Uranium Resources, Inc. (Nasdaq: URRE; ASX: URI) closed
the strategic and transformational merger (Merger) with Anatolia Energy
Limited (Anatolia) on November 9, 2015. URI has commenced a formal
update to the February 2015 Temrezli Pre-Feasibility Study, which is
expected to be completed in early 2016.
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With the merger with Anatolia now complete, URI is actively
progressing the high-grade, low-cost Temrezli in-situ recovery (ISR)
Project towards production in Central Turkey. The successful
development of this near-term project will put URI on the path to
profitable uranium production, which URI believes will be well-timed
to take advantage of the favorable outlook for uranium.
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URI’s engineering and design team has made significant progress on
planning and logistics for relocation of our Rosita facility’s
processing equipment and satellite ion exchange units for use at the
Temrezli Project.
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Subsequent to the end of the third quarter, URI executed a Binding
Letter of Intent (LOI) for the sale of its Churchrock and Crownpoint
projects in New Mexico to Laramide Resources Ltd. (TSX:LAM) for $12.5
million, contingent on Laramide’s expected financing initiative. For
further detail on this transaction, please refer to the Company’s news
release issued earlier today.
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Due to the gain from the sale of the Roca Honda assets in New Mexico
of $4.9 million and after recording operating expenses and interest
expense, URI reported net income of $305,000 or $0.01 per share for 3Q
2015 compared with a net loss of $(3.99) million or $(0.16) per share
for 3Q 2014.
Christopher M. Jones, President and Chief Executive Officer of URI said,
“URI has commenced a new chapter in its 38 year history through this
transformational Merger with Anatolia. Our goal is to create the next
low-cost uranium ISR producer, beginning with the high-margin Temrezli
Project in Central Turkey. URI’s highest priority is to advance the
high-grade Temrezli in-situ recovery project into commercial production
as quickly and efficiently as possible.”
Business Highlights for the Third Quarter:
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URI and Anatolia shareholders both overwhelmingly approved the merger
of the two companies, including the issuance of URI common shares to
effect the combination. Former Anatolia shareholders now own
approximately 41% of the newly combined company, with the remainder
being held by existing URI shareholders.
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URI received $2.5 million cash, 76,455 Energy Fuels’ shares (NYSE MKT:
UUUU) and other consideration on closing of the sale of its non-core
assets in the Roca Honda area of New Mexico to Energy Fuels Inc. as
announced in URI’s news release on August 3, 2015.
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Net cash used in operating activities was $2.65 million in 3Q 2015
compared with $2.87 million in 3Q 2014.
Third Quarter and Nine-Month Review
After expenses and recording of a gain of $4.9 million, including a cash
gain of $2.5 million, for the sale of the Roca Honda assets, URI
reported net income of $305,000 for the 3Q 2015 compared with a net loss
of $(3.99) million for 3Q 2014. URI had a net loss of $(8.0) million for
the first nine months of 2015, a 24% improvement against the larger net
loss of $(10.58) million for the first nine months of 2014.
Excluding non-cash stock compensation, URI’s cash expenditures for
general and administrative costs and mineral property expenses were $3.6
million in 3Q 2015, 40% higher than 3Q 2014, and $9.6 million in the
first nine months of 2015, slightly higher than the $8.9 million total
for the first nine months of 2014. The increase for the third quarter on
a year-over-year basis was driven mostly by increased general and
administrative costs largely due to the merger costs and $193,000 for
the evaluation and acquisition of historic data for the Butler Ranch
properties as described in the Company’s news release of July 7, 2015.
In addition, the lower recorded expenditures in 3Q 2014 were due to the
payment of $342,000 in non-cash stock payment for a property lease.
The Company’s total shares outstanding are now 50.5 million, pending the
issuance of the shares for the payment of certain transaction fees.
Balance Sheet and Liquidity Update
The Company ended the third quarter with cash and cash equivalents of
$3.8 million. URI believes its current cash balance is sufficient to
provide liquidity to fund its current operations through the end of
2015. Upon closing of the sale of Churchrock and Crownpoint projects,
URI expects to receive cash of $5.25 million and an additional $7.25
million to follow over the next three years, not including interest.
While this cash injection will enhance URI’s balance sheet and while URI
continues to have access to additional funding through its At-The-Market
agreement to sell common stock, under which there is approximately $6.0
million available, the Company expects it will need to raise additional
funding. In addition, URI continues to evaluate post-Merger financing
options, including those involving the Temrezli Project.
