Conference Call Today at 11am ET
Westwater Resources, Inc. (Nasdaq: WWR), an energy
materials development company, announced its results for the first
quarter of 2020, and provided an update on its battery graphite
business development.
Christopher M. Jones, President and Chief Executive Officer,
said, “Our top priority remains our employees and we are pleased to
report they are safe. In early May, our employees returned to field
work in Texas, and protocols are in place in all of our workplaces
to ensure we can continue to work safely going forward. Even with
stay at home and safer at home orders in place here in the United
States and Europe, during the quarter we continued to make
significant progress in our battery graphite business. We remain on
schedule to manufacture battery graphite in bulk quantities in the
fourth quarter of 2020. After visiting with our German engineering
partner Dorfner Anzaplan, as well as equipment manufacturers in
January 2020, we began to test advanced graphite products and
design our plan to operate a pilot plant later this year without
interruption. We expect to announce our graphite test results in
the coming weeks.
“With much of the global supply chain in flux in the wake of
COVID-19, the United States is taking important steps to mitigate
future risks to certain critical minerals. The report from the
Nuclear Fuel Working Group presents a comprehensive policy shift
that aims to support American uranium producers and the nuclear
industry, including a budget proposal by the Federal Government to
provide funding for a competitive procurement of U.S. uranium
production over a 10-year timeline. Westwater owns two licensed
uranium processing facilities in Texas, along with 199,700 acres of
uranium mineral rights in New Mexico and Texas. The Federal
Government’s support for domestic uranium production would enable
Westwater to better compete in these markets. Westwater’s diverse
assets include graphite, lithium, uranium and vanadium mineral
properties located throughout the U.S., and each is included in the
Federal Government’s Critical Minerals List.
“Our top priority will continue to be protecting the health and
safety of our employees, their families and the communities in
which we operate. While no company is immune to issues in today's
market environment, Westwater is relatively well positioned to take
advantage of the low carbon future, both in power generation and
energy storage. I wish to thank our shareholders for their
continued support,” concluded Mr. Jones.
BATTERY GRAPHITE BUSINESS
UPDATE:
- Our battery graphite business continues on track toward
operation of a pilot plant, which we anticipate will make battery
graphite in bulk quantities in the fourth quarter of 2020.
- On November 21, 2019, Westwater announced it had engaged
Dorfner Anzaplan, an internationally recognized and highly regarded
specialist in high-purity industrial and strategic metals
businesses to accelerate graphite product development and design
for the Coosa Graphite Project. During the first quarter of 2020,
Westwater and Dorfner worked together:
- Defining the method, equipment and operating parameters and
requirements for graphite purification;
- Defining operating parameters and equipment for downstream
processes required to manufacture Westwater’s battery graphite
products; and
- Designing Westwater’s pilot program.
ARBITRATION CASE DEVELOPMENTS – TURKEY’S
REQUEST DENIED
- Westwater’s Memorial filed on January 27, 2020 established
reparations of $36.5 million plus fees.
- On March 11, 2020, Turkey filed a request to bifurcate the
arbitration proceeding, and on March 30, 2020, Westwater filed a
response in opposition to Turkey’s request for bifurcation.
- On April 28, 2020, the arbitral tribunal denied Turkey’s
bifurcation request.
- As a result of this decision, Turkey must file a
Counter-Memorial on or before July 20, 2020, and a hearing on the
substantive issues and damages is now scheduled for September
2021.
URANIUM BUSINESS DEVELOPMENTS:
- Uranium prices have risen from a low of $24 per pound to $33.40
per pound as of May 11, 2020, the highest it’s been since February
2016. Demand for nuclear fuel is expected to continue driving the
price higher in the near term.
- The President’s Nuclear Fuel Working Group report seeks to
mitigate the near-term risks of losing American uranium production
capacity due to market factors, while considering actions that
would support the entire front-end of the nuclear fuel cycle. The
report includes a 10-year proposal by the Federal Government to
provide funding beginning FY2021 for a competitive procurement of
U.S. uranium production. This would provide assurance of
availability of uranium in the event of a market disruption and
support strategic U.S. fuel cycle capabilities.
Key Financial Highlights
Table 1: Financial Summary
($ in 000's, Except Per
Share)
Q1
2020
Q1
2019
Variance
Net Cash Used in Operations
$(3,455)
$(2,740)
26.1%
Mineral Property Expenses
$(728)
$(634)
14.8%
General and Administrative, including
Non-cash Stock Comp
$(1,779)
$(1,705)
4.3%
Net Loss
$(3,287)
$(3,174)
3.6%
Net Loss Per Share
$(0.82)
$(2.15)
-61.9%
Avg. Weighted Shares Outstanding
4,004,948
1,478,233
170.9%
- Net cash used in operations. Net
cash used in operating activities was $3.5 million for the three
months ended March 31, 2020, as compared with $2.7 million for the
same period in 2019. The $0.8 million increase in cash used was
primarily due to an increase in arbitration costs as well as land
maintenance and holding costs for our Vasquez project in South
Texas.
- Operating expenses. Mineral
property expenses for the first quarter of 2020 increased by $0.1
million from the corresponding period during 2019. The increase was
primarily due to an increase in work related to the Coosa project
as well as an increase in land maintenance and holding costs for
our Vasquez project in South Texas as a result of a lease renewal
that required a lease bonus payment. General and administrative
charges were approximately $0.1 million higher than the
corresponding period in 2019. The increase was primarily due to
executive search consulting cost for a sales and marketing
executive for Westwater.
- Net loss. Our consolidated net
loss for the three months ended March 31, 2020 was $3.3 million, or
$0.82 per share, as compared with a consolidated net loss of $3.1
million, or $2.15 per share for the same period in 2019. The $0.2
million increase in our consolidated net loss from the respective
prior period was largely the result of an increase in legal
expenses related to the arbitration against the Republic of Turkey
as well as legal and other administrative costs associated with
securing equity financing to fund operations.
- Cash and working capital. On March
31, 2020 the Company’s cash balance was $0.9 million and the
Company had a working capital deficit balance of $2.2 million. The
Company intends to pursue 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 facilities and
construction of commercial production facilities. The Company’s
current lithium business plan will be funded by working capital;
however, the Company is pursuing project financing including
possible joint venture partners to fund discretionary greenfield
exploration activities.
- Shares outstanding. Total shares
outstanding are 5,568,094 as of May 13, 2020.
Conference Call & Webcast
The Company will hold a conference call to discuss its first
quarter 2020 results on Thursday, May 14, 2020 at 11:00 a.m.
Eastern Time (9:00 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 A. 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:
4547
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. 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,” 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
developments and future production from the Coosa Project, the
performance of and market for the Company’s graphite products,
potential funding for a uranium reserve in the United States, and
the potential for partnering opportunities or project finance for
the Company’s projects, 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; (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; (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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200514005220/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 Matthew Abenante Phone: 212.564.4700 Email:
Westwater@plrinvest.com
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