Table of Contents

 

 

 

**SECURITIESAND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

 

**FORM 10-Q**

 

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

 

**For the quarterly period ended June 30, 2010**

 

**Or**

 

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

 

**For the transition periodfrom                to                **

 

**Commission file number 0-17171**

 

**URANIUMRESOURCES, 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 inRule 12-b2 of 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                                        |       | 84,264,256 as of August 9, 2010            |

 

 

 

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**URANIUM RESOURCES, INC.**

 

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

 

**TABLE OFCONTENTS**

 
| **PART I—FINANCIAL INFORMATION** |
|--------------------------------------------|
|                                       |   |   |   |   |
| Item 1.                                    |   | Financial  Statements |   |   |
|                                       |   |   |   |   |
|                                       |   | Condensed Consolidated Balance Sheets- June 30,  2010 (Unaudited) and December 31, 2009 (Unaudited) |   | 3 |
|                                       |   |   |   |   |
|                                       |   | Condensed Consolidated Statements of Operations—three  and six months ended June 30, 2010 and 2009 (Unaudited) |   | 5 |
|                                       |   |   |   |   |
|                                       |   | Condensed Consolidated Statements of Cash Flows—three  and six months ended June 30, 2010 and 2009 (Unaudited) |   | 6 |
|                                       |   |   |   |   |
|                                       |   | Notes to Condensed Consolidated Financial  Statements—June 30, 2010 (Unaudited) |   | 7 |
|                                       |   |   |   |   |
| Item 2.                                    |   | Management’s Discussion and Analysis  of Financial Condition and Results of Operations |   | 14 |
|                                       |   |   |   |   |
| Item 3.                                    |   | Quantitative  and Qualitative Disclosures About Market Risk |   | 19 |
|                                       |   |   |   |   |
| Item 4.                                    |   | Controls and  Procedures |   | 19 |
|                                       |   |   |   |   |
| **PART II—OTHER  INFORMATION**   |   | 20 |
|                                       |   |   |   |   |
| Item 1.                                    |   | Legal Proceedings |   | 20 |
|                                       |   |   |   |   |
| Item 1A.                                   |   | Risk Factors |   | 22 |
|                                       |   |   |   |   |
| Item 2.                                    |   | Unregistered  Sales of Equity Securities and Use of Proceeds |   | 22 |
|                                       |   |   |   |   |
| Item 3.                                    |   | Defaults  Upon Senior Securities |   | 22 |
|                                       |   |   |   |   |
| Item 4.                                    |   | Submission  of Matters to a Vote of Security Holders |   | 22 |
|                                       |   |   |   |   |
| Item 5.                                    |   | Other Information |   | 23 |
|                                       |   |   |   |   |
| Item  6.                                   |   | Exhibits and Reports on  Form 8—K |   | 23 |
|                                       |   |   |   |   |
| **SIGNATURES**                             |   | 24 |
|                                       |   |   |
| **Index to  Exhibits**                     |   | E-1 |

 

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**URANIUM RESOURCES, INC.**

**CONDENSEDCONSOLIDATED BALANCE SHEETS**

**ASSETS**

**(Unaudited)**

 
| ** **                                               | ** ** | **June 30,  2010** | ** ** | **December 31,  2009** | ** ** |
|----------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| Current assets:                                          |       |                    |       |                        |       |
| Cash and cash equivalents                                |       | $                       | 11,423,202 |                        | $          | 6,092,068 |   |
| Receivables, net                                         |       | 1,318                   |       | 63,890                      |       |
| Prepaid and other current assets                         |       | 202,460                 |       | 125,400                     |       |
| Total current assets                                     |       | 11,626,980              |       | 6,281,358                   |       |
|                                                     |       |                    |       |                        |       |
| Property, plant and equipment, at cost:                  |       |                    |       |                        |       |
| Uranium properties                                       |       | 81,566,473              |       | 82,212,719                  |       |
| Other property, plant and equipment                      |       | 926,149                 |       | 886,992                     |       |
| Less-accumulated depreciation, depletion and  impairment |       | (63,883,496             | )          | (64,155,311                 | )          |
| Net property, plant and equipment                        |       | 18,609,126              |       | 18,944,400                  |       |
|                                                     |       |                    |       |                        |       |
| Long-term investment:                                    |       |                    |       |                        |       |
| Certificates of deposit, restricted                      |       | 6,815,842               |       | 6,786,000                   |       |
|                                                     |       | $                       | 37,051,948 |                        | $          | 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)**

 
| ** **                                                                                                                                                                                             | ** ** | **June 30,********2010** | ** ** | **December 31,  2009** | ** ** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------------|------------|-----------------------------|------------|
| Current liabilities:                                                                                                                                                                                   |       |                          |       |                        |       |
| Accounts and short term notes payable                                                                                                                                                                  |       | $                             | 604,108    |                        | $          | 641,727 |   |
| Current portion of restoration reserve                                                                                                                                                                 |       | 1,254,672                     |       | 1,236,588                   |       |
| Royalties and commissions payable                                                                                                                                                                      |       | 665,745                       |       | 693,303                     |       |
| Deferred compensation                                                                                                                                                                                  |       | 697,028                       |       | —                      |       |
| Accrued interest and other accrued liabilities                                                                                                                                                         |       | 305,936                       |       | 321,235                     |       |
| Current portion of capital leases                                                                                                                                                                      |       | 90,843                        |       | 112,559                     |       |
| Total current liabilities                                                                                                                                                                              |       | 3,618,332                     |       | 3,005,412                   |       |
|                                                                                                                                                                                                   |       |                          |       |                        |       |
| Other long-term liabilities and deferred credits                                                                                                                                                       |       | 4,518,562                     |       | 5,487,389                   |       |
|                                                                                                                                                                                                   |       |                          |       |                        |       |
| Long term capital leases, less current portion                                                                                                                                                         |       | 167,744                       |       | 207,922                     |       |
| Long-term debt, less current portion                                                                                                                                                                   |       | 450,000                       |       | 450,000                     |       |
| Commitments and contingencies (Notes 5 and 12)                                                                                                                                                         |       |                          |       |                        |       |
| Shareholders’ equity:                                                                                                                                                                             |       |                          |       |                        |       |
| Common stock, $.001 par value, shares  authorized: 200,000,000; shares issued and outstanding  (net of treasury shares): 2010—80,930,863; 2009—56,781,792 |       | 80,969                        |       | 56,820                      |       |
| Paid-in capital                                                                                                                                                                                        |       | 157,318,036                   |       | 147,837,204                 |       |
| Accumulated deficit                                                                                                                                                                                    |       | (129,092,277                  | )          | (125,023,571                | )          |
| Less: Treasury stock (38,125 shares), at cost                                                                                                                                                          |       | (9,418                        | )          | (9,418                      | )          |
| Total shareholders’ equity                                                                                                                                                                        |       | 28,297,310                    |       | 22,861,035                  |       |
|                                                                                                                                                                                                   |       | $                             | 37,051,948 |                        | $          | 32,011,758 |   |

 

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

 

