Uranium Resources, Inc. Provides Third Quarter 2012 Update
- Search for CEO ongoing
- Deferring construction plans on Churchrock Section 8
- Positive groundwater study results support safety of in situ
mining
Uranium Resources, Inc. (NASDAQ: URRE) ('URI? or the 'Company?), today
provided an update on the Company′s activities, its liquidity position
for the third quarter of 2012 and its strategy and outlook.
Terence J. Cryan, Interim President and CEO of URI, commented on the
search for a permanent CEO, 'We are actively searching and considering
potential candidates to lead Uranium Resources into the future, but at
this time have not yet selected that person. In the meantime, we are
making the decisions needed to advance our valuable uranium assets in a
prudent manner and consistent with the present market environment.?
Strategic Direction
Mr. Cryan noted, 'The long-term opportunities for uranium remain as
robust as ever with demand well outstripping supply in the latter part
of the decade and we believe the extensive uranium assets that we hold
in New Mexico will be a major part of the needed supply. Nonetheless,
the current state has been a challenging market environment for uranium.
Uranium prices have been steadily declining since June of this year, and
may remain weak through 2013. We do expect that there could be a rapid
surge in prices when the clarity of the market imbalance is realized.
'At this time, we are deferring our construction plans for our
Churchrock Section 8 project. In addition to reducing our near-term
capital requirements, it will enable us to focus on those efforts that
will de-risk the project, improve its economics and facilitate future
development options.?
The Company′s primary areas of focus are as follows:
Contain costs to minimize the cash burn to only that needed to achieve
our priorities
Complete the feasibility study on Churchrock Section 8
Continue to advance negotiations with the Navajo Nation and its
government regarding access to Section 8, as well as garner a
comprehensive understanding of the environmental and safety focus of
our production and restoration plans
Attempt to reach agreements with royalty holders of Section 8, Section
17 and Mancos properties
Complete groundwater restoration of its Texas properties
Evaluate opportunities with the joint venture with Cameco in Texas
Advancements in New Mexico
URI′s primary focus in New Mexico is its Churchrock Section 8 property,
which contains 6.5 million pounds of in-place non-reserve mineralized
uranium material. Section 8 is in the area covered by the Company′s
underground injection control permit and NRC license. Both licenses are
in timely renewal and allow for uranium production by in situ recovery.
The NRC license addresses in total 27.4 million pounds of in-place,
non-reserve, mineralized uranium material for the Company′s
Churchrock/Crownpoint Project.
URI developed, in conjunction with the Navajo Nation and the City of
Gallup, the Section 8 / Navajo-Gallup Groundwater Report and
Conjunctive Use Evaluation for its Section 8 uranium in-situ
recovery ('ISR?) project. The study results indicate that existing area
water wells will not be impacted by Section 8 ISR activities, during
mining operations or into the future. Additionally, the study
demonstrated that there is no discernible risk that ISR activities would
adversely affect groundwater available for the City of Gallup and the
Navajo Nation′s coordinated water supply project.
On July 31, 2012, URI was granted temporary access to Sections 8, 9 and
17 for regulatory visits and to support license or permit requirements.
As part of the agreement, Hydro Resources, Inc., a wholly-owned
subsidiary of URI, offered to complete remediation of legacy mining
activities at the Sections 17 or 8 properties prior to commencing in
situ leach recovery on Section 8. Discussions continue with the Navajo
Nation, with the objective to reach a comprehensive agreement, mutually
beneficial to both parties, regarding the production of uranium in New
Mexico. The groundwater report developed in conjunction with the Navajo
Nation supports the safety of ISR mining in New Mexico.
The Company continues to refine the feasibility study performed on
Section 8 and expects to release a summary of the study in December
2012. Royalty discussions are also ongoing, which are intended to
improve the economic viability of the project.
On August 31, 2012, URI successfully completed a stock-for-stock
transaction to acquire 100% of the equity of Neutron Energy, Inc,
resulting in the addition of over 50 million pounds of in-place
mineralized uranium material. With this acquisition, URI gained
operational synergies for the development of its assets in New Mexico,
as well as added a previously permitted conventional mill site to its
asset base.
