Table of Contents

 

 

 

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

 

**FORM 10-Q**

 

x       **Quarterly report pursuant to Section 13 or15(d) of the Securities Exchange Act of 1934**

 

**For the quarterly period ended March 31,2010**

 

**Or**

 

**o**         **Transition report pursuant to Section 13 or15(d) of the Securities Exchange Act of 1934**

 

**For the transition periodfrom                to              **

 

**Commission file number 0-17171**

 

**URANIUM RESOURCES, INC.**

(Exact Name of Issuer as Specified in Its Charter)

 

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

 

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

(Address of Principal Executive Offices)

 

**(972) 219-3330**

(Issuer’s Telephone Number, Including Area Code)

 

Indicateby check mark whether the registrant (1) has filed all reports required tobe filed by Section 13 or 15(d) of the Securities Exchange Act of1934 during the preceding 12 months (or for such shorter period that theregistrant was required to file such reports), and (2) has been subject tosuch filing requirements for the 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 ofthis chapter) during the preceding 12 months (or for such shorter period thatthe registrant was required to submit and post suchfiles).   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) |   |                              |

 

Indicateby check mark whether the registrant is a shell company (as defined in Rule 12-b2of the Exchange Act).   Yes o   No x

 

Indicatethe number of shares outstanding of each of the issuer’s classes of commonstock, as of the latest practicable date.

 

| **Title of Each Class of Common Stock** | ** ** | **Number of Shares Outstanding** |
|-----------------------------------------------------------------------|------------|-------------------------------------------------|
| Common Stock,  $0.001 par value                                       |       | 56,921,363 as of  May 7, 2010              |

 

 

 

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**URANIUM RESOURCES, INC.**

 

**2010 FIRST QUARTERLY REPORT ON FORM 10-Q**

 

**TABLE OF CONTENTS**

 
| **PART I—FINANCIAL INFORMATION** |                                                                                                               |
|--------------------------------------------|--------------------------------------------------------------------------------------------------------------------|
|                                       |                                                                                                               |   |
| Item  1.                                   | Financial Statements                                                                                               |   |
|                                       |                                                                                                               |   |
|                                       | Condensed Consolidated Balance  Sheets- March 31, 2010 (Unaudited) and December 31, 2009                 | 3 |
|                                       |                                                                                                               |   |
|                                       | Condensed Consolidated  Statements of Operations—three months ended March 31, 2010 and 2009  (Unaudited) | 5 |
|                                       |                                                                                                               |   |
|                                       | Condensed Consolidated  Statements of Cash Flows—three months ended March 31, 2010 and 2009  (Unaudited) | 6 |
|                                       |                                                                                                               |   |
|                                       | Notes to  Condensed Consolidated Financial Statements—March 31, 2010 (Unaudited)                         | 7 |
|                                       |                                                                                                               |   |
| Item 2.                                    | Management’s  Discussion and Analysis of Financial Condition and Results of Operations                        | 13 |
|                                       |                                                                                                               |   |
| Item 3.                                    | Quantitative  and Qualitative Disclosures About Market Risk                                                        | 18 |
|                                       |                                                                                                               |   |
| Item 4.                                    | Controls and  Procedures                                                                                           | 19 |
|                                       |                                                                                                               |   |
| **PART II—OTHER INFORMATION**    | 20                                                                                                                 |
|                                       |                                                                                                               |   |
| Item 1.                                    | Legal Proceedings                                                                                                  | 20 |
|                                       |                                                                                                               |   |
| Item 1A.                                   | Risk Factors                                                                                                       | 20 |
|                                       |                                                                                                               |   |
| 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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**URANIUM RESOURCES, INC.**

**CONDENSED CONSOLIDATED BALANCE SHEETS**

**ASSETS**

**(Unaudited)**

 
| ** **                                               | ** ** | **March 31,  2010** | ** ** | **December 31,  2009** | ** ** |
|----------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| Current  assets:                                         |       |                     |       |                        |       |
| Cash  and cash equivalents                               |       | $                        | 3,845,435  |                        | $          | 6,092,068 |   |
| Receivables,  net                                        |       | 3,369                    |       | 63,890                      |       |
| Prepaid  and other current assets                        |       | 208,412                  |       | 125,400                     |       |
| Total  current assets                                    |       | 4,057,216                |       | 6,281,358                   |       |
|                                                     |       |                     |       |                        |       |
| Property,  plant and equipment, at cost:                 |       |                     |       |                        |       |
| Uranium  properties                                      |       | 81,536,814               |       | 82,212,719                  |       |
| Other  property, plant and equipment                     |       | 926,790                  |       | 886,992                     |       |
| Less-accumulated  depreciation, depletion and impairment |       | (63,654,968              | )          | (64,155,311                 | )          |
| Net  property, plant and equipment                       |       | 18,808,636               |       | 18,944,400                  |       |
|                                                     |       |                     |       |                        |       |
| Long-term  investment:                                   |       |                     |       |                        |       |
| Certificates  of deposit, restricted                     |       | 6,802,344                |       | 6,786,000                   |       |
|                                                     |       | $                        | 29,668,196 |                        | $          | 32,011,758 |   |
|                                                          |            |                          |            |                             |            |  |  |  |

 

The accompanying notes to financial statements are an integral part ofthese condensed consolidated statements.

 

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**LIABILITIES AND SHAREHOLDERS’ EQUITY**

**(Unaudited)**

 
| ** **                                                                                                                                                                                              | ** ** | **March 31,  2010** | ** ** | **December 31,  2009** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------------------------|------------|-----------------------------|------------|
| Current  liabilities:                                                                                                                                                                                   |       |                     |       |                        |       |
| Accounts  and short term notes payable                                                                                                                                                                  |       | $                        | 592,436    |                        | $          | 641,727 |   |
| Current  portion of restoration reserve                                                                                                                                                                 |       | 1,249,200                |       | 1,236,588                   |       |
| Royalties  and commissions payable                                                                                                                                                                      |       | 666,058                  |       | 693,303                     |       |
| Deferred  compensation                                                                                                                                                                                  |       | 697,028                  |       | —                      |       |
| Accrued  interest and other accrued liabilities                                                                                                                                                         |       | 313,099                  |       | 321,235                     |       |
| Current  portion of capital leases                                                                                                                                                                      |       | 99,373                   |       | 112,559                     |       |
| Total  current liabilities                                                                                                                                                                              |       | 3,617,194                |       | 3,005,412                   |       |
|                                                                                                                                                                                                    |       |                     |       |                        |       |
| Other  long-term liabilities and deferred credits                                                                                                                                                       |       | 4,626,682                |       | 5,487,389                   |       |
|                                                                                                                                                                                                    |       |                     |       |                        |       |
| Long  term capital leases, less current portion                                                                                                                                                         |       | 185,926                  |       | 207,922                     |       |
| Long-term  debt, less current portion                                                                                                                                                                   |       | 450,000                  |       | 450,000                     |       |
| Commitments  and contingencies (Notes 5 and 13)                                                                                                                                                         |       |                     |       |                        |       |
| Shareholders’  equity:                                                                                                                                                                             |       |                     |       |                        |       |
| Common  stock, $.001 par value, shares authorized: 200,000,000; shares issued and  outstanding (net of treasury shares):  2010—56,847,612; 2009—56,781,792 |       | 56,886                   |       | 56,820                      |       |
| Paid-in  capital                                                                                                                                                                                        |       | 148,112,647              |       | 147,837,204                 |       |
| Accumulated  deficit                                                                                                                                                                                    |       | (127,371,721             | )          | (125,023,571                | )          |
| Less:  Treasury stock (38,125 shares), at cost                                                                                                                                                          |       | (9,418                   | )          | (9,418                      | )          |
| Total  shareholders’ equity                                                                                                                                                                        |       | 20,788,394               |       | 22,861,035                  |       |
|                                                                                                                                                                                                    |       | $                        | 29,668,196 |                        | $          | 32,011,758 |   |

 

The accompanying notes to financial statements are an integral part ofthese condensed consolidated statements.

