Uranium Resources, Inc. Provides Third Quarter 2011 Update
Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update
on the Company′s activities and its liquidity position for the third
quarter of 2011 as well as its strategy and outlook.
Texas Exploration and Reclamation Activities Ongoing
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, prepare its processing
facilities and holding ponds for production, 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 addition,
the Company continues to demonstrate its capabilities for restoring
properties after production.
Los Finados Exploration Project Update
URI and Cameco Texas, Inc. ('CTI?), a subsidiary of Power Resources,
Inc., which is a subsidiary of Cameco (NYSE: CCJ), are near completion
of Phase I of a three-phase, three-year exploration program in Kenedy
County, Texas. This phase commenced in June 2011 and is expected to be
completed in November 2011.
Phase I exploratory work used a widely and evenly spaced drilling
program covering a grid designed to test the potential for uranium
mineralization over an approximate 54,000 acre area. Specifically, the
objective is to identify oxidation-reduction interfaces within the
wide-spaced drilling. As of October 31, 2011, a total of 16 holes have
been drilled at an average depth of 1,300 feet each for a total cost
of approximately $0.9 million. CTI will have earned a 40% interest in
the project at the completion of Phase I, which requires a $1.0
million investment in exploration.
CTI has 60 days from the completion of Phase I to opt into Phase II to
earn an additional 10% interest in Los Finados. This phase requires an
additional $1.5 million investment in the exploration program by CTI.
URI must notify KMF, the property owner, by November 25, 2011, of its
intent to commit an additional $1.5 million in exploration activities
in order to maintain the property lease.
Don Ewigleben, President and CEO of URI, commented, 'Challenging
drilling conditions, coupled with higher equipment costs due to
increased industry demand, caused Phase I expenses to be higher than
anticipated. This resulted in fewer than desired drilled holes and about
two additional months of exploration time. Nonetheless, we remain
encouraged with the properties potential and we are currently in
discussions with CTI on the potential start date of Phase II work.?
Texas Reclamation Activities
The Company has focused on reclamation activities in Texas since its
two remaining operating wellfields were fully depleted in June 2009.
URI has processed nearly 4 billion gallons of water associated with
all of its restoration activities through the end of the third quarter.
Restoration has been completed and production areas PA1 and PA2 are
moving to stabilization at Kingsville Dome (KVD). Further along in the
process are Rosita PA1 and PA2 wellfields. Restoration results for
these wellfields have been reviewed by the Texas regulatory agencies.
We expect to achieve final closure on these areas by the third quarter
of 2012. Restoration activities continue at KVD PA3 and Vasquez PA1
and PA2.
Feasibility Study Progressing in New Mexico
URI′s focus in New Mexico is on the completion of its feasibility study
by the end of 2011 to determine the options available to advance its
Churchrock/Crownpoint project.
Mr. Ewigleben noted, 'The feasibility study originally was commissioned
to evaluate all of our properties, including our conventional assets.
Given the complexity of the study, the various scenarios available, and
the need to accelerate our engineering activities in order to stay on
target, our focus for the near-term has shifted to our priority
production property at Churchrock Section 8 and the Crownpoint
processing facility. At section 8, we have 6.5 million pounds of
in-place mineralized uranium material under our recently reactivated
underground injection control permit and NRC license. We own a total of
27.4 million pounds of in-place mineralized uranium material that are
covered by the NRC license, inclusive of the uranium mineralization at
Section 8. We expect to have the various scenarios completed by year end
so that we can evaluate the best option for advancing to production in
the most cost effective manner. We should be in a position during the
first quarter of 2012 to review our evaluation of the options and
decisions on the project.?
The Company continues to target production in 2013. Production will be
dependent upon availability of financing, the speed of construction
activities, and access to required capital equipment.
In June 2011, 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. Eastern Navajo Din? Against Uranium Mining
('ENDAUM?), the intervener group that has been a party to much of the
New Mexico based litigation filed against the Company in the past,
filed on July 15, 2011, a Complaint for Declaratory and Injunctive
Relief and a Motion for Preliminary Injunction against the New Mexico
Environment Department ('NMED?). ENDAUM′s complaint claims NMED has no
authority to allow the Company to conduct in situ leach uranium
mining operations at its Churchrock Section 8 property under its
existing discharge permit while the permit is in timely renewal. A
hearing for summary judgment on the filing is scheduled for March 8,
2012, and a hearing in the Motion for Preliminary Injunction seeking
to prevent NMED from allowing HRI to conduct any discharges on the
Churchrock Section 8 property prior to NMED making a determination to
grant a new discharge permit application is scheduled for April 2,
2012. The Company has intervened in this case and is actively
defending our rights in the matter.
On October 18, 2011, URI announced that the NRC reactivated its Source
Materials License to conduct in-situ recovery uranium mining in
McKinley County, New Mexico. The reactivation effectively allows for
the production of up to 1 million pounds per year from Churchrock
Section 8 until a successful commercial demonstration of restoration
is made, after which mining on other properties can begin and the
quantity of production can be increased to 3 million pounds per year.
