Uranium Resources, Inc. Provides Second Quarter 2011 Update
Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update
on the Company′s activities and its liquidity position for the second
quarter of 2011 as well as its strategy and outlook.
Los Finados Exploration Project Continues to Move Forward
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.
In May, URI entered into a joint venture agreement with Cameco Texas,
Inc. ('CTI?), a subsidiary of Power Resources, Inc., which is a
subsidiary of Cameco (NYSE: CCJ), for a three-phase, three-year
exploration program on the Los Finados property, which encompasses
54,847 acres in Kenedy County, Texas. URI also secured the exploratory
drilling permit from the Surface Mining and Reclamation Division of
the Railroad Commission of Texas.
Having completed the joint venture agreement and obtaining the
drilling permit, on June 21, URI initiated the first phase of the
drilling program. This phase of the exploratory drilling, which is
expected to be completed by the end of September at a cost of
approximately $1 million, will be done using a widely and evenly
spaced program covering a grid designed to test the potential for
uranium mineralization over the entire area. Specifically, the
objective is to identify oxidation-reduction interfaces within the
wide-spaced drilling. To date, URI has completed 10 holes averaging
1,250 feet each.
Don Ewigleben, President and CEO of URI, commented, 'Less than ideal
drilling conditions are resulting in somewhat higher than expected costs
thereby reducing the number of potential holes drilled in the first
phase. Nonetheless, we are still on track to have the drilling for the
first phase completed by the end of September. As we have noted
previously, based on water sampling tests, we believe this green field
exploration site should be an excellent uranium prospect.?
Given current uranium pricing and existing unfavorable sales
contracts, 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 120 million gallons of
groundwater in the quarter, and since December of 2004, over 1.5
billion gallons of water have been treated. URI completed
restoration in PA1 and PA2 and the fields are now in stabilization
testing. 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 into 2011. Documents
have been filed with the State of Texas for final restoration
approval.
Vasquez: Treated over 76 million gallons of groundwater in the
quarter 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
to advance its Churchrock/Crownpoint project. 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.
Given the need to accelerate the significant engineering and design
requirements identified through the feasibility study activities, URI
now expects construction of its Churchrock/Crownpoint ISR wellfield
and processing facilities later in 2012, assuming that the necessary
financial resources are in place and uranium prices have recovered.
The Company continues to target production in mid-2013. Production
will be dependent upon the speed of construction activities and
availability of capital equipment. Given the most recent projections,
construction costs will likely be on order of $50 million or more,
dependent upon the various scenarios under consideration.
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 according to our
plan. In June, URI received confirmation from the New Mexico
Environment Department ('NMED?) that its discharge plan is in timely
renewal and that the NMED is currently conducting technical review of
its renewal application. In July, Eastern Navajo Dine Against Uranium
Mining filed a complaint claiming NMED misinterpreted its own
regulations governing the ground water discharge permits. URI will
intervene in this case.
Mr. Ewigleben, noted, 'The feasibility study is moving along as planned
and we are evaluating various scenarios specific to our priority
production property, Church Rock Section 8 which has 6.5 million pounds
of in-place mineralized uranium material. We are planning on
accelerating our engineering activities in order to stay on target.?
Liquidity Position
Cash at June 30, 2011 was $8.2 million compared with $11.1 million at
March 31, 2011 and $15.4 million at the end of 2010. The decrease from
the sequential first quarter reflects ongoing reclamation activities in
Texas, the costs associated with the feasibility study and $500,000 of
funding to collateralize URI′s financial surety obligations. URI′s cash
balance at July 31, 2011 was approximately $7.3 million.
Mr. Ewigleben concluded, 'Given our plan to accelerate our engineering
activities for our Churchrock project and our cash requirements for the
evaluation of various strategic initiatives, we are currently weighing
various alternatives and evaluating the timing associated with the need
to raise additional capital.?
