Apr 10 2019
Westwater Resources, Inc. ("Westwater," or the "Company"), an energy materials development company, is pleased to announce a new drilling and sampling exploration plan to explore for and define vanadium resources 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.
Management Commentary
Christopher M. Jones, President and CEO of Westwater Resources, stated, "This new exploration plan follows up our announcement earlier this year of a vanadium discovery on the Coosa Project. With vanadium prices at $15/lb. and strong steel markets to support these high prices, we believe that this new exploration plan could make a fundamentally positive change in our Coosa Project value proposition.
"The vanadium discovery compliments our strong asset portfolio and upside potential as demand fundamentals for vanadium, graphite and lithium continue to improve. As a reminder, while the Company develops its mining plans with a longer-term view, we believe that our graphite business is likely to generate revenue in 2020 and should become cashflow positive by 2021. This approach should make it possible for Westwater to develop the Coosa Project beyond the initial startup using the cash flows it generates. As a result, we believe that we can reinvest and grow the business to a 15,000 ton per year graphite business in just a couple of years, while we are building out the Coosa mine.
"The vanadium deposit was an unexpected and significant find for our company. The progress we have made so far, coupled with the new exploration plan, leads us to believe that vanadium could greatly enhance the asset value of Westwater Resources. As we continue to complete our reclamation activities with our uranium projects and move forward with lithium, graphite and vanadium, we believe these complementary energy materials should significantly increase shareholder value.
"We remain highly optimistic about our current materials base and we look forward to the potential of adding vanadium to our portfolio with the new exploration plan," concluded Mr. Jones.
Technical Report and Exploration Plan Highlights
Although the vanadium bearing mineral roscoelite was identified during exploration programs conducted prior to Westwater acquiring the Coosa Graphite Project, laboratory assays of core and trench samples did not include the analyses of vanadium. The Westwater technical team, headed up by Cevat Er, Vice President of Technical Services and supported by Ted Wilton, Chief Geologist, has designed an exploration and development plan to expand our knowledge of both graphite and vanadium mineralization. The exploration plan, the implementation of which is subject to funding, will be posted to our website in May 2019 and includes important findings and sets forth key objectives for the effort. Highlights from the plan include:
- As a result of the evaluation of 1923 samples taken of 35 drill holes and 16 trenches collected in December 2018, the Company previously announced that 441 samples returned values of between 0.15% and 0.45% V2O5, or between $45 and $135 gross value per ton of ore at current prices. Once the size of any resource is calculated, this could be in addition to any previously announced value for graphite.
- We believe that there is sufficient information to suggest that strong V2O5 mineralization is enclosed within more extensive zones of strong graphite mineralization.
- Five (5) new areas are identified from sampling efforts with strong vanadium and graphite mineralization. Additional exploration activities in these areas will target defining the mineral resources for both vanadium and graphite. The planned exploration plan for these areas are summarized below:
- Holy Schist Target - Where sampling and geophysics show favourable potential. We plan 30 holes in this area.
- Fixico Graphite Target - Where we see strong vanadium and graphite values in 3 previously drilled holes. We plan 20 holes in this area.
- Roscoe Ridge Target - Where we have a vanadium rich outcrop that needs to be defined at depth and extent. We plan 20 holes in this area.
- Northeast Extension of the Grid Deposit - Where we need to fill in data from widely placed holes to affirm grade continuity. We plan 50 holes in this area.
- Southeast Extension of the Grid Deposit - One hole previously drilled in this area returned some of the highest graphite and vanadium values seen on the Coosa Property. We plan 20 holes here to extend our knowledge about this higher-grade discovery.
- Also, as a result of our work earlier this year, we plan to resample core samples from 23 more previously drilled holes for vanadium analyses.
- Three holes are planned within the already defined graphite resource area for infill and verification purposes.
- 10 holes are planned to assist with siting the future mine and mill facilities.
- The overall exploration plan is expected to cost $950,000 for drilling and associated costs in 2019, with another $100,000 in 2020 to revise and update the mineral resource model for the deposit using the new information gathered from drilling and resampling.