**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C.  20549**

**FORM10-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, 2007** |
| ** **                                        |   | ** **                                                                                    |
| **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**

**URANIUM RESOURCES, INC.**

(Exact Name of Issuer as Specified in Its Charter)

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

 

**650S. Edmonds Lane, Suite 108, Lewisville, Texas 75067**

(Address of Principal Executive Offices)

**(972)219-3330**

(Issuer’s Telephone Number, Including Area Code)

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

Indicate by check mark whether the registrant is alarge accelerated filer, an accelerated filer, or a non-accelerated filer. Seedefinition of “accelerated filer” and “large accelerated filer” in Rule 12-b2of the Exchange Act.

|                (Check one): |   | Large  accelerated filer  o |   | Accelerated  filer  x |   | Non-accelerated  filer  o |
|--------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|---------------------------------|--------|-------------------------------------|

 

Indicate by check markwhether the registrant is a shell company (as defined in Rule 12-b2 of theExchange Act).

o  Yes    x  No

Indicate the number of shares outstanding of each of theissuer’s classes of common stock, as of the latest practicable date.

| Title of Each Class of Common Stock | ** ** | **Number of Shares Outstanding** |
|-------------------------------------------------------------------|------------|-------------------------------------------------|
| Common Stock,  $0.001 par value                                   |       | 52,271,929 as of  August 7, 2007                |

 

 

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**URANIUM RESOURCES, INC.2007 SECOND QUARTERLY REPORT ON FORM 10-Q**

**TABLE OF CONTENTS**
| **PART I - FINANCIAL INFORMATION**    |       |
|---------------------------------------|------------|
|                                  |       |   |   |
|                                  | Item 1.    | Financial Statements |   |
|                                  |       |   |   |
|                                  |       | Consolidated Balance  Sheets- June 30, 2007 (unaudited) and December 31, 2006 |   |
|                                  |       |   |   |
|                                  |       | Consolidated  Statements of Operations - three and six months ended June 30, 2007 and 2006  (Unaudited) |   |
|                                  |       |   |   |
|                                  |       | Consolidated  Statements of Cash Flows - three and six months ended June 30, 2007 and 2006  (Unaudited) |   |
|                                  |       |   |   |
|                                  |       | Notes to  Consolidated Financial Statements – June 30, 2007 (Unaudited) |   |
|                                  |       |   |   |
|                                  | Item 2.    | Management’s  Discussion and Analysis of Financial Condition and Results of Operations |   |
|                                  |       |   |   |
|                                  | Item 3.    | Quantitative  and Qualitative Disclosures About Market Risk |   |
|                                  |       |   |   |
|                                  | Item 4.    | Controls and Procedures |   |
|                                  |       |   |   |
| **PART II — OTHER  INFORMATION** |       |
| ** **                            | ** ** | ** ** | ** ** |
|                                  | Item 1.    | Legal Proceedings |   |
|                                  |       |   |   |
|                                  | Item  1A.  | Risk  Factors |   |
|                                  |       |   |   |
|                                  | Item 2.    | Unregistered  Sales of Equity Securities and Use of Proceeds |   |
|                                  |       |   |   |
|                                  | Item 3.    | Defaults Upon  Senior Securities |   |
|                                  |       |   |   |
|                                  | Item 4.    | Submission of  Matters to a Vote of Security Holders |   |
|                                  |       |   |   |
|                                  | Item 5.    | Other Information |   |
|                                  |       |   |   |
|                                  | Item  6.   | Exhibits  and Reports on Form 8-K |   |
|                                  |       |   |   |
| **SIGNATURES**                        |       |
| ** **                            | ** ** | ** ** | ** ** |
| **Index  to Exhibits**                |       |

 

2

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**URANIUM RESOURCES, INC.**

**CONSOLIDATEDBALANCE SHEETS**

**ASSETS**
| ** **                                               | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|----------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                                               | ** ** | **(Unaudited)**         | ** ** | ** **                  | ** ** |
| Current assets:                                          |       |                    |       |                        |       |
| Cash and cash  equivalents                               |       | $                       | 16,495,323 |                        | $          | 20,176,771 |   |
|                                                     |       |                    |       |                        |       |
| Receivables, net                                         |       | 1,168,130               |       | 713,529                     |       |
| Uranium and  materials/supplies inventory                |       | 2,491,425               |       | 1,603,585                   |       |
| Prepaid and  other current assets                        |       | 568,594                 |       | 410,000                     |       |
| Total current  assets                                    |       | 20,723,472              |       | 22,903,885                  |       |
|                                                     |       |                    |       |                        |       |
| Property, plant and  equipment, at cost:                 |       |                    |       |                        |       |
| Uranium  properties                                      |       | 75,758,035              |       | 67,153,797                  |       |
| Other property,  plant and equipment                     |       | 638,890                 |       | 465,613                     |       |
| Less-accumulated  depreciation, depletion and impairment |       | (53,759,117             | )          | (49,423,848                 | )          |
| Net property,  plant and equipment                       |       | 22,637,808              |       | 18,195,562                  |       |
|                                                     |       |                    |       |                        |       |
| Other assets                                             |       | 2,381,760               |       | 2,369,434                   |       |
| Long-term investment:                                    |       |                    |       |                        |       |
| Certificates of  deposit, restricted                     |       | 2,890,423               |       | 2,467,491                   |       |
|                                                     |       | $                       | 48,633,463 |                        | $          | 45,936,372 |   |

 

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

3

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**LIABILITIES AND SHAREHOLDERS’ EQUITY**
| ** **                                                                                                                                                          | ** ** | **June 30,  2007** | ** ** | **December 31,  2006** | ** ** |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|-------------------------|------------|-----------------------------|------------|
| ** **                                                                                                                                                          | ** ** | **(Unaudited)**         | ** ** | ** **                  | ** ** |
| Current liabilities:                                                                                                                                                |       |                    |       |                        |       |
| Accounts payable                                                                                                                                                    |       | $                       | 2,237,749  |                        | $          | 1,994,184 |   |
| Current portion  of restoration reserve                                                                                                                             |       | 1,399,006               |       | 1,520,192                   |       |
| Accrued interest  and other accrued liabilities                                                                                                                     |       | 1,554,389               |       | 816,877                     |       |
| Current portion  of long-term debt                                                                                                                                  |       | 226,869                 |       | 201,804                     |       |
| Total current  liabilities                                                                                                                                          |       | 5,418,013               |       | 4,533,057                   |       |
|                                                                                                                                                                |       |                    |       |                        |       |
| Other long-term  liabilities and deferred credits                                                                                                                   |       | 3,805,012               |       | 3,998,229                   |       |
|                                                                                                                                                                |       |                    |       |                        |       |
| Long-term debt, less  current portion                                                                                                                               |       | 607,555                 |       | 635,691                     |       |
| Commitments and contingencies  (Notes 1, 2 and 3)                                                                                                                   |       |                    |       |                        |       |
| Shareholders’ equity:                                                                                                                                          |       |                    |       |                        |       |
| Common stock,  $.001 par value, shares authorized: 200,000,000; shares issued and  outstanding (net of treasury shares): 2007—52,225,836; 2006—51,791,339 |       | 52,264                  |       | 51,829                      |       |
| Paid-in capital                                                                                                                                                     |       | 128,523,131             |       | 126,252,871                 |       |
| Accumulated  deficit                                                                                                                                                |       | (89,763,094             | )          | (89,525,887                 | )          |
| Less: Treasury  stock (38,125 shares), at cost                                                                                                                      |       | (9,418                  | )          | (9,418                      | )          |
| Total  shareholders’ equity                                                                                                                                    |       | 38,802,883              |       | 36,769,395                  |       |
|                                                                                                                                                                |       | $                       | 48,633,463 |                        | $          | 45,936,372 |   |

 

The accompanying notes to financial statements are anintegral part of these consolidated statements.

