Westwater Resources Reports Third Quarter 2018 Operating Results

CENTENNIAL, Colo.–(BUSINESS WIRE)–$WWRWestwater Resources, Inc. (“WWR” or “the Company”) (Nasdaq: WWR),
an energy materials development company, today announced its results
for the third quarter of fiscal year 2018, along with a business outlook
and new developments in its energy materials business for the remainder
of 2018 and calendar year 2019.

Christopher M. Jones, President and Chief Executive Officer of WWR,
commented, “We are continuing to work towards the development of battery
grade graphite production capacity through our Coosa Graphite Project,
with a goal to advance cash flows for Westwater Resources into 2021.
This will place WWR in the battery graphite market, enabling us to make
products for all types of batteries, including lithium ion batteries
that are driving the transportation market, as well as most other
batteries throughout the marketplace – from alkaline power cells, lead
acid batteries, to all types of rechargeable and non-rechargeable
lithium batteries. At the same time, we are developing our lithium
exploration effort, which provides us a second line of development for
similar markets that our graphite will serve (transportation, lithium
ion batteries, etc.). In addition, we retain our leverage to the rising
uranium price with properties and facilities in New Mexico and Texas.”

GRAPHITE BUSINESS DEVELOPMENT:

  • We have over 2 dozen NDAs in place for discussions with potential
    customers.
  • On Oct. 24, 2018, WWR announced the successful production of over 4
    kilograms of Purified Micronized Graphite (“PMG”). PMG is used as a
    conductivity enhancement material for a variety of battery
    applications. Electrical performance testing by an independent lab
    confirmed that the PMG performs as well as expected. Samples of PMG
    are being tested by two potential customers.
  • Work continues with business, state and local officials in Alabama to
    site, permit and explore business incentives.
  • The Company gave a well-received presentation at Benchmark
    Mineral Intelligence’s
    Graphite
    + Anodes 2018
    ’ Conference, on October 23rd in Newport Beach,
    California. The presentation included a Company overview and an update
    on Westwater’s graphite business for potential customers.

LITHIUM EXPLORATION PROJECTS:

  • On March 24, 2018, the Company exercised an option to acquire 76
    unpatented placer mining claims covering an area of approximately
    3,040 acres within the Columbus Salt Marsh area of Esmeralda County,
    Nevada.
  • The Company continues to develop its water rights positions and
    geological knowledge on its three highly prospective lithium-enriched
    brine properties in Nevada and Utah, USA.

URANIUM PROJECTS:

  • On Sept. 21st, 2018 the Company made public an analysis of the current
    uranium market that backs up the Company’s belief that a continued
    rise in uranium prices is likely. The analysis notes that spot market
    prices for uranium concentrate are up from $17/lb. to $27.50/lb. since
    2016 and have increased almost $5/lb. in 2018 alone. Market volumes
    for uranium concentrate are almost 57 million pounds so far in 2018,
    the highest spot market volume since 1992. This makes it clear there
    is strong interest in securing uranium supplies at lower prices as a
    hedge. Five-year futures have also risen to $35/lb. since August.
  • On June 20, 2018, the Turkish government notified the Company that the
    mining and exploration licenses for its Temrezli and Sefaatli projects
    located in Turkey have been revoked and potential compensation has
    been proffered. We will continue to investigate the legality of this
    action and what remedies, including compensation, might be available.
  • Continued restoration/reclamation activities are ongoing in South
    Texas. Work continues to complete reclamation at Rosita in Production
    Areas 1 & 2 and reclamation at Vasquez.
  • The Company published a new technical report outlining resources on
    its property holdings at Ambrosia Lake in New Mexico.
  • The US Environmental Protection Agency (EPA) has recently withdrawn a
    rule change proposed in 2017 for groundwater restoration that would
    have raised costs for the uranium industry with almost no benefit to
    the environment if enacted. WWR is currently involved in two uranium
    reclamation projects, and this EPA decision is an important sign that
    future reclamation operations will not be impacted by poorly conceived
    rules. WWR is committed to the safety of the environment and the
    public, and fully supports compliance with sensible and effective
    regulations.
  • Texas Supreme Court Success: After a
    nine-year legal dispute with Kleberg County, Westwater has prevailed
    at the Texas Supreme Court, enabling future reclamation of some of our
    wellfields at our Kingsville Dome site.

