Uranium Resources, Inc. Reviews 2010 and Outlines Strategic Initiatives for 2011
Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update
on the Company′s activities, its liquidity position as of December 31,
2010 and its strategy and outlook for 2011.
Excellent Progress in 2010 Set the Stage for Future Growth and
Expansion
Texas Properties and Progress
The Company has focused on reclamation activities in Texas since its
two remaining operating wellfields were fully depleted in June 2009.
Kingsville Dome (KVD): Treated over 250 million gallons of
groundwater, completing restoration in PA1 and PA2 which should
move to stabilization testing in Q2. Full scale restoration has
begun at the remaining KVD production area.
Rosita: Both production areas completed restoration and remained
in stabilization throughout 2010 and documents have been filed
with the state of Texas to allow for release.
Vasquez: Completed restoration in PA2 and converted to
stabilization phase. Began restoration in PA1 which should be
completed in 2012.
Payment of $1.375 million was made late January as final action on a
settlement made in October 2010 of a two-year-old lawsuit regarding a
lease agreement in Texas. The settlement eliminated costly legal fees
and risk of higher royalty claims while enabling future potential
discussions on additional properties with an estimated 250,000 pounds
of in-place mineralized uranium material.
URI signed a non-binding letter of intent with Power Resources, Inc.
d/b/a Cameco Resources (CR), a subsidiary of Cameco (NYSE: CCJ), in
the latter part of 2010 with the expectation that they would jointly
explore a new green field site in South Texas. On January 3, 2011, URI
took an important step in its strategy to expand its resource base in
Texas with the announcement that it completed a three-year agreement
to explore 53,500 acres in Kenedy County, with an option to lease the
acreage for uranium production. The property is located within the
prolific South Texas uranium district and based on water sampling
tests, is expected to yield uranium deposits that can be produced by
in-situ technology.
Don Ewigleben, President and CEO of Uranium Resources, commented,
'During 2010, we reset our strategy to recognize the value of our
processing facilities in Texas and laid out a plan to identify
opportunities to explore for and develop resources in that region. We
successfully acquired what we believe is an ideal property lease that
has strong indications for uranium potential. Additionally, we are
nearing completion of the agreements with our prospective partner which
provide us the financial means to explore and develop the property and,
assuming we do discover sufficient, producible uranium, the toll milling
agreement to capitalize on our processing plants, in keeping with our
strategic objective.'
New Mexico Activities
Two remaining litigation cases that delayed URI′s progress in New
Mexico were cleared in 2010. 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. With the second case, the opponents
petition to 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 uranium mining at the
Churchrock/Crownpoint project was denied.
In October 2010, URI submitted the necessary documents to the U.S.
Nuclear Regulatory Commission to reactivate its NRC License. The
process is ongoing, awaiting 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.
URI completed drilling on its Section 13 property in Ambrosia Lake in
September 2010. The purpose for the drilling was to categorize the
property based on the best mining method for the resource. A
third-party laboratory analysis of the approximately 70 feet of cores
recovered from its Ambrosia Lake property showed low organic carbons,
which, in URI's opinion, indicates that some of the 860,000 pounds of
in-place mineralized material at this property may be amenable to in
situ recovery (ISR) mining. This property would require licensing and
permitting and is much lower in priority than the Company′s Church
Rock/Crownpoint project.
Mr. Ewigleben noted, 'We made considerable progress in New Mexico this
last year and have detailed the progressive actions necessary to move
our Churchrock property toward production in 2013. With 101.4 million
pounds of in place mineralized uranium material, the eighth-largest
known uranium resource base in the world, New Mexico is clearly our
premier location. We believe we have a significant advantage in that
region and are pursuing opportunities to increase our assets and build
greater value for our shareholders.'
Liquidity Position Significantly Improved in 2010
During 2010, the Company completed two successful common stock
offerings, including the exercise of the over-allotment options,
raising $10.4 million in the second quarter and $9.0 million in the
fourth quarter. This capital enabled URI to further its strategy of
building its asset base in Texas and advancing its properties in New
Mexico toward production.
Cash at December 31, 2010 was $15.4 million compared with $10.5
million at the end of the trailing third quarter and $6.1 million at
the end of 2009.