 

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**URANIUM RESOURCES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OFOPERATIONS**

**(Unaudited)**

 
| ** **                                                    | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                    | ** ** | **2010**                                         | ** ** | **2009** | ** ** |
| Revenues:                                                     |       |                                             |       |   |   |
| Uranium  sales                                                |       | $                                                | —     |   | $ | 1,422,390 |   |
| Total  revenue                                                |       | —                                           |       | 1,422,390 |   |
| Costs  and expenses:                                          |       |                                             |       |   |   |
| Cost  of uranium sales                                        |       |                                             |       |   |   |
| Royalties  and commissions                                    |       | —                                           |       | 138,715 |   |
| Operating  expenses                                           |       | 141,858                                          |       | 869,949 |   |
| Accretion/amortization  of restoration reserve                |       | 37,407                                           |       | 144,002 |   |
| Depreciation  and depletion                                   |       | 197,487                                          |       | 231,294 |   |
| Impairment  of uranium properties                             |       | 210,447                                          |       | 182,374 |   |
| Exploration  expenses                                         |       | —                                           |       | 773 |   |
| Total  cost of uranium sales                                  |       | 587,199                                          |       | 1,567,107 |   |
| Loss  from operations before corporate expenses               |       | (587,199                                         | )          | (144,717 | ) |
|                                                          |       |                                             |       |   |   |
| Corporate  expenses—                                     |       |                                             |       |   |   |
| General  and administrative                                   |       | 1,723,233                                        |       | 1,441,295 |   |
| Depreciation                                                  |       | 35,016                                           |       | 35,137 |   |
| Total  corporate expenses                                     |       | 1,758,249                                        |       | 1,476,432 |   |
| Loss  from operations                                         |       | (2,345,448                                       | )          | (1,621,149 | ) |
|                                                          |       |                                             |       |   |   |
| Other  income (expense):                                      |       |                                             |       |   |   |
| Interest  expense                                             |       | (7,923                                           | )          | (11,228 | ) |
| Interest  and other income, net                               |       | 5,221                                            |       | 58,712 |   |
|                                                          |       |                                             |       |   |   |
| Net  loss                                                     |       | $                                                | (2,348,150 | ) | $ | (1,573,665 | ) |
|                                                          |       |                                             |       |   |   |
| Net  loss per common share:                                   |       |                                             |       |   |   |
| Basic                                                         |       | $                                                | (0.04      | ) | $ | (0.03 | ) |
| Diluted                                                       |       | $                                                | (0.04      | ) | $ | (0.03 | ) |
|                                                          |       |                                             |       |   |   |
| Weighted  average common shares and common equivalent shares: |       |                                             |       |   |   |
| Basic                                                         |       | 56,845,418                                       |       | 56,096,644 |   |
| Diluted                                                       |       | 56,845,418                                       |       | 56,096,644 |   |

 

The accompanying notes to financial statements are an integral part ofthese condensed consolidated statements.

 

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**URANIUM RESOURCES, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OFCASH FLOWS**

**(Unaudited)**

 
| ** **                                                          | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                                          | ** ** | **2010**                                         | ** ** | **2009** | ** ** |
| Net  loss                                                           |       | $                                                | (2,348,150 | ) | $ | (1,573,665 | ) |
| Reconciliation  of net earnings to cash used in by operations— |       |                                             |       |   |   |
| Accretion/amortization  of restoration reserve                      |       | 37,407                                           |       | 144,002 |   |
| Depreciation  and depletion                                         |       | 232,503                                          |       | 266,431 |   |
| Impairment  of uranium properties                                   |       | 210,447                                          |       | 182,374 |   |
| Decrease  in restoration and reclamation accrual                    |       | (349,549                                         | )          | (586,437 | ) |
| Stock  compensation expense                                         |       | 275,509                                          |       | 159,736 |   |
| Other  non-cash items, net                                          |       | 14,283                                           |       | — |   |
|                                                                |       |                                             |       |   |   |
| Effect  of changes in operating working capital items—         |       |                                             |       |   |   |
| Decrease  in receivables                                            |       | 60,521                                           |       | 36,211 |   |
| Decrease  in inventories                                            |       | —                                           |       | 234,714 |   |
| (Increase)  decrease in prepaid and other current assets            |       | (83,012                                          | )          | 179,969 |   |
| Decrease  in payables, accrued liabilities and deferred credits     |       | (84,672                                          | )          | (691,326 | ) |
| Net  cash used in operations                                        |       | (2,034,713                                       | )          | (1,647,991 | ) |
|                                                                |       |                                             |       |   |   |
| Investing  activities:                                              |       |                                             |       |   |   |
| Increase  in certificates of deposit, restricted                    |       | (16,344                                          | )          | (43,067 | ) |
| Additions  to property, plant and equipment—                   |       |                                             |       |   |   |
| Kingsville  Dome                                                    |       | (84,141                                          | )          | (68,015 | ) |
| Vasquez                                                             |       | —                                           |       | (71,288 | ) |
| Rosita                                                              |       | (5,945                                           | )          | (14,503 | ) |
| Churchrock                                                          |       | (70,200                                          | )          | (7,261 | ) |
| Other  property                                                     |       | (108                                             | )          | (10,030 | ) |
| Net  cash used in investing activities                              |       | (176,738                                         | )          | (214,164 | ) |
|                                                                |       |                                             |       |   |   |
| Financing  activities:                                              |       |                                             |       |   |   |
| Payments  on borrowings                                             |       | (35,182                                          | )          | (42,405 | ) |
| Net  cash used in financing activities                              |       | (35,182                                          | )          | (42,405 | ) |
| Net  decrease in cash and cash equivalents                          |       | (2,246,633                                       | )          | (1,904,560 | ) |
| Cash  and cash equivalents, beginning of period                     |       | 6,092,068                                        |       | 12,041,592 |   |
| Cash  and cash equivalents, end of period                           |       | $                                                | 3,845,435  |   | $ | 10,137,032 |   |

 

The accompanying notes to financial statements are an integral part ofthese condensed consolidated statements.

 

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**Uranium Resources, Inc.**

**Notes to Condensed ConsolidatedFinancial Statements March 31, 2010 (Unaudited)**

 

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

 

The accompanyingunaudited condensed consolidated financial statements have been prepared inaccordance with accounting principles generally accepted in the United Statesof America for interim financial information and with the instructions to Form 10-Qand Item 310(b) of Regulation S-K.  Accordingly, they do not includeall of the information and footnotes required by accounting principlesgenerally accepted in the United States of America for complete financialstatements.  The accompanying statements should be read in conjunction withthe audited financial statements included in the Company’s 2009 Annual Reporton Form 10-K.  In the opinion of management, all adjustments(consisting of normal recurring accruals) considered necessary for a fairpresentation have been included.  Operating results for the three monthsended March 31, 2010 are not necessarily indicative of the results thatmay be expected for the full year ending December 31, 2010.

 

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

 

Uranium Resources, Inc.(“URI”) was formed in 1977 and domesticated in Delaware in 1987. The Company isprimarily engaged in the business of acquiring, exploring, developing andmining uranium properties, using the *in situ*recovery (“ISR”) or solution mining process. Historically, the primarycustomers of the Company have been major utilities who utilize nuclear power togenerate electricity. At present the Company owns both developed 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 2008 at its Rosita project, each of suchprojects are located in South Texas. As a result of declining uranium marketprices and high production costs, the Company ceased development of additionalwellfields and curtailed production from its South Texas projects as existingproduction wellfields from each project were depleted. Production at ourVasquez and Rosita projects were shut down in the 4th quarter of 2008 and production was shut-in atthe Kingsville Dome project in June 2009. The Vasquez project was minedout in 2008 and is now being restored. At the Kingsville Dome and Rositaprojects, our production shut-in was done to conserve the in-place reserve baseuntil higher prices can be realized.

 

Prior to resumingVasquez production, the Company had been in production stand-by since the firstquarter of 1999 at its Kingsville Dome and Rosita projects. Groundwaterrestoration and reclamation activities have been conducted at these two sitesand are currently ongoing at the Kingsville Dome and Vasquez projects and weare in the stabilization phase of restoration in the first two Production Areasat our Rosita project.

 

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.  During 2009 we continued to significantly decrease our coststructure by implementing tighter spending controls, reducing employment,limiting exploration activities, and reducing public and government relationsactivities in New Mexico and Texas.  The Company expects to raiseadditional capital in 2010 through a financing transaction, the monetization ofnon-core assets or other means.  Absent the ability to complete one ormore of these actions the Company will need to implement significant additionalcost cutting measures designed to maintain the Company’s liquidity through 2010and beyond.  While the Company believes it will be successful in itscapital raising efforts, there can be no assurance that such activities willresult in the raising of sufficient funds to allow the Company to continueoperations through 2010.  However, we do project that with the cash onhand at March 31, 2010 and with the ability to sufficiently reduce ourcontrollable costs we will be able to maintain our liquidity until the firstquarter of 2011.  At such time,additional sources will be required to maintain liquidity.

