As we mentioned in our FED Policy Report we are going to be covering some commodities stocks over the next couple of months.
Did You Know the USA Has ZERO Graphite Mining Operations?
The USA recently declared graphite a supply critical mineral; the European Union declared graphite a critical raw material.
Over 90 US companies make 200 products using graphite.
The USA is about to start mining graphite and you could benefit from it.
Good day everyone,
We are initiating coverage on Westwater Resources, Inc. (NASDAQ: WWR), a diversified energy materials development company. They primarily explore and mine graphite and Vanadium deposits.
Current price $5.75/share
Outstanding shares (est.) 19.02 million
Shares in float (est.) 15.78 million
52-week high $14.50/share
We recently discussed how commodities could be the driver of a new era in the markets. Look at the minerals that Westwater is exploring, Graphite and Vanadium are crucial elements in battery and energy production. We believe that companies such as Apple, Tesla, Samsung, and others will be in fierce competition for these elements over the mid to long term.
The company is focused on the production of battery-grade graphite. The Company’s Coosa Graphite Project is the most advanced graphite project in the United States and, when developed, will produce high purity battery-grade graphite, a material that is essential for the components of high-technology energy applications such as electric automobiles.
Graphite is also used in pencils and lubricants. It is a good conductor of heat and electricity. Its high conductivity makes it useful in electronic products such as electrodes, batteries, and solar panels. Currently, 70% of the world graphite supply comes from China.
Both Tesla and Apple have expressed interest in finding a domestic supply of minerals for batteries.
On September 30, 2020, the U.S. President issued an executive order addressing the threat to the United States domestic supply chain of reliance on critical minerals from foreign adversaries and declaring such reliance a national emergency. The critical minerals referred to in the executive order include both natural graphite and vanadium.
The Company’s Coosa Graphite Project, located on 42,000 acres in Alabama, is the most advanced graphite project in the United States. A Preliminary Economic Assessment (PEA) technical report for the Coosa Graphite Project was completed by AGP Mining Consultants Inc. in November 2015 and included an Indicated Resource of 78,488,000 tons, grading 2.39% graphitic carbon (Cg) at a 1% cutoff grade, for a total of 1,876,000 tons contained/in-situ graphite—the largest graphite Indicated Resource in the United States. WWR acquired the rights to the Coosa Project in 2018.
That is a lot of graphite. The current prices for graphite run from $1000/ton for raw product, to $3000/ton for processed battery grade product. You can do the math and recognize that WWR is looking at potential revenue in the $ billions. Tesla alone consumes 93,000 tons of raw graphite annually and that figure will likely grow.
The United States currently has no domestic production of natural graphite, but it is consumed by roughly 90 U.S. companies.
Westwater recently announced delivery of 30 metric tons of natural flake graphite concentrate at pilot plant contractor Dorfner Anzaplan’s facility in Hirschau, Germany. This material is being utilized in the Company’s pilot plant facilities presently under construction in Germany, upstate New York, and Illinois. Operation of the pilot plants is expected to commence this month and continue through March 2021.
The Company has filed a provisional patent application with the U.S. Patent and Trademark Office for its proprietary graphite purification technology. The ability to deliver purified graphite could greatly increase future revenues.
The need for a domestic supply of graphite in the US is becoming more urgent, mainly due to political influences. China,The largest graphite producer had to recently curtail production due to environmental considerations, coincidentally while it is having trade difficulties with the US.
So why Westwater Resources?
The company shares are 60% off their high set just 4 weeks ago.
The company has a mining property with an indicated graphite assessment
The company is developing graphite processing plants
The September Presidential Executive Order is virtually a mandate for domestic graphite mining
The company shares are trending (all SMA levels are green)
Tiny share structure
As the chart indicates, WWR shares have passed their 50 and 200 DMA’s of $4.78 and $2.58 respectively, in a bullish manner.
We believe the big graphite consumers in America, specifically those who use batteries in their products, may eventually be forced to acquire companies that can produce the minerals required to make their batteries. Tesla has already committed to producing its own batteries but is currently dependent on foreign operators for crucial materials. WWR could be an ideal candidate.
We will have an additional report to this initial coverage on (NASDAQ: WWR) soon,
Stay tuned and stay informed,
The Traders News Group
Our full report on WestWater Resources
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