SEC Company Response from Western Uranium & Vanadium Corp. (WSTRF) (CIK 0001621906) (WSTRF) — Jun 21, 2016
Western Uranium & Vanadium Corp. (WSTRF) (CIK 0001621906)
Date: June 21, 2016 · CIK: 0001621906 · Accession: 0001213900-16-014422
AI Filing Summary & Sentiment
File numbers found in text: 000-55626
Referenced dates: May 23, 2016
Letter
United States Securities and Exchange Commission Form Filed April 29, 2016 File No. 000-55626
RE: Western Uranium Corporation
Dear Mr. Reynolds:
We are in receipt of your letter dated May 23, 2016 with respect to the Form 10. We hereby transmit for filing an Amendment No. 1 to the Form 10 (the “Amendment”). The Amendment and the remainder of this letter respond to the written comments of the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in the Staff’s letter, dated May 23, 2016 (the “Comment Letter”), with respect to the Form 10 filed by the Company with the Commission on April 29, 2016 (the “Form 10”).
Certain of the Staff’s comments in this Comment Letter call for the explanation of, or supplemental information as to, various matters relating to disclosures provided in the Form 10. The Company’s responses to these comments are set forth in this letter or in the Amendment.
The Company’s responses are set forth below, with the headings and numbered items of this letter corresponding to the headings and numbered items contained in the Comment Letter. To assist the Staff’s review, each of the comments from the Comment Letter is stated in bold italics prior to the Company’s response. Capitalized terms used but not defined in this letter shall have the meanings given to such terms in the Amendment.
All page number references in the Company’s responses are to the page numbers in the Amendment.
Mr. John Reynolds
Securities and Exchange Commission
June 21, 2016
Page 2 of 10
The Company, page 1
1. Please revise to clearly state that you are an exploration stage company as you have yet to define proven or probable reserves. See paragraph (4) of Industry Guide 7.
Pursuant to paragraph (4) of Industry Guide 7, Western Uranium Corporation has revised the disclosures on page 1 to reflect that it is in the exploration stage.
2. It appears that you qualify as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act. If so, please disclose that fact in your filing.
Western Uranium Corporation has confirmed that it qualifies as an “emerging growth company” as defined by the Jumpstart Our Business Startups Act. The Company has revised the disclosures on page 2, accordingly.
Our Strategy, page 2
3. Please disclose the anticipated time frame for the commencement of uranium production, including the related costs and the material requirements or conditions that must be met before you may commence uranium production.
Western Uranium Corporation has revised the disclosures on page 3 to address the conditions for the commencement of uranium production, including related costs, material requirements and other conditions that must be met before the commencement of uranium production.
4. We note your December 7, 2015 press release announcing that you have entered into a Uranium Concentrates Supply Agreement with a major U.S. Utility. If material, please disclose the material terms of your supply agreement and file it as an exhibit. See Item 601(b)(10) of Regulation S-K.
Pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K, Western Uranium Corporation has determined that its business is not substantially dependent upon this Uranium Concentrates Supply Agreement. We base this conclusion on the fact that there are over 400 nuclear reactors currently in operation globally, and our belief that there are over 60 additional nuclear reactors currently being constructed, to whom the Company could sell its uranium. Therefore, this supply agreement was not filed as an exhibit.
Mr. John Reynolds
Securities and Exchange Commission
June 21, 2016
Page 3 of 10
5. We note your disclosure here and on page 36 that you hold an exclusive license to use ablation mining technology. If material, please disclose the material terms of your exclusive license and file it as an exhibit. See Item 101(h)(vii) and Item 601(b)(10) of Regulation S-K.
Pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K, Western Uranium Corporation has determined that its business is not substantially dependent upon its license for Ablation Mining Technology (AMT). The AMT is not being used in the field and is not a requirement to gain profitability, and there are uncertainties about whether the anticipated benefits of the technology will be realized, as disclosed on page 9 in response to comment no. 8. As such, this supply agreement was not filed as an exhibit. Western Uranium Corporation has provided additional disclosure on page 2.
6. We note your website disclosure that you have a tolling agreement at the Energy Fuels White Mesa mill. Please describe your tolling agreement and, if material, file it as an exhibit. See Item 601(b) (10) of Regulation S-K.
Pursuant to Item 601(b)(10)(ii)(B) of Regulation S-K, Western Uranium Corporation has determined that its business is not substantially dependent upon this toll milling agreement. The toll milling agreement with Energy Fuels is a five-year agreement that allows for Western Uranium to ship a minimum of 40,000 tons of ore to be processed yearly through the White Mesa Mill. However, the mill is currently not processing or milling ore due to low spot uranium prices, and no decision has been made whether to utilize this toll milling agreement. As such, management believes this agreement is not material and has not filed the agreement as an exhibit.