 

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

 

In January 2010,a total of 65,820 shares of restricted stock were granted to four executiveofficers at a price of $0.809 per share in connection with a cash conservationplan initiated in 2009.  Under the plan,cash compensation was reduced by $53,250 for the quarter.  The issuance price is determined by theaverage closing price of the last ten trading days of the previous quarter. Theshares vest one year from the date of grant.

 

During the firstquarter of 2009, a total of 142,680 shares of restricted stock were granted tofive executive officers at a price of $0.615 per share in connection with acash conservation plan for 2009.  Underthe plan cash compensation was 

 

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reduced by $87,750 forthe quarter.  The issuance price isdetermined by the average closing price of the last ten trading days of theprevious quarter. The shares vested one year from the date of grant. At March 31,2010 all of the shares had vested.

 

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

 

**KingsvilleDome Project**

 

Productionfrom Kingsville Dome for the first quarter of 2010 and 2009 was 0 and 29,800pounds, respectively.  Total capital expenditures for Kingsville Dome forthe first quarter of 2010 and 2009 was $84,000 and $68,000, respectively andwas related to land and mineral lease payments.

 

During June 2009,the two remaining producing wellfields at Kingsville Dome were shut-down as aresult of these wellfields being depleted. We are conducting ongoingrestoration activities at this project and incurred $229,000 in costs for thethree months ended March 31, 2010.

 

**Rosita**

 

We beganproduction at one new wellfield at Rosita in August 2008.  Due topoor economics driven by technical challenges and lower uranium prices,production from this wellfield was shut-in in October 2008.  Capitalexpenditures for the first quarter of 2010 and 2009 were minimal withapproximately $6,000 and $15,000, respectively being spent for land and minerallease payments.

 

**VasquezProject**

 

Production at theVasquez project was shutdown during October 2008. The economicallyrecoverable reserves from this project have been mined out.  We areconducting ongoing restoration activities at this project and incurred $121,000and $202,000 in costs for the quarter ended March 31, 2010 and March 31,2009, respectively.  In the first quarter of 2009 we incurred $71,000 ofcapital expenditures primarily for land and mineral lease payments.

 

**Impairmentof Uranium Properties**

 

At March 31,2010, we determined the carrying value of our project assets at each of ourSouth Texas production locations exceeded their fair value.  A decline inthe market price of uranium and an increase in the estimated costs for each ofour South Texas projects resulted in a decrease in the estimated future cashflow to be generated from each site.  Such determination resulted in animpairment provision of approximately $210,000 for the first quarter of 2010,$160,000 related to Kingsville Dome, $44,000 related to Vasquez and $6,000 forRosita.  The net carrying value of the Kingsville Dome, Rosita and Vasquezprojects are approximately $5.6 million, $5.1 million and $532,000 at March 31,2010.

 

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

 

**UraniumSales Contracts**

 

In March 2006we entered into new sales contracts with Itochu Corporation (“Itochu”) and UGU.S.A., Inc. (“UG”) that superseded the previously existing contracts.Each new contract calls for delivery of one-half of our actual production fromour Vasquez property and other properties in Texas currently owned or hereafteracquired by the Company (excluding certain large potential exploration plays).The Itochu contract contains separate pricing terms for the Vasquez propertythat are no longer applicable since Vasquez has reached the end of its usefullife.  Our Texas production will be sold to Itochu at a price equal to theaverage spot price for the eight weeks prior to the date of delivery less $7.50per pound, with a floor for the spot price of $37 and a ceiling of $50 perpound. If the spot price is over $50 per pound the price will be increased by50% of such excess. The floor and ceiling and sharing arrangement over theceiling applies to 3.65 million pounds of deliveries, after which there isno floor or ceiling. Itochu has the right to cancel any deliveries onsix-month’s notice.

 

Under the amendedItochu contract there was potential for reinstatement of the original contractterms if our joint venture with Itochu to develop our Church Rock property inNew Mexico was terminated by us. On March 6, 2009, Itochu terminated theJoint Venture.  The only consequence of the termination was the increaseof the ceiling price for future uranium sales from $43 to $50 per pound.

 

Under the UGcontract all production from our Texas properties will be sold at a price equalto the month-end long-term contract price for the second month prior to themonth of delivery less $6 per pound until (i) 600,000 pounds have been 

 

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sold in a particulardelivery year and (ii) an aggregate of 3 million pounds of Uraniumhas been sold. After the 600,000 pounds in any year and 3 million poundstotal have been sold, UG will have a right of first refusal to purchase otherTexas production at a price equal to the average spot price for a period priorto the date of delivery less 4%.  We paid UG $12 million in cash torestructure its previously existing contract.

 

**6.             STOCK BASED COMPENSATION**

 

Our stock basedcompensation programs consist of stock options granted to employees anddirectors and restricted stock grants made employees.

 

***Stock Compensation Expense***

 

Stock compensationexpense for the three months March 31, 2010 and 2009 was $276,000 and$160,000, respectively. Stock compensation expense is recorded as a componentof general and administrative expenses for each period. The Company did notrecognize a tax benefit from the stock compensation expense because the Companyconsiders it is more likely than not that the related deferred tax assets,which have been reduced by a full valuation allowance, will not be realized.

 

The Black-Scholesoption pricing model was used to estimate the stock option fair values. Theoption pricing model requires a number of assumptions, of which the mostsignificant are, expected stock price volatility, the expected pre-vesting forfeiturerate and the expected option term (the amount of time from the grant date untilthe option or restricted shares are exercised, vest or expire). Expectedvolatility was calculated based upon actual historical stock price movementsthrough the measurement date of the stock option grant. Expected pre-vestingforfeitures were estimated based on actual historical pre-vesting forfeituresover the most recent periods ending March 31, 2010 for the expected term.The expected term was estimated based on historical averages over the mostrecent periods ending March 31, 2010.

 

A total of 50,000stock options were granted in the first quarter of 2010 to a director at anexercise price of $0.76 per share and fair value of $0.73 per option under the2004 Directors’ Plan. The non-employee directors held options covering 781,250shares under the 2004 Directors’ Plan at March 31, 2010.  At March 31, 2010, 331,250 shares wereavailable for future grants under the 2004 Directors’ Plan.

 

No stock optiongrants were made in the first quarter of 2009.

 

A total of 65,820shares of restricted stock were granted in the first quarter of 2010 to fourexecutive officers on January 4, 2010 in connection with a salaryreduction plan initiated in 2009.  All of these shares vest one year fromthe date of grant.  Restricted stock grants are valued using the fairmarket value of the stock on the date of grant. The Company recognized stockcompensation expense for the restricted share grants of approximately $113,000during the first quarter of 2010.

 

A total of 142,680shares of restricted stock were granted in the first quarter of 2009 to fiveexecutive officers on January 2, 2009 in connection with a salaryreduction plan for 2009.  All of these shares vest one year from the dateof grant.  Restricted stock grants are valued using the fair market valueof the stock on the date of grant. The Company recognized stock compensationexpense for the restricted share grants of approximately $29,200 during thefirst quarter of 2009.

 

A total of 70,000shares of restricted stock were granted in the first quarter of 2008. Thevesting with respect to 60,000 of these restricted shares was modified in thefirst quarter of 2009 to provide for immediate vesting. The remaining 10,000restricted shares vest ratably over five years from the date of grant.

 

The totalestimated unrecognized compensation cost from the unvested restricted grants atMarch 31, 2010 was approximately $316,000, which is expected to berecognized over the weighted average vesting period of the individual grantswhich range from 1-4 years.

