Westwater Resources, Inc.
Q1 2018 Earnings Call Transcript

Published: 14 May 2018

[Operator:]

Thank you for standing by. This is the conference operator. Welcome to the Westwater Resources Inc. First Quarter 2018 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 will be an opportunity to ask questions. [Operator Instructions]. I would now like to turn the conference over to Christopher Jones, President and CEO. Please go ahead.

[Christopher Jones:]

Thank you, Steve, and thanks to all of you for joining us today and welcome to the Westwater Resources’ first quarter results call. With me here in our Centennial Headquarters is Jeff Vigil our CFO and Vice President of Finance and with us by phone is Dain McCoig, our Vice President of Operations. I would like to remind our listeners to read our cautionary statements on the following pages, as we will be discussing some forward-looking statements and information. With that please turn to Slide 5. 2018 continues to be another important and pivotal year for Wastewater. We completed our acquisition of Alabama Graphite on April 23rd and have began the work of finishing integration of the business and optimizing that business plan. We've added to the management team to capitalize our experience to develop our growing business. We promoted Dain McCoig the VP of operation he is now in charge of our businesses in Texas and Alabama. We promoted Cevat Er to VP tech services and he continues as our country manager in Turkey. And we have Tyler Dinwoodie, as VP Marketing to our Graphite. The Continued Reclamation at Rosita and Vasquez working towards bond release and successful release of those lands factory owners. And we celebrate our success after a nine-year legal battle in Texas was already prevailed in the Texas Supreme Court paving the way for future operations that came slowdown. An analyst coverage was initiated by Crystal Equities. Our cash balance at March 31st was $1.6 million. We continued to demonstrate and a commitment to personal and environmental safety with more than one year without reportable incidents in either category of environmental or safe wood performance, our best record in five years and one that continues through this moment. My heartfelt thanks to the hard working and high-quality teams that made it all happen here at Westwater. With that, I would like to turn it over to Jeff Vigil for a corporate update.

[Jeff Vigil:]

Thanks, Chris. Good day everyone. First, let’s take a look at our capital structure on Slide 6, after the recent share price of $0.48 and with approximately 42.3 million shares outstanding our market capitalization stands at $20.3 million. During Q1, our stock performance once again was influenced by the uranium equity section with declining performance due to the lagging price in uranium. The price of uranium was nearly $24 per pound at December 31, 2017, that had declined to $21 per pound at the end of March. While the uranium equity sector remains important to Westwater, we believe that our strategic expansion into the battery material supply chain sector could be a catalyst for better share performance. Turning to Slide 7, financial summary on Slide 7 for our first quarter results, we want to highlight the current financial condition at URI. Our cash and liquid assets as of the end of the quarter was $1.6 million. Most importantly, at March 31 we have no long-term debt. Our current cash and liquid asset balances along with the financing facilities that we put in place during 2017 are expected to fund our business activities through mid-2019. Net cash used in operations for the three months ended March 31 was approximately 3.7 million. That compares to 3.3 million used there in the three months ended March 31, 2017, a slight year-over-year increase was primarily due to an increase from general administrative cost and the Alabama Graphite acquisition related cost is nearly 800,000 during the quarter. We also advanced approximately 800,000 to Alabama Graphite in the form of a loan during the first quarter. During Q1, 2018 our mineral property expenses were consistent year-over-year. Finally, our net loss for Q1 2018 was approximately 3.4 million versus a gain of approximately 2 million compared to the first quarter of 2017. The significant change was due primarily to a gain of 4.9 million recorded during the first quarter of 2017 from the sale of our Churchrock and Crownpoint Uranium properties to Laramide. With that I'll turn it back to you Chris.

[Christopher Jones:]

