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Uranium Resources Provides Full Year 2012 Review and Outlines Near-Term Initiatives



  Uranium Resources Provides Full Year 2012 Review and Outlines Near-Term
  Initiatives

Business Wire

LEWISVILLE, Texas -- March 15, 2013

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% U[3]O[8 ]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 U[3]O[8] 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.

 
URANIUM RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
                                              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,                (65,318,921  )     (64,791,294 )
depletion and impairment
                                                                              
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                1,160,378        1,227,125
reserve
Royalties and commissions payable             665,745          665,745
Accrued interest and other accrued            859,981          374,088
liabilities
Current portion of capital leases             112,140          65,161
                                                                
Total current liabilities                     9,130,132        3,480,931
Other long-term liabilities and               3,837,679        4,008,634
deferred credits
Long-term capital leases, less                17,582           54,071
current portion
Other long-term debt                          450,000          450,000
                                                                
Total liabilities                             13,435,393       7,993,636
Shareholders' equity:
                                                                              
Common stock, $0.001 par value,
shares authorized: 200,000,000;
shares
issued and outstanding (net of                16,154           9,404
treasury shares):

2012—16,150,163; 2011—9,400,501
Paid-in capital                               207,338,549      169,988,842
Accumulated deficit                           (162,201,908 )   (146,577,535  )
Less: Treasury stock (3,813 shares),          (9,418       )   (9,418        )
at cost
                                                                
Total shareholders' equity                    45,143,377       23,411,293
                                                                
Total liabilities and shareholders’         $ 58,578,770     $ 31,404,929
equity
 

 
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
 
                               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           85,181          121,183         155,943
of restoration reserve
Depreciation                     396,246         599,504         756,377
Writedown of uranium             1,737,359       1,460,170       961,278
properties
Exploration and land             492,858         17,918          1,646
maintenance expenses
                                                                  
Total cost of uranium            5,276,471       2,847,053       2,270,007
sales
                                                                  
Loss from operations
before corporate                 (5,276,471  )   (2,847,053  )   (2,270,007  )
expenses
Corporate expenses:
General and
administrative (includes
stock compensation
expense of                       10,399,084      8,400,955       6,911,672
$427,000, $884,000 and
$1,032,000 in 2012, 2011
and 2010,
respectively)
Provision for legal              —               —               1,375,000
settlement
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               262,809         195,320         370,835
income, net
                                                                  
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          $ (1.28       ) $ (1.20       ) $ (1.43       )
loss per common share
Average weighted shares          12,237,349      9,348,053       7,231,346
outstanding
 

 
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
                               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           85,181          121,183         155,943
of restoration reserve
Depreciation and                 556,993         727,245         899,738
depletion
Writedown of uranium
properties and                   1,737,359       1,460,170       961,278
exploration expenses
Decrease in restoration          (1,767,289  )   (1,530,303  )   (1,373,228  )
and reclamation accrual
Stock compensation               427,292         883,941         1,032,308
expense
Other non-cash items,            73,932          2,289           19,700
net
Effect of changes in
operating working
capital items—
(Increase) decrease in           (148,465    )   (77,092     )   17,646
receivables
(Increase) decrease in
prepaid and other                (88,578     )   13,722          (53,831     )
current assets
Increase (decrease) in
payables and accrued             (116,223    )   (802,560    )   1,334,939
liabilities and deferred
credits
Net cash used in                 (14,864,171 )   (10,400,802 )   (7,360,074  )
operating activities
Cash flows from
investing activities:
(Increase) decrease in
certificate of deposit,          161,834         (2,042,428  )   (551,366    )
restricted
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             (5,950      )   (88,236     )   (1,168,780  )
project
Churchrock                       (2,770,833  )   (58,838     )   (138,541    )
Crownpoint/Section 13            (283,625    )   (34,921     )   (119,624    )
Drilling
Proceeds from Joint              —               300,000         —
Venture agreement
Other property                   (519,690    )   (35,311     )   (23,123     )
Juan Tefoya                      (565,244    )   —               —
Acquisition of Neutron           (3,677,133  )   —               —
Energy, Inc.
Net cash used in                 (8,530,524  )   (2,364,723  )   (2,365,903  )
investing activities
Cash flows from
financing activities:
Proceeds from note               5,000,000       —               —
payable
Proceeds from (payments          (95,664     )   (83,539     )   (117,710    )
of) borrowings
Issuance of common               20,264,692      352,855         19,138,091
stock, net
Net cash provided by
(used in) financing              25,169,028      269,316         19,020,381
activities
                                                                
Net increase (decrease)
in cash and cash                 1,774,333       (12,496,209 )   9,294,404
equivalents
Cash and cash
equivalents, beginning           2,890,263       15,386,472      6,092,068
of year
                                                                
Cash and cash                  $ 4,664,596     $ 2,890,263     $ 15,386,472
equivalents, end of year
                                                                              

Contact:

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
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