WESTWATER RESOURCES, INC. - Quarter Report: 2007 June (Form 10-Q)

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

FORM 10-Q

 

For the transition period from                  to               

Commission file number 0-17171

URANIUM RESOURCES, INC.

(Exact Name of Issuer as Specified in Its Charter)

 

650 S. Edmonds Lane, Suite 108, Lewisville, Texas 75067

(Address of Principal Executive Offices)

(972) 219-3330

(Issuer’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x  Yes    o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer” and “large accelerated filer” in Rule 12-b2 of the Exchange Act.

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12-b2 of the Exchange Act).

o  Yes    x  No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

URANIUM RESOURCES, INC.
2007 SECOND QUARTERLY REPORT ON FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Consolidated Balance Sheets- June 30, 2007 (unaudited) and December 31, 2006
		Consolidated Statements of Operations - three and six months ended June 30, 2007 and 2006 (Unaudited)
		Consolidated Statements of Cash Flows - three and six months ended June 30, 2007 and 2006 (Unaudited)
		Notes to Consolidated Financial Statements – June 30, 2007 (Unaudited)
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	Item 4.	Controls and Procedures
PART II — OTHER INFORMATION
	Item 1.	Legal Proceedings
	Item 1A.	Risk Factors
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3.	Defaults Upon Senior Securities
	Item 4.	Submission of Matters to a Vote of Security Holders
	Item 5.	Other Information
	Item 6.	Exhibits and Reports on Form 8-K
SIGNATURES
Index to Exhibits

 

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URANIUM RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS

		June 30, 2007			December 31, 2006
		(Unaudited)
Current assets:
Cash and cash equivalents		$	16,495,323		$	20,176,771
Receivables, net		1,168,130			713,529
Uranium and materials/supplies inventory		2,491,425			1,603,585
Prepaid and other current assets		568,594			410,000
Total current assets		20,723,472			22,903,885
Property, plant and equipment, at cost:
Uranium properties		75,758,035			67,153,797
Other property, plant and equipment		638,890			465,613
Less-accumulated depreciation, depletion and impairment		(53,759,117		)	(49,423,848		)
Net property, plant and equipment		22,637,808			18,195,562
Other assets		2,381,760			2,369,434
Long-term investment:
Certificates of deposit, restricted		2,890,423			2,467,491
		$	48,633,463		$	45,936,372

 

The accompanying notes to financial statements are an integral part of these consolidated statements.

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LIABILITIES AND SHAREHOLDERS’ EQUITY

		June 30, 2007			December 31, 2006
		(Unaudited)
Current liabilities:
Accounts payable		$	2,237,749		$	1,994,184
Current portion of restoration reserve		1,399,006			1,520,192
Accrued interest and other accrued liabilities		1,554,389			816,877
Current portion of long-term debt		226,869			201,804
Total current liabilities		5,418,013			4,533,057
Other long-term liabilities and deferred credits		3,805,012			3,998,229
Long-term debt, less current portion		607,555			635,691
Commitments and contingencies (Notes 1, 2 and 3)
Shareholders’ equity:
Common stock, $.001 par value, shares authorized: 200,000,000; shares issued and outstanding (net of treasury shares): 2007—52,225,836; 2006—51,791,339		52,264			51,829
Paid-in capital		128,523,131			126,252,871
Accumulated deficit		(89,763,094		)	(89,525,887		)
Less: Treasury stock (38,125 shares), at cost		(9,418		)	(9,418		)
Total shareholders’ equity		38,802,883			36,769,395
		$	48,633,463		$	45,936,372

 

The accompanying notes to financial statements are an integral part of these consolidated statements.

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URANIUM RESOURCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

		Three Months Ended June 30,						Six Months Ended June 30,
		2007			2006			2007			2006
Revenues:
Uranium sales—		$	7,962,709		$	1,844,770		$	12,536,876		$	2,913,359
Total revenue		7,962,709			1,844,770			12,536,876			2,913,359
Costs and expenses:
Cost of uranium sales—
Royalties and commissions		981,966			169,891			1,420,942			249,326
Operating expenses		1,556,011			1,593,836			3,343,074			3,117,428
Accretion/amortization of restoration reserve		137,021			141,334			307,201			274,308
Depreciation and depletion		1,810,964			772,250			3,298,013			1,389,089
Exploration expenses		—			234,646			—			234,646
Gain on derivatives		—			(526,875		)	—			(34,820,947		)
Total (gain on) cost of uranium sales		4,485,962			2,385,082			8,369,230			(29,556,150		)
Earnings (loss) from operations before corporate expenses		3,476,747			(540,312		)	4,167,646			32,469,509
Corporate expenses—
General and administrative		2,479,152			1,600,261			4,691,244			2,657,013
Depreciation		25,022			7,088			46,184			13,059
Total corporate expenses		2,504,174			1,607,349			4,737,428			2,670,072
Earnings (loss) from operations		972,573			(2,147,661		)	(569,782		)	29,799,437
Other income (expense):
Interest expense		(4,500		)	(1,594		)	(12,366		)	(4,333		)
Interest and other income, net		215,179			33,158			344,941			246,945
Net earnings (loss)		$	1,183,252		$	(2,116,097	)	$	(237,207	)	$	30,042,049
Net earnings (loss) per common share:*
Basic		$	0.02		$	(0.04	)	$	(0.00	)	$	0.67
Diluted		$	0.02		$	(0.04	)	$	(0.00	)	$	0.63
Weighted average common shares and common equivalent shares per share data:*
Basic		52,113,104			48,744,297			51,954,068			44,870,884
Diluted		56,228,005			48,744,297			51,954,068			47,677,369

 

*                            Net earnings (loss) per share and weighted average common shares information reflects the effect of a reverse 1 for 4 stock split made effective April 11, 2006.

The accompanying notes to financial statements are an integral part of these consolidated statements.

