Table ofContents

 

 

 

**SECURITIESAND 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 thequarterly period ended March 31, 2009**

 

**Or**

 
| **o** | **Transition report pursuant to  Section 13 or 15(d) of the Securities Exchange Act of 1934** |
|-------|---------------------------------------------------------------------------------------------------------|

 

**For thetransition periodfrom                  to**

 

**Commissionfile number 0-17171**

 

**URANIUMRESOURCES, INC.**

(Exact Name of Issuer asSpecified in Its Charter)

 

| **DELAWARE**              | ** ** | **75-2212772**                          |
|---------------------------|------------|-----------------------------------------|
| (State of  Incorporation) |       | (I.R.S. Employer  Identification   No.) |

 

**405State Highway 121 Bypass, Building A, Suite 110, Lewisville,Texas 75067**

(Address of PrincipalExecutive Offices)

 

**(972)219-3330**

(Issuer’s TelephoneNumber, Including Area Code)

 

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

 

Indicateby check mark whether the registrant has submitted electronically and posted onits corporate Web site, if any, every Interactive Data File required to besubmitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of thischapter) during the preceding 12 months (or for such shorter period that theregistrant was required to submit and post such files).   Yes o   No o

 

Indicateby check mark whether the registrant is a large accelerated filer, anaccelerated filer, a non-accelerated filer, or a smaller reporting company. Seethe definitions of “large accelerated filer,” “accelerated filer” and “smallerreporting company” in Rule 12b-2 of the Exchange Act. (Check one):

 
| Large accelerated filer  o                     |   | Accelerated filer x          |
|------------------------------------------------|--------|-----------------------------------|
|                                           |   |                              |
| Non-accelerated filer o                        |   | Smaller reporting  company o |
| (Do not check if a  smaller reporting company) |   |                              |

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12-b2 of theExchange Act).   Yes o   No x

 

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

 

| **Title of Each Class of Common Stock** | ** ** | **Number of Shares Outstanding** |
|-----------------------------------------------------------------------|------------|-------------------------------------------------|
| Common Stock, $0.001  par value                                       |       | 56,262,245 as of  May 9, 2009              |

 

 

 

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**URANIUMRESOURCES, INC.**

 

**2009FIRST QUARTERLY REPORT ON FORM 10-Q**

 

**TABLE OFCONTENTS**

 
| **PART I—FINANCIAL INFORMATION** |                                                                                                    |
|--------------------------------------------|---------------------------------------------------------------------------------------------------------|
|                                       |                                                                                                    |   |
| Item 1.                                    | Financial Statements                                                                                    |   |
|                                       |                                                                                                    |   |
|                                       | Consolidated  Balance Sheets- March 31, 2009 (Unaudited) and December 31, 2008                | 3 |
|                                       |                                                                                                    |   |
|                                       | Consolidated Statements of Operations—three months  ended March 31, 2009 and 2008 (Unaudited) | 5 |
|                                       |                                                                                                    |   |
|                                       | Consolidated Statements of Cash Flows—three months  ended March 31, 2009 and 2008 (Unaudited) | 6 |
|                                       |                                                                                                    |   |
|                                       | Notes to Condensed Consolidated Financial Statements—March 31,  2009 (Unaudited)              | 7 |
|                                       |                                                                                                    |   |
| Item 2.                                    | Management’s  Discussion and Analysis of Financial Condition and Results of Operations             | 15 |
|                                       |                                                                                                    |   |
| Item 3.                                    | Quantitative  and Qualitative Disclosures About Market Risk                                             | 20 |
|                                       |                                                                                                    |   |
| Item 4.                                    | Controls and  Procedures                                                                                | 20 |
|                                       |                                                                                                    |
| **PART II—OTHER  INFORMATION**   | 21                                                                                                      |
| ** **                                 | ** **                                                                                              |
| Item 1.                                    | Legal Proceedings                                                                                       | 21 |
|                                       |                                                                                                    |   |
| Item 1A.                                   | Risk  Factors                                                                                           | 21 |
|                                       |                                                                                                    |   |
| Item 2.                                    | Unregistered  Sales of Equity Securities and Use of Proceeds                                            | 21 |
|                                       |                                                                                                    |   |
| Item 3.                                    | Defaults Upon  Senior Securities                                                                        | 21 |
|                                       |                                                                                                    |   |
| Item 4.                                    | Submission of  Matters to a Vote of Security Holders                                                    | 21 |
|                                       |                                                                                                    |   |
| Item 5.                                    | Other Information                                                                                       | 21 |
|                                       |                                                                                                    |   |
| Item 6.                                    | Exhibits  and Reports on Form 8–K                                                             | 21 |
|                                       |                                                                                                    |   |
| **SIGNATURES**                             | 22                                                                                                      |
| ** **                                 | ** **                                                                                              | ** ** |
| **Index to  Exhibits**                     | E-1                                                                                                     |
|                                            |                                                                                                         |  |  |  |  |

 

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**URANIUMRESOURCES, INC.**

**CONSOLIDATED BALANCE SHEETS**

**ASSETS**

 
| ** **                                              | ** ** | **March 31,  2009** | ** ** | **December 31,  2008** | ** ** |
|---------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| ** **                                              | ** ** | **(Unaudited)**          | ** ** | ** **                  | ** ** |
| Current assets:                                         |       |                     |       |                        |       |
| Cash and cash equivalents                               |       | $                        | 10,137,032 |                        | $          | 12,041,592 |   |
| Receivables, net                                        |       | 4,149                    |       | 40,360                      |       |
| Uranium inventory                                       |       | 909,635                  |       | 1,213,927                   |       |
| Prepaid and other current assets                        |       | 333,520                  |       | 513,489                     |       |
| Total current assets                                    |       | 11,384,336               |       | 13,809,368                  |       |
|                                                    |       |                     |       |                        |       |
| Property, plant and equipment, at cost:                 |       |                     |       |                        |       |
| Uranium properties                                      |       | 85,172,046               |       | 85,095,067                  |       |
| Other property, plant and equipment                     |       | 899,560                  |       | 898,933                     |       |
| Less-accumulated depreciation, depletion and impairment |       | (63,489,488              | )          | (63,215,677                 | )          |
| Net property, plant and equipment                       |       | 22,582,118               |       | 22,778,323                  |       |
|                                                    |       |                     |       |                        |       |
| Long-term investment:                                   |       |                     |       |                        |       |
| Certificates of deposit, restricted                     |       | 6,679,782                |       | 6,636,715                   |       |
|                                                    |       | $                        | 40,646,236 |                        | $          | 43,224,406 |   |

 

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

 

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**LIABILITIESAND SHAREHOLDERS’ EQUITY**

 
| ** **                                                                                                                                                                                             | ** ** | **March 31,  2009** | ** ** | **December 31,  2008** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| ** **                                                                                                                                                                                             | ** ** | **(Unaudited)**          | ** ** | ** **                  | ** ** |
| Current liabilities:                                                                                                                                                                                   |       |                     |       |                        |       |
| Accounts and short term notes payable                                                                                                                                                                  |       | $                        | 761,394    |                        | $          | 1,169,293 |   |
| Current portion of restoration reserve                                                                                                                                                                 |       | 1,411,008                |       | 1,660,422                   |       |
| Royalties and commissions payable                                                                                                                                                                      |       | 668,841                  |       | 719,542                     |       |
| Accrued interest and other accrued liabilities                                                                                                                                                         |       | 375,249                  |       | 607,975                     |       |
| Current portion of capital leases                                                                                                                                                                      |       | 150,606                  |       | 158,068                     |       |
| Total current liabilities                                                                                                                                                                              |       | 3,367,098                |       | 4,315,300                   |       |
|                                                                                                                                                                                                   |       |                     |       |                        |       |
| Other long-term liabilities and deferred credits                                                                                                                                                       |       | 6,350,282                |       | 6,531,378                   |       |
|                                                                                                                                                                                                   |       |                     |       |                        |       |
| Long term capital leases, less current portion                                                                                                                                                         |       | 285,165                  |       | 320,108                     |       |
| Long-term debt, less current portion                                                                                                                                                                   |       | 450,000                  |       | 450,000                     |       |
| Commitments and contingencies (Notes 2, 5 and 13)                                                                                                                                                      |       |                     |       |                        |       |
| Shareholders’ equity:                                                                                                                                                                             |       |                     |       |                        |       |
| Common stock, $.001 par value, shares  authorized: 200,000,000; shares issued and outstanding  (net of treasury shares): 2009—56,098,229; 2008—55,955,549 |       | 56,136                   |       | 55,994                      |       |
| Paid-in capital                                                                                                                                                                                        |       | 146,678,347              |       | 146,518,753                 |       |
| Accumulated deficit                                                                                                                                                                                    |       | (116,531,374             | )          | (114,957,709                | )          |
| Less: Treasury stock (38,125 shares), at cost                                                                                                                                                          |       | (9,418                   | )          | (9,418                      | )          |
| Total shareholders’ equity                                                                                                                                                                        |       | 30,193,691               |       | 31,607,620                  |       |
|                                                                                                                                                                                                   |       | $                        | 40,646,236 |                        | $          | 43,224,406 |   |

