CENTENNIAL, Colo.--(BUSINESS WIRE)--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.
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.