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URANIUM RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

		Six Months Ended June 30,
		2007			2006
Net earnings (loss)		$	(237,207	)	$	30,042,049
Reconciliation of net earnings (loss) to cash provided by (used in) operations—
Gain on derivatives		—			(34,820,947		)
Accretion/amortization of restoration reserve		307,201			274,308
Depreciation and depletion		3,344,197			1,402,148
Decrease in restoration and reclamation accrual		(655,542		)	(458,038		)
Stock compensation expense		1,555,941			796,451
Other non-cash items, net		341,421			210,281
Effect of changes in operating working capital items—
Increase in receivables		(454,601		)	(590,702		)
(Increase) decrease in inventories		46,274			(14,372		)
Increase in prepaid and other current assets		(486,875		)	(190,896		)
Increase in payables, accrued liabilities and deferred credits		981,077			1,348,207
Net cash provided by (used in) operations		4,741,886			(2,001,511		)
Investing activities:
Increase in certificates of deposit, restricted		(422,932		)	(566,008		)
Settlement of derivative instrument		—			(12,000,000		)
Additions to property, plant and equipment—
Kingsville Dome		(3,827,251		)	(5,196,719		)
Vasquez		(410,611		)	(1,573,094		)
Rosita		(1,877,161		)	(128,308		)
Rosita South		(1,163,880		)	(56,984		)
Churchrock		(417,681		)	(218,551		)
Crownpoint		(48,548		)	(58,555		)
Other property		(838,749		)	(931,034		)
Net cash used in investing activities		(9,006,813		)	(20,729,253		)
Financing activities:
Payments on borrowings		(131,275		)	(5,124		)
Issuance of common stock, net		714,754			48,572,182
Net cash provided by financing activities		583,479			48,567,058
Net decrease in cash and cash equivalents		(3,681,448		)	25,836,294
Cash and cash equivalents, beginning of period		20,176,771			5,852,716
Cash and cash equivalents, end of period		$	16,495,323		$	31,689,010

 

The accompanying notes to financial statements are an integral part of these consolidated statements.

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Uranium Resources, Inc.

Notes to Consolidated Financial Statements June 30, 2007 (Unaudited)

1.                                      BASIS OF PRESENTATION

The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with the instructions to Form 10-Q and Item 310(b) of Regulation S-K.  Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements.  The accompanying statements should be read in conjunction with the audited financial statements included in the Company’s 2006 Annual Report on Form 10-K/A.  In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included.  Operating results for the three and six months ended June 30, 2007 are not necessarily indicative of the results that may be expected for the full calendar year ending December 31, 2007.

Reverse Stock Split

On March 29, 2006 the Company’s Board of Directors declared a 1 for 4 reverse stock split for stockholders of record on April 10, 2006, effective April 11, 2006.  The split was approved by stockholders at the 2005 Annual Meeting of Stockholders.  All common stock share amounts, earnings per share data and references to the common stock of the Company in this report are stated on a post-split basis.

2.                                      DESCRIPTION OF BUSINESS

URI was organized in 1977 to mine uranium in the United States using the in situ recovery (“ISR”) mining process. From 1988 through 1999 we produced about 6.1 million pounds of uranium from two South Texas properties, 3.5 million pounds from Kingsville Dome and 2.6 million pounds from Rosita.

In 1999 we shut-in our production because of depressed uranium prices.  When uranium prices reached a level where it was prudent to commence operations the company began producing at its Vasquez property in South Texas in the fourth quarter of 2004.  Production at Kingsville Dome began in the second quarter of 2006.

The financial statements of the Company have been prepared on the basis of accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

3.                                      DISCLOSURE OF NON-CASH TRANSACTIONS

The following non-cash transaction occurred in the first six months of 2007 and 2006:

During the first six months of 2007 and 2006, the Company entered into capital leases to acquire property, plant and equipment items including logging trucks and office computers and equipment totaling $98,000 and $218,000, respectively.  The outstanding balance of the capital leases was $384,000 at June 30, 2007.

In March 2006, 103,896 shares of the Company’s Common Stock were issued in connection with the conversion of the Convertible Notes described in Footnote 8.

4.                                      URANIUM PROPERTIES

Vasquez Project

The Vasquez project commenced production in the fourth quarter of 2004.  Since its start-up and through June 30, 2007, the project has produced 615,800 pounds of uranium. In the first six months of 2007 we produced 20,400 pounds.  As production at Vasquez declines we are beginning preparations for restoration activities at this project.

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Kingsville Dome Project

We began production from wellfield 13 at Kingsville Dome at the end of January 2007, which was the first new wellfield to be brought on in Production Area Authorization (“PAA”) #3.  Production from wellfield 13 was 164,100 pounds in the first half of 2007.  Kingsville Dome produced a total of 180,300 pounds for the first six months of 2007.

During the first half of 2007 wellfield delineation and development work has continued on PAA #3 wellfields 14 and 15 at Kingsville Dome.  Production from wellfield 14 commenced in July 2007.

Rosita/Rosita South

Capital expenditures for our Rosita and Rosita South projects totaled $3.0 million in the first half of 2007.  These costs were made to upgrade the Rosita plant and elution circuit and construction of a drying facility at Rosita and for wellfield development at Rosita and wellfield evaluation at Rosita South.  The timing of production from Rosita and Rosita South will be dependent on the results of our drilling program.

5.                                      CONTRACT COMMITMENTS

Amendment to Uranium Sales Contracts

In March 2006 we entered into a new contract with Itochu Corporation (“Itochu”) and a new contract with UG U.S.A., Inc. (“UG”) that supersede the previously existing contracts and provide for delivery of one-half of our actual production from our Vasquez property and other properties in Texas currently owned or hereafter acquired by the Company (excluding certain large potential exploration plays). The terms of such contracts are summarized below.

The Itochu Contract. Under the Itochu contract all production from the Vasquez property will be sold at a price equal to the average spot price for the eight weeks prior to the date of delivery less $6.50 per pound, with a floor for the spot price of $37 and a ceiling of $46.50. Other Texas production will be sold at a price equal to the average spot price for the eight weeks prior to the date of delivery less $7.50 per pound, with a floor for the spot price of $37 and a ceiling of $43. On non-Vasquez production the price paid will be increased by 30% of the difference between actual spot price and the $43 ceiling up to and including $50 per pound. If the spot price is over $50 per pound the price on all Texas production will be increased by 50% of such excess. The floor and ceiling and sharing arrangement over the ceiling applies to 3.65 million pounds of deliveries, after which there is no floor or ceiling. Itochu has the right to cancel any deliveries on six-month’s notice.

In December 2005 we entered into a joint venture with Itochu to develop our Churchrock property in New Mexico. See “Joint Venture for Churchrock Property.”  Under the terms of the joint venture, both parties must make an investment decision after the completion of a feasibility study, which was completed at the end of 2006. If Itochu should terminate the venture at that time, we would no longer receive the additional price of 30% of the excess between $43 and $50 per pound outlined above. If we should terminate the venture at that time, the original contract terms will be reinstated from that time forward.  The parties have extended the preliminary investment decision until February 1, 2008.

The UG Contract. Under the UG contract all production from the Vasquez property and other Texas production will be sold at a price equal to the month-end long-term contract price for the second month prior to the month of delivery less $6 per pound until (i) 600,000 pounds have been sold in a particular delivery year and (ii) an aggregate of 3 million pounds of Uranium has been sold. After the 600,000 pounds in any year and 3 million pounds total have been sold, UG will have a right of first refusal to purchase other Texas production at a price equal to the average spot price for a period prior to the date of delivery less 4%. In consideration of UG’s agreement to restructure its previously existing contract, we paid UG $12 million in cash with funds raised in our equity offering completed in April 2006.