4

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**URANIUM RESOURCES, INC.**

**CONSOLIDATEDSTATEMENTS OF OPERATIONS**

**(Unaudited)**
| ** **                                                                    | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|-------------------------------------------------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                    | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| Revenues:                                                                     |       |                                            |       |                                          |       |   |   |   |   |
| Uranium sales—                                                           |       | $                                               | 7,962,709  |                                          | $          | 1,844,770 |   | $ | 12,536,876 |   | $ | 2,913,359 |   |
| Total revenue                                                                 |       | 7,962,709                                       |       | 1,844,770                                     |       | 12,536,876 |   | 2,913,359 |   |
| Costs and  expenses:                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Cost of uranium sales—                                                   |       |                                            |       |                                          |       |   |   |   |   |
| Royalties and commissions                                                     |       | 981,966                                         |       | 169,891                                       |       | 1,420,942 |   | 249,326 |   |
| Operating expenses                                                            |       | 1,556,011                                       |       | 1,593,836                                     |       | 3,343,074 |   | 3,117,428 |   |
| Accretion/amortization of restoration reserve                                 |       | 137,021                                         |       | 141,334                                       |       | 307,201 |   | 274,308 |   |
| Depreciation and depletion                                                    |       | 1,810,964                                       |       | 772,250                                       |       | 3,298,013 |   | 1,389,089 |   |
| Exploration expenses                                                          |       | —                                          |       | 234,646                                       |       | — |   | 234,646 |   |
| Gain on derivatives                                                           |       | —                                          |       | (526,875                                      | )          | — |   | (34,820,947 | ) |
| Total (gain on) cost of uranium sales                                         |       | 4,485,962                                       |       | 2,385,082                                     |       | 8,369,230 |   | (29,556,150 | ) |
| Earnings (loss) from operations before corporate  expenses                    |       | 3,476,747                                       |       | (540,312                                      | )          | 4,167,646 |   | 32,469,509 |   |
|                                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Corporate expenses—                                                      |       |                                            |       |                                          |       |   |   |   |   |
| General and administrative                                                    |       | 2,479,152                                       |       | 1,600,261                                     |       | 4,691,244 |   | 2,657,013 |   |
| Depreciation                                                                  |       | 25,022                                          |       | 7,088                                         |       | 46,184 |   | 13,059 |   |
| Total corporate expenses                                                      |       | 2,504,174                                       |       | 1,607,349                                     |       | 4,737,428 |   | 2,670,072 |   |
| Earnings (loss)  from operations                                              |       | 972,573                                         |       | (2,147,661                                    | )          | (569,782 | ) | 29,799,437 |   |
|                                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Other income  (expense):                                                      |       |                                            |       |                                          |       |   |   |   |   |
| Interest expense                                                              |       | (4,500                                          | )          | (1,594                                        | )          | (12,366 | ) | (4,333 | ) |
| Interest and other income, net                                                |       | 215,179                                         |       | 33,158                                        |       | 344,941 |   | 246,945 |   |
|                                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Net earnings (loss)                                                           |       | $                                               | 1,183,252  |                                          | $          | (2,116,097 | ) | $ | (237,207 | ) | $ | 30,042,049 |   |
|                                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Net earnings  (loss) per common share:*                                       |       |                                            |       |                                          |       |   |   |   |   |
| Basic                                                                         |       | $                                               | 0.02       |                                          | $          | (0.04 | ) | $ | (0.00 | ) | $ | 0.67 |   |
| Diluted                                                                       |       | $                                               | 0.02       |                                          | $          | (0.04 | ) | $ | (0.00 | ) | $ | 0.63 |   |
|                                                                          |       |                                            |       |                                          |       |   |   |   |   |
| Weighted average  common shares and common equivalent shares per share data:* |       |                                            |       |                                          |       |   |   |   |   |
| Basic                                                                         |       | 52,113,104                                      |       | 48,744,297                                    |       | 51,954,068 |   | 44,870,884 |   |
| Diluted                                                                       |       | 56,228,005                                      |       | 48,744,297                                    |       | 51,954,068 |   | 47,677,369 |   |

 

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*                            Netearnings (loss) per share and weighted average common shares informationreflects the effect of a reverse 1 for 4 stock split made effective April 11,2006.

The accompanying notes to financial statements are anintegral part of these consolidated statements.

5

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**URANIUM RESOURCES, INC.**

**CONSOLIDATEDSTATEMENTS OF CASH FLOWS**

**(Unaudited)**
| ** **                                                                            | ** ** | **Six Months Ended  June 30,** | ** ** |
|---------------------------------------------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                                                                            | ** ** | **2007**                                      | ** ** | **2006** | ** ** |
|                                                                                  |       |                                          |       |   |   |
| Net earnings  (loss)                                                                  |       | $                                             | (237,207   | ) | $ | 30,042,049 |   |
| Reconciliation  of net earnings (loss) to cash provided by (used in) operations— |       |                                          |       |   |   |
| Gain on derivatives                                                                   |       | —                                        |       | (34,820,947 | ) |
| Accretion/amortization of restoration reserve                                         |       | 307,201                                       |       | 274,308 |   |
| Depreciation and depletion                                                            |       | 3,344,197                                     |       | 1,402,148 |   |
| Decrease in restoration and reclamation accrual                                       |       | (655,542                                      | )          | (458,038 | ) |
| Stock compensation expense                                                            |       | 1,555,941                                     |       | 796,451 |   |
| Other non-cash items, net                                                             |       | 341,421                                       |       | 210,281 |   |
|                                                                                  |       |                                          |       |   |   |
| Effect of  changes in operating working capital items—                           |       |                                          |       |   |   |
| Increase in receivables                                                               |       | (454,601                                      | )          | (590,702 | ) |
| (Increase) decrease in inventories                                                    |       | 46,274                                        |       | (14,372 | ) |
| Increase in prepaid and other current assets                                          |       | (486,875                                      | )          | (190,896 | ) |
| Increase in payables, accrued liabilities and  deferred credits                       |       | 981,077                                       |       | 1,348,207 |   |
| Net cash  provided by (used in) operations                                            |       | 4,741,886                                     |       | (2,001,511 | ) |
|                                                                                  |       |                                          |       |   |   |
| Investing  activities:                                                                |       |                                          |       |   |   |
| Increase in certificates of deposit, restricted                                       |       | (422,932                                      | )          | (566,008 | ) |
| Settlement of derivative instrument                                                   |       | —                                        |       | (12,000,000 | ) |
| Additions to property, plant and equipment—                                      |       |                                          |       |   |   |
| Kingsville Dome                                                                       |       | (3,827,251                                    | )          | (5,196,719 | ) |
| Vasquez                                                                               |       | (410,611                                      | )          | (1,573,094 | ) |
| Rosita                                                                                |       | (1,877,161                                    | )          | (128,308 | ) |
| Rosita South                                                                          |       | (1,163,880                                    | )          | (56,984 | ) |
| Churchrock                                                                            |       | (417,681                                      | )          | (218,551 | ) |
| Crownpoint                                                                            |       | (48,548                                       | )          | (58,555 | ) |
| Other property                                                                        |       | (838,749                                      | )          | (931,034 | ) |
| Net cash used in  investing activities                                                |       | (9,006,813                                    | )          | (20,729,253 | ) |
|                                                                                  |       |                                          |       |   |   |
| Financing  activities:                                                                |       |                                          |       |   |   |
| Payments on borrowings                                                                |       | (131,275                                      | )          | (5,124 | ) |
| Issuance of common stock, net                                                         |       | 714,754                                       |       | 48,572,182 |   |
| Net cash provided  by financing activities                                            |       | 583,479                                       |       | 48,567,058 |   |
| Net decrease in  cash and cash equivalents                                            |       | (3,681,448                                    | )          | 25,836,294 |   |
| Cash and cash  equivalents, beginning of period                                       |       | 20,176,771                                    |       | 5,852,716 |   |
| Cash and cash equivalents,  end of period                                             |       | $                                             | 16,495,323 |   | $ | 31,689,010 |   |

 

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

6

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**UraniumResources, Inc.**

**Notes toConsolidated Financial Statements June 30, 2007 (Unaudited)**

**1.****                                      BASISOF PRESENTATION**

The accompanying unaudited consolidated financialstatements have been prepared in accordance with accounting principlesgenerally accepted in the United States of America for interim financialinformation and with the instructions to Form 10-Q and Item 310(b) ofRegulation S-K.  Accordingly, they do not include all of the informationand footnotes required by accounting principles generally accepted in theUnited States of America for complete financial statements.  Theaccompanying statements should be read in conjunction with the auditedfinancial statements included in the Company’s 2006 Annual Report onForm 10-K/A.  In the opinion of management, all adjustments(consisting of normal recurring accruals) considered necessary for a fairpresentation have been included.  Operating results for the three and sixmonths ended June 30, 2007 are not necessarily indicative of the results thatmay be expected for the full calendar year ending December 31, 2007.

**Reverse Stock Split**

On March 29, 2006 the Company’s Board of Directorsdeclared a 1 for 4 reverse stock split for stockholders of record on April 10,2006, effective April 11, 2006.  The split was approved by stockholders atthe 2005 Annual Meeting of Stockholders.  All common stock share amounts,earnings per share data and references to the common stock of the Company inthis report are stated on a post-split basis.

**2.****                                      DESCRIPTIONOF BUSINESS**

URI was organized in 1977 to mine uranium in theUnited States using the in situ recovery (“ISR”) mining process. From 1988through 1999 we produced about 6.1 million pounds of uranium from twoSouth Texas properties, 3.5 million pounds from Kingsville Dome and2.6 million pounds from Rosita.

In 1999 we shut-in our production because of depresseduranium prices.  When uranium pricesreached a level where it was prudent to commence operations the company beganproducing at its Vasquez property in South Texas in the fourth quarter of2004.  Production at Kingsville Dome began in the second quarter of 2006.

The financial statements of the Company have beenprepared on the basis of accounting principles applicable to a going concern,which contemplates the realization of assets and the satisfaction ofliabilities in the normal course of business.