URI is the only uranium company in New Mexico that possesses an NRC
license authorizing current or new production. URI has 27.4 million
pounds of in place mineralized uranium material under its License.
The outcome of the engineering and economic analysis is a bankable
feasibility study that can be used for the consideration of debt
financing of the project as well as other alternatives to include
strategic partners.
Liquidity Position and Flexible Financing Tool:At-the-Market
Stock Sales Agreement
Cash at September 30, 2011, was $5.4 million compared with $8.2 million
at June 30, 2011, and $11.1 million at March 31, 2011. The decrease from
the sequential second 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 October 31, 2011, was $4.3 million.
On October 28, 2011, URI entered into an At-The-Market Sales Agreement
with BTIG, LLC, allowing it to sell from time to time, its common shares
having an aggregate offering price of up to $15.0 million, through an
'at-the-market? equity offering program.
Mr. Ewigleben concluded, 'The ATM provides us a low cost, flexible
financing tool that we can use as needed to fund our ongoing feasibility
study, extended engineering requirements for the study, as well as to
support our corporate development efforts. We continue to pursue
opportunities to expand our uranium assets in New Mexico and Texas,
focusing on opportunities that will provide advantage to us when we
return to production in Texas and move toward production in New Mexico.?
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) 689-8471. 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 380578. The replay will be available from 2:00 p.m. ET the
day of the teleconference until 11:59 p.m. ET Monday, November 21, 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.
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URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) | ||||||||
? | ? | |||||||
| September 30, 2011 | December 31, 2010 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 5,414,726 | $ | 15,386,472 | ||||
Receivables, net | 293,065 | 46,244 | ||||||
Prepaid and other current assets | 260,676 | 179,231 | ||||||
Total current assets | 5,968,467 | 15,611,947 | ||||||
? | ||||||||
Property, plant and equipment, at cost: | ||||||||
Uranium properties | 82,689,009 | 82,989,579 | ||||||
Other property, plant and equipment | 868,186 | 905,511 | ||||||
Less-accumulated depreciation, depletion and impairment | (64,643,545 | ) | (64,282,888 | ) | ||||
Net property, plant and equipment | 18,913,650 | 19,612,202 | ||||||
? | ||||||||
Long-term investment: | ||||||||
Certificates of deposit, restricted | 8,862,491 | 7,337,366 | ||||||
$ | 33,744,608 | $ | 42,561,515 | |||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,176,868 | $ | 602,190 | ||||
Current portion of asset retirement obligations | 1,177,951 | 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 | 374,732 | 348,269 | ||||||
Current portion of capital leases | 64,482 | 83,183 | ||||||
Total current liabilities | 3,459,778 | 5,011,003 | ||||||
? | ||||||||
Asset retirement obligations | 3,637,683 | 3,804,057 | ||||||
Other long-term deferred credits | 500,000 | 500,000 | ||||||
Long term capital leases, less current portion | 71,028 | 119,588 | ||||||
Long-term debt, less current portion | 450,000 | 450,000 | ||||||
Commitments and contingencies (Notes 4 and 9) | ||||||||
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 | 169,426,529 | 167,971,955 | ||||||
Accumulated deficit | (143,884,558 | ) | (135,378,138 | ) | ||||
Less: Treasury stock (38,125 shares), at cost | (9,418 | ) | (9,418 | ) | ||||
Total shareholders′ equity | 25,626,119 | 32,676,867 | ||||||
$ | 33,744,608 | $ | 42,561,515 | |||||
? | ||||||||
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URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | ||||||||||||||||
? | ? | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||||||
| 2011 | ? | 2010 | 2011 | ? | 2010 | |||||||||||
Revenue: | ||||||||||||||||
Uranium sales | $ | ? | $ | ? | $ | ? | $ | ? | ||||||||
Total revenue | ? | ? | ? | ? | ||||||||||||
Costs and expenses: | ||||||||||||||||
Cost of uranium sales | ||||||||||||||||
Operating expenses | 133,753 | 67,260 | 498,862 | 297,570 | ||||||||||||
Accretion/amortization of asset retirement obligations | 26,543 | 39,143 | 95,562 | 116,431 | ||||||||||||
Depreciation and depletion | 145,193 | 186,603 | 476,375 | 576,449 | ||||||||||||