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Derivative Financial Instruments

The Company determined that its long-term uranium sales contracts in effect prior to March 2006 met the definition of derivative financial instruments for financial statement reporting purposes.  Changes in the Company’s derivatives represent non-cash charges to earnings for the present value of the loss the Company would incur in the event it would be required to purchase uranium in the spot market to satisfy the delivery obligations under the uranium sales contracts.  The Company has not entered into hedge transactions with respect to its uranium sales contracts.

6.                                      STOCK BASED COMPENSATION

Adoption of SFAS 123(R)

Effective January 1, 2006, the Company adopted the fair value recognition provisions of Statement of Financial Accounting Standard 123(R) “Share-Based Payment” (“SFAS 123(R)”) using the modified prospective transition method. In addition, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 107 “Share-Based Payment” (“SAB 107”) in March, 2005, which provides supplemental SFAS 123(R) application guidance based on the views of the SEC. Under the modified prospective transition method, compensation cost recognized in the quarter ended March 31, 2006 and beyond includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with the original provisions of SFAS No. 123, and (b) compensation cost for all share-based payments granted beginning January 1, 2006, based on the grant date fair value estimated in accordance with the provisions of SFAS 123(R). In accordance with the modified prospective transition method, results for prior periods have not been restated.

The adoption of SFAS 123(R) resulted in stock compensation expense for the three months ended June 30, 2007 and 2006 of $782,000 and $400,000, respectively, and $1.556 million and $796,000, respectively for the six months ended June 30, 2007 and 2006. Stock compensation expense is recorded as a component of general and administrative expenses for each period. The Company did not recognize a tax benefit from the stock compensation expense because the Company considers it is more likely than not that the related deferred tax assets, which have been reduced by a full valuation allowance, will not be realized.

The Black-Scholes option-pricing model was used to estimate the option fair values. The option-pricing model requires a number of assumptions, of which the most significant are, expected stock price volatility, the expected pre-vesting forfeiture rate and the expected option term (the amount of time from the grant date until the options are exercised or expire). Expected volatility was calculated based upon actual historical stock price movements through the measurement date of the stock option grant. Expected pre-vesting forfeitures were estimated based on actual historical pre-vesting forfeitures over the most recent periods ending June 30, 2007 for the expected option term. The expected option term was estimated based on historical averages over the most recent periods ending June 30, 2007.

A total of 100,000 new option grants were made to a non-employee director of the Company in April 2007 at a grant price of $9.25 per share.  This grant was subject to approval of and amendment to the 2004 Director’s Stock Option Plan that was approved at the Annual Meeting of Stockholders on July 12, 2007.  As such grant was subject to stockholder approval, the stock compensation expense related to these options will be recognized upon the approval date of July 12, 2007.

A total of 100,000 new option grants were made to the non-employee directors of the Company in June 2006 at grant prices of $5.15 and $5.13 per share.  Using the Black-Scholes option pricing model, the weighted average assumptions for grants in 2006: fair market value: $5.13 and $5.11, expected volatility of 184.7% and 184.7% and risk-free interest rates of 5.20% and 5.09%.  An expected life of 9.31 years was used for the options granted.  The weighted average fair value of the options granted in 2006 was $5.12.

Stock Options as of the Six Months Ended June 30, 2007 and 2006

Employee Stock Options

The Company has two stock Incentive Plans for Employees, both of which were approved by the Company’s stockholders.  Under the 1995 Stock Incentive Plan (the “1995 Plan”) 2,284,947 shares may be purchased upon the exercise of outstanding options at June 30, 2007, with exercise prices ranging from $0.76 to $11.75 per share.  No new options may be granted under the 1995 Plan.

Under the Company’s 2004 Stock Incentive Plan (the “2004 Plan”) a total of 1,750,000 shares may be issued upon exercise of options granted under the 2004 Plan. At June 30, 2007 there were outstanding under the 2004 Plan options for the purchase of 1,614,877 shares of Common Stock at exercise prices ranging from $2.96 to $5.19 per share. At June 30, 2007, 30,500 shares were available for future grants under the 2004 Plan.

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Employee stock options generally vest ratably over a 3 or 4 year time frame and have a contractual term of 10 years.

Directors Stock Options

On June 19, 2001, the Company granted to certain outside directors options to purchase 75,000 shares of the Company’s Common Stock at an exercise price of $0.88 per share.  All such options were immediately exercisable and will expire June 19, 2011 or 30 days after the holder ceases to be a director of the Company or one year after such holder’s death, whichever occurs first.  25,000 of these options have been exercised and 25,000 of these options have expired unexercised as of June 30, 2007.

On June 2, 2004 the Company adopted the 2004 Directors’ Stock Option Plan (the “2004 Directors’ Plan”). Under the 2004 Directors’ Plan, each non-employee director on the date the Plan was adopted was granted an option to purchase 75,000 shares of Common Stock. Each non-employee Director elected or appointed to the Board of Directors for the first time will be granted an option to purchase 25,000 shares of Common Stock and, each Non-Employee Director shall be granted an option to purchase 25,000 shares either, (a) upon his or her reelection at an annual meeting of the Company’s stockholders or (b) in any calendar year in which an annual meeting of stockholders is not held, on June 1 of such year. In June 2006, the Directors’ Stock Option Plan was amended to increase the initial grants to non-employee Directors to 50,000 shares of Common Stock.  The 2004 Directors’ Plan replaces an earlier plan that expired in 2004. Stock options under the 2004 Directors’ Plan vest ratably over a 4 year time frame or such other vesting schedule as designated by the Compensation Committee of the Board of Directors.  All option grants have a contractual term of 10 years.  The Compensation Committee may also make discretionary option awards under this plan.

At the June 2006 annual meeting of the stockholders, each of the non-employee directors of the Company was granted an option under the 2004 Directors Plan to purchase 25,000 shares of the Company’s common stock at an exercise price of $5.15 per share. In June and October 2006 options to purchase 50,000 shares of the Company’s Common Stock were granted to two new non-employee directors of the Company at exercise prices of $5.13 and $2.97, respectively.  The non-employee directors hold options covering 350,000 shares under the 2004 Directors’ Plan at June 30, 2007. At June 30, 2007, 700,000 shares were available for future grants under the 2004 Directors’ Plan.

A total of 100,000 new option grants were made to a non-employee director of the Company in April 2007 at a grant price of $9.25 per share subject to the approval of amendments to the 2004 Directors’ Stock Option Plan that was voted on at the Annual Meeting of Stockholders held on July 12, 2007.  Such approval was granted at the July 12, 2007 Annual Meeting.

