Uranium Resources, Inc. (Nasdaq:URRE) (ASX:URI),
an energy metals exploration and development company, announced
today its results for the second quarter of fiscal year 2017, and
also discussed its business outlook and its energy metals business
development in 2017.
Christopher M. Jones, President and Chief
Executive Officer, said, “Continued work to strengthen our lithium
projects portfolio, reclamation success in Texas, and a strong
working capital position combine to give us a robust platform for
growth in 2017 and beyond. As well, the startup of exploration
drilling activities at Columbus Basin further demonstrates our
commitment to our energy business.”
Highlights for 2Q-2017 and to
Date
- Acquired approximately 9,300 acres of federal placer mining
claims in the Railroad Valley of Central Nevada in June 2017, the
Company’s third lithium brine exploration project.
- Commenced exploration drilling at the Columbus Basin lithium
brine project on July 31, 2017.
- Executed an amendment to the Juan Tafoya Land Corporation
Mining Lease in April 2017, decreasing the annual rental payment
and the production royalty rate.
- Received shareholder approval of all proposals put forward at
the Annual General Meeting held July 18, 2017, including the
appointment of Tracy Pagliara to URI’s Board of Directors.
- Terminated the Stockholders’ Agreement dated March 1, 2012
between URI and Resource Capital Funds V L.P. (“RCF”) pursuant to
which RCF had certain participation and Board rights.
- Cash and working capital balances at June 30, 2017 are $7.2
million and $8.4 million, respectively.
Financial Overview
Table 1: Financial Summary
(unaudited)
($ and Shares in 000's, Except Per Share) |
1H 2017 |
2Q 2017 |
1Q 2017 |
1H 2016 |
2Q 2016 |
1Q 2016 |
1HVariance |
2QVariance |
Net Cash Used in Operations |
$ |
(6,334 |
) |
$ |
(3,047 |
) |
$ |
(3,287 |
) |
$ |
(5,240 |
) |
$ |
(3,035 |
) |
$ |
(2,205 |
) |
21 |
% |
0 |
% |
Mineral Property Expenses |
$ |
(2,321 |
) |
$ |
(1,552 |
) |
$ |
(769 |
) |
$ |
(1,869 |
) |
$ |
(1,138 |
) |
$ |
(731 |
) |
24 |
% |
36 |
% |
General and Administrative, including Non-cash Stock Comp |
$ |
(3,276 |
) |
$ |
(1,608 |
) |
$ |
(1,668 |
) |
$ |
(4,152 |
) |
$ |
(2,007 |
) |
$ |
(2,145 |
) |
-21 |
% |
-20 |
% |
Net Income/(Loss) |
$ |
(795 |
) |
$ |
(2,639 |
) |
$ |
1,844 |
|
$ |
(8,880 |
) |
$ |
(4,607 |
) |
$ |
(4,273 |
) |
-91 |
% |
-43 |
% |
Net Income/Loss Per Share |
$ |
(0.03 |
) |
$ |
(0.11 |
) |
$ |
0.09 |
|
$ |
(1.60 |
) |
$ |
(0.75 |
) |
$ |
(0.86 |
) |
-98 |
% |
-85 |
% |
Avg. Weighted Shares Outstanding |
|
23,117 |
|
|
24,615 |
|
|
21,602 |
|
|
5,560 |
|
|
6,152 |
|
|
4,968 |
|
316 |
% |
300 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- Net cash used in operations. Net cash used in operating
activities was $3.0 million in 2Q-2017, same as in 2Q-2016 and $6.3
million for 1H-2017 compared to $5.2 million for 1H-2016. The
increase of $1.1 million was primarily due to an increase in cash
used to reduce accounts payable.
- Operating expenses. Mineral property expenses increased
by approximately $0.4 million for both 2Q-2017 and 1H-2017 versus
the respective periods in 2016. The increase was mainly due to
staking new claims at the Railroad Valley lithium project and
payment of the 2016 annual lease for the Juan Tafoya project, which
the Company had previously deferred. General and
administrative charges decreased by $0.4 million and $0.9 million,
respectively, from the corresponding periods in 2016. The decrease
of $0.4 million was primarily due to a decrease in stock
compensation expense while the $0.9 million decrease was due to a
decrease in stock compensation, salaries and payroll burden, and
consulting, legal, accounting, professional and public company
expenses.
