Uranium Resources, Inc. Provides Third Quarter 2010 Update
Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update
on the Company′s activities and announced its financial results for the
third quarter of 2010, which ended September 30, 2010.
Recent Highlights
Letter of Intent Signed with Industry Leader.
On November 4, 2010, URI announced the signing of a non-binding letter
of intent with Cameco Resources, a subsidiary of Cameco (NYSE: CCJ), for
a large ranch in South Texas. The agreement, which is contingent on URI
successfully completing a lease agreement with the land owners, outlines
a three-phase exploration program that would be funded by Cameco. There
is an option for a production joint venture.
Liquidity Position Further Strengthened. On
November 5, 2010, URI successfully completed the second draw down under
its existing shelf registration statement when it closed its
underwritten registered offering of 8,222,500 shares of common stock at
a price of $1.16 per share, including the exercise by the underwriter of
an over-allotment option, with net proceeds to URI of approximately $9.0
million. The Company plans to use the proceeds for general corporate
purposes and to fund future potential acquisitions.
URI Settles Lease Agreement in Texas. On
September 29, 2010, URI settled a two-year old lawsuit regarding a lease
agreement in Texas; and as a result, eliminated costly legal fees while
enabling discussions on additional properties with an estimated 250,000
pounds of in place mineralized uranium material.
Tenth Circuit Court Ruling Stands. No
petitions were filed by the deadline to review the June 2010 United
States Court of Appeals for the 10th Circuit en banc ruling that URI′s
Section 8 property in Churchrock, New Mexico is not Indian Country, thus
affirming the authority of the State of New Mexico to issue the
underground injection control permit, which was granted to URI in 1989.
Documents Submitted to NRC to Activate License.
In October, URI submitted the necessary documents to the U.S. Nuclear
Regulatory Commission to activate its NRC License. URI is currently
awaiting a determination from the Commission, and once active, the
license may be utilized according to its present terms and conditions
while pending renewal from the NRC.
Opponents petitioned the United States Supreme Court for review of the
March 2010, 10th Circuit Court of Appeals′ ruling that upheld the
Company′s NRC license to conduct in-situ recovery (ISR) uranium mining
at the Churchrock/Crown Point project. The Supreme Court has not yet
acted on the petition which does not impede the Company′s progress.
Section 13 Drilling Completed.URI
completed drilling on its Section 13 property in Ambrosia Lake in
September. Core samples were shipped to an outside laboratory for the
purpose of determining the suitability of the property for ISR mining.
Results are expected to be completed in December 2010. If the property
is not ISR amenable, then it will fall into the Company′s conventional
mining portfolio. URI has approximately 2.4 million pounds of in-place,
mineralized uranium material in the Ambrosia Lake district.
NASDAQ Listing. URI regained compliance
with the $1.00 per share minimum bid price requirement for continued
listing on the NASDAQ Capital Market on October 7, 2010.
Don Ewigleben, President and CEO of Uranium Resources, noted, 'The first
nine months of 2010 have been a dynamic and rewarding time for the
Company. We have made measurable progress on all fronts, as we have
continued to deliver on our strategic initiatives. Last week, we
completed the sale of 8,222,500 shares of common stock which provided
net proceeds of approximately $9.0 million. As a result, we have further
strengthened our balance sheet with the requisite capital to fund our
growth strategy.?
Mr. Ewigleben commented on recent milestones and developments, 'Our
recent letter of intent with Cameco Resources has significantly enhanced
our Texas opportunities; and coupled with the settlement of the
litigation regarding a lease agreement, we are optimally positioned to
move forward on our Texas strategy. In New Mexico, we are also making
substantial progress as we completed drilling activity on our Ambrosia
Lake property and await results by the end of the year. Moreover, no
petitions were filed by the deadline to review the June 2010, United
States Court of Appeals for the 10th Circuit ruling that URI′s New
Mexico property is not Indian Country, thus affirming the authority of
the State of New Mexico to issue the underground injection control
permit.?
Mr. Ewigleben concluded, 'Our 30-plus years in uranium exploration,
development, and mining operations, our experience as the only uranium
company with approved restoration of an ISR mining operation in the
United States and our significant asset base provides us a significant
advantage in the uranium industry. Strategically, we continue to advance
our properties toward production as we identify new projects and
opportunities to grow our asset base, and, importantly, as we establish
relationships and develop opportunities to continually grow value.?