Overview of the Uranium Industry, page 3
7. We note your disclosure that “[m]any analysts are calling for improved uranium prices over the mid-term from a supply deficit as uranium market fundamentals for supply and demand improve.” Please update and provide the source for this statement.
Western Uranium Corporation has updated the disclosure and has provided sources on page 4 through 5 in response to the Staff’s request for sources for analysts’ statements.
The Ablation Process, page 5
8. We note your list of benefits of the ablation process. With the goal of balanced disclosure, please also include any negative factors or uncertainties of the ablation process. In this regard, please add a risk factor that addresses the risks of the ablation process.
Western Uranium Corporation has added a description of uncertainties regarding the ablation process to the discussion on page 6 and has also added a risk factor in that regard on page 9.
Mr. John Reynolds
Securities and Exchange Commission
June 21, 2016
Page 4 of 10
Liquidity and Capital Resources, page 16
9. Please describe the material terms of the mortgage and credit facility that you assumed after the acquisition of Black Range and disclose whether the company is still in default, as stated on page F-16. For guidance, see Section IV.C of SEC Release No. 33-8350. Also describe the material terms of the notes payable, which you disclose on page F-19. See Item 303(a)(1) of Regulation S-K.
Pursuant to Section IV.C of SEC Release No. 33-8350, Western Uranium Corporation has amended the disclosure on page 18 through 19 to include the material terms of the mortgage and credit facilities assumed in connection with the acquisition of Black Range and to address whether the Company is still in default. Pursuant to Item 303(a)(1) of Regulation S-K, Western Uranium Corporation has amended the disclosure to disclose the material terms of the notes payable, as requested by the Staff.
Properties page 18
10. Only proven and probable reserves may be disclosed in filings with the United States Securities and Exchange Commission. However, as a company incorporated in Canada, paragraph (b) (5) (3) allows for the disclosure of National Instrument 43-101 compliant resources. Please revise to remove resource disclosure that is not NI 43-101 compliant.
The presentation of Western Uranium Corporation's properties has been revised to clarify that, for the Sage Mine, the Farmer Girl Property and the Hansen/Taylor Ranch Property, the resources identified are historical estimates produced for the prior owners of those properties. National Instrument 43-101 permits the disclosure of historical estimates in this fashion, provided that certain additional disclosure is included (and such disclosure has been added).
Note that the historical estimate provided for the Sage Mine Property and the Farmer Girl Property is reproduced from a National Instrument 43-101-compliant technical report prepared for a previous owner of those properties, whereas the historical estimate for the Hansen/Taylor Ranch Property is reproduced from JORC-compliant reports prepared for that property's previous owner, which is now a subsidiary. For the Hansen/Taylor Ranch Property, National Instrument 43-101 permits the inclusion of the resource estimates available to the company, even if those were prepared under JORC and not under National Instrument 43-101, because those resource estimates constitute a historical estimate.
For the Dunn Project, the scientific and technical information now included is based on information provided in a National Instrument 43-101-compliant technical report that was also prepared for the property's prior owner, and that report is now identified as required.
11. For each of your 43-101 compliant resources, please revise to include the name of the technical report, the date of the technical report, the date the technical report was filed on sedar.com, the name of the company that filed the technical report, and the name of the qualified person who prepared the technical report.
Western Uranium Corporation has revised the disclosures related to its properties for each NI 43-101 compliant resource (The Sunday Mines Complex and San Rafael), to include the name of the technical report, the date of the technical report, the date the technical report was filed on sedar.com, the name of the company that filed the technical report, and the name of the qualified person who prepared the technical report beginning on page 23 and 25. Western Uranium Corporation has also provided the same NI 43-101 technical report references for properties which have had their resource disclosed in the past – these project’s resources are historic resources (Sage Mine, Dunn and Farmer Girl). Additional disclosures and/or revisions were included on Project Geology, History, and/or Permitting Status sections for the following projects: 1) The Sunday Mine Complex, 2) San Rafael, 3) Sage, 4) Dunn, 5) Farmer Girl, 6) Hansen/Taylor, 7) Van #4.
Mr. John Reynolds
Securities and Exchange Commission
June 21, 2016
Page 5 of 10
12. Additionally, mineral resources must have a reasonable prospect for economic extraction. Please tell us how you determined that each of your resources has a reasonable prospect for economic extraction and revise your filing to include the cut-off grade and pricing.
