8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 8-K

CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): March 5, 2019

WESTWATER RESOURCES, INC.

(Exact Name of Registrant as Specified in Charter)

Delaware	001-33404	75-2212772
(State or Other Jurisdiction	(Commission File Number)	(IRS Employer
of Incorporation)		Identification No.)

6950 S. Potomac Street, Suite 300 Centennial, Colorado 80112	80112
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (303) 531-0516

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b–2 of this chapter).

Emerging growth company    ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.    ☐

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Item 1.01  Entry into a Material Definitive Agreement.

On March 5, 2019, Westwater Resources, Inc. (the “Company”) entered into an Asset Purchase Agreement (the “Agreement”) with Uranium Resources (USA) Corp., a Delaware corporation (“URC”), and Uranium Royalty Corp (“URC Parent”), a Canadian corporation and the sole owner of URC, pursuant to which, upon the terms and subject to the conditions thereto, the Company will sell to URC, for a cash consideration of $2.75 million, its rights, title and interest (i) in royalties related to the Church Rock Property, Dewey-Burdock Property, Lance Property and Roca Honda Property and (ii) in the promissory note dated January 5, 2017, issued by Laramide Resources Ltd. in favor of the Company, in the remaining outstanding principal amount of $2 million.

Pursuant to the Agreement, URC delivered $500,000 as deposit to the Company upon signing, which will be credited against the purchase price at the closing of the transaction. The transaction will close following satisfaction or waiver of the closing conditions, which conditions include, among other things, the execution of various assignment agreements.

The Agreement contains customary representations, warranties and agreements. URC and URC Parent on the one hand, and the Company on the other, have generally agreed to indemnify each other for breach of the representations and warranties contained in the Agreement, subject to certain survival period limitations and caps. In addition, subject to certain survival period limitations, the Company has agreed to indemnify URC and URC Parent for liabilities related to or arising out of events or periods prior to the date of closing.

The Agreement contains certain termination rights and remedies for URC, URC Parent and the Company.  Subject to certain limitations, in the event that the transaction does not close by June 30, 2019, the Company may terminate the Agreement and retain the $500,000 deposit. In the event that there is a material uncured inaccuracy in any representation or warranty of the Company or a material breach of any covenant of the Company, URC has the right to terminate the Agreement and seek a return of the deposit or to seek specific performance of the Agreement. In the event that there is a material uncured inaccuracy in any representation or warranty of URC or URC Parent or a material breach of any covenant of URC or URC Parent, the Company has the right to terminate the Agreement or to seek specific performance of the Agreement.  The Agreement will terminate automatically on July 31, 2019 if the closing thereunder has not occurred by July 31, 2019, unless otherwise agreed by the parties.

The foregoing description of the Agreement and the transactions contemplated thereby does not purport to be complete and is subject to, and qualified in its entirety by, the full text of the Agreement, which will be filed with the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2019. In particular, the assertions embodied in the representations and warranties contained in the Agreement are qualified by information in a disclosure schedule provided by the Company to URC and URC Parent in connection with the signing of the Agreement. This disclosure schedule contains information that modifies, qualifies and creates exceptions to the representations and warranties set forth in the Agreement. Moreover, certain representations and warranties in the Agreement were used for the purpose of allocating risk between the parties to the Agreement rather than establishing matters as facts. Accordingly, you should not rely on the representations and warranties in the Agreement as characterizations of the actual state of facts about the Company, URC or URC Parent.

Item 7.01  Regulation FD Disclosure.

On March 7, 2019, the Company issued a press release announcing the entry into the Agreement. A copy of the press release is furnished with this Form 8-K as Exhibit 99.1.

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The information in this Item 7.01, including the press release, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by reference to such filing.

Item 9.01  Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.	Description
99.1	Press Release dated March 7, 2019.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: March 7, 2019

WESTWATER RESOURCES, INC.

By:        /s/ Jeffrey L. Vigil                                               

Name: Jeffrey L. Vigil 

Title: Vice President–Finance and Chief Financial Officer 

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EX-99

Exhibit 99.1

 

Westwater Announces Royalty and Promissory Note Sale for $2.75 Million

Uranium Royalty Corp. to buy four royalties on uranium properties located in South Dakota, Wyoming and New Mexico and a promissory note due 2020 for $2.75 million

CENTENNIAL, Colo., March 7, 2019 – Westwater Resources, Inc. (“Westwater,” or the “Company”) (Nasdaq: WWR), an energy materials development company, today announced that Uranium Royalty Corp. (URC) and its US subsidiary have together agreed to purchase 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, New Mexico properties of Laramide Resources.  Uranium Royalty Corp. and its US subsidiary have agreed to purchase these interests for collective total consideration of $2.75 million, including $0.5 million 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.

Christopher M. Jones, President and CEO of Westwater, stated “We continue to opportunistically manage our assets, with the goal of maximizing value to our shareholders. In this instance, we divested our non-core holdings for immediate cash consideration.   This transaction monetizes our uranium royalty portfolio and moves forward income from 2020 to 2019. Uranium Royalty’s unique model for funding uranium projects is well-timed for the industry. This is a win-win for both our companies."

The Westwater Royalty Portfolio being sold to URC under the Asset Purchase Agreement consists of:

A 4% net returns royalty on future uranium production from Laramide Resources’ Church Rock property located in New Mexico; 

A 30% net proceeds royalty on future uranium production from a portion of Azarga Uranium’s Dewey-Burdock property located in South Dakota; 

An up to 4% overriding royalty on part of Peninsula Energy’s future uranium production from its Lance Project located in Wyoming; and 

A 4% royalty on the gross value from uranium production from a portion of Energy Fuels’ Roca Honda property located in New Mexico. 

The sale also includes a promissory note secured by a mortgage held by Westwater on Laramide Resources’ Church Rock and Crownpoint, New Mexico uranium properties, with four remaining payments due through maturity on January 5, 2020. Westwater will be entitled to retain any interest payments on the promissory note made before the closing of the transaction.

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 over 41,000 acres (~17,000 hectares) in east-central Alabama.  In addition, the Company maintains lithium mineral properties in three prospective lithium brine

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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 please 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 the closing of the transaction with URC, 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 availability of capital to the Company and the Company’s ability to continue as a going concern; (b) the availability of the Company to continue to satisfy the listing requirements of the Nasdaq Capital Market; (c) spot price and long-term contract prices of graphite, lithium, vanadium and uranium; (d) the ability of the Company to enter into and successfully close acquisitions, dispositions or other material transactions; (e) government regulation of the mining industry and the nuclear power industry in the United States; (f) operating conditions at the Company’s projects; (g) the world-wide supply and demand of graphite, vanadium, lithium and uranium; (h) weather conditions; (i) unanticipated geological, processing, regulatory and legal or other problems the Company may encounter; (j) the results of the Company’s exploration activities, and the possibility that future exploration results may be materially less promising than initial exploration result; (k) any graphite, vanadium, lithium or uranium discoveries not being in high enough concentration to make it economic to extract the metals; (l) currently pending or new litigation or arbitration; (m) the Company’s ability to maintain and timely receive mining and other permits from regulatory agencies; 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.

Westwater Resources Contact:	Investor Relations Contact:
Christopher M. Jones, President & CEO	Michael Porter
Phone: 303.531.0480	Porter, LeVay and Rose
Jeff Vigil, VP Finance & CFO	Phone: 212.564.4700
Phone: 303.531.0481
Email: Info@WestwaterResources.net	Email: Westwater@plrinvest.com

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