Westwater Resources Announces Q3 2023 Business and Financial Updates - Seite 2

Additionally, Westwater has signed general terms and conditions for a supply agreement with a North American automobile manufacturing company and is negotiating a possible offtake agreement with this company for potentially all of Westwater’s Phase I and Phase II production capacity.

Westwater continues to engage with other potential customers who have tested samples of CSPG produced by the Company. Feedback from certain potential customers indicates that Westwater’s material meets their initial specifications. Westwater is continuing to provide additional samples to these potential customers and current counterparty interest indicates that Westwater's Phase I and Phase II production capacity may be subject to commercial contracts in 2023 or 2024.

Jon Jacobs, Westwater’s Chief Commercial Officer added, “Westwater expects to benefit from the combination of three trade policies that all positively affect our U.S.-produced graphite value proposition: the IRA, section 301 tariffs, and the newly-announced China export restrictions on graphite. Together, we believe these policies create financial motivation for U.S.-based cell makers to source graphite domestically. Westwater is working to fulfill that need.”

Construction Progress at the Kellyton Plant

During the third quarter of 2023, Westwater continued construction activities at the Kellyton Plant, including the receipt of additional long-lead equipment components, completing the construction of five of six primary plant buildings, and installation of overhead cranes ahead of equipment installation. As of the date of this press release, Westwater has constructed and is currently operating its research and development laboratory (“R&D Lab”). The R&D Lab allows Westwater to continue product development and optimization under the JDA with SK On and other potential customers, and to perform additional quality control tests. It also affords greater flexibility to optimize future samples in accordance with customer specifications. Further, in August, Westwater began installing micronizers, shaping mills and steel in its shaping building.

While construction has continued during the quarter, Westwater has reduced the level of construction activities from anticipated levels, including adjusting the timing of future work, until off-take and financing agreements are secured. Reducing the level of construction activity until financing is secured is expected to impact the overall construction schedule of Phase I of the Kellyton Plant. Westwater expects to provide an update to investors regarding the construction timeline of the Kellyton Plant when, and if, the requisite financing is secured.