Westwater Resources, Inc. (WWR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to Water Tower Research fireside chat. Joining us today are Terence Cryan, Executive Chairman of Westwater Resources; and Steven Cates, Chief Accounting Officer of the company. Welcome, gentlemen. Nice to have you with us again.

Good to be here.

Thanks for having us.

Surely. Terence, last Thursday, I believe, Westwater Resources announced a CFO transition, which is expected to take place at the end of August. Can you speak to -- with our audience to the circumstances around the pending change in the company's C-suite, which I believe is the second such change in the last 12 months?

Sure, happy to. Approximately a year ago, we began planning for succession around our CFO position. And that process really was led by Jeff Vigil, our incumbent CFO. And that search led us to Steven Cates, who was brought on board as our Principal Accounting Officer at that time. Our hope was that Steve would develop to become our next CFO. And with Jeff's mentoring and guidance, that's exactly what's transpired. And so Steve is going to be our next CFO. Jeff Vigil, after 9 years at Westwater Resources, where he made significant contributions to our progress and success, will retire at the end of August. I've been involved with a number of executive succession plans over the years. I have to tell you, this is probably the smoothest one I've ever been involved with. So kudos to my colleagues for making it such a successful succession plan. We've got a couple of months yet before Jeff leaves us. So we're really pleased with the way this is going.

Thank you, Terence. So this was a planned transition that sounds like the time has come, and you've been very thoughtful in how you're going to carry this out and what was going to take place as you transition from one CFO to another. Steve, first, congratulations on your new and a much expanded role with the company. Can you discuss how you see the job as Westwater's CFO? What are the areas you will be concentrating on in the short to midterm? And what do you see as your main priorities, going forward, in 2022 and '23?

Thanks, Dmitry. First, I want to thank Terence Cryan and the other Board of Directors for this opportunity. Very excited about it. And also thanks to Jeff Vigil, as Terry mentioned, his mentorship and guidance over the year has been tremendous. We talked about this when I looked at the opportunity to join the Westwater team that this was something that was planned and thought about, finding his successor, that he wanted to bring someone on to mentor to be a business partner with them, and that's exactly what's happened. And I just cannot think Jeff enough. As far as the objectives of this role in moving in, Dmitry, nothing really changes because of the smoothness and the fact that the transition was thought about. I was brought into a lot of the decisions overseeing much of the accounting and financing activity for the company. And so really nothing changes. We're still focused on completing Phase 1 of the Kellyton processing plant, raising the additional capital needed to get there. And so really, I wouldn't expect to see a lot of changes as we move in the near-term months.

Understood. Thank you, Steve. The last time we spoke, you mentioned that Westwater was awaiting a receipt of an air permit from the state of Alabama for the graphite conversion plant at Kellyton that you're referring to. So is that -- you have announced the receipt of this permit. As I understand it, this was the last permitting requirements needed to perceive with the planned construction in earnest. Is that correct? And if so, can you update us on what are sort of the next big milestones or steps in your efforts to bring this plan, which would be the nation's first [ natural ] graphite processing plant online later, obviously, to bring the mine online?

Yes, that's correct. We announced a couple of weeks ago now that we had received our air permit. So right now, we have all permits in hand necessary to complete the construction of Phase 1 of our Kellyton graphite processing plant. The next key milestone, as you'll see, is obviously continuing to construct the plant itself, complete the buildings, get the equipment in and receive it as well as raise the additional funds needed to complete construction next year.

Got it. So you mentioned previously that you have proactively placed orders for the long lead items that are required for the plant to be constructed and obviously, things like furnaces and other [ capital ] equipment, parts and [Technical Difficulty] equipment in general. We're getting to the second half of the year here in 2022. Is this -- your obtaining of the air permit, does that allow you to sort of accelerate or step on the gas pedal, if you will, and get some of this equipment put in and some of the walls starting to get a [Technical Difficulty] besides the 2 buildings that you bought and refurbished?

I think we're on schedule. I think getting the air permit, this is when we originally planned it. It's in a ] timeline. And so we do have 2 buildings that we had acquired already on site, that we had renovated 90,000 square feet of warehouse space. We're using that for not only warehouse but also our administration office. We've been doing civil and earthworks. And so the air permit allows us now to start going vertical and constructing the buildings themselves, which is a good step. But more than that, it really allows us to complete construction. And this was pretty much on point with what our original timeline was for getting this permit and continue to move the project forward.

Understood, Steve. Thank you very much for the update. Thank you, gentlemen. I think it's very exciting to see Steve step into a more expanded role. I'm sure he's going to do a great job. And Terence, it sounds like you guys are really -- really laid out a good plan since you are able to stick to it and get your permits and your equipment on time and so far, on budget. It should give investors a lot of confidence that the plan will come to fruition as expected in the second half of 2023. We're going to be up and running in producing graphite. Congratulations on staying on plan. Steve, congratulations again on your new and expanded role. And I wish you guys the best of luck, and we'll hopefully speak to you again.

Thank you.

Thank you.