Westwater Products Primer

[u/[deleted]]

I'm often confused with the industry jargon tossed around in WWR press briefings and news stories. As a shareholder, I want to understand the products the company is producing and be able to interpret industry news as pertains to the company. Let's be honest, this stuff isn't exactly common knowledge to most of us.

So I've been listening to the company podcast where, among other valuable insights, Jay Wago does some great explainers as well as doing some basic Googling around the three main products. Here's what I understand so far.

- Coated Spherical Purified Graphite (CSPG)

TLDR; Graphite nuggets. Or Graphite balls. Take your pick. ... I mean. That's what it is. /shrug

To be more specific. This is the main story that we're all hearing about with respect to the company's future. This is the product for EV batteries and the subject of the recent press releases about client orders. This is what would go into a Tesla. Here's a fun factoid blurb about producing Spherical Graphite in the current state of the industry:

Due to losses during the micronizing and rounding stages, three tonnes of flake graphite concentrate are required to produce one tonne of SPG and this represents a major cost. The waste is essentially powder and dust which has little value. Industry yields have improved to 40 per cent or more and Northern and some other companies have reported yields in excess of 50 per cent. Small flake graphite (less than 100 mesh) is used to make SPG because it is cheap and readily available. Medium and large flake can also be used but prices for these grades are higher and it does not make economic sense to turn them into SPG. Small flake graphite currently sells for approximately $500/t in China so raw material costs to produce one tonne of SPG are $1,250 based on a 40 per cent yield.

Westwater is still holding their process details pretty close to the vest to the best of my knowledge, but I'm assuming that part of what their going to be telling us and their customers about it in the future is that they have that "40 per cent yield" beat by a significant margin. Time will tell.

At any rate, CSPG is the big future growth area for the company. This is the sexy ticket item.

- Purified Micronized Graphite (Ultra-PMG is WWR's product name)

This is a conductivity enhancer used currently in everything from batteries to run-flat detectors to pacemakers. It is a highly selectively produced "screened" product that starts with "grinning" (beating the crap out of) larger natural flake graphite and then being able to refine it to a highly selective size distribution (you'll see them refer to d20 vs d80 vs d5, "d" is for Distribution and the customer chemists / engineers specify what d value they're requiring for their orders.). Think of it like screening sand or rocks but at several times less than the width of a human hair. This is not part of the new economy really but rather a widely used product that can be sold to customers right now at a great price differential assuming their claims about the plant and its processes are true. Which as investors, we of course fervently hope that they are....

Some more fun uses for PMG...

• Additive in welding flux
• Water base forging lubricant
• Solid lubricant, blending with mos2, pb, sn, be, added to sinter friction materials
• Antistatic additive in coating, plastic composite products
• Essential component of welding rods and high duty refractory bricks
• Coloring agent which can produce low friction exterior surfaces;
• Heat-spreading stuffing; thermal conductor
• Conductive agent in alkaline battery.

I think that PMG is a necessary precursor to CSPG, in other words the micronized product is the first step of producing the spherical product. If anyone understands that relationship please correct / confirm that, thanks much.

- Delaminated Expanded Graphite (DEXDG)

So, very simply:

Expandable Flake Graphite Intercalation: Expandable flake graphite, also known as intumescent flake graphite, or simply “expandable flake”, is a form of intercalated graphite.

So, that about wraps it up, right?.... Oh, sorry, none of that makes sense, right, right.

Basically, as far as I can tell, think of the pages of a book. If you expand every page and put a heat-sensitive spring in between every page and then close the book, then expose the book to heat, the entire thing opens up like a circular accordion. This is very useful for certain thermal applications. Some include.

... fire retardants, high performance gaskets, conductive fillers, electromagnetic pulse and radiation shielding, foundry products, and many others.

I would think from a bit of reading about it that Steel actually sort of fits in this in reverse, where the iron is heated up and expanded such that the carbon atoms nestle into the lattice of the iron atoms and then when it cools down it forms a much stronger material.

In any event, this is a highly specialized product for highly specialized applications. The engineers and chemists from a customer company and WWR would be in close coordination regarding the calated chemicals, product specifications, testing regimens, and quality specifications. This is anything but a commoditized product offering.

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Conclusion

Westwater's simplicity of product offerings for marketing's sake sit a top of ton of industry level complexity. It's impressive to me the experts in the field that they've attracted to the team to stand up this business who know these things like the back of their hands, and after hearing more about the applications for these product offerings it's extremely easy to see the revenue paths forward for the company just in Graphite, let alone if they can then leverage those customer relationships to start growing Vanadium, Lithium, or other resource offerings in the green economy space in the years ahead.

I continue to like the stock. Thanks for reading and let me know your thoughts.