<PAGE> 1
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
For the quarterly period ended September 30, 2000 or
Transition report pursuant to Section 13 or 15(d) of the Securities
--- Exchange Act of 1934
For the transition period from __________ to __________
Commission file number 0-17171
URANIUM RESOURCES, INC.
(exact name of Registrant as specified in its Charter)
DELAWARE 75-2212772
(State of Incorporation) (I.R.S. Employer Identification No.)
12750 MERIT DRIVE, SUITE 720, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)
(972) 387-7777
(Registrant'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.
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.
Title of Each Class of Common Stock Number of Shares Outstanding
----------------------------------- ----------------------------
Common Stock, $0.001 par value 22,740,366 as of November 13, 2000
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URANIUM RESOURCES, INC.
2000 THIRD QUARTERLY REPORT ON FORM 10-Q
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets -
September 30, 2000 and December 31, 1999
(Unaudited) 3
Consolidated Statements of Operations -
Three and Nine Months Ended September 30, 2000 and 1999
(Unaudited) 5
Consolidated Statements of Cash Flows -
Nine Months Ended September 30, 2000
and 1999 (Unaudited) 6
Notes to Consolidated Financial
Statements - September 30, 2000 (Unaudited) 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
INDEX TO EXHIBITS E-1
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (NOTE 1)
ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
------------ --------------
2000 1999
------------ --------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 512,438 $ 493,567
Receivables, net 21,110 1,155,198
Uranium inventory -- 112,901
Materials and supplies inventory 64,366 70,319
Prepaid and other current assets 18,320 45,913
------------ ------------
Total current assets 616,234 1,877,898
------------ ------------
Property, plant and equipment, at cost:
Uranium properties 99,442,824 99,400,677
Other property, plant and equipment 383,166 383,229
Less-accumulated depreciation and depletion (98,188,866) (97,578,333)
------------ ------------
Net property, plant and equipment 1,637,124 2,205,573
Long-term investment:
Certificate of deposit, restricted 3,392,628 3,651,758
Other assets 4,299 4,299
------------ ------------
$ 5,650,285 $ 7,739,528
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated balance sheets.
3
<PAGE> 4
URANIUM RESOURCES, INC.
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2000 AND DECEMBER 31, 1999 (NOTE 1)
LIABILITIES AND SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
September 30, December 31,
------------- -------------
2000 1999
------------- -------------
<S> <C> <C>
Current liabilities:
Accounts payable $ 282,449 $ 396,836
Notes payable -- 575,000
Accrued interest payable -- 2,336
Current portion of long-term debt 701 5,000
Royalties payable -- 64,922
Current portion of restoration reserve 83,000 83,000
Other accrued liabilities 256,375 164,646
------------ ------------
Total current liabilities 622,525 1,291,740
------------ ------------
Other long-term liabilities and deferred credits 5,351,403 6,474,680
Long-term debt, less current portion 585,000 6,372,208
Shareholders' equity:
Common stock, $0.001 par value,
shares authorized: 35,000,000;
shares issued and outstanding (net of treasury shares):
2000 - 22,740,366; 1999 - 12,341,290 22,893 12,494
Paid-in capital 48,240,477 40,737,736
Retained earnings (accumulated deficit) (49,162,595) (47,139,912)
Less: Treasury stock (152,500 shares), at cost (9,418) (9,418)
------------ ------------
Total shareholders' equity (908,643) (6,399,100)
------------ ------------
$ 5,650,285 $ 7,739,528
============ ============
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated balance sheets.