Thanks, Jeff, on the Slide 8. Transportation market is driving our interest in the lithium and the graphite spaces. The ongoing global shift towards low and zero emission transportation alternatives will continue to drive demand for both graphite and lithium. Cases in point the United Kingdom and France have announced they will prohibit the sale of gasoline and diesel vehicles by 2040. China has mandated that all auto manufacturers sell a minimum of 8% new energy vehicles which includes plug-in hybrid, battery electric and fuel cell powered cars. Volvo has vowed to cease production of company combustion engine promising every vehicle the automaker produces that after 2019 will have an electric motor. Governments around the world continue to incentivize worker vehicle ownership through corporate subsidies and back to incentives to buyers. On to Slide 9, large battery storage is an enabling technology for solar and wind power and has the potential to greatly reduce the issue of intermittent associated with these important next generation technologies. I'm hedging a salable rate that works at night or wind power generating field that works when there is no wind. Energy storage unlocks the in those assets. On to Slide 10, the lithium ion battery is important as it applies to graphite because graphite is a major component. It takes 10 to 20, 30 more times graphite than lithium to make a lithium-ion battery. And the minimum graphite purity required is 3955. Coated Spherical Purified Graphite is a critical important material for the anode side. And the sales for a significant premium to graphite flake concentrates which projected strong demand growth. Electric cars contained 100 to 200 pounds of graphite and we like to say here at Westwater you might see a Tesla coming down the road, we see 80,000 lithium and 200,000 graphites. And graphite is a critical strategic mineral and although they are over 200 graphite applications, the one with the most significant enduring future demand is lithium-ion batteries. Slide 11, transportation batteries are the fastest-growing segment of all battery supplies worldwide. Global electric vehicle sales are projected to increase at a compounded annual growth rate of over 22% through 2025. And the transportation sector accounts for 23% of greenhouse gas emissions accelerating demand for low emission alternatives. Demand is expected for energy storage to be driven by grid and peak demand management, this is as we said before the enabling technology for renewable energy, and we expect storage battery demand growth to add more than 11% per year and let's not forget the consumer electronics laptop batteries, phone batteries, they are going at 3% a year but understand that is a very large market and further to that Germany has announced pending legislation recently that allows banning of diesel powered vehicles at the municipal level. The UK plans to ban petroleum powered vehicles on a few years. Battery major car makers producing or is planning to produce vehicles that rely on electricity for propulsion either in part or in whole. This was driving increased demand for large batteries. On slide 12 battery material supply such as lithium and graphite must rise to meet demand. We expect $230 gigawatt hours of capacity additions from 15 to 20 battery facilities at a cost of $10 billion. Again, this includes lithium ion, alkaline power cell and led acid batteries and let's not forget that led acid batteries do use graphite and are 50% of the worldwide market for all batteries. Lithium is a key supply component for the growing market and transportation batteries such as lithium ion. All of these battery types use conductivity enhancers made from expanded graphite products. On slide 13 we talk about our cruiser graphite project. Our acquisition of Alabama Graphite increases our leverage to the fast-growing energy minerals end markets, while simultaneously pulling forward revenue and cash flow opportunities. This project is expected to be in the lowest cash cost quartile and it will be the only battery grade graphite project in the contiguous United States. Current production is controlled by China with an unsustainable environmental footprint. And battery manufacturers are now being held accountable for proper, environmentally sound and sustainable supply chain management. The importance of the U.S. securities supply has been affirmed through a presidential order naming graphite, lithium and uranium as critical minerals for the United States. This present potential executive order is presently in its comment period and we expect comments period to end in a report to be delivered to the executive office around August 17th of this year. On Slide 14, we talk about how we have de-risked the Coosa graphite project. This project is now planned to use proven environmentally sustainable technology. Processing begins on purchased feedstock which is widely available right now. And the mine is now deferred until 2026, permitting is no longer the critical path. Our pilot plant is expected to start operations in 2019, generating products for prequalification in large batches and a full-scale processing on our first furnace starts in 2020. And the economics are no longer solely dependent on coated spherical graphite. We’ve added two products to the mix, both are sustainable economically. Production starts with a simpler PMG, that’s purified micronized graphite in 2020. Is the kind of stuff that goes in the lead