Uranium Resources Provides Full Year 2012 Review and Outlines Near-Term Initiatives
Uranium Resources, Inc. (NASDAQ: URRE) ('URI? or the 'Company?) today
provided an update on the Company′s activities and financials through
December 31, 2012, as well as its strategy and outlook.
Key 2012 and Recent Accomplishments
Acquired Neutron Energy, Inc. ('Neutron?) in August 2012, adding over
50 million pounds of mineralized uranium material.
Substantiated financial and environmental viability of the Churchrock
Section 8 Project.
Achieved an agreement with the Navajo Nation for temporary access to
Section 8. First step taken in addressing legacy issues surrounding
uranium mining in New Mexico.
Expanded and extended its South Texas exploration agreement with a
subsidiary of Cameco Corporation (NYSE: CCJ).
Recapitalized through a $5 million bridge loan facility with Resource
Capital Fund V L.P. ('RCF?), a shareholder rights offering ('Rights
Offering?) and the pending release of $4.5 million back to URI after
securing new surety bonds.
Regained compliance with NASDAQ listing standards.
Named Christopher M. Jones as President and CEO effective April 1,
2013.
'We continue to forge ahead and have made sustained progress so far in
2013,? stated Terence J. Cryan, Interim President and CEO of URI. 'In
2012, we expanded our asset base through the acquisition of Neutron
which represented a significant consolidation of uranium properties in
New Mexico and positioned URI as one of the largest U.S.-based uranium
development companies. A number of key steps relating to our Churchrock
Section 8 project were also taken. We reached an agreement with the
Navajo Nation regarding temporary access, a significant first step in an
effort to reach a comprehensive agreement and as important, indicated
the willingness of both parties to reach a mutually beneficial,
long-term solution. There were two Section 8 property studies completed,
the feasibility study and the groundwater study, which substantiated the
technical and economic viability of the project, as well as the
environmental safety of in-situ recovery (ISR) mining at Section 8.
These are measurable steps forward as we work to realize our goal of
producing uranium in New Mexico.?
On March 13, 2013, URI announced that its Board of Directors appointed
Christopher M. Jones, P.E., as President and CEO effective April 1,
2013. Mr. Jones has more than 30 years experience in the mining industry
having successfully lead various mining and production operations, as
well as exploration and development projects. He most recently was
President and CEO of Wildcat Silver Corporation, and prior to that, he
was the Chief Operating Officer and the Mining General Manger at Albian
Sands Energy.
Near-term Objectives
Mr. Cryan noted, 'In the fourth quarter we outlined URI′s primary areas
of focus as we headed into 2013. During the fourth quarter we were able
to significantly reduce our cash burn and stabilized our capital levels
using our bridge loan facility, the Rights Offering and the
restructuring of our bonding requirements on our South Texas properties.
We will remain diligent in our efforts to preserve capital for the
remainder of 2013.
'With construction plans for our Churchrock Section 8 project currently
delayed, discussions aimed at reaching a permanent access agreement with
the Navajo Nation and with royalty holders of our Section 8, Section 17
and Mancos properties remain a priority in 2013. Concurrently, in Texas
we will continue our exploration efforts with Cameco and look at other
opportunities as part of our effort to grow our South Texas asset base
and return to production in the state.?
Advancements in New Mexico
URI′s primary focus in New Mexico is advancing the Churchrock Section 8
property, which contains 6.5 million pounds of mineralized uranium
material at a grade of 0.11% U3O8 and is covered
by the Company′s underground injection control permit and NRC license,
both of which are in timely renewal.
Neutron Acquisition - URI completed a stock-for-stock transaction to
acquire 100% of the equity of Neutron on August 31, 2012 on a
debt-free basis. The acquisition increased URI′s asset base by more
than 50 percent to 152.9 million pounds of in-place mineralized
uranium material in New Mexico.
Section 8 Feasibility Study ? Released the summary results of the
feasibility study for its Churchrock Section 8 Project at the end of
2012. ISR is the preferred uranium extraction technology for the
project and using an assumed recovery rate of 67% could result in the
production of approximately 4.4 million pounds. Pre-production
development costs are estimated at $35 million with direct operating
costs estimated to be $20 to $23 per pound of U3O8
produced.
Section 8 Groundwater Study ? Completed collaborative study with the
Navajo Nation and the City of Gallup with results indicating that
existing Gallup, Fort Wingate, Rehoboth and Navajo Nation water wells
will not be impacted by Section 8 ISR activities, during mining
operations or into the future.
