Westwater Resources Inc (NYSE:WWR) is poised to become a "key player" in the U.S. natural graphite sector, as it continues to create a vertically integrated supply chain, according to HC Wainwright.
The Westwater Resources Analyst: Analyst Heiko Ihle initiated coverage of Westwater Resources with a Buy rating and price target of $2.50.
The Westwater Resources Thesis: The Kellyton Graphite Plant, one of the company's two primary assets, is ready to become operational and is estimated to "eventually produce 12,500 metric tons (mt) of Coated Spherical Purified Graphite (CSPG) per year in Phase I," Ihle said in the initiation note.
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For longer-term production, Westwater Resources has inked offtake agreements with Stellantis NV's (NYSE:STLA) subsidiary Fiat Chrysler Automobiles (NYSE:FCAU) and SK On, he added.
"The company also holds mineral rights to explore the Coosa Graphite Deposit, which management anticipates to eventually provide natural graphite flake concentrate to the Kellyton Plant," the analyst wrote.
With these two assets, Westwater Resources aims to "create a streamlined and self-sustained supply chain from mine to finished graphite products," he further stated.
China has imposed stricter regulations on graphite exports and there are no natural graphite producers in the U.S., Ihle said. "Westwater is well-positioned to capitalize on the current geopolitical tension, as its environmentally friendly processing method provides a sustainable alternative for U.S. and global battery manufacturers," he added.
Price Action: Shares of Westwater Resources had risen by 4.88% to 61 cents at the time of publication on Tuesday.
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