Alabama Graphite - Accessing liquidity and financing optionality
Westwater Resources (NASDAQ:WWR) is set to complete its all-share takeover of Alabama Graphite 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.
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