Uranium Resources, Inc. Provides First Quarter 2011 Update
Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update
on the Company′s activities, its liquidity position as of March 31, 2011
and its strategy and outlook for 2011.
Don Ewigleben, President and CEO of URI, commented, 'We remain strongly
encouraged regarding the outlook for the uranium market and the nuclear
power industry. The devastating events in Japan creating the challenges
faced with the Fukushima nuclear power facility are daunting, but will
provide an excellent proving ground for the potential of nuclear power,
the requirements that must be considered even in the most bizarre of
situations and proof that controls and safety measures can work when
properly applied. Although there is yet to be more discussion, in the
end we expect the recognition of nuclear power as a global necessity
will prevail. This in turn will revive the conversation regarding the
shortage of uranium needed to supply the existing nuclear facilities
around the world, as well as any growth plans, and importantly, the
rapidly nearing shortage of uranium the U.S. could realize come 2013.?
Major Progress Made with Joint Venture in Texas
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.
On January 3, 2011, URI announced that it completed a three-year
agreement to explore 54,847 acres in Kenedy County, with an option to
lease the acreage for uranium production. The property, which will be
know as the "Los Finados Project,′ 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.
Significantly, URI announced on May 10, its joint venture agreement
with Cameco for a three-phase, three-year exploration program on the
Los Finados property. Having completed the joint venture agreement,
URI expects to begin the drilling program in the summer of 2011.
Given current uranium pricing, existing unfavorable sales contracts,
and the less than lucrative nature of the available resources, the
Company does not expect to return to production in Texas in 2011.
Currently, the Company has approximately 664,000 identified pounds of
in-place mineralized uranium material that could be produced over a
two to three year period.
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 430 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: The first two 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.
Feasibility Study Progressing in New Mexico
URI′s focus in New Mexico is on the completion of its feasibility study
which it plans to complete by the end of 2011. The evaluation includes
the economic analysis and operating requirements for the in situ
recovery of its uranium assets that are amenable to this lower cost
mining method which includes the wellfields, satellite plants and a
central processing plant at Crownpoint. URI 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. Its objective is to be in a position to
begin production on this property, which has 6.5 million pounds of
in-place mineralized uranium material, by mid-2013.
Assuming that the necessary financial resources are in place and
uranium prices have recovered, URI plans to begin construction of its
Churchrock/Crownpoint ISR wellfield and processing facilities in 2012,
with full production to take place in mid-2013. Given the most recent
projections, construction costs will likely be at the high end of the
$35-50 million range.
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. The
Company also submitted all of the necessary documents to the New
Mexico Environmental Department to renew our Underground Injection
Control Permit.
Don Ewigleben, President and CEO of Uranium Resources, commented,
'Although a tedious process, we are making progress with the feasibility
studies. While the analysis and preparation of the feasibility studies
is a very detailed process, the finished product will identify and
define the costs and options that we must evaluate for mining of uranium
from the Churchrock/Crownpoint uranium project.?
Liquidity Position
Cash at March 31, 2011 was $11.1 million compared with $15.4 million at
the end of 2010 and $3.8 million at the end of the prior year first
quarter. The increase from the first quarter of 2010 was due to two
successful common stock offerings that raised $19.4 million in 2010. The
decrease from 2010 year-end reflects ongoing reclamation activities in
Texas, and the following non-core payments.
Payment of $1.375 million was made in late January 2011 as final
action on a settlement made in October 2010 of a two-year-old lawsuit
regarding a lease agreement in Texas.
Funding of $500,000 to collateralize our financial surety obligations.
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 dialling (201) 689-8562. The
live listen-only audio webcast can be monitored on the Company′s website
at www.uraniumresources.com,
where it will be archived afterwards. A transcript will also be placed
on the Company′s website, once available.
To listen to the archived call, dial (858) 384-5517, and enter replay
pin number 372019. The replay will be available from 4:30 p.m. ET the
day of the teleconference until 11:59 p.m. ET Wednesday, May 18, 2011.
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.
