Westwater Resources Reports First Quarter 2019 Operating Results

CENTENNIAL, Colo.–(BUSINESS WIRE)–lt;a href=”https://twitter.com/search?q=%24WWR&src=ctag” target=”_blank”gt;$WWRlt;/agt;–Westwater Resources, Inc. (Nasdaq: WWR), an energy materials
development company, announced today its results for the first quarter
of fiscal year 2019, and discussed its business outlook and its energy
materials business development for the remainder of 2019.

Christopher M. Jones, President and Chief Executive Officer, said, “The
beginning of 2019 has been quite eventful for Westwater, where we are
starting to see clear evidence that our plans for generating shareholder
value are coming to fruition. Each of our energy materials segments have
seen meaningful progress. For example, at this time last year, we had
completed our acquisition of Alabama Graphite Corp., for the purpose of
fast-tracking the development of battery grade graphite production
capacity in Alabama. Today, we have independently-sourced data that
aligns closely with our expectations regarding the quality and scope of
the graphite at the Coosa Project. In addition, we have discovered
significant vanadium mineralization at the Project that could bring a
meaningful added opportunity to the Project. As well, the State of
Utah’s grant of water rights for Sal Rica is a positive for our lithium
business. Our uranium reclamation success in Texas also speaks to the
hard, high quality work our employees continue to execute as we push
this company forward. I remain confident that our operational strength,
as well as the quality of our assets, should provide value for our
shareholders.”

Highlights for 1Q-2019 and to Date

  • VANADIUM DISCOVERY: On February 19, 2019,
    Westwater 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.

    • On April 9, 2019, the Company announced a new drilling and
      sampling exploration plan to explore for and define vanadium
      resources, and to further quantify the graphite deposit, on five
      target areas at its Coosa Project in Alabama. The Company believes
      that this exploration plan could advance and enhance the
      evaluation of its existing graphite resource, including the
      possibility for an extension of that mineralization. The Company
      anticipates posting a Technical Report summarizing the vanadium
      exploration plan on the WWR website in May 2019.
  • GRAPHITE PROGRESS: On April 11, 2019,
    Westwater provided independent test results from long-term cycling
    data conducted on uncoated, spherical purified graphite (SPG) from the
    Company’s Coosa Graphite Project:

    • “Near theoretical” reversible capacity was achieved on the first
      cycle.
    • Purification, micronization, spheronization and sizing was
      performed on the natural flake graphite from our Coosa Graphite
      Project utilizing the Company’s proprietary process. The purity
      level achieved was 99.95 wt%.
    • Optimization on electrode formulation was achieved to extend the
      cycling performance. Testing under prolonged cycling conditions
      showed that SPG from the Coosa Graphite Project demonstrated
      stable performance over 150 cycles.
  • On April 19, 2019, Westwater provided the long-term cycling data
    obtained by independent tests conducted on coated spherical purified
    natural crystalline graphite (ULTRA-CSPG) from the Company’s Coosa
    Graphite Project:

    • Extremely low irreversible capacity loss of 4.03% due to optimized
      electrode formulation.
    • First ever long-term cycling data on US sourced CSPG.
    • Very stable cycling performance over 200 cycles.
    • Superior performance compared to the leading CSPG originated from
      China.
  • LITHIUM PROGRESS: On April 12, 2019,
    Westwater announced that its application for the use of 1500 acre-feet
    of groundwater per year has been approved by the Department of Natural
    Resources of the State of Utah. This water is intended for the
    development of lithium mining operations at the Company’s Sal Rica
    Project.

    • The right to use water is very important in the arid American
      West, and this right is essential to the development of lithium
      brine resources at the Sal Rica project.
  • URANIUM PROGRESS: On March 7, 2019,
    Westwater announced that Uranium Royalty Corp. (URC) and its US
    subsidiary have together agreed to purchase four royalties owned by
    Westwater on future uranium production from mineral properties in
    South Dakota, Wyoming and New Mexico, as well as a promissory note in
    the amount of $2.0 million and the related mortgage that the Company
    holds on the Church Rock and Crownpoint properties in New Mexico owned
    by Laramide Resources. URC and its US subsidiary have agreed to
    purchase these interests for collective total consideration of $2.75
    million, including $0.5 million already paid at signing.

    • The balance of $2.25 million will become due and payable at the
      earlier of June 30, 2019 or following the date upon which the
      closing conditions are satisfied.
  • RECLAMATION SUCCESS: On March 4, 2019,
    the Texas Commission on Environmental Quality (TCEQ) certified the
    third phase of site reclamation at the Vasquez Project in Duval
    County, Texas as complete and released a surety bond posted by the
    Company in excess of $208,000. This milestone involved the complete
    reclamation and plugging of 844 production wells formerly used for
    production and water quality monitoring. This success follows a
    similar reclamation milestone achievement at our Rosita property, also
    in Texas.

    • Final reclamation efforts, including surface work and the
      reclamation of a waste disposal well at Vasquez are expected to be
      complete later this year. Once that work is certified as complete
      by the TCEQ, Westwater will follow up with a request for surety
      bond release on that phase, much as we have on previous phases.
  • REVERSE SPLIT: On April 18, 2019 our
    shareholders approved a reverse split of our stock. Subsequently,
    following the close of business on April 22, 2019, we executed a 50-1
    split of our shares. Westwater took this action to regain compliance
    with the Nasdaq $1.00 minimum bid requirement, which allows the
    Company to maintain its listing on this prestigious exchange. As a
    result, we have traded in compliance with Nasdaq requirements for over
    ten days as of this writing.