Teleconference and Webcast
URI is hosting a conference call and webcast today at 11:00 a.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. 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 375633. The replay will be available from 2:00 p.m. ET the
day of the teleconference until 11:59 p.m. ET Monday, August 22, 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.
TABLES FOLLOW.
URANIUM RESOURCES, INC. | |||||||||
| June 30, 2011 | December 31, | ||||||||
Current assets: | |||||||||
Cash and cash equivalents | $ | 8,243,704 | $ | 15,386,472 | |||||
Receivables, net |
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Prepaid and other current assets |
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Total current assets |
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Property, plant and equipment, at cost: | |||||||||
Uranium properties |
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Other property, plant and equipment |
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Less-accumulated depreciation, depletion and impairment |
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| ) |
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| ) | |||
Net property, plant and equipment |
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Long-term investment: | |||||||||
Certificates of deposit, restricted |
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$ | 35,940,521 | $ | 42,561,515 | ||||||
Current liabilities: | |||||||||
Accounts payable | $ |
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|
| |||||
Current portion of asset retirement obligations |
|
| 1,239,588 | ||||||
Royalties and commissions payable |
|
| 665,745 | ||||||
Deferred compensation |
|
| 697,028 | ||||||
Accrued legal settlement |
|
| 1,375,000 | ||||||
Accrued interest and other accrued liabilities |
|
| 348,269 | ||||||
Current portion of capital leases |
|
| 83,183 | ||||||
Total current liabilities |
|
| 5,011,003 | ||||||
Asset retirement obligations |
|
| 3,804,057 | ||||||
Other long-term deferred credits |
|
| 500,000 | ||||||
Long term capital leases, less current portion |
|
| 119,588 | ||||||
Long-term debt, less current portion |
|
| 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?93,528,362; 2010?92,430,306 | 93,566 | 92,468 | |||||||
Paid-in capital |
|
| 167,971,955 | ||||||
Accumulated deficit |
|
| ) | (135,378,138 | ) | ||||
Less: Treasury stock (38,125 shares), at cost |
|
| ) | (9,418 | ) | ||||
Total shareholders′ equity |
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| 32,676,867 | ||||||
$ |
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URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
| 2011 | 2010 | 2011 | 2010 | |||||||||||||
Revenues: | ||||||||||||||||
Uranium sales | $ | ? | $ | ? | $ | ? | $ | ? | ||||||||
Total revenue | ? | ? | ? | ? | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of uranium sales | ||||||||||||||||
Operating expenses | 213,960 | 88,452 | 365,109 | 230,310 | ||||||||||||
Accretion/amortization of asset retirement obligations | 30,820 | 39,881 | 69,019 | 77,288 | ||||||||||||
Depreciation and depletion | 158,453 | 192,359 | 331,182 | 389,846 | ||||||||||||
Impairment of uranium properties | 282,184 | 179,200 | 588,098 | 389,647 | ||||||||||||
Exploration expenses | 16,789 | 725 | 108,687 | 725 | ||||||||||||
Total cost of uranium sales | 702,206 | 500,617 | 1,462,095 | 1,087,816 | ||||||||||||
Loss from operations before corporate expenses | (702,206 | ) | (500,617 | ) | (1,462,095 | ) | (1,087,816 | ) | ||||||||
Corporate expenses? | ||||||||||||||||
General and administrative | 1,968,427 | 1,455,379 | 4,267,418 | 3,178,612 | ||||||||||||