 

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

 

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**URANIUMRESOURCES, INC.**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

** **
| ** **                                                   | ** ** | **Three Months Ended  March 31,** | ** ** |
|--------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                   | ** ** | **2009**                                         | ** ** | **2008** | ** ** |
| Revenues:                                                    |       |                                             |       |   |   |
| Uranium sales—                                          |       | $                                                | 1,422,390  |   | $ | 5,731,538 |   |
| Total revenue                                                |       | 1,422,390                                        |       | 5,731,538 |   |
| Costs and expenses:                                          |       |                                             |       |   |   |
| Cost of uranium sales—                                  |       |                                             |       |   |   |
| Royalties and commissions                                    |       | 138,715                                          |       | 560,402 |   |
| Operating expenses                                           |       | 869,949                                          |       | 2,127,139 |   |
| Accretion/amortization of restoration reserve                |       | 144,002                                          |       | 206,988 |   |
| Depreciation and depletion                                   |       | 231,294                                          |       | 1,930,581 |   |
| Impairment of uranium properties                             |       | 182,374                                          |       | 135,842 |   |
| Exploration expenses                                         |       | 773                                              |       | 8,547 |   |
| Total cost of uranium sales                                  |       | 1,567,107                                        |       | 4,969,499 |   |
| Earnings (loss) from operations before corporate expenses    |       | (144,717                                         | )          | 762,039 |   |
|                                                         |       |                                             |       |   |   |
| Corporate expenses—                                     |       |                                             |       |   |   |
| General and administrative                                   |       | 1,441,295                                        |       | 2,701,807 |   |
| Depreciation                                                 |       | 35,137                                           |       | 34,213 |   |
| Total corporate expenses                                     |       | 1,476,432                                        |       | 2,736,020 |   |
| Loss from operations                                         |       | (1,621,149                                       | )          | (1,973,981 | ) |
|                                                         |       |                                             |       |   |   |
| Other income (expense):                                      |       |                                             |       |   |   |
| Interest expense                                             |       | (11,228                                          | )          | (11,429 | ) |
| Interest and other income, net                               |       | 58,712                                           |       | 147,986 |   |
|                                                         |       |                                             |       |   |   |
| Net loss                                                     |       | $                                                | (1,573,665 | ) | $ | (1,837,424 | ) |
|                                                         |       |                                             |       |   |   |
| Net loss per common share:                                   |       |                                             |       |   |   |
| Basic                                                        |       | $                                                | (0.03      | ) | $ | (0.04 | ) |
| Diluted                                                      |       | $                                                | (0.03      | ) | $ | (0.04 | ) |
|                                                         |       |                                             |       |   |   |
| Weighted average common shares and common equivalent shares: |       |                                             |       |   |   |
| Basic                                                        |       | 56,096,644                                       |       | 52,305,129 |   |
| Diluted                                                      |       | 56,096,644                                       |       | 52,305,129 |   |

 

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

 

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**URANIUMRESOURCES, INC.**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

 
| ** **                                                                     | ** ** | **Three Months Ended  March 31,** | ** ** |
|--------------------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                                     | ** ** | **2009**                                         | ** ** | **2008** | ** ** |
| Net loss                                                                       |       | $                                                | (1,573,665 | ) | $ | (1,837,424 | ) |
| Reconciliation of net earnings to cash provided (used in) by  operations— |       |                                             |       |   |   |
| Accretion/amortization of restoration reserve                                  |       | 144,002                                          |       | 206,988 |   |
| Depreciation and depletion                                                     |       | 266,431                                          |       | 1,964,794 |   |
| Impairment of uranium properties                                               |       | 182,374                                          |       | 135,842 |   |
| Decrease in restoration and reclamation accrual                                |       | (586,437                                         | )          | (250,986 | ) |
| Stock compensation expense                                                     |       | 159,736                                          |       | 654,427 |   |
| Other non-cash items, net                                                      |       | —                                           |       | 23,212 |   |
|                                                                           |       |                                             |       |   |   |
| Effect of changes in operating working capital items—                     |       |                                             |       |   |   |
| Decrease in receivables                                                        |       | 36,211                                           |       | 338,451 |   |
| Decrease in inventories                                                        |       | 234,714                                          |       | 277,400 |   |
| (Increase) decrease in prepaid and other current assets                        |       | 179,969                                          |       | (187,152 | ) |
| Decrease in payables, accrued liabilities and deferred credits                 |       | (691,326                                         | )          | (517,627 | ) |
| Net cash provided by (used in) operations                                      |       | (1,647,991                                       | )          | 807,925 |   |
|                                                                           |       |                                             |       |   |   |
| Investing activities:                                                          |       |                                             |       |   |   |
| Increase in certificates of deposit, restricted                                |       | (43,067                                          | )          | (325,054 | ) |
| Additions to property, plant and equipment—                               |       |                                             |       |   |   |
| Kingsville Dome                                                                |       | (68,015                                          | )          | (2,159,188 | ) |
| Vasquez                                                                        |       | (71,288                                          | )          | (152,520 | ) |
| Rosita                                                                         |       | (14,503                                          | )          | (1,801,713 | ) |
| Churchrock                                                                     |       | (7,261                                           | )          | (75,064 | ) |
| Crownpoint                                                                     |       | —                                           |       | (30,523 | ) |
| Other property                                                                 |       | (10,030                                          | )          | (226,858 | ) |
| Net cash used in investing activities                                          |       | (214,164                                         | )          | (4,770,920 | ) |
|                                                                           |       |                                             |       |   |   |
| Financing activities:                                                          |       |                                             |       |   |   |
| Payments on borrowings                                                         |       | (42,405                                          | )          | (82,718 | ) |
| Net cash used in financing activities                                          |       | (42,405                                          | )          | (82,718 | ) |
| Net decrease in cash and cash equivalents                                      |       | (1,904,560                                       | )          | (4,045,713 | ) |
| Cash and cash equivalents, beginning of period                                 |       | 12,041,592                                       |       | 9,284,270 |   |
| Cash and cash equivalents, end of period                                       |       | $                                                | 10,137,032 |   | $ | 5,238,557 |   |

 

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

 

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**Uranium Resources, Inc.**

**Notes to Condensed ConsolidatedFinancial Statements March 31, 2009 (Unaudited)**

 

**1.****                                     ****BASIS OF PRESENTATION**

 

Theaccompanying unaudited condensed consolidated financial statements have beenprepared in accordance with accounting principles generally accepted in theUnited States of America for interim financial information and with theinstructions to Form 10-Q and Item 310(b) of Regulation S-K. Accordingly, they do not include all of the information and footnotes requiredby accounting principles generally accepted in the United States of America forcomplete financial statements.  The accompanying statements should be readin conjunction with the audited financial statements included in the Company’s2008 Annual Report on Form 10-K.  In the opinion of management, alladjustments (consisting of normal recurring accruals) considered necessary fora fair presentation have been included.  Operating results for the threemonths ended March 31, 2009 are not necessarily indicative of the resultsthat may be expected for the full calendar year ending December 31, 2009.

 

**2.****                                     ****DESCRIPTION OF BUSINESS**

 

UraniumResources, Inc. (“URI”) was formed in 1977 and domesticated in Delaware in1987. The Company is primarily engaged in the business of acquiring, exploring,developing and mining uranium properties, using the *in situ* recovery (“ISR”) or solution mining process.Historically, the primary customers of the Company have been major utilitiesand commodities brokers that sell uranium to utilities who utilize nuclearpower to generate electricity. At present the Company owns both producing andundeveloped uranium properties in South Texas and undeveloped uraniumproperties in New Mexico.

 

 TheCompany resumed uranium production in 2004 at its Vasquez project, in 2006 atits Kingsville Dome project and in the 3rd quarterof 2008 at its Rosita project, each of such projects are located in SouthTexas. As a result of declining uranium market prices and high productioncosts, the Company announced its decision to cease further development ofadditional wellfields and to curtail production from its South Texas projectsas existing production wellfields from each project were depleted. Productionat our Vasquez and Rosita projects were shut down in the 4th quarterof 2008 and production at the Kingsville Dome project has produced longer thanexpected, but we believe production may be shut-in over the next several months.The Vasquez project was mined out in 2008 and is now being restored. At theKingsville Dome and Rosita projects, the decision to shut-in production wasmade to conserve the in-place reserve base until higher prices can be realized.