**3.****                                      DISCLOSUREOF NON-CASH TRANSACTIONS**

The following non-cash transaction occurred in thefirst six months of 2007 and 2006:

During the first six months of 2007 and 2006, theCompany entered into capital leases to acquire property, plant and equipmentitems including logging trucks and office computers and equipment totaling$98,000 and $218,000, respectively.  The outstanding balance of thecapital leases was $384,000 at June 30, 2007.

In March 2006, 103,896 shares of the Company’s CommonStock were issued in connection with the conversion of the Convertible Notesdescribed in Footnote 8.

**4.****                                      URANIUMPROPERTIES**

**Vasquez Project**

The Vasquez project commenced production in the fourthquarter of 2004.  Since its start-up and through June 30, 2007, theproject has produced 615,800 pounds of uranium. In the first six months of2007 we produced 20,400 pounds.  As production at Vasquez declines we arebeginning preparations for restoration activities at this project.

7

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**Kingsville Dome Project**

We began production from wellfield 13 at KingsvilleDome at the end of January 2007, which was the first new wellfield to bebrought on in Production Area Authorization (“PAA”) #3.  Production fromwellfield 13 was 164,100 pounds in the first half of 2007.  KingsvilleDome produced a total of 180,300 pounds for the first six months of 2007.

During the first half of 2007 wellfield delineationand development work has continued on PAA #3 wellfields 14 and 15 at KingsvilleDome.  Production from wellfield 14 commenced in July 2007.

**Rosita/Rosita South**

Capital expenditures for our Rosita and Rosita Southprojects totaled $3.0 million in the first half of 2007.  These costs weremade to upgrade the Rosita plant and elution circuit and construction of adrying facility at Rosita and for wellfield development at Rosita and wellfieldevaluation at Rosita South.  The timing of production from Rosita andRosita South will be dependent on the results of our drilling program.

**5.****                                      CONTRACTCOMMITMENTS**

**Amendment to Uranium Sales Contracts**

In March 2006 we entered into a new contract withItochu Corporation (“Itochu”) and a new contract with UG U.S.A., Inc. (“UG”)that supersede the previously existing contracts and provide for delivery ofone-half of our actual production from our Vasquez property and otherproperties in Texas currently owned or hereafter acquired by the Company(excluding certain large potential exploration plays). The terms of suchcontracts are summarized below.

*The Itochu Contract*.Under the Itochu contract all production from the Vasquez property will be soldat a price equal to the average spot price for the eight weeks prior to thedate of delivery less $6.50 per pound, with a floor for the spot price of $37and a ceiling of $46.50. Other Texas production will be sold at a price equalto the average spot price for the eight weeks prior to the date of deliveryless $7.50 per pound, with a floor for the spot price of $37 and a ceiling of$43. On non-Vasquez production the price paid will be increased by 30% of thedifference between actual spot price and the $43 ceiling up to and including$50 per pound. If the spot price is over $50 per pound the price on all Texasproduction will be increased by 50% of such excess. The floor and ceiling andsharing arrangement over the ceiling applies to 3.65 million pounds ofdeliveries, after which there is no floor or ceiling. Itochu has the right tocancel any deliveries on six-month’s notice.

In December 2005 we entered into a joint venture withItochu to develop our Churchrock property in New Mexico. See “**Joint Venture for Churchrock Property**.” Under the terms of the joint venture, both parties must make an investmentdecision after the completion of a feasibility study, which was completed atthe end of 2006. If Itochu should terminate the venture at that time, we wouldno longer receive the additional price of 30% of the excess between $43 and $50per pound outlined above. If we should terminate the venture at that time, theoriginal contract terms will be reinstated from that time forward.  Theparties have extended the preliminary investment decision until February 1,2008.

*The UG Contract*.Under the UG contract all production from the Vasquez property and other Texasproduction will be sold at a price equal to the month-end long-term contractprice for the second month prior to the month of delivery less $6 per pounduntil (i) 600,000 pounds have been sold in a particular delivery year and (ii)an aggregate of 3 million pounds of Uranium has been sold. After the 600,000pounds in any year and 3 million pounds total have been sold, UG will have aright of first refusal to purchase other Texas production at a price equal tothe average spot price for a period prior to the date of delivery less 4%. Inconsideration of UG’s agreement to restructure its previously existingcontract, we paid UG $12 million incash with funds raised in our equity offering completed in April 2006.

8

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**Derivative Financial Instruments**

The Company determined that its long-term uraniumsales contracts in effect prior to March 2006 met the definition of derivativefinancial instruments for financial statement reporting purposes.  Changesin the Company’s derivatives represent non-cash charges to earnings for thepresent value of the loss the Company would incur in the event it would berequired to purchase uranium in the spot market to satisfy the deliveryobligations under the uranium sales contracts.  The Company has notentered into hedge transactions with respect to its uranium sales contracts.

**6.**                                      **STOCK BASED COMPENSATION**

***Adoption of SFAS 123(R)***

Effective January 1, 2006, the Company adopted thefair value recognition provisions of Statement of Financial Accounting Standard123(R) “*Share-Based Payment”* (“SFAS123(R)”) using the modified prospective transition method. In addition, theSecurities and Exchange Commission issued Staff Accounting Bulletin No. 107 “*Share-Based Payment*” (“SAB 107”) in March,2005, which provides supplemental SFAS 123(R) application guidance based on theviews of the SEC. Under the modified prospective transition method,compensation cost recognized in the quarter ended March 31, 2006 and beyond includes:(a) compensation cost for all share-based payments granted prior to, butnot yet vested as of January 1, 2006, based on the grant date fair valueestimated in accordance with the original provisions of SFAS No. 123, and(b) compensation cost for all share-based payments granted beginningJanuary 1, 2006, based on the grant date fair value estimated in accordancewith the provisions of SFAS 123(R). In accordance with the modified prospectivetransition method, results for prior periods have not been restated.

The adoption of SFAS 123(R) resulted in stockcompensation expense for the three months ended June 30, 2007 and 2006 of$782,000 and $400,000, respectively, and $1.556 million and $796,000,respectively for the six months ended June 30, 2007 and 2006. Stockcompensation expense is recorded as a component of general and administrativeexpenses for each period. The Company did not recognize a tax benefit from thestock compensation expense because the Company considers it is more likely thannot that the related deferred tax assets, which have been reduced by a fullvaluation allowance, will not be realized.

The Black-Scholes option-pricing model was used toestimate the option fair values. The option-pricing model requires a number ofassumptions, of which the most significant are, expected stock pricevolatility, the expected pre-vesting forfeiture rate and the expected optionterm (the amount of time from the grant date until the options are exercised orexpire). Expected volatility was calculated based upon actual historical stockprice movements through the measurement date of the stock option grant.Expected pre-vesting forfeitures were estimated based on actual historicalpre-vesting forfeitures over the most recent periods ending June 30, 2007 forthe expected option term. The expected option term was estimated based onhistorical averages over the most recent periods ending June 30, 2007.

A total of 100,000 new option grants were made to anon-employee director of the Company in April 2007 at a grant price of $9.25per share.  This grant was subject to approval of and amendment to the2004 Director’s Stock Option Plan that was approved at the Annual Meeting ofStockholders on July 12, 2007.  As suchgrant was subject to stockholder approval, the stock compensation expenserelated to these options will be recognized upon the approval date of July 12,2007.

A total of 100,000 new option grants were made to thenon-employee directors of the Company in June 2006 at grant prices of $5.15 and$5.13 per share.  Using the Black-Scholes option pricing model, theweighted average assumptions for grants in 2006: fair market value: $5.13 and$5.11, expected volatility of 184.7% and 184.7% and risk-free interest rates of5.20% and 5.09%.  An expected life of 9.31 years was used for the optionsgranted.  The weighted average fair value of the options granted in 2006was $5.12.

***Stock Options as of the Six Months EndedJune 30, 2007 and 2006***

*Employee Stock Options*

The Company has two stock Incentive Plans for Employees,both of which were approved by the Company’s stockholders.  Under the 1995Stock Incentive Plan (the “1995 Plan”) 2,284,947 shares may be purchased uponthe exercise of outstanding options at June 30, 2007, with exercise pricesranging from $0.76 to $11.75 per share.  No new options may be grantedunder the 1995 Plan.

Under the Company’s 2004 Stock Incentive Plan (the “2004Plan”) a total of 1,750,000 shares may be issued upon exercise of optionsgranted under the 2004 Plan. At June 30, 2007 there were outstanding under the2004 Plan options for the purchase of 1,614,877 shares of Common Stock atexercise prices ranging from $2.96 to $5.19 per share. At June 30, 2007, 30,500shares were available for future grants under the 2004 Plan.

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Employee stock options generally vest ratably over a 3or 4 year time frame and have a contractual term of 10 years.

*Directors Stock Options*

On June 19, 2001, the Company granted to certainoutside directors options to purchase 75,000 shares of the Company’s CommonStock at an exercise price of $0.88 per share.  All such options wereimmediately exercisable and will expire June 19, 2011 or 30 daysafter the holder ceases to be a director of the Company or one year after suchholder’s death, whichever occurs first.  25,000 of these options have beenexercised and 25,000 of these options have expired unexercised as of June 30,2007.