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The following table summarizes stock options outstanding and changes during the six months period ended June 30, 2007:

		Outstanding Options
		Number of Shares		Weighted Average Exercise Price			Weighted Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value
Options outstanding at January 1, 2007		4,725,209		$	1.47
Exercised		(434,497	)	$	1.65
Canceled or forfeited		(58,575	)	$	14.96
Options outstanding at June 30, 2007		4,232,137		$	2.34		7.59		$	36,798,157
Options exercisable at June 30, 2007		2,602,884		$	1.95		7.05		$	23,646,515

 

Shares available for grant under the Plans as of June 30, 2007 were 730,500.

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Stock options outstanding and currently exercisable at June 30, 2007 are as follows:

		Options Outstanding							Options Exercisable
Stock Option Plan		Number of Options Outstanding		Weighted Average Remaining Contractual Life (in years)		Weighted Average Exercise price			Number of Options Exercisable		Weighted Average Exercise Price
1995 Stock Incentive Plan		2,284,947		6.78		$	1.51		1,738,908		$	1.39
2004 Employee Incentive Plan		1,614,877		8.69		3.42			719,163		3.30
Directors Stock Option Plan		1,063		2.71		4.99			1,063		4.99
2004 Directors Plan		306,250		8.18		2.85			118,750		2.10
Other		25,000		4.00		0.88			25,000		0.88
		4,232,137		7.59		$	2.34		2,602,884		$	1.95

 

Total estimated unrecognized compensation cost from unvested stock options as of June 30, 2007 was approximately $3.1 million, which is expected to be recognized over a weighted average period of approximately 2 years.

7.                                      ASSET RETIREMENT OBLIGATIONS

The following table shows the change in the balance of the restoration and reclamation liability during the three months ended June 30, 2007:

Reserve for future restoration and reclamation costs beginning of period		$	4,229,193
Additions and changes in cash flow estimates		344,918
Costs incurred		(726,107		)
Accretion expense		66,788
Reserve for future restoration and reclamation costs at end of period		$	3,914,790

 

8.                                      SHAREHOLDERS’ EQUITY

Convertible Notes

In March 2006, 103,896 shares of the Company’s Common Stock were issued in connection with the conversion of $182,900 of principal and accrued interest of the Convertible Notes issued in 2000.

Common Stock Issued Upon Exercise of Options

During the first six months of 2007, the Company raised $714,754 of equity through the issuance of 434,497 shares of Common Stock of the Company upon the exercise of outstanding stock options.

The following table details the changes in shareholders equity for the six months ended June 30, 2007:

		Common Stock					Paid-In			Accumulated
		Shares		Amount			Capital			Deficit			Treasury Stock
Balances, December 31, 2006		51,791,339		$	51,829		$	126,252,871		$	(89,525,887	)	$	(9,418	)
Net loss		—		—			—			(237,207		)	—
Stock option exercise		434,497		435			714,319			—			—
Stock compensation expense		—		—			1,555,941			—			—
Balances, June 30, 2007		52,225,836		$	52,264		$	128,523,131		$	(89,763,094	)	$	(9,418	)

 

9.                                      ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES

On January 1, 2007, we adopted FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretation of FASB Statements No. 109” (“FIN 48”). FIN 48 clarifies the accounting for uncertainty in income taxes by prescribing a two-step method of first evaluating whether a tax position has met a more likely than not recognition threshold and second, measuring that tax

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position to determine the amount of benefit to be recognized in the financial statements. FIN 48 provides guidance on the presentation of such positions within a classified statement of financial position as well as on derecognition, interest and penalties, accounting in interim periods, disclosure, and transition.

As a result of the implementation of FIN 48, we recognized no change in our recorded assets or liabilities for unrecognized income tax benefits. Based on our analysis of all material tax positions taken, management believes the technical merits of these positions are justified and expects that the full amount of the deductions taken and associated tax benefits will be allowed.

FIN 48 requires the evaluation of a tax position as a two-step process. We must determine whether it is more likely than not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigation processes, based on the technical merits of the position. If the tax position meets the “more likely than not” recognition threshold, then the tax benefit is measured and recorded at the largest amount that is greater than 50 percent likely of being realized upon ultimate settlement. The re-assessment of our tax positions in accordance with FIN 48 did not result in any material change to our financial condition, results of operations or cash flows.

We have also assessed the classification of interest and penalties, if any, related to income tax matters. Pursuant to the application of FIN 48, we have made an accounting election to treat interest and penalties related to income tax matters, if any, as a component of income tax expense rather than other operating expenses.

10.                               IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS

Fair Value Measurements. In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which provides a common definition for the measurement of fair value for use in applying generally accepted accounting principles in the United States of America and in preparing financial statement disclosures. SFAS No. 157 is effective for fiscal years beginning after November 15, 2007. We are evaluating the effect of the adoption and implementation of SFAS No. 157, which is not expected to have a material impact on our financial condition, results of operations or cash flows.

Fair Value Option for Financial Assets and Liabilities. In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities,” which permits entities to choose to measure many financial instruments and certain other items at fair value. SFAS No. 159 is effective for fiscal years beginning after November 15, 2007. We are evaluating the effect of the adoption and implementation of SFAS No. 159, which is not expected to have a material impact on our financial condition, results of operations or cash flows.

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ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and any financial data incorporated herein by reference to the Company’s reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Except for historical information contained in this report, the matters discussed herein contain forward-looking statements, made pursuant to the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including management’s expectations regarding the Company’s reserves and mineralized uranium materials, timing of receipt of mining permits, production capacity of mining operations planned for properties in South Texas and New Mexico and planned dates for commencement of production at such properties. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from management’s expectations. Key factors impacting current and future operations of the Company include the price of uranium, weather conditions, operating conditions at the Company’s mining projects, government regulation of the mining industry and the nuclear power industry, the world-wide supply and demand of uranium, availability of capital, timely receipt of mining and other permits from regulatory agencies and other matters indicated in “Cautionary Statement,” found in the Company’s Annual Report.

Financial Condition and Results of Operations

Comparison of Three and Six Months Ended June 30, 2007 and 2006

Production and production costs.  In the first six months of 2007 we produced 244,900 pounds.  The Vasquez project produced 64,600 pounds and Kingsville Dome produced 180,300 pounds.  Production in the first six months of 2006 was 114,800, 91,300 from Vasquez and 23,500 from Kingsville Dome.  The following table details our production and production cost breakdown for the three and six months ended June 30, 2007 and 2006.