 

Priorto resuming Vasquez production, the Company had been in production stand-bysince the first quarter of 1999 at its Kingsville Dome and Rosita projects.Groundwater restoration and reclamation activities have been conducted at thesetwo sites and are currently ongoing at each of the Kingsville Dome, Vasquez andRosita projects.

 

Thefinancial statements of the Company have been prepared on the basis ofaccounting principles applicable to a going concern, which contemplates therealization of assets and the satisfaction of liabilities in the normal courseof business.  The Company believes thatthe cash balance of $10.1 million at March 31, 2009 and the cash expectedto be provided through our remaining uranium sales will be sufficient tomaintain its liquidity beyond the next twelve months.

 

**3.****                                     ****DISCLOSURE OF NON-CASHTRANSACTIONS**

 

Duringthe first quarter of 2009, the Company’s executive officers cash compensationwas reduced by 30% to 40% and in lieu of such cash compensation the officerswere issued restricted shares of common stock of the Company.  A total of 142,680 shares of restrictedcommon stock were issued in January 2009 with respect to a reduction of$87,750 of cash compensation for the quarter.

 

**4.****                                     ****URANIUM PROPERTIES**

 

**KingsvilleDome Project**

 

Productionfrom Kingsville Dome for the first quarter of 2009 and 2008 was 29,800 and79,100 pounds, respectively.  Totalcapital expenditures for Kingsville Dome for the first quarter of 2009 was$68,000 and was related to land and mineral lease payments.  Total capital expenditures for KingsvilleDome for the first quarter of 2008 were $2.2 million for wellfield development,the construction of additional satellite plants and for wellfield evaluationand delineation of future wellfields.

 

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Asof May 2009, the two remaining wellfields at Kingsville Dome havecontinued to produce at costs that at current uranium market conditions generatepositive cash flow.  As production fromdepleted wellfields at Kingsville Dome ceases, restoration activities in thosewellfields are conducted.  We areconducting ongoing restoration activities at this project and incurred $282,000in costs for the quarter ended March 31, 2009.

 

**Rosita**

 

We began production at one new wellfield at Rosita in August 2008.  Due to poor economics driven by technicalchallenges and lower uranium prices, production from this wellfield was shut-inin October 2008.  We have beenconducting ongoing restoration activities at this project on our depletedwellfields and incurred $179,000 in costs for the quarter ended March 31,2009.  Capital expenditures for the firstquarter of 2009 were minimal with approximately $15,000 being spent for landand mineral lease payments.  Capitalexpenditures for our Rosita project were $1.7 million in the first quarter of2008.  These expenditures were made to upgrade the Rosita plant andelution circuit, for the addition of another satellite plant, for theconstruction of a drying facility at Rosita and for wellfield development inanticipation of start-up of production later in the year.

 

**VasquezProject**

 

Productionat the Vasquez project was shutdown during October 2008 and has beendepleted of its economically recoverable reserves.  During the quarter we incurred $71,000 ofcapital expenditures primarily for land and mineral lease payments.  As production from depleted wellfieldsceased, restoration activities in those wellfields were begun.  We are conducting ongoing restorationactivities at this project and incurred $202,000 in costs for the quarter endedMarch 31, 2009.  In the firstquarter of 2008 we produced 4,300 pounds and we incurred wellfield developmentexpenditures of $153,000, primarily for development of new wellfields to bringon new production at Vasquez.  Such new production commenced in March 2008.

 

**Impairmentof Uranium Properties**

 

AtMarch 31, 2009, we determined the carrying value of our project assets ateach of our South Texas production locations exceeded their fair value asprovided in SFAS 144 “Accounting for the Impairment or Disposal ofLong-Lived Assets”.  A decline in themarket price of uranium and an increase in the estimated production costs foreach of our South Texas projects resulted in a decrease in the estimated futurecash flow to be generated from each site. Such determination resulted in an impairment provision of approximately$182,000 for the first quarter of 2009, $155,000 related to Vasquez and $27,000for Rosita.  The net carrying value ofthe Kingsville Dome, Rosita and Vasquez projects are approximately $8.1million, $5.4 million and $909,000 at March 31, 2009.

 

**5.****                                     ****CONTRACT COMMITMENTS**

 

**Amendmentto Uranium Sales Contracts**

 

In March 2006 we entered into new sales contracts with ItochuCorporation (“Itochu”) and UG U.S.A., Inc. (“UG”) that supersede thepreviously existing contracts and provide for delivery of one-half of ouractual production from our properties in Texas currently owned or hereafter acquired by the Company(excluding certain large potential exploration plays).  TheItochu contract contains separate pricing terms for the Vasquez property thatare no longer applicable since Vasquez has reached the end of its usefullife.  Our Texas production will be soldto Itochu at a price equal to the average spot price for the eight weeks priorto the date of delivery less $7.50 per pound, with a floor for the spot priceof $37 and a ceiling of $50.per pound. If the spot price is over $50 per pound theprice will be increased by 50% of such excess. The floor and ceiling andsharing arrangement over the ceiling applies to 3.65 million pounds ofdeliveries, after which there is no floor or ceiling. Itochu has the right tocancel any deliveries on six-month’s notice.

 

Underthe amended Itochu contract there was potential for reinstatement of theoriginal contract terms if our joint venture with Itochu to develop our ChurchRock property in New Mexico was terminated by us. On March 6, 2009, Itochuterminated the Joint Venture.  The onlyconsequence of the termination was the increase of the ceiling price for futureuranium sales from $43 to $50 per pound.

 

Underthe UG contract all production from our Texas properties will be sold at aprice equal to the month-end long-term contract price for the second monthprior to the month of delivery less $6 per pound until (i) 600,000 poundshave been sold in a particular delivery year and (ii) an aggregate of3 million pounds of Uranium has been sold. After the 600,000 

 

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pounds in any year and3 million pounds total have been sold, UG will have a right of firstrefusal to purchase other Texas production at a price equal to the average spotprice for a period prior to the date of delivery less 4%.  We paid UG $12 million in cash torestructure its previously existing contract.

 

**6.             STOCK BASED COMPENSATION**

 

Our stock based compensationprograms consist of stock options granted to employees and directors andrestricted stock grants made employees.

 

***Stock Compensation Expense - SFAS 123(R)***

 

Stockcompensation expense for the three months March 31, 2009 and 2008 was$160,000 and $654,000, respectively. Stock compensation expense is recorded asa component of general and administrative expenses for each period. The Companydid not recognize a tax benefit from the stock compensation expense because theCompany considers it is more likely than not that the related deferred taxassets, which have been reduced by a full valuation allowance, will not berealized.

 

TheBlack-Scholes option pricing model was used to estimate the stock option fairvalues. The option pricing model requires a number of assumptions, of which themost significant are, expected stock price volatility, the expected pre-vestingforfeiture rate and the expected option term (the amount of time from the grantdate until the option or restricted shares are exercised, vest or expire).Expected volatility was calculated based upon actual historical stock pricemovements through the measurement date of the stock option grant. Expectedpre-vesting forfeitures were estimated based on actual historical pre-vestingforfeitures over the most recent periods ending March 31, 2009 for theexpected term. The expected term was estimated based on historical averagesover the most recent periods ending March 31, 2009.

 

Nostock option grants were made in the first quarter of 2009.

 

Atotal of 142,680 shares of restricted stock were granted in the first quarterof 2009 to five executive officers on January 2, 2009 in connection with asalary reduction plan for 2009.  All ofthese shares vest one year from the date of grant.  Restricted stock grants are valued using thefair market value of the stock on the date of grant. The Company recognizedstock compensation expense for the restricted share grants of approximately$29,200 during the first quarter of 2009.

 

Nostock option grants were made in the first quarter of 2008.

 

Atotal of 70,000 shares of restricted stock were granted in the first quarter of2008.  Total restricted share grants of60,000 shares were made to three non-executive employees on March 6, 2008.30,000 of these shares vested ratably over five years and 30,000 shares vestratably over four years.  Another 10,000restricted share grant was made to an executive of the Company on March 24,2008, these shares vest ratably over 5 years. In November 2008, the terms of the restricted stock grants weremodified to permit the acceleration of their vesting upon certainconditions.  In the first quarter of2009, the vesting for 60,000 of the Restricted Shares was accelerated to befully vested.  Restricted stock grantsare valued using the fair market value of the stock on the later of the date ofgrant or modification. The Company recognized a reduction of stock compensationexpense for the restricted share grants of approximately $36,000 during thefirst quarter of 2009 as a result of the vesting modification.

 

Thetotal estimated unrecognized compensation cost from the unvested restrictedgrants at March 31, 2009 was approximately $98,000, which is expected tobe recognized over the weighted average vesting period of the individual grantswhich range from 1-4 years.

