The Energy GraphiteTM
Company
Alabama Graphite Corp. (“
Alabama
Graphite” or the “
Corporation”)
(TSX-V:CSPG) (OTCQB:CSPGF) (FRANKFURT:1AG) announces that it has
reported its financial results for the fiscal year ended August 31,
2017 (“
FY 2017”). The Corporation’s complete
annual audited financial statements and management discussion and
analysis (“
MD&A”) for the year ended August
31, 2017 are available on the Canadian Securities Administrators’
(“
CSA”) System for Electronic Document Analysis
and Retrieval (“SEDAR”) on www.sedar.com or on the Corporation’s
website at www.alabamagraphite.com. The audit of Alabama Graphite’s
financial statements was completed by the Corporation’s independent
auditors, Toronto-based UHY McGovern Hurley LLP.
The past fiscal year was a pivotal one for
Alabama Graphite, as the Corporation announced on December 13, 2017
that it has entered into a definitive agreement (the
“Arrangement Agreement”) with Colorado, USA-based
Westwater Resources, Inc.
(“Westwater”) (NASDAQ:WWR) pursuant to which
Westwater will acquire all of the issued and outstanding securities
of Alabama Graphite (the “Acquisition”).
Management and the Board of Directors of both Westwater and Alabama
Graphite, as well as the Special Committee of Alabama Graphite’s
Board of Directors, are unanimously in support of the Acquisition,
which remains subject to all requisite regulatory approvals, court
approval, obtaining all security holder approvals required by
applicable laws and such other conditions as are customary in
transactions of this nature.
HIGHLIGHTS OF THE
ACQUISITIONThe Boards of Directors of Westwater and
Alabama Graphite consider the Acquisition to be a compelling and
fair transaction, which is expected to provide significant
strategic and financial benefits to the shareholders of both
companies.
Key benefits of the Acquisition include:
- The combination of Westwater’s in-house technical abilities and
operational expertise in the production of a wide range of
commodities with the mineral resources controlled by Alabama
Graphite near Sylacauga, Alabama provides strategic corporate
experience and stronger balance for a fast-track route to expected
low-cost, specialized graphite intended to supply the existing and
growing battery markets;
- Provides the shareholders of both companies with exposure to an
extensive project portfolio consisting of near and mid-term
resources to support the fast-growing transportation battery market
through the near-term Coosa Graphite Project and the mid-term
Westwater lithium exploration properties in Nevada and Utah, as
well as long-term leverage to the expected rise in the uranium
price with Westwater’s uranium property portfolio;
- Greatly improved access to and greater appeal for global equity
capital markets through Westwater’s current listing on the NASDAQ;
and
- Establishment of a strong platform to continue developing a
leading energy materials, exploration and development business
through both organic growth and/or further corporate transactions.
For more information on Westwater, please visit
www.westwaterresources.net.
Alabama Graphite shareholders will derive many
benefits from the Acquisition, including:
- Leverage the skills and know-how of Westwater’s experienced
mining and operations teams;
- Benefits of a higher US profile through Westwater’s NASDAQ
listing;
- Benefits of being an American company, advancing the only
natural flake graphite project in the contiguous USA;
- Benefits from both diversification and product synergies
related to Westwater’s lithium and uranium project portfolios;
and
- Improved short-term and long-term funding capabilities and
resourcefulness.
More information regarding the Acquisition will
be available in an upcoming Information Circular, currently
expected to be completed on or about the end of January 2018. The
Corporation will report its first quarter (“Q1”)
financial statements and the MD&A on January 29,
2018. CONVERSION
PRICE OF SECURED LOANIn connection with the Acquisition,
Alabama Graphite and Westwater also agreed to the terms of a
previously-announced secured loan from Westwater to Alabama
Graphite for up to USD$2 million (the “Secured
Loan”). The Secured Loan carries a 3% interest rate,
and is convertible into common shares of Alabama Graphite
(“Common Shares”) at Westwater’s election using a
conversion price of $0.0878, which was determined by calculating
the volume-weighted average price (“VWAP”) of the
Common Shares for the five trading days immediately following the
initial public announcement of the Acquisition (which occurred on
December 13, 2017).