On June 2, 2004 the Company adopted the 2004Directors’ Stock Option Plan (the “2004 Directors’ Plan”). Under the 2004Directors’ Plan, each non-employee director on the date the Plan was adoptedwas granted an option to purchase 75,000 shares of Common Stock. Eachnon-employee Director elected or appointed to the Board of Directors for thefirst time will be granted an option to purchase 25,000 shares of Common Stockand, each Non-Employee Director shall be granted an option to purchase 25,000shares either, (a) upon his or her reelection at an annual meeting of theCompany’s stockholders or (b) in any calendar year in which an annualmeeting of stockholders is not held, on June 1 of such year. In June 2006,the Directors’ Stock Option Plan was amended to increase the initial grants tonon-employee Directors to 50,000 shares of Common Stock.  The 2004Directors’ Plan replaces an earlier plan that expired in 2004. Stock optionsunder the 2004 Directors’ Plan vest ratably over a 4 year time frame or suchother vesting schedule as designated by the Compensation Committee of the Boardof Directors.  All option grants have acontractual term of 10 years.  TheCompensation Committee may also make discretionary option awards under thisplan.

At the June 2006 annual meeting of the stockholders,each of the non-employee directors of the Company was granted an option underthe 2004 Directors Plan to purchase 25,000 shares of the Company’s common stockat an exercise price of $5.15 per share. In June and October 2006 options topurchase 50,000 shares of the Company’s Common Stock were granted to two newnon-employee directors of the Company at exercise prices of $5.13 and $2.97,respectively.  The non-employee directors hold options covering 350,000shares under the 2004 Directors’ Plan at June 30, 2007. At June 30, 2007,700,000 shares were available for future grants under the 2004 Directors’ Plan.

A total of 100,000 new option grants were made to anon-employee director of the Company in April 2007 at a grant price of $9.25per share subject to the approval of amendments to the 2004 Directors’ StockOption Plan that was voted on at the Annual Meeting of Stockholders held onJuly 12, 2007.  Such approval was grantedat the July 12, 2007 Annual Meeting.

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The following table summarizes stock optionsoutstanding and changes during the six months period ended June 30, 2007:
| ** **                              | ** ** | **Outstanding Options** | ** ** |
|-----------------------------------------|------------|------------------------------|------------|
| ** **                              | ** ** | **Number of  Shares**   | ** ** | **Weighted  Average  Exercise  Price** | ** ** | **Weighted  Average  Remaining  Contractual  Term  (in years)** | ** ** | **Aggregate  Intrinsic  Value** | ** ** |
| Options  outstanding at January 1, 2007 |       | 4,725,209                    |       | $ | 1.47 |   |   |   |   |   |
| Exercised                               |       | (434,497                     | )          | $ | 1.65 |   |   |   |   |   |
| Canceled or  forfeited                  |       | (58,575                      | )          | $ | 14.96 |   |   |   |   |   |
| Options  outstanding at June 30, 2007   |       | 4,232,137                    |       | $ | 2.34 |   | 7.59 |   | $ | 36,798,157 |   |
|                                    |       |                         |       |   |   |   |   |   |   |
| Options exercisable at  June 30, 2007   |       | 2,602,884                    |       | $ | 1.95 |   | 7.05 |   | $ | 23,646,515 |   |

 

Sharesavailable for grant under the Plans as of June 30, 2007 were 730,500.

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Stock options outstanding and currently exercisable atJune 30, 2007 are as follows:
| ** **                      | ** ** | **Options Outstanding**             | ** ** | **Options Exercisable**                                                 | ** ** |
|---------------------------------|------------|------------------------------------------|------------|------------------------------------------------------------------------------|------------|
| **Stock Option Plan** | ** ** | **Number of  Options  Outstanding** | ** ** | **Weighted Average  Remaining  Contractual Life  (in years)** | ** ** | **Weighted Average  Exercise price** | ** ** | **Number of  Options  Exercisable** | ** ** | **Weighted Average  Exercise Price** | ** ** |
| 1995 Stock  Incentive Plan      |       | 2,284,947                                |       | 6.78                                                                         |       | $ | 1.51 |   | 1,738,908 |   | $ | 1.39 |   |
| 2004 Employee  Incentive Plan   |       | 1,614,877                                |       | 8.69                                                                         |       | 3.42 |   | 719,163 |   | 3.30 |   |
| Directors Stock  Option Plan    |       | 1,063                                    |       | 2.71                                                                         |       | 4.99 |   | 1,063 |   | 4.99 |   |
| 2004 Directors  Plan            |       | 306,250                                  |       | 8.18                                                                         |       | 2.85 |   | 118,750 |   | 2.10 |   |
| Other                           |       | 25,000                                   |       | 4.00                                                                         |       | 0.88 |   | 25,000 |   | 0.88 |   |
|                            |       | 4,232,137                                |       | 7.59                                                                         |       | $ | 2.34 |   | 2,602,884 |   | $ | 1.95 |   |

 

Total estimated unrecognized compensation cost fromunvested stock options as of June 30, 2007 was approximately $3.1 million,which is expected to be recognized over a weighted average period ofapproximately 2 years.

**7.****                                      ASSETRETIREMENT OBLIGATIONS**

The following table shows the change in the balance ofthe restoration and reclamation liability during the three months ended June30, 2007:
| Reserve for future  restoration and reclamation costs beginning of period |   | $        | 4,229,193 |   |
|---------------------------------------------------------------------------|--------|----------|-----------|--------|
| Additions and  changes in cash flow estimates                             |   | 344,918  |      |
| Costs incurred                                                            |   | (726,107 | )         |
| Accretion  expense                                                        |   | 66,788   |      |
| Reserve for future  restoration and reclamation costs at end of period    |   | $        | 3,914,790 |   |

 

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

**Convertible Notes**

In March 2006, 103,896 shares of the Company’s CommonStock were issued in connection with the conversion of $182,900 of principaland accrued interest of the Convertible Notes issued in 2000.

**Common Stock Issued Upon Exercise of Options**

During the first six months of 2007, the Companyraised $714,754 of equity through the issuance of 434,497 shares of CommonStock of the Company upon the exercise of outstanding stock options.

The following table details the changes inshareholders equity for the six months ended June 30, 2007:
| ** **                        | ** ** | **Common Stock** | ** ** | **Paid-In** | ** ** | **Accumulated** | ** ** | ** **  | ** ** |
|-----------------------------------|------------|-----------------------|------------|-------------|------------|-----------------|------------|-------------|------------|
| ** **                        | ** ** | **Shares**            | ** ** | **Amount**  | ** ** | **Capital**     | ** ** | **Deficit** | ** ** | **Treasury Stock** | ** ** |
| Balances,  December 31, 2006 |       | 51,791,339            |       | $           | 51,829     |            | $          | 126,252,871 |       | $ | (89,525,887 | ) | $ | (9,418 | ) |
| Net loss                          |       | —                |       | —      |       | —          |       | (237,207    | )          | — |   |
| Stock option  exercise            |       | 434,497               |       | 435         |       | 714,319         |       | —      |       | — |   |
| Stock  compensation expense       |       | —                |       | —      |       | 1,555,941       |       | —      |       | — |   |
| Balances, June 30, 2007           |       | 52,225,836            |       | $           | 52,264     |            | $          | 128,523,131 |       | $ | (89,763,094 | ) | $ | (9,418 | ) |

 

**9.**                                      **ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES**

On January 1, 2007, we adopted FASBInterpretation No. 48, “Accounting for Uncertainty in Income Taxes, an interpretationof FASB Statements No. 109” (“FIN 48”). FIN 48 clarifies the accounting foruncertainty in income taxes by prescribing a two-step method of firstevaluating whether a tax position has met a more likely than not recognitionthreshold and second, measuring that tax

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positionto determine the amount of benefit to be recognized in the financialstatements. FIN 48 provides guidance on the presentation of such positionswithin a classified statement of financial position as well as onderecognition, interest and penalties, accounting in interim periods,disclosure, and transition.

As a result of the implementation of FIN 48, werecognized no change in our recorded assets or liabilities for unrecognizedincome tax benefits. Based on our analysis of all material tax positions taken,management believes the technical merits of these positions are justified andexpects that the full amount of the deductions taken and associated taxbenefits will be allowed.

FIN 48 requires the evaluation of a tax position as atwo-step process. We must determine whether it is more likely than not that atax position will be sustained upon examination, including the resolution ofany related appeals or litigation processes, based on the technical merits ofthe position. If the tax position meets the “more likely than not” recognitionthreshold, then the tax benefit is measured and recorded at the largest amountthat is greater than 50 percent likely of being realized upon ultimatesettlement. The re-assessment of our tax positions in accordance with FIN 48did not result in any material change to our financial condition, results ofoperations or cash flows.

We have also assessed the classification of interestand penalties, if any, related to income tax matters. Pursuant to the applicationof FIN 48, we have made an accounting election to treat interest and penaltiesrelated to income tax matters, if any, as a component of income tax expenserather than other operating expenses.

