Combination Would Create One of the First
Companies with United States-Sourced Graphite, Key Rare Earth
Elements and Established Growing Gold Production in a World-Class
Mining Jurisdiction
Proposal Represents an Attractive Premium of
Approximately 73% And Will Deliver Immediate Value to All Westwater
Shareholders
WWR Shareholders Should Be Given the Choice – A
Combined Company With a Best-In-Class Leadership Team or the Status
Quo Led by a Westwater Team That Has Overseen Significant Share
Dilution and More Than 95% Stock Decline in Five Years
WWR Has Zero Revenue, Zero Production and an
Underfunded High CapEx/Low IRR Plan
Idaho Strategic Encourages the WWR Board to
Conduct Due Diligence and Review the Benefits of a Combined
Company
Idaho Strategic Resources (NYSE American: IDR) (“Idaho
Strategic” or “we”) today sent the following letter to the Board of
Directors (the “Board”) of Westwater Resources, Inc. (NYSE
American: WWR) (“WWR” or “Westwater”) regarding its preliminary
business combination proposal to acquire all outstanding shares of
Westwater at approximately $1.36 per share in IDR stock.
***
Terence J. Cryan Executive Chairman 6950 S. Potomac Street,
Suite 300 Centennial, Colorado 80112
January 25, 2023
Dear Terence and the other members of the WWR Board of
Directors,
As you know, on December 15, 2022, we delivered a compelling
proposal for Idaho Strategic to combine with WWR to create a unique
critical minerals company within the U.S. mining industry. We have
since reiterated that proposal in numerous private attempts at
engagement – unfortunately, without any meaningful or constructive
responses from you. Importantly, we do not believe that yet another
of WWR’s recent executive changes should interfere with the Board’s
further consideration of our offer or engagement with us.
We continue to believe the combined company would possess the
operating team and diversified asset potential to appeal to larger
entities and gain government funding. In our view, the significant
upside potential of a combined company is incredibly clear – so we,
and we believe your shareholders, are understandably disappointed
by your quick dismissal of our proposal.
While we would prefer to have private discussions and have
proposed reasonable terms under your non-disclosure agreement, we
have been continuously rebuffed by you. We believe that you have a
fiduciary duty to your shareholders – and a duty to all your
stakeholders – to thoroughly consider our value-enhancing proposal
and to engage with us. WWR shareholders deserve better, and we urge
you to immediately open the lines of communication.
The Value to Westwater Shareholders is
Clear: We Are Offering a 73% Premium to the Last Unaffected Trading
Day, While WWR Stock is Down More Than 95% in Five Years1
We believe our proposed offer to the Board to acquire all of the
outstanding shares of common stock of Westwater at a ratio of
0.2353 Idaho Strategic shares for 1 WWR share is attractive and
compelling. It values Westwater at approximately $1.36 per share,
representing a premium of approximately 73% to the last unaffected
trading day for both companies prior to the business combination
proposal announcement on December 22, 2022. We anticipate that
Idaho Strategic’s offer will deliver immediate and long-term value
to all Westwater shareholders, in contrast to what Westwater has
delivered on its own: long-term stock price decline of more than
95% over the past five years.
Additionally, as shareholders of Idaho Strategic, Westwater
investors should benefit from being led by a senior team that
maintains high stock ownership and financial exposure and possesses
significant relevant mining and business experience. It is not
surprising to us that WWR’s management and Board together own less
than 2% of the Company, considering their apparent track record of
reverse splits and using shares to fund growth with little regard
for shareholder dilution.
In our view, it should be a welcomed change for Westwater
investors to have their investment in the hands of a team focused
on expanding domestic sources of technology metals, battery metals
and energy metals just as the markets are expected to be looking
for new investment choices and domestic supply chain options.
Again, compare this to the track record of Westwater’s current and
past management team, which has diluted shareholders from 1.5
million shares to 48 million shares in three years.2
A Combination With Westwater is a Rare
Opportunity to Build a Domestic Critical Minerals Supply
Chain
Idaho Strategic is not a lifestyle company, and our directors
are not serial board members. Nor do we consider Idaho Strategic to
be beholden to institutional holders or our shareholders captive to
someone else’s exit strategy or retirement plans. As our track
record demonstrates, we very rarely look to the markets for M&A
or larger financings.