Liquidity Discussion
Cash at September 30, 2010 was $10.5 million compared with $11.4 million
at the end of the trailing second quarter and $6.1 million at the end of
2009. The significant increase from the prior year end reflected the
Company′s common stock offering in June 2010 and the over-allotment
option that was exercised in July. Subsequent to the end of the third
quarter, URI completed another common stock offering, including an
over-allotment, which resulted in net proceeds of $9.0 million. The cash
balance as of the close of the offering on November 5, 2010 was $18.8
million.
As previously mentioned, on September 29, 2010, URI settled a Texas land
lease dispute and agreed to pay the plaintiffs $1.38 million in cash,
which includes amounts for prior royalties that the plaintiffs had
previously rejected. The payment of this settlement is subject to
execution of amendments to the leases and to documentation of other
aspects of the settlement and dismissal of the suit and is expected to
be made prior to year end 2010.
The Company used $1.9 million in cash in operating activities during the
third quarter of 2010 compared with $1.3 million and $2.0 million used
in operations in the second quarter and first quarter of 2010,
respectively. For the nine-month period of 2010, URI used $5.2 million
in operations compared with $3.3 million used in operations during the
corresponding period of 2009.
Teleconference and Webcast
The Company is hosting a conference call and webcast today at 1:30 p.m.
ET. During the call, Don Ewigleben, President and Chief Executive
Officer, will review financial results for the quarter, provide an
update on URI′s strategies and outlook, and discuss the recent stock
offering. A question-and-answer session will follow.
The URI conference call can be accessed by dialing (201) 689-8562 and
entering conference ID number 359643. The live listen-only audio webcast
can be monitored on the Company′s Web site at www.uraniumresources.com,
where it will be archived afterwards. To listen to the archived call,
dial (858) 384-5517, and enter conference ID number 359643. The replay
will be available from 4:30 p.m. ET the day of the teleconference until
11:59 p.m. ET Monday, November 15, 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
are 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. | ||||||||
| September 30, 2010 | December 31, 2009 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 10,505,189 | $ | 6,092,068 | ||||
Receivables, net | 4,602 | 63,890 | ||||||
Prepaid and other current assets | 283,277 | 125,400 | ||||||
Total current assets | 10,793,068 | 6,281,358 | ||||||
Property, plant and equipment, at cost: | ||||||||
Uranium properties | 81,722,252 | 82,212,719 | ||||||
Other property, plant and equipment | 948,687 | 886,992 | ||||||
Less-accumulated depreciation, depletion and impairment | (64,106,430 | ) | (64,155,311 | ) | ||||
Net property, plant and equipment | 18,564,509 | 18,944,400 | ||||||
Long-term investment: | ||||||||
Certificates of deposit, restricted | 6,827,795 | 6,786,000 | ||||||
$ | 36,185,372 | $ | 32,011,758 | |||||
Current liabilities: | ||||||||
Accounts and short term notes payable | $ | 566,226 | $ | 641,727 | ||||
Current portion of restoration reserve | 1,251,984 | 1,236,588 | ||||||
Royalties and commissions payable | 665,745 | 693,303 | ||||||
Deferred compensation | 697,028 |
| ||||||
Accrued legal settlement | 1,375,000 |
| ||||||
Accrued interest and other accrued liabilities | 398,485 | 321,235 | ||||||
Current portion of capital leases | 90,740 | 112,559 | ||||||
Total current liabilities | 5,045,208 | 3,005,412 | ||||||
Other long-term liabilities and deferred credits | 4,423,625 | 5,487,389 | ||||||
Long term capital leases, less current portion | 139,322 | 207,922 | ||||||
Long-term debt, less current portion | 450,000 | 450,000 | ||||||
Commitments and contingencies (Notes 5 and 12) | ||||||||
Shareholders′ equity: | ||||||||