Subsequent to the end of 2010, URI paid $1.0 million for the execution
of the South Texas land exploration and lease option agreement, and
expects to be reimbursed $0.3 million by its prospective joint venture
partner after the signing of an exploration agreement.
2011 Plans Focused on Advancing Texas and New Mexico Properties
URI′s objectives in Texas are to explore for and develop a larger
reserve base, advance current properties through licensing and
permitting, lease additional targeted properties and work with its
customers to redefine the terms of its sales agreements to enable better
margins and greater likelihood of returning to production in Texas.
URI is nearing completion of an exploration agreement with the global
leader in uranium production; the agreement also entails operating and
toll milling agreements. The exploration agreement will provide for a
three-phase, three-year exploration program, funded by the partner who
has the option to earn up to 70% of the property rights. URI is
expected to be the operator of the site and the uranium would be
processed at URI′s Kingsville Dome or Rosita processing facility under
the toll milling agreement. URI expects to commence exploration
drilling in the second quarter of 2011.
The Company plans to advance certain properties in Texas toward
production, although given current sales contracts, uranium pricing,
and the less than lucrative nature of the resources available for
production, the Company does not expect at this time to return to
production in Texas in 2011. Currently, there are about 400,000
identified recoverable pounds of in place uranium that would take two
to three years to produce. These resources are relatively costly to
produce at an estimated $48 per pound.
URI′s focus in New Mexico is on the completion of its feasibility study
which it plans to complete at the end of 2011. It expects that it will
be able to report preliminary concepts regarding its priority production
property, Church Rock Section 8, and its processing facility plans early
in the third quarter of 2011.
The feasibility study will provide project parameters, costs, and
equipment and personnel requirements to begin production at Churchrock
Section 8. The evaluation includes wellfields, satellite plant and a
central processing plant at Crownpoint. Outcome will also include the
definition of project timelines, financial requirements and milestones.
The feasibility study will also evaluate the Company′s conventional
mining properties, which currently make up approximately 55% of the
101.4 million pounds of in-place mineralized uranium material in New
Mexico. URI believes it is prudent to evaluate the cost and timing
associated with advancing the conventional properties forward so that
it is in a position to evaluate proposals and partnerships in
conjunction with New Mexico′s vast uranium resource base. Conventional
mining processes would take several years longer than ISR mining, so
early initial planning is required in order to be prepared for five
and ten years from now.
URI plans to be in a position to begin construction of its Church
Rock/Crownpoint ISR wellfield and processing facilities in 2012 and
production in 2013 assuming that all permits and licenses are in
place, that there is a sustained recovery in uranium prices and
financing is available for the necessary capital expenditures to build
the infrastructure.
URI holds the necessary NRC License, EPA Aquifer Exemption, State of
New Mexico Water Rights and Underground Injection Control Permit to
allow Church Rock Section 8 development to begin in January 2012.
Mr. Ewigleben concluded, '2011 looks to be another year of significant
advancement for URI. We will be quite intensely involved in our
exploration activities in Texas, the feasibility study in New Mexico and
continuing our efforts to consolidate assets in New Mexico. Given
general expectations for uranium pricing over the long tem and the
opportunities that we see on the horizon with our efforts in both
states, we believe the next several years should demonstrate momentous
progress for the Company.?
Teleconference and Webcast
The Company is hosting a conference call and webcast today at 1:30 p.m.
ET. During the call, management will provide an update on URI′s
strategies, outlook, and progress in advancing its Texas and New Mexico
properties. A question-and-answer session will follow.
The URI conference call can be accessed by dialing (201) 689-8562 and
entering conference ID number 366232. The live listen-only audio webcast
can be monitored on the Company′s website 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 366232. The replay
will be available from 4:30 p.m. ET the day of the teleconference until
11:59 p.m. ET Monday, February 21, 2011.
A transcript will also be placed on the Company′s website, 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 news 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 news release.
Investor:
Kei Advisors LLC
Deborah K. Pawlowski
Phone:
716-843-3908
Email: dpawlowski@keiadvisors.com
Media:
Mat
Lueras
Vice President, Corporate Development
Phone:
505-269-8317
E-mail: mlueras@uraniumresources.com
or
Uranium
Resources, Inc.
Don Ewigleben
President & Chief Executive
Officer
Phone: 972-219-3330