**10.**                               **IMPACT OF RECENT ACCOUNTINGPRONOUNCEMENTS**

***Fair ValueMeasurements.*** In September 2006, the FASB issued SFASNo. 157, “Fair Value Measurements,” which provides a common definition forthe measurement of fair value for use in applying generally accepted accountingprinciples in the United States of America and in preparing financial statementdisclosures. SFAS No. 157 is effective for fiscal years beginning afterNovember 15, 2007. We are evaluating the effect of the adoption andimplementation of SFAS No. 157, which is not expected to have a materialimpact on our financial condition, results of operations or cash flows.

***Fair Value Optionfor Financial Assets and Liabilities.*** In February 2007,the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assetsand Financial Liabilities,” which permits entities to choose to measure manyfinancial instruments and certain other items at fair value. SFAS No. 159is effective for fiscal years beginning after November 15, 2007. We areevaluating the effect of the adoption and implementation of SFAS No. 159,which is not expected to have a material impact on our financial condition,results of operations or cash flows.

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**ITEM2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS**

**Forward Looking Statements**

The following summary is qualified in its entirety by,and should be read in conjunction with, the more detailed information and any financialdata incorporated herein by reference to the Company’s reports filed with theSecurities and Exchange Commission under the Securities Exchange Act of 1934.Except for historical information contained in this report, the mattersdiscussed herein contain forward-looking statements, made pursuant to the “safeharbor” provisions of the Private Securities Litigation Reform Act of 1995,including management’s expectations regarding the Company’s reserves andmineralized uranium materials, timing of receipt of mining permits, productioncapacity of mining operations planned for properties in South Texas and NewMexico and planned dates for commencement of production at such properties.Such forward-looking statements are inherently uncertain, and investors mustrecognize that actual results may differ from management’s expectations. Keyfactors impacting current and future operations of the Company include theprice of uranium, weather conditions, operating conditions at the Company’smining projects, government regulation of the mining industry and the nuclearpower industry, the world-wide supply and demand of uranium, availability ofcapital, timely receipt of mining and other permits from regulatory agenciesand other matters indicated in “Cautionary Statement,” found in the Company’sAnnual Report.

**Financial Condition and Results of Operations**

**Comparison of Three and Six Months Ended June 30, 2007 and2006**

*Production and productioncosts. *In the firstsix months of 2007 we produced 244,900 pounds.  The Vasquez projectproduced 64,600 pounds and Kingsville Dome produced 180,300 pounds. Production in the first six months of 2006 was 114,800, 91,300 from Vasquez and23,500 from Kingsville Dome.  Thefollowing table details our production and production cost breakdown for thethree and six months ended June 30, 2007 and 2006.
|                                    | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                         | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **Vasquez  production**            |       | 20,412                                          |       | 35,943                                        |       | 64,557 |   | 91,321 |   |
|                               |       |                                            |       |                                          |       |   |   |   |   |
| **Kingsville  Dome production**    |       | 115,425                                         |       | 23,461                                        |       | 180,321 |   | 23,461 |   |
|                               |       |                                            |       |                                          |       |   |   |   |   |
| **Total  production**              |       | 135,837                                         |       | 59,404                                        |       | 244,878 |   | 114,782 |   |
| ** **                         |       |                                            |       |                                          |       |   |   |   |   |
| Total operating  costs             |       | $                                               | 1,708,622  |                                          | $          | 1,576,417 |   | $ | 3,297,405 |   | $ | 3,131,799 |   |
| Per pound  operating costs         |       | $                                               | 12.58      |                                          | $          | 26.54 |   | $ | 13.47 |   | $ | 27.28 |   |
| Total deprec.  and depletion costs |       | $                                               | 2,064,767  |                                          | $          | 987,843 |   | $ | 4,231,521 |   | $ | 1,567,093 |   |
| Per pound  DD&A cost           |       | $                                               | 15.20      |                                          | $          | 16.63 |   | $ | 17.28 |   | $ | 13.65 |   |
| Total production  cost             |       | $                                               | 3,773,389  |                                          | $          | 2,564,260 |   | $ | 7,528,926 |   | $ | 4,698,892 |   |
| Production cost per pound          |       | $                                               | 27.78      |                                          | $          | 43.17 |   | $ | 30.75 |   | $ | 40.94 |   |

 

*Uranium Sales. *In the first half of 2007we sold 194,022 pounds generating revenue of $12.537 million ($64.62 perpound), compared to sales of 129,970 pounds in the same period of 2006 forrevenue of $2.913 million ($22.42 per pound).  In the quarter ended June30, 2007 we sold 114,351 pounds and had revenue of $7.963 million ($69.63 perpound) compared to second quarter 2006 sales of 64,355 pounds which generatedrevenue of $1.845 million ($28.67 per pound).  Our increase in the salesresulted from our increased production in 2007 achieved by the commencement ofoperations in PAA#3 at Kingsville Dome. The increase in sales revenue was the result of both the increase inpounds sold but more significantly from higher prices we received under newcontracts entered into with each of our two customers in March 2006 whichsuperseded the previous contracts.

*Cost of Uranium Sales. *Ourcost of uranium sales from the sale of produced uranium in the first six monthsof 2007 was $8.4 million compared to $5.3 million in the same period of 2006,excluding the gain on derivatives of $34.8 million recorded in connection withthe revised uranium sales contracts in the first half of 2006.  Cost of uranium sales is comprised primarilyof royalties and commissions related to our uranium sales, production costs, includingoperating expenses, depreciation and depletion expenses and amortization of ourrestoration and reclamation cost estimates. The following table details the cost of uranium sales breakdown for thethree and six months ended June 30, 2007 and 2006.

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|                                         | ** ** | **Three Months Ended  June 30,** | ** ** | **Six Months Ended  June 30,** | ** ** |
|-----------------------------------------|------------|-------------------------------------------------|------------|-----------------------------------------------|------------|
| ** **                              | ** ** | **2007**                                        | ** ** | **2006**                                      | ** ** | **2007** | ** ** | **2006** | ** ** |
| **Total  pounds sold**                  |       | 114,351                                         |       | 64,355                                        |       | 194,022 |   | 129,970 |   |
| Total operating  expenses               |       | $                                               | 1,556,011  |                                          | $          | 1,593,836 |   | $ | 3,343,074 |   | $ | 3,117,429 |   |
| Per pound  operating expense            |       | $                                               | 13.61      |                                          | $          | 24.77 |   | $ | 17.23 |   | $ | 23.99 |   |
| Depreciation and  depletion             |       | $                                               | 1,810,964  |                                          | $          | 772,250 |   | $ | 3,298,013 |   | $ | 1,389,089 |   |
| Per pound  DD&A expense             |       | $                                               | 15.84      |                                          | $          | 12.00 |   | $ | 17.00 |   | $ | 10.69 |   |
| Direct cost of  uranium production sold |       | $                                               | 3,366,975  |                                          | $          | 2,366,086 |   | $ | 6,641,087 |   | $ | 4,506,517 |   |
| Direct cost of  sales per pound         |       | $                                               | 29.44      |                                          | $          | 36.77 |   | $ | 34.23 |   | $ | 34.67 |   |
|                                    |       |                                            |       |                                          |       |   |   |   |   |
| **Royalties  and commissions**          |       | $                                               | 981,966    |                                          | $          | 169,891 |   | $ | 1,420,942 |   | $ | 249,326 |   |
| Royalties and  commissions per pound    |       | $                                               | 8.59       |                                          | $          | 2.64 |   | $ | 7.32 |   | $ | 1.92 |   |

 

The second quarter and six months ended June 30, 2007reflected a higher percentage of sales of Kingsville Dome production comparedto Vasquez production sold, resulting from the continued increase in productionfrom PAA #3 wellfields along with a decrease of production from the Vasquezproject.  Kingsville Dome PAA#3wellfields have shown both lower operating and capital cost compared to theprevious Kingsville Dome wellfields placed in production in the second quarterof 2006 because of the higher quality of the ore trend being put under the newwellfield.  The PAA#3 wellfields havealso demonstrated lower operating costs than our Vasquez production because ofthe better ore quality at Kingsville Dome and because the Kingsville Dome orebody does not contain the re-reduced ore characteristics found at Vasquez.

Accretion and amortization of future restoration costsin the second quarter of 2007 and 2006 was $137,000 and $141,000, respectivelyand $307,000 and $274,000, respectively for the first six months of 2007 and2006.

*General and Administrative Charges.* We incurred general and administrative charges and corporate depreciation of$2.5 million and $1.6 million, respectively in the three months ended June 30,2007 and 2006.   General andadministrative charges and corporate depreciation was $4.7 million and $2.7million, respectively in the six months ended June 30, 2007 and 2006.

