Westwater Resources has entered into a purchase agreement and registration rights agreement with Lincoln Park Capital Fund (Lincoln Park), a current investor in Westwater.


Photo: Lithium floating in oil. Courtesy of Tomihahndorf/Wikipedia

Under the purchase agreement, upon satisfaction of the conditions in the purchase agreement, including after a registration statement registering the resale of shares to be sold to Lincoln Park under the purchase agreement is declared effective by the Securities and Exchange Commission (SEC), Westwater, from time to time over a 24 month period, will have the right, in its sole discretion, to sell up to $10 million of its stock to Lincoln Park. Westwater will control the timing and amount of any sales to Lincoln Park, and Lincoln Park is obligated to make purchases in accordance with the purchase agreement. Any common stock that is sold to Lincoln Park will occur at a purchase price that is based on an agreed upon fixed discount to the Company’s prevailing market prices at the time of each sale and with no upper limits to the price Lincoln Park may pay to purchase common stock.

Lincoln Park has also agreed not to cause or engage in any direct or indirect short selling or hedging of the Company’s common stock. No warrants are being issued in this transaction, and there are no limitations on our use of proceeds from sales to Lincoln Park under the purchase agreement. Furthermore, the purchase agreement does not contain any rights of first refusal, participation rights, penalties or liquidated damages provisions in favor of any party. The agreement may be terminated by Westwater at any time, in its sole discretion, without any additional cost or penalty.

Christopher M. Jones, President and Chief Executive Officer, said, “Westwater has re-focused its financing strategy on a low-cost solution with minimally dilutive terms to provide working capital. Given current market conditions, and to avoid offerings that may come with high discounts, warrant coverage and/or restrictive covenants, we have opted for a strategy that allows for any dilution that may occur, to occur on an as needed basis and as we progress with our business plan and create shareholder value.

“As we move forward, we believe that an appropriate mix of project specific debt, low cost off-take financing and carefully placed equity or joint venture financing can develop our battery ready graphite business in an advantageous manner. Furthermore, we anticipate that our planned expansion of the initial graphite processing facility followed by the mine itself will utilize cash flow from operations – further reducing the need for dilutive offerings of shares.”

The Company’s current business plan requires working capital to fund non-discretionary expenditures for uranium reclamation activities, mineral property holding costs, business development costs and administrative costs. 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’s current lithium business plan will be funded by working capital; however, the Company is pursuing project financing including possible joint venture partners to fund discretionary greenfield exploration activities.

A description of the Agreements is set forth in the Company’s Current Report on Form 8-K to be filed with the SEC on June 11, 2019.

The offer and sale of the securities by Westwater in the above transaction have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and have not been registered or qualified under any state securities laws, and therefore may not be offered or sold in the United States absent registration under the Securities Act or an applicable exemption from such registration requirements, and registration or qualification and under applicable state securities or “Blue Sky” laws or an applicable exemption from such registration or qualification requirements. Westwater has agreed to file a registration statement with the SEC to register the resale by Lincoln Park of the shares of common stock to be purchased by Lincoln Park under the purchase agreement.

This press release does not constitute an offer to sell or the solicitation of an offer to buy the securities, nor shall there be any sale of the securities in any state in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of such state.

Source: Company Press Release

Photo: Lithium floating in oil. Courtesy of Tomihahndorf/Wikipedia