We believe the potential combination with Westwater is a rare
opportunity to build a domestic critical minerals company that has
the potential to address 21 of the 50 critical minerals listed by
the U.S. Government. With the expected addition of key personnel
and financial assets from the proposed transaction, the likelihood
of advancing multiple projects simultaneously could exist. We
expect the combination will also consolidate, streamline and
ultimately reduce much of the management and corporate costs being
incurred. We anticipate this will create a company with a clean
share structure, a low float, high insider ownership, a significant
cash position and several tier 1 critical minerals projects within
the United States.
Idaho Strategic’s Plan Begins with
Advancement of the Coosa Graphite Mine Toward Production
If we are successful in combining the two companies, our plan
will begin with the advancement of the Coosa Graphite Mine toward
production. We believe that the roughly $81 million of net cash
on-hand is sufficient to not only advance the Coosa Project toward
production but also make further substantial discoveries and
advancements on our rare earth elements projects, all while
continuing to expand our gold operations as a reliable and
profitable source of cash flow.
We have spent considerable time conducting due diligence of
public sources along with discussions with professionals – and
retained a respected senior geologist who was close to the project
as an advisor. In addition to the Coosa Graphite Mine, we feel that
our U.S.-based, production-focused goals in this regard are
attainable and what our country is looking for. We would be happy
to set a board meeting with Westwater’s directors to discuss future
plans for this asset and an overall vision that does not include
sourcing graphite from foreign countries or additional stock
dilution.
Idaho Strategic Has Proven Financial
Stewardship and Mining Experience and Remains Ready to Engage with
Westwater on Next Steps
By design, Idaho Strategic maintains a modest cash balance and
financial resources. This approach has allowed us to operate in a
lean and capital efficient manner, while minimizing shareholder
dilution. We advance our business segments and manage financial
resources through project-specific capital raises that support our
surface and underground mining/production and award-winning milling
facility. We have a shareholder base that has long supported this
capital raise strategy. We are producing gold and consolidated a
historic gold district in a well-known and active mining area that
we use as our growing base of cash flow. This approach has, in
turn, already proven successful as we have not only expanded
operations and milling capacity, but also drilled and advanced our
rare earth projects.
We are hopeful that, following completion of your review of our
business combination proposal, you will agree to engage in
constructive conversations with Idaho Strategic and give the WWR
shareholders the opportunity to receive the benefits of a combined
company. Our preference would be to work toward a mutually
acceptable agreement, and we are ready to devote all necessary
resources on an expeditious basis to completing this
combination.
We ask that the Board please take our business combination
proposal seriously and we look forward to engaging with you to
finalize the terms of our proposal.
Sincerely,
/s/ John Swallow President and Chief Executive Officer
For a more in-depth look at the combined entities, please view
the presentation here: https://idahostrategic.com/IDR+WWR.pdf.
About Idaho Strategic Resources,
Inc.
Domiciled in Idaho and headquartered in the Panhandle of
northern Idaho, Idaho Strategic Resources (IDR) is one of the few
resource-based companies (public or private) possessing the
combination of officially recognized U.S. domestic rare earth
element properties (in Idaho), the largest known concentration of
thorium resources in the U.S., and Idaho-based gold production
located in an established mining community.
Idaho Strategic Resources maintains an important strategic
presence in the U.S. Critical Minerals sector, specifically focused
on the more “at-risk” Rare Earth Elements (REE’s) and Thorium. With
over 11,000 acres of Rare Earth Element landholdings, the Company
is the second largest REE landholder in the U.S. The Company’s
Diamond Creek and Roberts REE properties are included the U.S.
national REE inventory as listed in USGS, IGS and DOE publications.
IDR’s Lemhi Pass Thorium-REE Project is recognized by the USGS and
IGS as containing the largest concentration of thorium resources in
the country. All three projects are located in central Idaho and
are participating in the IGEM Program and the USGS Earth MRI
program.