 

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***Stock Options for the Three Months Ended March 31, 2009***

 

Thefollowing table summarizes stock options outstanding and changes during thethree month period ended March 31, 2009:

 
| ** **                                   | ** ** | **Outstanding Options** | ** ** |
|----------------------------------------------|------------|------------------------------|------------|
| ** **                                   | ** ** | **Number of  Shares**   | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Weighted  Average  Remaining  Contractual  Term****–****in years** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
| ** **                                   | ** ** | ** **                   | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** | ** ** |
| Options  outstanding at January 1, 2009 |       | 4,278,574                    |       | $ | 2.81 |   |   |   |   |   |
| Granted                                      |       | —                       |       | — |   |   |   |   |   |
| Exercised                                    |       | —                       |       | — |   |   |   |   |   |
| Canceled or  forfeited                       |       | —                       |       | — |   |   |   |   |   |
| Options  outstanding at March 31, 2009  |       | 4,278,574                    |       | $ | 2.81 |   | 6.2 |   | $ | 20 |   |
|                                         |       |                         |       |   |   |   |   |   |   |
| Options  exercisable at March 31, 2009  |       | 3,889,824                    |       | $ | 2.46 |   | 6.0 |   | $ | 20 |   |

 

Sharesavailable for grant under the Stock Option Plans as of March 31,2009 were 605,895.

 

Stockoptions outstanding and currently exercisable at March 31, 2009 are as follows:

 
| ** **                         | ** ** | **Options Outstanding**             | ** ** | **Options Exercisable**                                | ** ** |
|------------------------------------|------------|------------------------------------------|------------|-------------------------------------------------------------|------------|
| **Stock Option Plan**    | ** ** | **Number of  Options  Outstanding** | ** ** | **Weighted Average  Remaining  Contractual Life** | ** ** | **Weighted Average  Exercise price** | ** ** | **Number of  Options  Exercisable** | ** ** | **Weighted Average  Exercise Price** | ** ** |
| ** **                         | ** ** | **(in years)**                      | ** ** | ** **                                                  | ** ** | ** ** | ** ** |
| 1995 Stock  Incentive Plan         |       | 2,156,447                                |       | 5.1                                                         |       | $ | 1.38 |   | 2,156,447 |   | $ | 1.38 |   |
| 2004 Stock  Incentive Plan         |       | 1,540,814                                |       | 6.9                                                         |       | 3.37 |   | 1,483,314 |   | 3.30 |   |
| Directors’  Stock Option Plan |       | 63                                       |       | 4.3                                                         |       | 0.16 |   | 63 |   | 0.16 |   |
| 2004  Directors’ Plan         |       | 581,250                                  |       | 8.1                                                         |       | 6.62 |   | 250,000 |   | 6.73 |   |
|                               |       | 4,278,574                                |       | 6.2                                                         |       | $ | 2.81 |   | 3,889,824 |   | $ | 2.46 |   |

 

Totalestimated unrecognized compensation cost from unvested stock options at March 31,2009 was approximately $1.497million, which is expected to be recognized over the weighted average vestingperiod of the individual grants which range from approximately 2-4 years.

 

**7.****            ****ASSET RETIREMENT OBLIGATIONS**

 

Thefollowing table shows the change in the balance of the restoration andreclamation liability during the three months ended March 31, 2009:

 
| Reserve for future restoration and  reclamation costs beginning of period |   | $        | 6,994,772 |   |
|---------------------------------------------------------------------------|--------|----------|-----------|--------|
| Additions and changes in cash flow  estimates                             |   | 149,484  |      |
| Costs incurred                                                            |   | (663,395 | )         |
| Accretion expense                                                         |   | 83,401   |      |
| Reserve for future restoration and  reclamation costs at end of period    |   | $        | 6,564,262 |   |

 

**8.****                                     ****SHAREHOLDERS’ EQUITY**

 

***RestrictedStock Grant***

 

Atotal of 142,680 shares of restricted stock were granted to five executiveofficers on January 2, 2009 at a price of $0.615 per share in connectionwith a salary reduction plan for 2009. The issuance price is determined by the average closing price of thelast ten trading days of the previous quarter. All of these shares vest one year from the date of grant.

 

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OnApril 1, 2009 a total of 164,016 shares of restricted stock were grantedto five executive officers at a price of $0.535 per share in connection withthe salary reduction plan for 2009.  Theissuance price is determined by the average closing price of the last tentrading days of the previous quarter and these shares vest one year from theirdate of grant.

 

***EquityInfusion — Private Placement***

 

InMay 2008, the Company completed the sale of 3,295,920 shares of commonstock to accredited investors at a price of $4.34 per share and warrants topurchase 988,771 additional shares of common stock, at a price of $5.78. Thesewarrants expire 60 months after issuance and are exercisable immediately.In addition, ratchet warrants to purchase shares of common stock at $0.01 pershare were issued as part of the private placement. The ratchet warrants aretriggered and become immediately exercisable in the event that the Company shouldissue shares of Common Stock at a price below $4.34 per share. The number ofshares that may be purchased upon the exercise of the ratchet warrants isdetermined by a formula that results in the effective price paid by theinvestors in this offering being equal to the price paid in a subsequent below$4.34 per share offering. The ratchet warrants expire on May 13,2009.  Upon implementation of EITF Issue07-5 (EITF 07-5), *Determining Whetheran Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock,*management determined the ratchet warrantsqualified as a derivative resulting in the fair market value to be recorded asa liability.  The fair market value ofthe ratchet warrants was deemed to be insignificant as of January 1, 2009and March 31, 2009.

 

Thefollowing table details the changes in shareholders equity for the quarterended March 31, 2009:

 
| ** **                       | ** ** | **Common Stock** | ** ** | **Paid-In** | ** ** | **Accumulated** | ** ** | ** **  | ** ** |
|----------------------------------|------------|-----------------------|------------|-------------|------------|-----------------|------------|-------------|------------|
| ** **                       | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Deficit** | ** ** | **Treasury Stock** | ** ** |
| Balances, December 31, 2008 |       | 55,955,549            |       | $           | 55,994     |            | $          | 146,518,753 |       | $ | (114,957,709 | ) | $ | (9,418 | ) |
| Net loss                         |       | —                |       | —      |       | —          |       | (1,573,665  | )          | — |   |
| Stock compensation expense       |       | —                |       | —      |       | 159,736         |       | —      |       | — |   |
| Restricted stock issuance        |       | 142,680               |       | 142         |       | (142            | )          |        |       |   |   |
| Balances, March 31, 2009    |       | 56,098,229            |       | $           | 56,136     |            | $          | 146,678,347 |       | $ | (116,531,374 | ) | $ | (9,418 | ) |

 

**10.**          **IMPACT OF RECENT ACCOUNTING PRONOUNCEMENTS**

 

**Impact ofRecent Accounting Pronouncements**

 

***Business Combinations.***    InDecember 2007, the FASB issued SFAS No. 141R, “Business Combinations,”which changes how business acquisitions are accounted for. SFAS No. 141Rrequires the acquiring entity in a business combination to recognize all (andonly) the assets acquired and liabilities assumed in the transaction andestablishes the acquisition-date fair value as the measurement objective forall assets acquired and liabilities assumed in a business combination. Certainprovisions of this standard will, among other things, impact the determinationof acquisition-date fair value of consideration paid in a business combination(including contingent consideration); exclude transaction costs fromacquisition accounting; and change accounting practices for acquiredcontingencies, acquisition-related restructuring costs, in-process research anddevelopment, indemnification assets, and tax benefits. SFAS No. 141R iseffective for business combinations and adjustments to an acquired entity’sdeferred tax asset and liability balances occurring after December 31,2008.  The Company adopted this standard on January 1, 2009 which did nothave an impact on its financial position, results of operations or cash flowsas there have been no acquisitions that have been consummated after January 1,2009.

 

***Noncontrolling Interests inConsolidated Financial Statements.***    In December 2007, the FASB issued SFAS No. 160,“Noncontrolling Interests in Consolidated Financial Statements, an amendment ofARB No. 51,” which establishes new standards governing the accounting forand reporting of noncontrolling interests (NCIs) in partially ownedconsolidated subsidiaries and the loss of control of subsidiaries. Certainprovisions of this standard indicate, among other things, that NCIs (previouslyreferred to as minority interests) be treated as a separate component ofequity, not as a liability; that increases and decrease in the parent’sownership interest that leave control intact be treated as equity transactions,rather than as step acquisitions or dilution gains or losses; and that lossesof a partially owned consolidated subsidiary be allocated to the NCI even whensuch allocation might result in a deficit balance. This standard also requireschanges to certain presentation and disclosure requirements. SFAS No. 160is effective beginning January 1, 2009. The provisions of the standard areto be applied to all NCIs prospectively, except for the presentation anddisclosure requirements, which are to be applied retrospectively to all periodspresented.  The Company adopted thisstandard on January 1, 2009 which did not have an impact on its financialposition, results of operations or cash flows as the Company owns 100% of itssubsidiaries.