4
<PAGE> 5
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
2000 1999 2000 1999
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Uranium sales -
Produced uranium $ -- $ 2,092,244 $ 121,954 $ 3,128,594
Purchased uranium -- 1,036,350 815,148 1,037,862
-------------- -------------- -------------- --------------
Uranium sales -- 3,128,594 937,102 4,166,456
Other uranium revenues -- 1,289,600 144,793 1,289,600
-------------- -------------- -------------- --------------
Total revenue -- 4,418,194 1,081,895 5,456,056
Costs and expenses:
Cost of uranium sales -
Direct cost of purchased uranium -- 2,500,046 799,850 2,500,046
Royalties -- 9,000 16,626 66,234
Operating expenses 32,877 417,979 650,056 2,125,599
Provision for restoration and reclamation costs -- 16,440 12,297 152,383
Depreciation and depletion 24,985 118,930 180,912 468,107
Writedown of uranium properties 195,463 -- 470,186 --
-------------- -------------- -------------- --------------
Total cost of uranium sales 253,325 3,062,395 2,129,927 5,312,369
-------------- -------------- -------------- --------------
Earnings (loss) from operations
before corporate expenses (253,325) 1,355,799 (1,048,032) 143,687
Corporate expenses -
General and administrative 343,682 498,000 1,157,961 1,491,639
Depreciation 6,483 6,011 18,039 18,954
-------------- -------------- -------------- --------------
Total corporate expenses 350,165 504,011 1,176,000 1,510,593
-------------- -------------- -------------- --------------
Earnings (loss) from operations (603,490) 851,788 (2,224,032) (1,366,906)
Other income (expense):
Interest expense, net of capitalized interest (32,510) (38,514) (86,252) (115,358)
Interest and other income, net 55,499 158,705 287,601 263,511
-------------- -------------- -------------- --------------
Total other income 22,989 120,191 201,349 148,153
-------------- -------------- -------------- --------------
Earnings (loss) before federal income taxes (580,501) 971,979 (2,022,683) (1,218,753)
Federal income tax expense (benefit):
Deferred -- 19,810 -- (244,000)
-------------- -------------- -------------- --------------
Net income (loss) $ (580,501) $ 952,169 $ (2,022,683) $ (974,753)
============== ============== ============== ==============
Net income (loss) per common share and
common equivalent (basic and diluted) $ (0.03) $ 0.08 $ (0.13) $ (0.08)
============== ============== ============== ==============
Weighted average common shares and common
equivalent shares per share data:
Basic 18,451,670 12,257,310 15,519,974 12,122,614
============== ============== ============== ==============
Diluted 18,451,670 12,257,310 15,519,974 12,122,614
============== ============== ============== ==============
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated statements.
5
<PAGE> 6
URANIUM RESOURCES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999 (NOTE 1)
(UNAUDITED)
<TABLE>
<CAPTION>
September 30,
---------------------------
2000 1999
----------- -----------
<S> <C> <C>
Cash flows from operations:
Net loss $(2,022,683) $ (974,753)
Reconciliation of net income to cash provided by operations-
Provision for restoration and reclamation costs 12,297 152,383
Depreciation and depletion 198,951 487,061
Writedown of uranium properties 470,186 --
Credit for deferred income taxes -- (244,000)
Decrease in restoration and reclamation accrual (412,031) (330,045)
Other non-cash items, net 178,552 1,209,572
----------- -----------
Cash flow provided by (used in) operations, before
changes in operating working capital items (1,574,728) 300,218
Effect of changes in operating working capital items-
Decrease in receivables 1,134,088 1,398,760
(Increase) decrease in inventories 48,064 (208,318)
Increase in prepaid and other current assets (1,614) (149,007)
Decrease in payables and accrued liabilities (89,916) (1,836,010)
----------- -----------
Net cash used in operations (484,106) (494,357)
----------- -----------
Investing activities:
(Increase) decrease in investments 259,130 (2,432)
(Additions to) proceeds from property, plant and equipment -
Kingsville Dome 69,573 (125,170)
Rosita (111,290) (59,622)
Vasquez (40,043) (50,656)
Alta Mesa -- (33,724)
Churchrock (92,782) (558,361)
Crownpoint 265,279 (741,598)
Other property (17,015) (191,221)
----------- -----------
Net cash provided by (used in) investing activities 332,852 (1,762,784)
----------- -----------
Financing activities:
Proceeds from borrowings -- 2,150,000
Payments and refinancings of principal (579,875) (3,390,883)
Issuance of common stock and warrants, net 750,000 --
----------- -----------
Net cash provided by (used in) investing activities 170,125 (1,240,883)
----------- -----------
Net increase (decrease) in cash and cash equivalents 18,871 (3,498,024)
Cash and cash equivalents, beginning of period 493,567 3,713,566
----------- -----------
Cash and cash equivalents, end of period $ 512,438 $ 215,542
=========== ===========
</TABLE>
The accompanying notes to financial statements are an integral part of
these consolidated statements.