acid batteries and other products as a conductivity enhancer? DEXDG which is delaminated expanded graphite, production is slated for 2021, and further our CSPG the coated spherical graphite production is slated for 2023. This stage product introduction allows us to take full advantage of customer product qualification timelines, and again the mine begins production in 2026, some eight years away. And again, we don't have to worry about critical timelines associated with permitting with regard to the mine. Speaking about accounts in the battery material space and this plant works to place advanced graphite materials for the market earlier than originally contemplated. On Page 15 we talk about the economics, pretax NPV at 8% discount rate is estimated between $400 million and $500 million, depending on how you treat contingency, 15% contingency puts that NPV at around $400 million. Pilot plant, land acquisition, etc. is around $7 million, the full-scale plant and permitting around $35 million. Positive cash flow for the year is expected in 2021, only 2.5 years from now, and revenues in 2020. External CapEx required, including all of the research and development and pilot plant needs is now at $42 million. And on Page 16 we show a product, a detailed project schedule. And a reminder that the pilot plant is inside that $42 million cost. Further expansions, the second furnace and the mine will be built out of cash flow, internal cash flow and there will be no need for external capital once we spent these dollars. On Page 17 a reminder about our lithium projects. Our three projects, two of which are in Nevada and one in Utah are under -- right now some stage of exploration work. Phase 1 drilling is already complete on Columbus Basin and Phase 2 drilling is planned. Railroad Valley geophysical information is being evaluated for future use and planning our drilling activities and surface standpoint has already occurred on south rig. On Slide 18 we remind you that Uranium is still a strategic focus, why, because there are expected to be 35% more nuclear reactors in 10 years than there are right now, and they all need uranium to produce. Our Ambrosia lake project, we published the technical reports, it's on our website and it shows that as a project of merit right here in the United States and New Mexico. West Largo, quite near Ambrosia Lake is a plant that has a report right now under construction and we expect that to be out within a year. And in South Texas a reminder that we have succeeded at the Texas Supreme Court in unlocking our bar permitting and operational activities now in the Kingsville area. A reclamation continues to rise in west coast so that we can release that land back to its owners and gain boundary lease as part of that. And our Temrzli project in the Republic of Turkey is still in the lowest cost quartile all planned and present producers. It's waiting for price and is always two years away from production. On Slide 19, experience matters. Energy mineral exploration and development of the process requires discipline and diligent capital stewardship. We restructured and recapitalized our company making it now debt free and handoffs and put facilities in place where we can raise needed cash to fund our operations and certainly through as Jeff said mid-2019. Our experienced management team has a demonstrated history of developing and operating operations, large and small in the energy base and precious metals sectors. We have demonstrated ability to raise capital. A product development end program has helped reposition Westwater's uranium asset base around low production cost assets, selling our non-core uranium properties for capital, which was redeployed to cost-effectively expand our resource base into lithium in 2016 and on into graphite. And again, we acquired Alabama graphite in April of 2018 just last month to cost-effectively expand energy material resource base. And we consistently reduced total mineral property and G&A expenses over the last five years. On Page 20, our team is made up of tenured leaders. You have already heard from Jeff and me and Dain on the phone with us, our VP Operations, we talked about Tyler Dinwoodie being promoted now to VP Marketing and Cevat Er as our VP Tech Services and Country Manager. And in previous phone calls, we talked about John Lawrence, our general counsel and corporate secretary. Firstly, technical experienced to a person and fully capable of taking this company and our projects to fruition. On Page 21 our value proposition. No other company offers this combination of strengths. We continued to expand our portfolio in green energy metals. Coosa graphite project in Alabama, three lithium exploration projects in western U.S., the Temrezli uranium and one of the largest uranium mineralization basins in United States, including two licensed uranium processing facilities in Texas. We’re debt free with cash and financial facilities in place to fund through for mid ’19. We’ve got an experienced management team. We continue to monetize non-core assets and we have continued reclamation success in Texas. And you should expect news flow throughout 2018 from the Coosa graphite project development and our project milestone achievement, and exploration on water rights milestones achievement on our lithium projects. Let’s be frank, with this combination of talent, our balance sheet, our projects we’re clearly undervalued. And with that let’s take some questions. Steve?

