Westwater Resources, Inc. Q1 FY2026 earnings call

Strategic Positioning

• Westwater Resources holds a multiyear first-mover advantage as the most advanced developer of battery-grade natural graphite in the United States, targeting growing demand for secure domestic critical mineral supply chains amid geopolitical uncertainty and shifting trade policies.
• The company's strategy combines two complementary assets: the Coosa Graphite Deposit (the largest and most advanced natural flake graphite deposit in the contiguous U.S.) and the Kellyton graphite plant, which will process concentrate into coated spherical purified graphite (CSPG) for lithium-ion battery anodes.

Kellyton Graphite Plant Updates

• Construction and operational readiness activities continued through Q1 2026, with the operational qualification line producing over 1 metric ton of aggregate CSPG samples for customer evaluation.
• An in-house R&D lab remains operational to support product optimization, customer qualification, and internal quality control.
• The Phase 1 total capital estimate for the project is maintained at $245 million, which includes $19 million in unused contingency; cumulative spending to date is $130 million. If financing is secured, initial production is expected within 12 months.
• SKL terminated its 2024 product procurement agreement during the quarter, but both SK On and its new joint venture with Hyundai have indicated intent to negotiate new agreements with Westwater. The company continues to receive inbound interest from prospective customers across battery, automotive, industrial, and defense sectors amid growing supply chain security concerns.

Coosa Graphite Deposit Updates

• Coosa received FAST 41 designation during the quarter, a key milestone that improves interagency coordination and accelerates federal permitting efforts.
• A formal permitting timeline is expected to be agreed upon by participating federal agencies in Q2 2026; the full permitting process is expected to take 12 to 24 months, after which a final mine development construction decision will be made.
• Ongoing work includes geotechnical analysis, hydrology monitoring, environmental studies, and preparation for Section 404 permit application and Alabama state air permitting.

Capital and Liquidity

• The company is prioritizing non-dilutive, lower-cost capital sources, including multiple federal government funding programs, with active engagement and ongoing applications across agencies in Washington D.C.
• Management retains flexibility to evaluate additional funding alternatives including project-level, equipment-based financing and existing equity tools, while maintaining disciplined capital allocation to preserve shareholder value.

Westwater Resources operates as a single focused business segment developing a vertically integrated natural graphite platform for battery and industrial applications in the United States. For Q1 2026, the company reported a net loss of approximately $4.7 million, or $0.04 per share, compared to a net loss of $2.7 million (or $0.40 per share) in the year-ago quarter. The increase in net loss stemmed from higher permitting activity at the Coosa Graphite Deposit, increased product development costs at the Kellyton graphite plant, and higher stock-based compensation expense. As of quarter-end, the company held $41.5 million in cash on hand, had raised $1.2 million via its at-the-market (ATM) equity facility during the quarter, with $71 million remaining available under the ATM facility and $26 million in undrawn committed capital under its ELOC facility. Cumulative investment in the Kellyton project reached approximately $29.6 million as of quarter-end.

• The total Phase 1 capital estimate for the Kellyton graphite plant is maintained at $245 million, including $19 million in untouched contingency. Approximately $50 million in additional funding is required to complete the project, after cumulative spending of $130 million.
• If full financing for Kellyton is secured, initial production is projected to occur within approximately 12 months from that point.
• Permitting for the Coosa Graphite Deposit is expected to take 12 to 24 months after the Q2 2026 alignment on a timeline with federal agencies, after which a construction decision will be made.
• Management expects moderate quarterly capital spending for the remainder of 2026, aligned with available liquidity, with no large unexpected expenditures planned as the company advances work at the speed of available cash.

• Near-term market uncertainty for graphite remains driven by volatile trade policies, shifting on-again off-again tariff proposals, and broader geopolitical instability, which have caused customers to adjust procurement and development timelines, including the termination of the existing SKL procurement agreement.
• The company requires approximately $50 million in additional financing to complete Phase 1 of the Kellyton project; failure to secure this financing on acceptable terms could delay or halt project development.
• Permitting timelines for the Coosa Graphite Deposit are subject to potential delays across federal and state agencies, which could push back mine development beyond the current 12 to 24 month projected window.
• Actual project costs, production timelines, and customer demand could differ materially from current projections due to the early-stage development nature of the projects and dynamic market conditions.

Q: Heiko Ihle asked for additional context on market dynamics for graphite, demand from prospective customers, and interest from government agencies that is not obvious from public filings. / A: Steven Cates responded that while near-term market uncertainty exists around shifting tariff and trade policies, long-term demand for North American-sourced graphite still significantly outpaces projected supply. Demand growth is driven by battery energy storage systems for AI data centers, EVs, defense, and advanced industrial applications, and Westwater is the only near-term viable domestic source of anode material for customers needing supply in 2027–2029, giving it a major timing advantage over peers that are still at lab or conceptual stage.

Q: Ihle followed up asking for color on quarterly capital spending expectations for the remainder of 2026, and how much total funding the company still needs to complete Kellyton. / A: Cates confirmed the total project cost remains $245 million including $19 million in contingency, with $130 million already spent and $41.5 million on the balance sheet, leaving ~$50 million in additional funding required. He said capital spending will remain moderate and measured for the rest of the year, with the company moving project work at the speed of available cash.

Q: Ihle also asked about current equipment lead times compared to 6–12 months prior. / A: Frank Bakker answered that lead times for the remaining equipment the company needs to order are currently 3–4 months of manufacturing, plus shipping, meaning all remaining equipment can be received within roughly 6 months of ordering.

Q: Matthew Sotelo asked for more detail on the status of the customer qualification pipeline, including how far along the most advanced process is. / A: Bakker explained that the company works with multiple customers, providing samples ranging from 1-kilogram to large-scale batches, and has received positive feedback from all ongoing qualification processes. Final qualification will only occur once the full production facility is complete and mass production scale samples can be provided.