Key Financial Highlights

Table 1: Financial Summary

   
                 

($ and Shares in 000, Except Per
Share)

      Q1-2019       Q1-2018       Variance
Net Cash Used in Operations       $ (2,740)       $ (3,696)       -26%
Mineral Property Expenses       $ (634)       $ (782)       -19%

General and Administrative,
including Non-Cash Stock
Compensation

      $ (1,836)       $ (1,805)       2%
Net Loss       $ (3,174)       $ (3,419)       -7%
Net Loss Per Share       $ (2.15)       $ (6.11)       -65%

Avg. Weighted Shares
Outstanding

      1,478,233       559,357       164%
 
  • Net cash used in operations. Net cash
    used in operating activities was $2.7 million for the three months
    ended March 31, 2019, as compared with $3.7 million for the same
    period in 2018. The decrease was primarily due to non-recurring costs
    of $0.8 million related to the Alabama Graphite Corp. acquisition
    incurred during the three months ending March 31, 2018.
  • Operating expenses. For the three months
    ended March 31, 2019, mineral property expenses decreased by $0.2
    million from the corresponding periods during 2018. The decrease was
    primarily due to a reduction in operating activities at the Temrezli
    Project of $0.1 million because of the revocation of the mining
    licenses by the government of Turkey in June 2018 and by a reduction
    of $0.2 million in reclamation activities at the Vasquez and Rosita
    Projects due to adverse weather conditions in 2019. General and
    administrative charges increased only slightly as compared with the
    corresponding period in 2018. Increases in legal, accounting and
    public company expenses of $0.2 million were offset by decreases in
    stock compensation and salary costs.
  • Net loss. Consolidated net loss for the
    three months ended March 31, 2019 was $3.2 million, or $2.15 per
    share, as compared with a consolidated net loss of $3.4 million, or
    $6.11 per share for the same period in 2018.
  • Cash and working capital. The Company’s
    cash balance was $1.0 million at March 31, 2019 and had a working
    capital deficit of $1.0 million. The Company intends to pursue project
    financing to support execution of the graphite business plan,
    including discretionary capital expenditures associated with graphite
    battery-material product development, construction of pilot plant
    facilities and construction of commercial production facilities. The
    Company is pursuing project financing including possible joint venture
    partners to fund discretionary greenfield exploration activities for
    its lithium business.
  • Shares outstanding. Total shares
    outstanding are 1,494,153 as of May 7, 2019. On April 18, 2019, the
    Company’s shareholders approved a reverse split of not less than
    1-for-5 and not more than 1-for-50. Subsequently, the Board of
    Directors approved a 1-for-50 reverse split, which went into effect
    after market close on April 22, 2019. The reverse split reduced the
    number of Westwater’s outstanding common stock from 74,707,659 shares
    to 1,494,153 shares of common stock. No fractional shares were issued
    as a result of the reverse stock split. Any fractional shares that
    would have resulted were settled in cash.

Conference Call & Webcast

The Company will hold a conference call to discuss its first quarter
2019 results later today, Wednesday, May 8, 2019 at 10:00 a.m. Eastern
Time (8:00 a.m. Mountain Time).

Dial-in Numbers:       +1 (800) 319-4610 (U.S. and Canada)
+1 (604) 638-5340 (International)
Conference ID: Westwater Resources Conference Call

Hosting the call will be Christopher M. Jones, President and Chief
Executive Officer of Westwater Resources, who will be joined by Jeffrey
L. Vigil, Vice President-Finance and Chief Financial Officer. Mr. Jones
will present an overview of the Company’s business position and provide
updates on its graphite, lithium and uranium businesses. Mr. Vigil will
review the financial results.

The conference call and presentation will also be available via a live
webcast through the Company’s website, www.WestwaterResources.net.
A replay of the call will be available on the Company’s website for a
limited time and also by phone using the details below.

Replay Numbers:       +1 (855) 669-9658 (U.S. and Canada)
+1 (412) 317-0088 (International)
Replay Access Code: 3258

About Westwater Resources

WWR is focused on developing energy-related materials. The Company’s
battery-materials 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. In addition, the Company
maintains lithium mineral properties in three prospective lithium brine
basins in Nevada and Utah. Westwater’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 hectares) of prospective in-situ recovery uranium
projects. In New Mexico, the Company controls mineral rights
encompassing approximately 188,700 acres (~76,000 hectares) 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., Westwater 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 developments and future production from the Coosa
Project, the performance of and market for the Company’s graphite
products, and the potential for partnering opportunities or project
finance for the Company’s projects, 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 Alabama Graphite Corporation’s 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, vanadium and uranium; (d) risks associated with our
domestic operations; (e) operating conditions at the Company’s projects;
(f) government and tribal regulation of the graphite industry, the
lithium industry, the vanadium industry, the uranium industry, and the
power industry; (g) world-wide graphite, lithium, vanadium 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 result; (I) any graphite, lithium, vanadium 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 Graphite
Project.

Contacts

Westwater Resources Contact:
Christopher M. Jones, President
& CEO
Phone: 303.531.0480

Jeff Vigil, VP Finance & CFO
Phone: 303.531.0481
Email: Info@WestwaterResources.net

Investor Relations Contact:
Michael Porter
Porter,
LeVay and Rose
Phone: 212.564.4700
Email: Westwater@plrinvest.com

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