Western Uranium Corporation believes that its mineral resources have a reasonable prospect for economic extraction, both with the utilization of ablation mining technology and without it. However, the Company has not yet been able to perform a Preliminary Economic Assessment (“PEA”). The inputs to the PEA are dependent on the extent to which ablation mining technology will be utilized. The Company will not know whether it will be able to utilize the ablation mining technology until the Colorado Department of Public Health and Environment regulatory authorities decide on if a source material, or other license, is required. It is possible the Colorado Department of Public Health and Environment decides no license is required. As such, the Company has not yet been able to determine the cut-off grades and pricing under an economic assessment.
13. Please tell us if a member of your management team has visited your properties and, if not, disclose this in your filing.
All Colorado mining properties that are scheduled to go into production have been visited by all management members of the Company. Utah mining properties have been visited by the President and CEO.
14. For each of your properties please disclose the source of power and water that will be utilized at your properties and fully describe the property infrastructure pursuant to paragraph (b) of Industry Guide 7.
Pursuant to paragraph (b) of Industry Guide 7, Western Uranium has disclosed the property infrastructure and the source of power and water that will be utilized in the section labeled, “Properties”. Each mine has been updated with its individual infrastructure information.
Mr. John Reynolds
Securities and Exchange Commission
June 21, 2016
Page 6 of 10
15. For each property please discuss your exploration plans as required by paragraph (b) (4) (i) of Industry Guide 7. The exploration plan should address the following points:
● Give a breakdown of the exploration timetable and budget, including estimated amounts that will be required for each exploration activity, such as geophysics, geochemistry, surface sampling, drilling, etc. for each prospect.
● If there is a phased program planned, briefly outline all phases.
● If there are no current detailed plans to conduct exploration on the property, disclose this prominently.
● Disclose how the exploration program will be funded.
● Identify who will be conducting any proposed exploration work and disclose their qualifications.
Western Uranium Corporation has added disclosure on page 22 that near term exploration is not needed because substantial underground infrastructure has already been developed.
16. We note your disclosure on page 22 that assumes a district wide average vanadium r
Show Raw Text
CORRESP
1
filename1.htm
June
21, 2016
VIA
E-MAIL AND EDGAR
Mr.
John Reynolds
Assistant
Director
United
States Securities and Exchange Commission
100
F Street, N.E.
Washington,
D.C. 20549
RE:
Western
Uranium Corporation
Form
10
Filed
April 29, 2016
File
No. 000-55626
Dear
Mr. Reynolds:
We
are in receipt of your letter dated May 23, 2016 with respect to the Form 10. We hereby transmit for filing an Amendment No. 1
to the Form 10 (the “Amendment”). The Amendment and the remainder of this letter respond to the written comments of
the staff (the “Staff”) of the Securities and Exchange Commission (the “Commission”) contained in the
Staff’s letter, dated May 23, 2016 (the “Comment Letter”), with respect to the Form 10 filed by the Company
with the Commission on April 29, 2016 (the “Form 10”).
Certain
of the Staff’s comments in this Comment Letter call for the explanation of, or supplemental information as to, various matters
relating to disclosures provided in the Form 10. The Company’s responses to these comments are set forth in this letter
or in the Amendment.
The
Company’s responses are set forth below, with the headings and numbered items of this letter corresponding to the headings
and numbered items contained in the Comment Letter. To assist the Staff’s review, each of the comments from the Comment
Letter is stated in bold italics prior to the Company’s response. Capitalized terms used but not defined in this letter
shall have the meanings given to such terms in the Amendment.
All
page number references in the Company’s responses are to the page numbers in the Amendment.
Mr.
John Reynolds
Securities
and Exchange Commission
June
21, 2016
Page
2 of 10
The
Company, page 1
1. Please
revise to clearly state that you are an exploration stage company as you have yet to
define proven or probable reserves. See paragraph (4) of Industry Guide 7.
Pursuant
to paragraph (4) of Industry Guide 7, Western Uranium Corporation has revised the disclosures on page 1 to reflect that it is
in the exploration stage.
2. It
appears that you qualify as an “emerging growth company” as defined in the
Jumpstart Our Business Startups Act. If so, please disclose that fact in your filing.
Western
Uranium Corporation has confirmed that it qualifies as an “emerging growth company” as defined by the Jumpstart Our
Business Startups Act. The Company has revised the disclosures on page 2, accordingly.
Our
Strategy, page 2
3. Please
disclose the anticipated time frame for the commencement of uranium production, including
the related costs and the material requirements or conditions that must be met before
you may commence uranium production.