6
<PAGE> 7
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. The accompanying statements should be read in conjunction
with the unaudited financial statements included in the Company's 1999 Annual
Report on Form 10-K. As a result of the Company not having an audit performed on
its December 31, 1999 financial statements, the financial statements contained
in this report have not been reviewed by the Company's independent public
accountants. 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 nine months ended September 30,
2000 are not necessarily indicative of the results that may be expected for the
full calendar year ending December 31, 2000.
2. FUTURE OPERATIONS
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. Due to a continued period of depressed prices for uranium as
compared to the Company's cost to produce uranium, the Company has generated
operating losses in each of the last three years and during the first three
quarters of 2000. During the fourth quarter of 1998 the Company began
implementation of the shut-in and placement on stand-by of its Kingsville Dome
and Rosita production facilities in response to these market conditions. Each
production site was shut-in in the first quarter of 1999 but the Company
maintained nominal production through July 1999 when the incremental production
cost of operating exceeded the cost of purchasing uranium on the spot market.
The market price of uranium is currently below the Company's cost to
produce uranium and the price needed to obtain the necessary financing to allow
development of new production areas at the Company's South Texas sites.
In 1999 and the first three quarters of 2000 the Company monetized all
of its remaining long-term uranium sales contracts and sold certain of its
property and equipment to maintain a positive cash position. In August, the
Company raised $750,000 of equity by the issuance of 7.5 million shares of
Common Stock at $0.10 per share to a group of private investors.
In October 2000, the Company entered into an agreement with Texas
regulatory authorities and the Company's bonding company that provides the
Company access to up to $2.3 million of Company funds pledged to secure the
Company's restoration bonds. Approximately $820,000 has been released to the
Company to date. The funds are being used by the Company to perform restoration
at the Company's Kingsville Dome and Rosita mine sites in South Texas. The term
of the agreement is expected to run through the end of 2001.
The Company's current cash position is approximately $600,000, an
amount sufficient to permit the company to remain operating through February
2001. The Company will require additional capital to permit it to operate
thereafter.
These factors raise substantial doubt concerning the ability of the
Company to continue operating as a going concern.
The Company will also require additional capital resources to fund the
cost to resume production and to fund development of its undeveloped properties
in the event that the market price of uranium should increase to profitable
levels. There is no assurance the Company will be successful in raising such
capital or that uranium prices will recover to levels which would enable the
Company to operate profitably. If the Company is unsuccessful in these efforts
the Company will cease to continue as a going concern.
7
<PAGE> 8
The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and
classification of liabilities that might result should the Company be unable to
continue as a going concern. The ability of the Company to continue as a going
concern is dependent upon a recovery of uranium prices, its ability to restart
its uranium production facilities and successfully produce uranium at
economically feasible levels and its ability to successfully raise capital to
support ongoing operations and future development efforts.
3. LONG-TERM DEBT/SHAREHOLDERS' EQUITY
EQUITY INFUSION
In August, the Company raised $750,000 of equity by the issuance of 7.5
million shares of Common Stock at $0.10 per share to a group of private
investors. The investors were also issued five-year warrants to purchase an
aggregate of 5,475,000 shares of Common Stock at an exercise price of $0.20 per
share.
STOCK OPTION GRANTS
The Company granted the right to its directors and certain key
employees to convert $186,756 of previously deferred compensation into shares of
Common Stock at $0.20 per share. These persons will also continue to defer a
portion of their compensation and will be entitled to convert that deferred
compensation into shares of Common Stock at $0.20 per share. The Company will
also issue certain key employees stock options to acquire a total of 2.25
million shares of Common Stock at $0.20 per share, subject to stockholder
approval. In addition, the Company will allow holders of current outstanding
options covering 892,782 shares of Common Stock at prices ranging from $0.25 per
share to $17.00 per share to surrender these options for new options with an
option price of $0.20 per share.