- Net income. Consolidated net loss for 2Q-2017 decreased
$2.0 million compared to 2Q-2016 due to a decrease in interest
expense and impairment charges and additional gain recorded on the
sale of Churchrock and Crownpoint projects. The consolidated
net loss for 1H-2017 decreased by $8.1 million from 1H-2016
primarily due to the gain on the sale of the Churchrock and
Crownpoint projects, a decrease in interest expense, a decrease in
impairment charges and a decrease of general administrative
expenses.
- Cash and working capital. Continued working capital
improvements resulted in an improved cash balance of $7.2 million
at June 30, 2017 and working capital of $8.4 million compared to a
working capital deficit of $4.3 million at December 31, 2016.
The increase in working capital of $12.7 million during 1H-2017 was
primarily due to the completion of two equity offerings in 1Q-2017
and the completion of the sale of our Churchrock and Crownpoint
projects to Laramide in January 2017. The cash balance as of July
31, 2017 was $6.6 million.
- Shares outstanding. Total shares outstanding as of August
11, 2017 were 24,963,345.
Business Update
Lithium Business
On June 20, 2017, the Company acquired its third lithium
exploration project, through the staking of 9,270 acres of federal
placer mining claims within the Railroad Valley of central Nevada.
The Railroad Valley project is located approximately 75 miles west
of Ely, Nevada and covers an area for which company-led
reconnaissance sediment sampling returned lithium values as high as
366ppm.
Over the past year URI has expanded its energy metals business
by leveraging its existing business operations and technical
capabilities. Those efforts have resulted in the acquisition
of three lithium brine exploration projects -- Columbus Basin, Sal
Rica, and now Railroad Valley -- totaling over 36,730 acres of
mineral claims and representing one of the largest lithium brine
exploration holdings in North America.
URI will integrate the Railroad Valley project into the
Company’s ongoing lithium exploration activities in Nevada and
Utah. Initial studies planned for the project include
additional surface sediment sampling, and acquisition of relevant
geophysical data generated from both historical and current oil
exploration within the basin for reinterpretation. Further
exploration work will be dependent on results from these
studies.
On July 31, the company announced the commencement of
exploration drilling at the Columbus Basin lithium brine
project. Earlier in the month, URI announced positive surface
sampling results. The planned Phase I drilling program at the
project will consist of five (5) core holes, and a total of 8,000
feet (2,440 meters) of drilling. Drill targets for this program are
based on completed surface sediment sampling (see our news releases
dated February 22, 2017 and July 12, 2017), and interpretation and
analysis of multiple geophysical data sets covering the project
area (see our news release dated April 5, 2017).
Uranium Business
Continuing reclamation work at our Texas
properties has resulted in the approval by Texas Commission on
Environmental Quality on July 28, 2017 of bond reduction in the
amount of $318,000 at the Rosita project. This is an
important milestone for the Company that demonstrates its
continuing commitment to the communities where we work, and is a
testament to the hard and high quality work on the part of our team
in Texas.
The Company executed an amendment to the Juan
Tafoya Land Corporation Mining Lease whereby the annual rent was
reduced from $307,000 to $175,000 for each of the next three years
and the production royalty was fixed at 4% versus a variable rate
ranging from 4.65% to 6.50%. The Company is continuing
discussions with Cebolleta Land Grant representatives about revised
terms on its mining lease.
Corporate Business
URI’s shareholders approved all proposals put forward at the
Annual General Meeting held July 18, 2017. We welcome Tracy
Pagliara to the Uranium Resources Board of Directors, who replaced
retiring member Tracy Stevenson. We thank Mr. Stevenson for
his valuable service and wish him continued success and good
fortune.
In a continued effort to streamline its business, the Company
and RCF terminated the Stockholders’ Agreement dated March 1, 2012,
pursuant to which RCF had certain participation and Board
rights.
On April 14, 2017, the Company entered into a Controlled Equity
Offering Sales Agreement with Cantor Fitzgerald & Co.