Depreciation | 33,787 | 36,234 | 68,666 | 71,250 | ||||||||||||
Total corporate expenses | 2,002,214 | 1,491,613 | 4,336,084 | 3,249,862 | ||||||||||||
Loss from operations | (2,704,420 | ) | (1,992,230 | ) | (5,798,179 | ) | (4,337,678 | ) | ||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (4,985 | ) | (2,910 | ) | (10,605 | ) | (10,833 | ) | ||||||||
Interest and other income, net | 16,724 | 274,584 | 89,610 | 279,805 | ||||||||||||
Net loss | $ | (2,692,681 | ) | $ | (1,720,556 | ) | $ | (5,719,174 | ) | $ | (4,068,706 | ) | ||||
Net loss per common share: | ||||||||||||||||
Basic | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.07 | ) | ||||
Diluted | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.06 | ) | $ | (0.07 | ) | ||||
Weighted average common shares and common equivalent shares per share data: | ||||||||||||||||
Basic | 93,429,103 | 58,814,401 | 93,346,428 | 57,835,348 | ||||||||||||
Diluted | 93,429,103 | 58,814,401 | 93,346,428 | 57,835,348 | ||||||||||||
URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
| Six Months Ended June 30, | ||||||||
| 2011 | 2010 | |||||||
Operating activities: | ||||||||
Net loss | $ | (5,719,174 | ) | $ | (4,068,706 | ) | ||
Reconciliation of net loss to cash used in by operations? | ||||||||
Accretion/amortization of asset retirement obligations | 69,019 | 77,288 | ||||||
Depreciation and depletion | 399,848 | 461,096 | ||||||
Impairment of uranium properties | 588,098 | 389,647 | ||||||
Decrease in restoration and reclamation accrual | (752,961 | ) | (653,544 | ) | ||||
Stock compensation expense | 579,502 | 525,475 | ||||||
Other non-cash items, net | 2.288 | 14,859 | ||||||
Effect of changes in operating working capital items? | ||||||||
(Increase) decrease in receivables | (90,134 | ) | 62,572 | |||||
Increase (decrease) in prepaid and other current assets | 17,394 | (77,060 | ) | |||||
Decrease in payables, accrued liabilities and deferred credits | (1,185,614 | ) | (80,476 | ) | ||||
Net cash used in operations | (6,091,734 | ) | (3,348,849 | ) | ||||
Investing activities: | ||||||||
Increase in certificates of deposit, restricted | (1,018,354 | ) | (29,842 | ) | ||||
Additions to property, plant and equipment? | ||||||||
Kingsville Dome | (73,913 | ) | (89,400 | ) | ||||
Vasquez | (15,100 | ) | (7,500 | |||||
Rosita/Rosita South | (92,080 | ) | (14,048 | ) | ||||
Los Finados | (88,237 | ) | ? | |||||
Churchrock | (9,899 | ) | (90,266 | ) | ||||
Other property | (28,812 | ) | (6,573 | ) | ||||
Proceeds from joint venture agreement | 300,000 | ? | ||||||
Net cash used in investing activities | (1,026,395 | ) | (237,629 | ) | ||||
Financing activities: | ||||||||
Payments on borrowings | (45,984 | ) | (61,894 | ) | ||||
Issuance of common stock, net | 21,345 | 8,979,506 | ||||||
Net cash from (used in) financing activities | (24,639 |
| 8,917,612 | |||||
Net increase (decrease) in cash and cash equivalents | (7,142,768 | ) | 5,331,134 | |||||
Cash and cash equivalents, beginning of period | 15,386,472 | 6,092,068 | ||||||
Cash and cash equivalents, end of period | $ | 8,243,704 | $ | 11,423,202 | ||||
Non-cash transactions: | ||||||||
Issuance of common stock in settlement of deferred compensation | $ | 697,027 | $ | ? | ||||
Issuance of restricted stock to employees and directors | $ | 176 | $ | 339 | ||||
Uranium Resources, Inc.
Don Ewigleben, 972-219-3330
President
& Chief Executive Officer
or
Investor:
Kei
Advisors LLC
Deborah K. Pawlowski, 716-843-3908
dpawlowski@keiadvisors.com
or
Media:
Uranium
Resources, Inc.
Mat Lueras, 505-269-8317
Vice President,
Corporate Development
mlueras@uraniumresources.com