Uranium Resources, Inc. Provides Second Quarter 2010 Update
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.
The URI conference call can be accessed the by dialing (201) 689-8562.
The listen-only audio webcast can be monitored on the Company′s Web site
at www.uraniumresources.com.
To listen to the archived call, dial (201) 612-7415 and entering
reference ID number 353825. The telephonic replay will be available from
2:00 p.m. today until 11:59 p.m. ET, Monday, August 16, 2010.
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 www.uraniumresources.com.
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 |
|
| $ | 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 |
|
|
|
|
|
| ||||
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 |
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|
|
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Less: Treasury stock (38,125 shares), at cost |
|
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| ||||
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 | ||||||||||||||||