 

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***Derivative Instruments and Hedging Activities.***    In March 2008,the FASB issued SFAS No. 161 “Disclosures about Derivative Instruments andHedging Activities an amendment of FASB Statement No. 133”. The newstandard requires additional disclosures regarding a company’s derivativeinstruments and hedging activities by requiring disclosure of the fair valuesof derivative instruments and their gains and losses in a tabular format. Thestandard is effective for our fiscal year and interim periods within such year,beginning January 1, 2009.  TheCompany adopted this standard on January 1, 2009 which did not have animpact on its financial position, results of operations or cash flows as therewere no derivative instruments or hedging activities after January 1,2009.

 

***Fair Value Measurements and Impairments ofSecurities. ***InApril 2009, the Financial Accounting Standards Board issued three finalstaff positions intended to provide additional application guidance and enhancedisclosures regarding fair value measurements and impairments of securities.FSP FAS 157-4, “Determining Fair Value When the Volume and Level of Activityfor the Asset or Liability Have Significantly Decreased and IdentifyingTransactions That Are Not Orderly,” provides guidelines for making fair valuemeasurements more consistent with the principles presented in FASB Statement No. 157,“Fair Value Measurements.” FSP FAS 107-1 and APB 28-1, “Interim Disclosuresabout Fair Value of Financial Instruments,” enhances consistency in financialreporting by increasing the frequency of fair value disclosures. FSP FAS 115-2and FAS 124-2, “Recognition and Presentation of Other-Than-TemporaryImpairments,” provides additional guidance designed to create greater clarityand consistency in accounting for and presenting impairment losses onsecurities. We do not expect this guidance to have a significant impact on ourfinancial statements.

 

***Determining Whetheran Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock.**** * In June 2008, the FASB issued EITF Issue07-5 (EITF 07-5),*Determining Whether anInstrument (or Embedded Feature) is Indexed to an Entity’s Own Stock*.  EITFNo. 07-5 is effective for financial statements issued for fiscal yearsbeginning after December 15, 2008, and interim periods within those fiscalyears.  Early application is not permitted. Paragraph 11(a) ofSFAS No. 133*  Accounting for Derivatives and HedgingActivities,*  specifies that acontract that would otherwise meet the definition of a derivative but is both (a) indexedto the Company’s own stock and (b) classified in stockholders’ equity inthe statement of financial position would not be considered a derivativefinancial instrument. EITF 07-5 provides a new two-step model to be applied indetermining whether a financial instrument or an embedded feature is indexed toan issuer’s own stock and thus able to qualify for the SFAS No. 133paragraph 11(a) scope exception.  The application of thisguidance at January 1, 2009 did not have a significant impact on theCompany’s financial statements.

 

***Fair Value Measurements.***  InFebruary 2008, the FASB issued FASB Staff Position 157-2 (“FSP 175-2”),*  EffectiveDate of FASB Statement 157*, which delays the effective date of Statement ofFinancial Accounting No. 157, “Fair Value Measurements” (“SFAS 157”) forall non-financial assets and non-financial liabilities, except for items thatare recognized or disclosed as fair value in the financial statements on arecurring basis (at least annually).  Beginning January 1,2009, we applied SFAS 157 to nonrecurring, nonfinancial assets andliabilities. This adoption did not have a material impact on our consolidatedcondensed statement of operations or financial condition.  Our asset retirement obligation is classifiedas a Level 3 liability within the valuation hierarchy. The significantunobservable inputs to this fair value measurement include estimates ofplugging, abandonment and restoration costs, inflation rate and the expectedremaining life of wellfields. The inputs are calculated based on historical dataas well as current estimated costs.  SeeNote 7 — Asset Retirement Obligation for additional information of our assetretirement obligation as of March 31, 2009.

 

**11.          EARNINGS PER SHARE**

 

Basicearnings per share includes no dilution and is computed by dividing income orloss attributed to common stockholders by the weighted-average number of commonshares outstanding for the period. Diluted earnings per share reflects thepotential dilution that could occur if stock options were exercised orconverted into common stock.  Potentiallydilutive shares of 6,152,366 were excluded from the calculation of earning pershare because they were anti-dilutive due to our net loss position for thequarter ended March 31, 2009.

 

**12.          TENTH CIRCUIT COURT OF APPEALSDECISION**

 

OnApril 17, 2009, a three-judge panel of the United States Court of Appealsfor the Tenth Circuit issued a decision holding that Section 8 of URI’sChurchrock property in New Mexico is Indian country.  One of the members of the paneldissented.  Section 8 is owned infee by URI’s subsidiary Hydro Resources, Inc. Indian country falls underthe jurisdiction of the United States Environmental Protection Agency (USEPA),and not the State of New Mexico, to administer the Underground InjectionControl (UIC) program permit which URI requires for in situ recovery (ISR)mining of that property. The jurisdictional dispute originated among the Stateof New Mexico, the USEPA and the Navajo Nation and was initially taken to theTenth Circuit Court of Appeals which in January 2000 remanded it to theUSEPA. In February 2007, the USEPA reached a decision, which the Companysubsequently appealed to the Tenth Circuit, that Section 8 is Indiancountry, and 

 

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thereforeunder its jurisdiction to administer the UIC program permit. The Company isevaluating its alternatives on this matter and no impairment was considerednecessary at March 31, 2009.

 

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**13.****         ****COMMITMENTS AND CONTINGENCIES**

 

The Company’s miningoperations are subject to federal and state regulations for the protection ofthe environment, including water quality. These laws are constantly changingand generally becoming more restrictive. The ongoing costs of complying withsuch regulations have not been significant to the Company’s annual operatingcosts. Future mine closure and reclamation costs are provided for as each poundof uranium is produced on a unit-of-production basis. The Company reviews itsreclamation obligations each year and determines the appropriate unit charge.The Company also evaluates the status of current environmental laws and theirpotential impact on its accrual for costs. The Company believes its operationsare in compliance with current environmental regulations.

 

The Company is from timeto time involved in various legal proceedings of a character normally incidentto its business. Management does not believe that adverse decisions in anypending or threatened proceedings will have a material adverse effect on theCompany’s financial condition or results of operations.

 

The Company has filed aregistration statement under the Securities Act of 1933, as amended, toregister the resale of the shares. Such shares are subject to certain resaleregistration rights that would include penalties in the event the registrationstatement fails to remain effective. At March 31, 2009, the Company’sregistration statement was and remains effective.

 

The Company has enteredinto Compensation Agreements with Executive Officers of the Company thatprovide that, in the event of a change in control, such officers will havecertain rights and benefits for a period of thirty-six months for the ExecutiveChairman of the Company and twenty-four months for the other officers,following such change in control. The Compensation Agreements provide that theexecutive’s base salary payments shall be made on a monthly basis for theduration of the term and any incentive payments shall be paid annually untilthe obligation to make such payments expires.

 

On July 13, 2007, anemployee of a drilling contractor engaged by the Company was killed when thedrill rig on which he was making repairs backed over him. His heirs have filedclaims against the drilling company and us. Our insurance carrier is defendingthe matter on our behalf. We believe we have meritorious defenses to the claimsand that, in any event, we have adequate insurance to cover the matter.

 

In June 2008 a suitfor declaratory judgment titled, ***Saenz v. URI Inc.,*** was filed in the 105th Judicial District Court, Kleberg County, Texasby the owners of the mineral estate of property in Kleberg County, Texas leasedto the Company, seeking a declaratory judgment that a certain lease is limitedto one specific lot only and does not encompass other adjacent lands. TheCompany has a lease on the adjacent lands from the same mineral owners and hasproduced over 340,000 pounds of uranium from those lands in 2007 and 2008. TheCompany entered a general denial of the claims. On September 24, 2008 themineral owners amended their suit to include a declaration that both of theleases held by the Company are not valid. The Company has entered a generaldenial and other specific defenses to the amended complaint. The Company hasproduced uranium from both leases. On November 5, 2008, the Companyengaged in mediation with the plaintiffs but was unable to resolve the matter.The Plaintiffs filed a Motion for Summary Judgment alleging that the leasesterminated prior to any production occurring. The Court denied the motion. Atrial date was originally set for June 1, 2009 but has been rescheduledfor December 7, 2009. The Company will defend the case vigorously. While theCompany believes that each of the leases is valid, counsel to the Company isunable to predict the outcome of the litigation. A determination of theinvalidity of the lease on the adjacent lands on which the Company haspreviously produced uranium could have a material adverse affect on the Company’sfinancial condition.