Significant expenditures for general andadministrative expenses for the three and six months ended June 30, 2007 and2006 were:
|                                             | ** ** | **Three Months Ended** | ** ** | **Six Months Ended** | ** ** |
|---------------------------------------------|------------|----------------------------------|------------|--------------------------------|------------|
| ** **                                  | ** ** | **2007**                         | ** ** | **2006**                       | ** ** | **2007** | ** ** | **2006** | ** ** |
| Stock  compensation expense                 |       | $                                | 782,000    |                           | $          | 400,000 |   | $ | 1,556,000 |   | $ | 796,000 |   |
| Salaries and  payroll burden                |       | 573,000                          |       | 354,000                        |       | 1,122,000 |   | 655,000 |   |
| Legal,  accounting, public company expenses |       | 485,000                          |       | 539,000                        |       | 837,000 |   | 695,000 |   |
| Insurance and  bank fees                    |       | 159,000                          |       | 104,000                        |       | 271,000 |   | 189,000 |   |
| Consulting and  professional services       |       | 276,000                          |       | 86,000                         |       | 525,000 |   | 144,000 |   |
| Office, travel  and other expenses          |       | 204,000                          |       | 117,000                        |       | 380,000 |   | 178,000 |   |
|                                        |       |                             |       |                           |       |   |   |   |   |
| Total                                       |       | $                                | 2,479,000  |                           | $          | 1,600,000 |   | $ | 4,691,000 |   | $ | 2,657,000 |   |

 

The non-cash compensation expense recorded for thethree and six months ended June 30, 2007 and 2006 resulted from the adoption ofSFAS 123(R) in January 2006, requiring the recognition of expense related tothe Company’s stock option grants.

Salary and payroll costs increases for the three andsix months presented resulted primarily from the additions to the engineering,professional and executive levels in South Texas and New Mexico made in 2007and 2006 and compensation increases for the Company’s key personnel in thesecond half of 2006.

Increases in the Company’s legal, accounting andpublic company expenses in the first six months of 2007 compared to 2006resulted from audit and consulting fees related to Sarbanes-Oxley compliance,listing fees related to our April 2007 NASDAQ listing and the increase in theCompany’s Board of Directors membership in late 2006.  These increases were offset by a reduction inlegal fees, as the 2006 period included significant legal costs related to theItochu joint venture agreement.

The decrease in the Company’s legal, accounting andpublic company expenses in the second quarter of 2007 compared to 2006 resultedfrom a reduction in legal fees in 2006 related to the Itochu jointventure.  Increases in the second quarterof 2007 were from audit and consulting fees related to Sarbanes-Oxley compliance,listing fees related to our April 2007 NASDAQ listing and the increase in theCompany’s Board of Directors membership in late 2006.

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Our insurance costs increased in the three and sixmonths ended June 30, 2007 compared to 2006 from higher directors and officer’sinsurance premiums, higher cost of property and casualty coverage and increasedvehicle coverage premiums resulting from additional vehicles in 2007.

The costs for consulting and professional servicesincreased in the three and six months ended June 30, 2007 compared to 2006resulted from increases in project related activities in 2007.  Theseactivities include work performed in the review and assessment of our NewMexico property data bases to evaluate their potential as conventionalmining projects, New Mexico costs related to the preparation of ISR projectstowards their final licensing and permitting phase, increases in environmental,health and safety training, the engagement of an investor relations and mediarelations firm in late 2006, consulting and computer networking and web sitedesign work.

Increased office costs incurred in the three and sixmonths ended June 30, 2007 compared to 2006 resulted primarily from the openingof a corporate office location in Corpus Christi, Texas in June 2006, increasesin the South Texas Kingsville operations office resulting from the personneladded in 2006 and additions made to the Crownpoint office in New Mexico tosupport the additional activities in the first quarter of 2007.

*Net Earnings and Losses.*Forthe three months ended June 30, 2007 and 2006, we had net earnings of $1.2million and a net loss of $2.1 million, respectively.  The six monthsended June 30, 2007 and 2006, had a net loss of $237,000 and net earnings of$30.0 million, respectively.  The earnings in 2006 included a non-cashgain on derivatives of $34.8 million.

*Cash Flow. *Asof June 30, 2007 we have a cash balance of approximately $16.5 million comparedto $31.6 million at the same date in 2006.

In the first six months of 2007, we had positive cashflow provided by operations of $4.7 million, resulting primarily from thehigher volume of uranium sold and the increase in sales prices received underour uranium sales contracts that were amended in March 2006.  We used $9.0million in investing activities during the first half of 2007.  These expenditures were primarily forwellfield development, evaluation drilling capital and plant and dryer upgradesat Kingsville Dome of $3.8 million, plant and equipment expenditures forrestoration start-up at Vasquez of $411,000, Rosita and Rosita South projectexpenditures for wellfield development, evaluation drilling capital and plantand dryer upgrades of $3.0 million, other Texas property and other assets of$839,000 and property additions in New Mexico of $467,000 primarily for licenseand permitting activities.

In the first half of 2006, we had a negative cash flowused in operations of ($2.0 million), resulting primarily from our lowproduction volumes coupled with high production costs for the first half of theyear.  We also used $20.7 million in investing activities, the largestcomponent of which was the payment of $12.0 million to one of our customers inconnection with the restructuring of our uranium sales contract.  Othersignificant investing activities were for production start-up capital atKingsville Dome of $5.2 million, additional wellfield development at Vasquez of$1.6 million, other plant and equipment additions of $0.9 million and otherproperty additions in Texas and New Mexico of $1.0 million.

**Liquidity—Cash Sources and Uses for 2007**

In the second quarter 2007 we were able to remain cashneutral for the period.  Our cash balanceat June 30, 2007 was $16.5 million, essentially the same as our balance fromthe previous quarter.  During the secondquarter of 2007 we averaged a net cash outflow of $1.2 million per month. Basedupon our current plan of operations we anticipate that our operating andcapital requirements for 2007 will be met through existing cash and throughcash to be generated from operations.

**Contingent Liabilities—Off Balance Sheet Arrangements**

In April 2006, the Company completed the sale of10,200,307 shares of its Common Stock at $4.90 per share to accreditedinvestors resulting in gross proceeds of approximately $50 million beforeexpenses of the offering.  The Company has filed a registration statementunder the Securities Act of 1933, as amended, to register the resale of theshares.  Such shares are subject to certain resale registration rightsthat include penalties (1% per month) in the event registration statement doesnot become effective in a timely manner or if the registration statement failsto remain effective.  On August 4, 2006, such registration statement wasmade effective and the Company met its initial obligation.  We haveperiodically updated the registration statement as necessary to ensure that theregistration statement has continued to remain effective.

The Company has obtained financial surety relating tocertain of its future restoration and reclamation obligations as required bythe State of Texas regulatory agencies. The Company has bank Letters of Credit(the “L/C’s) and performance bonds issued for the benefit of the Company tosatisfy such regulatory requirements. The L/C’s were issued by Bank of Americaand the performance bonds have been issued by United States Fidelity andGuaranty Company (“USF&G”). L/C’s for $2.9 million and $2.0 million wereissued at June 30, 2007 and December 31, 2006, respectively, such L/C’sare collateralized in their entirety by certificates of deposit.

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Performance bonds totaling $2.8 million were issuedfor the benefit of the Company at June 30, 2007 and December 31, 2006.USF&G has required that the Company deposit funds collateralizing a portionof the bonds. The amount of bonding issued by USF&G exceeded the amount ofcollateral by $2.5 million at June 30, 2007 and December 31, 2006,respectively. In the event that USF&G is required to perform under itsbonds or the bonds are called by the state agencies, the Company would beobligated to pay any expenditure in excess of the collateral.

**Critical Accounting Policies**

Our significant accounting policies are described inNote 2 to the consolidated financial statements included in the Company’s 2006Annual Report on Form 10-K/A.  We believe our most criticalaccounting policies involve those requiring the use of significant estimatesand assumptions in determining values or projecting future costs.

Specifically regarding our uranium properties,significant estimates were utilized in determining the carrying value of theseassets. These assets have been recorded at their estimated net realizable valuefor impairment purposes on a liquidation basis, which is less than our cost.The actual value realized from these assets may vary significantly from theseestimates based upon market conditions, financing availability and otherfactors.

Regarding our reserve for future restoration andreclamation costs, significant estimates were utilized in determining thefuture costs to complete the groundwater restoration and surface reclamation atour mine sites.  The actual cost to conduct these activities may varysignificantly from these estimates.

Such estimates and assumptions affect the reportedamounts of assets and liabilities and disclosure of contingent assets andliabilities at the date of the financial statements and the reported amounts ofexpenses during the reporting period.

17

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**ITEM 3.****                                                     QUANTITATIVEAND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Uranium Price Volatility**

The Company is subject to market risk related to themarket price of uranium.  The Company’s cash flow has historically beendependent on the price of uranium, which is determined primarily by globalsupply and demand, relative to the Company’s cost of production. Historically, uranium prices have been subject to fluctuation, and the price ofuranium has been and will continue to be affected by numerous factors beyondthe Company’s control, including the demand for nuclear power, politicaland economic conditions, governmental legislation in uranium producing andconsuming countries and production levels and costs of production of otheruranium producing companies.

