Update 01/21/21 Westwater has gone “all in” on Graphite! The sale of their North American Uranium Business has been announced.
Westwater Resources (NASDAQ: WWR) Is Looking Very Attractive Right Now.
Here’s why…
Good day everyone,
We are continuing coverage on Westwater Resources, Inc. (NASDAQ: WWR), a diversified energy materials development company. They primarily explore for graphite and Vanadium deposits.
Westwater may be the first major producer of battery grade graphite in the USA. The USA recently declared graphite a supply critical mineral. What the order means is the President requires certain government agencies to provide guidance in determining which projects are eligible for government support, which can include loans or grants. The agencies are also directed to use available authorities to accelerate the issuance of permits in connection with the expansion the supply chain for specified minerals.
In 2020, China will account for roughly 70% of all graphite produced, while the US only accounts for 1%. The United States Government is mandating this to change.
Current price $6.60/share
In Monday’s session, WWR shares opened at $5.90 per share after gapping from Friday’s close of $5.75, closing the day at $6.60 (+14.78%) per share. Trading volume was strong at 12M shares.
Let’s look at the graphite picture:
The market for graphite is growing. Every battery for an electric vehicle, cell phone, tablet, laptop, solar panel, and a plethora of other devices needs graphite. Every pencil and many lubricants use graphite. A diverse number of analysts place the growth of graphite consumption at 6-20% annualized growth rate.
The USA needs a source of domestic graphite, produced in large quantities and produced in an environmentally safe manner. Right now, America imports 100% of the graphite it consumes. The USA is literally at the mercy of its offshore trading partners for supply. China is the largest supplier, currently producing 70% of the world’s graphite. The graphite mined in China uses hydrofluoric in the refining process, creating a dangerous environmental cost. Westwater has filed a patent for their claim on an environmentally safe proprietary process.
The US President has issued an Executive order stating that America’s reliance on foreign sources for the minerals used in batteries a national security threat and advises government agencies to offer miners credit, other financial help, and ease in permitting to develop a domestic supply of graphite and other minerals used in batteries.
Now let’s look at Westwater Resources:
Westwater owns the most advanced graphite mine in the USA, located in Coosa County Alabama on 42,000 acres and called the Coosa Graphite Project. 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; and Inferred Resources of 79,443,000 tons, grading at 2.56% Cg at a 1% cutoff grade, for a total of 2,034,000 tons contained/in-situ graphite.
Currently, Chinese graphite sells for $500 to $1600 per ton depending on the flake size with the larger flake size going for a premium.
WWR has developed a method of processing graphite into its usable form that does not use hydrofluoric acid and has the potential to eliminate 300,000 tons of carbon emissions annually. The process is proprietary and is patent pending. The company is currently building a processing plant and in conjunction with three other facilities is processing 30 metric tons of graphite utilizing their new technology. This is happening right now!
The US government is involved in the development of a domestic graphite industry and WWR seems to have all the needed requirements to do just that in an environmentally responsible manner.
The US government carries stores of gold and oil to protect our national security. Could minerals for energy storage devices be coming into that equation?
WWR looks like it could be a ground floor opportunity, right now while the share price is low (54% off its October high). Keep in mind, the public float is only 15.78 million shares.
What is graphite?
A non-metallic mineral, Graphite is one of two natural forms of carbon (the other is diamond). With the highest natural strength and stiffness of any material, graphite is an excellent conductor of heat and electricity. It is stable over a wide range of temperatures. Graphite is a highly refractory material with a high melting point (3650°C). Graphite has a high natural lubricity and is one of the lightest of all reinforcing agents. While chemically inert, Graphite also has a high resistance to corrosion.
Stay tuned and stay informed,
The Traders News Group
Original Report on Westwater Resources
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