Texas Activities Progressing
Groundwater restoration has been completed and is currently being
monitored for stability at Kingsville Dome Production Area (PA)1 and
PA2, in addition to Rosita PA1 and PA2. Final closure of these
production areas is targeted for mid- to late-2013. The Company
continues restoration activities with stabilization targeted for the
third quarter of 2013 at Kingsville Dome PA3 and fourth quarter of 2013
for Vasquez PA1 and PA2.
Phase II of the joint Los Finados exploration project with Cameco
started in December 2011. Drilling activities concluded in August and
both parties have agreed to delay a decision to proceed with Phase III
until December 31, 2012. Under Phase II, 40 holes were drilled at an
average depth of 1,327 feet and, while there have been no significant
findings, the geologic opportunities in the area are still encouraging.
Cameco currently has earned a 50% interest in the project and can earn a
70% interest with the completion of Phase III.
URI is in the process of refurbishing the Kingsville Dome holding ponds
and expects this project to complete in mid-2013.
Liquidity Position
Cash at September 30, 2012 was $4.0 million compared with $2.9 million
at December 31, 2011 and reflects the $5 million option with Resource
Capital Fund V L.P. that closed on September 5, 2012 through the sale of
9,691,801 shares of URI common stock at a price of $0.5159 per share. As
of October 31, 2012, URI had $3.0 million in cash.
During the third quarter, the Company sold 5.6 million shares of common
stock, raising net proceeds of $2.9 million under the existing
At-The-Market Sales Agreement ('ATM?) with BTIG, LLC. In October 2012,
the Company sold an additional 2.2 million shares under the ATM program,
raising net proceeds of $937,000. At October 31, 2012, URI has a total
of $9.0 million in share value available for future sales under the ATM.
URI incurred cash expenditures from its operating and investing
activities during the first nine months of $18.2 million.
Teleconference and Webcast
URI will host a conference call and webcast on November 9, 2012 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 telephonic replay will be available from 2:00 p.m. ET the day of the
teleconference until Friday, November 16, 2012. To listen to the
archived call, dial (858) 384-5517 and enter replay pin number 401283. 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. URI has
over 206,600 acres of uranium mineral holdings and 152.9 million pounds
of in-place mineralized uranium material in New Mexico and an NRC
license to produce up to 1 million pounds of uranium per year. URI has
an additional 1.3 million pounds of in-place mineralized uranium
material in Texas and South Dakota. The Company acquired these
properties over the past 20 years along with an extensive information
database of historic drill hole logs, assay certificates, maps and
technical reports. None of URI′s properties is currently in production.
URI′s strategy is to fully develop its resource base in New Mexico and
Texas, expand its asset base both within and outside of New Mexico and
Texas, and partner with larger mining companies that have undeveloped
uranium assets 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 website 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, access to properties, 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, receiving shareholder approval of the Neutron transaction,
realizing the benefits of the merger and resource development synergies,
the exploration upside of the acquired properties, the Company′s ability
to acquire other properties, the benefit of permitting on private lands,
the effect of additional major investors with mining investment
