CENTENNIAL, Colo. - Westwater Resources, Inc. (NYSE American: WWR), a company specializing in energy technology and battery-grade natural graphite, has announced a binding off-take agreement with Fiat Chrysler Automobiles (FCA), part of the global automotive group Stellantis (NYSE:STLA). This agreement mandates Westwater to provide natural graphite anode material from its Alabama-based Kellyton Graphite Plant to FCA's battery partner plants in the United States.
Under the terms of the contract, FCA is obligated to purchase a predetermined annual quantity of graphite, which corresponds to a portion of their projected volume needs. This deal marks a significant step for Westwater as it secures 100% of its Kellyton Phase 1 capacity through off-take agreements. The company has previously confirmed an agreement with SK ON, further solidifying its position in the graphite supply sector.
Frank Bakker, President and CEO of Westwater, expressed the importance of this contract in aiding the completion of financing for the construction of the Kellyton Plant's first phase. Terence Cryan, Westwater's Executive Chairman, highlighted the partnership's role in bolstering a US-based supply chain for natural graphite anode material.
The Kellyton facility is central to Westwater's operations, which focus on the development of battery-grade natural graphite. The company also oversees the Coosa Graphite Deposit in Coosa County, Alabama, recognized as the most developed natural flake graphite deposit in the contiguous United States.
Stellantis, the parent company of FCA, is a major player in the automotive industry, ranking as the world's fourth-largest automaker by sales as of 2023. The company operates under 14 brands and maintains a significant global presence with around 300,000 employees.
The information is based on a press release statement.
InvestingPro Insights
As Westwater Resources, Inc. (NYSE American: WWR) steps into a pivotal role within the battery-grade natural graphite supply chain through its recent off-take agreement with Fiat Chrysler Automobiles, the company's financial health and market performance become a focal point for potential investors. With a market capitalization of $32.16 million, Westwater's current position in the market reflects a modest scale relative to the broader industry. Despite this, the company has been able to secure 100% of its Kellyton Phase 1 capacity, showcasing its strategic value to major players like FCA.
Investors should note that Westwater is trading at a low Price / Book multiple of 0.23, according to the last twelve months as of Q1 2024. This metric could indicate that the stock is potentially undervalued relative to its assets. However, the company's financials reveal some challenges, such as a negative operating income of -13.26 million USD and a gross profit of -0.03 million USD over the same period, reflecting operational difficulties that may impact profitability.
For those looking to delve deeper into Westwater's financial nuances, InvestingPro offers a range of InvestingPro Tips that can provide further clarity. For instance, one tip highlights that Westwater holds more cash than debt on its balance sheet, which could be a sign of financial stability in its operations. On the other hand, the company is noted for quickly burning through cash, which may raise concerns about its long-term financial health. With 12 additional InvestingPro Tips available, investors can gain a comprehensive understanding of Westwater's financial position and future prospects.
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