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**URANIUM RESOURCES, INC.**

**CONDENSEDCONSOLIDATED STATEMENTS OF OPERATIONS**

**(Unaudited)**

 
| ** **                                                                   | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                   | ** ** | **2010**                                        | ** ** | **2009**                                      | ** ** | **2010** | ** ** | **2009** | ** ** |
| Revenues:                                                                    |       |                                            |       |                                          |       |   |   |   |   |
| Uranium sales                                                                |       | $                                               | —     |                                          | $          | 1,786,973 |   | $ | — |   | $ | 3,209,363 |   |
| Total revenue                                                                |       | —                                          |       | 1,786,973                                     |       | — |   | 3,209,363 |   |
| Costs and expenses:                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Cost of uranium sales                                                        |       |                                            |       |                                          |       |   |   |   |   |
| Royalties and commissions                                                    |       | —                                          |       | 166,937                                       |       | — |   | 305,652 |   |
| Operating expenses                                                           |       | 88,452                                          |       | 762,753                                       |       | 230,310 |   | 1,632,702 |   |
| Accretion/amortization of restoration reserve                                |       | 39,881                                          |       | 114,206                                       |       | 77,288 |   | 258,208 |   |
| Depreciation and depletion                                                   |       | 192,359                                         |       | 181,969                                       |       | 389,846 |   | 413,263 |   |
| Impairment of uranium properties                                             |       | 179,200                                         |       | 1,232,615                                     |       | 389,647 |   | 1,414,989 |   |
| Exploration expenses                                                         |       | 725                                             |       | 4,050                                         |       | 725 |   | 4,823 |   |
| Total cost of uranium sales                                                  |       | 500,617                                         |       | 2,462,530                                     |       | 1,087,816 |   | 4,029,637 |   |
| Loss from operations before corporate expenses                               |       | (500,617                                        | )          | (675,557                                      | )          | (1,087,816 | ) | (820,274 | ) |
|                                                                         |       |                                            |       |                                          |       |   |   |   |   |
| Corporate expenses—                                                     |       |                                            |       |                                          |       |   |   |   |   |
| General and administrative                                                   |       | 1,455,379                                       |       | 1,578,967                                     |       | 3,178,612 |   | 3,020,262 |   |
| Depreciation                                                                 |       | 36,234                                          |       | 36,751                                        |       | 71,250 |   | 71,888 |   |
| Total corporate expenses                                                     |       | 1,491,613                                       |       | 1,615,718                                     |       | 3,249,862 |   | 3,092,150 |   |
| Loss from operations                                                         |       | (1,992,230                                      | )          | (2,291,275                                    | )          | (4,337,678 | ) | (3,912,424 | ) |
|                                                                         |       |                                            |       |                                          |       |   |   |   |   |
| Other income (expense):                                                      |       |                                            |       |                                          |       |   |   |   |   |
| Interest expense                                                             |       | (2,910                                          | )          | (10,375                                       | )          | (10,833 | ) | (21,603 | ) |
| Interest and other income, net                                               |       | 274,584                                         |       | 55,743                                        |       | 279,805 |   | 114,455 |   |
|                                                                         |       |                                            |       |                                          |       |   |   |   |   |
| Net loss                                                                     |       | $                                               | (1,720,556 | )                                             | $          | (2,245,907 | ) | $ | (4,068,706 | ) | $ | (3,819,572 | ) |
|                                                                         |       |                                            |       |                                          |       |   |   |   |   |
| Net loss per common share:                                                   |       |                                            |       |                                          |       |   |   |   |   |
| Basic                                                                        |       | $                                               | (0.03      | )                                             | $          | (0.04 | ) | $ | (0.07 | ) | $ | (0.07 | ) |
| Diluted                                                                      |       | $                                               | (0.03      | )                                             | $          | (0.04 | ) | $ | (0.07 | ) | $ | (0.07 | ) |
|                                                                         |       |                                            |       |                                          |       |   |   |   |   |
| Weighted average common shares and common  equivalent shares per share data: |       |                                            |       |                                          |       |   |   |   |   |
| Basic                                                                        |       | 58,814,401                                      |       | 56,249,628                                    |       | 57,835,348 |   | 56,173,559 |   |
| Diluted                                                                      |       | 58,814,401                                      |       | 56,249,628                                    |       | 57,835,348 |   | 56,173,559 |   |

 

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

 

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**URANIUM RESOURCES, INC.**

**CONDENSEDCONSOLIDATED STATEMENTS OF CASH FLOWS**

**(Unaudited)**

 
| ** **                                                      | ** ** | **Six Months Ended  June 30,** | ** ** |
|-----------------------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                      | ** ** | **2010**                                      | ** ** | **2009** | ** ** |
| Net loss                                                        |       | $                                             | (4,068,706 | ) | $ | (3,819,572 | ) |
| Reconciliation of net earnings to cash used in operations— |       |                                          |       |   |   |
| Accretion/amortization of restoration reserve                   |       | 77,288                                        |       | 258,208 |   |
| Depreciation and depletion                                      |       | 461,096                                       |       | 485,151 |   |
| Impairment of uranium properties                                |       | 389,647                                       |       | 1,414,989 |   |
| Decrease in restoration and reclamation accrual                 |       | (653,544                                      | )          | (1,076,575 | ) |
| Stock compensation expense                                      |       | 525,475                                       |       | 381,941 |   |
| Other non-cash items, net                                       |       | 14,859                                        |       | — |   |
|                                                            |       |                                          |       |   |   |
| Effect of changes in operating working capital  items—     |       |                                          |       |   |   |
| Decrease in receivables                                         |       | 62,572                                        |       | 29,529 |   |
| Decrease in inventories                                         |       | —                                        |       | 408,695 |   |
| (Increase) decrease in prepaid and other current  assets        |       | (77,060                                       | )          | 250,221 |   |
| Decrease in payables, accrued liabilities and  deferred credits |       | (80,476                                       | )          | (620,328 | ) |
| Net cash used in operations                                     |       | (3,348,849                                    | )          | (2,287,741 | ) |
|                                                            |       |                                          |       |   |   |
| Investing activities:                                           |       |                                          |       |   |   |
| Increase in certificates of deposit, restricted                 |       | (29,842                                       | )          | (83,925 | ) |
| Additions to property, plant and equipment—                |       |                                          |       |   |   |
| Kingsville Dome                                                 |       | (89,400                                       | )          | (80,534 | ) |
| Vasquez                                                         |       | (7,500                                        | )          | (90,577 | ) |
| Rosita                                                          |       | (14,048                                       | )          | (28,024 | ) |
| Churchrock                                                      |       | (90,266                                       | )          | (59,676 | ) |
| Other property                                                  |       | (6,573                                        | )          | (16,095 | ) |
| Net cash used in investing activities                           |       | (237,629                                      | )          | (358,831 | ) |
|                                                            |       |                                          |       |   |   |
| Financing activities:                                           |       |                                          |       |   |   |
| Issuance of common stock, net                                   |       | 8,979,506                                     |       | — |   |
| Payments on borrowings                                          |       | (61,894                                       | )          | (83,536 | ) |
| Net cash provided by (used in) financing  activities            |       | 8,917,612                                     |       | (83,536 | ) |
| Net increase (decrease) in cash and cash  equivalents           |       | 5,331,134                                     |       | (2,730,108 | ) |
| Cash and cash equivalents, beginning of period                  |       | 6,092,068                                     |       | 12,041,592 |   |
| Cash and cash equivalents, end of period                        |       | $                                             | 11,423,202 |   | $ | 9,311,484 |   |

 

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

 

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**Uranium Resources, Inc.**

**Notes toCondensed Consolidated Financial Statements June 30, 2010 (Unaudited)**

 

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

 

Theaccompanying unaudited condensed consolidated financial statements have beenprepared in accordance with accounting principles generally accepted in theUnited States of America for interim financial information and with theinstructions to Form 10-Q and Item 310(b) of Regulation S-K. Accordingly, they do not include all of the information and footnotes requiredby accounting principles generally accepted in the United States of America forcomplete financial statements.  The accompanying statements should be readin conjunction with the audited financial statements included in the Company’s2009 Annual Report on Form 10-K.  In the opinion of management, alladjustments (consisting of normal recurring accruals) considered necessary fora fair presentation have been included.  Operating results for the sixmonths ended June 30, 2010 are not necessarily indicative of the resultsthat may be expected for the full year ending December 31, 2010.

 

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

 

UraniumResources, Inc. (“URI”) was formed in 1977 and domesticated in Delaware in1987. The Company is primarily engaged in the business of acquiring, exploring,developing and mining uranium properties, using the *in situ* recovery (“ISR”) or solution mining process.Historically, the primary customers of the Company have been major utilitieswho utilize nuclear power to generate electricity. At present the Company ownsboth developed and undeveloped uranium properties in South Texas andundeveloped uranium properties 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 project was shut down in the 4th quarter of 2008. Production wasshut-in at the Rosita project in the 4th quarter of2008 and at the Kingsville Dome project in June 2009. The Vasquez projectwas mined out in 2008 and is now being restored. At the Kingsville Dome andRosita projects, our production shut-in was done to conserve the in-placereserve base until higher prices can be realized.