The Company produces gold at the Golden Chest Mine located in
the Murray Gold Belt (MGB) area of the world-class Coeur d’Alene
Mining District, north of the prolific Silver Valley. With over
7,000 acres of patented and unpatented land, the Company has the
largest private land position in the area following its
consolidation of the Murray Gold Belt for the first time in over
100 years.
With an impressive mix of mining and business experience, IDR
maintains a long-standing “We Live Here” approach to corporate
culture, land management, and historic preservation. Furthermore,
it is our belief that successful operations begin with the
heightened responsibility that only local oversight and a community
mindset can provide. Its “everyone goes home at night” policy would
not be possible without the multi-generational base of local
exploration, drilling, mining, milling, and business professionals
that reside in and near the communities of the Silver Valley and
North Idaho.
For more information on Idaho Strategic Resources click here for
our corporate presentation or visit www.idahostrategic.com.
Forward Looking
Statements
This release contains “forward-looking statements” within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, as amended
that are intended to be covered by the safe harbor created by such
sections. When a forward-looking statement expresses or implies an
expectation or belief as to future events or results, such
expectation or belief is expressed in good faith and believed to
have a reasonable basis. However, such statements are subject to
risks, uncertainties and other factors, which could cause actual
results to differ materially from future results expressed,
projected or implied by the forward-looking statements.
Forward-looking statements often address our expected future
business, potential business combinations, financial performance,
and financial condition and often contain words such as
“anticipate,” “intend,” “plan,” “will,” “could,” “would,” “may,”
“estimate,” “should,” “expect,” “believe,” “project,” “target,”
“indicative,” “preliminary,” “potential,” “represents” and similar
expressions suggesting future outcomes, or other expectations,
beliefs, assumptions, intentions, or statements about future events
or performance. Forward-looking statements contained herein may
include, without limitation, the following: (1) that the
combination would create one of the first companies with United
States-sourced graphite, key Rare Earth Elements and established
growing gold production in a world-class mining jurisdiction; (2)
that the proposal represents an attractive premium of approximately
73% and will deliver immediate value to all Westwater shareholders;
(3) that the combined company would possess the operating team and
diversified asset potential to appeal to larger entities and gain
government funding; (4) that Idaho Strategic’s offer will deliver
immediate and long-term value to all Westwater shareholders; (5)
that Westwater investors should benefit from being led by a senior
team that maintains high stock ownership and financial exposure and
possesses significant relevant mining and business experience; (6)
that the likelihood to advance multiple projects simultaneously
could exist; (7) that the combination will also consolidate,
streamline, and ultimately reduce much of the management and
corporate costs being incurred; (8) that the combination will
create a company with a clean share structure, and a low float,
high insider ownership, a significant cash position, and several
tier 1 critical minerals projects within the United States; (9)
that our plan will begin with the advancement of the Coosa Graphite
Mine toward production; and (10) that the roughly $81 million of
net cash on-hand is sufficient to not only advance the Coosa
Project toward production but also make further substantial
discoveries and advancement on our rare earth elements projects,
all while expanding our gold operations into a reliable and
profitable source of cash flow. Forward-looking information is
based on the opinions and estimates of Idaho Strategic Resources as
of the date such information is provided and is subject to known
and unknown risks, uncertainties, and other factors that may cause
the actual results, level of activity, performance, or achievements
of IDR to be materially different from those expressed or implied
by such forward-looking information. Forward-looking information
also includes the risks and uncertainties regarding the proposed
acquisition of Westwater and the expected benefits and synergies
from the proposed acquisition, results from due diligence and
evaluation of Westwater assets, business plans, projects and
current and ongoing required capex. There is no certainty that any
transaction with Westwater will ultimately be agreed to or as to
the terms on which such a transaction, if any, might occur. Idaho
Strategic would also like to inform investors that the metrics used
to determine Idaho Strategic’s belief that it is the second largest
rare earth elements property holder come from reviewing the readily
available publicly announced landholding of MP Materials, US Rare
Earths, UCore, Rare Element Resources, and Western Rare Earths.