experience, 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) | |||||||||||
September 30, 2012 | December 31, 2011 | ||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 3,978,348 | $ | 2,890,263 | |||||||
Receivables, net | 268,564 | 123,336 | |||||||||
Prepaid and other current assets | 307,907 | 165,509 | |||||||||
Total current assets | 4,554,819 | 3,179,108 | |||||||||
? | |||||||||||
Property, plant and equipment, at cost: | |||||||||||
Uranium properties | 107,074,892 | 82,768,867 | |||||||||
Other property, plant and equipment | 1,359,626 | 868,454 | |||||||||
| (65,185,316) | (64,791,294) | |||||||||
Net property, plant and equipment | 43,249,202 | 18,846,027 | |||||||||
? | |||||||||||
Long-term investment: | |||||||||||
Certificates of deposit, restricted | 9,485,844 | 9,379,794 | |||||||||
$ | 57,289,865 | $ | 31,404,929 | ||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 2,116,976 | $ | 1,148,812 | |||||||
Current portion of asset retirement obligations | 1,245,667 | 1,227,125 | |||||||||
Royalties and commissions payable | 665,745 | 665,745 | |||||||||
Accrued interest and other accrued liabilities | 859,206 | 374,088 | |||||||||
Current portion of capital leases | 142,004 | 65,161 | |||||||||
Total current liabilities | 5,029,598 | 3,480,931 | |||||||||
? | |||||||||||
Asset retirement obligations, less current portion | 3,153,759 | 3,508,634 | |||||||||
Other long-term deferred credits | 500,000 | 500,000 | |||||||||
Long term capital leases, less current portion | 26,607 | 54,071 | |||||||||
Long-term debt, less current portion | 450,000 | 450,000 | |||||||||
Commitments and contingencies | ? | ? | |||||||||
Total Liabilities: | 9,159,964 | 7,993,636 | |||||||||
Shareholders′ equity: | |||||||||||
| |||||||||||
| 158,835 | 94,043 | |||||||||
Paid-in capital | 206,046,082 | 169,904,203 | |||||||||
Accumulated deficit | (158,065,598) | (146,577,535) | |||||||||
Less: Treasury stock (38,125 shares), at cost | (9,418) | (9,418) | |||||||||
Total shareholders′ equity | 48,129,901 | 23,411,293 | |||||||||
$ | 57,289,865 | $ | 31,404,929 | ||||||||
? | |||||||||||
? | ? | ? | ? | ? | |||||||||||||||||
URANIUM RESOURCES, ?INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) | |||||||||||||||||||||
? | |||||||||||||||||||||
| Three Months Ended September 30, | Nine months ended September 30, | ||||||||||||||||||||
| 2012 | ? | ? | 2011 | 2012 | ? | ? | 2011 | ||||||||||||||
Revenues: | |||||||||||||||||||||
Uranium sales | $ | ? | $ | ? | $ | ? | $ | ? | |||||||||||||
Total revenue | ? | ? | ? | ? | |||||||||||||||||
Costs and expenses: | |||||||||||||||||||||
Cost of uranium sales | |||||||||||||||||||||
Operating expenses | 776,764 | 133,753 | 1,920,601 | 498,862 | |||||||||||||||||
|
|
|
|
| |||||||||||||||||
|
|
|
|
| |||||||||||||||||
Depreciation and depletion | 91,319 | 145,193 | 318,637 | 476,375 | |||||||||||||||||
Impairment of uranium properties | 296,628 | 493,568 | 1,048,400 | 1,081,666 | |||||||||||||||||
Exploration expenses | 12,402 | (25,816 | ) | 69,861 | 82,871 | ||||||||||||||||
Total cost of uranium sales | 1,199,786 | 773,241 | 3,426,915 | 2,235,336 | |||||||||||||||||
Loss from operations before corporate expenses | (1,199,786 | ) | (773,241 | ) | (3,426,915 | ) | (2,235,336 | ) | |||||||||||||
Corporate expenses? | |||||||||||||||||||||
General and administrative | 2,994,663 | 2,022,139 | 8,191,352 | 6,289,557 | |||||||||||||||||
Depreciation | 40,911 | 31,717 | 104,751 | 100,383 | |||||||||||||||||
Total corporate expenses | 3,035,574 | 2,053,856 | 8,296,103 | 6,389,940 | |||||||||||||||||
Loss from operations | (4,235,360 | ) | (2,827,097 | ) | (11,723,018 | ) | (8,625,276 | ) | |||||||||||||
Other income (expense): | |||||||||||||||||||||