 

Priorto resuming Vasquez production, the Company had been in production stand-bysince the first quarter of 1999 at its Kingsville Dome and Rosita projects.Groundwater restoration and reclamation activities have been conducted at thesetwo sites and are currently ongoing at the Kingsville Dome and Vasquez projectsand we are in the stabilization phase of restoration in the first twoProduction Areas at 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 raised a total of approximately$10.3 million, net of expenses in additional capital in June and July 2010through the sale of 27,142,830 shares of the Company’s common stock.  Approximately $9.0 million, net, was raisedon June 25, 2010 with the issuance of 23,809,500 shares at a price of$0.42 per share and approximately $1.3 million, net, was raised on July 16,2010 with the issuance of 3,333,330 shares at $0.42 per share in connectionwith the exercise of an over-allotment option by the underwriter.

 

**3.****                                     ****DISCLOSURE OF NON-CASH TRANSACTIONS**

 

InJanuary 2010 a total of 65,820 shares of restricted stock were granted tofour executive officers at a price of $0.809 per share and in April 2010 atotal of 73,751 shares of restricted stock were granted to four executiveofficers at a price of $0.722 per share in connection with a cash conservationplan initiated in 2009.  Under the plan, cash compensation was reduced by$53,250 for each quarter.  The issuance price was determined by theaverage closing price of the last ten trading days of the quarter prior to thegrant date. The shares vest one year from the date of grant.

 

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Duringthe first and second quarters of 2009, a total of 142,680 and 164,016 shares ofrestricted stock were granted to five executive officers at a price of $0.615and $0.535 per share, respectively in connection with a cash conservation planfor 2009.  Under the plan cash compensation was reduced by $87,750 foreach quarter.  The issuance price was determined by the average closingprice of the last ten trading days of the quarter prior to the grant date. Theshares vested one year from the date of grant. At June 30, 2010 all of theshares had vested.

 

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

 

**Kingsville Dome Project**

 

Productionfrom Kingsville Dome for the six months of 2010 and 2009 was 0 and 49,200pounds, respectively.  Total capital expenditures for Kingsville Dome forthe first six months of 2010 and 2009 was $89,400 and $80,500, respectively,and was related to land and mineral lease payments.

 

DuringJune 2009, the two remaining producing wellfields at Kingsville Dome wereshut-down as a result of these wellfields being depleted. We are conductingongoing restoration activities at this project and incurred $439,000 and$521,000 in costs for the six months ended June 30, 2010 and 2009,respectively.

 

**Rosita**

 

Webegan production at one new wellfield at Rosita in August 2008.  Dueto poor economics driven by technical challenges and lower uranium prices,production from this wellfield was shut-in in October 2008.  Capitalexpenditures for the first six months of 2010 and 2009 were minimal withapproximately $14,000 and $28,000, respectively, being spent for land andmineral lease payments.

 

**Vasquez Project**

 

Productionat the Vasquez project was shut-down during October 2008. The economicallyrecoverable reserves from this project have been mined out.  We areconducting ongoing restoration activities at this project and incurred $215,000and $391,000 in costs for the six months ended June 30, 2010 and 2009,respectively.  In the first six months of 2010 and 2009 we incurred $7,500and $90,600, respectively, of capital expenditures primarily for land andmineral lease payments.

 

**Impairment of Uranium Properties**

 

AtJune 30, 2010, we determined the carrying value of our project assets ateach of our South Texas production locations exceeded their fair value.  Adecline in the market price of uranium and an increase in the estimated costsfor each of our South Texas projects resulted in a decrease in the estimatedfuture cash flow to be generated from each site.  Such determinationresulted in an impairment provision of approximately $390,000 and $1.4 millionfor the first six months of 2010 and 2009, respectively.  The 2010 impairment consisted of $281,000related to Kingsville Dome, $98,000 related to Vasquez and $11,000 forRosita. The 2009 impairment consisted of $910,000 related to KingsvilleDome, $308,000 related to Vasquez and $197,000 for Rosita. The net carryingvalue of the Kingsville Dome, Rosita and Vasquez projects are approximately$5.5 million, $5.0 million and $518,000, respectively, at June 30, 2010.

 

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

 

**Uranium Sales Contracts**

 

InMarch 2006 we entered into new sales contracts with Itochu Corporation (“Itochu”)and UG U.S.A., Inc. (“UG”) that superseded the previously existingcontracts. Each new contract calls for delivery of one-half of our actualproduction from our Vasquez property and other properties in Texas currentlyowned or hereafter acquired by the Company (excluding certain large potentialexploration plays). The Itochu contract contains separate pricing terms for theVasquez property that are no longer applicable since Vasquez has reached theend of its useful life.  Our Texas production will be sold to Itochu at aprice equal to the average spot price for the eight weeks prior to the date ofdelivery less $7.50 per pound, with a floor for the spot price of $37 and aceiling of $50 per pound. If the 

 

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spotprice is over $50 per pound the price will be increased by 50% of such excess.The floor and ceiling and sharing arrangement over the ceiling applies to3.65 million pounds of deliveries, after which there is no floor orceiling. Itochu has the right to cancel any deliveries on six-month’s notice.

 

Underthe amended Itochu contract there was potential for reinstatement of theoriginal contract terms if our joint venture with Itochu to develop our Churchrockproperty in New Mexico was terminated by us. On March 6, 2009, Itochuterminated the Joint Venture.  The only consequence of the termination wasthe increase of the ceiling price for future uranium sales from $43 to $50 perpound.

 

Underthe UG contract all production from our Texas properties will be sold at aprice equal to the month-end long-term contract price for the second monthprior to the month of delivery less $6 per pound until (i) 600,000 poundshave been sold in a particular delivery year and (ii) an aggregate of3 million pounds of Uranium has been sold. After the 600,000 pounds in anyyear and 3 million pounds total have been sold, UG will have a right offirst refusal to purchase other Texas production at a price equal to theaverage spot price for a period prior to the date of delivery less 4%.  Wepaid UG $12 million in cash in 2006 to restructure its previously existingcontract.

 

**6.             STOCKBASED COMPENSATION**

 

Ourstock based compensation programs consist of stock options granted to employeesand directors and restricted stock grants made to employees and directors.

 

***Stock Compensation Expense***

 

Stockcompensation expense for the six months ended June 30, 2010 and 2009 was$525,000 and $382,000, respectively. Stock compensation expense is recorded asa component of general and administrative expenses for each period. The Companydid not recognize a tax benefit from the stock compensation expense because theCompany considers it is more likely than not that the related deferred taxassets, which have been reduced by a full valuation allowance, will not berealized.

 

TheBlack-Scholes option pricing model was used to estimate the stock option fairvalues. The option pricing model requires a number of assumptions, of which themost significant are, expected stock price volatility, the expected pre-vestingforfeiture rate and the expected option term (the amount of time from the grantdate until the option or restricted shares are exercised, vest or expire).Expected volatility was calculated based upon actual historical stock pricemovements through the measurement date of the stock option grant. Expected pre-vestingforfeitures were estimated based on actual historical pre-vesting forfeituresover the most recent periods ending June 30, 2010 for the expected term.The expected term was estimated based on historical averages over the mostrecent periods ending June 30, 2010.

 

Atthe June 2010 annual meeting of the stockholders, each of the non-employeedirectors of the Company was granted 50,000 shares of restricted common stockof the Company under the Amended and Restated 2004 Directors Stock Option andRestricted Stock Plan (the “Amended 2004 Directors’ Plan”) in lieu of theannual stock option grants made in connection with the annual meeting.  Such shares vest 25% per year on theanniversary date of their grant date.  Inthe first quarter of 2010, 50,000 stock options were granted to a newlyappointed director at an exercise price of $0.76 per share and fair value of$0.73 per option under the 2004 Directors’ Stock Option Plan.  The non-employee directors held optionscovering 781,250 shares and 200,000 shares for restricted stock under theAmended 2004 Directors’ Plan at June 30, 2010. At June 30, 2010,131,250 shares were available for future stock option and restricted sharegrants under the Amended 2004 Directors’ Plan.