 

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

 

**Forward Looking Statements**

 

The following summary isqualified in its entirety by, and should be read in conjunction with, the moredetailed information and any financial data incorporated herein by reference tothe Company’s reports filed with the Securities and Exchange Commission underthe Securities Exchange Act of 1934. Except for historical informationcontained in this report, the matters discussed herein contain forward-lookingstatements, made pursuant to the “safe harbor” provisions of the PrivateSecurities Litigation Reform Act of 1995, including management’s expectationsregarding the Company’s reserves and mineralized uranium materials, timing ofreceipt of mining permits, production capacity of mining operations planned forproperties in South Texas and New Mexico and planned dates for commencement ofproduction at such properties. Such forward-looking statements are inherentlyuncertain, and investors must recognize that actual results may differ frommanagement’s expectations. Key factors impacting current and future operationsof the Company include the price of uranium, weather conditions, operatingconditions at the Company’s mining projects, government regulation of themining industry and the nuclear power industry, the world-wide supply anddemand of uranium, availability of capital, timely receipt of mining and otherpermits from regulatory agencies and other matters indicated in “CautionaryStatement,” found in the Company’s 2008 Annual Report on Form 10Q.

 

**Overview**

 

URI explores for andproduces uranium in South Texas where it has three projects: Kingsville Dome,Vasquez and Rosita. URI also has an estimated 101.4 million pounds of inplace mineralized uranium material on 183,000 acres in New Mexico. Ouroperations are heavily influenced by the price of uranium both on the spot andlong-term markets. The spot price of uranium, which has fluctuated from a highof $136/lb in June 2007 to its recent price level of $46.00/lb, has beenthe primary driver of the strategic decisions of the Company.  Spot prices have improved to $46.00 over thelast month from a recent low of $40.00 in April 2009, however, thelong-term price for uranium has declined from $70.00 per pound where it hadheld for several months to $65.00 per pound at April 30, 2009.

 

Our strategy has beenfocused on two fronts: 1) advancing our New Mexico assets towardsproduction, and 2) expanding our reserve base in Texas in an effort tocontinue to generate cash from operations to sustain our efforts in New Mexico.

 

In 2008, we had to adjustour plans in response to changes in the uranium market. Operating margins fromour production are impacted by uranium prices and costs. Although uraniumprices escalated rapidly from 2004 to 2007, so did costs. In 2008, while pricesdeclined, costs did not, leading to a significant decrease in margins. As aresult, in October 2008 we decided to suspend new wellfield development atKingsville and Rosita until sufficient margins can be made to justify the newinvestment required to bring on additional production.

 

*SouthTexas Production:*  At March 31,2009, we had two operating wellfields, both at Kingsville Dome which areexpected to completetheir production over the next several months.  We produced 29,800 pounds of uranium during the firstquarter of 2009.  Current activity atKingsville Dome is primarily focused on the restoration of depleted wellfields.We are also studying the potential of uranium recovery from the by-productmaterial that was generated from prior uranium processing at our KingsvilleDome plant. Such activities may reduce our restoration costs and may result inthe recovery of uranium that could be processed into a saleable product.  The last wellfield at Vasquez was fullydepleted in October 2008 and the project is now undergoing restoration.Production from Rosita was started in June 2008, but was suspended in October 2008due to poor economics driven by increased operating costs as a result oftechnical operating challenges and the decreased price of uranium.

 

The Company believes ithas sufficient in-place mineralized uranium material to produce a total of300,000 to 500,000 pounds U3O8 over a one totwo year period should realized uranium prices recover to the level of $70 perpound U3O8,the current long-term uranium price. A new wellfield typically requires 4 to5 months to install and 9 to 12 months to mine out. The Company hasdeferred all activities for delineating or developing wellfields until astronger pricing environment is realized.

 

*Reservedevelopment:*    Asignificant portion of the cash on hand at December 31, 2008 was generatedfrom the $12.8 million in net proceeds received from the sale of commonstock and warrants in a private placement in May 2008. The equity wasraised to fund the acquisition, exploration, permitting and development of newand existing properties in South 

 

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Texas to increase our resource base in an effort toextend production at our Texas operations beyond 2009 as well as for generalcorporate purposes.

 

During 2008, we conducteddrilling activities on several of our exploration targets including280 holes on the Marshall property, 100 holes at the South Rosita propertyand 13 holes on the Cooke property. We found significant mineralization on theMarshall property, however, further evaluations need to be completed todetermine if this property can be mined by ISR methods. We also have completedsome initial drilling on the Mosser property. At Kingsville, we conductedexploration drilling on our potential extension to Production Area Authorization 2(known as PAA2 extension), but suspended drilling in the fourth quarter due topoor results. A preliminary program to identify additional reserves withinProduction Area 3 have had mixed results to-date and have been put on hold.

 

Due to higher productioncosts, combined with geologic and technical risk and unknown market risk, wehave chosen to suspend our exploration activities until the economics justifyfurther activity. We are seeking opportunities for the rights to potentialuranium properties in South Texas in geographic areas that have historicallyheld significant uranium resources. There is no assurance that we will besuccessful in the acquisition of such properties, or if acquired, that suchproperties will contain commercially viable uranium deposits.

 

**Financial Condition and Results ofOperations**

***Comparison of ThreeMonths Ended March 31, 2009 and 2008***

 

*Productionand production costs. *In the first quarter of 2009, we produced 29,800pounds and received positive inventory adjustments of 1,800 pounds. Production in the first quarter of 2008 was 83,400; 4,300 pounds from Vasquezand 79,100 from Kingsville Dome.  We ceased production at Vasquez anddeferred additional development of new wellfields at Kingsville Dome in thefourth quarter of 2008.  This resulted inthe reduction in production in the first quarter of 2009 compared to 2008.  We have two wellfields under production atKingsville Dome whose production is expected to be completed over the nextseveral months.

 

The following table detailsour production and production cost breakdown for the three months ended March 31,2009 and 2008.

 
| ** **                        | ** ** | **Three Months Ended  March 31,** | ** ** |
|-----------------------------------|------------|--------------------------------------------------|------------|
| ** **                        | ** ** | **2009**                                         | ** ** | **2008** | ** ** |
| **Total uranium production**      |       | 31,600                                           |       | 83,400 |   |
| ** **                        | ** ** | ** **                                       | ** ** | ** ** | ** ** |
| Total operating costs             |       | $                                                | 635,000    |   | $ | 1,912,000 |   |
| Per pound operating costs         |       | $                                                | 20.11      |   | $ | 22.94 |   |
| Total deprec. and depletion costs |       | $                                                | 162,000    |   | $ | 2,238,000 |   |
| Per pound DD&A cost           |       | $                                                | 5.12       |   | $ | 26.85 |   |
| Total production cost             |       | $                                                | 797,000    |   | $ | 4,150,000 |   |
| Production cost per pound         |       | $                                                | 25.23      |   | $ | 49.78 |   |

 

Total operating costs,total depreciation and depletion costs and total production costs incurred forthe periods presented above differ from the cost of uranium sales recorded inconsolidated statements of operations because of changes in the amounts recordedto inventory for the same periods.  The cost of uranium sales includes thesales of uranium inventory on hand at the beginning of the period and does notinclude certain uranium produced during the period that was not sold at periodend.

 

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Reconciliation of production costs to cost of uranium sales:

 
| ** **                                             | ** ** | **Three Months Ended  March 31,** | ** ** |
|--------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                             | ** ** | **2009**                                         | ** ** | **2008** | ** ** |
| Operating costs                                        |       | $                                                | 635,000    |   | $ | 1,912,000 |   |
| Change in uranium inventory                            |       | 235,000                                          |       | 216,000 |   |
| Operating expense for uranium production sold     |       | $                                                | 870,000    |   | $ | 2,127,000 |   |
|                                                   |       |                                             |       |   |   |
| Depreciation and depletion costs                       |       | $                                                | 162,000    |   | $ | 2,238,000 |   |
| Change in uranium inventory                            |       | 69,000                                           |       | (307,000 | ) |
| Depreciation and depletion for uranium production sold |       | $                                                | 231,000    |   | $ | 1,931,000 |   |
|                                                   |       |                                             |       |   |   |
| Total production costs                                 |       | $                                                | 797,000    |   | $ | 4,150,000 |   |
| Change in uranium inventory                            |       | 304,000                                          |       | (92,000 | ) |
| Direct cost of uranium production sold            |       | $                                                | 1,101,000  |   | $ | 4,058,000 |   |

 

*UraniumSales. *Inthe first quarter of 2009, we sold 27,600 pounds generating revenue of $1.422million ($51.51 per pound), compared with sales of 81,100 pounds in the sameperiod of 2008 for revenue of $5.732 million ($70.66 per pound).  Thedecrease in sales revenue was the result of the reduction in pounds sold, aswell as from lower prices we received as a result of lower uranium marketprices in the first quarter 2009 compared to the prior year’s quarter.