		Three Months Ended June 30,						Six Months Ended June 30,
		2007			2006			2007			2006
Vasquez production		20,412			35,943			64,557			91,321
Kingsville Dome production		115,425			23,461			180,321			23,461
Total production		135,837			59,404			244,878			114,782
Total operating costs		$	1,708,622		$	1,576,417		$	3,297,405		$	3,131,799
Per pound operating costs		$	12.58		$	26.54		$	13.47		$	27.28
Total deprec. and depletion costs		$	2,064,767		$	987,843		$	4,231,521		$	1,567,093
Per pound DD&A cost		$	15.20		$	16.63		$	17.28		$	13.65
Total production cost		$	3,773,389		$	2,564,260		$	7,528,926		$	4,698,892
Production cost per pound		$	27.78		$	43.17		$	30.75		$	40.94

 

Uranium Sales.  In the first half of 2007 we sold 194,022 pounds generating revenue of $12.537 million ($64.62 per pound), compared to sales of 129,970 pounds in the same period of 2006 for revenue of $2.913 million ($22.42 per pound).  In the quarter ended June 30, 2007 we sold 114,351 pounds and had revenue of $7.963 million ($69.63 per pound) compared to second quarter 2006 sales of 64,355 pounds which generated revenue of $1.845 million ($28.67 per pound).  Our increase in the sales resulted from our increased production in 2007 achieved by the commencement of operations in PAA#3 at Kingsville Dome.  The increase in sales revenue was the result of both the increase in pounds sold but more significantly from higher prices we received under new contracts entered into with each of our two customers in March 2006 which superseded the previous contracts.

Cost of Uranium Sales.  Our cost of uranium sales from the sale of produced uranium in the first six months of 2007 was $8.4 million compared to $5.3 million in the same period of 2006, excluding the gain on derivatives of $34.8 million recorded in connection with the revised uranium sales contracts in the first half of 2006.  Cost of uranium sales is comprised primarily of royalties and commissions related to our uranium sales, production costs, including operating expenses, depreciation and depletion expenses and amortization of our restoration and reclamation cost estimates.  The following table details the cost of uranium sales breakdown for the three and six months ended June 30, 2007 and 2006.

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		Three Months Ended June 30,						Six Months Ended June 30,
		2007			2006			2007			2006
Total pounds sold		114,351			64,355			194,022			129,970
Total operating expenses		$	1,556,011		$	1,593,836		$	3,343,074		$	3,117,429
Per pound operating expense		$	13.61		$	24.77		$	17.23		$	23.99
Depreciation and depletion		$	1,810,964		$	772,250		$	3,298,013		$	1,389,089
Per pound DD&A expense		$	15.84		$	12.00		$	17.00		$	10.69
Direct cost of uranium production sold		$	3,366,975		$	2,366,086		$	6,641,087		$	4,506,517
Direct cost of sales per pound		$	29.44		$	36.77		$	34.23		$	34.67
Royalties and commissions		$	981,966		$	169,891		$	1,420,942		$	249,326
Royalties and commissions per pound		$	8.59		$	2.64		$	7.32		$	1.92

 

The second quarter and six months ended June 30, 2007 reflected a higher percentage of sales of Kingsville Dome production compared to Vasquez production sold, resulting from the continued increase in production from PAA #3 wellfields along with a decrease of production from the Vasquez project.  Kingsville Dome PAA#3 wellfields have shown both lower operating and capital cost compared to the previous Kingsville Dome wellfields placed in production in the second quarter of 2006 because of the higher quality of the ore trend being put under the new wellfield.  The PAA#3 wellfields have also demonstrated lower operating costs than our Vasquez production because of the better ore quality at Kingsville Dome and because the Kingsville Dome ore body does not contain the re-reduced ore characteristics found at Vasquez.

Accretion and amortization of future restoration costs in the second quarter of 2007 and 2006 was $137,000 and $141,000, respectively and $307,000 and $274,000, respectively for the first six months of 2007 and 2006.

General and Administrative Charges.  We incurred general and administrative charges and corporate depreciation of $2.5 million and $1.6 million, respectively in the three months ended June 30, 2007 and 2006.   General and administrative charges and corporate depreciation was $4.7 million and $2.7 million, respectively in the six months ended June 30, 2007 and 2006.

Significant expenditures for general and administrative expenses for the three and six months ended June 30, 2007 and 2006 were:

		Three Months Ended						Six Months Ended
		2007			2006			2007			2006
Stock compensation expense		$	782,000		$	400,000		$	1,556,000		$	796,000
Salaries and payroll burden		573,000			354,000			1,122,000			655,000
Legal, accounting, public company expenses		485,000			539,000			837,000			695,000
Insurance and bank fees		159,000			104,000			271,000			189,000
Consulting and professional services		276,000			86,000			525,000			144,000
Office, travel and other expenses		204,000			117,000			380,000			178,000
Total		$	2,479,000		$	1,600,000		$	4,691,000		$	2,657,000

 

The non-cash compensation expense recorded for the three and six months ended June 30, 2007 and 2006 resulted from the adoption of SFAS 123(R) in January 2006, requiring the recognition of expense related to the Company’s stock option grants.

Salary and payroll costs increases for the three and six months presented resulted primarily from the additions to the engineering, professional and executive levels in South Texas and New Mexico made in 2007 and 2006 and compensation increases for the Company’s key personnel in the second half of 2006.

Increases in the Company’s legal, accounting and public company expenses in the first six months of 2007 compared to 2006 resulted from audit and consulting fees related to Sarbanes-Oxley compliance, listing fees related to our April 2007 NASDAQ listing and the increase in the Company’s Board of Directors membership in late 2006.  These increases were offset by a reduction in legal fees, as the 2006 period included significant legal costs related to the Itochu joint venture agreement.

The decrease in the Company’s legal, accounting and public company expenses in the second quarter of 2007 compared to 2006 resulted from a reduction in legal fees in 2006 related to the Itochu joint venture.  Increases in the second quarter of 2007 were from audit and consulting fees related to Sarbanes-Oxley compliance, listing fees related to our April 2007 NASDAQ listing and the increase in the Company’s Board of Directors membership in late 2006.

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Our insurance costs increased in the three and six months ended June 30, 2007 compared to 2006 from higher directors and officer’s insurance premiums, higher cost of property and casualty coverage and increased vehicle coverage premiums resulting from additional vehicles in 2007.

The costs for consulting and professional services increased in the three and six months ended June 30, 2007 compared to 2006 resulted from increases in project related activities in 2007.  These activities include work performed in the review and assessment of our New Mexico property data bases to evaluate their potential as conventional mining projects, New Mexico costs related to the preparation of ISR projects towards their final licensing and permitting phase, increases in environmental, health and safety training, the engagement of an investor relations and media relations firm in late 2006, consulting and computer networking and web site design work.

Increased office costs incurred in the three and six months ended June 30, 2007 compared to 2006 resulted primarily from the opening of a corporate office location in Corpus Christi, Texas in June 2006, increases in the South Texas Kingsville operations office resulting from the personnel added in 2006 and additions made to the Crownpoint office in New Mexico to support the additional activities in the first quarter of 2007.