 

Atotal of 85,000 stock options were granted to employees of the Company at anexercise price of $0.73 per share and fair value of $0.70 per option in thesecond quarter of 2010 under the Company’s 2004 Stock Incentive Plan.  These options vest ratably over fouryears.  There were options covering3,127,260 shares under the Company’s stock option plans at June 30,2010.  At June 30, 2010, 512,145 shares were available for futuregrants under these plans.

 

Atthe June 2009 annual meeting of the stockholders, each of the non-employeedirectors of the Company was granted an option under the 2004 Directors’ Planto purchase 50,000 shares of the Company’s common stock at an exercise price of$1.49 per share.  The non-employee directors held options covering 731,250shares under the 

 

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2004Directors’ Plan at June 30, 2009. At June 30, 2009, 381,250 shareswere available for future grants under the 2004 Directors’ Plan.

 

Atotal of 65,820 and 73,751 shares of restricted stock were granted in the firstand second quarters of 2010, respectively, to four executive officers onJanuary 4 and April 1, 2010 in connection with a cash conservationplan initiated in 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 $39,400 during thefirst half of 2010.

 

Atotal of 142,680 and 164,016 shares of restricted stock were granted in thefirst and second quarters of 2009, respectively to five executive officers onJanuary 2 and April 1, 2009 in connection with a cash conservationplan for 2009.  All of these shares vest one year from the date ofgrant.  Restricted stock grants are valued using the fair market value ofthe stock on the date of grant. The Company recognized stock compensationexpense for the restricted share grants of approximately $82,100 during thefirst half of 2009.

 

Atotal of 70,000 shares of restricted stock were granted in the first quarter of2008. The vesting with respect to 60,000 of these restricted shares wasmodified in connection with Company downsizings in the first quarter of 2009 toprovide for immediate vesting. The remaining 10,000 restricted shares vestratably over five years from the date of grant.

 

Thetotal estimated unrecognized compensation cost from the unvested restrictedgrants at June 30, 2010 was approximately $390,300, which is expected tobe recognized over the weighted average vesting period of the individual grantswhich range from 1-4 years.

 

***Stock Options for the Six Months Ended June 30,2010***

 

Thefollowing table summarizes stock options outstanding and changes during the sixmonth period ended June 30, 2010:

 
| ** **                                  | ** ** | **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                                     |       | 135,000                      |       | 0.74 |   |   |   |   |   |
| Exercised                                   |       | —                       |       | — |   |   |   |   |   |
| Canceled or forfeited                       |       | (632,501                     | )          | 3.25 |   |   |   |   |   |
| Options outstanding at June 30, 2010   |       | 3,908,573                    |       | $ | 2.60 |   | 5.3 |   | $ | 15 |   |
|                                        |       |                         |       |   |   |   |   |   |   |
| Options exercisable at June 30, 2010   |       | 3,498,573                    |       | $ | 2.49 |   | 4.9 |   | $ | 15 |   |

 

Sharesavailable for grant under the Stock Option Plans as of June 30, 2010 were643,395.

 

Stockoptions outstanding and currently exercisable at June 30, 2010 are asfollows:

 
| ** **                        | ** ** | **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                                |       | 3.8                                                         |       | $ | 1.28 |   | 2,023,946 |   | $ | 1.28 |   |
| 2004 Stock Incentive Plan         |       | 1,103,314                                |       | 6.5                                                         |       | 3.14 |   | 1,018,314 |   | 3.34 |   |
| Directors’ Stock Option Plan |       | 63                                       |       | 3.0                                                         |       | 0.16 |   | 63 |   | 0.16 |   |
| 2004 Directors’ Plan         |       | 781,250                                  |       | 7.4                                                         |       | 5.26 |   | 456,250 |   | 5.94 |   |
|                              |       | 3,908,573                                |       | 5.3                                                         |       | $ | 2.60 |   | 3,498,573 |   | $ | 2.49 |   |

 

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Totalestimated unrecognized compensation cost from unvested stock options at June 30,2010 was approximately $905,000, which is expected to be recognized over theweighted average vesting period of the individual grants which range fromapproximately 2-4 years.

 

**7.             ASSETRETIREMENT OBLIGATIONS**

 

Thefollowing table shows the change in the balance of the restoration andreclamation liability during the three months ended June 30, 2010:

 
| Reserve for future restoration and reclamation  costs beginning of period |   | $        | 5,526,949 |   |
|---------------------------------------------------------------------------|--------|----------|-----------|--------|
| Additions and changes in cash flow estimates                              |   | 322,541  |      |
| Costs incurred                                                            |   | (653,544 | )         |
| Accretion expense                                                         |   | 77,288   |      |
| Reserve for future restoration and reclamation  costs at end of period    |   | $        | 5,273,234 |   |

 

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

 

OnJune 25, 2010, the Company completed an underwritten public offering underwhich 23,809,500 shares common stock of were sold at a price of $0.42 pershare. Net proceeds to the Company, after deducting underwriting discounts andcommissions and estimated offering expenses, were approximately $9.0 million.

 

OnJuly 16, 2010, the Company sold an additional 3,333,330 shares at $0.42per share in connection with the full exercise of the over-allotment optionheld by ROTH Capital Partners, the underwriter in the June 2010transaction.  With the exercise of theover-allotment option, a total of 27,142,830 shares of common stock were soldin the offering with net proceeds to URI of approximately $10.3 million, afterdeducting underwriting discounts and commissions and estimated offeringexpenses.

 

Theofferings were made pursuant to a shelf registration statement on Form S-3filed with the Securities and Exchange Commission on May 7, 2010, whichbecame effective on May 21, 2010.

 

Thefollowing table details the changes in shareholders equity for the quarterended June 30, 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 | ) |
| Common stock issuance            |       | 23,809,500            |       | 23,810      |       | 8,955,696       |       |        |       |   |   |
| Net loss                         |       | —                |       | —      |       | —          |       | (4,068,706  | )          | — |   |
| Stock compensation expense       |       | —                |       | —      |       | 525,475         |       | —      |       | — |   |
| Restricted stock issuance        |       | 339,571               |       | 339         |       | (339            | )          |        |       |   |   |
| Balances, June 30, 2010     |       | 80,930,863            |       | $           | 80,969     |            | $          | 157,318,036 |       | $ | (129,092,277 | ) | $ | (9,418 | ) |

 

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

 

**10.          EARNINGSPER SHARE**

 

Basicearnings per share includes no dilution and is computed by dividing income orloss attributed to common stockholders by the weighted-average number of commonshares outstanding for the period. Diluted earnings per share reflects thepotential dilution that could occur if stock options were exercised orconverted into common stock.  Potentially dilutive shares of 6,212,747were excluded from the calculation of earning per share because they wereanti-dilutive due to our net loss position for the six months ended June 30,2010.

 

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**11.          TENTHCIRCUIT COURT OF APPEALS DECISION**

 

OnJune 15, 2010 the United States Court of Appeals for the Tenth Circuit enbanc held that the Company’s Section 8 property in Churchrock, New Mexicois not Indian Country.  The result of theruling means the authority to issue a UIC permit to URI falls under thejurisdiction of the State of New Mexico, and not the U.S. EnvironmentalProtection Agency (USEPA).  The opposingparties have the right to petition the Supreme Court for review within 90 days,or until September 13, 2010.

 

InMarch 2010, the Tenth Circuit Court upheld URI’s NRC license to conduct insitu recovery (ISR) uranium mining in McKinley County, the only such license inthe state of New Mexico. That license allows for the production of up to 1 millionpounds per year from Churchrock until a successful commercial demonstration ofrestoration is made, after which mining on other properties can begin and thequantity of production can be increased to 3 million pounds per year.  Petitioners filed a motion with the Supreme Courtto extend the time of filing a petition for certiorari or final review.  The Supreme Court granted petitioners’ motionand extended the time for filing a petition to September 15, 2010.