(“Cantor”). Under the ATM Offering, the Company may from time
to time sell shares of its common stock having an aggregate
offering amount up to $30.0 million in “at-the-market” offerings.
The Company pays Cantor a commission equal to 2.5% of the
gross proceeds from the sale of any shares pursuant to the ATM
Offering
Outlook
The Company’s current cash is expected to fund
critical operations through year-end 2017 and into the first
quarter of 2018. As an exploration and development company
with no current production, the Company expects to obtain
additional capital market financing, including the possible further
sale of non-core assets, to fund its lithium exploration program
and to operate the Company through 2018.
The Company’s goals for the remainder of 2017 are as
follows:
- Lithium: Continue to develop and implement
exploration plans for the Company’s lithium assets in Nevada and
Utah.
- Uranium: Maintain our low-cost uranium
portfolio and continue reclamation work in Texas.
- Ongoing Cost Rationalization Efforts: Continue
to reduce operating and general and administrative expenditures in
2017.
- M&A Efforts Continue. Maintain an
opportunistic posture in mergers and acquisitions by focusing on
low-cost development opportunities in energy metals.
About Uranium Resources
URI is focused on expanding its energy metals
strategy, which includes developing its new lithium business while
maintaining optionality on the future rising uranium price.
The Company has developed a dominant land position in three
prospective lithium brine basins in Nevada and Utah in preparation
for exploration and potential development of any lithium resources
that may be discovered there. In addition, URI remains
focused on advancing the Temrezli in-situ recovery (ISR) uranium
project in Central Turkey when uranium prices permit economic
development of this project. URI controls extensive exploration
properties in Turkey under eight exploration and operating licenses
covering approximately 39,000 acres (over 16,000 ha) with numerous
exploration targets, including the potential satellite Sefaatli
Project, which is 30 miles (48 km) southwest of the Temrezli
Project. In Texas, the Company has two licensed and currently idled
uranium processing facilities and approximately 11,000 acres (4,400
ha) of prospective ISR uranium projects. In New Mexico, the Company
controls mineral rights encompassing approximately 186,000 acres
(75,300 ha) in the prolific Grants Mineral Belt, which is one of
the largest concentrations of sandstone-hosted uranium deposits in
the world. Incorporated in 1977, URI also owns an extensive
information database of historic drill hole logs, assay
certificates, maps and technical reports for uranium properties
located in 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 events or developments that the Company expects or
anticipates will occur in the future, including but not limited to
statements relating to developments at the Company’s projects,
including future exploration costs and results, future demand for
and price of uranium and lithium, integration of the Railroad
Valley project, the Phase I drilling at the Columbus Basin project,
continuing discussions with Cebolleta Land Grant representatives,
and the Company’s liquidity, including future capital markets
and disposition activities, 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)
estimated or expected net cash used in operations, mineral property
expenses, general and administrative expenses, net loss, and cash
and working capital positions for the twelve months ended December
31, 2017, (b) the Company’s ability to raise additional capital in
the future; (c) spot price and long-term contract price of uranium
and lithium; (d) risks associated with our foreign operations, (e)
operating conditions at the Company’s projects; (f) government and
tribal regulation of the uranium industry, the lithium industry,
and the power industry; (g) world-wide uranium and lithium supply
and demand, including the supply and demand for lithium-based
batteries; (h) maintaining sufficient financial assurance in the
form of sufficiently collateralized surety instruments; (i)
unanticipated geological, processing, regulatory and legal or other
problems the Company may encounter in the jurisdictions where the
Company operates, including in Texas, New Mexico, Utah, Nevada and
Turkey; (j) the ability of the Company to enter into and
successfully close acquisitions or other material transactions;
(k) the results of the Company’s lithium brine exploration
activities at the Columbus Basin, Railroad Valley and Sal Rica
Projects, (l) the ability of the Company to negotiate an extension
on the Cebolleta lease and (m) 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.
Uranium Resources Contact:
Christopher M. Jones, President and CEO
303.531.0472
Jeff Vigil, VP Finance and CFO
303.531.0473
Email: Info@uraniumresources.com
Website: www.uraniumresources.com
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