Western
Uranium Corporation has revised the disclosures on page 3 to address the conditions for the commencement of uranium production,
including related costs, material requirements and other conditions that must be met before the commencement of uranium production.
4. We
note your December 7, 2015 press release announcing that you have entered into a Uranium
Concentrates Supply Agreement with a major U.S. Utility. If material, please disclose
the material terms of your supply agreement and file it as an exhibit. See Item 601(b)(10)
of Regulation S-K.
Pursuant
to Item 601(b)(10)(ii)(B) of Regulation S-K, Western Uranium Corporation has determined that its business is not substantially
dependent upon this Uranium Concentrates Supply Agreement. We base this conclusion on the fact that there are over 400 nuclear
reactors currently in operation globally, and our belief that there are over 60 additional nuclear reactors currently being constructed,
to whom the Company could sell its uranium. Therefore, this supply agreement was not filed as an exhibit.
Mr.
John Reynolds
Securities
and Exchange Commission
June
21, 2016
Page
3 of 10
5. We
note your disclosure here and on page 36 that you hold an exclusive license to use ablation
mining technology. If material, please disclose the material terms of your exclusive
license and file it as an exhibit. See Item 101(h)(vii) and Item 601(b)(10) of Regulation
S-K.
Pursuant
to Item 601(b)(10)(ii)(B) of Regulation S-K, Western Uranium Corporation has determined that its business is not substantially
dependent upon its license for Ablation Mining Technology (AMT). The AMT is not being used in the
field and is not a requirement to gain profitability, and there are uncertainties about whether the anticipated benefits of the
technology will be realized, as disclosed on page 9 in response to comment no. 8. As such, this supply agreement was not
filed as an exhibit. Western Uranium Corporation has provided additional disclosure on page 2.
6. We
note your website disclosure that you have a tolling agreement at the Energy Fuels White
Mesa mill. Please describe your tolling agreement and, if material, file it as an exhibit.
See Item 601(b) (10) of Regulation S-K.
Pursuant
to Item 601(b)(10)(ii)(B) of Regulation S-K, Western Uranium Corporation has determined that its business is not substantially
dependent upon this toll milling agreement. The toll milling agreement with Energy Fuels is a five-year agreement that allows
for Western Uranium to ship a minimum of 40,000 tons of ore to be processed yearly through the White Mesa Mill. However,
the mill is currently not processing or milling ore due to low spot uranium prices, and no decision has been made whether to utilize
this toll milling agreement. As such, management believes this agreement is not material and has not filed the agreement
as an exhibit.
Overview
of the Uranium Industry, page 3
7. We
note your disclosure that “[m]any analysts are calling for improved uranium prices
over the mid-term from a supply deficit as uranium market fundamentals for supply and
demand improve.” Please update and provide the source for this statement.
Western
Uranium Corporation has updated the disclosure and has provided sources on page 4 through 5 in response to the Staff’s request
for sources for analysts’ statements.
The
Ablation Process, page 5
8. We
note your list of benefits of the ablation process. With the goal of balanced disclosure,
please also include any negative factors or uncertainties of the ablation process. In
this regard, please add a risk factor that addresses the risks of the ablation process.
Western
Uranium Corporation has added a description of uncertainties regarding the ablation process to the discussion on page 6 and has
also added a risk factor in that regard on page 9.
Mr.
John Reynolds
Securities
and Exchange Commission
June
21, 2016
Page
4 of 10
Liquidity
and Capital Resources, page 16
9. Please
describe the material terms of the mortgage and credit facility that you assumed after
the acquisition of Black Range and disclose whether the company is still in default,
as stated on page F-16. For guidance, see Section IV.C of SEC Release No. 33-8350. Also
describe the material terms of the notes payable, which you disclose on page F-19. See
Item 303(a)(1) of Regulation S-K.
Pursuant
to Section IV.C of SEC Release No. 33-8350, Western Uranium Corporation has amended the disclosure on page 18 through 19 to include
the material terms of the mortgage and credit facilities assumed in connection with the acquisition of Black Range and to address
whether the Company is still in default. Pursuant to Item 303(a)(1) of Regulation S-K, Western Uranium Corporation has amended
the disclosure to disclose the material terms of the notes payable, as requested by the Staff.
Properties
page 18
10. Only
proven and probable reserves may be disclosed in filings with the United States Securities
and Exchange Commission. However, as a company incorporated in Canada, paragraph (b)
(5) (3) allows for the disclosure of National Instrument 43-101 compliant resources.
Please revise to remove resource disclosure that is not NI 43-101 compliant.
