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SEGMENT REPORTING | 12 Months Ended
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Dec. 31, 2024
SEGMENT REPORTING |
SEGMENT REPORTING |
13. | SEGMENT REPORTING
The Company has one reporting segment, the “battery-grade graphite business” segment. Graphite extraction and processing are regulated by federal and state governments. Compliance with regulations have a material effect on the economics of our operations and the timing of project development. Our primary regulatory costs have been, and are expected to continue to relate to, obtaining licenses and operating permits from federal and state agencies before the commencement of production activities, as well as continuing compliance with licenses and permits once they have been issued. The current environmental and technical regulatory requirements for the graphite extraction and processing industry are well established, however, the regulatory process can make permitting difficult and timing unpredictable. U.S. regulations pertaining to graphite extraction and processing may evolve in the U.S., however, at this time we do not anticipate any adverse impact from these regulations that would be unique to our operations. The battery-grade graphite business segment includes the Kellyton Graphite Plant and the Coosa Graphite Deposit, both at a pre-revenue stage and located in Coosa County, Alabama. Both are anticipated to be used to produce battery-grade natural graphite materials as follows: Kellyton Graphite Plant: The Company will process natural graphite concentrate at the Kellyton Graphite Plant through a combination of sizing, shaping, spheroidization and classification. Once completed, the purification is expected to be performed using a proprietary purification process. The process uses a combination of technologies including a caustic bake, acid leach and thermal treatment, a process that allows for a smaller and more sustainable environmental footprint than that of a hydrofluoric acid (“HF”) leaching system, which is widely used by other graphite processing companies. Once the graphite is purified to a minimum graphite carbon content of 99.95%, the Company will coat the SPG to manufacture the advanced graphite products it intends to sell. The purification process developed by Westwater is the subject of a patent application that has been filed in the U.S. Patent and Trademark Office. For construction and operations of the Kellyton Graphite Plant, the Company is required to obtain and maintain permits related to air emissions, water discharge, storm water drainage, and possibly other regulated waste. On January 31, 2022, Westwater announced that it had received its National Pollutant Discharge Elimination System (“NPDES”) construction stormwater permit, which was required to commence site grading for the Kellyton Graphite Plant. The NPDES permit has been issued by the State of Alabama under NPDES to ensure Westwater’s construction efforts comply with the Federal Clean Water Act as it relates to regulated disturbances and any stormwater runoff from the Kellyton Graphite Plant site. In June 2022 and August 2022, the Company received its air permit and its State Indirect Discharge (“SID”) permit for the treatment of wastewater from the Alabama Department of Environmental Management, respectively. Consequently, the Company has all necessary permits to complete the construction of Phase I of the Kellyton Graphite Plant. ​ Coosa Graphite Deposit: Westwater currently purchases graphite flake concentrate for the Kellyton Graphite Plant under a supply contract with Syrah Resources Limited. Westwater expects to continue to purchase graphite concentrate from Syrah Resources Limited and/or other sources for the Kellyton Graphite Plant until the Coosa Graphite Deposit is developed and in operation. Westwater believes its current contract with Syrah Resources Limited provides adequate feedstock supply until then. Currently, the Coosa Graphite Deposit is being evaluated and developed for future mining operations, which will require permitting as well. Development of a mine at the Coosa Graphite Deposit, is expected to serve as an in-house source of graphite feedstock and will provide in-house QA/QC for raw-material inputs. Graphite mining and processing in Alabama requires various permits, including those for any emissions to air, water, or other aspects of the environment. Permits may be required from the State of Alabama, the U.S. Environmental Protection Agency, the Army Corps of Engineers, and other state and federal