SETTLEMENT OF REGULATORY COUNSEL INDEBTEDNESS
The Company also reached a compromise with its regulatory counsel
settling an outstanding indebtedness of approximately $566,000 for a payment of
$100,000 in cash, the assignment of certain claims, the issuance of 720,000
shares of Common Stock and an agreement to issue up to an additional 200,000
shares upon the occurrence of certain events.
SETTLEMENT OF OUTSTANDING CLAIMS
In July 2000 the Company finalized the settlement with the Liquidating
Trustee in connection with the bankruptcy of Oren L. Benton and certain of his
affiliated companies. Under the settlement, the Trustee released the Company
from approximately $1.6 million in claims in exchange for the Company releasing
certain claims, assigning certain claims to the Trustee and the issuance of a
$135,000 promissory note. The promissory note requires no payments until
maturity on July 17, 2005 and is convertible by the Trustee into shares of
Common Stock at $0.75 per share. The note is secured by a deed of trust covering
the Company's Kingsville Dome and Rosita properties.
LINDNER NOTE CONVERSION
In February 2000, the Company converted $6,000,000 in debt and $344,000
in accrued interest into 2,111,478 shares of the Company's common stock related
to the convertible note issued in May 1995 to Lindner Investments and Lindner
Dividend Fund (the "Lindner Note"). In connection with the Lindner Note, the
Company issued warrants to purchase up to 1,000,000 shares of the Company's
common stock at $3.00 per share. Such warrants expired unexercised on May 31,
2000.
CAPITALIZED INTEREST
Interest capitalized in the nine months ended September 30, 2000 and
1999 was $61,000 and $462,000, respectively. Total interest costs in these
periods were $147,000 and $577,000, respectively.
8
<PAGE> 9
4. URANIUM PROPERTIES
PROPERTY REALIZABILITY
The Company's potential illiquidity necessitated a reevaluation of the
Company's method of valuing its uranium properties for accounting purposes
during the fourth quarter of 1999. Prior to the fourth quarter of 1999, the
Company had previously valued its uranium properties on a held for production
basis, i.e., assuming that each property would be ultimately placed into
production. Because of the Company's potential illiquidity, the Company
determined that it should value these properties on a held for sale basis using
the discounted cash flow method. Under this method, for the nine months ended
September 30, 2000, the Company expensed $470,000 of capital costs incurred on
the Company's uranium properties.
CROWNPOINT UNIT I PROPERTY
The Company had mineral leases on nine separate parcels of land in
northwest New Mexico with Navajo allotees who are the beneficial owners of the
surface and mineral rights. The leases have been and are subject to approval by
the Bureau of Indian Affairs (the "BIA"). Such approval had not been received at
December 31, 1999 and the Company requested the return of escrowed funds for six
of the Unit I leases which require additional efforts to complete the leasing
process. In March 2000, the Company received funds totaling $440,000 related to
these six leases. This transaction resulted in the writedown of the carrying
value of the Company's uranium properties of $440,000 in the first quarter of
2000.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Forward Looking Statements
This Item 2 contains "forward-looking statements" which are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. These statements include, without limitation, statements
relating to liquidity, financing of operations, continued volatility of uranium
prices, estimates of future capital expenditures, proved undeveloped reserves
and other such matters. The words "believes," "expects," "projects," "targets,"
or "estimates" and similar expressions identify forward-looking statements. The
Company does not undertake to update, revise or correct any of the
forward-looking information. Readers are cautioned that such forward-looking
statements should be read in conjunction with the Company's disclosures under
the heading: "Cautionary Statement for the Purposes of the `Safe Harbor'
Provisions of the Private Securities Litigation Reform Act of 1995" in the
Company's 1999 Annual Report on Form 10-K.
GOING CONCERN/UNCERTAIN FUTURE OPERATIONS
The Company ceased production activities in 1999 at both of its two
producing properties because of depressed uranium prices. In 1999 and the first
quarter of 2000 the Company monetized all of its remaining long-term uranium
sales contracts and sold certain of its property and equipment to maintain a
positive cash position. In August, the Company raised $750,000 of equity by the
issuance of 7.5 million shares of Common Stock at $0.10 per share to a group of
private investors. The investors were also issued five-year warrants to purchase
an aggregate of 5,475,000 shares of Common Stock at an exercise price of $0.20
per share.