 

**12.          COMMITMENTSAND CONTINGENCIES**

 

TheCompany’s mining operations are subject to federal and state regulations forthe protection of the environment, including water quality. These laws areconstantly changing and generally becoming more restrictive. Future mineclosure and reclamation costs are provided for as each pound of uranium isproduced on a unit-of-production basis. The Company reviews its reclamationobligations each year and determines the appropriate unit charge. The Companyalso evaluates the status of current environmental laws and their potentialimpact on its accrual for costs. The Company believes its operations are incompliance with current environmental regulations.

 

TheCompany is from time to time involved in various legal proceedings of acharacter normally incident to its business. Management does not believe thatadverse decisions in any such pending or threatened proceedings will have amaterial adverse effect on the Company’s financial condition or results ofoperations.

 

TheCompany has filed a registration statement under the Securities Act of 1933, asamended, to register the resale of the shares of its common stock issued in aMay 2008 private placement. Such shares are subject to certain resaleregistration rights that would include penalties in the event the registrationstatement fails to remain effective. At June 30, 2010, the Company’sregistration statement was and remains effective.

 

TheCompany has entered into Compensation Agreements with Executive Officers of theCompany that provide that, in the event of a change in control, such officerswill have certain rights and benefits for a period of thirty-six months for theExecutive Chairman of the Company and twenty-four months for the otherofficers, following such change in control. The Compensation Agreements providethat the executive’s base salary payments shall be made on a monthly basis forthe duration of the term and any incentive payments shall be paid annuallyuntil the obligation to make such payments expires.  The Company has anemployment agreement with Mr. Donald C. Ewigleben, the Company’s Presidentand CEO, which provides for severance payments to Mr. Ewigleben upontermination of his employment under certain circumstances.  Severancepayments for Mr. Ewigleben’s termination range from one year’s base salaryplus 60% bonus to two year’s base salary 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.

 

InJune 2008 a suit for declaratory judgment titled, ***Saenz v. URI Inc.,***was filed in the 105th Judicial District Court, Kleberg County, Texas bythe owners of the mineral estate of property in Kleberg County, Texas leased tothe Company, seeking a declaratory judgment that a certain lease is limited toone specific lot only and does not encompass other adjacent lands. The Companyhas a lease on the adjacent lands from the same mineral owners and has producedover 340,000 pounds of uranium from those lands in 2007 and 2008. The Companyentered a general denial of the claims. On September 24, 2008 the mineralowners amended their suit to include a declaration that both of the leases heldby the Company are not valid. The Company has entered a general denial andother specific defenses to the amended complaint. The Company has produceduranium from both leases. On November 5, 2008, the Company engaged inmediation with the plaintiffs but was unable to resolve the matter. ThePlaintiffs filed a Motion for Summary Judgment alleging that the leasesterminated prior to any production occurring. The Court denied the motion. Atrial date has been set for January 2011. The Company will defend the casevigorously. While the Company believes that each of the leases is valid,counsel to the Company is unable to predict the outcome of the litigation. Adetermination of the invalidity of the leases on which the Company haspreviously produced uranium would have a material adverse affect on the Company’sfinancial condition.

 

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**13.          SUBSEQUENTEVENTS**

 

TheCompany raised a total of approximately $1.3 million, net of expenses inadditional capital on July 16, 2010 with the issuance of 3,333,330 sharesof common stock at $0.42 per share.

 

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**ITEM 2.  MANAGEMENT’SDISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

 

**Forward Looking Statements**

 

Thefollowing summary is qualified in its entirety by, and should be read inconjunction with, the more detailed information and any financial dataincorporated herein by reference to the Company’s reports filed with theSecurities and Exchange Commission under the Securities Exchange Act of 1934. Forward-looking statements convey our current expectations or forecasts offuture events. We intend such forward-looking statements to be covered by thesafe harbor provisions for forward-looking statements contained in the PrivateSecurities Litigation Reform Act of 1995.

 

Forward-lookingstatements are generally identifiable by use of the words “estimate,” “project,”“believe,” “intend,” “plan,” “anticipate,” “expect” and similar expressions.These forward-looking statements include management’s expectations regardingour liquidity and burn rate, reserves and mineralized uranium material, timingof receipt of mining permits, production capacity of mining operations plannedfor properties in South Texas and New Mexico and dates for commencement of productionat such properties. Our ability to predict results or the actual effect offuture plans or strategies is inherently uncertain. Actual results could differmaterially from those in forward-looking statements because of, among otherreasons, the factors described below and in the periodic reports that we filewith the SEC from time to time, including Forms 10-K, 10-Q and 8-K and anyamendments thereto. The forward-looking statements are not guarantees of futureperformance. They are based on numerous assumptions that we believe arereasonable, but they are open to a wide range of uncertainties and businessrisks.

 

Keyfactors that could cause actual results to be different than expected oranticipated include, but are not limited to the price of uranium; weatherconditions; operating conditions at our mining projects; government regulationof the mining industry and the nuclear power industry; the world-wide supplyand demand of uranium; availability of capital; timely receipt of mining andother permits from regulatory agencies; and the risks set forth herein underthe caption “Risk Factors.”

 

Inlight of these risks, uncertainties and assumptions, you are cautioned not toplace undue reliance on forward-looking statements, which speak only as of thedate of this report. When considering forward-looking statements, you shouldkeep in mind the cautionary statements in this report. We are not under anyobligation, and we expressly disclaim any obligation, to update or alter anyforward-looking statements, whether as a result of new information, futureevents or otherwise, except as required by law. In light of these risks,uncertainties and assumptions, the forward-looking events discussed in orincorporated by reference in this prospectus might not occur.

 

**Overview**

 

URIexplores for and produces uranium in South Texas where it has two remainingproduction operations that are currently on stand-by: Kingsville Dome andRosita. URI also has an estimated 101.4 million pounds of in placemineralized uranium material on 183,000 acres in New Mexico. Our operations areheavily influenced by the price of uranium both on the spot and long-termmarkets. The spot price of uranium, which has fluctuated from a high of $136.00per pound in June 2007 to its recent price level of $46.00 per pound, hasbeen the primary driver of the strategic decisions of the Company.

 

Ourstrategy has been focused on two fronts: 1) advancing our New Mexicoassets towards production, and 2) expanding our reserve base in Texas sowe can generate cash from operations to expand our Texas production base and tosustain our efforts in New Mexico.

 

During2010, the softening of uranium market prices that began in early 2008 hascontinued.  As a result we continued to focus on our cash conservation planwhile performing restoration activities in Texas and maintaining our public andgovernment relations efforts in New Mexico.  During the first quarter of2010, our Board of Directors approved a revised strategic plan which emphasizesthe cash conservation program and addresses the Company’s future cash needs, aswell as its strategic options for unlocking potential value for shareholders byutilizing its current assets and by evaluating possible regional and structuralsynergies.  Key operational points of the plan for our Texas propertiesare (i) prepare to be in a position to return to production in Texasshould the price of 

 

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uraniumreturn to a level sufficient to generate positive cash flow; (ii) analyzeexploration potential in South Texas and enhance exploration capabilities;(iii) maintain restoration activities in South Texas in accordance withexisting agreements and requirements; and (iv) analyze synergisticopportunities and asset monetization prospects in Texas.

 

*South Texas Production:*    Sinceconcluding uranium production from our last remaining wellfields in Texas inJuly 2009, we no longer have a source of revenue or operating cashflow.  We produced approximately 64,200 pounds of uranium from our SouthTexas operations in the first half of 2009 but currently have no productionoperations.  Current activity at Kingsville Dome is primarily focused onthe restoration of depleted wellfields. The last wellfield at Vasquez was fullydepleted in October 2008 and the project is now undergoing restoration.Production from Rosita was started in June 2008, but was suspended inOctober 2008 due to poor economics driven by increased operating costs asa result of technical operating challenges and the decreased price ofuranium.  We are currently in the stabilization phase of groundwaterrestoration at the Rosita project.

 

Dueto higher costs, combined with geologic and technical risk and unknown marketrisk, we have chosen to suspend development activities until the economicsjustify further activity. We are continuing to seek opportunities for therights to potential uranium properties in South Texas and New Mexico ingeographic areas that have historically held significant uranium resources.There can be no assurance that we will be successful in the acquisition of suchproperties, or if acquired, that such properties will contain commerciallyviable uranium deposits.

