Seeks full compensation for illegal taking of
the Temrezli and Şefaatli uranium projects – an investment that
would have returned $267 million
Westwater Resources, Inc. (“Westwater,” or the “Company”)
(Nasdaq: WWR), an energy materials development company, today
announced the filing of a Request for Arbitration against the
Republic of Turkey for its unlawful actions against the Company’s
investments, most notably, the illegal taking of its Temrezli and
Şefaatli uranium projects in June 2018. These projects were owned
by Westwater’s Turkish subsidiary Adur Madencilik Limited Sirketi
(“Adur”).
Christopher M. Jones, President and CEO of Westwater Resources,
stated: “Over the course of this year, we have attempted to open a
dialogue with the Republic of Turkey without substantive result.
Our good faith efforts have not been reciprocated by the Turkish
government. The time for utilizing the provisions of the US-Turkey
bilateral investment treaty and to seek recovery of the Company’s
investment in the Temrezli and Şefaatli projects has come.”
Since 2007, Adur has held the exclusive rights for the
exploration and development of uranium at Temrezli and Şefaatli. To
date, Adur and its shareholders have invested substantially in
these two projects, using their technical expertise and carrying
out extensive drilling, testing and studies to move the projects
towards production. Having successfully completed the exploration
stage, in 2013-2014, Adur was granted a number of operating
licenses by the Turkish government to develop the Temrezli mine. As
a direct result of Adur’s efforts, Temrezli is the most advanced
uranium project in Turkey. Experts have estimated that the mine
will generate revenues of up to USD 644 million over its life,
netting Westwater a return on its investment of USD 267 million as
described in the Prefeasibility Study completed for the Temrezli
project in 2015.
For many years, Adur and Westwater worked closely with the
Turkish authorities and shared their technical expertise in uranium
mining. However, Turkey's most recent actions have undermined this
longstanding relationship. In particular, in June 2018, the Turkish
government cancelled all of Adur’s exploration and operating
licenses with retroactive effect, rendering Westwater’s investment
in Adur effectively worthless. While the Turkish authorities had
variously issued, renewed and overseen these licenses for more than
a decade, they now assert that the licenses were issued by mistake
and that the Turkish government has a governmental monopoly over
all uranium mining activities in Turkey, in violation of
Westwater’s rights under Turkish and international law. Westwater
has reached out on numerous occasions to the Turkish government to
resolve this dispute amicably, to reinstate the licenses, and to
remedy the unlawful actions, but to no avail.
Westwater will continue to seek meaningful engagement from the
Turkish authorities to resolve this dispute. However, Westwater is
also fully committed to the protection of its rights. In the
absence of any willingness of the Turkish authorities to engage in
a such a dialogue at this time, Westwater has been left with no
choice but to file a Request for Arbitration against the Republic
of Turkey before the International Centre for the Settlement of
Investment Disputes (“ICSID”), pursuant to the Treaty between the
United States of America and the Republic of Turkey concerning the
Reciprocal Encouragement and Protection of Investments.
History of the Projects
Since 2007, Adur has held the exclusive rights for the
exploration and development of uranium at Temrezli and Şefaatli,
two sites located around 200km from Ankara, which include the
largest and highest-grade deposits of uranium in Turkey. These
rights were granted by licenses issued by the Turkish mining
agency, MIGEM, in accordance with the relevant legislation, and for
many years Adur has worked closely with the Turkish authorities,
even sharing know-how on uranium mining.
In November 2015, Westwater acquired Anatolia Energy and thus
became the ultimate owner of Adur and its interest in the Temrezli
and Şefaatli projects. The acquisition allowed Westwater to bring
to the table its technical knowledge, funding and access to the US
market. In particular, Westwater has decades of experience in
uranium mining and processing, operating several facilities in
Texas and New Mexico. Since the 1980s, it has brought to market
over 8 million pounds of uranium concentrate (U3O8, known as
"yellowcake"). Westwater has particular expertise in the in-situ
recovery (“ISR”) of uranium. This technique – in which uranium is
extracted in solution through wells drilled on the property – bears
significant environmental and cost advantages over other methods,
such as open pit mining, including by reducing water consumption
and waste. Since the feasibility of the projects had been modelled
on the basis of ISR, Westwater’s knowledge of this technology was
welcomed by MIGEM.
With the support of its shareholders, by 2018 Adur had carried
out extensive work on the projects, including the drilling of 123
holes at Temrezli and 164 holes at Şefaatli, with a total depth of
almost 40km. Investment was also undertaken in new infrastructure
and outreach programs to the local community. At the same time,
Westwater and its predecessors in interest had engaged consultants
to undertake various studies, hydrogeological and metallurgical
test programs, and environmental impact assessments in order to
plan for the sustainable development of the projects.
All these efforts have been with the active encouragement of,
and in concert with, the Turkish authorities. For many years, Adur
and its shareholders enjoyed a close working relationship with
MIGEM and the Ministry of Energy – for example, regularly meeting,
reporting on progress at the sites, organizing workshops to share
Westwater's know-how, and even arranging for a delegation from the
Turkish government to visit uranium mining facilities in the USA.
Throughout this time, the Turkish government not only supported
Adur’s activities on the ground, but also drew on Westwater’s
technical expertise in uranium mining to help train its
personnel.
Turkey’s Cancellation of Adur’s Licenses in June 2018
On 20 June 2018, the Turkish government informed Adur that it
was cancelling all Adur’s licenses with retroactive effect, making
it impossible for Adur to continue exploring and developing the two
projects. Immediately prior to their cancellation, Adur had held
seven licenses – four operating licenses, one pending operating
license and two exploration licenses – granting it exclusive rights
over an area of more than 10,000 hectares (24,700 acres). The
justification given in the letters was that MIGEM had apparently
issued the licenses in error.
Turkey’s Failure to Negotiate and to Pay Compensation
Westwater attempted to engage with the Turkish authorities on
numerous occasions and wrote letters to Turkish governmental
officials on 28 June 2018, 7 September 2018, 11 October 2018, and
again on 25 November 2018. In each letter, Westwater expressed its
concern with the illegal taking of the Adur licenses and requested
that Turkey negotiate, in good faith, as to the compensation that
Westwater is entitled to under international law. The Turkish
government has, however, persistently failed to make any offer of
compensation despite committing to do so. As a result, Westwater
has now filed its request for arbitration before ICSID.
About Westwater Resources
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. In addition, the Company maintains lithium mineral
properties in three 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,” 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 statements relating to the
Request for Arbitration and timing and outcome thereof, 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
domestic operations; (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; (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, Railroad Valley, and Sal Rica projects, and the possibility
that future exploration results may be materially less promising
than initial exploration result; (I) 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. The results of the initial optimization study
are preliminary in nature and subject to revision following WWR’s
further analysis of the Coosa Graphite Project.
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version on businesswire.com: https://www.businesswire.com/news/home/20181213005207/en/
Westwater Resources Contact:Christopher M. Jones,
President & CEOPhone: 303.531.0480
Jeff Vigil, VP Finance & CFOPhone: 303.531.0481Email:
Info@WestwaterResources.net
Investor Relations Contact:Michael PorterPorter, LeVay
and RosePhone: 212.564.4700Email:
Westwater@plrinvest.com
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