Definitive Feasibility Study Completed –
Contractor Proposals Initiated
Coosa Graphite Deposit Exploration to
Continue for Remainder of 2021
Westwater Resources, Inc. (NYSE: American: WWR) (“Westwater
Resources” or “the Company”), a battery grade natural graphite
development company, today announced its third quarter results for
the period ended September 30, 2021 and provided an update on its
Coosa Graphite Project (“Project”).
During the nine months ended September 30, 2021, Westwater
substantially completed its pilot program at facilities located in
Amberg and Frankfort Germany, Chicago, IL, and Buffalo, NY. These
facilities produced 13.2 metric tonnes of battery-grade graphite
which provided product samples for testing by potential customers.
Results from the pilot program operations were also used to inform
and enhance design work for the commercial production facility,
which was incorporated into the Definitive Feasibility Study
(“DFS”).
On October 11, 2021, Westwater Resources announced the results
of the DFS pertaining to Phase I of the Project and a plan and
design for Phase II of the Project at a pre-feasibility level
(“PFS”). The capital costs of Phase I are estimated at $202 million
and, after processing and purification, the Company expects to
produce approximately 7,500 mt per year of purified graphite
products. The capital costs of Phase II are estimated at $464
million and, after processing and purification, the Company expects
to produce approximately 32,400 mt per year of purified graphite
products from both phases. The Company intends to initiate a second
DFS for Phase II upon completion and commissioning of Phase I.
On October 11, 2021, the Westwater Resources Board of Directors
approved the construction and commissioning plan for Phase I of the
Project. Construction activities are expected to begin before the
end of 2021 and, beginning in early 2023, Phase I of the facility
is expected to begin production operations with purchased graphite
feedstock from outside sources until at least 2028; after 2028,
Westwater Resources expects to produce graphite feedstock from its
Coosa Graphite Deposit (near Rockford, AL). The Company anticipates
financing Phase I expenditures using its current treasury and its
existing finance facilities and may evaluate opportunities for
project financing utilizing debt and equity instruments.
On October 13, 2021, Westwater completed the purchase of two
buildings that total approximately 90,000 sq. ft. to support the
Project. These buildings are adjacent to the graphite processing
facility and will be used for the Project’s administrative offices,
laboratory and warehousing space. The purchase of these two
buildings mitigates the need for certain construction
activities.
Immediate next steps are the creation of the construction
management team, which will be led by Chad Potter, Westwater
Resources’ Chief Operating Officer. Westwater Resources is in the
process of soliciting proposals for construction management,
engineering and procurement and for various contractors who will
build and assemble the processing facility.
The Coosa Graphite Deposit exploration effort will continue
throughout the remainder of the year, and the Company is actively
drilling various targets to expand its knowledge of the geology and
improve the existing resource model. In addition, vanadium
mineralization is expected to be evaluated to ascertain any
economic potential.
The President of the United States signed an executive order
that seeks to provide for a more resilient supply chain to
revitalize and rebuild domestic capacity of graphite and vanadium
to reduce the United States’ heavy dependence on China. Both
minerals have been given critical metal status. With regard to
graphite, the United States is almost 100 percent dependent on
imports for battery-grade graphite, which is currently the primary
anode material in the Lithium-Ion batteries that power smartphones,
laptops, electric vehicles and store power generated from
intermittent renewable energy sources. It is expected that the
Project will ultimately supply natural flake graphite for
beneficiation into battery-grade graphite for all types of
batteries.
“The past nine months have been the most productive period in
the Company’s recent history,” said Christopher Jones, CEO of
Westwater Resources. “We completed our pilot program which produced
13.2 metric tonnes of graphite for final testing. We sent samples
of our products to several customers for evaluation and are in
contact with more potential customers. Our marketing efforts have
resulted in engagements with potential customers with various
battery manufacturers, original equipment manufacturers and battery
developers.”
“We are excited about the results of the DFS for the Project,”
Jones continued. “Our Board of Directors approved an investment of
$202 million to build Phase I of our graphite processing facility,
which is expected to be operational in early 2023. We also
purchased two buildings which will support the development of the
Project. These buildings are adjacent to the proposed site of the
graphite processing facility and will be used for the Project’s
administrative offices, laboratory, and warehouse space. We have
requested proposals from contractors, with construction expected to
begin before the end of the year.”
“Westwater Resources is grateful to the Governor of Alabama and
other state and local leaders who worked with us to bring this
unique graphite project to the state,” Jones concluded. “We expect
to benefit from the Alabama Jobs Act by securing certain tax
credits and other incentives for over 10 years and the grant of
land for the siting of the processing facility at minimal cost. At
the Westwater Resources corporate level, this year we joined the
Russell Microcap Index, an important milestone for us, and we
transferred our listing to the NYSE American. All around, it’s been
a productive nine months for us.”
FINANCIAL REVIEW
($ in 000's, Except Per Share Amounts)
Q3
2021
Q3
2020
Variance
Net Cash Used in Operations*
$(13,040)
$(10,134)
29%
Product Development Expenses
$(1,834)
$(1,641)
12%
General and Administrative Expenses**
$(2,189)
$(1,941)
13%
Net Loss
$(4,568)
$(9,751)
-53%
Net Loss Per Share
$(0.13)
$(1.23)
-89%
Avg. Weighted Shares Outstanding
34,331,778
7,904,522
334%
* Net Cash Used in Operations is presented
on a year-to-date basis.
**General and Administrative Expenses for
the three months ended September 30, 2020, includes $405 thousand
of expense attributable to discontinued operations.