In October 2000 the Company signed an agreement with Texas regulatory
authorities and the Company's bonding company that provides the Company access
to up to $2.3 million of Company funds pledged to secure the Company's
restoration bonds. Approximately $820,000 has been released to the Company to
date under the letter of intent. The funds are being used by the Company to
perform restoration at the Company's Kingsville Dome and Rosita mine sites in
South Texas. The term of the agreement is expected to run through the end of
2001.
The funding from the equity infusion and the agreement with the Texas
regulatory authorities should provide the Company with the resources to remain
operating through February 2001. It will be necessary, however, to obtain
additional funds for the Company to continue operating thereafter. Efforts to
obtain such additional funding is ongoing.
9
<PAGE> 10
CAPITAL RESOURCES AND LIQUIDITY
Operating Cash Flows and Liquidity
For the quarter ended September 30, 2000, the Company's cash and cash
equivalents of $512,000 represented an increase of $16,000 for the quarter. This
compares to a decrease of $131,000 for the third quarter of 1999. The Company's
uranium operations used cash flow from operations of $741,000 for the quarter
ended September 30, 2000, in comparison to cash flow generated from operations
in the same period in 1999 of $632,000. The Company's net working capital at
September 30, 2000 was a negative $6,000.
As a result of the volatility of spot prices in the uranium
marketplace, the Company shut-in and placed on stand-by its two South Texas
facilities in the first quarter of 1999. Nominal production from these sites
continued through July 1999 until their incremental production costs exceeded
the cost of purchasing uranium in the marketplace. The Company continues to
maintain certain activities at these locations including its ongoing groundwater
restoration efforts.
Investing Cash Flows
South Texas Projects
During the nine months ending September 30, 2000, capitalized
expenditures at the Company's South Texas locations totaled $244,000. Also
during this period, the Company sold a parcel of land at Kingsville Dome which
generated $162,000 of cash to the Company. Capital expenditures for the balance
of 2000 for these properties is expected to be minimal. The Company will require
additional sources of funding in 2000 and 2001 to fund its activities, including
those at the Kingsville Dome and Rosita locations.
New Mexico Projects
Capital expenditures at the Company's Churchrock and Crownpoint
projects for permitting and land holding costs totaled approximately $268,000
for the nine months ending September 30, 2000 compared to costs of $1,300,000
for the first nine months of 1999. Capital expenditures for the remainder of
2000 for these properties is expected to be minimal. In March 2000, the Company
received $440,000 in escrowed funds related to certain of the Company's
Crownpoint Unit I properties.
Financing Cash Flows
In July 1999, the Company extended its revolving credit facility
through July 2000. This facility is secured by the Company's uranium inventory
and/or by receivables from its uranium sales contracts. Principal and interest
payments under the loan are due monthly, with interest on the loan accruing at
the prime rate plus 1%. Principal advances, outstanding under the facility
totaled $575,000 at December 31, 1999 and such amount was repaid in the first
quarter of 2000. At March 31, 2000, the Company had monetized all of its uranium
sales contracts and uranium inventories. Without these underlying assets the
Company was unable to draw on the credit facility or utilize it as a source of
working capital, and terminated the agreement in the second quarter of 2000.
ENVIRONMENTAL ASPECTS
The Company utilizes ISL solution mining technology as its only mining
method. Unlike conventional uranium mining companies, the Company's mining
technology does not create "tailings". Nevertheless, the Company is highly
regulated. Its primary environmental costs to date have been related to
obtaining and complying with environmental mining permits and, once mining is
completed, the reclamation and restoration of the surface areas and underground
water quality to a condition consistent with applicable requirements. Accruals
for the estimated future cost of such activities are made on a per-pound basis
as part of production costs. See the Consolidated Statements of Operations for
the applicable provisions for such future costs. See also Note 1 -
10
<PAGE> 11
"Restoration and Reclamation Costs" of Notes to Consolidated Financial
Statements in the Company's Form 10-K as of December 31, 1999.
