 2040, they are expected to exceed 65 million units. That’s a 4-fold increase in just 15 short years. At the same time, grid scale battery energy storage systems are expected to expand to support needed grid capacity growth in data centers, semiconductor manufacturing, and other renewable power generation technologies, which are expected to increase several fold over the next 20 years. Given these factors, demand for natural graphite anode material is expected to grow by approximately 185% over the next decade. This is exciting news for Westwater and our industry. More good news for us is the need for domestic reliable sources of critical minerals, especially graphite.

China has dominated the graphite active anode market for decades, and as can be seen on slide five, it continues to show they will dominate over the next decade, making a foreign entity of a country of concern a critical link in the global battery supply chain. This is problematic. As such, governments, OEMs, industrial customers, and battery manufacturers are now increasingly focused on building a safe, secure domestic supply chain for critical minerals and battery materials. Here in the U.S., we’re seeing growing support and targeted governmental investment to strengthen the domestic supply chains, from upstream mineral development to downstream processing and manufacturing. There is now broad recognition that materials like graphite are essential to the establishment and long-term competitiveness of the North American battery industry, and this dynamic is central to Westwater’s strategy.

Our vertically integrated mine-to-market approach, as shown on slide six, will deliver domestic, secure battery-grade natural graphite via the development of two complementary assets in Alabama, USA. The first is the Coosa Graphite Deposit, which is the largest and most advanced natural flake graphite deposit in the contiguous United States. The second is the Kellyton Graphite Plant, which will process graphite concentrate into coated spherical purified graphite or CSPG, the material used in lithium-ion battery anodes. Together, these assets form a vertically integrated domestic graphite platform. As a result of the progress we have made advancing these projects, we believe Westwater is currently the most advanced American developer of battery-grade natural graphite in the United States.

By linking resource development at Coosa with downstream processing at Kellyton, we are leading the establishment of a domestic supply chain for battery-grade graphite, and we’re doing so at a time when the current U.S. administration and domestic customers are increasingly recognizing the strategic importance of U.S.-produced graphite. In 2025, we made great strides to advance our strategy. We progressed construction activities at Kellyton, delivered samples to potential customers via our qualification line there, and progressed mine planning and permitting activities at the Coosa Graphite Deposit. As you can see from slide seven, we have a strong value proposition, and our efforts to date are positioning Westwater to play a leading role in the development of a domestic battery material supply chain in the U.S. Our goal is clear. We are establishing Westwater to be America’s source for battery-grade natural graphite.

We’re confident in our ability to complete the balance of financing needed for phase one at Kellyton. Once secured, we believe we’re just 12 months away from delivering secure, reliable, domestic battery-grade natural graphite. With the investment we have made to date at Kellyton, which exceeds $130 million, the cash we have on hand and the success that we have had maintaining our overall project budget at $245 million, which contains an untouched contingency of about $20 million, we believe obtaining the remaining finance needed can be accomplished through a range of options available to us. Our focus now is on completing Kellyton with non-dilutive debt financing on a timeline which will support commercial production in 2027, consistent with the delivery forecast in our offtake contracts.

The timeline to commercial production reinforces our first-mover advantage over our North American competitors, who largely remain at a conceptual stage and are 2-5 years behind Westwater in the customer qualification process in constructing a battery anode processing plant. With that context, I’ll now turn the call over to Frank to walk through our operational progress in more detail and discuss the key developments from the quarter.

Frank Bakker, Chief Executive Officer, Westwater Resources, Inc.: Thanks, Terrence, and good morning, everyone. I would like to begin with an update on the Kellyton Graphite Plant, which you will see on slide 8. Kellyton is a central part of our vertically integrated mine-to-market strategy and an important step towards establishing a domestic U.S. supply of battery-grade graphite. During 2025, we advanced construction and operational readiness at Kellyton. Key progress included installation of micronization and spheroidization equipment in the shaping and sizing building, along with commissioning of one micronization mill and one spheroidization mill. These assets are part of our qualification line, and experience gained is supporting our transition to the full production line as part of phase one. We continue to operate a qualification line, which is currently producing samples of CSPG and is capable of producing samples of at least one metric ton for testing and evaluation.