Net Cash Used in Consolidated Operations
Net cash used in operating activities for the first nine months
of 2021 increased $2.9 million compared to the same period in the
prior year. The increase was due primarily to increased graphite
product development, exploration, general and administrative, and
arbitration costs in 2021.
Product Development Expenses
Product development expenses for the third quarter 2021
increased $0.2 million, compared to the same prior-year quarter.
Product development costs were primarily comprised of expenses for
our DFS, which began in February 2021 and was completed in October
2021, and our product development program continued through the
first nine months of 2021. The product development program includes
costs incurred to collaborate with outside experts for lab work,
product testing and other auxiliary costs associated with the Coosa
Project.
General and Administration Costs
General and Administration expenses for the third quarter 2021
increased $0.2 million compared to the same prior-year quarter, due
primarily to higher stock compensation, and sales and marketing
efforts that began in the third quarter of 2020 and have continued
throughout 2021. These increases were offset partially by lower
personnel costs due to the sale of Westwater’s uranium business on
December 31, 2020.
Net Loss
Net loss for the three months ended September 30, 2021, was $4.6
million, or $0.13 per share, as compared with a net loss of $9.8
million or $1.23 per share in 2020. The $5.2 million decrease in
the net loss was due primarily to the elimination of costs from our
former uranium business, and an unrealized gain related to the
enCore common stock of $0.5 million. These decreases were offset
partially by increases in general and administrative, arbitration,
exploration and product development expenses.
Cash and Subsequent Financing Activity
As of September 30, 2021, the Company’s cash balance was $119.0
million compared to $5.5 million as of September 30, 2020. The
significant increase in 2021 was due to capital raises utilizing
the company’s financing facilities with Cantor Fitzgerald & Co.
and Lincoln Park Capital LLC.
Subsequent to September 30, 2021, and through the date of this
release, the company has sold 637,200 common shares for net
proceeds of $2.3 million – pursuant to its financing facility with
Cantor Fitzgerald & Co. – and liquidated its holdings of enCore
common stock for net cash proceeds of $3.6 million.
Shares Outstanding
Total shares outstanding are 35.3 million as of November 11,
2021.
Conference Call
Management will host a conference call to discuss these results
on November 11, 2021, at 10:00 AM EDT (8:00 AM Mountain).
The dial-in numbers are: Canada/USA TF: 1-800-319-4610
International Toll: +1-604-638-5340 Callers should dial in 5 – 10
min prior to the scheduled start time and simply ask to join your
call.
For a replay of the call: Canada/USA TF: 1-855-669-9658
International Toll: +1-412-317-0088 Replay Access Code: 7635
About Westwater Resources Inc.
Westwater Resources Inc. (NYSE American: WWR) is focused on
developing battery-grade graphite. The Company’s primary project is
the Coosa Graphite Project — the most advanced natural flake
graphite project in the contiguous United States — and the
associated Coosa Graphite Deposit located across 41,900 acres
(~17,000 hectares) in east-central Alabama. For more information,
visit www.westwaterresources.net.
Cautionary Statement Regarding Forward-Looking
Statements
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. Forward looking statements
include, among other things, statements concerning the construction
and operation of the Company’s graphite processing facility and the
related costs and schedules associated therewith, estimated
production levels, expected sources of graphite feedstock,
potential sources of capital and expected benefit from the Alabama
Jobs Act and tax credits. The company cautions that there are
certain factors that could cause actual results to differ
materially from the forward-looking information that has been
provided. The reader is cautioned not to put undue reliance on this
forward-looking information, which is not a guarantee of future
performance and is subject to a number of uncertainties and other
factors, many of which are outside the control of the company;
accordingly, there can be no assurance that such suggested results
will be realized. The following factors, in addition to those
discussed in Westwater Resources’ Annual Report on Form 10-K for
the year ended December 31, 2020, and subsequent securities
filings, could cause actual results to differ materially from
management expectations as suggested by such forward-looking
information: (a) the spot price and long-term contract price of
graphite (both flake graphite feedstock and purified graphite
products) and vanadium, and the world-wide supply and demand of
graphite and vanadium; (b) the effects, extent and timing of the
entry of additional competition in the markets in which the Company
operates; (c) the ability to obtain contracts with customers; (d)
available sources and transportation of graphite feedstock; (e)
government regulation of the mining and processing industries in
the United States; (f) the Company’s ability to maintain and timely
receive mining and other permits from regulatory agencies; (g) the
ability to control costs and avoid cost and schedule overruns
during the development, construction and operation of the Project;
(h) risks associated with the Company’s operations and the
operations of the Company’s partners, including the impact of
COVID-19 and supply chain disruptions; (j) unanticipated
geological, processing, regulatory and legal or other problems the
Company may encounter; (k) the results of the Company’s exploration
activities, and the possibility that future exploration results may
be materially less promising than initial exploration results; (l)
any graphite or vanadium discoveries not being in high enough
concentration to make it economic to extract the metals; (m) the
Company’s ability to finance growth plans; (n) currently pending or
new litigation or arbitration; 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/20211111005355/en/
Westwater Resources Inc. Christopher M. Jones, President
& CEO Phone: 303.531.0480
Jeff Vigil, VP Finance & CFO Phone: 303.531.0481 Email:
Info@WestwaterResources.net
Product Sales Contact: Jay Wago, Vice President – Sales and
Marketing Phone: 303.531.0472 Email:
Sales@westwaterresources.net
Investor Relations Porter, LeVay & Rose Michael
Porter, President Phone: 212.564.4700 Email:
Westwater@plrinvest.com
Westwater Resources (NASDAQ:WWR)
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