CORPORATE ACTIVITIES:

  • Karli Anderson Joins WWR’S BOD: The
    Company announced that Karli Anderson had been appointed to the Board
    of Directors as of September 18, 2018. Anderson, 45, most recently
    served as Vice President Investor Relations for Royal Gold, Inc
    (NASDAQ: RGLD), a precious metals stream and royalty company with over
    190 properties across six continents. Previously, Karli was a Senior
    Director of Investor Relations for Newmont Mining Corporation (NYSE:
    NEM), one of the world’s largest gold mining companies. Karli also
    serves on the Board of Directors of the Women’s Mining Coalition.
  • M&A Efforts: WWR maintains an
    opportunistic posture in mergers and acquisitions by focusing on
    low-cost, high-value development opportunities in the resource sector.
  • Cost Rationalization Efforts: The Company
    continues to seek to reduce operating and general and administrative
    expenditures.
  • Property Monetization: On January 5,
    2018, Laramide Resources Ltd. (“Laramide”) made the first required
    $1.5 million principal payment to Westwater on its original $5.0
    million promissory note, consisting of $0.75 million in cash and the
    issuance of 1,982,483 of Laramide’s common shares. Laramide also made
    interest payments in 2018 of approximately $0.4 million in cash.
  • Equity Capital Raises: In 2018 to date,
    the Company has raised net proceeds of $7.8 million, comprised of $1.3
    million from sales of stock pursuant to the Company’s Stock Purchase
    Agreements with Aspire Capital (now canceled), $3.6 million from sales
    of stock from the Company’s ATM facility with Cantor Fitzgerald and a
    registered direct offering of $2.9 million from the sale of common
    stock and pre-funded warrants to Aspire Capital which closed on June
    14, 2018. All pre-funded warrants were exercised in August 2018.

Key Financial Highlights

Table 1: Financial Summary

 

($ and Shares in 000’s, Except Per Share)

   

3Q 2018

   

3Q 2017

    3Q Variance    

9 Mos
2018

   

9 Mos
2017

   

9 Mo
Variance

Net Cash Used in Operations     $ (2,943 )     $ (2,542 )     16 %     $ (9,032 )     $ (8,876 )     2 %
Mineral Property Expenses     $ (955 )     $ (1,316 )     -27 %     $ (2,706 )     $ (3,637 )     -26 %
General and Administrative, including Non-cash Stock Comp    

$

(1,803

)

   

$

(1,700

)

   

6

%

   

$

(5,662

)

   

$

(4,976

)

   

14

%

Net Loss     $ (3,137 )     $ (2,983 )     5 %     $ (27,012 )     $ (3,778 )     615 %
Net Loss Per Share     $ (0.06 )     $ (0.12 )     -50 %     $ (0.68 )     $ (.16 )     325 %
Avg. Weighted Shares Outstanding      

51,118

       

25,037

     

104

%

     

39,750

       

23,764

     