 

***Stock Options for the Three Months Ended March 31, 2010***

 

The followingtable summarizes stock options outstanding and changes during the three monthperiod ended March 31, 2010:

 

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| ** **                                   | ** ** | **Outstanding Options** | ** ** |
|----------------------------------------------|------------|------------------------------|------------|
| ** **                                   | ** ** | **Number of  Shares**   | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Weighted  Average  Remaining  Contractual  Term –in years** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
|                                         |       |                         |       |   |   |   |   |   |   |
| Options  outstanding at January 1, 2010 |       | 4,406,074                    |       | $ | 2.75 |   |   |   |   |   |
| Granted                                      |       | 50,000                       |       | 0.76 |   |   |   |   |   |
| Exercised                                    |       | —                       |       | — |   |   |   |   |   |
| Canceled  or forfeited                       |       | (132,501                     | )          | 2.82 |   |   |   |   |   |
| Options  outstanding at March 31, 2010  |       | 4,323,573                    |       | $ | 2.73 |   | 5.4 |   | $ | 35 |   |
|                                         |       |                         |       |   |   |   |   |   |   |
| Options  exercisable at March 31, 2010  |       | 3,917,323                    |       | $ | 2.59 |   | 5.0 |   | $ | 35 |   |

 

Shares available forgrant under the Stock Option Plans as of March 31, 2010 were 428,395.

 

Stock optionsoutstanding and currently exercisable at March 31, 2010 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         |       | 2,023,946                                |       | 4.1                                                         |       | $ | 1.28 |   | 2,023,946 |   | $ | 1.28 |   |
| 2004  Stock Incentive Plan         |       | 1,518,314                                |       | 5.9                                                         |       | 3.35 |   | 1,518,314 |   | 3.35 |   |
| Directors’  Stock Option Plan |       | 63                                       |       | 3.3                                                         |       | 0.16 |   | 63 |   | 0.16 |   |
| 2004  Directors’ Plan         |       | 781,250                                  |       | 7.7                                                         |       | 5.26 |   | 375,000 |   | 6.59 |   |
|                               |       | 4,323,573                                |       | 5.4                                                         |       | $ | 2.73 |   | 3,917,323 |   | $ | 2.59 |   |

 

Total estimatedunrecognized compensation cost from unvested stock options at March 31,2010 was approximately $1.021 million, which is expected to be recognized overthe weighted average vesting period of the individual grants which range fromapproximately 2-4 years.

 

On April 1, 2010 a total of 85,000 stock options were granted toemployees under the 2004 Stock Incentive Plan at a price of $0.73 pershare.  These options vest ratably overfour years.

 

***Restricted Stock Grant***

 

On April 1,2010 a total of 73,751 shares of restricted stock were granted to fourexecutive officers at a price of $0.722 per share in connection with the cashconservation plan for 2010.  The issuance price was determined by theaverage closing price of the Company’s common stock for the last ten tradingdays of the previous quarter and these shares vest one year from their date ofgrant.

 

**7.             ASSET RETIREMENT OBLIGATIONS**

 

The followingtable shows the change in the balance of the restoration and reclamationliability during the three months ended March 31, 2010:

 
| Reserve  for future restoration and reclamation costs beginning of period |   | $        | 5,526,949 |   |
|---------------------------------------------------------------------------|--------|----------|-----------|--------|
| Additions  and changes in cash flow estimates                             |   | 161,075  |      |
| Costs  incurred                                                           |   | (349,549 | )         |
| Accretion  expense                                                        |   | 37,407   |      |
| Reserve  for future restoration and reclamation costs at end of period    |   | $        | 5,375,882 |   |

 

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

 

The followingtable details the changes in shareholders equity for the quarter ended March 31,2010:

 
| ** **                        | ** ** | **Common Stock** | ** ** | **Paid-In** | ** ** | **Accumulated** | ** ** | ** **  | ** ** |
|-----------------------------------|------------|-----------------------|------------|-------------|------------|-----------------|------------|-------------|------------|
| ** **                        | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Deficit** | ** ** | **Treasury Stock** | ** ** |
| Balances,  December 31, 2009 |       | 56,781,792            |       | $           | 56,820     |            | $          | 147,837,204 |       | $ | (125,023,571 | ) | $ | (9,418 | ) |
| Net  loss                         |       | —                |       | —      |       | —          |       | (2,348,150  | )          | — |   |
| Stock  compensation expense       |       | —                |       | —      |       | 275,509         |       | —      |       | — |   |
| Restricted  stock issuance        |       | 65,820                |       | 66          |       | (66             | )          |        |       |   |   |
| Balances,  March 31, 2010    |       | 56,847,612            |       | $           | 56,886     |            | $          | 148,112,647 |       | $ | (127,371,721 | ) | $ | (9,418 | ) |

 

SeeNote 6 — Stock Based Compensation, for further discussion of stock compensationexpense and restricted stock issuance.

 

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**10.          EARNINGS PER SHARE**

 

Basic earnings pershare includes no dilution and is computed by dividing income or lossattributed 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.  Potentially dilutive shares of 6,259,666were excluded from the calculation of earning per share because they wereanti-dilutive due to our net loss position for the quarter ended March 31,2010.

 

**11.          TENTH CIRCUIT COURT OF APPEALSDECISION**

 

On April 17,2009, a three-judge panel of the United States Court of Appeals for the TenthCircuit issued a decision holding that Section 8 of URI’s Churchrockproperty in New Mexico is Indian country.  One of the members of the paneldissented.  Section 8 is owned in fee by URI’s subsidiary HydroResources, Inc. Indian country falls under the jurisdiction of the UnitedStates Environmental Protection Agency (USEPA), and not the State of NewMexico, to administer the Underground Injection Control (UIC) program permit,which URI requires for in situ recovery (ISR) mining of that property. Thejurisdictional dispute originated among the State of New Mexico, the USEPA andthe Navajo Nation and was initially taken to the Tenth Circuit Court of Appealswhich in January 2000 remanded it to the USEPA. In February 2007, theUSEPA issued a decision finding that the Churchrock Section 8 property isIndian Country and that the USEPA is the proper authority to issue the UICpermit. The expansive definition of Indian Country adopted by the USEPA mayencompass properties owned by non-Indians within Navajo chapters in New Mexico.If that expansive definition prevails, as much as 84% of our in-placemineralized uranium materials in New Mexico could be deemed to be in IndianCountry, which could subject these properties to the Navajo Nation ban onuranium mining.  The Company petitioned for and was granted an en bancreview of the Tenth Circuit panel’s decision.  Oral arguments werepresented to the Court on January 12, 2010 and we are waiting for theCourt to render a decision.

 

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**12.          COMMITMENTS AND CONTINGENCIES**

 

The Company’smining operations are subject to federal and state regulations for theprotection of the environment, including water quality. These laws areconstantly changing and generally becoming more restrictive. The ongoing costsof complying with such regulations have not been significant to the Company’sannual operating costs. Future mine closure and reclamation costs are providedfor as each pound of uranium is produced on a unit-of-production basis. TheCompany reviews its reclamation obligations each year and determines theappropriate unit charge. The Company also evaluates the status of currentenvironmental laws and their potential impact on its accrual for costs. TheCompany believes its operations are in compliance with current environmentalregulations.

 

The Company isfrom time to time involved in various legal proceedings of a character normallyincident to its business. Management does not believe that adverse decisions inany pending or threatened proceedings will have a material adverse effect onthe Company’s financial condition or results of operations.

 

The Company hasfiled a registration statement under the Securities Act of 1933, as amended, toregister the resale of the shares of its common stock issued in a May 2008private placement. Such shares are subject to certain resale registrationrights that would include penalties in the event the registration statementfails to remain effective. At March 31, 2010, the Company’s registrationstatement was and remains effective.

 

The Company hasentered into Compensation Agreements with Executive Officers of the Companythat provide 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. The Company has an employment agreement with Mr. Donald C.Ewigleben, the Company’s President and CEO, which provides for severancepayments to Mr. Ewigleben upon termination of his employment under certaincircumstances.  Severance payments for Mr. Ewigleben’stermination range from one year’s base salary plus 60% bonus to two years basesalary plus a 60% bonus.  The agreementalso contains certain change of control provisions which provide for two year’sbase salary plus a 60% bonus, continuation of health benefits, acceleration ofunvested stock options and restricted common stock awards and the extension ofexercise periods for stock options by 90 days.