Interest expense | (6,055 | ) | (4,395 | ) | (12,723 | ) | (15,000 | ) | |||||||||||||
Interest and other income, net | 20,501 | 44,246 | 247,678 | 133,856 | |||||||||||||||||
Net loss | $ | (4,220,914 | ) | $ | (2,787,246 | ) | $ | (11,488,063 | ) | $ | (8,506,420 | ) | |||||||||
Net loss per common share: | |||||||||||||||||||||
Basic | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.10 | ) | $ | (0.09 | ) | |||||||||
Diluted | $ | (0.03 | ) | $ | (0.03 | ) | $ | (0.10 | ) | $ | (0.09 | ) | |||||||||
| |||||||||||||||||||||
| |||||||||||||||||||||
Basic | 124,134,763 | 93,528,362 | 109,534,070 | 93,407,739 | |||||||||||||||||
Diluted | 124,134,763 | 93,528,362 | 109,534,070 | 93,407,739 | |||||||||||||||||
? | |||||||||||||||||||||
? | ? | ? | ? | |||||||||
URANIUM RESOURCES, ?INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) | ||||||||||||
| Nine months ended September 30, | |||||||||||
| 2012 | ? | ? | 2011 | |||||||||
Operating activities: | ||||||||||||
Net loss | $ | (11,488,063 | ) | $ | (8,506,420 | ) | ||||||
Reconciliation of net loss to cash used in operations? | ||||||||||||
Accretion/amortization of asset retirement obligations | 69,416 | 95,562 | ||||||||||
Depreciation and depletion | 423,388 | 576,758 | ||||||||||
Impairment of uranium properties | 1,048,400 | 1,081,666 | ||||||||||
Decrease in restoration and reclamation accrual | (1,299,806 | ) | (1,170,956 | ) | ||||||||
Stock compensation expense | 373,838 | 737,300 | ||||||||||
Other non-cash items, net | 73,932 | 2,289 | ||||||||||
Effect of changes in operating working capital items? | ||||||||||||
Increase in receivables | (140,228 | ) | (246,821 | ) | ||||||||
Increase in prepaid and other current assets | (125,058 | ) | (81,445 | ) | ||||||||
Increase (decrease) in payables, accrued liabilities and deferred credits | 668,089 | (773,860 | ) | |||||||||
Net cash used in operations | (10,396,092 | ) | (8,285,927 | ) | ||||||||
? | ||||||||||||
Investing activities: | ||||||||||||
(Increase) decrease in certificates of deposit, restricted | 167,855 | (1,525,125 | ) | |||||||||
Additions to property, plant and equipment? | ||||||||||||
Kingsville Dome | (667,920 | ) | (110,063 | ) | ||||||||
Vasquez | (10,274 | ) | (15,100 | ) | ||||||||
Rosita/Rosita South | (46,213 | ) | (118,732 | ) | ||||||||
Los Finados | (5,950 | ) | (88,236 | ) | ||||||||
Churchrock | (2,649,359 | ) | (30,057 | ) | ||||||||
Crownpoint/Section 13 | (280,529 | ) | (17,805 | ) | ||||||||
Other property | (617,885 | ) | (34,785 | ) | ||||||||
Acquisition of Neutron Energy Inc. | (3,677,133 | ) | ? | |||||||||
Proceeds from joint venture agreement | ? | 300,000 | ||||||||||
Net cash used in investing activities | (7,787,408 | ) | (1,639,903 | ) | ||||||||
Financing activities: | ||||||||||||
Payments on borrowings | (56,775 | ) | (67,261 | ) | ||||||||
Issuance of common stock, net | 19,328,360 | 21,345 | ||||||||||
Net cash provided by (used in) financing activities | 19,271,585 | (45,916 | ) | |||||||||
Net increase (decrease) in cash and cash equivalents | 1,088,085 | (9,971,746 | ) | |||||||||
Cash and cash equivalents, beginning of period | 2,890,263 | 15,386,472 | ||||||||||
Cash and cash equivalents, end of period | $ | 3,978,348 | $ | 5,414,726 | ||||||||
Non-cash transactions: | ||||||||||||
Issuance of common stock to acquire Neutron Energy, Inc. | $ 16,650,000 | $ | ||||||||||
Issuance of common stock in settlement of deferred compensation | $ | ? | $ | 697,027 | ||||||||
Issuance of restricted stock to employees and directors | $ | 391 | $ | 176 | ||||||||
Capital lease obligations | $ | 106,154 | $ | ? | ||||||||
? | ||||||||||||
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