Similarly, the metric used to determine IDR’s belief that Lemhi
Pass Thorium Project is the largest in the US comes from reviewing
readily available public information reported by the USGS and has
not been independently verified. IDR would also like investors to
note that while Idaho Strategic works with the University of Idaho,
Idaho National Labs, the Center for Advanced Energy Studies and the
Idaho Geological Survey as a part of the IGEM Program, this does
not serve as an indication or obligation that IDR will be
successful in obtaining any additional government-funded programs
with the help of the aforementioned partners. The forward-looking
statement information above, and those following are applicable to
both this press release, the letter to Westwater as well as the
links contained within the letter and this press release. With
respect to the business of Idaho Strategic Resources, these risks
and uncertainties include risks relating to widespread epidemics or
pandemic outbreaks, if they occur, including our ability to access
goods and supplies, the ability to transport our products and
impacts on employee productivity, the risks in connection with the
operations, cash flow and results of the Company relating to the
unknown duration and impact of the COVID-19 pandemic;
interpretations or reinterpretations of geologic information; the
accuracy of historic estimates; unfavorable exploration results;
inability to obtain permits required for future exploration,
development or production; general economic conditions and
conditions affecting the industries in which the Company operates;
the uncertainty of regulatory requirements and approvals;
fluctuating mineral and commodity prices; the ability to obtain
necessary future financing on acceptable terms; the ability to
operate the Company’s projects; and risks associated with the
mining industry such as economic factors (including future
commodity prices, and energy prices), ground conditions, failure of
plant, equipment, processes and transportation services to operate
as anticipated, environmental risks, government regulation, actual
results of current exploration and production activities, possible
variations in ore grade or recovery rates, permitting timelines,
capital and construction expenditures, reclamation activities.
Although the Company has attempted to identify important factors
that could cause actual results to differ materially from those
contained in forward-looking information, there may be other
factors that cause results not to be as anticipated, estimated, or
intended. Readers are cautioned not to place undue reliance on such
information. Additional information regarding the factors that may
cause actual results to differ materially from this forward‐looking
information is available in Idaho Strategic Resources filings with
the SEC on EDGAR. IDR does not undertake any obligation to update
publicly or otherwise revise any forward-looking information
whether as a result of new information, future events or other such
factors which affect this information, except as required by law.
This release is not intended to and shall not constitute a
solicitation of a proxy, consent, or authorization with respect to
any securities or in respect of the proposed business combination.
This release shall also not constitute an offer to sell or the
solicitation of an offer to buy any securities, nor shall there be
any sale of securities in any states or jurisdictions in which such
offer, solicitation, or sale would be unlawful prior to
registration or qualification under the securities laws of any such
jurisdiction. No offering of securities shall be made except by
means of a prospectus meeting the requirements of Section 10 of the
Securities Act of 1933, as amended, or an exemption therefrom.
Continued reliance on “forward-looking statements” is at investors’
own risk.
___________________________ 1 Yahoo Finance; Stock price
calculated from December 31, 2017 through December 21, 2022, the
day before IDR's proposal for WWR was made public. 2 WWR has
conducted four stock splits: 1:4 (April 11, 2006); 1:10 (January
23, 2013); 1:12 on (March 8, 2016); and 1:50 (April 23, 2019).
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230125005290/en/
For Investors: Travis Swallow, Investor Relations &
Corporate Development Email: tswallow@idahostrategic.com Phone:
(208) 625-9001 Saratoga Proxy Consulting John Ferguson
info@saratogaproxy.com (212) 257-1311 For Media: Longacre Square
Partners Rebecca Kral / Dan Zacchei rkral@longacresquare.com /
dzacchei@longacresquare.com
Grafico Azioni Idaho Strategic Resources (AMEX:IDR)
Storico
Da Ott 2024 a Nov 2024
Grafico Azioni Idaho Strategic Resources (AMEX:IDR)
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Da Nov 2023 a Nov 2024