Agreement with Navajo Nation ? Hydro Resources, Inc., a wholly-owned
subsidiary of URI, completed a temporary access agreement with the
Navajo Nation for its Churchrock Section 8 property providing access
for regulatory requirements to include on-site visits with the Nuclear
Regulatory Commission.
Focus in Texas: Tecolote exploration project kicks off, Restoration
activities ongoing
In 2012, URI and Cameco completed Phase II of the joint Los Finados
exploration project to include drilling 40 holes at an average depth of
1,327 feet. On January 7, 2013, URI announced the expansion of its lease
agreement in Kenedy County, Texas, to include the Tecolote tract which
has approximately 22,700 net acres and that it will be a part of the
exploration program with Cameco. In addition, the Company extended the
original lease to 60 months with the election date to lease the acreage
for production now being November 30, 2015. The amended lease agreement
requires a minimum exploration obligation of $1.0 million, or 100
exploration wells during Phase III. Phase IV and Phase V require $1.5
million, or 150 exploration wells, and $2.0 million, or 200 exploration
wells, respectively.
In conjunction with the amended lease agreement, URI and Cameco have
agreed to extend their amended exploration agreement to a five-phase,
five-year exploration program to include Tecolote. Cameco has committed
$4.3 million to increase its interest to 70% in the expanded program and
will be the exploration operator for Phase III.
URI secured $9 million in new surety bonds for the benefit of the Texas
Commission on Environmental Quality for remediation and reclamation
activities at the Company′s South Texas projects. The new bonds required
$4.5 million in cash collateral and replaced the existing $9.0 million
of fully collateralized financial surety instruments. The result is that
$4.5 million will be released back to URI due to the lower cash
collateral requirement.
Groundwater restoration at Kingsville Dome Production Area (PA)1 and PA2
and Rosita PA1 and PA2 has been completed and is currently being
monitored for stability. 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.
Refurbishment of the Kingsville Dome holding ponds is ongoing and URI
expects this project to be completed by year-end 2013.
Strengthened Liquidity Position
Cash at December 31, 2012 was $4.7 million, after giving effect to the
$5 million bridge loan facility with RCF that closed on December 17,
2012, compared with $2.9 million at December 31, 2011. During 2012, the
Company also raised net proceeds of $5.4 million under the existing
At-The-Market Sales Agreement ('ATM?) with BTIG, LLC. At February 28,
2013, URI had a total of $9.0 million in share value available for
future sales under the ATM.
Subsequent to the end of the fourth quarter, URI raised gross proceeds
of approximately $8.9 million, before expenses, from the Rights
Offering, which was used to repay the $5.0 million bridge loan from RCF
and the remainder of which will be used for general working capital. URI
will also free up $4.5 million in working capital as a result of the
collateral requirements of the new surety bonds.
URI incurred cash expenditures from its operating and investing
activities during 2012 of $23.4 million.
Reverse Stock Split and NASDAQ Compliance
On January 23, 2013 URI conducted a 1-for-10 reverse stock split of its
common stock. The primary purpose of the reverse split was to bring URI
into compliance with NASDAQ's $1.00 minimum bid price requirement. On
February 6, 2013 the Company was notified that its common stock had
maintained a closing price of $1.00 or more for at least ten consecutive
trading days and that the Company was in full compliance with NASDAQ
listing requirements and therefore will continue to be listed and traded
on the NASDAQ Capital Market.
URI also regained compliance with NASDAQ rules requiring the Board of
Directors to be comprised of a majority of independent directors and the
Audit Committee to be comprised of at least three independent members.
Teleconference and Webcast
URI will host a conference call and webcast today at 11:30 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 2:30 p.m. ET the day of the
teleconference until Friday,
March 22, 2013. To listen to the archived call, dial (858) 384-5517 and
enter replay pin number 408349. A transcript will also be posted 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.