In addition to these operational advancements, we received a U.S. patent during the year related to our graphite purification process. Our now-patented approach produces high-purity graphite while avoiding the use of hydrofluoric acid, which is used in traditional production methods. This technology sets us apart from other producers, and importantly, it supports environmentally friendly, responsible production of battery-grade graphite here in the U.S. At the same time, capital discipline remains at the heart of everything we do. Last year, we told you we would review our phase one capital plan, and we just did. When we initially introduced the Kellyton phase one project several years ago, the estimated capital cost was approximately $270 million. Through earlier optimization efforts, we reduced that to approximately $245 million, including a contingency of roughly $20 million.

Importantly, this latest review was completed in the context of a rising input cost environment. Since October 2025, copper prices have increased by approximately 18%, and steel prices by roughly 8%, both of which are key inputs for plant construction and equipment. Despite these pressures, our updated capital plan reflects disciplined engineering, scope optimization, and procurement strategies that allow us to maintain our cost framework. We continue to estimate total phase one capital expenditures at approximately $245 million, inclusive of the $20 million in untouched contingency, which we believe appropriately captures both current market condition and potential variability going forward. Overall, this still represents a reduction of approximately $25 million from the original estimate, while maintaining the core design and production capabilities of the facility. Our optimization efforts reflect our continued focus on capital discipline as we advance Kellyton.

As Terence shared, assuming we have financing in place, we estimate we are 12 months away from delivering battery-grade graphite material in the U.S. markets. Turning to the Coosa graphite deposit on slide 9. Coosa is the upstream component of our mine to market platform. It’s located just 30 miles from the Kellyton plant in the heart of the U.S. Battery Corridor. Given this logistical advantage, we expect it to serve as a long-term feedstock of natural graphite for Kellyton. Last year, we initiated permitting activities for its development and engaged a third-party engineering and environmental firm to support this process. The permitting pathway for Coosa involves several federal and state approvals. Two key components include the Section 404 permit with the U.S. Army Corps of Engineers and the water discharge permit administered by the state of Alabama.

We filed the water discharge permit at the beginning of March, which was an important step forward in permitting for the project. Our focus now turns to progressing activities in support of the Section 404 permit, which we expect to file mid-year. We are excited to share that we recently submitted our formal application for Coosa to be considered under the FAST-41 program. FAST-41 is designed to improve coordination and transparency among federal agencies, so the permitting process for important projects like ours can be streamlined. We believe Coosa aligns well with the objectives of FAST-41, given the U.S. increased focus on securing domestic supply chains for critical minerals like graphite. Overall, we expect the permitting process for Coosa to be 12-24 months, after which we would look to move forward mine development.

Under this timeline, the earliest potential production from Coosa would be late 2028 to 2029. Finally, I will briefly touch on customer engagement. We continue to engage with potential customers in the battery and automotive industries, including global battery manufacturers and OEMs, and particularly those interested in domestic sources of battery materials. We are also in discussions with companies evaluating graphite for defense-related and other industrial applications where reliable domestic supply is becoming more and more important. Our existing offtake agreements with Eskom and Hiller Carbon are in place, and we are providing product samples to other prospective customers as part of their qualification processes. These qualification activities are an important step in advancing commercial discussions as customers look to secure domestic sources of reliable graphite.

Major battery manufacturers and OEMs are putting more and more emphasis on establishing a reliable domestic supply chain for critical minerals like graphite. We believe our vertically integrated mine-to-market platform positions us well within this evolving landscape. With that overview, I will turn the call over to Steve, who will walk through our financial results and liquidity position. Steve?

Steve Cates, Chief Financial Officer, Westwater Resources, Inc.: Thanks, Frank. Appreciate the overview of the progress we have made across our portfolio in the past year. I’ll begin by providing a brief overview of our liquidity position and financial results, which you will find in our latest financials filed with the SEC. Overall, we closed the year in a strong financial position with cash of approximately $50 million. We did this through several financing initiatives, including convertible note offerings and primarily through our ATM. Strengthening our cash position ensured we have the flexibility to continue investing in Kellyton, advance permitting at Coosa, and pursue potential government funding opportunities. Importantly, following the optimization work completed on the phase one capital plan. We now estimate that there is less than $100 million of remaining capital needed to complete Kellyton phase one, excluding the $20 million in untouched contingency.