Common stock, $.001 par value, shares authorized: 200,000,000; shares issued and outstanding (net of treasury shares): 2010?84,264,256; 2009?56,781,792 |
| 56,820 | ||||||
Paid-in capital | 158,809,128 | 147,837,204 | ||||||
Accumulated deficit | (132,756,758 | ) | (125,023,571 | ) | ||||
Less: Treasury stock (38,125 shares), at cost | (9,418 | ) | (9,418 | ) | ||||
Total shareholders′ equity | 26,127,217 | 22,861,035 | ||||||
$ | 36,185,372 | $ | 32,011,758 | |||||
URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
| Three Months Ended September 30, | Nine months Ended September 30, | |||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||
Revenues: | ||||||||||||||||
Uranium sales | $ |
| $ | 1,406,782 | $ |
| $ | 4,616,145 | ||||||||
Total revenue |
| 1,406,782 |
| 4,616,145 | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of uranium sales | ||||||||||||||||
Royalties and commissions |
| 143,319 |
| 448,971 | ||||||||||||
Operating expenses | 67,260 | 886,313 | 297,570 | 2,519,015 | ||||||||||||
Accretion/amortization of restoration reserve | 39,143 | (3,818 | ) | 116,431 | 254,390 | |||||||||||
Depreciation and depletion | 186,603 | 474,207 | 576,449 | 887,470 | ||||||||||||
Impairment of uranium properties | 352,631 | 400,231 | 742,278 | 1,815,220 | ||||||||||||
Exploration expenses |
| 34,929 | 725 | 39,752 | ||||||||||||
Total cost of uranium sales | 645,637 | 1,935,181 | 1,733,453 | 5,964,818 | ||||||||||||
Loss from operations before corporate expenses | (645,637 | ) | (528,399 | ) | (1,733,453 | ) | (1,348,673 | ) | ||||||||
Corporate expenses | ||||||||||||||||
General and administrative | 1,674,030 | 1,989,331 | 4,852,642 | 5,009,593 | ||||||||||||
Provision for legal settlement | 1,375,000 |
| 1,375,000 |
| ||||||||||||
Depreciation | 36,331 | 35,792 | 107,581 | 107,680 | ||||||||||||
Total corporate expenses | 3,085,361 | 2,025,123 | 6,335,223 | 5,117,273 | ||||||||||||
Loss from operations | (3,730,998 | ) | (2,553,522 | ) | (8,068,676 | ) | (6,465,946 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (7,597 | ) | (10,119 | ) | (18,430 | ) | (31,722 | ) | ||||||||
Interest and other income, net | 74,114 | 39,053 | 353,919 | 153,508 | ||||||||||||
Net loss | $ | (3,664,481 | ) | $ | (2,524,588 | ) | $ | (7,733,187 | ) | $ | (6,344,160 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.12 | ) | $ | (0.11 | ) | ||||
Diluted | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.12 | ) | $ | (0.11 | ) | ||||
Weighted average common shares and common equivalent shares: | ||||||||||||||||
Basic | 83,720,754 | 56,453,076 | 66,558,635 | 56,267,755 | ||||||||||||
Diluted | 83,720,754 | 56,453,076 | 66,558,635 | 56,267,755 | ||||||||||||
URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
Nine months Ended | ||||||||
| 2010 | 2009 | |||||||
Net loss | $ | (7,733,187 | ) | $ | (6,344,160 | ) | ||
Reconciliation of net loss to cash used in operations? | ||||||||
Accretion/amortization of restoration reserve | 116,431 | 254,390 | ||||||
Depreciation and depletion | 684,030 | 995,150 | ||||||
Impairment of uranium properties | 742,278 | 1,815,220 | ||||||
Decrease in restoration and reclamation accrual | (1,072,148 | ) | (1,487,541 | ) | ||||
Stock compensation expense | 795,743 | 960,811 | ||||||
Other non-cash items, net | 14,858 | 2,132 | ||||||
Effect of changes in operating working capital items? | ||||||||
Increase (decrease) in receivables | 59,288 | (323,878 | ) | |||||
Decrease in inventories |
| 1,010,845 | ||||||
(Increase) decrease in prepaid and other current assets | (157,877 | ) | 299,355 | |||||
Increase (decrease) in payables, accrued liabilities and deferred credits | 1,349,191 | (439,413 | ) | |||||
Net cash used in operating activities | (5,201,393 | ) | (3,257,089 | ) | ||||
Investing activities: | ||||||||
Increase in certificates of deposit, restricted | (41,795 | ) | (120,826 | ) | ||||
Additions to property, plant and equipment? | ||||||||
Kingsville Dome | (143,324 | ) | (109,524 | ) | ||||
Vasquez | (7,500 | ) | (99,578 | ) | ||||
Rosita | (63,852 | ) | (31,759 | ) | ||||