| URANIUM RESOURCES, INC. | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| (Unaudited) | |||||||||
| March 31, | December 31, | ||||||||
| 2011 | 2010 | ||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 11,136,988 | $ | 15,386,472 | |||||
Receivables, net | 998 | 46,244 | |||||||
Prepaid and other current assets | 272,217 | 179,231 | |||||||
Total current assets | 11,410,203 | 15,611,947 | |||||||
Property, plant and equipment, at cost: | |||||||||
Uranium properties | 83,091,441 | 82,989,579 | |||||||
Other property, plant and equipment | 895,711 | 905,511 | |||||||
Less-accumulated depreciation, depletion and impairment | (64,471,959 | ) | (64,282,888 | ) | |||||
Net property, plant and equipment | 19,515,193 | 19,612,202 | |||||||
Long-term investment: | |||||||||
Certificates of deposit, restricted | 7,847,197 | 7,337,366 | |||||||
$ | 38,772,593 | $ | 42,561,515 | ||||||
Current liabilities: | |||||||||
Accounts payable | $ | 935,711 | $ | 602,190 | |||||
Current portion of restoration reserve | 1,249,453 | 1,239,588 | |||||||
Royalties and commissions payable | 665,745 | 665,745 | |||||||
Deferred compensation | ? | 697,028 | |||||||
Accrued legal settlement | ? | 1,375,000 | |||||||
Accrued interest and other accrued liabilities | 376,802 | 348,269 | |||||||
Current portion of capital leases | 75,123 | 83,183 | |||||||
Total current liabilities | 3,302,834 | 5,011,003 | |||||||
Asset retirement obligations | 3,667,025 | 3,804,057 | |||||||
Other long-term deferred credits | 500,000 | 500,000 | |||||||
Long term capital leases, less current portion | 104,141 | 119,588 | |||||||
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): 2011?93,395,030; 2010?92,430,306 |
| 92,468 | |||||||
Paid-in capital | 169,069,209 | 167,971,955 | |||||||
Accumulated deficit | (138,404,631 | ) | (135,378,138 | ) | |||||
Less: Treasury stock (38,125 shares), at cost | (9,418 | ) | (9,418 | ) | |||||
Total shareholders′ equity | 30,748,593 | 32,676,867 | |||||||
$ | 38,772,593 | $ | 42,561,515 | ||||||
| URANIUM RESOURCES, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
Revenues: | ||||||||
Uranium sales | $ | ? | $ | ? | ||||
Total revenue | ? | ? | ||||||
Costs and expenses: | ||||||||
Cost of uranium sales | ||||||||
Operating expenses | 151,149 | 141,858 | ||||||
Accretion/amortization of restoration reserve | 38,199 | 37,407 | ||||||
Depreciation and depletion | 172,729 | 197,487 | ||||||
Impairment of uranium properties | 305,914 | 210,447 | ||||||
Exploration expenses | 91,898 | ? | ||||||
Total cost of uranium sales | 759,889 | 587,199 | ||||||
Loss from operations before corporate expenses | (759,889 | ) | (587,199 | ) | ||||
Corporate expenses? | ||||||||
General and administrative | 2,298,991 | 1,723,233 | ||||||
Depreciation | 34,879 | 35,016 | ||||||
Total corporate expenses | 2,333,870 | 1,758,249 | ||||||
Loss from operations | (3,093,759 | ) | (2,345,448 | ) | ||||
Other income (expense): | ||||||||
Interest expense | (5,620 | ) | (7,923 | ) | ||||
Interest and other income, net | 72,886 | 5,221 | ||||||
Net loss | $ | (3,026,493 | ) | $ | (2,348,150 | ) | ||
Net loss per common share: | ||||||||
Basic | $ | (0.03 | ) | $ | (0.04 | ) | ||
Diluted | $ | (0.03 | ) | $ | (0.04 | ) | ||
Weighted average common shares and common equivalent shares: | ||||||||
Basic | 93,263,212 | 56,845,418 | ||||||
Diluted | 93,263,212 | 56,845,418 | ||||||
| URANIUM RESOURCES, INC. | ||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2011 | 2010 | |||||||
Operating activities: | ||||||||
Net loss | $ | (3,026,493 | ) | $ | (2,348,150 | ) | ||
Reconciliation of net earnings to cash used in by operations? | ||||||||
Accretion/amortization of restoration reserve | 38,199 | 37,407 | ||||||
Depreciation and depletion | 207,608 | 232,503 | ||||||
Impairment of uranium properties | 305,914 | 210,447 | ||||||
Decrease in restoration and reclamation accrual | (361,903 | ) | (349,549 | ) | ||||
Stock compensation expense | 373,847 | 275,509 | ||||||
Other non-cash items, net | 2,289 | 14,283 | ||||||
Effect of changes in operating working capital items? | ||||||||
Decrease in receivables | 45,246 | 60,521 | ||||||
Increase in prepaid and other current assets | (92,986 | ) | (83,012 | ) | ||||
Decrease in payables, accrued liabilities and deferred credits | (1,012,947 | ) | (84,672 | ) | ||||
Net cash used in operations | (3,521,226 | ) | (2,034,713 | ) | ||||
Investing activities: | ||||||||
Increase in certificates of deposit, restricted | (509,831 | ) | (16,344 | ) | ||||
Additions to property, plant and equipment? | ||||||||
Kingsville Dome | (17,748 | ) | (84,141 | ) | ||||
Vasquez | (6,600 | ) | ? | |||||
Rosita/Rosita South | (88,209 | ) | (5,945 | ) | ||||
Los Finados | (85,236 | ) | ? | |||||
Churchrock | (6,667 | ) | (70,200 | ) | ||||
Other property | (17,805 | ) | (108 | ) | ||||
Net cash used in investing activities | (732,096 | ) | (176,738 | ) | ||||
Financing activities: | ||||||||
Payments on borrowings | (23,507 | ) | (35,182 | ) | ||||
Issuance of common stock, net | 27,345 | ? | ||||||
Net cash provided by (used in) financing activities | 3,838 | (35,182 | ) | |||||
Net decrease in cash and cash equivalents | (4,249,484 | ) | (2,246,633 | ) | ||||
Cash and cash equivalents, beginning of period | 15,386,472 | 6,092,068 | ||||||
Cash and cash equivalents, end of period | $ | 11,136,988 | $ | 3,845,435 | ||||
Non-cash transactions: | ||||||||
Issuance of common stock in settlement of deferred compensation | $ | 697,027 | $ | ? | ||||
Issuance of restricted stock to employees | $ | 43 | $ | 66 | ||||
Investors:
Kei Advisors LLC
Deborah K. Pawlowski,
716.843.3908
dpawlowski@keiadvisors.com
or
Uranium
Resources, Inc.
President & Chief Executive Officer
Don
Ewigleben, 972.219.3330
or
Media:
Vice President,
Corporate Development
Mat Lueras, 505.269.8317
mlueras@uraniumresources.com