The presentation of Western Uranium Corporation's properties has been revised to clarify that, for the Sage Mine, the Farmer
Girl Property and the Hansen/Taylor Ranch Property, the resources identified are historical estimates produced for the prior
owners of those properties. National Instrument 43-101 permits the disclosure of historical estimates in this fashion, provided
that certain additional disclosure is included (and such disclosure has been added).
Note that the historical estimate provided
for the Sage Mine Property and the Farmer Girl Property is reproduced from a National Instrument 43-101-compliant technical
report prepared for a previous owner of those properties, whereas the historical estimate for the Hansen/Taylor Ranch Property
is reproduced from JORC-compliant reports prepared for that property's previous owner, which is now a subsidiary. For the
Hansen/Taylor Ranch Property, National Instrument 43-101 permits the inclusion of the resource estimates available to the
company, even if those were prepared under JORC and not under National Instrument 43-101, because those resource estimates
constitute a historical estimate.
For the Dunn Project, the scientific and technical information now included is based on information
provided in a National Instrument 43-101-compliant technical report that was also prepared for the property's prior owner,
and that report is now identified as required.
11. For
each of your 43-101 compliant resources, please revise to include the name of the technical
report, the date of the technical report, the date the technical report was filed on
sedar.com, the name of the company that filed the technical
report, and the name of the qualified person who prepared the technical report.
Western Uranium Corporation
has revised the disclosures related to its properties for each NI 43-101 compliant resource (The Sunday Mines Complex and San Rafael),
to include the name of the technical report, the date of the technical report, the date the technical report was filed on
sedar.com, the name of the company that filed the technical report, and the name of the qualified
person who prepared the technical report beginning on page 23 and 25. Western Uranium
Corporation has also provided the same NI 43-101 technical report references for properties which have had their resource disclosed
in the past – these project’s resources are historic resources (Sage Mine, Dunn and Farmer Girl). Additional disclosures
and/or revisions were included on Project Geology, History, and/or Permitting Status sections for the following projects: 1) The
Sunday Mine Complex, 2) San Rafael, 3) Sage, 4) Dunn, 5) Farmer Girl, 6) Hansen/Taylor, 7) Van #4.
Mr.
John Reynolds
Securities
and Exchange Commission
June
21, 2016
Page
5 of 10
12.
Additionally,
mineral resources must have a reasonable prospect for economic extraction. Please tell us how you determined that each of
your resources has a reasonable prospect for economic extraction and revise your filing to include the cut-off grade and pricing.
Western
Uranium Corporation believes that its mineral resources have a reasonable prospect for economic extraction, both with the utilization
of ablation mining technology and without it. However, the Company has not yet been able to perform a Preliminary Economic
Assessment (“PEA”). The inputs to the PEA are dependent on the extent to which ablation mining technology will
be utilized. The Company will not know whether it will be able to utilize the ablation mining technology until the Colorado
Department of Public Health and Environment regulatory authorities decide on if a source material, or other license, is required.
It is possible the Colorado Department of Public Health and Environment decides no license is required. As such, the
Company has not yet been able to determine the cut-off grades and pricing under an economic assessment.
13. Please
tell us if a member of your management team has visited your properties and, if not,
disclose this in your filing.
All
Colorado mining properties that are scheduled to go into production have been visited by all management members of the Company.
Utah mining properties have been visited by the President and CEO.
14. For
each of your properties please disclose the source of power and water that will be utilized
at your properties and fully describe the property infrastructure pursuant to paragraph
(b) of Industry Guide 7.
Pursuant
to paragraph (b) of Industry Guide 7, Western Uranium has disclosed the property infrastructure and the source of power and water
that will be utilized in the section labeled, “Properties”. Each mine has been updated with its individual infrastructure
information.
Mr.
John Reynolds
Securities
and Exchange Commission
June
21, 2016
Page
6 of 10
15. For
each property please discuss your exploration plans as required by paragraph (b) (4)
(i) of Industry Guide 7. The exploration plan should address the following points:
● Give
a breakdown of the exploration timetable and budget, including estimated amounts that
will be required for each exploration activity, such as geophysics, geochemistry, surface
sampling, drilling, etc. for each prospect.
● If
there is a phased program planned, briefly outline all phases.
● If
there are no current detailed plans to conduct exploration on the property, disclose
this prominently.
● Disclose
how the exploration program will be funded.
● Identify
who will be conducting any proposed exploration work and disclose their qualifications.
Western
Uranium Corporation has added disclosure on page 22 that near term exploration is not needed because substantial underground infrastructure
has already been developed.
16. We
note your disclosure on page 22 that assumes a district wide average vanadium r