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 and proceeds related to its new surety bonds, the
outcome of discussions with the Navajo Nation and royalty holders,
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 Company′s ability to raise additional capital in the
future, spot price and long-term contract price of uranium, the outcome
of negotiations with the Navajo Nation, the Company's ability to reach
agreements with current royalty holders, weather conditions, operating
conditions at the Company's mining projects, government and tribal
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, maintaining
sufficient financial assurance in the form of sufficiently
collateralized surety instruments 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. | ||||||||||
? | ||||||||||
? | ? | ? | December 31, | |||||||
| 2012 | 2011 | |||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 4,664,596 | $ | 2,890,263 | ||||||
Receivables, net | 276,801 | 123,336 | ||||||||
Prepaid and other current assets | 431,427 | 165,509 | ||||||||
? | ||||||||||
Total current assets | 5,372,824 | 3,179,108 | ||||||||
Property, plant and equipment, at cost: | ||||||||||
Uranium properties | 107,672,404 | 82,768,867 | ||||||||
Other property, plant and equipment | 1,360,598 | 868,454 | ||||||||
Less?accumulated depreciation, depletion and impairment | (65,318,921 | ) | (64,791,294 | ) | ||||||
? | ||||||||||
Net property, plant and equipment | 43,714,081 | 18,846,027 | ||||||||
Long-term investment: | ||||||||||
Restricted cash | 9,491,865 | 9,379,794 | ||||||||
? | ||||||||||
Total assets | $ | 58,578,770 | $ | 31,404,929 | ||||||
? | ? | ? | ||||||||
? | ||||||||||
Current liabilities: | ||||||||||
Accounts and short term notes payable | $ | 1,331,888 | $ | 1,148,812 | ||||||
Note payable | 5,000,000 | ? | ||||||||
Current portion of restoration reserve | 1,160,378 | 1,227,125 | ||||||||
Royalties and commissions payable | 665,745 | 665,745 | ||||||||
Accrued interest and other accrued liabilities | 859,981 | 374,088 | ||||||||
Current portion of capital leases | 112,140 | 65,161 | ||||||||
? | ? | ? | ? | |||||||
Total current liabilities | 9,130,132 | 3,480,931 | ||||||||
Other long-term liabilities and deferred credits | 3,837,679 | 4,008,634 | ||||||||
Long-term capital leases, less current portion | 17,582 | 54,071 | ||||||||
Other long-term debt | 450,000 | 450,000 | ||||||||
? | ? | ? | ? | |||||||
Total liabilities | 13,435,393 | 7,993,636 | ||||||||
Shareholders' equity: | ||||||||||
? | ||||||||||
| 16,154 | 9,404 | ||||||||
Paid-in capital | 207,338,549 | 169,988,842 | ||||||||
Accumulated deficit | (162,201,908 | ) | (146,577,535 | ) | ||||||
Less: Treasury stock (3,813 shares), at cost | (9,418 | ) | (9,418 | ) | ||||||
? | ? | ? | ? | |||||||
Total shareholders' equity | 45,143,377 | 23,411,293 | ||||||||
? | ? | ? | ? | |||||||
Total liabilities and shareholders′ equity | $ | 58,578,770 | $ | 31,404,929 | ||||||
? | ||||||||||
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URANIUM RESOURCES, INC. | ||||||||||||
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? | ? | ? | Year Ended December 31, | |||||||||
| 2012 | 2011 | 2010 | ||||||||||
Revenues: | ||||||||||||
Uranium sales | $ | ? | ? | $ | ? | ? | $ | ? | ||||
Total revenue | ? | ? | ? | |||||||||
Cost of uranium sales: | ||||||||||||
Royalties and commissions | ? | ? | ? | |||||||||
Operating expenses | 2,564,827 | 648,278 | 394,763 | |||||||||
Accretion/amortization of restoration reserve | 85,181 | 121,183 | 155,943 | |||||||||
Depreciation | 396,246 | 599,504 | 756,377 | |||||||||
Writedown of uranium properties | 1,737,359 | 1,460,170 | 961,278 | |||||||||
Exploration and land maintenance expenses | 492,858 | 17,918 | 1,646 | |||||||||
? | ? | ? | ? | ? | ? | |||||||
Total cost of uranium sales | 5,276,471 | 2,847,053 | 2,270,007 | |||||||||
? | ? | ? | ? | ? | ? | |||||||
Loss from operations before corporate expenses | (5,276,471 | ) | (2,847,053 | ) | (2,270,007 | ) | ||||||
Corporate expenses: | ||||||||||||
| 10,399,084 | 8,400,955 | 6,911,672 | |||||||||