With approximately $50 million of cash on hand at year-end, that leaves us with just another $50 million needed to have the funding for phase one of Kellyton substantially complete. We will continue to prioritize non-dilutive lower cost sources of capital where possible to help raise the remaining $50 million, including government programs such as EXIM. Last year, the company received a letter of interest from EXIM in connection with advancing Kellyton. While our application is currently being evaluated, we have engaged with advisors and are spending quality time in D.C. to evaluate additional government-backed financing sources that may be available to us.

Given the vertically integrated nature of our domestic business model and the ability to take a phased approach in scaling the business with phase one at Kellyton, the Coosa deposit, and then expansion capability at Kellyton with phase two, we believe we are in the middle of the fairway, and our vertically integrated strategy covers multiple areas of interest that are a priority to the current U.S. administration. From critical mineral domestic resource security and extraction at Coosa to advanced mineral processing capability and supply chain resiliency at Kellyton. As of year-end, the company had approximately $72 million of remaining capacity under the ATM and approximately $26 million under the ELOC. These instruments provide us access to the capital markets, but we intend to remain disciplined. As shareholders ourselves, we are sensitive to dilution. Turning to the financial results.

In 2025, the net loss from operations was approximately $27 million or $0.32 per share compared to last year’s net loss of $12.7 million or $0.22 per share. The increase in our net loss was primarily driven by non-cash items associated with our convertible notes, which included conversions and fair value adjustments, as well as increases in stock-based compensation and depreciation related to the qualification line that was placed into service this year. G&A expenses for the year totaled approximately $12 million, an increase of approximately $2.4 million compared to the prior year. This primarily reflects the higher stock-based compensation of restricted stock unit awards granted during the year. These awards are important, and that it helps to align our employees with shareholders, and also supports the retention of the team as we advance our projects, while also helping to conserve cash.

From a cash flow perspective, net cash used in operating activities were approximately $10 million in 2025. Investing activities reflected CapEx associated with the development at Kellyton. Altogether, our existing liquidity, access to capital markets, and ongoing financing discussions provide a solid foundation as we advance our mine to market strategy at both Kellyton and Coosa. Frank, back to you.

Frank Bakker, Chief Executive Officer, Westwater Resources, Inc.: Thanks, Steve. Before we open the line for questions, I would like to reiterate what continues to guide our work at Westwater. We are advancing a vertically integrated mine to market platform for battery-grade natural graphite here in the United States. Through development at Coosa and Kellyton, we are establishing a domestic supply chain that supports the growing demand for battery materials. We made meaningful progress over the past year across several parts of our strategy, which you will find outlined on slide 10. This included advancing construction and our operational readiness at Kellyton, production of customer samples via our qualification line, optimization of the phase one capital plan, and permitting progress at Coosa. We also actively engage with potential customers, especially those in search of a secure, reliable domestic source of battery-grade graphite.

When it comes to the remaining $50 million needed to bring Kellyton into full production, we will continue to evaluate non-dilutive financing opportunities, and we have the right support in D.C. and otherwise to do so. The long-term outlook for battery materials, and especially graphite, is strong. Based on the progress we’ve made so far, Westwater is currently the most advanced American developer of battery-grade natural graphite in the United States. We are on the right path, and our objective is clear: to establish Westwater as America’s source for battery-grade graphite. With that, operator, we would be happy to take questions.

Operator: We will now begin the analyst question and answer session. If you are an analyst and would like to ask a question, please press star one on your telephone keypad. To withdraw your question, press star one again. Please pick up your handset when asking a question, and if you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from Heiko Ihle from H.C. Wainwright & Co. Your line is now open. A kind reminder to please unmute yourself locally if you are.

Heiko Ihle, Analyst, H.C. Wainwright & Co.: I am off mute. Can you hear me?

Operator: Yes, we can hear you. Thank you very much.

Heiko Ihle, Analyst, H.C. Wainwright & Co.: Oh, perfect. Good morning, Steve and team. Given the ongoing geopolitical risks that, you know, just seem to be exacerbating here by the week, can you walk us through how your investor base is looking at the domestic supply for graphite. But obviously, Kellyton is one of the best locations in the world, at least in our view. Are you seeing investors assigning more favorable discount rates? Are you having guys that maybe used to focus on other locales, suddenly interested in the U.S.? What are you seeing in that regard? And maybe just a little bit of color.

