Westwater Resources Responds to Unsolicited Proposal
December 22 2022 - 8:00AM
Business Wire
Westwater Resources, Inc. (NYSE American: WWR), a battery-grade,
natural graphite development company (“Westwater” or “the
Company”), today announced that the Company had received an
unsolicited proposal from Idaho Strategic Resources (NYSE American:
IDR) (“IDR”) on December 15, 2022. IDR publicly disclosed its
proposal on December 22, 2022.
Westwater is focused on developing battery-grade natural
graphite products through its Kellyton advanced graphite materials
processing plant (the “Kellyton Plant”) that is under construction
in east-central Alabama. Westwater also holds the mineral rights to
mine graphite from two properties in Alabama, one in Coosa County
and the other in Chilton County, and efforts have begun to permit
the graphite deposit in Coosa County. The Company has estimated the
cost to construct and commission Phase I of the Kellyton Plant to
be approximately $202 million, of which approximately $50 million
has been incurred through the end of the third quarter of Fiscal
Year 2022. With approximately $100 million in cash on its balance
sheet as of September 30, 2022, the Company is considering various
forms of financing to fund the remaining construction of the
Kellyton Plant.
IDR first contacted Westwater in early December 2022 regarding a
potential transaction. Although Westwater offered to hold an
introductory call with IDR in late December 2022, IDR choose,
instead, to submit an unsolicited proposal to Westwater on December
15, 2022, prior to having any direct dialogue with Westwater. The
proposal lacked important information regarding the ability of IDR
to finance its existing business plans. Furthermore, the proposal
did not include any information regarding the ability of a combined
company to advance the construction of the Kellyton Plant or
Westwater’s business plans. After considering the proposal with the
Westwater Board and management team, on December 19, 2022, the
Board and management determined that, at this time, it was not in
the best interests of the Company to pursue the proposal
further.
IDR’s financial statements as of September 30, 2022 revealed
that IDR has negative operating cash flow for first nine months of
2022 and had cash on hand, net of accounts payables, accrued
payroll related liabilities, and current note payable obligations
of less than $1 million, which indicates that IDR:
- lacks sufficient financial resources to advance its business,
and would likely siphon resources from Westwater to fund unproven
exploration projects;
- lacks the resources to complete Phase I construction of the
Kellyton Plant; and
- cannot even cover the transaction costs associated with its own
proposal.
Further, Westwater understands that IDR operates a single gold
mine and mill, and that it is exploring properties for thorium and
rare earth element mining as well as additional gold mining – but
it does not own, and it does not mine any graphite properties or
have any technical expertise in producing advanced graphite
products.
Taken as a whole, Westwater believes the proposal advanced by
IDR:
- Lacks technical or strategic synergies as it appears to be
premised on discarding the Kellyton Plant which has been under
construction for approximately one year and is expected to position
the Company at the forefront of the domestic energy
transition;
- Is an opportunistic attempt by IDR to utilize cash from
Westwater’s balance sheet that is based on a false assumption that
the Westwater’s cash balance is available to advanced IDR’s
business plan. However, Westwater’s cash balance is already
substantially committed to the construction of Phase I of the
Kellyton Plant; and
- As previously stated by Westwater, the Company is working to
secure the additional funding needed to complete Phase I
construction and does not believe the proposal unlocks additional
opportunities to complete the funding of Phase I of the Kellyton
Plant. Rather, this opportunistic proposal represents an
unnecessary distraction and cost to the Company.
For the reasons outlined above, Westwater responded to IDR that,
at this time, it was not in the best interests of the Company to
pursue the proposal further at this time.
About Westwater Resources, Inc.
Westwater Resources, Inc. (NYSE American: WWR) is focused on
developing battery-grade, natural graphite products. The Company’s
primary project is the Kellyton graphite processing plant that is
under construction in east-central Alabama. In addition, the
Company’s Coosa graphite deposit is the most advanced natural flake
graphite deposit in the contiguous United States — and is located
across 41,965 acres (~17,000 hectares) in Coosa County, 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 and phrases such as
“estimated,” “expected,” “focused on,” and other similar words and
phrases. Forward-looking statements in this release include, among
other things: plans for, the cost of, and the potential for
financing the construction and commissioning of the Kellyton
graphite processing plant; plans for permitting and the technical
expertise in the mining of the Coosa graphite deposit; and
positioning of the Company at the forefront of the domestic energy
transition. Westwater cautions that there are a number of important
factors that could cause actual results to differ materially from
the forward-looking information that has been provided. Investors
are 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 Westwater; accordingly, there can
be no assurance that such suggested results will be realized.
Additional risks factors relevant to Westwater‘s future prospects
are discussed in the Westwater Resources, Inc. Annual Report on
Form 10-K for the year ended December 31, 2021, and subsequent
securities filings.
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version on businesswire.com: https://www.businesswire.com/news/home/20221221005671/en/
Westwater Resources, Inc. Email: Info@WestwaterResources.net
Investor Relations Porter, LeVay & Rose Michael
Porter, President Phone: 212.564.4700 Email: Westwater@plrinvest.com
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