 

*Cost ofUranium Sales. *Our cost of uranium sales from the sale of produced uranium in thefirst quarter of 2009 was $1.5 million compared with $5.0 million in the sameperiod of 2008.  Total cost of uranium sales includes royalties andcommissions related to our uranium sales, production costs, including operatingexpenses, depreciation and depletion expenses and amortization of ourrestoration and reclamation cost estimates.  The following table detailsthe direct cost of uranium sales and royalties and commissions breakdown forthe three months ended March 31, 2009 and 2008.

 
| ** **                                  | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                  | ** ** | **2009**                                         | ** ** | **2008** | ** ** |
| **Total pounds sold**                       |       | 27,600                                           |       | 81,100 |   |
| Total operating expenses                    |       | $                                                | 870,000    |   | $ | 2,127,000 |   |
| Per pound operating expense                 |       | $                                                | 31.50      |   | $ | 26.22 |   |
| Depreciation and depletion                  |       | $                                                | 231,000    |   | $ | 1,931,000 |   |
| Per pound DD&A expense                  |       | $                                                | 8.38       |   | $ | 23.80 |   |
| Direct cost of uranium production sold |       | $                                                | 1,101,000  |   | $ | 4,058,000 |   |
| Direct cost of sales per pound              |       | $                                                | 39.88      |   | $ | 50.02 |   |
|                                        |       |                                             |       |   |   |
| **Royalties and commissions**               |       | $                                                | 139,000    |   | $ | 560,000 |   |
| Royalties and commissions per pound    |       | $                                                | 5.02       |   | $ | 6.91 |   |

 

We saw a decrease in ouroverall production costs in the first quarter of 2009 compared to 2008. Our2009 production was sourced from the remaining two wellfields at KingsvilleDome and was supplemented by nominal amounts derived from finalized assaying ofprior Vasquez shipments.  The costdecreases seen in the first quarter resulted from significant operating costreductions made beginning in the fourth quarter of 2008 along with the impactof the impairment of our uranium assets in 2008 and 2009.  The impairment provisions reduced the amountof capital costs attributable to our uranium properties and resulted in thelower cost per pound attributable to depreciation and depletion in the currentperiod. Our cost of sales for the current quarter also included stand-by costsat Vasquez and Rosita of approximately $39,000.

 

The 2008 production fromKingsville Dome was sourced from wellfields in their latter stages ofproduction as well as from new less prolific wellfields compared to priorproduction. These changes resulted in an increase in our costs. Alsocontributing to higher costs in 2008 was initial production from a newwellfield at Vasquez, which began production in March 2008. HistoricallyVasquez has had lower recovery factors than Kingsville Dome and this factor hascontributed to increased operating and capital costs. Our average cost ofpounds sold in the first quarter of 2008 was $50.02 per pound with KingsvilleDome production contributing approximately 95% and Vasquez pounds totalingapproximately 5% of total pounds 

 

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sold during the quarter.  Our cost of sales for the first quarter of2008 also included stand-by costs at Vasquez and Rosita of approximately$425,000 ($5.24 per pound) associated with pre-operating activities anddepreciation at these projects in advance of the start-up of new wellfields ateach location.

 

*Royaltiesand Commissions.*    Duringthe first quarter of 2009, royalties and commissions for Vasquez and KingsvilleDome production sold totaled $139,000, representing 9.8% of sales. During thefirst quarter of 2008, royalties and commissions for Vasquez and KingsvilleDome production sold totaled $560,000, representing 9.8% of sales.

 

*OperatingExpenses.*    Duringthe first quarter of 2009, operating expenses for Vasquez and Kingsville Domeproduction sold was $870,000. During this period we incurred approximately$39,000 of stand-by costs related to our Vasquez and Rosita projects with suchcosts charged to operations. During the first quarter of 2008, operatingexpenses for Vasquez and Kingsville Dome production sold was $2.201 million.During this period we incurred approximately $425,000 of stand-by costs relatedto our Vasquez and Rosita projects with such costs charged to operations.

 

*Depreciationand Depletion.*    Duringthe first quarter of 2009, we incurred depreciation and depletion expenseattributable to our Vasquez and Kingsville Dome production of $172,000. Duringthe same period in 2008, we incurred depreciation and depletion expenseattributable to our Vasquez and Kingsville Dome production of $1.931 million.

 

*Impairmentof Uranium Properties.*    During the first quarter of 2009 and 2008, wedetermined the carrying value of our uranium assets exceeded their fair valueas provided in SFAS 144 “Accounting for the Impairment or Disposal ofLong-Lived Assets”. Such determination resulted in an impairment provision ofapproximately $182,000 and $136,000 in 2009 and 2008, respectively.

 

*Accretionand Amortization of Future Restoration Costs.*    Accretion and amortization offuture restoration costs in the first quarter of 2009 and 2008 was $144,000 and$207,000, respectively.

 

*Generaland Administrative Charges.*  We incurred general and administrative chargesand corporate depreciation of $1.5 million and $2.7 million, respectively inthe three months ended March 31, 2009 and 2008.

 

Significant expendituresfor general and administrative expenses for the three months ended March 31,2009 and 2008 were:

 
| ** **                                 | ** ** | **Three Months Ended  March 31,** | ** ** |
|--------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                 | ** ** | **2009**                                         | ** ** | **2008** | ** ** |
| Stock compensation expense                 |       | $                                                | 160,000    |   | $ | 654,000 |   |
| Salaries and payroll burden                |       | 596,000                                          |       | 840,000 |   |
| Legal, accounting, public company expenses |       | 288,000                                          |       | 283,000 |   |
| Insurance and bank fees                    |       | 132,000                                          |       | 143,000 |   |
| Consulting and professional services       |       | 156,000                                          |       | 501,000 |   |
| Office expenses                            |       | 66,000                                           |       | 175,000 |   |
| Travel and other expenses                  |       | 43,000                                           |       | 106,000 |   |
| Total                                      |       | $                                                | 1,441,000  |   | $ | 2,702,000 |   |

 

The non-cash compensationexpense recorded for the quarter ended March 31, 2009 and 2008 resultedfrom the adoption of SFAS 123(R) in January 2006, requiring therecognition of expense related to the Company’s stock option and restrictedstock grants.

 

Salary and payroll costsdecreases for the three months presented resulted primarily from a reduction insalaried positions primarily in South Texas and New Mexico in conjunction withcost cutting moves which began in the fourth quarter of 2008.

 

The costs for consultingand professional services decreased in the quarter ended March 31, 2009compared with 2008 and resulted from the cost cutting moves which began in thefourth quarter of 2008.  The activitiesincurred in the first quarter of 2008 included work performed in the review andassessment of our New Mexico property data bases to evaluate their potentialas conventional mining projects and other costs related to communityoutreach and information campaigns designed to enhance public awareness of ourplanned New Mexico operations.  We alsoincurred increased costs for environmental, health and safety training,investor relations and media relations activities and for human resources andcomputer networking consultants.

 

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Decreased office costsincurred in the quarter ended March 31, 2009 compared to 2008 resultedprimarily from the closure of our corporate offices in Corpus Christi, Texasand Albuquerque, New Mexico in the third and fourth quarters of 2008,respectively.

 

    *Net Losses.*For the three months ended March 31,2009 and 2008, we had net losses of $1.6 million and of $1.8 million,respectively.

 

*CashFlow. *At ofMarch 31, 2009 we had a cash balance of approximately $10.1 millioncompared with $5.2 million at the same date in 2008.

 

In the first quarter of2009, we had cash used in operations of $1.6 million. We used $214,000 ininvesting activities during the first quarter of 2009.  We increased thecollateral supporting our South Texas financial surety requirements by $43,000and made additions to our South Texas and New Mexico property, plant andequipment of $171,000 during the quarter.  These expenditures wereprimarily for land and mineral lease payments during the quarter.

 

In the first quarter of2008, we had positive cash flow provided by operations of $808,000. We used$4.8 million in investing activities during the first quarter of 2008.  Weincreased the collateral supporting our South Texas financial suretyrequirements by $325,000 and also made significant additions to our South Texasand New Mexico property, plant and equipment of $4.5 million during thequarter.  These expenditures were primarily for wellfield development, forevaluation drilling and plant and dryer upgrades at Kingsville Dome of $2.2million and for wellfield development, evaluation drilling and plant and dryer upgradesat Rosita of $1.7 million, for additional wellfield development at Vasquez of$153,000, for other Texas property and for other assets and other propertyadditions in New Mexico of $347,000.