 

**Financial Condition and Results of Operations**

 

***Comparison of Three and Six Months Ended June 30,2010 and 2009***

 

*Production and production costs. *We had nouranium production in the first half of 2010.  In the first half of 2009,we produced 49,200 pounds and received positive inventory adjustments of 2,700pounds.

 

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.

 

Thefollowing table details our production and production cost breakdown for thethree and six months ended June 30, 2010 and 2009.

 
| ** **                          | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|-------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                          | ** ** | **2010 (1)**                                    | ** ** | **2009**                                      | ** ** | **2010 (1)** | ** ** | **2009** | ** ** |
| **Total uranium production (lbs.)** |       | —                                          |       | 20,300                                        |       | — |   | 51,850 |   |
|                                |       |                                            |       |                                          |       |   |   |   |   |
| Total operating costs               |       | $                                               | 88,000     |                                          | $          | 589,000 |   | $ | 230,000 |   | $ | 1,224,000 |   |
| Per pound operating costs           |       | N/A                                             |       | $                                             | 28.95      |   | N/A |   | $ | 23.57 |   |
| Total deprec. and depletion costs   |       | $                                               | 193,000    |                                          | $          | 158,000 |   | $ | 390,000 |   | $ | 319,000 |   |
| Per pound DD&A cost             |       | N/A                                             |       | $                                             | 7.76       |   | N/A |   | $ | 6.15 |   |
| Total production cost               |       | $                                               | 281,000    |                                          | $          | 747,000 |   | $ | 620,000 |   | $ | 1,543,000 |   |
| Production cost per pound           |       | N/A                                             |       | $                                             | 36.71      |   | N/A |   | $ | 29.73 |   |

 

----

(1) 2010operating costs and total depreciation and depletion costs represent stand-bycosts at our Kingsville Dome, Rosita and Vasquez facilities.

 

Totaloperating costs, total depreciation and depletion costs and total productioncosts incurred 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 

 

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uraniuminventory on hand at the beginning of the period and does not include certainuranium produced during the period that was not sold at period end.

 

Reconciliationof production costs to cost of uranium sales:

 
| ** **                                              | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                              | ** ** | **2010**                                        | ** ** | **2009**                                      | ** ** | **2010** | ** ** | **2009** | ** ** |
| Operating costs                                         |       | $                                               | 88,000     |                                          | $          | 589,000 |   | $ | 230,000 |   | $ | 1,224,000 |   |
| Change in uranium inventory                             |       | $                                               | —     |                                          | $          | 174,000 |   | $ | — |   | $ | 409,000 |   |
| Operating expense for uranium production sold           |       | $                                               | —     |                                          | $          | 763,000 |   | $ | — |   | $ | 1,633,000 |   |
| Depreciation and depletion costs                        |       | $                                               | 193,000    |                                          | $          | 158,000 |   | $ | 390,000 |   | $ | 319,000 |   |
| Change in uranium inventory                             |       | $                                               | —     |                                          | $          | 24,000 |   | $ | — |   | $ | 94,000 |   |
| Depreciation and depletion for uranium production  sold |       | $                                               | —     |                                          | $          | 182,000 |   | $ | — |   | $ | 413,000 |   |
| Total production costs                                  |       | $                                               | 281,000    |                                          | $          | 747,000 |   | $ | 620,000 |   | $ | 1,543,000 |   |
| Change in uranium inventory                             |       | $                                               | —     |                                          | $          | 198,000 |   | $ | — |   | $ | 503,000 |   |
| Direct cost of uranium production sold                  |       | $                                               | —     |                                          | $          | 945,000 |   | $ | — |   | $ | 2,046,000 |   |

 

*Uranium Sales.  *For the firsthalf of 2010 we did not have any uranium sales.  * *Inthe first half of 2009, we sold 64,200 pounds, generating revenue of $3.2million ($49.99 per pound).

 

*Cost of Uranium Sales. * Our cost of uranium salesfrom the sale of produced uranium in the first half of 2010 was $1.1 millioncompared with $4.0 million in the same period of 2009.  Total cost ofuranium sales includes royalties and commissions related to our uranium sales,production costs, including operating expenses, depreciation and depletionexpenses, amortization of our restoration and reclamation cost estimates,exploration costs and impairment costs for the write-down of uranium assets.

 

Thefollowing table details the direct cost of uranium sales and royalties andcommissions breakdown for the three and six months ended June 30, 2010 and2009.

 
| ** **                             | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|----------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                             | ** ** | **2010**                                        | ** ** | **2009**                                      | ** ** | **2010** | ** ** | **2009** | ** ** |
| **Total pounds sold**                  |       | —                                          |       | 36,600                                        |       | — |   | 64,200 |   |
| Total operating expenses               |       | $                                               | 88,000     |                                          | $          | 763,000 |   | $ | 230,000 |   | $ | 1,633,000 |   |
| Per pound operating expense            |       | $                                               | —     |                                          | $          | 20.85 |   | $ | — |   | $ | 25.43 |   |
| Depreciation and depletion             |       | $                                               | 193,000    |                                          | $          | 182,000 |   | $ | 390,000 |   | $ | 413,000 |   |
| Per pound DD&A expense             |       | $                                               | —     |                                          | $          | 4.97 |   | $ | — |   | $ | 6.44 |   |
| Direct cost of uranium production sold |       | $                                               | 281,000    |                                          | $          | 945,000 |   | $ | 640,000 |   | $ | 2,046,000 |   |
| Direct cost of sales per pound         |       | $                                               | —     |                                          | $          | 25.83 |   | $ | — |   | $ | 31.87 |   |
|                                   |       |                                            |       |                                          |       |   |   |   |   |
| **Royalties and commissions**          |       | $                                               | —     |                                          | $          | 167,000 |   | $ | — |   | $ | 306,000 |   |
| Royalties and commissions per pound    |       | $                                               | —     |                                          | $          | 4.56 |   | $ | — |   | $ | 4.76 |   |

 

Thecosts for the six months ended June 30, 2010 resulted from shut-in costsat our Kingsville Dome, Rosita and Vasquez projects. Our 2009 production wassourced from the remaining two wellfields at Kingsville Dome and wassupplemented by nominal amounts derived from finalized assaying of priorVasquez shipments.

 

*Royalties and Commissions.*   Forthe first half of 2010, we did not have any royalties and commissions fromuranium sales.  During the first half of 2009, royalties and commissionsfor Vasquez and Kingsville Dome production sold totaled $306,000, representing9.5% of sales.

 

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*Operating Expenses.*    Duringthe first half of 2010, operating expenses resulted from stand-by costs relatedto our Kingsville Dome, Vasquez and Rosita projects of $230,000 with such costscharged to operations. During the first half of 2009, operating expenses forVasquez and Kingsville Dome production sold was $1.6 million. During thisperiod we incurred approximately $90,000 of stand-by costs related to ourVasquez and Rosita projects with such costs charged to operations.

 

*Depreciation and Depletion.*    Duringthe first half of 2010, we incurred stand-by depreciation and depletion expenseattributable to our Rosita, Vasquez and Kingsville Dome projects of $390,000.During the same period in 2009, we incurred depreciation and depletion expenseattributable to our Vasquez and Kingsville Dome production of $413,000.

 

*Impairment of Uranium Properties.*    Duringthe first half of 2010 and 2009, we determined the carrying value of oururanium assets were impaired and recorded an impairment provision ofapproximately $390,000 and $1.4 million in 2010 and 2009, respectively.

 

*Accretion and Amortization of Future RestorationCosts.*    Accretion and amortization of futurerestoration costs in the first half of 2010 and 2009 was $77,000 and $258,000,respectively.

 

*General and Administrative Charges.*  Weincurred general and administrative charges and corporate depreciation of $3.2million and $3.1 million, respectively during the six months ended June 30,2010 and 2009.

