Westwater Resources to acquire Alabama Graphite and its flagship Coosa Project

Trading in Alabama Graphite Corp. [CSPG-TSXV, CSPGF-OTCQB] shares resumed trading Thursday December 14 after the company said it has agreed to be acquired by Westwater Resources Inc. [WWR-NASDAQ] by way of a plan of arrangement.

Westwater and Alabama Graphite are mineral exploration and development companies with advancing green-energy minerals and materials projects. Alabama is focused on its flagship Coosa Graphite Project in Coosa County, Alabama. Alabama said Coosa represents the largest indicated mineral resource of flake graphite in the United States.

Under the terms of the transaction, holders of Alabama shares will receive 0.08 of a Westwater share for each share held, an amount that represents $0.117 per Alabama share, based on the closing price of Westwater’s common shares on NASDAQ, December 11, 2017.

Westwater has also agreed to provide Alabama Graphite with a secured loan of US $2 million to remedy Alabama’s current working capital deficit, to fund outstanding payables, as well as essential operations prior to closing of the acquisition. Closing is targeted for April, 2018.

“The timing of the transaction could not be better,” said Jean Depatie, Chairman of Alabama Graphite.

“Alabama Graphite’s Coosa Graphite Project is at the feasibility study stage and Westwater, having excellent management and financial resourcefulness, has the experience and ability to advance our projects and enhance shareholder value at a pace, and in a manner, we would not have been able to achieve on our own,” he said.

“Furthermore, this transaction provides Alabama Graphite with much needed interim financing that protects our shareholders from equity dilution and going-concern risk.”

The Coosa Graphite Project is located on private land in Alabama, meaning it only requires permitting at the state level, and providing the company with the opportunity to fast track the project to production.

An independent NI 43-101 compliant preliminary economic assessment was completed in November 2015. It is based on a resource estimate for Coosa, which includes indicated resources of 78.5 million tons, grading 2.39% graphitic carbon (CG) at a 1% cutoff grade, for a total of 1.9 million tonnes of contained in-situ graphite.

On top of that is an inferred resource of 79.4 million tons, grading 2.56% graphitic carbon at a 1% carbon, for a total of just over 2 million tonnes of contained in-situ graphite.

Alabama Graphite’s intent is to commence a small-scale mining and primary processing operation in Alabama, and subsequently divert 100% of primary production to secondary processing, specialty-graphite production (namely coated spherical purified graphite) for use in lithium-ion and other battery markets.

Alabama Graphite shares eased 25% or $0.03 to $0.09 in early afternoon trading, Thursday.