**Derivative Financial Instruments**

The Company determined that its long-term uraniumsales contracts in effect prior to March 2006 met the definition of derivativefinancial instruments for financial statement reporting purposes.  Changesin the Company’s derivatives represent non-cash charges to earnings for thepresent value of the loss the Company would incur in the event it would berequired to purchase uranium in the spot market to satisfy the deliveryobligations under the uranium sales contracts.  The Company has notentered into hedge transactions with respect to its uranium sales contracts.

The Company amended these contracts inMarch 2006.  The amended contracts obligate the Company to deliver50% of its uranium production to each customer, and do not obligate the Companyto deliver any uranium in excess of its production.  The Company hasdetermined that the terms of the amended contracts eliminates theirqualification as derivatives and therefore are not required to be valued atfair value.

**ITEM 4.****                                                     CONTROLSAND PROCEDURES**

During the the year ended December 31, 2006 and thequarter ended June 30, 2007, the Company’s management, with the participationof the Chief Executive Officer and Chief Financial Officer of the Company,carried out an evaluation of the effectiveness of the design and operation ofthe Company’s disclosure controls and procedures (as defined in Rules 13a-15(e)and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the “ExchangeAct”)).

Based on that evaluation, our Chief Executive Officerand Chief Financial Officer concluded that our disclosure controls and proceduresas of December 31, 2006 and June 30, 2007 were not effective as aresult of the material weakness in our internal controls over financialreporting discussed below.

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

The Company’s management assessed the effectiveness ofthe Company’s internal control over financial reporting as of December 31,2006. In making this assessment, the Company’s management used the criteria setforth by the Committee of Sponsoring Organizations of the Treadway Commission(COSO) in *Internal Control-IntegratedFramework*.

Under the supervision and with the participation ofour management, including our Chief Executive Officer and Chief FinancialOfficer, we conducted an evaluation of the effectiveness of our internalcontrol over financial reporting in connection with preparation of the annualreport on Form 10-K for the year ended December 31, 2006. As a resultof these assessments, a material weakness was identified in March 2007, inconnection with our year ended December 31, 2006 audit procedures, leadingmanagement to conclude that our internal controls over financial reporting werenot effective as of December 31, 2006. A material weakness is a controldeficiency, or combination of control deficiencies, that results in more than aremote likelihood that a material misstatement of the annual or interimfinancial statements will not be prevented or detected.

The following material weakness forms the basis forour conclusion at December 31, 2006:

·       *Controls over the Review of Financial Statements.*Our financial and accounting organization consists of the VicePresident—Finance and the Corporate Controller. Due to a lack of financial andaccounting resources, the financial records preparation and review proceduresperformed by our personnel with respect to our application of the fair valuerecognition provisions of Statement of Financial Accounting Standard123(R) ” *Share-Based Payment”*(“SFAS 123(R)”) for the fourth quarter of 2006 did not correctly record certainterms of stock option grants made in the fourth quarter of 2006. This matterwas identified by our auditors in March 2007 during the course of theiraudit procedures and resulted in an audit adjustment increasing stockcompensation expense by $629,000 in our year end 2006 financial statements.Because of this lack of resources, review procedures were not consistentlyperformed on a timely basis to ensure that financial reporting and fraud riskcontrols were operating in the manner designed.

18

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**Changes in Internal Controls**

During the second quarter of 2007 we have made certainchanges in our internal control over financial reporting that may havematerially affected, or are reasonably likely to materially affect, ourinternal control over financial reporting.  Management is currentlyevaluating the implementation of these procedures and such additionalprocedures that may be necessary to fully remediate the material weaknessdescribed above. Management is in the process of making the following changes toits system of internal controls:

·       Weare relocating and expanding our corporate office effective August 2007.  This will allow for the hiring of additionalpersonnel, including both experienced accounting and support staff to allow forimproved segregation of duties and allow for a more thorough review, by seniorfinancial personnel, of the financial statements and underlying supportingdocumentation. We added one accounting staff in June 2007 and have designedtheir responsibilities to improve the segregation of duties functionspreviously identified as internal control weaknesses.  We are currently reviewing potentialcandidates to expand our internal accounting resources and expect to make theseadditional hires in August 2007.

·       Theaddition of accounting and support staff in June 2007 has allowed us to conducta more detailed review of our purchasing and procurement procedures.  We are currently evaluating the results ofthis review and expect to determine an evaluation on the compliance with ourexisting purchasing policies and permit the implementation of additional reviewprocedures at each uranium project location and in the financial reportingarea.

We believe thechanges that were made in the second quarter of 2007 have addressed certain ofthose weaknesses in internal controls identified as of December 31, 2006.  While we believe certain of thesedeficiencies have been remediated and/or mitigated we have not conducted acomplete review and assessment of our overall internal control environment tobe able to conclude that the material weakness identified in connection withour December 31, 2006 financial statements is no longer applicable.

19

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**PART II - OTHER INFORMATION**

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

No change from the prior annual filing on our Form10-K/A.

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

**Over 65.7% of our shares of CommonStock is controlled by Principal Stockholders and Management.**

Over 56.0% of our Common Stock is controlled by fivestockholders of record. In addition, our directors and officers are thebeneficial owners of about 9.7% of our Common Stock. This includes with respectto both groups shares that may be purchased upon the exercise of outstandingoptions. Such ownership by the Company’s principal shareholders, executiveofficers and directors may have the effect of delaying, deferring, preventingor facilitating a sale of the Company or a business combination with a thirdparty.

The availability for sale of a large amount of sharesmay depress the market price for our Common Stock.

**As of December 31, 2006 and June 30, 2007, weidentified a material weakness in internal control over financial reporting andconcluded that our disclosure controls were not effective. If we fail tomaintain an effective system of internal and disclosure controls, we may not beable to accurately report our financial results or prevent fraud. As a result,investors may be misled and lose confidence in our financial reporting anddisclosures and the price of our common stock may be negatively affected.**

The Sarbanes-Oxley Act of 2002 requires that we reportannually on the effectiveness of our internal control over financial reporting.Among other things, we must perform systems and process evaluation and testing.We must also conduct an assessment of our internal controls to allow managementto report on, and our independent registered public accounting firm to attestto, our assessment of our internal control over financial reporting as requiredby Section 404 of the Sarbanes-Oxley Act.

In connection with the assessment of our internalcontrol over financial reporting for our Annual Report on Form 10-K/A, asfurther described in Item 9A of such Form 10K/A, management and our registeredpublic accounting firm determined that as of December 31, 2006 and June 30, 2007 our disclosurecontrols and procedures were ineffective because of the material weakness inour internal control over financial reporting.

Although we have made and are continuing to makeimprovements in our internal controls, if we are unsuccessful in remediatingthe material weakness impacting our internal control over financial reportingand disclosure controls, or if we discover other deficiencies, it may adverselyimpact our ability to report accurately and in a timely manner our financialcondition and results of operations in the future, which may cause investors tolose confidence in our financial reporting and may negatively affect the priceof our Common Stock. Moreover, effective internal and disclosure controls arenecessary to produce accurate, reliable financial reports and to prevent fraud.If we continue to have deficiencies in our internal control over financialreporting and disclosure controls, they may negatively impact our business andoperations.

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

None

20

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

None

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

None

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

None

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

See the Index to Exhibits on Page E-1 for a listing ofthe exhibits that are filed as part of this Quarterly Report.

21

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**SIGNATURES**

Pursuant to the requirements of the SecuritiesExchange Act of 1934, the Registrant has duly caused this report to be signedon its behalf by the undersigned thereunto duly authorized.
|                       |   | **URANIUM  RESOURCES, INC.** |                                          |
|-----------------------|--------|------------------------------|-----------------------------------------------|
|                  |   |                         |                                          |
| Dated: August 9, 2007 |   | By:                          | */s/*  David N. Clark                         |   |
|                  |   |                         | David N. Clark                                |   |
|                  |   |                         | Director and                                  |   |
|                  |   |                         | Chief Executive Officer                       |   |
|                  |   |                         |                                          |   |
| Dated: August 9, 2007 |   | By:                          | */s/*  Thomas H. Ehrlich                      |   |
|                  |   |                         | Thomas H. Ehrlich                             |   |
|                  |   |                         | Vice President -  Finance and                 |   |
|                  |   |                         | Chief Financial Officer                       |   |
|                  |   |                         | (Principal Financial  and Accounting Officer) |   |

 