 

Significantexpenditures for general and administrative expenses for the three and sixmonths ended June 30, 2010 and 2009 were:

 
| ** **                                 | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|--------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                 | ** ** | **2010**                                        | ** ** | **2009**                                      | ** ** | **2010** | ** ** | **2009** | ** ** |
| Stock compensation expense                 |       | $                                               | 250,000    |                                          | $          | 222,000 |   | $ | 526,000 |   | $ | 382,000 |   |
| Salaries and payroll burden                |       | 543,000                                         |       | 512,000                                       |       | 1,071,000 |   | 1,107,000 |   |
| Legal, accounting, public company expenses |       | 350,000                                         |       | 301,000                                       |       | 944,000 |   | 589,000 |   |
| Insurance and bank fees                    |       | 103,000                                         |       | 109,000                                       |       | 232,000 |   | 241,000 |   |
| Consulting and professional services       |       | 97,000                                          |       | 270,000                                       |       | 196,000 |   | 427,000 |   |
| Office, travel and other expenses          |       | 112,000                                         |       | 165,000                                       |       | 210,000 |   | 274,000 |   |
|                                       |       |                                            |       |                                          |       |   |   |   |   |
| Total                                      |       | $                                               | 1,455,000  |                                          | $          | 1,579,000 |   | $ | 3,179,000 |   | $ | 3,020,000 |   |

 

Thenon-cash stock compensation expense recorded for the six months ended June 30,2010 and 2009 resulted from issuance of stock options and restricted stock. Thevalue of each option award is estimated on the date of grant using theBlack-Scholes option-pricing model. The Black-Scholes option-pricing modelrequires the input of subjective assumptions, including the expected term ofthe option award and stock price volatility. The expected term of optionsgranted was derived from historical data on our employee exercise andpost-vesting employment termination experience. The expected volatility wasbased on the historical volatility of our stock.

 

Reductionsin salary and payroll costs in 2010 compared with 2009 resulted in the lowersalaries and payroll related expenses for the current year. The $36,000decrease resulted primarily from a reduction in the number of employees for2010 when compared to 2009.

 

TheCompany’s legal, accounting and public company expenses had a net increase of$355,000 in the first half of 2010 compared with 2009. The primary increaserelated to a significant amount of pre-trial legal activities in 2010 relatedto the Saenz lawsuit, and preparation of the proxy statement in conjunctionwith the 2010 annual meeting.  We also recorded higher audit andSarbanes-Oxley Section 404 (“SOX 404”) fees in the first half of 2010compared to 2009.  During the first half of 2010 the board of directorsheld more meetings than in 2009 and added an additional member inJanuary 2010 which increased the year over year directors related costs.

 

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Consultingand professional service expenses were reduced in the six months ended June 30,2010 compared with 2009 as a result of lower public relations costs associatedwith New Mexico community relations and community information educationactivities incurred during the period when compared with the same period in2009.

 

*Net Losses.*For the six months ended June 30,2010 and 2009, we had net losses of $4.1 million and $3.8 million,respectively.

 

*Cash Flow. *At of June 30, 2010 wehad a cash balance of approximately $11.4 million compared with $9.3 million atthe same date in 2009.

 

Inthe first six months of 2010, we had cash used in operations of $3.3 million.We used $238,000 in investing activities during the first half of 2010. We increased the collateral supporting our South Texas financial suretyrequirements by $30,000 and made additions to our South Texas and New Mexicoproperty, plant and equipment of $207,000 during the period.  Theseexpenditures were primarily for land and mineral lease payments during thequarter.  During the first half of 2010our net cash from financing activities increased by $8.9 million, primarilyfrom the sale of 23,809,500 shares of common stock that were sold at a price of$0.42 per share on June 25, 2010 in an underwritten public offering. Netproceeds to the Company, after deducting underwriting discounts and commissionsand estimated offering expenses, were approximately $9.0 million.  We used approximately $62,000 during theperiod for principal payments for the Company’s capital leases.

 

Inthe first half of 2009, we had cash used in operations of $2.3 million. We used$359,000 in investing activities during the first half of 2009.  Weincreased the collateral supporting our South Texas financial suretyrequirements by $84,000 and made additions to our South Texas and New Mexicoproperty, plant and equipment of $274,000 during the quarter.  Theseexpenditures were primarily for land and mineral lease payments during thequarter.  For the period we also usedapproximately $84,000 during the period for principal payments for the Company’scapital leases.

 

**Liquidity—Cash Sources and Uses for 2010**

 

Ourhighest priority is to maintain a positive cash position while we await thereturn of the uranium market and improved prices.  Production ceased inthe second quarter of 2009 when it was determined that the best economicdecision for shareholders given the price of uranium at the time was topreserve the asset until appropriate margins could be made with the expectedreturn of uranium prices.

 

Wehad $6.1 million in cash at year-end 2009 and had $11.4 million at the end of June 2010. As of December 31, 2009 the Company had sold its entire uranium inventoryand as such, we do not expect any additional sales revenue or related cashinflows 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. During the first half of 2010 weincurred certain non-routine expenditures for legal matters, trailingoperations activities and South Texas project related costs that kept us fromreaching the target.

 

TheCompany raised additional capital in June and July 2010 through anunderwritten public offering. Under the transactions, a total of 27,142,830shares of common stock were sold in the offering with net proceeds ofapproximately $10.3 million, after deducting underwriting discounts andcommissions and estimated offering expenses. Our cash balance at July 31, 2010 was $12.1 million.

 

**Contingent Liabilities—Off Balance Sheet Arrangements**

 

TheCompany has obtained financial surety relating to certain of its futurerestoration and reclamation obligations as required by the State of Texasregulatory agencies. The Company has bank Letters of Credit (the “L/C’s) andperformance bonds issued for the benefit of the Company to satisfy suchregulatory requirements. The L/C’s were issued by Bank of America and theperformance bonds have been issued by United States Fidelity and GuarantyCompany (“USF&G”). L/C’s for $5,841,000 and $5,761,000 were issued at June 30,2010 and December 31, 2009, respectively, such L/C’s are collateralized intheir entirety by certificates of deposit.

 

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Performancebonds totaling $2,834,000 were issued for the benefit of the Company at June 30,2010 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 June 30,2010 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.

 

**Critical Accounting Policies**

 

Oursignificant accounting policies are described in Note 2 to the consolidatedfinancial statements included in the Company’s 2009 Annual Report onForm 10-K.  We believe our most critical accounting policies involvethose requiring the use of significant estimates and assumptions in determiningvalues or projecting 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.

 

Regardingour reserve 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.

 

Suchestimates and assumptions affect the reported amounts of assets and liabilitiesand disclosure of contingent assets and liabilities at the date of the financialstatements and the reported amounts of expenses during the reporting period.

 

Theaccounts of the Company are maintained in United States dollars. All dollaramounts in the financial statements are stated in United States dollars exceptwhere indicated.

 

**ITEM 3.****                                                    ****QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

 

**Uranium Price Volatility**

 

TheCompany is subject to market risk related to the market price of uranium. TheCompany’s cash flow has historically been dependent on the price of uranium, whichis determined 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.

 

Thespot market price for uranium has demonstrated a large range sinceJanuary 2001. Prices have risen from $7.10 per pound at January 2001to a high of $136.00 per pound in June 2007. The spot market price was$46.00 per pound as of July 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, summarized andreported within the time period specified in the SEC’s rules and forms,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 inRule 13a-15(e) promulgated under the Securities Exchange Act of 1934,as amended (the “Exchange Act”). In designing and evaluating the disclosure controlsand procedures, management has recognized that any controls and procedures, nomatter how well designed and operated, can provide only reasonable assurance ofachieving the desired control objectives, and management is required to applyjudgment in evaluating its controls and procedures

 

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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 inRules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of1934, as amended (the “Exchange Act”)). Based on that evaluation, our ChiefExecutive Officer and Chief Financial Officer have certified that ourdisclosure controls and procedures were effective as of and June 30, 2010.

 

**Management’s Report on Internal Control over FinancialReporting**

 

Managementof the Company is responsible for establishing and maintaining adequateinternal control over financial reporting as defined inRules 13a-15(f) and 15d-15(f) under the Exchange Act. TheCompany’s internal control over financial reporting is designed, under thesupervision of the Company’s Chief Executive Officer and Chief FinancialOfficer, to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes inaccordance with accounting principles generally accepted in the United Statesof America (GAAP). The Company’s internal control over financial reportingincludes those policies and procedures that: (i) pertain to themaintenance of records that, in reasonable detail, accurately and fairlyreflect the transactions and dispositions of the assets of the Company;(ii) provide reasonable assurance that transactions are recorded as necessaryto permit preparation of financial statements in accordance with GAAP, and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of management and directors of the Company; and(iii) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition, use or disposition of the Company’sassets that could have a material 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.