 

In June 2008a suit for declaratory judgment titled, ***Saenz v. URI Inc.,*** was filed in the 105th Judicial District Court, KlebergCounty, Texas by the owners of the mineral estate of property in KlebergCounty, Texas leased to the Company, seeking a declaratory judgment that acertain lease is limited to one specific lot only and does not encompass otheradjacent lands. The Company has a lease on the adjacent lands from the samemineral owners and has produced over 340,000 pounds of uranium from those landsin 2007 and 2008. The Company entered a general denial of the claims. On September 24,2008 the mineral owners amended their suit to include a declaration that bothof the leases held by the Company are not valid. The Company has entered ageneral denial and other specific defenses to the amended complaint. TheCompany has produced uranium from both leases. On November 5, 2008, theCompany engaged in mediation with the plaintiffs but was unable to resolve thematter. The Plaintiffs filed a Motion for Summary Judgment alleging that theleases terminated prior to any production occurring. The Court denied themotion. A trial date has been set for January 2011. The Company willdefend the case vigorously. While the Company believes that each of the leasesis valid, counsel to the Company is unable to predict the outcome of thelitigation. A determination of the invalidity of the lease on the adjacent landson which the Company has previously produced uranium would have a materialadverse affect on the Company’s financial condition.

 

**13.          SUBSEQUENT EVENTS**

 

We have evaluated eventsafter the date of these financial statements, March 31, 2010, through the datethat these financial statements were filed. There were no material subsequent events as of the date of this filing.

 

**ITEM 2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OFFINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

**ForwardLooking 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 under theSecurities Exchange Act of 1934. Forward-looking statements convey our current expectations or forecastsof future events. We intend such forward-looking statements to be covered bythe safe harbor provisions for forward-looking statements contained in thePrivate Securities Litigation Reform Act of 1995.

 

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Forward-lookingstatements are generally identifiable by use of the words “estimate,”“project,” “believe,” “intend,” “plan,” “anticipate,” “expect” and similarexpressions. These forward-looking statements include management’s expectationsregarding our liquidity and burn rate, reserves and mineralized uranium material,timing of receipt of mining permits, production capacity of mining operationsplanned for properties in South Texas and New Mexico and dates for commencementof production at such properties. Our ability to predict results or the actualeffect of future plans or strategies is inherently uncertain. Actual resultscould differ materially from those in forward-looking statements because of,among other reasons, the factors described below and in the periodic reportsthat we file with the SEC from time to time, including Forms 10-K, 10-Q and 8-Kand any amendments thereto. The forward-looking statements are not guaranteesof future performance. They are based on numerous assumptions that we believeare reasonable, but they are open to a wide range of uncertainties and businessrisks.

 

Key factors that couldcause actual results to be different than expected or anticipated include, butare not limited to the price of uranium; weather conditions; operatingconditions at our mining projects; government regulation of the mining industryand the nuclear power industry; the world-wide supply and demand of uranium;availability of capital; timely receipt of mining and other permits fromregulatory agencies; and the risks set forth herein under the caption “RiskFactors.”

 

In light of theserisks, uncertainties and assumptions, you are cautioned not to place unduereliance on forward-looking statements, which speak only as of the date of thisreport. When considering forward-looking statements, you should keep in mindthe cautionary statements in this report. We are not under any obligation, andwe expressly disclaim any obligation, to update or alter any forward-lookingstatements, whether as a result of new information, future events or otherwise,except as required by law. In light of these risks, uncertainties andassumptions, the forward-looking events discussed in or incorporated byreference in this prospectus might not occur.

 

**Overview**

 

URI explores forand produces uranium in South Texas where it has two remaining productionoperations that are currently on stand-by: Kingsville Dome and Rosita. URI alsohas an estimated 101.4 million pounds of in place mineralized uraniummaterial on 183,000 acres in New Mexico. Our operations are heavily influenced bythe price of uranium both on the spot and long-term markets. The spot price ofuranium, which has fluctuated from a high of $136.00 per pound in June 2007to its recent price level of $41.75 per pound, has been the primary driver ofthe strategic decisions of the Company.

 

Our strategy hasbeen focused on two fronts: 1) advancing our New Mexico assets towardsproduction, and 2) expanding our reserve base in Texas so we can generatecash from operations to sustain our efforts in New Mexico.

 

During 2010, thesoftening of uranium market prices that began in early 2008 has continued.  As a result we continued to focus on our cashconservation plan while performing restoration activities in Texas andmaintaining our public and government relations efforts in New Mexico.  During the first quarter of 2010 our Board ofDirectors approved a revised strategic plan which emphasizes the cashconservation program and addresses the Company’s future cash needs, as well asits strategic options for unlocking potential value for shareholders byutilizing its current assets and by evaluating possible regional and structuralsynergies.  Key operational points of theplan for our Texas properties are (i) prepare to be in a position toreturn to production in Texas should the price of uranium return to a levelsufficient to generate positive cash flow; (ii) analyze explorationpotential in South Texas and enhance exploration capabilities; (iii) maintainrestoration activities in South Texas in accordance with existing agreementsand requirements; and (iv) analyze synergistic opportunities and assetmonetization prospects in Texas.

 

*SouthTexas Production:*    Sinceconcluding uranium production from our last remaining wellfields in Texas in July 2009,we no longer have a source of revenue or operational cash flow.  We produced approximately 30,000 pounds ofuranium from our South Texas operations in the first quarter of 2009 butcurrently have no production operations.  Current activity at KingsvilleDome is primarily focused on the restoration of depleted wellfields. The lastwellfield at Vasquez was fully depleted in October 2008 and the project isnow undergoing restoration. Production from Rosita was started in June 2008,but was suspended in October 2008 due to poor economics driven byincreased operating costs as a result of technical operating challenges and thedecreased price of uranium.  We are currently in the stabilization phaseof groundwater restoration at the Rosita project.

 

*Reserve development:*    In May 2008 we generated $12.9 millionin net proceeds from the sale of common stock and warrants in a privateplacement.  The equity was raised to fundthe acquisition, exploration, permitting and development of new and existingproperties in South Texas to increase our resource base in an effort to extendproduction at our Texas operations beyond 2009 and for general corporatepurposes.  These activities were halted when uranium prices declined in2008 and 2009.

 

Due to highercosts, 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 potential 

 

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uranium properties inSouth Texas and New Mexico in geographic areas that have historically heldsignificant uranium resources. There can be no assurance that we will besuccessful in the acquisition of such properties, or if acquired, that suchproperties will contain commercially viable uranium deposits

 

**FinancialCondition and Results of Operations**

***Comparison of Three Months Ended March 31, 2010 and2009***

 

*Productionand production costs. *We had nouranium production in the first quarter of 2010.  In the first quarter of 2009, we produced 29,800pounds and received positive inventory adjustments of 1,800 pounds.

 

Wecompleted production at the Vasquez project and shut-in production at theRosita project in the fourth quarter of 2008 and we shut-in production atthe Kingsville Dome project in the second quarter of 2009. The Vasquez projectwas mined out in 2008 and is now being restored. At the Kingsville Dome andRosita projects, we shut-in production to conserve the in-place reserve base inresponse to a drop in uranium market prices. We do not intend to resumeproduction at these sites until there is a significant recovery of uraniumprices.

 

The followingtable details our production and production cost breakdown for the three monthsended March 31, 2010 and 2009.

 
| ** **                         | ** ** | **Three Months Ended  March 31,** | ** ** |
|------------------------------------|------------|--------------------------------------------------|------------|
| ** **                         | ** ** | **2010(1)**                                      | ** ** | **2009** | ** ** |
| **Total uranium production**       |       | —                                           |       | 31,600 |   |
|                               |       |                                             |       |   |   |
| Total  operating costs             |       | $                                                | 142,000    |   | $ | 635,000 |   |
| Per  pound operating costs         |       | $                                                | N/A        |   | $ | 20.11 |   |
| Total  deprec. and depletion costs |       | $                                                | 197,000    |   | $ | 162,000 |   |
| Per  pound DD&A cost           |       | $                                                | N/A        |   | $ | 5.12 |   |
| Total  production cost             |       | $                                                | 339,000    |   | $ | 797,000 |   |
| Production  cost per pound         |       | $                                                | N/A        |   | $ | 25.23 |   |

 

Total operatingcosts, total depreciation and depletion costs and total production costsincurred for 2009 presented above differ from the cost of uranium salesrecorded in consolidated statements of operations because of changes in theamounts recorded to inventory for the same periods.  The cost of uraniumsales includes the sales of uranium inventory on hand at the beginning of theperiod and does not include certain uranium produced during the period that wasnot sold at period end.

