Westwater Resources Announces Sale of North American Uranium Business
January 05 2021 - 8:00AM
Business Wire
Focus is Now on Graphite Development
Company Anticipates $4 Million Annual Cost
Reduction
Westwater Resources, Inc. (Nasdaq: WWR), a battery
graphite development company, today announced the sale of all of
its uranium assets located in New Mexico and Texas to enCore Energy
Corp. of Vancouver, British Columbia, Canada, a Toronto Venture
Exchange-listed company (TSXV:EU). Total consideration accruing to
Westwater from the deal is $1.8 million in enCore shares (2,571,598
shares), representing a 1.5% ownership of enCore, and two royalties
from future production from the New Mexico uranium properties.
enCore also assumed the asset retirement obligation on all
remaining uranium reclamation activities associated with the assets
in the amount of approximately $6.0 million. All performance bonds
for the Texas uranium properties have been transferred to enCore as
of December 31, 2020, as well as the release of $742,642 in
restricted cash collateral to Westwater as a result of the transfer
of the performance bonds. Westwater is retaining its uranium
interests in the Republic of Turkey, which are subject to an
ongoing international arbitration proceeding.
Christopher M. Jones, President and Chief Executive Officer of
Westwater said, “We are happy to place these uranium assets in the
hands of a company like enCore where they can be developed further
as part of a larger, consolidated land position. With over $50
million in our treasury, Westwater can now devote its full focus,
attention and resources on advancing our battery-grade graphite
product business. At the same time, we expect to free-up over $4
million per year for the next several years in land payments,
reclamation expenses and operating costs associated with the
uranium properties – money that can be used for our Coosa Graphite
Project.”
“The Coosa Graphite Project in Alabama is perfectly timed to
take advantage of the advances in the electrification of our
transportation system and in the grid electricity storage for
renewable energy, both here in the United States and the rest of
the world. These systems need graphite as a critical component –
and our development plan puts battery-grade graphite in the
marketplace in FY2021 and accelerates Westwater’s path to cash flow
in FY2023. Completing the transformation of the Company from its
uranium past to its graphite future is good for business and
provides value for our shareholders.”
Pilot Plant Update
Westwater has been conducting integrated pilot operations to
obtain battery-grade purified graphite and demonstrate that
advanced graphite products can be produced from purified graphite.
These pilot operations are expected to provide detailed design
parameters for a full-scale production facility, construction of
which is anticipated to begin in late 2021, with commissioning and
startup expected to follow in late 2022. To date, pilot operations
have achieved the following:
- Produced purified graphite at purities over 99.95%, with a high
of 99.99% carbon – exceeding minimum design criteria.
- Demonstrated that Westwater’s process can produce Purified
Micronized Graphite (PMG) at pilot scale.
- Demonstrated that Westwater’s process can produce Spheronized
Purified Graphite (SPG) at pilot scale.
- Produced precursor material for Delaminated Expanded Graphite
(DEXDG) at pilot scale.
- Provided key inputs for energy and reagent consumption.
- Provided key output information for environmental controls
design.
- Identified, optimized and tested key equipment that will be
scaled-up for full production.
Aspects of the pilot operations are expected to run through the
second quarter of 2021 and provide important data to inform the
Bankable Feasibility Study, which is expected to be completed
mid-year 2021, and continue to produce quantities of battery-grade
graphite for customer tests. Look for updates during the first and
second quarters on this important project, which is running in
Germany, New York and Illinois.
About Westwater
Resources
Westwater Resources (NASDAQ: WWR) is focused on developing
battery-grade graphite to serve green energy markets such as
electric vehicles and grid electrical storage for renewable energy,
in addition to alkaline power cell and other battery markets. The
Company’s battery-grade graphite 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. Operation of the pilot plant is underway and
is scheduled to produce ULTRA-PMG™, ULTRA-DEXDG™ and ULTRA-CSPG™ in
quantities that facilitate qualification testing at potential
customers. 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 the commencement of operations at the
pilot plant; future production of battery-grade graphite;
developments at the Company’s projects; and the Company’s future
liquidity, cost-savings and cash demands 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 construct and operate
a pilot plant capable of producing battery-grade materials in
quantities and on schedules consistent with the Coosa Graphite
Project business plan; (b) the Company’s ability to raise
additional capital in the future including the ability to utilize
existing financing facilities; (c) spot price and long-term
contract price of graphite and vanadium; (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) government regulation of the
graphite industry and the vanadium industry; (f) world-wide
graphite and vanadium supply and demand; (g) 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 and Colorado;
(h) any graphite or vanadium discoveries not being in high-enough
concentration to make it economic to extract the minerals; (i)
currently pending or new litigation or arbitration; and (j) other
risk 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/20210105005541/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
Sales Contact: Jay Wago, Vice President, Sales and
Marketing Phone: 980.242.1605 Email:
Sales@WestwaterResources.net
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