Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update on the Company′s activities through the end of July 2010. The Company also announced financial results for the second quarter of 2010, which ended June 30, 2010.
Recent Highlights
NRC Source Materials License Upheld. The United States Court of Appeals for the Tenth Circuit in May denied a petition for a rehearing or en banc review of the court′s previous decision that upheld URI′s Nuclear Regulatory Commission (NRC) license to conduct in-situ recovery (ISR) uranium mining in McKinley County, New Mexico. On July 29, 2010, at a public meeting at the offices of the U.S. Nuclear Regulatory Commission, URI presented its intent to file the necessary documents to place its Crownpoint Source Materials License in active status and outlined its plans for the license renewal. The opposing parties were granted an extension until September 15, 2010 of their right to petition the Supreme Court for review.
Favorable Ruling by Tenth Circuit Court. TheUnited States Court of Appeals for the Tenth Circuit en banc held in June that the Company′s Section 8 property in Churchrock, New Mexico is not Indian Country. The ruling means the authority to issue a UIC permit to URI falls under the jurisdiction of the State of New Mexico, and not the U.S. Environmental Protection Agency (USEPA). The ruling enables URI to seek to renew the underground injection control (UIC) permit that it had been granted by the State of New Mexico in 1989. The opposing parties have the right to petition the Supreme Court for review on or before September 13, 2010.
Improved Liquidity Position. In July, URI successfully completed a public offering of 27,142,830 shares of common stock at $0.42 per share, including the exercise by the underwriter of an over-allotment option, with net proceeds to URI of approximately $10.4 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company plans to use the proceeds for general corporate purposes, which may include making additions to URI′s working capital and funding future acquisitions.
Database. URI sold a small part of its extensive geologic database in June for $250,000. The drill logs and maps that were sold were considered non-core assets and therefore not part of the Company′s growth strategy. URI continues to own a large database of over 18,800 drill logs in New Mexico, where the Company holds over 101 million pounds of in-place mineralized uranium material on 183,000 acres. The drill logs represent nearly 23 million feet of drill hole with an estimated replacement value of $700 million.
Section 13 Drilling.URI announced that it expects to begin drilling on its Section 13 property at Ambrosia Lake in early September under the permit the Company was first issued in 2008. The objective of the drilling activity is to evaluate the suitability of the property for ISR mining. URI has approximately 2.4 million pounds of in-place, mineralized uranium material in the Ambrosia Lake district.
NASDAQ Capital Markets Listing. URI transferred its stock listing to the NASDAQ Capital Market, ensuring uninterrupted trading in its shares, which previously traded on another of the exchange′s market tiers. The Company′s stock symbol remained 'URRE? after the transfer, which became effective on July 2, 2010. The Company has until January 4, 2011, to achieve meet the minimum bid price requirement to maintain its listing on the NASDAQ Capital Market.
Don Ewigleben, President and CEO of Uranium Resources noted, 'Critical components of our strategic plan fell into place in the past few months. We received a favorable and long-awaited decision that the state of New Mexico has the authority to issue the underground injection control permits we need to advance our Churchrock project. We received an equally positive ruling confirming the validity of our NRC license in McKinley County, which includes both our Churchrock and Crownpoint projects. And perhaps most important in the short term, we secured the capital necessary to advance our plan.
With the distractions of litigation and liquidity issues behind us, we can now focus on the future. We will move forward with our drilling activity at Ambrosia Lake to determine the property′s suitability for ISR mining. We are also committed to returning our NRC license to active status. Concurrently, we will continue to maintain strict cost discipline, pursue the many opportunities that have presented themselves recently and, where appropriate, monetize any non-core assets as we did with the few Texas drill data that we sold this last quarter,? he continued.
Liquidity Discussion
Cash at June 30, 2010 was $11.4 million compared with $3.8 million at March 31, 2010. The increase in cash was from the Company′s common stock offering that closed on June 25, 2010, in which the Company sold 23.8 million shares of common stock for net proceeds of $9.1 million. Subsequent to the end of the second quarter the underwriter exercised its over-allotment option under which an additional 3.3 million shares were sold for net proceeds of $1.3 million. The over-allotment proceeds are not included in the June 30, 2010 cash balance. Cash at July 31, 2010 was $12.1 million.