RESULTS OF OPERATIONS
Revenues, earnings from operations and net income for the Company can
fluctuate significantly on a quarter to quarter basis during the year because of
the timing of deliveries requested by its utility customers. Accordingly,
operating results for any quarter or year-to-date period are not necessarily
comparable and may not be indicative of the results which may be expected for
future quarters or for the entire year.
Three and Nine Months Ended September 30, 2000 and 1999
The following is a summary of the key operational and financial
statistics related to the Results of Operations:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(In thousands, except per pound data)
<S> <C> <C> <C> <C>
Uranium sales revenue $ -- $ 3,129 $ 937 $ 4,166
Other uranium revenues -- 1,290 145 1,290
Total pounds delivered -- 235 98 305
Average sales price/pound N/A $ 13.29 $ 9.58 $ 13.64
Pounds produced -- 3 -- 107
Pounds purchased -- 274 85 274
Average production cost of produced pounds N/A (a) N/A (a)
Average cost of purchased pounds N/A $ 10.59 $ 9.41 $ 10.59
Average cost of produced pounds sold N/A N/A N/A $ 13.01
Average cost of purchased pounds sold N/A $ 10.62 $ 9.41 $ 10.62
</TABLE>
(a) The Company ceased uranium production operations in the first quarter of
1999 when its South Texas projects were placed on stand-by. Costs while on
stand-by are expensed to operating expenses as they are incurred. A nominal
amount of production has occurred while the projects have been on stand-by. The
inventory resulting from such incidental production was valued at the cost of
obtaining uranium in the spot market.
11
<PAGE> 12
The Company delivered 98,000 pounds of uranium in the first quarter of
2000, and does not have any remaining deliveries scheduled for the balance of
2000 or beyond. The Company delivered 305,000 pounds of uranium in the first
nine months of 1999 at an average sales price of $13.64 per pound.
Details of the cost of uranium sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
2000 1999 2000 1999
---------- ---------- ---------- ----------
(In thousands) (In thousands)
<S> <C> <C> <C> <C>
Cost of purchased uranium $ -- $ 2,500 $ 800 $ 2,500
Royalties -- 9 17 66
Operating expenses 33 418 650 2,126
Provision for restoration and reclamation costs -- 16 12 152
Depreciation and depletion of uranium properties 25 119 181 468
Writedown of uranium properties 195 -- 470 --
---------- ---------- ---------- ----------
Total cost of uranium sales $ 253 $ 3,062 $ 2,130 $ 5,312
========== ========== ========== ==========
</TABLE>
The Company placed its South Texas production facilities on stand-by in
the first quarter of 1999 but maintained nominal production until the
incremental cost of production exceeded the cost of purchasing uranium in the
spot market. All production activities ceased in July 1999. Total production in
the first nine months of 1999 was 107,000 pounds.
Operating expenses in the first nine months of 2000 consisted of the
sale in uranium inventory ($42,000) and restoration costs ($608,000). Operating
expenses in the first nine months of 1999 were $2,126,000 and consisted of
stand-by costs ($1,131,000), production sold ($572,000 or $8.17 per pound) and a
lower of cost or market inventory adjustment ($423,000).
The provision for restoration and reclamation in the first nine months
of 2000 was $12,000, compared to $152,000 for 1999. Such amount in 1999
consisted of $66,000 ($0.94 per pound) for production sold and $86,000 for
restoration related to a previous production site.
The depreciation and depletion provision in the nine months ended
September 30, 2000 was $181,000 compared to $468,000 in the first nine months of
1999. The 1999 amount consisted of $273,000 ($3.90 per pound) for produced
uranium sold and $195,000 for depreciation while on stand-by.
The Company incurred royalties from production sold in the first nine
months of 2000 of $17,000. Royalty expense in the first nine months of 1999 was
$66,000.
Uranium purchases were made in the first nine months of 2000 consisting
of 85,000 pounds at $9.41 per pound. Uranium purchases were made in the first
nine months of 1999 consisting of 274,000 pounds at an average cost of $10.59
per pound.