[Operator:]

We’ll now begin the question-and-answer session. [Operator Instructions] The first question is from [Preston McDougall], a shareholder. Thank you.

[Unidentified Analyst:]

I am a shareholder who came over from Alabama Graphite, so of course I am interested in what you guys are doing in Alabama. I got to appreciate the business plan. I really can. I want to get to my questions. I didn’t appreciate the 8 to 1, but hey things happen. What kind of governmental support you guys have in terms of Alabama supporting the project, the government of Alabama, local government, the state, we’d like to hear some support from the government, if you can call graphite, one of graphite plant in Alaska, they’re after [bonds], they have a lot of local support, there’s a lot of press to that effect, and we’d like to see that for Alabama, again the business plan that you guys came up with sounds solid, actually like that you guys are going to hold off on to the mine, you’re probably going to purchase some graphite and then refine it, with the technology, that I hope is patented, so what kind of -- I just wanted to know, are we going to see any press as far as Alabama, the actual government supporting, are there any bonds, are there any grants, what’s going on with local support and government support in Alabama for the project?

[Christopher Jones:]

We have been to see the Department of Commerce -- the state Department of Commerce in Alabama and the Governor’s office and our state senator on a few weeks ago, and we received unquestioned support and interest in the project during those conversations. In terms of individual incentives to operate in Alabama that will be the subject of negotiations for the next several months, as you know it's the state government, and while they are intentionally interested in landing business and by the way, have been intensely successful in landing businesses such as Mercedes, and Honda, and Hyundai and Toyota, amongst others. [Other] state government, and they work at the speed of government such is that is, but again we've received unquestioned support for the project so far. I think more importantly our visit last week to Alabama and to Birmingham, was really a meeting with people like Alabama Power and our attorneys and other people in Alabama that can really provide the sort of service we need to build a site Coosa graphite has it all possible and we are very excited on the way from that meeting with just because it supports well. These are either early days Preston, for the project and you should expect updates as we can construct them. Thanks.

[Operator:]

The next question is from Debra Fiakas of Crystal Equity Research. Please go ahead.

[Debra Fiakas:]

I think my first questions might be best addressed to Jeff, I wanted to know a little bit about the cash usage. it was helpful to get some guidance in your quarter filing that you anticipate that your current cash and the funds that you have available to you will probably last through June of 2019, and I appreciate that guidance but I was wondering what kind of cash usage sort of went into your prediction. Do you anticipate that it will be near to sort of 1 to 1.2 million a month that you've been using?

[Christopher Jones:]

Yes, we do. And the one thing that is helpful and without Alabama Graphite because it was early stage administrative and holding cost for the compaies are fairly minimal and we will be able to derive that quite effectively within our current structure and the current financing facilities we've already look at the longer-term project related expenses as the entitled to more project financing.

[Debra Fiakas:]

Excellent, and that actually leads directly to my next question. I also saw on the prepared remarks that you have $7 million price tag on the cost of the pilot plant and land and I wanted to ask about the land in particular what part of this 7 million is allocated for to a land and is it your plan to buy a location, to buy land and if so where would that be?

[Christopher Jones:]

With regard to the land, we are interested in building our plant in Alabama and are working with Alabama officials right now for if you will, a proposal from them. It can be a land purchase or it can be a land that for instance Alabama power already has and is willing to build into a rate structure in order to deliver the electricity. it can be development lands previously designated for other use that we can recast. Jeff and I traveled the areas around Coosa County on Thursday and so many candidate sites. so, all the land purchase options are on the table including payments in kind.

[Jeff Vigil:]

The pilot plant itself is more of a services agreement with a potential lab and we are working on those agreements right now with multiple parties.

[Debra Fiakas:]

Okay. And I think I understand a little bit better now about what that line item meant. And then it also -- there is also notation in your prepared remarks and I think in your discussion at the pilot, you anticipated that this pilot level will be ready in 2019. Could you give us answer as to whether or not this is 1Q of 2019 or 4Q? What's the runway to get it up and ready to go?

[Christopher Jones:]

Frankly looking backwards from the end of 2019 if you will, what we need are in foreign design parameters for the construction of our furnace in 2020. So that really speaks to having the pilot plant up and running sometime in the first or second quarter of 2019 to serve those ends. We only need to produce a few tons of material to prove the processes or all processes that we intend to use. So, we just seem to make sure the material that we are introducing behaves as we expected. So, I guess not the development of new technology, so you don’t need quite the runway that you might put something like.

[Debra Fiakas:]

Just to refresh everyone's memory. What was the anticipated production capacity of this pilot plant?

[Christopher Jones:]

We need to produce about 2 tons of material and what we would like it to do is to produce at a rate of between 30 kg and 100 kg an hour if you will, so that we can easily scale up production for the production furnace at 5000 to 7000 tons a year.

[Debra Fiakas:]

And then actually if I could maybe move on I today asked lots of questions about the graphite but I do also want to take up a little bit of your time also about asking about the lithium technical report that you just issued here just recently. There was sort of some hints in this report that the IFR technology might be a possibility. You were looking in that regard and I just want to know how important that would be if I’m correct in my understanding how important will that be in your final decision moving forward in New Mexico.

[Christopher Jones:]

That’s actually, you are speaking about our Ambrosia Lake uranium project.

[Debra Fiakas:]

Yes, I’m thank you.