Net Earnings and Losses. For the three months ended June 30, 2007 and 2006, we had net earnings of $1.2 million and a net loss of $2.1 million, respectively.  The six months ended June 30, 2007 and 2006, had a net loss of $237,000 and net earnings of $30.0 million, respectively.  The earnings in 2006 included a non-cash gain on derivatives of $34.8 million.

Cash Flow.  As of June 30, 2007 we have a cash balance of approximately $16.5 million compared to $31.6 million at the same date in 2006.

In the first six months of 2007, we had positive cash flow provided by operations of $4.7 million, resulting primarily from the higher volume of uranium sold and the increase in sales prices received under our uranium sales contracts that were amended in March 2006.  We used $9.0 million in investing activities during the first half of 2007.  These expenditures were primarily for wellfield development, evaluation drilling capital and plant and dryer upgrades at Kingsville Dome of $3.8 million, plant and equipment expenditures for restoration start-up at Vasquez of $411,000, Rosita and Rosita South project expenditures for wellfield development, evaluation drilling capital and plant and dryer upgrades of $3.0 million, other Texas property and other assets of $839,000 and property additions in New Mexico of $467,000 primarily for license and permitting activities.

In the first half of 2006, we had a negative cash flow used in operations of ($2.0 million), resulting primarily from our low production volumes coupled with high production costs for the first half of the year.  We also used $20.7 million in investing activities, the largest component of which was the payment of $12.0 million to one of our customers in connection with the restructuring of our uranium sales contract.  Other significant investing activities were for production start-up capital at Kingsville Dome of $5.2 million, additional wellfield development at Vasquez of $1.6 million, other plant and equipment additions of $0.9 million and other property additions in Texas and New Mexico of $1.0 million.

Liquidity—Cash Sources and Uses for 2007

In the second quarter 2007 we were able to remain cash neutral for the period.  Our cash balance at June 30, 2007 was $16.5 million, essentially the same as our balance from the previous quarter.  During the second quarter of 2007 we averaged a net cash outflow of $1.2 million per month. Based upon our current plan of operations we anticipate that our operating and capital requirements for 2007 will be met through existing cash and through cash to be generated from operations.

Contingent Liabilities—Off Balance Sheet Arrangements

In April 2006, the Company completed the sale of 10,200,307 shares of its Common Stock at $4.90 per share to accredited investors resulting in gross proceeds of approximately $50 million before expenses of the offering.  The Company has filed a registration statement under the Securities Act of 1933, as amended, to register the resale of the shares.  Such shares are subject to certain resale registration rights that include penalties (1% per month) in the event registration statement does not become effective in a timely manner or if the registration statement fails to remain effective.  On August 4, 2006, such registration statement was made effective and the Company met its initial obligation.  We have periodically updated the registration statement as necessary to ensure that the registration statement has continued to remain effective.

The Company has obtained financial surety relating to certain of its future restoration and reclamation obligations as required by the State of Texas regulatory agencies. The Company has bank Letters of Credit (the “L/C’s) and performance bonds issued for the benefit of the Company to satisfy such regulatory requirements. The L/C’s were issued by Bank of America and the performance bonds have been issued by United States Fidelity and Guaranty Company (“USF&G”). L/C’s for $2.9 million and $2.0 million were issued at June 30, 2007 and December 31, 2006, respectively, such L/C’s are collateralized in their entirety by certificates of deposit.

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Performance bonds totaling $2.8 million were issued for the benefit of the Company at June 30, 2007 and December 31, 2006. USF&G has required that the Company deposit funds collateralizing a portion of the bonds. The amount of bonding issued by USF&G exceeded the amount of collateral by $2.5 million at June 30, 2007 and December 31, 2006, respectively. In the event that USF&G is required to perform under its bonds or the bonds are called by the state agencies, the Company would be obligated to pay any expenditure in excess of the collateral.

Critical Accounting Policies

Our significant accounting policies are described in Note 2 to the consolidated financial statements included in the Company’s 2006 Annual Report on Form 10-K/A.  We believe our most critical accounting policies involve those requiring the use of significant estimates and assumptions in determining values or projecting future costs.

Specifically regarding our uranium properties, significant estimates were utilized in determining the carrying value of these assets. These assets have been recorded at their estimated net realizable value for impairment purposes on a liquidation basis, which is less than our cost. The actual value realized from these assets may vary significantly from these estimates based upon market conditions, financing availability and other factors.

Regarding our reserve for future restoration and reclamation costs, significant estimates were utilized in determining the future costs to complete the groundwater restoration and surface reclamation at our mine sites.  The actual cost to conduct these activities may vary significantly from these estimates.

Such estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

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ITEM 3.                                                     QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Uranium Price Volatility

The Company is subject to market risk related to the market price of uranium.  The Company’s cash flow has historically been dependent on the price of uranium, which is determined primarily by global supply and demand, relative to the Company’s cost of production.  Historically, uranium prices have been subject to fluctuation, and the price of uranium has been and will continue to be affected by numerous factors beyond the Company’s control, including the demand for nuclear power, political and economic conditions, governmental legislation in uranium producing and consuming countries and production levels and costs of production of other uranium producing companies.

Derivative Financial Instruments

The Company determined that its long-term uranium sales contracts in effect prior to March 2006 met the definition of derivative financial instruments for financial statement reporting purposes.  Changes in the Company’s derivatives represent non-cash charges to earnings for the present value of the loss the Company would incur in the event it would be required to purchase uranium in the spot market to satisfy the delivery obligations under the uranium sales contracts.  The Company has not entered into hedge transactions with respect to its uranium sales contracts.

The Company amended these contracts in March 2006.  The amended contracts obligate the Company to deliver 50% of its uranium production to each customer, and do not obligate the Company to deliver any uranium in excess of its production.  The Company has determined that the terms of the amended contracts eliminates their qualification as derivatives and therefore are not required to be valued at fair value.

ITEM 4.                                                     CONTROLS AND PROCEDURES

During the the year ended December 31, 2006 and the quarter ended June 30, 2007, the Company’s management, with the participation of the Chief Executive Officer and Chief Financial Officer of the Company, carried out an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)).

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of December 31, 2006 and June 30, 2007 were not effective as a result of the material weakness in our internal controls over financial reporting discussed below.

Management’s Report on Internal Control over Financial Reporting

The Company’s management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2006. In making this assessment, the Company’s management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework.

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting in connection with preparation of the annual report on Form 10-K for the year ended December 31, 2006. As a result of these assessments, a material weakness was identified in March 2007, in connection with our year ended December 31, 2006 audit procedures, leading management to conclude that our internal controls over financial reporting were not effective as of December 31, 2006. A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.