Corporate expenses consisting of general and administrative ("G&A")
expenses decreased to $1,176,000 in the first nine months of 2000 from
$1,511,000 in the first nine months of 1999. The lower G&A costs in 2000 reflect
the continued focus on reducing costs throughout all corporate levels and
activities.
12
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES.
None
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 AND REPORTS ON FORM 8-K.
(a) 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.
(b) Reports on Form 8-K
The Company filed a Current Report on Form 8-K on
August 22, 2000 reporting under Item 5 the closing of an
equity infusion to the Company of $730,000, the granting to
key employees the right to convert deferred compensation into
Common Stock of the Company, the settlement of outstanding
indebtedness with the Company's regulatory counsel and the
settlement of certain other claims through the issuance of a
promissory note and the assignment and release of certain
claims.
13
<PAGE> 14
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: November 13, 2000 By: /s/ Paul K. Willmott
-------------------------------
Paul K. Willmott
Director, President and
Chief Executive Officer
Dated: November 13, 2000 By: /s/ Thomas H. Ehrlich
-------------------------------
Thomas H. Ehrlich
Vice President - Finance and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1* Restated Certificate of Incorporation of the Company, as amended (filed
with the Company's Annual Report on Form 10-K dated March 27, 1997).
3.2* Certificate Amendment to the Certificate of Incorporation dated June
22, 1999 (filed with the Company's Quarterly Report on Form 10-Q dated
August 12, 1999).
3.3* Restated Bylaws of the Company (filed with the Company's Form S-3
Registration No. 333-17875 on December 16, 1996).
4.1* Registration Rights Agreement dated March 25, 1997 between the Company
and Santa Fe Pacific Gold Corporation (filed with the Company's Annual
Report on Form 10-K dated March 27, 1997).
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 22, 1996).
10.3* 1995 Stock Incentive Plan (filed with the Company's Form S-8
Registration No. 333-00405 on January 22, 1996).
10.4* Non-Qualified Stock Option Agreement dated August 16, 1995, between the
Company and Leland O. Erdahl (filed with the Company's Annual Report on
Form 10-K dated March 27, 1996).
10.5* Non-Qualified Stock Option Agreement dated May 25, 1995, between the
Company and George R. Ireland (filed with the Company's Annual Report
on Form 10-K dated March 27, 1996).
10.6* 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).
10.7* Agreement of Santa Fe Pacific Gold Corporation as Uranco, Inc.
Shareholder with the Company and Guarantee of the Company dated as of
March 25, 1997 (filed with the Company's Annual Report on Form 10-K
dated March 27, 1997). (1)
10.8* Stock Exchange Agreement and Plan of Reorganization dated as of March
25, 1997 (filed with the Company's Annual Report on Form 10-K dated
March 27, 1997).
10.9* License to Explore and Option to Purchase dated March 21, 1997 between
Santa Fe Pacific Gold Corporation and Uranco, Inc. (filed with the
Company's Annual Report on Form 10-K dated March 27, 1997).(1)
10.10* Amendment #1 to Nonqualified Stock Option Agreement dated November 17,
1997 between the Company and Leland O. Erdahl (filed with the Company's
Annual Report on Form 10-K dated March 27, 1998).
</TABLE>
E-1
<PAGE> 16
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
10.11* Amendment #1 to Nonqualified Stock Option Agreement dated November 17,
1997 between the Company and George R. Ireland (filed with the
Company's Annual Report on Form 10-K dated March 27, 1998).
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
March 27, 1998).
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 March 27, 1998).
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 March 27, 1998).
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
March 27, 1998).
10.16* Uranium Resources, Inc. 1999 Deferred Compensation Plan (filed with the
Company's Annual Report on Form 10-K dated March 31, 1999).
10.21* Note Exchange Agreement dated June 30,1999 between the Company and
Lindner Investments (filed with the Company's Quarterly Report on Form
10-Q dated August 12, 1999).
27.1 Financial Schedule.
</TABLE>
*Incorporated by reference pursuant to Rule 12b-32 under the Securities
and Exchange Act of 1934, as amended.
E-2