 

**Changes in Internal Controls**

 

Duringthe first six months of 2010 no material changes have been made in our internalcontrol over financial reporting that may have materially affected, or arereasonably likely to materially affect, our internal control over financialreporting.

 

**PART II- OTHER INFORMATION**

 

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

 

**New Mexico Radioactive Material License**

 

Inthe State of New Mexico, uranium recovery by ISR technology requires a combinedsource and 11e. (2) byproduct material (uranium recovery) license issuedby the United States Nuclear Regulatory Commission (the “NRC” or the“Commission”). We applied for one license covering the four properties locatedin the Churchrock and Crownpoint districts collectively known as the CrownpointUranium Project (CUP). The Commission issued a uranium recovery license for theCUP in January 1998 that allowed licensed ISR operations to begin in theChurchrock district. In mid-1998, a panel of administrative law judges (NRC’sAtomic Safety and Licensing Board (hereinafter “Licensing Board”) determinedthat certain interested stakeholders who requested an NRC administrativehearing had standing to raise certain objections to the NRC license. TheLicensing Board conducted administrative hearings from 1999 through 2007 whichincluded a bifurcated hearing schedule, initial Licensing Board decisions,appeals to the Commission, settlement discussions, and a final Commissiondecision upholding HRI’s license.

 

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. Afterthis decision, petitioners requested that the Tenth Circuit rehear the case *en banc*. In May 2010, the United States Court of Appeals for the TenthCircuit denied the petition for a rehearing *en banc.*   Petitioners filed a motion with the UnitedStates Supreme Court (“Supreme Court”) to extend the time for filing a petitionfor certiorari or final review.  TheSupreme Court granted petitioners’ motion and extended the time for filing apetition to September 15, 2010.

 

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**Tenth Circuit Court of Appeals Decision**

 

OnJune 15, 2010 the United States Court of Appeals for the Tenth Circuit enbanc held that the Company’s Section 8 property in Churchrock, New Mexicois not Indian Country.  The result of theruling means the authority to issue a UIC permit to URI falls under thejurisdiction of the State of New Mexico, and not the U.S. EnvironmentalProtection Agency (USEPA).  Thejurisdictional dispute originated among the State of New Mexico, the USEPA andthe Navajo Nation and was initially taken to the Tenth Circuit Court ofAppeals. In January 2000, the issue was remanded to the USEPA. In February 2007,the USEPA reached a decision that Section 8 is Indian country, andtherefore under its jurisdiction to administer the UIC permit. URI appealed thedecision to the Tenth Circuit Court in April 2009. By a 2-1 decision thecourt upheld the EPA’s ruling. In August 2009, URI’s petition for an enbanc review was granted and oral arguments were held January 2010. Thesubject ruling that the Section 8 property is not Indian Country is theresult of the en banc review.

 

Theopposing parties have the right to petition the Supreme Court for review within90 days, or until September 13, 2010.

 

**Kingsville Dome Lessor Legal Action**

 

InJune 2008 a suit for declaratory judgment titled, ***Saenz v. URI Inc.,***was filed in the 105th Judicial District Court, Kleberg County, Texas bythe owners of the mineral estate of property in Kleberg County, Texas leased tothe Company, seeking a declaratory judgment that a certain lease is limited toone specific lot only and does not encompass other adjacent lands. The Companyhas a lease on the adjacent lands from the same mineral owners and has producedover 340,000 pounds of uranium from those lands in 2007 and 2008. The Companyentered a general denial of the claims. On September 24, 2008 the mineralowners amended their suit to include a declaration that both of the leases heldby the Company are not valid. The Company has entered a general denial andother specific defenses to the amended complaint. The Company has produceduranium from both leases. On November 5, 2008, the Company engaged inmediation with the plaintiffs but was unable to resolve the matter. ThePlaintiffs filed a Motion for Summary Judgment alleging that the leasesterminated prior to any production occurring. The Court denied the motion. Atrial date has been set for January, 2011. The Company will defend the casevigorously. While the Company believes that each of the leases is valid,counsel to the Company is unable to predict the outcome of 

 

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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**

 

None,in addition to those risk factors set forth in our Form 10-Q for theperiod ended March 31, 2010 and our Form 10-K for the year ended December 31,2009.

 

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

 

None

 

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

 

None

 

**ITEM 4.****                            ****SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.**

 

Atthe Company’s Annual Meeting of shareholders, held June 3, 2010, theCompany’s shareholders re-elected its directors, voted to approve therecommended proposal for ratification of the Company’s independent auditors andvoted for the recommended proposal to ratify the Company’s amended and restatedDirectors’ Stock Option Plan.

 

Followingare the votes cast for and against each director.

 
| **Directors**       | ** ** | **For**    | ** ** | **Against** | ** ** |
|---------------------|------------|------------|------------|-------------|------------|
| Paul K Willmott     |       | 15,299,088 |       | 594,621     |       |
| Donald C. Ewigleben |       | 15,078,572 |       | 815,137     |       |
| Leland O. Erdahl    |       | 15,083,882 |       | 809,827     |       |
| Terence J. Cryan    |       | 15,072,307 |       | 821,402     |       |
| Marvin K. Kaiser    |       | 15,084,901 |       | 808,808     |       |
| Robert M. Gallagher |       | 15,094,607 |       | 799,102     |       |

 

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Broker non votes for this proposal totaled27,282,549 shares.

 

Voteson the proposal for ratification of Hein & Associates, LLP, independentaccountants, as the Company’s independent auditors for the fiscal year ended December 31,2010 are as follows:

 
| ** **                                                            | ** ** | **For**    | ** ** | **Against** | ** ** | **Abstentions** | ** ** |
|-----------------------------------------------------------------------|------------|------------|------------|-------------|------------|-----------------|------------|
| Proposal for ratification of the Company’s  independent auditors |       | 41,367,268 |       | 1,015,825   |       | 793,165         |       |

 

Voteson the proposal for ratification of the Company’s Amended and RestatedDirectors’ Stock Option and Restricted Stock Plan are as follows:

 
| ** **                                                                                              | ** ** | **For**    | ** ** | **Against** | ** ** | **Abstentions** | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|------------|------------|-------------|------------|-----------------|------------|
| Proposal for ratification of the Company’s amended  and restated Directors’ Stock Option Plan |       | 11,500,871 |       | 1,393,873   |       | 2,998,965       |       |

 

Broker non votes for this proposal totaled27,282,549 shares.

 

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

 

None

 

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

 

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

 

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**SIGNATURES**

 

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

 
|                        | **URANIUM RESOURCES, INC.** |
|-----------------------------|----------------------------------|
|                        |                             |
| Dated:  August 9, 2010 | By:                              | /s/  Donald C. Ewigleben |
|                        |                             | Donald  C. Ewigleben |
|                        |                             | President  and Chief Executive Officer |
|                        |                             |   |
| Dated:  August 9, 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 10-K on  March 16, 2010).                                                                                                                                           |
|                |       |                                                                                                                                                                                                                                              |
| 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).                                                                                           |
|                |       |                                                                                                                                                                                                                                              |
| 10.7*               |       | 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).                                                                                   |
|                |       |                                                                                                                                                                                                                                              |
| 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).                                                 |

 

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| 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). |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.35*   |   | 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).                                                                                                             |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.37*   |   | 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).                                                       |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.43*   |   | 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).                                      |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 10.43.1  |   | Amended  and Restated 2004 Directors’ Stock Option and Restricted Stock Plan dated  April 1, 2010.                                                                                                                                                                                           |
|     |   |                                                                                                                                                                                                                                                                                                   |
| 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. Incorporatedby reference pursuant to Rule 12b-32 under the Securities Exchange Act of1934.

 

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