The following material weakness forms the basis for our conclusion at December 31, 2006:

·       Controls over the Review of Financial Statements. Our financial and accounting organization consists of the Vice President—Finance and the Corporate Controller. Due to a lack of financial and accounting resources, the financial records preparation and review procedures performed by our personnel with respect to our application of the fair value recognition provisions of Statement of Financial Accounting Standard 123(R) ” Share-Based Payment” (“SFAS 123(R)”) for the fourth quarter of 2006 did not correctly record certain terms of stock option grants made in the fourth quarter of 2006. This matter was identified by our auditors in March 2007 during the course of their audit procedures and resulted in an audit adjustment increasing stock compensation expense by $629,000 in our year end 2006 financial statements. Because of this lack of resources, review procedures were not consistently performed on a timely basis to ensure that financial reporting and fraud risk controls were operating in the manner designed.

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Changes in Internal Controls

During the second quarter of 2007 we have made certain changes in our internal control over financial reporting that may have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  Management is currently evaluating the implementation of these procedures and such additional procedures that may be necessary to fully remediate the material weakness described above. Management is in the process of making the following changes to its system of internal controls:

·       We are relocating and expanding our corporate office effective August 2007.  This will allow for the hiring of additional personnel, including both experienced accounting and support staff to allow for improved segregation of duties and allow for a more thorough review, by senior financial personnel, of the financial statements and underlying supporting documentation. We added one accounting staff in June 2007 and have designed their responsibilities to improve the segregation of duties functions previously identified as internal control weaknesses.  We are currently reviewing potential candidates to expand our internal accounting resources and expect to make these additional hires in August 2007.

·       The addition of accounting and support staff in June 2007 has allowed us to conduct a more detailed review of our purchasing and procurement procedures.  We are currently evaluating the results of this review and expect to determine an evaluation on the compliance with our existing purchasing policies and permit the implementation of additional review procedures at each uranium project location and in the financial reporting area.

We believe the changes that were made in the second quarter of 2007 have addressed certain of those weaknesses in internal controls identified as of December 31, 2006.  While we believe certain of these deficiencies have been remediated and/or mitigated we have not conducted a complete review and assessment of our overall internal control environment to be able to conclude that the material weakness identified in connection with our December 31, 2006 financial statements is no longer applicable.

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PART II - OTHER INFORMATION

ITEM 1.                             LEGAL PROCEEDINGS

No change from the prior annual filing on our Form 10-K/A.

ITEM 1A.                    RISK FACTORS

Over 65.7% of our shares of Common Stock is controlled by Principal Stockholders and Management.

Over 56.0% of our Common Stock is controlled by five stockholders of record. In addition, our directors and officers are the beneficial owners of about 9.7% of our Common Stock. This includes with respect to both groups shares that may be purchased upon the exercise of outstanding options. Such ownership by the Company’s principal shareholders, executive officers and directors may have the effect of delaying, deferring, preventing or facilitating a sale of the Company or a business combination with a third party.

The availability for sale of a large amount of shares may depress the market price for our Common Stock.

As of December 31, 2006 and June 30, 2007, we identified a material weakness in internal control over financial reporting and concluded that our disclosure controls were not effective. If we fail to maintain an effective system of internal and disclosure controls, we may not be able to accurately report our financial results or prevent fraud. As a result, investors may be misled and lose confidence in our financial reporting and disclosures and the price of our common stock may be negatively affected.

The Sarbanes-Oxley Act of 2002 requires that we report annually on the effectiveness of our internal control over financial reporting. Among other things, we must perform systems and process evaluation and testing. We must also conduct an assessment of our internal controls to allow management to report on, and our independent registered public accounting firm to attest to, our assessment of our internal control over financial reporting as required by Section 404 of the Sarbanes-Oxley Act.

In connection with the assessment of our internal control over financial reporting for our Annual Report on Form 10-K/A, as further described in Item 9A of such Form 10K/A, management and our registered public accounting firm determined that as of December 31, 2006 and June 30, 2007 our disclosure controls and procedures were ineffective because of the material weakness in our internal control over financial reporting.

Although we have made and are continuing to make improvements in our internal controls, if we are unsuccessful in remediating the material weakness impacting our internal control over financial reporting and disclosure controls, or if we discover other deficiencies, it may adversely impact our ability to report accurately and in a timely manner our financial condition and results of operations in the future, which may cause investors to lose confidence in our financial reporting and may negatively affect the price of our Common Stock. Moreover, effective internal and disclosure controls are necessary to produce accurate, reliable financial reports and to prevent fraud. If we continue to have deficiencies in our internal control over financial reporting and disclosure controls, they may negatively impact our business and operations.

ITEM 2.                             UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None

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ITEM 3.                             DEFAULTS UPON SENIOR SECURITIES.

None

ITEM 4.                             SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

None

ITEM 5.                             OTHER INFORMATION.

None

ITEM 6.                             EXHIBITS

See the Index to Exhibits on Page E-1 for a listing of the exhibits that are filed as part of this Quarterly Report.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		URANIUM RESOURCES, INC.
Dated: August 9, 2007		By:	/s/ David N. Clark
			David N. Clark
			Director and
			Chief Executive Officer
Dated: August 9, 2007		By:	/s/ Thomas H. Ehrlich
			Thomas H. Ehrlich
			Vice President - Finance and
			Chief Financial Officer
			(Principal Financial and Accounting Officer)

 

22

EXHIBIT INDEX

Exhibit Number		Description
3.1*		Restated Certificate of Incorporation of the Company, dated February 15, 2004 (filed with the Company’s Registration Statement on Form SB-2 dated July 26, 2004, SEC File Number 333-117653).
3.1.1*		Certificate of Amendment of Restated Certificate of Incorporation of the Company (filed with the Company’s Form 8-K dated April 11, 2006, SEC File Number 000-17171).
3.2*		Restated Bylaws of the Company (filed with the Company’s Form 8-K on April 14, 2005).
4.1*		Common Stock Purchase Agreement dated February 28, 2001 between the Company and Purchasers of the Common Stock of the Company (filed with the Company’s Annual Report on Form 10-KA dated July 26, 2001, SEC File Number 000-17171).
10.1*		Amended and Restated Directors Stock Option Plan (filed with the Company’s Form S-8 Registration No. 333- 00349 on January 22, 1996).
10.2*		Amended and Restated Employee’s Stock Option Plan (filed with the Company’s Form S-8 Registration No. 333-00403 on January 24, 1996).
10.3*		Amended and restated 1995 Stock Incentive Plan (filed with the Company’s Form SB-2 Registration No. 333-117653 on July 26, 2005).
10.4*		Non-Qualified Stock Option Agreement dated June 19, 2001 between the Company and Leland O. Erdahl (filed with the Company’s 10-QSB dated August 13, 2001, SEC File Number 000-17171).
10.5*		Non-Qualified Stock Option Agreement dated June 19, 2001 between the Company and George R. Ireland (filed with the Company’s 10-QSB dated August 13, 2001, SEC File Number 000-17171).
10.7*		Summary of Supplemental Health Care Plan (filed with Amendment No. 1 to the Company’s Form S-1 Registration Statement (File No. 33-32754) as filed with the Securities and Exchange Commission on February 20, 1990).
10.9*		License to Explore and Option to Purchase dated March 25, 1997 between Santa Fe Pacific Gold Corporation and Uranco, Inc. (filed with the Company’s Annual Report on Form 10-K dated June 30, 1997, SEC File Number 000-17171).
10.12*		Compensation Agreement dated June 2, 1997 between the Company and Paul K. Willmott (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).
10.13*		Compensation Agreement dated June 2, 1997 between the Company and Richard A. Van Horn (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).
10.14*		Compensation Agreement dated June 2, 1997 between the Company and Thomas H. Ehrlich (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).
10.15*		Compensation Agreement dated June 2, 1997 between the Company and Mark S. Pelizza (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).

