Uranium Resources, Inc. (Nasdaq:URRE) announced that its shareholders
overwhelmingly approved the senior secured convertible loan agreement
(Loan Agreement) for up to $15.0 million and the issuance of
approximately 7.5 million shares of URI common stock related to the Loan
Agreement at its Special Meeting of Shareholders held yesterday.
URI closed the loan agreement with its largest shareholder, Resource
Capital Fund V L.P. (RCF), on November 13, 2013 and borrowed an initial
$3.0 million as part of the first tranche available under the Loan
Agreement.
URI and RCF agreed that RCF’s approval of the Loan Agreement would
require the affirmative vote of a majority of the votes cast by holders
of URI common stock other than RCF and its affiliates. URI’s other
shareholders approved the Loan Agreement with approximately 95% of the
votes cast in favor of approval. Following shareholder approval of the
Loan Agreement, the Company expects to draw another $2.0 million under
the Loan Agreement.
Proceeds are being used to fund expenses to manage the business and
general corporate purposes. Management continues its efforts to reduce
costs and position the Company to return to production when the uranium
market strengthens. URI already reduced its burn rate by $300,000 per
month on average as a result of corporate consolidation and cost
containment efforts as reported in URI’s October 29, 2013 news release
about its third quarter financial results.
The Company achieved a milestone in completing the two-year pond
restoration work at its idled Kingsville Dome processing facility in
Texas.
The Company is working with the appropriate Qualified Persons on the
preparation and review of the technical reports compliant under Canadian
National Instrument 43-101 for its mid-term New Mexico projects at San
Mateo (Roca Honda), Cebolleta and Churchrock. The Company expects
completion of the technical reports for Cebolleta and San Mateo by
mid-year 2014 and Churchrock by the end of 2014.
Financing Terms
Under the Loan Agreement, there are two additional tranches of $5.0
million each available at the sole option of URI between April 15, 2014
and June 30, 2014 and between July 15, 2014 and September 30, 2014,
subject to certain conditions. Amounts drawn under the Loan Agreement
carry an annualized interest rate of 10% following stockholder approval
at the special meeting and have no prepayment penalty. RCF may convert
amounts drawn under the Loan Agreement into URI common shares at a rate
of $2.60 per share, subject to certain adjustments. Further information
regarding the Loan Agreement is available in the Company’s Proxy
Statement of December 24, 2013, available on the Company’s website, and
filed at www.sec.gov.
About Uranium Resources
Uranium Resources, Inc. explores for and recovers uranium projects. URI
has over 206,600 acres of uranium mineral holdings in New Mexico,
processing facilities and properties in Texas, and an NRC license to
recover up to three million pounds of uranium per year using the in situ
recovery (ISR) process. 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.
For further information about Uranium Resources, please refer to our
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 of additional
amounts under the Loan Agreement, the use of the proceeds under the Loan
Agreement, a reduction in costs, a return to production, completion of
technical reports and the planned recovery at the Company's properties
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 projects, government and tribal regulation
of the uranium 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.
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