 

----

(1) 2010 operating costs and total depreciation anddepletion costs represent stand-by costs at our Kingsville Dome, Rosita andVasquez facilities.

 

Reconciliation ofproduction costs to cost of uranium sales:

 
| ** **                                              | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                              | ** ** | **2010**                                         | ** ** | **2009** | ** ** |
| Operating  costs                                        |       | $                                                | 142,000    |   | $ | 635,000 |   |
| Change  in uranium inventory                            |       | —                                           |       | 235,000 |   |
| Operating  expense for uranium production sold     |       | $                                                | —     |   | $ | 870,000 |   |
|                                                    |       |                                             |       |   |   |
| Depreciation  and depletion costs                       |       | $                                                | 197,000    |   | $ | 162,000 |   |
| Change  in uranium inventory                            |       | —                                           |       | 69,000 |   |
| Depreciation  and depletion for uranium production sold |       | $                                                | —     |   | $ | 231,000 |   |
|                                                    |       |                                             |       |   |   |
| Total  production costs                                 |       | $                                                | 339,000    |   | $ | 797,000 |   |
| Change  in uranium inventory                            |       | —                                           |       | 304,000 |   |
| Direct  cost of uranium production sold            |       | $                                                | 339,000    |   | $ | 1,101,000 |   |

 

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*UraniumSales. *Forthe first quarter of 2010 we did not have any uranium sales.  In the first quarter of 2009, we sold 27,600pounds generating revenue of $1.422 million ($51.51 per pound).

 

*Cost of Uranium Sales. *Our cost of uranium sales from the sale of produceduranium in the first quarter of 2010 was $587,000 compared with $1.5 million inthe same period of 2009.  Total cost of uranium sales includes royaltiesand commissions related to our uranium sales, production costs, includingoperating expenses, 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, 2010 and 2009.

 
| ** **                                   | ** ** | **Three Months Ended  March 31,** | ** ** |
|----------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                   | ** ** | **2010**                                         | ** ** | **2009** | ** ** |
| **Total pounds sold**                        |       | —                                           |       | 27,600 |   |
| Total  operating expenses                    |       | $                                                | 142,000    |   | $ | 870,000 |   |
| Per  pound operating expense                 |       | $                                                | —     |   | $ | 31.50 |   |
| Depreciation  and depletion                  |       | $                                                | 197,000    |   | $ | 231,000 |   |
| Per  pound DD&A expense                  |       | $                                                | —     |   | $ | 8.38 |   |
| Direct  cost of uranium production sold |       | $                                                | 339,000    |   | $ | 1,101,000 |   |
| Direct  cost of sales per pound              |       | $                                                | —     |   | $ | 39.88 |   |
|                                         |       |                                             |       |   |   |
| **Royalties and commissions**                |       | $                                                | —     |   | $ | 139,000 |   |
| Royalties  and commissions per pound    |       | $                                                | —     |   | $ | 5.02 |   |

 

The costs for thequarter ended March 31, 2010 resulted from shut-in costs at our KingsvilleDome, Rosita and Vasquez projects. Our 2009 production was sourced from theremaining two wellfields at Kingsville Dome and was supplemented by nominalamounts derived from finalized assaying of prior Vasquez shipments.  Wesaw lower depreciation and depletion costs in the first quarter of 2009 becauseof the impact of the impairment of our uranium assets in 2008 and 2009. The impairment provisions reduced the amount of capital costs attributable toour uranium properties and resulted in the lower cost per pound attributable todepreciation and depletion in the current period. Our cost of sales for the firstquarter of 2009 also included stand-by costs at Vasquez and Rosita ofapproximately $39,000.

 

*Royalties and Commissions.*   For the first quarter of 2010, wedid not have any royalties and commissions from uranium sales.  During the first quarter of 2009, royaltiesand commissions for Vasquez and Kingsville Dome production sold totaled$139,000, representing 9.8% of sales.

 

*Operating Expenses.*    During the first quarter of2010, operating expenses resulted from stand-by costs related to our KingsvilleDome, Vasquez and Rosita projects of $142,000 with such costs charged tooperations. During the first quarter of 2009, operating expenses for Vasquezand Kingsville Dome production sold was $870,000. During this period weincurred approximately $39,000 of stand-by costs related to our Vasquez andRosita projects with such costs charged to operations.

 

*Depreciation and Depletion.*    During the first quarter of2010, we incurred stand-by depreciation and depletion expense attributable toour Rosita, Vasquez and Kingsville Dome projects of $197,000. During the sameperiod in 2009, we incurred depreciation and depletion expense attributable toour Vasquez and Kingsville Dome production of $172,000 and $59,000 of stand-bydepreciation and depletion.

 

*Impairmentof Uranium Properties.*    During the first quarter of 2010 and 2009, wedetermined the carrying value of our uranium assets were impaired and recordedan impairment provision of approximately $210,000 and $182,000 in 2010 and2009, respectively.

 

*Accretion and Amortization of Future Restoration Costs.*    Accretion andamortization of future restoration costs in the first quarter of 2010 and 2009was $37,000 and $144,000, respectively.

 

*General and Administrative Charges.*  We incurred general andadministrative charges and corporate depreciation of $1.7 million and $1.5million, respectively in the three months ended March 31, 2010 and 2009.

 

Significantexpenditures for general and administrative expenses for the three months endedMarch 31, 2010 and 2009 were:

 

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| ** **                                  | ** ** | **Three Months Ended  March 31,** | ** ** |
|---------------------------------------------|------------|--------------------------------------------------|------------|
| ** **                                  | ** ** | **2010**                                         | ** ** | **2009** | ** ** |
| Stock  compensation expense                 |       | $                                                | 276,000    |   | $ | 160,000 |   |
| Salaries  and payroll burden                |       | 527,000                                          |       | 595,000 |   |
| Legal,  accounting, public company expenses |       | 594,000                                          |       | 292,000 |   |
| Insurance  and bank fees                    |       | 129,000                                          |       | 132,000 |   |
| Consulting  and professional services       |       | 99,000                                           |       | 153,000 |   |
| Office  expenses                            |       | 48,000                                           |       | 66,000 |   |
| Travel  and other expenses                  |       | 50,000                                           |       | 43,000 |   |
| Total                                       |       | $                                                | 1,723,000  |   | $ | 1,441,000 |   |

 

The non-cash stockcompensation expense recorded for the quarter ended March 31, 2010 and2009 resulted from issuance of stock options and restricted stock. The value ofeach option award is estimated on the date of grant using the Black-Scholesoption-pricing model. The Black-Scholes option-pricing model requires the inputof subjective assumptions, including the expected term of the option award andstock price volatility. The expected term of options granted was derived fromhistorical data on our employee exercise and post-vesting employmenttermination experience. The expected volatility was based on the historicalvolatility of our stock.

 

We made additionalreductions in salary and payroll costs in 2010 compared with 2009. The $68,000,or 11% decrease resulted primarily from a reduction in personnel headcount inconjunction with cost cutting moves which began in the fourth quarter of 2008.

 

The Company’slegal, accounting and public company expenses had a net increase of $302,000 inthe first quarter of 2010 compared with 2009. The primary increase related to asignificant amount of pre-trial legal activities in 2010 related to the Saenzlawsuit, and preparation of the proxy statement in conjunction with the 2010annual meeting.  We also recorded higheraudit and Sarbanes-Oxley Section 404 (“SOX 404”) fees in the firstquarter of 2010 compared to 2009.  Duringthe first quarter of 2010 the board of directors held more meetings than in2009 and added an additional member in January 2010 which increased theyear over year directors related costs.

 

Consulting andprofessional service expenses were reduced in the quarter ended March 31,2010 compared with 2009 as a result of lower public relations costs associatedwith New Mexico community relations and community information educationactivities during the quarter.

 

*Net Losses.*For the three months ended March 31, 2010 and2009, we had net losses of $2.3 million and $1.6 million, respectively.

 

*CashFlow. *At ofMarch 31, 2010 we had a cash balance of approximately $3.8 millioncompared with $10.1 million at the same date in 2009.

 

In the firstquarter of 2010, we had cash used in operations of $2.0 million. We used$176,000 in investing activities during the first quarter of 2010.  Weincreased the collateral supporting our South Texas financial suretyrequirements by $16,000 and made additions to our South Texas and New Mexicoproperty, plant and equipment of $160,000 during the quarter.  These expenditureswere primarily for land and mineral lease payments during the quarter.