22

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**EXHIBITINDEX**
| Exhibit  Number | ** ** | **Description**                                                                                                                                                                                                                                             |
|-----------------|------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1*            |       | Restated Certificate of Incorporation of the  Company, dated February 15, 2004 (filed with the Company’s Registration  Statement on Form SB-2 dated July 26, 2004, SEC File Number 333-117653).                                              |
|            |       |                                                                                                                                                                                                                                                        |
| 3.1.1*          |       | Certificate of Amendment of Restated Certificate of  Incorporation of the Company (filed with the Company’s Form 8-K dated  April 11, 2006, SEC File Number 000-17171).                                                                      |
|            |       |                                                                                                                                                                                                                                                        |
| 3.2*            |       | Restated Bylaws of the Company (filed with the  Company’s Form 8-K on April 14, 2005).                                                                                                                                                       |
|            |       |                                                                                                                                                                                                                                                        |
| 4.1*            |       | Common Stock Purchase Agreement dated  February 28, 2001 between the Company and Purchasers of the Common Stock  of the Company (filed with the Company’s Annual Report on Form 10-KA  dated July 26, 2001, SEC File Number 000-17171). |
|            |       |                                                                                                                                                                                                                                                        |
| 10.1*           |       | Amended and Restated Directors Stock Option Plan  (filed with the Company’s Form S-8 Registration No. 333- 00349 on  January 22, 1996).                                                                                                 |
|            |       |                                                                                                                                                                                                                                                        |
| 10.2*           |       | Amended and Restated Employee’s Stock Option Plan  (filed with the Company’s Form S-8 Registration No. 333-00403 on  January 24, 1996).                                                                                                 |
|            |       |                                                                                                                                                                                                                                                        |
| 10.3*           |       | Amended and restated 1995 Stock Incentive Plan  (filed with the Company’s Form SB-2 Registration No. 333-117653 on  July 26, 2005).                                                                                                     |
|            |       |                                                                                                                                                                                                                                                        |
| 10.4*           |       | Non-Qualified Stock Option Agreement dated  June 19, 2001 between the Company and Leland O. Erdahl (filed with the  Company’s 10-QSB dated August 13, 2001, SEC File Number 000-17171).                                                      |
|            |       |                                                                                                                                                                                                                                                        |
| 10.5*           |       | Non-Qualified Stock Option Agreement dated  June 19, 2001 between the Company and George R. Ireland (filed with the  Company’s 10-QSB dated August 13, 2001, SEC File Number 000-17171).                                                     |
|            |       |                                                                                                                                                                                                                                                        |
| 10.7*           |       | Summary of Supplemental Health Care Plan (filed with  Amendment No. 1 to the Company’s Form S-1 Registration Statement  (File No. 33-32754) as filed with the Securities and Exchange Commission  on February 20, 1990).           |
|            |       |                                                                                                                                                                                                                                                        |
| 10.9*           |       | License to Explore and Option to Purchase dated  March 25, 1997 between Santa Fe Pacific Gold Corporation and  Uranco, Inc. (filed with the Company’s Annual Report on Form 10-K  dated June 30, 1997, SEC File Number 000-17171). |
|            |       |                                                                                                                                                                                                                                                        |
| 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).                                              |

 

E-1

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| 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).                                                                                            |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.23*   |   | Uranium Resources, Inc. Deferred Compensation  Plan for 2003 (filed with the Company’s Quarterly Report on Form 10-QSB  dated November 13, 2002, SEC File Number 000-17171).                                                                                            |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.24*   |   | Uranium Resources, Inc. Deferred Compensation  Plan for 2004 (filed with the Company’s Quarterly Report on Form 10-QSB  dated May 14, 2004, SEC File Number 000-17171).                                                                                                      |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.24.1* |   | Amendment No. 2 to the Uranium Resources, Inc.  Deferred Compensation Plan for 2002, Deferred Compensation Plan for 2003, and  Deferred Compensation Plan for 2004 (filed with the Company’s Annual Report  on Form 10-KSB dated March 31, 2006, SEC File Number 000-17171). |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.27*   |   | Contract with UG U.S.A., Inc for the Purchase of  Natural Uranium Concentrates (U3O8) dated August 12, 2003 (filed with  the Company’s Pre-Effective Amendment No. 2 to Registration Statement on form  SB-2 dated September 20, 2005, SEC File Number 333-125106).               |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.27.1* |   | Amendment No. 1 with UG U.S.A., Inc. dated August  30, 2004 to Exhibit 10.27 (filed with the Company’s Pre-Effective Amendment  No. 2 to Registration Statement on form SB-2 dated September 20, 2005, SEC  File Number 333-125106).                                                   |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.27.2* |   | Amendment No. 2 with UG U.S.A., Inc. dated April 29,  2005 to Exhibit 10.27 (filed with the Company’s Pre-Effective Amendment No. 2  to Registration Statement on form SB-2 dated September 20, 2005, SEC File  Number 333-125106).                                                    |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.28*   |   | Amended and Restated Uranium Supply Contract with  Itochu Corporation dated June 7, 2005 (filed with the Company’s Pre-Effective  Amendment No. 2 to Registration Statement on form SB-2 dated September 20,  2005, SEC File Number 333-125106).                                       |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.31*   |   | Note Purchase Agreement dated March 24, 2005  and promissory notes issued thereunder (filed with the Company’s Annual  Report on Form 10-K for the year ended December 31, 2004, SEC File  Number 000-17171).                                                                |
|     |   |                                                                                                                                                                                                                                                                                        |
| 10.32*   |   | Uranium Supply Contract with UG U.S.A., Inc. dated  April 29, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to  Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number  333-125106).                                                             |

 

E-2

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| 10.33* |   | Uranium Supply Contract with Itochu Corporation  dated June 15, 2005 (filed with the Company’s Pre-Effective Amendment No. 2  to Registration Statement on Form SB-2 dated September 20, 2005, SEC File  Number 333-125106).                                |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |   |                                                                                                                                                                                                                                                             |
| 10.34* |   | Stock Purchase Agreement by and between Uranium  Resources, Inc. and accredited investors (filed with the Company’s Form 8-K  dated August 12, 2005, SEC File No. 000-17171).                                                                               |
|   |   |                                                                                                                                                                                                                                                             |
| 10.35* |   | Uranium Resources, Inc. 2004 Stock Incentive Plan  (filed with the Company’s Quarterly Report on Form 10QSB/A dated November 18,  2005, SEC File No. 000-17171).                                                                                            |
|   |   |                                                                                                                                                                                                                                                             |
| 10.36* |   | Feasibility Study Funding Agreement between Itochu  Corporation, Uranium Resources, Inc. and Hydro Resources, Inc. effective  March 29, 2006. (filed with the Company’s Form 10KSB dated March 31, 2006,  SEC file Number 000-17171).                       |
|   |   |                                                                                                                                                                                                                                                             |
| 10.37* |   | Amended and Restated Uranium Supply Contract between  Itochu Corporation and Uranium Resources, Inc. effective March 1, 2006.  (filed with the Company’s Form 10KSB dated March 31, 2006, SEC file Number  000-17171).                                      |
|   |   |                                                                                                                                                                                                                                                             |
| 10.38* |   | Agreement for the Sale of Uranium Concentrates  between UG U.S.A., Inc. and Uranium Resources, Inc. dated March 31, 2006.  (filed with the Company’s Form 10KSB dated March 31, 2006, SEC file Number  000-17171).                                          |
|   |   |                                                                                                                                                                                                                                                             |
| 10.39* |   | Stock Purchase Agreement dated as of April 19, 2006,  by and between Uranium Resources, Inc. and accredited investors (filed with  the Company’s Current Report on Form 8-K dated April 19, 2006, SEC File No.  000-17171).                                 |
|   |   |                                                                                                                                                                                                                                                             |
| 10.40* |   | Limited Liability Company Agreement of Churchrock  Venture LLC (filed with the Company’s Current Report on Form 8-K dated  December 5, 2006, SEC File No. 000-17171).                                                                                       |
|   |   |                                                                                                                                                                                                                                                             |
| 10.41* |   | Compensation Agreement dated March 12, 2007 between  the Company and Craig S. Bartels (filed with the Company’s Form 8-K dated  March 13, 2007, SEC File No. 000-17171).                                                                                    |
|   |   |                                                                                                                                                                                                                                                             |
| 10.42* |   | Compensation Agreement dated March 12, 2007 between  the Company and David N. Clark (filed with the Company’s Form 8-K dated March  13, 2007, SEC File No. 000-17171).                                                                                      |
|   |   |                                                                                                                                                                                                                                                             |
| 10.43* |   | Amended and Restated 2004 Directors’ Stock Option  Plan dated April 10, 2007 (filed with the Company’s Post-Effective  Amendment No. 1 to Registration Statement on Form S-3 dated  April 11, 2007, SEC File No. 333-133960). |
|   |   |                                                                                                                                                                                                                                                             |
| 10.44* |   | Uranium Resources, Inc. 2007 Restricted Stock Plan (filed  with the Company’s Form 10-Q dated May 10, 2007, SEC File No. 000-17171).                                                                                                         |
|   |   |                                                                                                                                                                                                                                                             |
| 14*    |   | Uranium Resources, Inc. Code of Ethics for Senior  Executives. Filed with the Company’s Annual Report on Form 10-KSB dated  March 30, 2004, SEC File Number 000-17171).                                                                                |
|   |   |                                                                                                                                                                                                                                                             |
| 31.1   |   | Certification of Chief Executive Officer pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                             |
| 31.2   |   | Certification of Chief Financial Officer pursuant to  Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                             |
| 32.1   |   | Certification of Chief Executive Officer pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        |
|   |   |                                                                                                                                                                                                                                                             |
| 32.2   |   | Certification of Chief Financial Officer pursuant to  Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                                                        |

 

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

 

E-3

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