DISCONTINUED OPERATIONS

12 Months Ended

Dec. 31, 2021

DISCONTINUED OPERATIONS

DISCONTINUED OPERATIONS

12. DISCONTINUED OPERATIONS

In the third quarter of 2020, the Company made the strategic decision to focus its resources on its graphite business, as further discussed below, and discontinue its investment in its lithium business. On December 31, 2020 the Company entered into a securities purchase agreement pursuant to which it agreed to sell its subsidiaries engaged in the uranium business in Texas and New Mexico to enCore. The transaction closed on December 31, 2020. The Company’s lithium business included mineral leases and water rights in Nevada and Utah. The Company elected not to renew the annual lease rentals on the mineral properties and terminated the lease on April 1, 2020, which also voids the water rights. 

In accordance with ASC 205-20 – “Discontinued Operations,” the enCore transaction represented a major strategic shift for Westwater and indicated the need to re-classify the Company’s uranium activities as discontinued operations and disclose the associated profit/loss of the Company’s uranium business as a separate line-item on the Company’s statement of operations for all periods presented. Accordingly, the Company’s uranium segment has been classified as a discontinued operation and is reported separate from continuing operations on the Consolidated Statement of Operations for all periods presented.

The results of the Company’s uranium and lithium business segments included in discontinued operations for the year ended December 31, 2020 were as follows:

	For the Year Ended
(thousands of dollars)	December 31, 2020
Mineral property expenses	$	(2,606)
General and administrative expenses		(1,665)
Accretion of asset retirement obligations		(201)
Depreciation and amortization		(38)
Impairment of uranium properties		(5,200)
Other income		48
Net Loss from Discontinued Operations	$	(9,662)

Our cash flow information for the year ended December 31, 2020 included the following activities related to discontinued operations:

	For the Year Ended
(thousands of dollars)	December 31, 2020
Depreciation and amortization	$	38
Capital expenditures		81
Accretion of asset retirement obligations		201
Impairment of uranium properties		5,200