 

In the firstquarter of 2009, we had cash used in operations of $1.6 million. We used$214,000 in investing activities during the first quarter of 2009.  Weincreased the collateral supporting our South Texas financial suretyrequirements by $43,000 and made additions to our South Texas and New Mexicoproperty, plant and equipment of $171,000 during the quarter.  Theseexpenditures were primarily for land and mineral lease payments during thequarter.

 

**Liquidity—CashSources and Uses for 2010**

 

The highestpriority objective for us at the moment is to maintain a positive cash positionwhile we await the return of the uranium market and improved prices.  Production ceased in the second quarter of2009 when it was determined that the best economic decision for shareholdersgiven the then current price of uranium was to preserve the asset untilappropriate margins could be made with the expected return of uranium prices.

 

We had $6.1million in cash at year-end 2009 and had $3.8 million at the end of March 2010.  As of December 31, 2009 the Company hadsold its entire uranium inventory and as such, we do not expect any additionalsales revenue or related cash inflows for the Company in 2010.  We had targeted a $6 million annual burnrate, or $500,000 per month, for our core business operations as part of ourcost reduction and cash conservation program which was put in place inlate-2008 and 

 

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continued in 2009. Duringthe first quarter of 2010 we incurred certain non-routine expenditures forlegal matters, trailing operations activities and South Texas project relatedcosts that kept us from reaching the target. We are striving to meet this ratein the second quarter; however, in order to be in a solid position for thereturn of the uranium market and to address certain legal issues, the targetmay be attainable but not sustainable throughout the year.

 

The Companyexpects to raise additional capital in 2010 through a financing transaction,the monetization of non-core assets or other means.  Absent the ability tocomplete one or more of these actions the Company will need to implementsignificant additional cost cutting measures designed to maintain the Company’sliquidity through 2010.  While the Company believes it will be successfulin its capital raising efforts, there can be no assurance that such activitieswill result in the raising of sufficient funds to allow the Company to continueoperations through 2010 and beyond.  However, we do project that with thecash on hand at March 31, 2010 and with significant additional reductionsof our existing costs we will be able to maintain our liquidity until the firstquarter of 2011.  At such time,additional sources will be required to maintain liquidity.

 

**ContingentLiabilities—Off Balance Sheet Arrangements**

 

The Company hasobtained financial surety relating to certain of its future restoration andreclamation obligations as required by the State of Texas regulatory agencies.The Company has bank Letters of Credit (the “L/C’s) and performance bondsissued for the benefit of the Company to satisfy such regulatory requirements.The L/C’s were issued by Bank of America and the performance bonds have beenissued by United States Fidelity and Guaranty Company (“USF&G”). L/C’s for$5,761,000 were issued at March 31, 2010 and December 31, 2009,respectively, such L/C’s are collateralized in their entirety by certificatesof deposit.

 

Performance bondstotaling $2,835,000 were issued for the benefit of the Company at March 31,2010 and December 31, 2009. 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 31,2010 and December 31, 2009, 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.

 

**CriticalAccounting Policies**

 

Our significantaccounting policies are described in Note 2 to the consolidated financialstatements included in the Company’s 2009 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.

 

Specificallyregarding our uranium properties, significant estimates were utilized indetermining the carrying value of these assets. These assets have been recordedat their estimated net realizable value for impairment purposes on a discountedcash flow 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 ourreserve for future restoration and reclamation costs, significant estimateswere utilized in determining the future costs to complete the groundwaterrestoration and surface reclamation at our mine sites.  The actual cost toconduct these activities 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.

 

The accounts ofthe Company are maintained in United States dollars. All dollar amounts in thefinancial statements are stated in United States dollars except whereindicated.

 

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

 

**UraniumPrice Volatility**

 

The Company issubject to market risk related to the market price of uranium. The Company’scash flow has historically been dependent on the price of uranium, which isdetermined primarily by global supply and demand, relative to the Company’scosts of production. Historically, uranium prices have been subject tofluctuation, and the price of uranium has been and will continue to be affectedby numerous factors beyond the Company’s control, including the demand fornuclear power, political and economic conditions, and governmental legislationin uranium producing and consuming countries and production levels and costs ofproduction of other producing companies.

 

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The spot marketprice for uranium has demonstrated a large range since January 2001.Prices have risen from $7.10 per pound at January 2001 to a high of$136.00 per pound in June 2007. The spot market price was $41.75 per poundas of April 26, 2010.

 

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

 

TheCompany maintains disclosure controls and procedures that are designed toensure that information required to be disclosed in its filings with theSecurities and Exchange Commission (SEC) are recorded, processed, summarizedand reported within the time period specified in the SEC’s rules andforms, and that such information is accumulated and communicated to management,including its Chief Executive Officer and Chief Financial Officer, asappropriate, to allow timely decisions regarding required disclosure based onthe definition of “disclosure controls and procedures” as defined in Rule 13a-15(e) promulgatedunder the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Indesigning and evaluating the disclosure controls and procedures, management hasrecognized that any controls and procedures, no matter how well designed andoperated, can provide only reasonable assurance of achieving the desiredcontrol objectives, and management is required to apply judgment in evaluatingits controls and procedures

 

Duringthe fiscal period covered by this report, the Company’s management, with theparticipation of the Chief Executive Officer and Chief Financial Officer of theCompany, carried out an evaluation of the effectiveness of the design andoperation of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and15d-15(e) of the Securities Exchange Act of 1934, as amended (the“Exchange Act”)). Based on that evaluation, our Chief Executive Officer andChief Financial Officer have certified that our disclosure controls andprocedures were effective as of and March 31, 2010.

 

**Management’sReport on Internal Control over Financial Reporting**

 

Managementof the Company is responsible for establishing and maintaining adequateinternal control over financial reporting as defined in Rules 13a-15(f) and15d-15(f) under the Exchange Act. The Company’s internal control overfinancial reporting is designed, under the supervision of the Company’s ChiefExecutive Officer and Chief Financial Officer, to provide reasonable assuranceregarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with accountingprinciples generally accepted in the United States of America (GAAP). TheCompany’s internal control over financial reporting includes those policies andprocedures that: (i) pertain to the maintenance of records that, inreasonable detail, accurately and fairly reflect the transactions anddispositions of the assets of the Company; (ii) provide reasonableassurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with GAAP, and that receipts andexpenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and (iii) providereasonable assurance regarding prevention or timely detection of unauthorizedacquisition, use or disposition of the Company’s assets that could have amaterial effect on the financial statements

 

TheCompany conducted an evaluation of the effectiveness of its internal controlover financial reporting as of December 31, 2009. This evaluation wasbased on the framework in “Internal Control—Integrated Framework” issued by theCommittee of Sponsoring Organizations of the Treadway Commission (COSO). Allinternal control systems, no matter how well designed, have inherentlimitations. Therefore, even those systems determined to be effective canprovide only reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes inaccordance with GAAP.

 

Basedon the Company’s evaluation under the framework in *Internal Control—Integrated Framework*, our Chief ExecutiveOfficer and Chief Financial Officer concluded that internal control overfinancial reporting was effective as of December 31, 2009.

 

**Changesin Internal Controls**

 

Duringthe first three months of 2010 no material changes have been made in ourinternal control over financial reporting that may have materially affected, orare reasonably likely to materially affect, our internal control over financialreporting.

 

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**PART II - OTHER INFORMATION**

 

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

 

**NewMexico Radioactive Material License**

 

In theState of New Mexico, uranium recovery by ISR technology requires a combinedsource and 11e.(2) byproduct material (uranium recovery) license issued bythe United States Nuclear Regulatory Commission (the “NRC” or the“Commission”). We applied for one license covering the properties located inboth the Churchrock and Crownpoint districts collectively known as theCrownpoint Uranium Project (CUP). The Commission issued a uranium recoverylicense for the CUP in January 1998 that allowed licensed ISR operationsto begin in the Churchrock district. In mid-1998, the Commission determinedthat certain interested stakeholders who requested an NRC administrativehearing had standing to raise certain objections to the NRC license. A panel ofadministrative law judges (NRC’s Atomic Safety and Licensing Board (hereinafter“Licensing Board”)) conducted an administrative hearing during 1999. TheLicensing Board upheld the Churchrock Section 8 portion of the NRC licenseand granted our request to defer any dispute on the remaining CUP propertiesuntil we make a decision whether to mine these other properties.