 

E-1

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10.16*		Uranium Resources, Inc. 1999 Deferred Compensation Plan (filed with the Company’s Annual Report on Form 10-K dated June 30, 1999, SEC File Number 000-17171).
10.16.1*		Amendment No. 1 to the Uranium Resources, Inc. 1999 Deferred Compensation Plan (filed with the Company’s Annual Report on Form 10KSB dated March 31, 2006, SEC File Number 000-17171).
10.17*		2000-2001 Deferred Compensation Plan (filed with the Company’s Annual Report on Form 10-K dated December 31, 2004, SEC File Number 000-17171).
10.17.1*		Amendment No. 2 to the Uranium Resources, Inc. Deferred Compensation Plan for 2000-2001 (filed with the Company’s Annual Report on Form 10KSB dated March 31, 2006, SEC File Number 000-17171).
10.22*		Uranium Resources, Inc. Deferred Compensation Plan for 2002 (filed with the Company’s Quarterly Report on Form 10-QSB dated November 13, 2002, SEC File Number 000-17171).
10.23*		Uranium Resources, Inc. Deferred Compensation Plan for 2003 (filed with the Company’s Quarterly Report on Form 10-QSB dated November 13, 2002, SEC File Number 000-17171).
10.24*		Uranium Resources, Inc. Deferred Compensation Plan for 2004 (filed with the Company’s Quarterly Report on Form 10-QSB dated May 14, 2004, SEC File Number 000-17171).
10.24.1*		Amendment No. 2 to the Uranium Resources, Inc. Deferred Compensation Plan for 2002, Deferred Compensation Plan for 2003, and Deferred Compensation Plan for 2004 (filed with the Company’s Annual Report on Form 10-KSB dated March 31, 2006, SEC File Number 000-17171).
10.27*		Contract with UG U.S.A., Inc for the Purchase of Natural Uranium Concentrates (U3O8) dated August 12, 2003 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on form SB-2 dated September 20, 2005, SEC File Number 333-125106).
10.27.1*		Amendment No. 1 with UG U.S.A., Inc. dated August 30, 2004 to Exhibit 10.27 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on form SB-2 dated September 20, 2005, SEC File Number 333-125106).
10.27.2*		Amendment No. 2 with UG U.S.A., Inc. dated April 29, 2005 to Exhibit 10.27 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on form SB-2 dated September 20, 2005, SEC File Number 333-125106).
10.28*		Amended and Restated Uranium Supply Contract with Itochu Corporation dated June 7, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on form SB-2 dated September 20, 2005, SEC File Number 333-125106).
10.31*		Note Purchase Agreement dated March 24, 2005 and promissory notes issued thereunder (filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, SEC File Number 000-17171).
10.32*		Uranium Supply Contract with UG U.S.A., Inc. dated April 29, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106).

 

E-2

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10.33*		Uranium Supply Contract with Itochu Corporation dated June 15, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106).
10.34*		Stock Purchase Agreement by and between Uranium Resources, Inc. and accredited investors (filed with the Company’s Form 8-K dated August 12, 2005, SEC File No. 000-17171).
10.35*		Uranium Resources, Inc. 2004 Stock Incentive Plan (filed with the Company’s Quarterly Report on Form 10QSB/A dated November 18, 2005, SEC File No. 000-17171).
10.36*		Feasibility Study Funding Agreement between Itochu Corporation, Uranium Resources, Inc. and Hydro Resources, Inc. effective March 29, 2006. (filed with the Company’s Form 10KSB dated March 31, 2006, SEC file Number 000-17171).
10.37*		Amended and Restated Uranium Supply Contract between Itochu Corporation and Uranium Resources, Inc. effective March 1, 2006. (filed with the Company’s Form 10KSB dated March 31, 2006, SEC file Number 000-17171).
10.38*		Agreement for the Sale of Uranium Concentrates between UG U.S.A., Inc. and Uranium Resources, Inc. dated March 31, 2006. (filed with the Company’s Form 10KSB dated March 31, 2006, SEC file Number 000-17171).
10.39*		Stock Purchase Agreement dated as of April 19, 2006, by and between Uranium Resources, Inc. and accredited investors (filed with the Company’s Current Report on Form 8-K dated April 19, 2006, SEC File No. 000-17171).
10.40*		Limited Liability Company Agreement of Churchrock Venture LLC (filed with the Company’s Current Report on Form 8-K dated December 5, 2006, SEC File No. 000-17171).
10.41*		Compensation Agreement dated March 12, 2007 between the Company and Craig S. Bartels (filed with the Company’s Form 8-K dated March 13, 2007, SEC File No. 000-17171).
10.42*		Compensation Agreement dated March 12, 2007 between the Company and David N. Clark (filed with the Company’s Form 8-K dated March 13, 2007, SEC File No. 000-17171).
10.43*		Amended and Restated 2004 Directors’ Stock Option Plan dated April 10, 2007 (filed with the Company’s Post-Effective Amendment No. 1 to Registration Statement on Form S-3 dated April 11, 2007, SEC File No. 333-133960).
10.44*		Uranium Resources, Inc. 2007 Restricted Stock Plan (filed with the Company’s Form 10-Q dated May 10, 2007, SEC File No. 000-17171).
14*		Uranium Resources, Inc. Code of Ethics for Senior Executives. Filed with the Company’s Annual Report on Form 10-KSB dated March 30, 2004, SEC File Number 000-17171).
31.1		Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2		Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1		Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

*	Not filed herewith. Incorporated by reference pursuant to Rule 12b-32 under the Securities Exchange Act of 1934.

 

E-3