Provision for legal settlement | ? | ? | 1,375,000 | |||||||||
Depreciation | 160,747 | 127,741 | 143,361 | |||||||||
? | ? | ? | ? | ? | ? | |||||||
Total corporate expenses | 10,559,831 | 8,528,696 | 8,430,033 | |||||||||
? | ? | ? | ? | ? | ? | |||||||
Loss from operations | (15,836,302 | ) | (11,375,749 | ) | (10,700,040 | ) | ||||||
Other income (expense): | ||||||||||||
Interest expense | (50,880 | ) | (18,968 | ) | (25,362 | ) | ||||||
Interest and other income, net | 262,809 | 195,320 | 370,835 | |||||||||
? | ? | ? | ? | ? | ? | |||||||
Total other income, net | 211,929 | 176,352 | 345,473 | |||||||||
? | ? | ? | ? | ? | ? | |||||||
Net loss | $ | (15,624,373 | ) | $ | (11,199,397 | ) | $ | (10,354,567 | ) | |||
? | ? | ? | ? | ? | ? | |||||||
Basic and diluted net loss per common share | $ | (1.28 | ) | $ | (1.20 | ) | $ | (1.43 | ) | |||
Average weighted shares outstanding | 12,237,349 | 9,348,053 | 7,231,346 | |||||||||
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URANIUM RESOURCES, INC. | ||||||||||||
? | ||||||||||||
? | ? | ? | Year Ended December 31, | |||||||||
| 2012 | 2011 | 2010 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net loss | $ | (15,624,373 | ) | $ | (11,199,397 | ) | $ | (10,354,567 | ) | |||
Reconciliation of net loss to cash used in operations? | ||||||||||||
Accretion/amortization of restoration reserve | 85,181 | 121,183 | 155,943 | |||||||||
Depreciation and depletion | 556,993 | 727,245 | 899,738 | |||||||||
Writedown of uranium properties and exploration expenses | 1,737,359 | 1,460,170 | 961,278 | |||||||||
Decrease in restoration and reclamation accrual | (1,767,289 | ) | (1,530,303 | ) | (1,373,228 | ) | ||||||
Stock compensation expense | 427,292 | 883,941 | 1,032,308 | |||||||||
Other non-cash items, net | 73,932 | 2,289 | 19,700 | |||||||||
Effect of changes in operating working capital items? | ||||||||||||
(Increase) decrease in receivables | (148,465 | ) | (77,092 | ) | 17,646 | |||||||
(Increase) decrease in prepaid and other current assets | (88,578 | ) | 13,722 | (53,831 | ) | |||||||
Increase (decrease) in payables and accrued liabilities and deferred credits | ? | (116,223 | ) | ? |
| ) | ? | 1,334,939 | ||||
Net cash used in operating activities | (14,864,171 | ) | (10,400,802 | ) | (7,360,074 | ) | ||||||
Cash flows from investing activities: | ||||||||||||
(Increase) decrease in certificate of deposit, restricted |
| 161,834 | (2,042,428 | ) | (551,366 | ) | ||||||
Additions to property, plant and equipment? | ||||||||||||
Kingsville Dome | (690,108 | ) | (141,137 | ) | (149,652 | ) | ||||||
Rosita | (68,454 | ) | (125,693 | ) | (58,504 | ) | ||||||
Vasquez | (101,874 | ) | (97,200 | ) | (77,500 | ) | ||||||
Rosita South | (9,447 | ) | (40,959 | ) | (78,813 | ) | ||||||
Los Finados/Tecolote project | (5,950 | ) | (88,236 | ) | (1,168,780 | ) | ||||||
Churchrock | (2,770,833 | ) | (58,838 | ) | (138,541 | ) | ||||||
Crownpoint/Section 13 Drilling | (283,625 | ) | (34,921 | ) | (119,624 | ) | ||||||
Proceeds from Joint Venture agreement | ? | 300,000 | ? | |||||||||
Other property | (519,690 | ) | (35,311 | ) | (23,123 | ) | ||||||
Juan Tefoya | (565,244 | ) | ? | ? | ||||||||
Acquisition of Neutron Energy, Inc. | ? | (3,677,133 | ) | ? | ? | ? | ? | |||||
Net cash used in investing activities | (8,530,524 | ) | (2,364,723 | ) | (2,365,903 | ) | ||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from note payable | 5,000,000 | ? | ? | |||||||||
Proceeds from (payments of) borrowings | (95,664 | ) | (83,539 | ) | (117,710 | ) | ||||||
Issuance of common stock, net | ? | 20,264,692 | ? | 352,855 | ? | 19,138,091 | ||||||
Net cash provided by (used in) financing activities | 25,169,028 | 269,316 | 19,020,381 | |||||||||
? | ? | ? | ||||||||||
Net increase (decrease) in cash and cash equivalents | 1,774,333 | (12,496,209 | ) | 9,294,404 | ||||||||
Cash and cash equivalents, beginning of year | 2,890,263 | 15,386,472 | 6,092,068 | |||||||||
? | ? | ? | ||||||||||
Cash and cash equivalents, end of year | $ | 4,664,596 | $ | 2,890,263 | $ | 15,386,472 | ||||||
? | ||||||||||||
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