The Company used $1.3 million in cash in operations during the second quarter of 2010 compared with $2.0 million used in operations in the trailing first quarter of 2010. The second quarter′s cash burn rate was less than the Company′s targeted monthly burn rate of $500,000. For the first six months of 2010, URI used $3.3 million in operations compared with $2.3 million used in operations during the first half of 2009.
Mr. Ewigleben commented, 'Now that several major hurdles are behind us, we are better positioned to take advantage of any recovery in the price of uranium. In Texas, our focus is on expanding our reserve base. In New Mexico, our focus is on renewing the necessary permitting to allow us to advance to production. We feel the uranium market has reached a bottom and the demand exists to return to a price level that can ultimately sustain profitable mining. The nuclear energy market is expanding globally and we believe will also build again in the U.S. This focus on nuclear power is driving the burgeoning global need for uranium. We look forward to the second half of 2010 and our future as we realize the potential of our significant asset base.?
Teleconference and Webcast
The Company is hosting a conference call and webcast today at 11 a.m. ET. During the call, Don Ewigleben, President and Chief Executive Officer, will review financial results for the quarter and will provide an update on URI′s strategies and outlook. He will also discuss the recent stock offering as well as activities underway in New Mexico following the 10th Circuit Court of Appeals decision upholding the jurisdiction of the Company′s UIC permit. A question-and-answer session will follow.
A transcript will also be placed on the Company′s Web site, once available.
About Uranium Resources, Inc.
Uranium Resources Inc. explores for, develops and mines uranium. Since its incorporation in 1977, URI has produced over 8 million pounds of uranium by in-situ recovery (ISR) methods in the state of Texas where the Company currently has ISR mining projects. URI also has 183,000 acres of uranium mineral holdings and 101.4 million pounds of in-place mineralized uranium material in New Mexico and a NRC license to produce up to 1 million pounds of uranium per year. The Company acquired these properties over the past 20 years along with an extensive information database of historic mining logs and analysis. None of URI′s properties is currently in production.
URI′s strategy is to fully exploit its resource base in New Mexico and Texas, expand its asset base both within and outside of New Mexico and Texas, partner with larger mining companies that have undeveloped uranium or with junior mining companies that do not have the mining experience of URI, as well as provide restoration expertise to those that require the capability or lack the proficiency.
Uranium Resources routinely posts news and other information about the Company on its web site at
Safe Harbor Statement
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are subject to risks, uncertainties and assumptions and are identified by words such as 'expects,? 'estimates,? 'projects,? 'anticipates,? 'believes,? 'could,? and other similar words. All statements addressing operating performance, events, or developments that the Company expects or anticipates will occur in the future, including but not limited to statements relating to the Company′s mineralized uranium materials, timing of receipt of mining permits, production capacity of mining operations planned for properties in South Texas and New Mexico, planned dates for commencement of production at such properties, revenue, cash generation and profits are forward-looking statements. Because they are forward-looking, they should be evaluated in light of important risk factors and uncertainties. These risk factors and uncertainties include, but are not limited to, the spot price and long-term contract price of uranium, weather conditions, operating conditions at the Company′s mining projects, government regulation of the mining industry and the nuclear power industry, world-wide uranium supply and demand, availability of capital, timely receipt of mining and other permits from regulatory agents and other factors which are more fully described in the Company′s documents filed with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should any of the Company′s underlying assumptions prove incorrect, actual results may vary materially from those currently anticipated. In addition, undue reliance should not be placed on the Company′s forward-looking statements. Except as required by law, the Company disclaims any obligation to update or publicly announce any revisions to any of the forward-looking statements contained in this press release.
URANIUM RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
June 30, 2010
December 31, 2009
Current assets:
Cash and cash equivalents
$
11,423,202
$
6,092,068
Receivables, net
1,318
63,890
Prepaid and other current assets
202,460
125,400
Total current assets
11,626,980
6,281,358
Property, plant and equipment, at cost:
Uranium properties
81,566,473
82,212,719
Other property, plant and equipment
926,149
886,992
Less-accumulated depreciation, depletion and impairment
(63,883,496
)
(64,155,311
)
Net property, plant and equipment
18,609,126
18,944,400
Long-term investment:
Certificates of deposit, restricted
6,815,842
6,786,000
$
37,051,948
$
32,011,758
June 30,
2010
December 31, 2009
Current liabilities:
Accounts and short term notes payable
$
604,108
$
641,727
Current portion of restoration reserve
1,254,672
1,236,588
Royalties and commissions payable
665,745
693,303
Deferred compensation
697,028
?