As at the date hereof and since the announcement
of the Acquisition and the Secured Loan, Alabama Graphite has drawn
on an aggregate amount of approximately USD$1 million, pursuant to
the Secured Loan from Westwater.
The Secured Loan remains subject to final TSX
Venture Exchange review and approval.
On behalf of the Board of Directors ofALABAMA
GRAPHITE CORP.
Gareth P. Hatch, PhD, CEng,
FIMMM, FIETChief Executive Officer and Executive Director
ABOUT ALABAMA GRAPHITE
CORP.Alabama Graphite is a Canadian-based flake graphite
exploration and development company as well as an aspiring battery
materials production and technology company. Alabama Graphite
operates through its wholly owned subsidiary, Alabama Graphite
Company, Inc. (a company registered in the state of Alabama). With
an advancing flake graphite project in the United States of
America, Alabama Graphite intends to become a reliable, long-term
U.S. supplier of specialty high-purity graphite products. Alabama
Graphite is focused on the exploration and development of its
flagship Coosa Graphite Project in Coosa County, Alabama, and its
Bama Mine Project in Chilton County, Alabama as well as the
research and development of the manufacturing and technological
processing of battery materials.
Alabama Graphite holds a 100% interest in the
mineral rights for these two U.S.-based graphite projects, which
are both located on private land. The two projects encompass more
than 43,000 acres and are located in a geopolitically stable,
mining-friendly jurisdiction with significant historical production
of crystalline flake graphite in the flake graphite belt of central
Alabama, also known as the Alabama Graphite Belt (source: U.S.
Bureau of Mines). A significant portion of the Alabama deposits are
characterized by graphite-bearing material that is oxidized and has
been weathered into extremely soft rock. Both projects have
infrastructure in place, are within close proximity to major
highways, rail, power and water, and are approximately three hours
(by truck or train) to the Port of Mobile, the Alabama Port
Authority’s deep-seawater port and the ninth largest port by
tonnage in the United States (source: U.S. Army Corps of
Engineers/USACE). The state of Alabama’s hospitable climate allows
for year-round mining operations and the world’s largest marble
quarry (which operates 24 hours a day, 365 days a year in
Sylacauga, Alabama), is located within a 30-minute drive of the
Coosa Graphite Project.
On November 30, 2015, Alabama Graphite announced
the results of its PEA2 for the Coosa Graphite Project, indicating
a potentially low-cost project with potential positive economics.
Please refer to the Corporation’s technical report titled “Alabama
Graphite Corp. Preliminary Economic Assessment (PEA) on the Coosa
graphite Project, Alabama, USA” dated November 27, 2015, prepared
by independent engineering firms AGP Mining Consultants Inc. and
Metal Mining Consultants Inc., and filed on SEDAR at
www.sedar.com.
2 A Preliminary Economic Assessment or PEA is
preliminary in nature, it includes inferred mineral resources that
are considered too speculative geologically to have economic
considerations applied to them that would enable them to be
categorized as mineral reserves and there is no certainty that the
preliminary economic assessment will be realized.
For more information on Alabama Graphite, please
visit www.alabamagraphite.com.
