Westwater Resources (NASDAQ:WWR) is set to complete its all-share takeover of Alabama Graphite Corp (OTC:CSPGF) during CY Q218, subject to necessary approvals. The value of the deal is tethered to WWR’s share price and currently implies a total value for Alabama of c US$9m. This compares to an EV/t value for Coosa’s in-situ graphite resource of US$14m and our tentative, undiluted, post-tax DCF estimate for the project’s Phase 1 of US$71m (using reduced Phase 1 capex of US$30m and a 10% discount rate). The deal is timely; in reality, the financing of Coosa under the Alabama banner was proving problematic and we see a greater chance of WWR developing the asset using its own network of contacts and incumbent financing arrangements.
Coosa brings a full suite of battery products to WWR
Unlike many of its graphite peers, Alabama is focused on developing a graphite mine and processing plant in Coosa County, Alabama, US to produce battery-ready graphite end-products. It has four viable and proven products for battery applications. These are a purified micronized graphite (PMG, marketed under the name ULTRA-PMG™), a coated spherical purified graphite (ULTRA-CSPG™), a silicon-enhanced ULTRA-CSPG™ and a delaminated expanded graphite (ULTRA-DEXDG™) product.
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