Impairment of uranium properties | 493,568 | 352,631 | 1,081,666 | 742,278 | ||||||||||||
Exploration expenses | (25,816 | ) | ? | 82,871 | 725 | |||||||||||
Total cost of uranium sales | 773,241 | 645,637 | 2,235,336 | 1,733,453 | ||||||||||||
Loss from operations before corporate expenses | (773,241 | ) | (645,637 | ) | (2,235,336 | ) | (1,733,453 | ) | ||||||||
? | ||||||||||||||||
Corporate expenses? | ||||||||||||||||
General and administrative | 2,022,139 | 1,674,030 | 6,289,557 | 4,852,642 | ||||||||||||
Provision for legal settlement | ? | 1,375,000 | ? | 1,375,000 | ||||||||||||
Depreciation | 31,717 | 36,331 | 100,383 | 107,581 | ||||||||||||
Total corporate expenses | 2,053,856 | 3,085,361 | 6,389,940 | 6,335,223 | ||||||||||||
Loss from operations | (2,827,097 | ) | (3,730,998 | ) | (8,625,276 | ) | (8,068,676 | ) | ||||||||
? | ||||||||||||||||
Other income (expense): | ||||||||||||||||
Interest expense | (4,395 | ) | (7,597 | ) | (15,000 | ) | (18,430 | ) | ||||||||
Interest and other income, net | 44,246 | 74,114 | 133,856 | 353,919 | ||||||||||||
? | ? | ? | ? | |||||||||||||
Net loss | $ | (2,787,246 | ) | $ | (3,664,481 | ) | $ | (8,506,420 | ) | $ | (7,733,187 | ) | ||||
? | ||||||||||||||||
Net loss per common share: | ||||||||||||||||
Basic | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.09 | ) | $ | (0.12 | ) | ||||
Diluted | $ | (0.03 | ) | $ | (0.04 | ) | $ | (0.09 | ) | $ | (0.12 | ) | ||||
? | ||||||||||||||||
Weighted average common shares and common equivalent shares per share data: | ||||||||||||||||
Basic | 93,528,362 | 83,720,754 | 93,407,739 | 66,558,635 | ||||||||||||
Diluted | 93,528,362 | 83,720,754 | 93,407,739 | 66,558,635 | ||||||||||||
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? | ||||||||
URANIUM RESOURCES, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||
? | ||||||||
? | Nine Months Ended September 30, | |||||||
| 2011 | ? | 2010 | ||||||
Operating activities: | ||||||||
Net loss | $ | (8,506,420 | ) | $ | (7,733,187 | ) | ||
Reconciliation of net loss to cash used in by operations? | ||||||||
Accretion/amortization of asset retirement obligations | 95,562 | 116,431 | ||||||
Depreciation and depletion | 576,758 | 684,030 | ||||||
Impairment of uranium properties | 1,081,666 | 742,278 | ||||||
Decrease in restoration and reclamation accrual | (1,170,956 | ) | (1,072,148 | ) | ||||
Stock compensation expense | 737,300 | 795,743 | ||||||
Other non-cash items, net | 2,289 | 14,858 | ||||||
? | ||||||||
Effect of changes in operating working capital items? | ||||||||
(Increase) decrease in receivables | (246,821 | ) | 59,288 | |||||
Decrease in prepaid and other current assets | (81,445 | ) | (157,877 | ) | ||||
(Increase) decrease in payables, accrued liabilities and deferred credits | (773,860 | ) | 1,349,191 | |||||
Net cash used in operations | (8,285,927 | ) | (5,201,393 | ) | ||||
? | ||||||||
Investing activities: | ||||||||
Increase in certificates of deposit, restricted | (1,525,125 | ) | (41,795 | ) | ||||
Additions to property, plant and equipment? | ||||||||
Kingsville Dome | (110,063 | ) | (143,324 | ) | ||||
Vasquez | (15,100 | ) | (7,500 | ) | ||||
Rosita/Rosita South | (118,732 | ) | (63,852 | ) | ||||
Los Finados | (88,236 | ) | ? | |||||
Churchrock | (30,057 | ) | (125,543 | ) | ||||
Section 13 Drilling | (17,805 | ) | (89,882 | ) | ||||
Other property | (34,785 | ) | (26,797 | ) | ||||
Proceeds from joint venture agreement | 300,000 | ? | ||||||
Net cash used in investing activities | (1,639,903 | ) | (498,693 | ) | ||||
? | ||||||||
Financing activities: | ||||||||
Payments on borrowings | (67,261 | ) | (90,419 | ) | ||||
Issuance of common stock, net | 21,345 | 10,203,626 | ||||||
Net cash provide by (used in) financing activities | (45,916 | ) | 10,113,207 | |||||
? | ||||||||
Net increase (decrease) in cash and cash equivalents | (9,971,746 | ) | 4,413,121 | |||||
Cash and cash equivalents, beginning of period | 15,386,472 | 6,092,068 | ||||||
Cash and cash equivalents, end of period | $ | 5,414,726 | $ | 10,505,189 | ||||
? | ||||||||
Non-cash transactions: | ||||||||
? | ||||||||
Issuance of common stock in settlement of deferred compensation | $ | 697,027 | $ | ? | ||||
Issuance of restricted stock to employees and directors | $ | 176 | $ | 302 | ||||
Investors:
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
or
Company:
Uranium
Resources, Inc.
Don Ewigleben, 972-219-3330
President & Chief
Executive Officer