Tables 1 and 2: Financial Summaries (unaudited)
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($ in 000)
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Sept 30, 2015
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June 30, 2015
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March 31, 2015
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Dec. 31, 2014
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Cash and Cash Equivalents
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$
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3,836
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$
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4,485
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$
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8,381
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$
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5,570
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Current Assets
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6,239
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6,031
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9,437
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6,433
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Current Liabilities
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3,946
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2,806
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2,645
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2,672
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Working Capital
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2,293
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3,225
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6,792
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3,761
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Total Assets
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44,802
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42,546
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46,023
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43,104
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Convertible Loan
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8,000
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8,000
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8,000
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8,000
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Total Shareholders' Equity
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$
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29,921
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$
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29,357
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$
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33,571
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$
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31,137
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($ and Shares in 000, Except Per Share and Uranium Price)
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First Nine Months 2015
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3Q 2015
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2Q 2015
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1Q 2015
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First Nine Months 2014
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3Q 2014
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2Q 2014
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1Q 2014
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First Nine Months Variance
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3Q YOY Variance
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Net Cash Used in Operations
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$
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(8,481
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)
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$
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(2,646
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)
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$
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(3,136
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)
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$
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(2,699
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)
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$
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(9,648
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)
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$
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(2,865
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)
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$
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(3,033
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)
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$
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(3,749
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)
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-12
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%
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-8
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%
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Mineral Property Expenses
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3,021
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920
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1,292
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|
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809
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2,929
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987
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1,062
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880
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3
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%
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-7
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%
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General and Administrative, including Non-cash Stock Compensation
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7,352
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2,851
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2,406
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2,095
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7,002
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2,202
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2,157
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2,642
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5
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%
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29
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%
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Non-Cash Interest & Fees Incurred on Convertible Loan
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522
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180
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161
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181
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513
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200
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|
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175
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|
|
138
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2
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%
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-10
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%
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Net Income/(Loss)
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$
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(8,008
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)
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$
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305
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$
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(4,552
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)
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$
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(3,761
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)
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$
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(10,583
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)
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$
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(3,993
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)
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$
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(3,128
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)
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$
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(3,460
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)
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-24
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%
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-108
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%
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Net Income/(Loss) Per Share
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$
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(0.28
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)
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$
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0.01
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|
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$
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(0.15
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)
|
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$
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(0.14
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)
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$
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(0.44
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)
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$
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(0.16
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)
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$
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(0.13
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)
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$
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(0.15
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)
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-36
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%
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-106
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%
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Avg. Weighted Shares Outstanding
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28,799
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30,010
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29,794
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|
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26,555
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|
|
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23,987
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|
|
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24,954
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|
|
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24,619
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|
|
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22,359
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|
20
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%
|
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20
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%
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Uranium Average Weekly Spot Price for the Period (source: UxC)
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$
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37.08
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$
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36.48
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|
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$
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37.41
|
|
|
$
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37.95
|
|
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$
|
31.99
|
|
|
$
|
31.17
|
|
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$
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29.65
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$
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35.15
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16
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%
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17
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%
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Uranium Long-term Price at Period End (source: UxC)
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$
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47.00
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$
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44.00
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$
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46.00
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$
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49.00
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$
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46.11
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$
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44.33
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$
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45.00
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$
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47.00
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2
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%
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-1
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%
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Outlook
URI’s 2015 goals outlined below remain unchanged:
-
Achieve zero lost time incidents,
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Complete and evaluate drill results from the phase one exploration
drilling programs at Butler Ranch and Alta Mesa Este projects in South
Texas,
-
Establish the scope and timing for phase two exploration programs,
-
Achieve the targeted cash expenditure level of $9.0 million, excluding
the transaction costs for the Merger, Anatolia’s operating costs
post-merger and other transactions, and
-
Increase shareholder value by adding to our portfolio of quality
mineralized material and pursuing opportunistic, value-accretive
acquisitions and partnering opportunities.
About Uranium Resources
Uranium Resources, Inc. (URI) is focused on advancing to near-term
production the Temrezli in-situ recovery (ISR) project in Central
Turkey. URI also controls extensive exploration properties under nine
exploration and operating licenses covering approximately 44,700 acres
(over 18,000 ha) with numerous exploration targets, including the
potential satellite Sefaatli Project, which is 25 miles (40 km)
southwest of the Temrezli Project. In Texas, the Company has two
licensed and currently idled processing facilities and approximately
17,000 acres (6,900 ha) of prospective ISR projects. In New Mexico,
controls minerals rights encompassing approximately 186,000 acres
(73,500 ha) in the prolific Grants Mineral Belt in New Mexico, which
holds one of the largest known concentrations of sandstone-hosted
uranium deposits in the world. Incorporated in 1977, URI also owns an
extensive uranium information database of historic drill hole logs,
assay certificates, maps and technical reports for the Western United
States.
Cautionary 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 proposed transaction
between URI and Laramide, including entry into and the terms and
conditions of definitive documentation and the timing of definitive
documentation and closing, the benefits of the combination with Anatolia
Energy, the timing, occurrence or cost of production at the Company’s
properties, including the timing of construction, permits and initial
production at the Temrezli Project, the timing and conclusions of the
updated technical report and economic analysis at the Temrezli Project,
the potential relocation of the Rosita plant to Turkey, the availability
of financing to the Company, and the achievement of URI’s 2015 goals are
forward-looking statements. 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, (a) the Company's ability to raise additional
capital in the future; (b) spot price and long-term contract price of
uranium; (c) the Company's ability to reach agreements with current
royalty holders; (d) operating conditions at the Company's projects; (e)
government and tribal regulation of the uranium industry and the nuclear
power industry; (f) world-wide uranium supply and demand; (g)
maintaining sufficient financial assurance in the form of sufficiently
collateralized surety instruments; (h) unanticipated geological,
processing, regulatory and legal or other problems the Company may
encounter, including in Turkey; (i) the ability of the Company to enter
into and successfully close acquisitions or other material transactions,
including the proposed transaction with Laramide, and other factors
which are more fully described in the Company's Annual Report on Form
10-K, Quarterly Reports on Form 10-Q, and other filings 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.
Competent Person
Technical information in this release as well as references to mineral
resources in Texas and New Mexico are based on information compiled by
Dean T. “Ted” Wilton (CPG-7659), who is Chief Geologist and Vice
President of URI, and a Qualified Person under Canada National
Instrument 43-101. Mr. Wilton is a Professional Geologist in the State
of Wyoming and is a Certified Professional Geologist by the American
Institute of Professional Geologists a Recognized Overseas Professional
Organization (ROPO) as listed by the ASX. Mr. Wilton has over 40 years
of minerals industry experience, including more than 5 years of
experience that are relevant to the style of mineralization and type of
deposit under consideration. He is a Competent Person as defined in the
2012 Edition of the “Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves”. Mr. Wilton consents to the
inclusion in this release of the matters based on their information in
the form and context in which it appears.
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