Uranium Resources Provides Corporate Update
*URI to expense previously capitalized historic development costs and
report mineralized uranium material in terms of tons and grade instead of
*Resource Capital Fund V L.P. provides first $3.0 million at closing of the
convertible loan facility
*Texas Court issues decision in Kleberg County litigation
CENTENNIAL, Colo., Nov. 19, 2013 (GLOBE NEWSWIRE) -- Uranium Resources, Inc.
(Nasdaq:URRE) ("URI" or the "Company") today announced that after discussions
with the Securities and Exchange Commission ("SEC") Staff, URI management has
determined that the Company's policy of capitalizing development costs after
confirmation of the existence of a commercially minable uranium deposit is not
in conformance with the SEC's Industry Guide 7. Management has also
determined, consistent with Industry Guide 7, to disclose mineralized material
in terms of tons and grade only in SEC filings. As a result, the Company will
no longer disclose pounds of mineralized uranium material contained in the
As previously disclosed in URI's Form 10-Q for the period ended September 30,
2013, the Company had received letters from the Staff of the SEC with
questions related to the Company's historic accounting policies and
capitalization practices for development costs on its uranium properties.The
letters were associated with the SEC's routine three-year review of URI's 2012
Annual Report on Form 10-K.
Accordingly, the Company will restate its historical financial results to
expense certain costs that were previously capitalized for the years ended
December 31, 2010, 2011 and 2012 and the quarters therein, and the quarterly
periods in 2013 that ended March 31, June 30 and September 30. URI management
estimates that the impact of expensing such costs will be to reduce property,
plant and equipment on the Company's consolidated balance sheets by
approximately $9 million and is evaluating corresponding changes to the
consolidated statements of operations, shareholders' equity and cash flows in
the relevant periods. Please refer to documents filed with the SEC for further
Jeffrey L. Vigil, Vice President - Finance and Chief Financial Officer,
commented, "This restatement does not impact our cash position, financing
agreements, progress on our operating plans or future production."
Financing with Resource Capital Fund V L.P. Closed
URI also announced today the closing of an agreement with the Company's
largest shareholder, Resource Capital Fund V L.P. (RCF), to provide financing.
As previously announced, URI and RCF entered into a non-binding letter
agreement on October 14, 2013, following careful consideration of a variety of
financing options available to the Company. The $15 million secured
convertible debt facility closed on November 13, 2013, with an initial amount
of $3.0 million advanced to the Company upon closing.Another $2.0 million of
the first tranche will be available upon shareholder approval of the facility,
which is expected to occur on or before January 31, 2014, and two additional
tranches of $5.0 million each will be available later in 2014 at the election
of the Company.
"RCF has again demonstrated its support for URI and its continuing belief in
URI's strategy and assets," stated Christopher M. Jones, President and Chief
Executive Officer of URI. "We look forward to working closely with RCF as we
build shareholder value."
Amounts drawn under the facility carry an annualized interest rate of 12%
until shareholder approval of the agreement and 10% thereafter. RCF may
convert amounts drawn under the facility into URI common stock at an initial
rate of $2.60 per share, subject to adjustment in certain situations. The
facility matures on December 31, 2016. Please refer to documents filed with
the SEC for further information.
Update on Kleberg County Litigation
The 105^th Judicial District Court in Texas announced its final decision
regarding URI's contractual dispute with Kleberg County that began in 2007.
This decision by the Court re-affirms that any ongoing mining and restoration
activities at URI's Kingsville Dome Project may continue. The Court declined
to award any attorney fees to either party in the case. Mr. Jones commented,
"This decision allows the Company and the County to work cooperatively on
future endeavors at our Kingsville plant."
Management Maintains Focus on Cost Reduction and Positioning for a Return to
With financing secured, management continues its efforts to reduce costs and
position the Company to return to production when uranium market fundamentals
The Company has already reduced its burn rate by $300,000 per month on
average, a result of corporate consolidation and cost containment efforts.The
Company continues to look for ways to improve efficiencies in the current
uranium price environment.
Positioning the Company for future production
URI is continuing internal evaluation work in an effort to produce National
Instrument 43-101 reports for its near-term production project at the Rosita
site in South Texas and its mid-term New Mexico development projects at Roca
Honda, Cebolleta and Churchrock. The reports assist in the understanding of
URI's projects by providing greater detail on the assets, production plans and
the economics of potential development scenarios which set the stage for
potential project financing activities under consideration for 2014. Internal
review of reports for Roca Honda and Cebolleta is expected by end of year, and
external independent third party reviews will be accomplished throughout 2014.
Mr. Jones concluded, "We have secured financing, continue to reduce costs, and
are working to prepare URI for production when uranium fundamentals begin to
improve – actions we believe will maximize shareholder value."
About Uranium Resources, Inc.
Uranium Resources, Inc. explores for, develops and mines uranium. URI has over
206,600 acres of uranium mineral holdings in New Mexico, processing facilities
and properties in Texas, and an NRC license to produce up to three million
pounds of uranium per year. 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 availability and timing of additional tranches of the RCF
facility, the timing and ultimate resolution of the SEC comments, the extent
of the restatement of the Company's historical financial statements and the
Company's ability to restate its financial statements in a timely manner, the
Company's mineralized uranium materials, access to properties, completion of
restoration activities, de-risking the Company's properties, the planned
commencement of production at the Company's properties, production of NI
43-101 reports, lower monthly cash burn, the ability of the Company to expand
its asset base, the possibility of project financing, and the Company's
ability to conserve cash 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, 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.
CONTACT: Investor Contact:
Deborah K. Pawlowski
Kei Advisors LLC
Uranium Resources, Inc.
Press spacebar to pause and continue. Press esc to stop.