FORWARD-LOOKING STATEMENTSThis
press release contains forward-looking information under applicable
Canadian securities laws (“forward-looking
statements”), which may include, without limitation,
statements with respect to the anticipated benefits and completion
of the Acquisition and any transactions relating thereto, the
ability to obtain all requisite regulatory approvals, court
approval and security holder approvals, and satisfying such other
conditions as are required in connection with the Acquisition and
any transactions relating thereto, and the mailing and filing of
the management information circular related to the Special Meeting
and the timing thereof and timing of the Special Meeting. The
forward-looking statements are based on the beliefs of management
and reflect Alabama Graphite’s current expectations. When used in
this press release, the words “estimate”, “project”, “belief”,
“anticipate”, “intend”, “expect”, “plan”, “predict”, “may”, “will”
or “should” and the negative of these words or such variations
thereon or comparable terminology are intended to identify
forward-looking statements. Such statements reflect the current
view of Alabama Graphite with respect to risks and uncertainties
that may cause actual results to differ materially from those
contemplated in those forward-looking statements. Completion of the
Acquisition is subject to a number of conditions which are typical
for transactions of this nature. Failure to satisfy any of these
conditions, the emergence of a superior proposal or the failure to
obtain the approval of the security holders of Alabama Graphite and
Westwater may result in the termination of the Arrangement
Agreement. By their nature, forward-looking statements involve
known and unknown risks, uncertainties and other factors which may
cause our actual results, performance or achievements, or other
future events, to be materially different from any future results,
performance or achievements expressed or implied by such
forward-looking statements. Such factors include, among other
things, the interpretation and actual results of current
exploration activities; changes in project parameters as plans
continue to be refined; future prices of graphite; possible
variations in grade or recovery rates; failure of equipment or
processes to operate as anticipated; the failure of contracted
parties to perform; labor disputes and other risks of the mining
industry; delays in obtaining governmental approvals or financing
or in the completion of exploration, as well as those factors
disclosed in the Corporation’s publicly filed documents.
Forward-looking statements are also based on a number of
assumptions, including that contracted parties provide goods and/or
services on the agreed timeframes, that equipment necessary for
exploration is available as scheduled and does not incur unforeseen
breakdowns, that no labor shortages or delays are incurred, that
plant and equipment function as specified, that no unusual
geological or technical problems occur, and that laboratory and
other related services are available and perform as contracted.
Forward-looking statements are made based on management’s beliefs,
estimates and opinions on the date that statements are made and
Alabama Graphite undertakes no obligation to update forward-looking
statements (unless required by law) if these beliefs, estimates and
opinions or other circumstances should change. Investors are
cautioned against attributing undue certainty to forward-looking
statements. Alabama Graphite cautions that the foregoing list of
material factors and assumptions are not exhaustive. When relying
on Alabama Graphite forward-looking statements to make decisions,
investors and others should carefully consider the foregoing
factors and assumptions and other uncertainties and potential
events.
Alabama Graphite has also assumed that the
material factors and assumptions will not cause any forward-looking
statements to differ materially from actual results or events.
However, the list of these factors and assumptions is not
exhaustive and is subject to change and there can be no assurance
that such assumptions will reflect the actual outcome of such items
or factors.
NEITHER THE TSX VENTURE EXCHANGE NOR ITS
REGULATION SERVICE PROVIDER (AS THAT TERM IS DEFINED IN THE
POLICIES OF THE TSX VENTURE EXCHANGE) ACCEPTS RESPONSIBILITY FOR
THE ADEQUACY OR ACCURACY OF THE CONTENT OF THIS NEWS
RELEASE.
QUALIFIED PERSONS
Gareth P. Hatch, PhD, CEng,
FIMMM, FIET, Chief Executive Officer and Director of Alabama
Graphite, is a Qualified Person as defined by National Instrument
43-101 (“N.I. 43-101”) guidelines, and has
reviewed and approved the scientific and technical disclosure in
this news release.
Jesse R. Edmondson, P.G.,
Project Geologist of Alabama Graphite, is a Qualified Person as
defined by N.I. 43-101 guidelines, and has reviewed and approved
the geology and mineral resource estimation disclosure in this news
release.
CONTACT
Alabama Graphite
Corp.
Tyler W. P. Dinwoodie President +1 (416) 309-8641
tdinwoodie@alabamagraphite.com
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