Market Overview

Westwater Resources Reports 2018 Results & Energy Minerals Business Update


Expands Energy Materials Assets with Significant Vanadium Discovery
at Coosa

Westwater Resources, Inc. ("Westwater," or the "Company") (Nasdaq: WWR), an energy materials development company, announced its results
for fiscal year 2018, and provided an outlook on its energy minerals
business development for 2019.

Christopher M. Jones, President and Chief Executive Officer, said, "We
are pleased with our accomplishments in 2018, including our acquisition
and integration of Alabama Graphite Corp., which gives us an advantage
in a key component of electrical storage devices. We ended 2018 with the
discovery of substantial vanadium mineralization on our existing mineral
leases in Alabama. We are making progress on all fronts; many facets of
Westwater's business are developing simultaneously. Collectively, I
believe these factors will continue to benefit our business and further
advance Westwater all while maximizing shareholder value."

Highlights for 2018 and to Date

    • On November 29, 2018, Westwater announced the discovery of
      significant levels of vanadium concentrations at several locales
      within the graphitic schists at the Company's Coosa Graphite
      Project ("Coosa Project").
    • On February 19, 2019, concurrent with the issuance of this press
      release the Company also announced that it has received
      independent lab results that demonstrated a wide-spread
      distribution of vanadium mineralization throughout the central
      portion of the Company's mineral holdings within the Coosa Project
      in Alabama. The wide-spread distribution of highly anomalous
      vanadium mineralization, commonly in association with strong
      graphite mineralization, points to the need for comprehensive
      follow-up drilling and trenching to more fully define the ultimate
      distribution and intensity (grade) of the graphite and vanadium
      resources of the Coosa Project. Planning is underway for
      additional core drilling and surface trenching of individual
      target areas and extensions of known mineralized zones.
      Additionally, Westwater will initiate a program to evaluate and
      assess various processing options to economically recover vanadium
      as a byproduct to graphite.
    • Pilot plant planning for operations remains on-track for 2019.
    • Plant start up and initial operations will utilize purchased
      graphite feedstock, bringing forward revenues and cash flow in
    • First revenues are expected in 2021.
    • Positive cash flow for the graphite business is expected in 2022.
    • The mine is planned for construction in 2025, with planned
      production in 2026 – funded from operating cash flow rather than
      external financing.
    • Net present values are estimated to be $400 - $500 million,
      depending on contingency.
    • Capital expenditures, now including pilot plant studies and final
      plant design, are estimated at $42.0 million.
    • We have over two-dozen Non-Disclosure Agreements in place for
      discussions with potential customers.
    • On September 6, 2018, Westwater 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
    • 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
      plan for potential customers.
    • On March 24, 2018, the Company exercised an option to purchase a
      block of unpatented placer mining claims covering an area of
      approximately 3,000 acres within the Columbus Salt Marsh area of
      Esmeralda County, Nevada. The claims adjoin a portion of the
      Company's other property holdings at its Columbus Basin Project,
      expanding the project area within the basin to approximately
      14,200 acres.
    • 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.
  • URANIUM PROJECTS: Activities included:
    • On September 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. This makes it clear
      there is strong interest in securing uranium supplies at lower
      prices as a hedge. Uranium spot prices hit $29.15 per pound on
      November 19, 2018 its highest level since March 2016. Five-year
      futures have also risen to over $35/lb. since August.
    • Westwater has completed wellfield plugging at the Vasquez Project
      in Texas and has received certification by the Texas Commission on
      Environmental Quality (TCEQ). This paves the way for surface
      reclamation completion and bond release applications in 2019.
      Reclamation of the waste disposal well and its associated pond, as
      well as the remainder of the surface is scheduled for completion
      in 2019.
    • At the Rosita Project in Texas, the wellfield Production Areas 1 &
      2 are plugged, and surface reclamation in those areas is also
      expected to be completed in 2019.
    • The Company published a new technical report outlining resources
      on its property holdings at Ambrosia Lake in New Mexico.
      December 21, 2018, the International Centre for Settlement of
      Investment Disputes (ICSID) registered Westwater's Request for
      Arbitration. The registration is the next step in the process
      whereby Westwater will recover compensation from the Republic of
      Turkey for its takings of the Temrezli and Sefaatli uranium
      properties. 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 had been revoked and
      proffered as-yet undefined compensation.
      Anderson joined Westwater's Board of Directors on September 18,
      2018. Ms. 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, Ms. Anderson was a Senior Director of
      Investor Relations for Newmont Mining Corporation (NYSE:NEM), one
      of the world's largest gold mining companies. Ms. Anderson also
      serves on the Board of Directors of the Women's Mining Coalition.
      The US Environmental Protection Agency (EPA) recently withdrew 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. Westwater 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. Westwater is
      committed to the safety of the environment and the public, and
      fully supports compliance with sensible and effective regulations.
      23, 2018, after a nine-year legal dispute with Kleberg County,
      Texas, involving the Company's Kingsville Dome site, Westwater
      prevailed at the Texas Supreme Court, enabling future reclamation
      of some of our wellfields at Kingsville.
      Company continues to seek to reduce operating and general and
      administrative expenditures.
    • EQUITY CAPITAL RAISES: In 2018, the
      Company raised net proceeds of $8.7 million, comprised of $1.3
      million from sales of stock pursuant to the Company's Stock
      Purchase Agreements with Aspire Capital (now canceled), $4.5
      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.
      working capital balances at December 31, 2018 were $1.6 million
      and $1.0 million, respectively.

Key Financial Highlights
Table 1: Financial Summary


($ and Shares in 000, Except Per Share)







Net Cash Used in Operations   $ (11,648 )  



)   1 %
Mineral Property Expenses   $ (3,538 )   $ (4,584 )   -23 %
General and Administrative, including Non-cash Stock Compensation   $ (7,357 )   $ (6,614 )   11 %
Net Loss   $ (35,684 )   $ (19,288 )   85 %
Net Loss Per Share   $ (0.77 )   $ (0.78 )   1 %
Weighted Avg. Shares Outstanding     46,384       24,737     88 %
  • Net cash used in operations. Net cash
    used in operating activities was $11.7 million in 2018, compared to
    $11.6 million in 2017. The increase of $0.1 million reflected an
    increase in cash used for prepaids and accounts payable of $1.1
    million, which was mostly offset by a decrease in operating expenses
    of $1.0 million.
  • Operating expenses. Mineral property
    expenses for the year ended December 31, 2018 were $3.5 million, as
    compared with $4.6 million for the year ended December 31, 2017. The
    decrease was primarily due to a reduction in exploration activities in
    our lithium projects in Utah and Nevada, and a reduction in land
    holding costs for the Cebolleta and Juan Tafoya uranium properties of
    $0.4 million. However, general and administrative expense increased by
    $0.7 million for fiscal year 2018, compared with fiscal year 2017. The
    increase of $0.7 million in 2018 was due to increases in salaries and
    payroll burden of $0.3 million, largely due to a higher head count and
    consulting and professional expenses of $0.4 million, primarily
    related to post-acquisition Alabama Graphite operations.
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