Westwater Resources, Inc. (Nasdaq: WWR), an energy
materials development company, today announced its results for the
second quarter of 2020 and provided an update on its materials
development business.
Christopher M. Jones, President and Chief Executive Officer,
said, “In the first half of the year, the COVID-19 pandemic has not
materially impacted our business activities. Even though we closed
our offices, the remote use system already in place enabled our
team to remain productive and to make great strides as we continued
to execute our 2020 strategy. We remain focused on the health and
safety of all Westwater Resources employees, on maintaining highest
safety standards in all of our operations and on ensuring the
safety of the communities where we live and work. To this end, we
have eliminated unnecessary travel and instituted health protocols
at all job sites. We also continue to make sure our team members
can take time off without penalty due to illness or to care for
those around them who have fallen ill. Thanks to our diligence and
concern, and to the enthusiasm and industriousness of our team, we
are efficiently conducting our business.”
Some of the key milestones from the second quarter of 2020 and
through the date of this press release include:
- On July 9, 2020, the company announced that independent
performance testing of its ULTRA-CSPG™ (Coated Spherical Purified
Graphite ("CSPG”)) material produced in a laboratory setting shows
that it performs as well or better than benchmark commercially
available natural flake and synthetic materials. ULTRA-CSPG™ is
Westwater’s anode material utilized in lithium ion batteries in the
fast-growing electric vehicle market.
- As of June 30, 2020, the Westwater Resources relationship with
Dorfner Anzaplan continues without pause to produce results that
inform the design of Westwater’s pilot plant operation. The pilot
plant is scheduled to operate during the 4th quarter of 2020.
Westwater is now undertaking the final design of the pilot plant,
as well as the purchase and installation of all necessary
equipment.
- On June 2, 2020, Westwater announced that independent testing
of its ULTRA-PMG™ (Purified Micronized Graphite (“PMG”)) battery
graphite material has shown outstanding resistivity values as a
conductive additive.
- The Company continues its restoration and reclamation
activities on its South Texas uranium properties.
- During the quarter the Company secured a PPP loan for its
subsidiary, URI, Inc. Since the loan was executed, the Company has
met all requirements for forgiveness of the loan as outlined in the
Small Business Administration Guidelines, and a process has begun
for extinguishment of the note.
- On April 28, 2020, in the ICSID arbitration proceeding for the
Company’s challenge that the Republic of Turkey unlawfully revoked
licenses for the Temrezli and Sefaatli uranium projects, the
arbitral tribunal denied Turkey’s bifurcation request, which would
have materially extended the potential timeline for the completion
of the arbitration proceeding. On June 3, 2020, the arbitral
tribunal ruled that Turkey must file its Counter-Memorial on or
before September 14, 2020. The hearing on substantive issues and
damages is still scheduled for September 13-17, 2021.
“We are delighted with the progress we have made during an
immensely difficult quarter for just about every business
worldwide,” Mr. Jones added. “Our goal now is to continue at this
pace through year-end. We are inspired by the performance of our
battery materials, and we are on target to have our pilot plant, in
collaboration with Dorfner Anzaplan, operational by year-end.
Notwithstanding COVID-19 and other challenges, 2020 is shaping up
to be a solid year for Westwater Resources.”
FINANCIAL SUMMARY
Table 1: Financial Summary
(000's, Except Per Share)
2Q
2020
2Q
2019
2Q Variance
1H
2020
1H
2019
1H Variance
Net Cash Used in Operations
$ (2,610)
$ (1,584)
65%
$ (6,065)
$ (4,324)
40%
Mineral Property Expenses
$ (576)
$ (808)
-29%
$ (1,178)
$ (1,426)
-17%
General and Administrative
$ (1,659)
$ (1,700)
-2%
$ (3,438)
$ (3,405)
1%
Net Loss
$ (2,467)
$ (2,775)
-11%
$ (5,754)
$ (5,949)
-3%
Net Loss Per Share
$ (0.43)
$ (1.81)
-76%
$ (1.18)
$ (3.95)
-70%
Weighted Avg. Shares Outstanding
5,786
1,533
277%
4,896
1,506
225%
- Net Cash Used in
Operations. Net cash used in operating activities was
$6.0 million for the six months ended June 30, 2020, as compared
with $4.3 million for the same period in 2019. The $1.7 million
increase in cash used was primarily due to an increase in prepaid
assets and a decrease in accounts payable and accrued liabilities
in 2020.