agencies. Specifically, to mine the Coosa Graphite Deposit, permits may be required in accordance with the Alabama Surface Mining Act of 1969, which is administered by the Alabama Department of Labor (“DoL”). DoL issues mining permits, ensures that mine sites are properly bonded for reclamation purposes, and makes periodic inspections. The Company is currently in the process of determining which permits are needed as well as the requirements for posting surety obligations or negotiable bonds related to the area to be disturbed. Future mining operations at the Coosa Graphite Deposit may be subject to the U.S. National Environmental Policy Act process, with potential review by various federal agencies that may include the U.S. Environmental Protection Agency, the Army Corp of Engineers, the Bureau of Land Management, and others. In Alabama, any surface or groundwater withdrawals are managed through the Alabama Water Use Reporting Program. The Alabama Water Resources Act and associated regulations establish the requirements for water withdrawals. The process begins with the submission of an application form called a “Declaration of Beneficial Use” and other required information to the Office of Water Resources (“OWR”) within the Alabama Department of Economic and Community Affairs. Once application information is reviewed and determined to be complete, OWR will issue a Certificate of Use (“COU”) that lists the applicant’s name and information concerning all registered surface and/or groundwater withdrawal points and their withdrawal information. Entities with a capacity to withdraw more than 100,000 gallons per day are required to register with OWR and obtain a COU. The COU certifies that proposed water use will not interfere with existing water use and is beneficial. The Company anticipates evaluating the future need for a COU during its development of a detailed mine plan. The accounting policies of the battery-grade graphite business are the same as those described in Note 1, The Company and Summary of Significant Accounting Policies. The CODM assesses performance for the battery-grade graphite business segment and decides how to allocate resources based on operating expenses, as reported on the Consolidated Statement of Operations, compared to forecasted expenses. The CODM intends to continue to use operating expenses to evaluate the segment until the Kellyton Graphite Plant is operational. ​ ​ The following is a table of the segment assets as of December 31, 2024 and 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31,
(thousands of dollars) | ​ | 2024 |  | 2023
Assets: | ​ | ​ | ​ | ​ | ​ | ​
Battery-grade graphite business segment assets | ​ | $ | 141,470 | ​ | $ | 137,636
Corporate and other assets | ​ | ​ | 4,887 | ​ | ​ | 12,195
Consolidated total assets | ​ | $ | 146,357 | ​ | $ | 149,831
​ | ​ | ​ | ​ | ​ | ​ | ​
Expenditures for battery-grade graphite business segment assets | ​ | $ | 6,138 | ​ | $ | 58,295
​ The following is a table of the segment profit or loss and significant segment expenses as of December 31, 2024 and 2023: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2024
(thousands of dollars) | ​ | Battery-grade Graphite Segment | ​ | Corporate and Other | ​ | Consolidated Statements of Operations
Other (expense) income | ​ | $ | (1,462) | ​ | $ | 273 | ​ | $ | (1,189)
Less: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Product development expenses | ​ | ​ | 1,177 | ​ | ​ | — | ​ | ​ | 1,177
Exploration expenses | ​ | ​ | 20 | ​ | ​ | — | ​ | ​ | 20
General and administrative expenses | ​ | ​ | 2,046 | ​ | ​ | 7,941 | ​ | ​ | 9,987
Mineral property | ​ | ​ | 35 | ​ | ​ | — | ​ | ​ | 35
Depreciation and amortization | ​ | ​ | 244 | ​ | ​ | 5 | ​ | ​ | 249
Net loss | ​ | $ | (4,983) | ​ | $ | (7,674) | ​ | $ | (12,657)
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2023
(thousands of dollars) | ​ | Battery-grade Graphite Segment | ​ | Corporate and Other | ​ | Consolidated Statements of Operations
Other (expense) income | ​ | $ | (60) | ​ | $ | 5,580 | ​ | $ | 5,520
Less: | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Product development expenses | ​ | ​ | 2,935 | ​ | ​ | — | ​ | ​ | 2,935
Exploration expenses | ​ | ​ | 301 | ​ | ​ | — | ​ | ​ | 301
General and administrative expenses | ​ | ​ | 2,432 | ​ | ​ | 7,348 | ​ | ​ | 9,780
Mineral property | ​ | ​ | 34 | ​ | ​ | — | ​ | ​ | 34
Depreciation and amortization | ​ | ​ | 211 | ​ | ​ | 10 | ​ | ​ | 221
Net loss | ​ | $ | (5,973) | ​ | $ | (1,778) | ​ | $ | (7,751)
​

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