[Christopher Jones:]

And there are IFR from a cost standpoint alone regardless of the technology but from a cost standpoint alone IFR technologies are usually less expensive than conventional technologies for recovering the ore and the uranium that’s in it. What you need is a wet deposit basically, so you don’t have to make -- you don’t have to wet it up first. In our case, the Ambrosia Lake District there is plenty of moisture in it as evidenced by previous mining activities. And with that we have shown it to be a candidate for ISR. Also, your surface footprint is quite a bit smaller with [indiscernible] recovery because all you are bringing out is uranium and water. You put the water back where it was and you keep the uranium, you don’t have mill tales or large mills facility and a whole lot of infrastructure on the ground associated with that, that's the reason we prefer it when we can.

[Debra Fiakas:]

So, if you don’t continue to get indications of that technique is feasible in your New Mexico properties, would you decide then not to go forward with it?

[Christopher Jones:]

Our conventional technologies are still utilized worldwide for recovering uranium, it really depends on the grade of deposit and what complications you have with that. So, no, we are agnostic with regard to method, but not economics.

[Debra Fiakas:]

And then just one other quick question about the lithium properties that you just recently I think announced that you had received and exercised an option on some locations in Nevada and I wanted to know what that particular location adds to the portfolio that you've accumulated in Nevada and Utah?

[Christopher Jones:]

It adds to our Columbus Basin portfolio properties, we’ve got a pretty extensive land position now after the exercise of the [credit] option is what we’d like to call it. That is untested at depth right now, but that is the basin for which we hold a significant share of the water rights, in fact all of the water is not held by a small gold company, on the western edge, so for us it’s a key piece of business and the option was inexpensive.

[Operator:]

The next question is from [Preston McDougall], shareholder. Please go ahead.

[Unidentified Analyst:]

I’d like to shift my questions to the uranium aspect, other than waiting for the [glut] to run out uranium across the planet for the share price to raise or major mines, decreasing their output, things like that, what can a federal government, the Trump administration do as a catalyst for our uranium industry in the United States specifically. In other words, right now [indiscernible], trade talks things of that nature, what can administration do specifically for the United States, uranium market, what are some of things that you guys like to hear, if you have lobbyists, what are they trying to accomplish?

[Christopher Jones:]

First of all, we do not necessarily endorse tariffs as a method for distorting markets and that’s typically what they do. So, if there’s truly a trade imbalance, that is government related, they may or may not have their desired effect, primary driver in uranium business is production from Kazakhstan, $13 to $16 a pound. And while our Temrezli project once running is competitive prices at those prices. It takes capital to get there. So, it needs to wait just a little bit longer for price. United States is simply the world's largest consumer of uranium by a very large stretch, and their actions by some of our competitors to enact or try to enact to what deflation to prevent them from using foreign uranium. We do not support that action. We do not believe it's healthy over the long run, and we believe that left to its own, uranium market will stabilize and we believe that’s in the next three to five years as most people do.

[Operator:]

The next question is from [Tim Garland], private investor. Please go ahead.

[Unidentified Analyst:]

I just want to clarify a point in your presentation here as far as the starting refining in 2020, correct or, that’s you’re able to determine?

[Christopher Jones:]

End of 2020.

[Unidentified Analyst:]

And that’s utilizing available, and I quote ‘available feedstocks’?

[Christopher Jones:]

That’s right.

[Unidentified Analyst:]

And what’s the source of those feedstocks?

[Christopher Jones:]

Well right now of course that would be some confidential information but know that the world produces plenty of graphite in an unrefined state. This graphite concentrate is available worldwide from places like Madagascar and Brazil and other places so in the short run we're quite confident that there is a very small premium we would pay for raw material feedstock versus our own and we can leave our own high-quality feedstock in the ground for that period of time, we estimate that's about years.

[Unidentified Analyst:]

Okay, so just my confusion one of the selling points for salient features of the Alabama graphite you said it's the only graphite project contiguous to the U.S. so you want to start processing graphite but the source of that graphite is going to be international?

[Christopher Jones:]

If your question is can you honestly say that you are a U.S. graphite project you bet, also the hard work is done in refining and post process immaterial and to saleable products but remember that if you want to derisk a project it is very important that you pull the mine half of the table and allow it to basically go along normal timelines for state permitting, federal permitting and proper evaluation of the ore bodies to fully optimize that. And that would take 3 to 5 years, and little more interest going in cash flow in the near term.

[Unidentified Analyst:]

Okay, I will confess, I am confused. I thought the permitting issue was almost a non-issue. Okay going to the refining portion then, you mentioned I think Mr. Dain that you are going to be utilizing old processors for refining so there is not a need for a new technology patent?

[Dain McCoig:]

It's true.