Terence J. Cryan, Executive Chairman, Westwater Resources, Inc.: Hi, Heiko Ihle. This is Terence J. Cryan, and thanks for your question. You know, I think that what we’re seeing in terms of customer behavior is really the best way for customers to insulate themselves from supply shocks, price volatility due to, you know, tariffs, duties, export restrictions, and policy shifts, is to put in place a domestic supply contract. I think as you know, because of the first mover advantage that we have, we’re better positioned than anyone else to meet that need. You know, we’re seeing continued strong customer interest. The customer base is broadening beyond just EV to markets like battery energy storage systems, other utility and industrial customers and some defense opportunities.

You know, I think, you know, it’s been an exhausting year or so for everyone I think, with all the policy changes and, tariff shifts, et cetera. Customers want that secure supply and price stability. The way you get that is through a domestic contract with Westwater.

Heiko Ihle, Analyst, H.C. Wainwright & Co.: Fair enough. One more, if I may. Thanks, Terence. Earlier on this call, the prepared remarks mentioned, you know, the governmental support. Again, this builds on the last question. Can you give a few ways how exactly this has been manifesting and shaping? And going a step further, have these governmental interactions been changing in tone, voice, intensity compared to how they were, you know, six months ago?

Terence J. Cryan, Executive Chairman, Westwater Resources, Inc.: Sure. You know, what we’re seeing from the current administration is definitely a shift in terms of support for critical minerals including graphite. You know, as we’ve previously talked about, you know, we received a letter of interest from the Ex-Im Bank, and we submitted a full application, which is currently in due diligence. We’re seeing a broader effort across various government agencies, and they’ve even put in place a coordinating function in Washington to coordinate the activities between Ex-Im Bank, the DOE, and areas within DOD like the Office of Strategic Capital. We’ve assembled a team of advisors that we think has really positioned us well to pursue these various initiatives, and we’re, you know, in a very active process right now.

I can’t predict how this is all gonna, you know, play out, but what I can tell you is I think we’re right in the middle of the fairway of what this administration is trying to do. The OSC alone has $100 billion appropriated and approved for critical minerals.

Heiko Ihle, Analyst, H.C. Wainwright & Co.: Yeah. Fair enough. I will get back at you and stop hogging up the questions here. Thank you very much.

Terence J. Cryan, Executive Chairman, Westwater Resources, Inc.: Thank you, Heiko.

Operator: Thank you very much for your question. There are no further questions at this time. I would like to turn the call back to Steve Cates, CFO.

Steve Cates, Chief Financial Officer, Westwater Resources, Inc.: Thank you. Thanks to our investors who submitted questions ahead of this call. One of the ones that has come through is just about our permitting process and specifically, ADEM’s technical review, and comment period for our NPDES permit. Frank, would you like to address that?

Frank Bakker, Chief Executive Officer, Westwater Resources, Inc.: Yeah. Steve, of course. It’s, of course, difficult to predict the permit timeline. We engaged a very experienced engineering company in Alabama that has done a lot of these permit applications and has a good relationship with the permitting agencies. Based on that, we anticipate that the NPDES permit will be issued this year.

Steve Cates, Chief Financial Officer, Westwater Resources, Inc.: Great. Thank you. That’s the end of the questions that have not already come up on this call that were pre-submitted. Again, appreciate everybody submitting those questions in advance. With that, I’d like to turn the call back over to Terence Cryan for closing remarks.

Terence J. Cryan, Executive Chairman, Westwater Resources, Inc.: Thanks, Steve. Westwater has made meaningful progress over the past year, advancing our Coosa graphite mine, continuing to invest in the development of the Kellyton processing plant, and importantly, lowering the additional capital needed to substantially complete Kellyton phase one to approximately $50 million. Those are big strides forward. I also think it’s important for investors to appreciate the customers who are exhausted by all of the policy shifts, supply shocks, and price volatility that has occurred due to tariffs, duties, export restrictions, and policy shifts, and that the best way to insulate themselves is to put in place a domestic supply contract. Westwater is better positioned than anyone else to meet that need. If you want domestic graphite anode material in 2027, 2028, or 2029, you better have Westwater on your speed dial.

Because of all this, we have real confidence in our ability to reach our goal of being America’s source for battery-grade graphite. Thanks for your time today and your interest in Westwater Resources. Good day.

Operator: This concludes today’s call. Thank you for attending, and you may now disconnect.