Benzinga | Feb 16, 2021 08:15AM EST

Westwater Resources Announces Year-End 2020 Results And Business Update; Co. Says Is Expanding Battery Graphite Manufacturing Business With Pilot Program

Company Expanding Battery Graphite Manufacturing Business with Pilot Program

Westwater Has Developed A New, More Sustainable Processing Method for Purification of Graphite

Battery Graphite Market Expected to Grow at an Annual Rate of 20% Over the Next 10 Years

Westwater Resources, Inc. (NASDAQ:WWR), an explorer and developer of U.S.-based mineral resources essential for batteries for energy storage, today announced its results for the year ended December 31, 2020.

"2020 was an immensely successful year for us. We sold our uranium assets and commenced graphite production with our Pilot Program, and as a result, we are now focused on processing battery-grade graphite products for an energy-dependent world," said Chris Jones, CEO of Westwater Resources. "This major step into the energy storage economy, which aligns with electrification and decarbonization transitions around the world, is critical to our success and has the potential to provide remarkable new value to our Shareholders. The Westwater team is experienced and has the strengths needed to execute a business plan that manufactures battery graphite products, while keeping our promise to be environmentally sensitive and sustainable. Westwater expects to be producing commercial quantities of battery-grade graphite in 2023."

BUSINESS UPDATE

Graphite

Graphite has become essential to people -- it is used in products that touch almost every aspect of life, including airplanes, cars, flashlights, laptops, smartphones, and smoke detectors. The battery-grade graphite market has been growing with no signs of slowing. Westwater is now positioned to benefit from this growth with its battery-grade graphite. The United States has no domestically sourced and processed graphite production, and Westwater can provide a domestic battery-grade source of this important material. The Company has developed a patent-pending proprietary process for the purification of graphite; this process is anticipated to be environmentally safe and cost-efficient, giving Westwater a distinct advantage over its competitors. A definitive feasibility study is expected to be completed in mid-2021 for our commercial processing plant, which is planned for startup in late 2022.

Vanadium

Vanadium is a lightweight metal used in the construction industry, in high strength steel alloys and in large grid storage batteries. Vanadium batteries are also used in solar and wind power generators to make their installations more reliable electricity providers. Currently 85 percent of all vanadium is imported into the United States from South Africa, China and Russia. There is no significant production of vanadium currently in the United States. Over the last several years, Westwater has discussed and updated the marketplace with regard to its vanadium mineralization. During the first half of 2021, the Company anticipates drilling various targets on its Coosa property to expand its knowledge of the project's geology, examine the core and/or cutting results for mineral constituents and evaluate its economic potential.

U.S. Critical Minerals List

Both graphite and vanadium have been listed on the U.S. Government Critical Minerals List because they are "essential to the economic and national security of the United States." Priority is being given to these minerals by the U.S. Government.

Recent News

On January 5, 2021, Westwater 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 Texas uranium assets in the amount of approximately $5.2 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 $0.7 million 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.

On December 7, 2020, Westwater provided an update on progress at its pilot plant operations at Dorfner Anzaplan's facilities near Amberg, Germany, as well as at facilities in Frankfurt, Germany, Chicago, Illinois and Buffalo, New York. This pilot program, performed at several individual facilities has produced high quality battery-grade graphite products which were previously produced at a bench scale. Westwater intends to sell these three battery-grade graphite products: ULTRA-PMG(tm), ULTRA-CSPG(tm) and ULTRA-DEXDG(tm).

FINANCIAL SUMMARY

"We significantly strengthened our balance sheet during the fourth quarter of 2020 with the sale of our uranium business and disposal of its legacy asset retirement obligation liabilities, and with the addition of over $50 million to our treasury," said Jeff Vigil, CFO of Westwater. "Our successful strategic shift to battery materials has resonated with investors and the capital markets, reflective in the increase in our market capitalization from $7 million beginning 2020 to $95 million ending 2020, and $260 million as of February 12, 2021. With an additional $50 million added to the treasury since the end of 2020, we are on the path towards raising the necessary financial resources to direct at our graphite beneficiation business plan."