- Operating Expenses. For the
three months ended June 30, 2020, mineral property expenses
decreased by $0.2 million from the corresponding period in 2019.
The decrease was primarily due to the timing of the annual lease
rental for a uranium property in New Mexico. For the current year,
the leaseholder agreed to payments in seven monthly installments
from May to November, while in 2019 the lease rental was paid in
whole during the second quarter of the year. At June 30, 2020, five
monthly payments remained.
- General and Administrative
Expenses. General and administrative expenses for the
three and six months ended June 30, 2020 and 2019 remained
relatively constant at $1.7 million and $3.4 million
respectively.
- Net Loss. Consolidated net
loss for the three months ended June 30, 2020 was $2.5 million, or
$0.43 per share, as compared with a consolidated net loss of $2.8
million, or $1.81 per share for the same period in 2019. The $0.3
million decrease in our consolidated net loss from the respective
prior period was the result of a decrease in mineral property
expenses in the current year and a decrease in arbitration costs
due to minimal scheduled proceedings during the current
quarter.
- Cash and Working Capital.
At June 30, 2020 the Company’s cash balances were $2.3 million and
the Company had a working capital deficit balance of $1.0 million.
The Company’s cash balance at July 31, 2020 is $2.9 million. The
company is pursuing project financing to support execution of the
graphite business plan, including discretionary capital
expenditures associated with graphite battery-material product
development, construction of pilot plant facility and construction
of commercial production facility.
- Shares Outstanding. Total
shares outstanding are 7,564,815 at July 31, 2020.
Conference Call & Webcast
The Company will hold a conference call to discuss its financial
results and recent developments for its second quarter ended June
30th 2020 on Thursday, August 6, 2020 at 12:00 p.m. Eastern Time
(10:00 a.m. Mountain Time).
Dial-in Numbers: +1 (800) 319-4610 (U.S.
and Canada) +1 (604) 638-5340 (International) Conference ID:
Westwater Resources Conference Call
Hosting the call will be Christopher M. Jones, President and
Chief Executive Officer of Westwater Resources, who will be joined
by Jeffrey L. Vigil, Vice President-Finance and Chief Financial
Officer and Dain McCoig, Vice President of Operations. Mr. Jones
will present an overview of the Company’s business position and
provide updates on its graphite, lithium and uranium businesses.
Mr. Vigil will review the financial results. Mr. McCoig will be
available for questions as part of the call.
The conference call and presentation will also be available via
a live webcast through the Company’s website,
www.WestwaterResources.net. A replay of the call will be available
on the Company’s website for a limited time and by phone using the
details below.
Replay Numbers: +1 (855) 669-9658 (U.S.
and Canada) +1 (412) 317-0088 (International) Replay Access Code:
4994
About Westwater Resources
Westwater Resources (NASDAQ: WWR) is focused on developing
energy-related materials. The Company’s battery-materials projects
include the Coosa Graphite Project — the most advanced natural
flake graphite project in the contiguous United States — and the
associated Coosa Graphite Mine located across 41,900 acres (~17,000
hectares) in east-central Alabama. Processing pilot plant
operations are scheduled in the fourth quarter of 2020, producing
ULTRA-PMGTM, ULTRA-DEXDGTM and ULTRA-CSPGTM in quantities that
facilitate qualification testing at potential customers. In
addition, the Company maintains lithium mineral properties in
prospective lithium brine basins in Nevada and Utah. Westwater’s
uranium projects are located in Texas and New Mexico. In Texas, the
Company has two licensed and currently idled uranium processing
facilities and approximately 11,000 acres (~4,400 hectares) of
prospective in-situ recovery uranium projects. In New Mexico, the
Company controls mineral rights encompassing approximately 188,700
acres (~76,000 hectares) in the prolific Grants Mineral Belt, which
is one of the largest concentrations of sandstone-hosted uranium
deposits in the world. Incorporated in 1977 as Uranium Resources,
Inc., Westwater also owns an extensive uranium information database
of historic drill hole logs, assay certificates, maps, and
technical reports for the western United States. For more
information, visit www.westwaterresources.net.