Accrued interest and other accrued liabilities
305,936
321,235
Current portion of capital leases
90,843
112,559
Total current liabilities
3,618,332
3,005,412
Other long-term liabilities and deferred credits
4,518,562
5,487,389
Long term capital leases, less current portion
167,744
207,922
Long-term debt, less current portion
450,000
450,000
Commitments and contingencies
Shareholders′ equity:
Common stock, $.001 par value, shares
authorized: 200,000,000; shares issued and outstanding (net
of treasury shares): 2010?80,930,863; 2009?56,781,792
80,969
56,820
Paid-in capital
157,318,036
147,837,204
Accumulated deficit
(129,092,277
)
(125,023,571
)
Less: Treasury stock (38,125 shares), at cost
(9,418
)
(9,418
)
Total shareholders′ equity
28,297,310
22,861,035
$
37,051,948
$
32,011,758
URANIUM RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2010
2009
2010
2009
Revenue:
Uranium sales
$
?
$
1,786,973
$
?
$
3,209,363
Total revenue
?
1,786,973
?
3,209,363
Costs and expenses:
Cost of uranium sales
Royalties and commissions
?
166,937
?
305,652
Operating expenses
88,452
762,753
230,310
1,632,702
Accretion/amortization of restoration reserve
39,881
114,206
77,288
258,208
Depreciation and depletion
192,359
181,969
389,846
413,263
Impairment of uranium properties
179,200
1,232,615
389,647
1,414,989
Exploration expenses
725
4,050
725
4,823
Total cost of uranium sales
500,617
2,462,530
1,087,816
4,029,637
Earnings (loss) from operations before
corporate expenses
(500,617
)
(675,557
)
(1,087,816
)
(820,274
)
Corporate expenses?
General and administrative
1,455,379
1,578,967
3,178,612
3,020,262
Write-off of target acquisition costs
?
?
?
?
Depreciation
36,234
36,751
71,250
71,888
Total corporate expenses
1,491,613
1,615,718
3,249,862
3,092,150
Loss from operations
(1,992,230
)
(2,291,275
)
(4,337,678
)
(3,912,424
)
Other income (expense):
Interest expense
(2,910
)
(10,375
)
(10,833
)
(21,603
)
Interest and other income, net
274,584
55,743
279,805
114,455
Net loss
$
(1,720,556
)
$
(2,245,907
)
$
(4,068,706
)
$
(3,819,572
)
Net loss per common share:
Basic
$
(0.03
)
$
(0.04
)
$
(0.07
)
$
(0.07
)
Diluted
$
(0.03
)
$
(0.04
)
$
(0.07
)
$
(0.07
)
Weighted average common shares and common
equivalent shares per share data:
Basic
58,814,401
56,249,628
57,835,348
56,173,559
Diluted
58,814,401
56,249,628
57,835,348
56,173,559
URANIUM RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended June 30,
2010
2009
Net loss
$
(4,068,706
)
$
(3,819,572
)
Reconciliation of net earnings to cash used in operations?
Accretion/amortization of restoration reserve
77,288
258,208
Depreciation and depletion
461,096
485,151
Impairment of uranium properties
389,647
1,414,989
Decrease in restoration and reclamation accrual
(653,544
)
(1,076,575
)
Stock compensation expense
525,475
381,941
Other non-cash items, net
14,859
?
Effect of changes in operating working capital items?
Decrease in receivables
62,572
29,529
Decrease in inventories
?
408,695
(Increase) decrease in prepaid and other current assets
(77,060
)
250,221
Decrease in payables, accrued liabilities and deferred credits
(80,476
)
(620,328
)
Net cash used in operations
(3,348,849
)
(2,287,741
)
Investing activities:
Increase in certificates of deposit, restricted
(29,842
)
(83,925
)
Additions to property, plant and equipment?
Kingsville Dome
(89,400
)
(80,534
)
Vasquez
(7,500
)
(90,577
)
Rosita
(14,048
)
(28,024
)
Churchrock
(90,266
)
(59,676
)
Other property
(6,573
)
(16,095
)
Net cash used in investing activities
(237,629
)
(358,831
)
Financing activities:
Issuance of common stock, net
8,979,506
?
Payments on borrowings
(61,894
)
(83,536
)
Net cash provided by (used in) financing activities
8,917,612
(83,536
)
Net increase (decrease) in cash and cash equivalents
