Uranium Resources, Inc. Provides
Second Quarter 2010 Update
LEWISVILLE, TX, August 9, 2010 ---
Uranium Resources, Inc. (NASDAQ: URRE) (URI), today provided an update on
the Company�s activities through the end of July 2010. The Company also
announced financial results for the second quarter of 2010, which ended June
30, 2010.
Recent
Highlights
NRC
Source Materials License Upheld. The United States Court of Appeals for the Tenth
Circuit in May denied a petition for a rehearing or en banc review of the
court�s previous decision that upheld URI�s Nuclear Regulatory Commission (NRC)
license to conduct in-situ recovery (ISR) uranium mining in McKinley County,
New Mexico. On July 29, 2010, at a public meeting at the offices of the
U.S. Nuclear Regulatory Commission, URI presented its intent to file the
necessary documents to place its Crownpoint Source Materials License in active
status and outlined its plans for the license renewal. The opposing
parties were granted an extension until September 15, 2010 of their right to
petition the Supreme Court for review.
Favorable
Ruling by Tenth Circuit Court. The United States Court of Appeals for
the Tenth Circuit en banc held in June that the Company�s Section 8 property in
Churchrock, New Mexico is not Indian Country. The ruling means the
authority to issue a UIC permit to URI falls under the jurisdiction of the
State of New Mexico, and not the U.S. Environmental Protection Agency (USEPA). The ruling enables URI to seek to renew the
underground injection control (UIC) permit that it had been granted by the
State of New Mexico in 1989. The opposing parties have the right to petition
the Supreme Court for review on or before September 13, 2010.
Improved Liquidity Position. In July, URI successfully completed
a public offering of 27,142,830 shares of common stock at $0.42 per share,
including the exercise by the underwriter of an over-allotment option, with net
proceeds to URI of approximately $10.4 million, after deducting underwriting
discounts and commissions and estimated offering expenses. The Company
plans to use the proceeds for general corporate purposes, which may include
making additions to URI�s working capital and funding future acquisitions.
Database. URI sold a small part of its
extensive geologic database in June for $250,000. The drill logs and maps that
were sold were considered non-core assets and therefore not part of the Company�s
growth strategy. URI continues to own a large database of over 18,800
drill logs in New Mexico, where the Company holds over 101 million pounds of
in-place mineralized uranium material on 183,000 acres. The drill logs
represent nearly 23 million feet of drill hole with an estimated replacement
value of $700 million.
Section 13 Drilling. URI announced that it expects to begin drilling on its Section 13
property at Ambrosia Lake in early September under the permit the Company was
first issued in 2008. The objective of the drilling activity is to
evaluate the suitability of the property for ISR mining. URI has
approximately 2.4 million pounds of in-place, mineralized uranium material in
the Ambrosia Lake district.
NASDAQ Capital Markets Listing. URI transferred its stock listing to
the NASDAQ Capital Market, ensuring uninterrupted trading in its shares, which
previously traded on another of the exchange�s market tiers. The
Company�s stock symbol remained �URRE� after the transfer, which became effective
on July 2, 2010. The Company has until January 4, 2011, to achieve meet
the minimum bid price requirement to maintain its listing on the NASDAQ Capital
Market.
Don
Ewigleben, President and CEO of Uranium Resources noted, �Critical components
of our strategic plan fell into place in the past few months. We received
a favorable and long-awaited decision that the state of New Mexico has the
authority to issue the underground injection control permits we need to advance
our Churchrock project. We received an equally positive ruling confirming
the validity of our NRC license in McKinley County, which includes both our
Churchrock and Crownpoint projects. And perhaps most important in the
short term, we secured the capital necessary to advance our plan.
With the distractions of litigation
and liquidity issues behind us, we can now focus on the future. We will move
forward with our drilling activity at Ambrosia Lake to determine the property�s
suitability for ISR mining. We are also committed to returning our NRC
license to active status. Concurrently, we will continue to
maintain strict cost discipline, pursue the many opportunities that have
presented themselves recently and, where appropriate, monetize any non-core
assets as we did with the few Texas drill data that we sold this last quarter,�
he continued.
Liquidity
Discussion
Cash
at June 30, 2010 was $11.4 million compared with $3.8 million at March 31,
2010. The increase in cash was from the Company�s common stock offering
that closed on June 25, 2010, in which the Company sold 23.8 million shares of
common stock for net proceeds of $9.1 million. Subsequent to the end of
the second quarter the underwriter exercised its over-allotment option under
which an additional 3.3 million shares were sold for net proceeds of $1.3
million. The over-allotment proceeds are not included in the June 30,
2010 cash balance. Cash at July 31, 2010 was $12.1 million.
The
Company used $1.3 million in cash in operations during the second quarter of
2010 compared with $2.0 million used in operations in the trailing first
quarter of 2010. The second quarter�s cash burn rate was less than the
Company�s targeted monthly burn rate of $500,000. For the first six months of
2010, URI used $3.3 million in operations compared with $2.3 million used in
operations during the first half of 2009.
Mr. Ewigleben commented, �Now that
several major hurdles are behind us, we are better positioned to take advantage
of any recovery in the price of uranium. In Texas, our focus is on
expanding our reserve base. In New Mexico, our focus is on renewing the
necessary permitting to allow us to advance to production. We feel the
uranium market has reached a bottom and the demand exists to return to a price
level that can ultimately sustain profitable mining. The nuclear energy
market is expanding globally and we believe will also build again in the
U.S. This focus on nuclear power is driving the burgeoning global need
for uranium. We look forward to the second half of 2010 and our future as
we realize the potential of our significant asset base.�
Teleconference and Webcast
The Company is hosting a conference
call and webcast today at 11 a.m. ET. During the call, Don Ewigleben,
President and Chief Executive Officer, will review financial results for the
quarter and will provide an update on URI�s strategies and outlook. He
will also discuss the recent stock offering as well as activities underway in
New Mexico following the 10th Circuit Court of Appeals decision upholding the
jurisdiction of the Company�s UIC permit. A
question-and-answer session will follow.
The
URI conference call can be accessed the by dialing (201) 689-8562. The
listen-only audio webcast can be monitored on the Company�s Web site at www.uraniumresources.com.
To listen to the archived call, dial (201) 612-7415 and entering reference ID number
353825. The telephonic replay will be available from 2:00 p.m. today until 11:59 p.m. ET, Monday, August 16,
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
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 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.
FINANCIAL
STATEMENTS CAN BE FOUND IN THE ATTACHED PDF.