67

%

                       
  • Net cash used in operations. Net cash
    used in operating activities was $2.9 million in 3Q-2018, compared to
    $2.5 million in 3Q-2017. For the 9 Months-2018, net cash used in
    operating activities was $9.0 million compared to $8.9 million for 9
    Months-2017. The increases for both periods reflect increases in cash
    used for general working capital requirements.
  • Operating expenses. Mineral property
    expenses decreased by approximately $0.4 million for 3Q-2018 from
    3Q-2017. The decrease was primarily due to a reduction in exploration
    activities in the lithium projects. For the 9 Months-2018, mineral
    property expenses decreased $0.9 million from the same period in 2017.
    The decrease was mostly the result of a reduction of exploration
    activities in the lithium projects of $0.6 million and a reduction in
    land holding costs for the Cebolleta and Juan Tafoya uranium
    properties of $0.4 million. General and administrative expenses,
    however, increased by $0.1 million and $0.7 million for the 3Q-2018
    and 9 Months-2018 periods, respectively, as compared with the
    corresponding periods in 2017. The increase of $0.1 million for
    Q3-2018 was due to an increase in stock compensation expense. The
    increase of $0.7 million for 9 Months-2018 was due to increases in
    salaries and payroll burden of $0.3 million and consulting and
    professional expenses of $0.4 million, primarily related to
    post-acquisition Alabama Graphite operations. Additionally, stock
    compensation expense increased by $0.2 million as compared to the
    corresponding period in 2017. These increases were partially offset by
    a decrease in legal, accounting and public company expenses of $0.2
    million.
  • Net loss. Consolidated net loss for the
    three months ended September 30, 2018 was $3.1 million, or $0.06 per
    share, as compared with a loss of $3.0 million, or $0.12 per share for
    the same period in 2017. The increase in our consolidated net loss
    from the respective prior period was primarily the result of an
    increase in loss on sale of marketable securities of $0.4 million and
    an increase in general and administrative expenses of $0.1 million.
    These increases were mostly offset by a decrease in mineral property
    expenses of $0.4 million. Consolidated net loss for 9 Months-2018 was
    $27.0 million, or $0.68 per share, as compared with $3.8 million, or
    $0.16 per share for the same period in 2017. The increase in the
    consolidated net loss of $23.1 million was the result of the
    combination of the $18.0 million impairment charge for the Temrezli
    and Sefaatli uranium mineral interests recorded in 2018 plus a
    one-time gain of $4.9 million from the sale of the Churchrock and
    Crownpoint projects recorded in 2017.
  • Cash and working capital. The Company’s
    cash balance and working capital was $1.4 million and $0.9 million,
    respectively, at September 30, 2018. This compares to working capital
    of $3.9 million at December 31, 2017. The $3.0 million decrease in
    working capital was due to $1.5 million in loan advances and
    acquisition costs for the acquisition of Alabama Graphite, a $0.4
    million reduction in accounts payable and continued funding of
    operating losses from the sale proceeds of available-for-sale
    marketable securities of $0.8 million and from notes receivable
    proceeds of $1.1 million.
  • As of October 31, 2018, the Company held cash and cash equivalents
    totaling approximately $1.7 million. The Company’s working capital,
    along with the anticipated funding from the Company’s financing
    agreements described in the Company’s Form 10-Q filed on November 7,
    2018, is expected to provide the necessary liquidity through January
    31, 2020.
  • Shares outstanding. Total shares
    outstanding at October 31, 2018 were 66,332,617.

About Westwater Resources

WWR is focused on developing energy-related materials. The Company’s
battery materials projects include the Coosa Graphite Project and the
associated Coosa Graphite Mine located across 41,900 acres (17,000 ha)
in east-central Alabama. In addition, the Company maintains lithium
mineral properties in three prospective lithium brine basins in Nevada
and Utah. WWR’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 ha) of
prospective in-situ recovery uranium projects. In New Mexico, the
Company controls mineral rights encompassing approximately 188,700 acres
(76,394 ha) 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., WWR 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 Company’s growth, developments at the
Company’s projects, including future exploration costs and results,
intent and timing of new and existing programs and testing, the future
production of graphite, including on a pilot scale, and future sales of
graphite, including as a first mover for key components of electrical
storage devices, the expected demand for and price of uranium, and the
Company’s liquidity and cash demands, including future capital markets
financing and disposition activities, 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 the acquired graphite 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 and
uranium; (d) risks associated with our operations; (e) operating
conditions at the Company’s projects; (f) government and tribal
regulation of the graphite industry, lithium industry, uranium industry,
and the power industry; (g) world-wide graphite, lithium 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 results; (I) any graphite, lithium 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 project.

Contacts

Westwater Resources Contact:
Christopher M. Jones,
303-531-0480
President & CEO
or
Jeff Vigil,
303-531-0481
VP Finance & CFO
Info@WestwaterResources.net
or
Investor
Relations Contact:

Porter, LeVay and Rose
Michael Porter,
212-564-4700
Westwater@plrinvest.com

Leave a Reply

Sky Optics Media drone video