Westwater Resources Inc (NYSE-A:WWR) revealed that it had received an unsolicited merger proposal from Idaho Strategic Resources (IDR) and has opted to decline, according to a company statement.
The company received the proposal on December 15, and IDR publicly disclosed it Thursday morning. However, “the proposal lacked important information regarding the ability of IDR to finance its existing business plans,” Westwater said in a statement.
Westwater is working to progress its advanced graphite materials processing plant, known as the Kellyton project, in Alabama. The company has estimated the cost to construct and commission phase one of the Kellyton Plant at about $202 million.
READ: Westwater Resources achieves milestone with completion of Technical Report Summary for Coosa graphite deposit
With roughly $50 million of costs already incurred and another $100 million on its balance sheet, Westwater is considering various forms of financing the remaining construction, the company said.
Westwater initially offered to hold an introductory call with IDR in late December after IDR reached out, but the firm sent an unsolicited proposal instead, the company said. For Westwater, it left much to be desired.
“The proposal did not include any information regarding the ability of a combined company to advance the construction of the Kellyton Plant or Westwater’s business plans,” the company said.
Additionally, Westwater pointed to IDR’s financial statements as of September 30, which show negative operating cash flow for the first nine months of 2022 and the company had cash on hand, net of accounts payables, accrued payroll-related liabilities and current note payable obligations of less than $1 million.
.IDR also does not operate any graphite properties but rather operates a single gold mine and mill, the company said
Westwater did not mince words, saying the proposal “would likely siphon resources from Westwater to fund unproven exploration projects” and “is an opportunistic attempt by IDR to utilize cash from Westwater’s balance sheet that is based on a false assumption that the Westwater’s cash balance is available to advance IDR’s business plan.”
Westwater Resources is an energy technology and battery-grade natural graphite development company focused on developing battery-grade natural graphite. Westwater’s primary project is the Kellyton Graphite Plant which is under construction in east-central Alabama. In addition, Westwater’s Coosa Graphite Deposit is the most advanced natural flake graphite deposit in the contiguous US and located across 41,965 acres in Coosa County, Alabama.
Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com
Follow him on Twitter @andrew_kessel