Cautionary Statement
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements are subject to risks, uncertainties and
assumptions and are identified by words such as "expects,"
"estimates," "projects," "anticipates," "believes," "could,"
“scheduled,” and other similar words. All statements addressing
events or developments that WWR expects or anticipates will occur
in the future, including but not limited to the future demand for
and price of graphite, lithium and uranium, the Company’s growth,
developments at the Company’s projects, and the Company’s liquidity
and cash demands, including future capital markets financing and
disposition activities, are forward-looking statements. Because
they are forward-looking, they should be evaluated in light of
important risk factors and uncertainties. These risk factors and
uncertainties include, but are not limited to, (a) the Company’s
ability to successfully integrate Alabama Graphite Corporation’s
business into its own, and the risk that additional analysis of the
Coosa Graphite Project may result in revisions to the findings of
WWR’s initial optimization study; (b) the Company’s ability to
raise additional capital in the future; (c) spot price and
long-term contract price of graphite, lithium, vanadium and
uranium; (d) risks associated with our operations and the
operations of our partners such as Dorfner Anzaplan, including the
impact of COVID-19 and its potential impacts to the capital
markets; (e) operating conditions at the Company’s projects; (f)
government and tribal regulation of the graphite industry, the
lithium industry, the vanadium industry, the uranium industry, and
the power industry, and government support for domestic uranium
production and nuclear power; (g) world-wide graphite, lithium,
vanadium and uranium supply and demand, including the supply and
demand for lithium-based batteries; (h) maintaining sufficient
financial assurance in the form of sufficiently collateralized
surety instruments; (i) unanticipated geological, processing,
regulatory and legal or other problems the Company may encounter in
the jurisdictions where the Company operates or intends to operate,
including in Alabama, Texas, New Mexico, Utah, and Nevada; (j) the
ability of the Company to enter into and successfully close
acquisitions or other material transactions; (k) the results of the
Company’s lithium brine exploration activities at the Columbus
Basin and Sal Rica projects, and the possibility that future
exploration results may be materially less promising than initial
exploration result; (l) any graphite, lithium, vanadium or uranium
discoveries not being in high-enough concentration to make it
economic to extract the metals; (m) currently pending or new
litigation or arbitration; and (n) other factors which are more
fully described in the Company’s Annual Report on Form 10-K,
Quarterly Reports on Form 10-Q, and other filings with the
Securities and Exchange Commission. Should one or more of these
risks or uncertainties materialize or should any of the Company’s
underlying assumptions prove incorrect, actual results may vary
materially from those currently anticipated. In addition, undue
reliance should not be placed on the Company’s forward-looking
statements. Except as required by law, the Company disclaims any
obligation to update or publicly announce any revisions to any of
the forward-looking statements contained in this news release.
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version on businesswire.com: https://www.businesswire.com/news/home/20200806005548/en/
Westwater Resources Contact: Christopher M. Jones, President
& CEO Phone: 303.531.0480 Jeff Vigil, VP Finance & CFO
Phone: 303.531.0481 Email: Info@WestwaterResources.net
Investor Relations Contact: Porter, LeVay & Rose
Michael Porter Phone: 212.564.4700 Email:
Westwater@plrinvest.com
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