On March 13, 2013, URI announced that its Board of Directors appointed Christopher M. Jones, P.E., as President and CEO effective April 1, 2013. Mr. Jones has more than 30 years experience in the mining industry having successfully lead various mining and production operations, as well as exploration and development projects. He most recently was President and CEO of Wildcat Silver Corporation, and prior to that, he was the Chief Operating Officer and the Mining General Manger at Albian Sands Energy.
Mr. Cryan noted, “In the fourth quarter we outlined URI’s primary areas of focus as we headed into 2013. During the fourth quarter we were able to significantly reduce our cash burn and stabilized our capital levels using our bridge loan facility, the Rights Offering and the restructuring of our bonding requirements on our South Texas properties. We will remain diligent in our efforts to preserve capital for the remainder of 2013.
“With construction plans for our Churchrock Section 8 project currently delayed, discussions aimed at reaching a permanent access agreement with the Navajo Nation and with royalty holders of our Section 8, Section 17 and Mancos properties remain a priority in 2013. Concurrently, in Texas we will continue our exploration efforts with Cameco and look at other opportunities as part of our effort to grow our South Texas asset base and return to production in the state.”
Advancements in New Mexico
URI’s primary focus in New Mexico is advancing the Churchrock Section 8 property, which contains 6.5 million pounds of mineralized uranium material at a grade of 0.11% U
and is covered by the Company’s underground injection control permit and NRC license, both of which are in timely renewal.
Focus in Texas: Tecolote exploration project kicks off, Restoration activities ongoing
- Neutron Acquisition - URI completed a stock-for-stock transaction to acquire 100% of the equity of Neutron on August 31, 2012 on a debt-free basis. The acquisition increased URI’s asset base by more than 50 percent to 152.9 million pounds of in-place mineralized uranium material in New Mexico.
- Section 8 Feasibility Study – Released the summary results of the feasibility study for its Churchrock Section 8 Project at the end of 2012. ISR is the preferred uranium extraction technology for the project and using an assumed recovery rate of 67% could result in the production of approximately 4.4 million pounds. Pre-production development costs are estimated at $35 million with direct operating costs estimated to be $20 to $23 per pound of U 3O 8 produced.
- Section 8 Groundwater Study – Completed collaborative study with the Navajo Nation and the City of Gallup with results indicating that existing Gallup, Fort Wingate, Rehoboth and Navajo Nation water wells will not be impacted by Section 8 ISR activities, during mining operations or into the future.
- Agreement with Navajo Nation – Hydro Resources, Inc., a wholly-owned subsidiary of URI, completed a temporary access agreement with the Navajo Nation for its Churchrock Section 8 property providing access for regulatory requirements to include on-site visits with the Nuclear Regulatory Commission.
In 2012, URI and Cameco completed Phase II of the joint Los Finados exploration project to include drilling 40 holes at an average depth of 1,327 feet. On January 7, 2013, URI announced the expansion of its lease agreement in Kenedy County, Texas, to include the Tecolote tract which has approximately 22,700 net acres and that it will be a part of the exploration program with Cameco. In addition, the Company extended the original lease to 60 months with the election date to lease the acreage for production now being November 30, 2015. The amended lease agreement requires a minimum exploration obligation of $1.0 million, or 100 exploration wells during Phase III. Phase IV and Phase V require $1.5 million, or 150 exploration wells, and $2.0 million, or 200 exploration wells, respectively.