Westwater Resources, Inc.

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources, Inc. second quarter 2022 results and business update conference call. As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there'll be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. Should you need assistance during the conference call, you may signal an operator by pressing star and zero. I would now like to turn the conference over to Chad Potter, president and CEO. Please go ahead, sir.

Thank you, and thank you all for attending our second quarter 2002 results call. With us today is Terrance Kryan, our executive chairman of the board, Jeff Vigil, our vice president and chief financial officer, and Steve Cates, our chief financial officer-elect. Prior to beginning, I would like to congratulate Jeff Vigil on his retirement from Westwater after more than nine years in the election of Steve Cates to Vice President and Chief Financial Officer upon Jeff's retirement at the end of August. Jeff's financial leadership positioned Westwater for financial success in the ongoing construction and planned operation of the Kelton Graphite Processing Facility in Alabama. We appreciate all you've done for your efforts to prepare Steve for this planned and seamless transition. We would like to wish you a happy and healthy retirement, Jeff. Slide two. During this presentation, the forward-looking statements we will be making are based off management's judgment, including, but not limited to, the cost and scheduled projections related to the Kellington Graphite Plant and the Coosa Graphite Deposit. These statements are subject to certain risks and uncertainties, of which a description can be found on slide two within this presentation, our 10-K for 2021, and our other SEC filings. Actual results may differ materially from what may be discussed today. On to slide three. Why Westwater as an investment? Westwater is an energy technology company focused on producing advanced graphite materials in the United States using our patent-pending purification process. We're currently constructing phase one of our Kelton Graphite Processing Plant, which has a projected total capital cost of $202 million. We also hold mineral rights to approximately 41,900 acres across the Alabama Graphite Belt, which we call our Coosa Graphite Deposit. We chose to develop our graphite processing plant first and our Coosa deposit second, and we believe there are a number of strategic advantages to this approach. First, it lowers the capital cost and gets us to revenue and positive cash flow sooner. As many published sources have shown, There's an increasing supply shortage of processed graphite material for electric vehicles and energy storage markets, with projections that the supply shortage will continue for the foreseeable future. This approach, along with securing our supply of natural graphite flake from a non-Chinese source, will allow us to take advantage of this growing market while de-risking the permitting process and the preparation of the KUSA deposit being brought online in 2028. Turning to slide four, since the beginning of our project, there have been no recordable safety incidents by contractors or Westwater team members. There is nothing more important than the safety of our team members and contractors at Westwater and the protection of the environment where we live and operate. This is a significant accomplishment and I would like to thank all of our team members and contract team members that continue to keep safety their number one priority. During the second quarter, Earthwork and site grading continued and was completed in July with 97,000 cubic yards moved. Construction activity during the second quarter also included the mobilization of our general contractor, receipt of the first components of our long lead time equipment, and the beginning of the underground utilities, foundations, and the manufacturing of plant buildings. Also in June, The company received its air permit from the Alabama Department of Environmental Management and now has all necessary permits to continue and complete the construction of phase one of the Kelton graphite plant. In regards to our Coosa graphite deposit, in April we completed our exploration drilling program and expect a resource model by the end of the year. Now I'd like to turn it over to our chief financial officer elect, Mr. Steve Cates.

Thank you, Chad. And good morning, everyone. Before we discuss our capital position, I want to thank Jeff Vigil. His guidance and mentorship during my time at Westwater has been instrumental. Jeff, I will miss working with you every day. You have not only been a model of professionalism and integrity, but an extraordinary example of servant leadership. I wish you and Julie a long and healthy retirement. Now let's look at our capital position on slide five. Our closing share price on Tuesday, August 9th, was $1.36. And with approximately 47.2 million shares outstanding, which is unchanged since our first quarter investor call on May 11th, our market capitalization stands at approximately 64 million. And as of August 9th, our three-month average daily trading volume was approximately 557,000 shares per day. Our share price began the second quarter at $1.92, and ended at $1.08. We believe in the current market environment, investors have taken a more cautious approach to pre-revenue companies and those companies in need of additional funding in an environment marked by rising rates. Westwater, however, finished the second quarter with a cash balance of $109 million and a working capital balance of approximately $103 million. During the second quarter, we received net cash proceeds of $9 million related to stock sales using our ATM facility. 97% of the cash received from stock sales during the second quarter related to trades that were executed at the end of the first quarter but did not settle and we did not receive the related cash proceeds until April. The company has not been active with its ATM facility since the first week of April. Our working capital balance and zero debt continue to support the construction of Phase 1 of the Kellyton Graphite Processing Plant. Since beginning construction of Phase 1, we have incurred $30 million of the estimated total cost of $202 million. Management continues to aggressively seek out additional or alternative sources of capital funding, which potentially could include more traditional project-level debt, offtake agreements, loan, or grants, a strategic partner, or a combination thereof. Management is having discussions with multiple third parties and, subject to capital market availability, we are looking to raise the additional capital needed by the end of the year. Turning to the financial summary on slide 6, net cash used in all operating activities was approximately $6 million for the first six months of 2022, as compared with approximately $9 million in the first half of 2021. The $3 million decrease in cash used in operations was primarily due to reduced product development expenses and costs related to our arbitration against the Republic of Turkey. The cash used in investing activities for the first six months of 2022 totaled approximately $25 million and was related to the ongoing construction of Phase 1 of the Kelleyton Graphite Processing Plant. Cash provided by financing activities for the first six months of 2022 totaled $24.5 million and is related to the already mentioned stock sales on our ATM, which, as mentioned, has not been active since the first week of April. Product development costs decreased $1.7 million during the second quarter compared to the same quarter in 2021. Product development costs for the second quarter of 2022 related to continued product development and optimization costs. Second quarter 2021 product development costs related to our definitive feasibility study for phase one of the Kellyton plant and the company's pilot program, both completed in the second half of 2021. We continue to run our pilot program as needed, however, to produce additional samples of our battery grade products for shipment to and evaluation by potential customers. General and administrative expenses during the second quarter increased by approximately $400,000 compared to the same quarter in 2021. The increase quarter over quarter is due primarily to higher payroll and personnel costs as the company continues to build out its team in Kellyton, Alabama. Net loss for the second quarter of 2022 was $3.2 million, or $0.07 per share, compared to a net loss of $3.5 million, or $0.11 per share, for the second quarter of 2021. The $300,000 reduction in net loss was due primarily to lower product development costs and lower exploration expenses as we completed our drilling program in April of 2022. These decreases were partially offset by the higher G&A expenses already mentioned and the absence of the unrealized gain recorded in the second quarter of 2021 related to equity securities held by Westwater that we received in 2020 with the final sale of our former uranium business. We subsequently sold those equity securities for cash proceeds in the fourth quarter of 2021. Now turning to slide seven. We continue to advance phase one of the Kellyton graphite processing plant. As previously mentioned, since its inception, Westwater has incurred $30 million of the $202 million estimated cost of phase one. Also, as mentioned previously, in April, we completed exploration drilling at the Coosa deposit. The drilling program was executed on 4,000 acres of the approximately 41,900 acres at the Coosa deposit. We continued to work to ensure adequate financial liquidity, and at June 30, 2022, we had a cash balance of $109 million and no debt. With that, I'll turn it back to you, Chad.