[Unidentified Analyst:]

And again, wasn’t that one of the attractions for the [indiscernible] process graphite state thinking more environmentally sustainable. I don’t understand how we can sell it as environmentally sustainable when utilizing old processes.

[Dain McCoig:]

Old processes are not necessarily environmentally unsustainable, those in [Houston] can be. And in our particular case as part of our project de-risking using older processes that produce the same products but making sure that we are operating here in the United States where our environmental legislation is robust, our environmental affect is intact and using a team like we have here in the United States to go do that and work, makes those processes sound.

[Unidentified Analyst:]

Okay, so just to clarify then it's going to be the importation of foreign graphite process utilizing all processors. Then the next point I have is what are your plan to get your share price back up to the NASDAQ hard deck level?

[Dain McCoig:]

That's exactly what we're talking about Preston. What we are going to do is to execute on this plan and we expect that by producing fundamentals -- and I'm sorry did I call you Preston?

[Unidentified Analyst:]

It's okay. I have been called a lot worse.

[Dain McCoig:]

I apologize. By using by utilizing these processes that are already built and merely validating them in the field, by advancing cash flow into the nearness of time by de-risking a project to the point where we can actually produce revenues in 2020 and positive cash flow for the year in 2021, these are the kind of value drivers that should be driving the stock price for us. We recognize that we are undervalued but you should expect new slowing you should expect us to end our project points as we go along, that’s what is going to drive the stock price.

[Unidentified Analyst:]

You are certain you are funded probably through until June of 2019 correct?

[Dain McCoig:]

Yes, we said mid 2019.

[Unidentified Analyst:]

Any plans or continue to look -- what's going to take you beyond the June 2019?

[Dain McCoig:]

I think you have to stay tuned, for a junior company like ours and certainly like Alabama Graphite from whom you came to us that is a pretty long leg of timeframe to be funded as opposed to your previous experience I would expect.

[Unidentified Analyst:]

That may be but shareholders were interested in -- we are interested at the bottom line right. So not everybody was in favor of the circumstances by the takeover but that’s for a discussion for another time.

[Dain McCoig:]

But we are unhappy to have you long and less. Thanks for your questions.

[Operator:]

The next question is from Debra Fiakas of Crystal Equity Research. Please go ahead.

[Debra Fiakas:]

I wanted to maybe continue the graphite discussion just a little bit more. I was pleased to see that you continue to have a number of non-disclosure agreements in place with prospective customers', people, entities who are testing the graphite products. And I wondered if you could perhaps give us a little bit more color on that basket about three dozen or so. Are they mostly looking at the CPSG, the coded purified spherical graphite? Or is it the PMG, the purified micronized graphite what's their interest seem to be in this group of prospective testers and prospective customers?

[Christopher Jones:]

Well as you might expect that’s pretty confidential information from a specific standpoint. Generally speaking we are looking at all three products. And generally speaking several of them have products in their hands right now for qualification testing. So, we will certainly make sure along these lines if you will for a company that hasn’t yet build its purification facility so we are very pleased and proud that these customers are willing to take a chance on our projects in these early days. It also serves our product qualification timelines to be doing this quite early in the process with the lab levels we can, because their own qualification timelines tend to be like some of the more advanced products.

[Debra Fiakas:]

There were announcements made. I think this was prior to the time that Westwater Resources purchased Alabama Graphite. But there was one particular entity that has signed a letter of intent to move forward with PMG purchases. And I wondered if that relationship remains intact and if you can confirm that.

[Christopher Jones:]

I can confirm that all of the relationships that Alabama graphite had are still intact.

[Debra Fiakas:]

Excellent, that's very good news. And then you also suggested that there is still quite a bit sampling going on. Are those samples that have been sent out so far still graphite materials that were made under the proprietary process that had been pursued by Alabama Graphite over the last several years?

[Christopher Jones:]

The blessing that graphite gives you that once it’s a 3955, it’s pretty much enduring on how it got there, and that’s what enabled us to consider two other processes to start with for purifying graphite.

[Operator:]

This concludes the question-and-answer session. I’d like to turn the conference back over to Christopher Jones for any closing remarks.

[Christopher Jones:]

I want to thank you all for your questions and your time and attention today. It’s important to us that we spend this time together and get these communications established. So once again thank you and thank you from the entire Westwater team and have a great day.

[Operator:]

This concludes today’s conference call. You may disconnect your lines. Thank you for participating and have a pleasant day.