 

**Liquidity—Cash Sources and Uses for2009**

 

As of March 31, 2009we had $10.1 million in cash compared to $12.0 million at December 31,2008.  The cash at March 31, 2009was generated from operations as well as the $12.8 million in net proceedsreceived from the sale of common stock and warrants in a private placement in May 2008.

 

The Company used$1.6 million in cash from operations during the first quarter of 2009.With falling sales prices and higher production costs, the Company decided tosuspend the development of new wellfields at Kingsville Dome and Rosita as of October 2008.As such, sales revenue for the Company will be limited to the remainingproduction that is expected to be completed over the next several months.

 

In the second half of2008, we took significant steps to decrease our cost structure by implementingtighter spending controls, closing two offices, reducing employment, limitingexploration activities, and reducing public and government relations activitiesin New Mexico and Texas. Our objective is to reduce our cash requirements to alevel that allows us to sustain our reclamation activities and continue therequisite activities in New Mexico to advance our projects toward productionwithout needing outside sources of capital through 2010.  The Company is also evaluating certain assetsto determine if they can be better utilized and/or monetized.

 

**Contingent Liabilities—Off BalanceSheet Arrangements**

 

The Company has obtainedfinancial surety relating to certain of its future restoration and reclamationobligations as required by the State of Texas regulatory agencies. The Companyhas bank Letters of Credit (the “L/C’s) and performance bonds issued for thebenefit of the Company to satisfy such regulatory requirements. The L/C’s wereissued by Bank of America and the performance bonds have been issued by UnitedStates Fidelity and Guaranty Company (“USF&G”). L/C’s for $5.7 million and$5.6 million were issued at March 31, 2009 and December 31, 2008,respectively, such L/C’s are collateralized in their entirety by certificatesof deposit.

 

Performance bondstotaling $2.8 million were issued for the benefit of the Company at March 31,2009 and December 31, 2008. USF&G has required that the Companydeposit funds collateralizing a portion of the bonds. The amount of bondingissued by USF&G exceeded the amount of collateral by $2.5 million at March 31,2009 and December 31, 2008, respectively. In the event that USF&G isrequired to perform under its bonds or the bonds are called by the stateagencies, the Company would be obligated to pay any expenditure in excess ofthe collateral.

 

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**Critical Accounting Policies**

 

Our significantaccounting policies are described in Note 2 to the consolidated financialstatements included in the Company’s 2008 Annual Report on Form 10-K. We believe our most critical accounting policies involve those requiring theuse of significant estimates and assumptions in determining values orprojecting future costs.

 

Specifically regardingour uranium properties, significant estimates were utilized in determining thecarrying value of these assets. These assets have been recorded at theirestimated net realizable value for impairment purposes on a discounted cashflow analysis, which is less than our cost. The actual value realized fromthese assets may vary significantly from these estimates based upon marketconditions, financing availability and other factors.

 

Regarding our reserve forfuture restoration and reclamation costs, significant estimates were utilizedin determining the future costs to complete the groundwater restoration andsurface reclamation at our mine sites.  The actual cost to conduct theseactivities may vary significantly from these estimates.

 

Such estimates andassumptions affect the reported amounts of assets and liabilities anddisclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of expenses during the reporting period.

 

**ITEM 3.****                                                    ****QUANTITATIVE ANDQUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

**Uranium Price Volatility**

 

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

 

The spot market price foruranium has demonstrated a large range since January 2001. Prices haverisen from $7.10 per pound at January 2001 to a high of $136.00 per poundin June 2007 and were $46.00 per pound as of May 4, 2009.

 

**ITEM 4.****                                                    ****CONTROLS AND PROCEDURES**

 

During the year ended December 31,2008 and the three months ended March 31, 2009, the Company’s management,with the participation of the Chief Executive Officer and Chief FinancialOfficer of the Company, carried out an evaluation of the effectiveness of thedesign and operation of the Company’s disclosure controls and procedures (asdefined in Rules 13a-15(e) and 15d-15(e) of the SecuritiesExchange Act of 1934, as amended (the “Exchange Act”)).

 

Based on that evaluation,our Chief Executive Officer and Chief Financial Officer concluded that ourdisclosure controls and procedures as of December 31, 2008 and March 31,2009 were effective.

 

**Management’s Report on InternalControl over Financial Reporting**

 

The Company’s managementassessed the effectiveness of the Company’s internal control over financialreporting as of December 31, 2008. In making this assessment, the Company’s management used the criteriaset forth by the Committee of Sponsoring Organizations of the Treadway Commission(COSO) in *Internal Control-IntegratedFramework*.

 

Under the supervision andwith the participation of our management, including our Chief Executive Officerand Chief Financial Officer, we conducted an evaluation of the effectiveness ofour internal control over financial reporting in connection with preparation ofthe annual report on Form 10-K for the year ended December 31, 2008.As a result of these assessments management concluded that our internalcontrols over financial reporting were effective as of December 31, 2008.

 

**Changes in Internal Controls**

 

During the first threemonths of 2009 no material changes have been made in our internal control overfinancial reporting that may have materially affected, or are reasonably likelyto materially affect, our internal control over financial reporting.

 

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**PART II - OTHER INFORMATION**

 

**ITEM 1.****                            ****LEGAL PROCEEDINGS**

 

OnApril 17, 2009, a three-judge panel of the United States Court of Appealsfor the Tenth Circuit issued a decision holding that Section 8 of URI’sChurchrock property in New Mexico is Indian country.  One of the members of the paneldissented.  Section 8 is owned infee by URI’s subsidiary Hydro Resources, Inc. Indian country falls underthe jurisdiction of the United States Environmental Protection Agency (USEPA),and not the State of New Mexico, to administer the Underground InjectionControl (UIC) program permit which URI requires for in situ recovery (ISR)mining of that property. The jurisdictional dispute originated among the Stateof New Mexico, the USEPA and the Navajo Nation and was initially taken to theTenth Circuit Court of Appeals which in January 2000 remanded it to theUSEPA. In February 2007, the USEPA reached a decision, which the Companysubsequently appealed to the Tenth Circuit, that Section 8 is Indiancountry, and therefore under its jurisdiction to administer the UIC programpermit. The Company is evaluating its alternatives on this matter.

 

**ITEM 1A.****                   ****RISK FACTORS**

 

**Over 28.9%of our shares of Common Stock are controlled by Principal Stockholders andManagement.**

 

Approximately21.0% of our Common Stock is controlled by two stockholders of record. Inaddition, our directors and officers are the beneficial owners of about 7.9% ofour Common Stock. This includes with respect to both groups shares that may bepurchased upon the exercise of outstanding options. Such ownership by theCompany’s principal shareholders, executive officers and directors may have theeffect of delaying, deferring, preventing or facilitating a sale of the Companyor a business combination with a third party.

 

Theavailability for sale of a large amount of shares may depress the market pricefor our Common Stock.

 

**ITEM 2.****                            ****UNREGISTERED SALES OF EQUITYSECURITIES AND USE OF PROCEEDS**

 

Atotal of 142,680 shares of restricted stock were granted to five executiveofficers on January 2, 2009 at a price of $0.615 per share.  The issuance price is determined by theaverage closing price of the last ten trading days of the previous quarter.  All of these shares vest one year from thedate of grant.

 

**ITEM 3.****                            ****DEFAULTS UPON SENIORSECURITIES.**

 

None

 

**ITEM 4.****                            ****SUBMISSION OF MATTERS TO AVOTE OF SECURITY HOLDERS.**

 

None

 

**ITEM 5.****                            ****OTHER INFORMATION.**

 

None

 

**ITEM 6.****                            ****EXHIBITS**

 

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

 

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**SIGNATURES**

 

Pursuantto the requirements of the Securities Exchange Act of 1934, the Registrant hasduly caused this report to be signed on its behalf by the undersigned thereuntoduly authorized.

 
|                          | **URANIUM  RESOURCES, INC.** |
|--------------------------|------------------------------|
|                     |                         |   |
| Dated: May 11, 2009 | By:                          | /s/ David N. Clark |
|                     |                         | David N. Clark |
|                     |                         | Director and |
|                     |                         | Chief Executive Officer |
|                     |                         |   |
| Dated: May 11, 2009 | By:                          | /s/ Thomas H. Ehrlich |
|                     |                         | Thomas H. Ehrlich |
|                     |                         | Vice President - Finance  and |
|                     |                         | Chief Financial Officer |
|                     |                         | (Principal Financial  and Accounting Officer) |

 

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**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).                 |
|                |       |                                                                                                                                                                                                                                                              |
| 10.12*              |       | 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).                                                    |
|                |       |                                                                                                                                                                                                                                                              |
| 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).                                                                                                   |

 

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| 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). |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.27.1* |   | 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).                                  |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.33*   |   | 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                                                                                                                                                                                              |

 

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|   |   | 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.                                                                                                                                                       |

 

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

 

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