 

TheLicensing Board’s ruling was then appealed to the full Commission. On January 31,2000, the Commission issued an order concurring with the technical,substantive, and legal findings of the Licensing Board, but the Commission alsodetermined that we were required to submit restoration action plans (RAP) foreach CUP project site and that we must proceed with the hearing process for theother New Mexico properties beyond the Churchrock Section 8 project site(i.e. Churchrock Section 17, Unit 1 and Crownpoint). Subsequently, the NRCadministrative hearing was held in abeyance until 2004, pursuant toNRC-supervised settlement negotiations between the parties.

 

In February 2004,the Licensing Board issued an order, which concluded that we must make threespecific changes to our submitted RAP for Churchrock Section 8 in order tocommence uranium recovery operations at Churchrock Section 8. TheCommission accepted our petition for review on two of the three issues andsubsequently issued an order overruling the Licensing Board on these issues.Then, the parties agreed to truncate the number and scope of the issuesremaining for consideration for the remaining three CUP project sites. Sincethen, the Licensing Board and the full Commission has endorsed our NRC licenseand its requirements for the entire CUP.

 

Intervenorsappealed the Commission’s final approved action to the United States Court ofAppeals for the Tenth Circuit. On March 8, 2010 the Tenth Circuit rejectedthe petition and affirmed the action of the Commission in all respects. Withthis decision, the petitioners are permitted to request that the Tenth Circuitrehear the case *en banc* or topetition the United States Supreme Court for a writ of certiorari to hear thecase.

 

**KingsvilleDome Lessor Legal Action**

 

In June 2008a suit for declaratory judgment titled, ***Saenz v. URI Inc.,*** was filed in the 105th Judicial District Court, KlebergCounty, Texas by the owners of the mineral estate of property in KlebergCounty, Texas leased to the Company, seeking a declaratory judgment that acertain lease is limited to one specific lot only and does not encompass otheradjacent lands. The Company has a lease on the adjacent lands from the samemineral owners and has produced over 340,000 pounds of uranium from those landsin 2007 and 2008. The Company entered a general denial of the claims. On September 24,2008 the mineral owners amended their suit to include a declaration that bothof the leases held by the Company are not valid. The Company has entered ageneral denial and other specific defenses to the amended complaint. TheCompany has produced uranium from both leases. On November 5, 2008, theCompany engaged in mediation with the plaintiffs but was unable to resolve thematter. The Plaintiffs filed a Motion for Summary Judgment alleging that theleases terminated prior to any production occurring. The Court denied themotion. A trial date has been set for January, 2011. The Company will defendthe case vigorously. While the Company believes that each of the leases isvalid, counsel to the Company is unable to predict the outcome of thelitigation. A determination of the invalidity of the lease on the adjacentlands on which the Company has previously produced uranium could have amaterial adverse effect on the Company’s financial condition.

 

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

 

The following risk factors supplement the riskfactors set forth in our Form 10-K for the year ended December 31, 2009.

 

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**GeneralRisks and Uncertainties**

 

***We will need to obtain additional financing in order toimplement our business plan, and the inability to obtain it could cause ourbusiness plan to fail.***

 

As of December 31,2009, we had approximately $6.1 million in cash. We will requireadditional financing in order to complete our plan of operations. We may not beable to obtain all of the financing we require. Our ability to obtain additionalfinancing is subject to a number of factors, including the market price ofuranium, market conditions, investor acceptance of our business plan, andinvestor sentiment. These factors may make the timing, amount, terms andconditions of additional financing unattractive or unavailable to us. Inrecognition of current economic conditions and the shut-down of production, wehave significantly reduced our spending, delayed or cancelled plannedactivities and substantially changed our current corporate structure. However,these actions may not be sufficient to offset the detrimental effects of theweak economy and cessation of production, which could result in materialadverse effects on our business, revenues, operating results, and prospects.

 

***The availability for sale of a large amountof shares may depress the market price of our Common Stock.***

 

As of March 31,2010, 56,847,612 shares of our Common Stock were currently outstanding, all ofwhich are registered or otherwise transferable. The availability for sale of alarge amount of shares or conversion of the Company’s outstanding warrants byany one or several shareholders may depress the market price of our CommonStock and impair our ability to raise additional capital through the publicsale of our Common Stock. We have no arrangement with any of the holders of theforegoing shares to address the possible effect on the price of our CommonStock of the sale by them of their shares.

 

***Terms of subsequent financings mayadversely impact our stockholders.***

 

Inorder to finance our working capital needs, we will have to raise funds throughthe issuance of equity or debt securities in the future. We currently have noauthorized preferred stock. Depending on the type and the terms of anyfinancing we pursue, stockholder’s rights and the value of their investment inour Common Stock could be reduced. For example, if we have to issue secureddebt securities, the holders of the debt would have a claim to our assets thatwould be prior to the rights of stockholders until the debt is paid. Intereston these debt securities would increase costs and negatively impact operatingresults.  If the issuance of new securities results in diminished rightsto holders of our common stock, the market price of our common stock could benegatively impacted.

 

***Shareholders could be diluted if we were touse Common Stock to raise capital.***

 

Aspreviously noted, we will need to seek additional capital in the future tosatisfy our working capital requirements.  This financing could involve oneor more types of securities including common stock, convertible debt, preferredstock or warrants to acquire common or preferred stock.  These securitiescould be issued at or below the then prevailing market price for our commonstock.  Any issuance of additional shares of our common stock could bedilutive to existing stockholders and could adversely affect the market priceof our common stock.

 

**ITEM 2.****                            ****UNREGISTERED SALES OFEQUITY SECURITIES AND USE OF PROCEEDS**

 

None

 

**ITEM 3.****                            ****DEFAULTS UPON SENIOR SECURITIES.**

 

None

 

**ITEM 4.****                            ****SUBMISSION OF MATTERS TOA VOTE OF SECURITY HOLDERS.**

 

None

 

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

 

None

 

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

 

See the Index toExhibits on Page E-1 for a listing of the exhibits that are filed as partof this Quarterly Report.

 

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**SIGNATURES**

 

Pursuant to therequirements of the Securities Exchange Act of 1934, the Registrant has dulycaused this report to be signed on its behalf by the undersigned thereunto dulyauthorized.

 
| ** **                | **URANIUM  RESOURCES, INC.** |
|---------------------------|------------------------------|
|                      |                         |
| Dated: May 10,  2010 | By:                          | /s/ Donald C. Ewigleben |
|                      |                         | Donald C. Ewigleben |
|                      |                         | President and Chief  Executive Officer |
|                      |                         |   |
| Dated: May 10,  2010 | 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). |
|                |       |                                                                                                                                                                                                                                                             |
| 4.2*                |       | Form of Warrant to  Purchase Common Stock (filed with the Company’s Form 8-K on May 19,  2008).                                                                                                                                              |
|                |       |                                                                                                                                                                                                                                                             |
| 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).                                  |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.31*   |   | Note Purchase Agreement  dated March 24, 2005 and promissory notes issued thereunder (filed with  the Company’s Annual Report on Form 10-K for the year ended  December 31, 2004, SEC File Number 000-17171).                                                                 |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.32*   |   | Uranium Supply Contract  with UG U.S.A., Inc. dated April 29, 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).                                             |

 

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| 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 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).                                                                                                   |
|   |   |                                                                                                                                                                                                                                                             |
| 10.45* |   | Agreement dated  September 3, 2009 between the Company and David N. Clark (Filed with the  Company’s Form 8-K dated September 4, 2009, SEC File  No. 001-33404).                                                                        |
|   |   |                                                                                                                                                                                                                                                             |
| 10.46* |   | Letter Agreement dated  September 3, 2009 between the Company and Donald C. Ewigleben (Filed  with the Company’s Form 8-K dated September 4, 2009, SEC File  No. 001-33404).                                                            |
|   |   |                                                                                                                                                                                                                                                             |
| 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).                                                                     |
|   |   |                                                                                                                                                                                                                                                             |
| 21*    |   | Subsidiaries of the  Registrant                                                                                                                                                                                                                                  |
|   |   |                                                                                                                                                                                                                                                             |
| 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 byreference pursuant to Rule 12b-32 under the Securities Exchange Act of1934.

 

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