Uranium Resources, Inc. (



Preliminary 2011 Continental AG Earnings Conference Call

March 2, 2012 11:30 am ET


Deborah Pawlowski - Head, IR

Don Ewigleben - President, CEO & COO

Matt Lueras - VP, Corporate Development

Tom Ehrlich - VP & CFO


Davis Snow - Energy Equities

Anthony Young - Dahlman Rose

George Walsh - Gilford Securities



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Greetings and welcome to the Uranium Resources Neutron Acquisition call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. (Operator Instructions) As a reminder this conference is being recorded. It is now my pleasure to introduce your host, Ms. Deborah Pawlowski, Investor Relations for Uranium Resources. Thank you Ms. Pawlowski, you may begin.

Deborah Pawlowski

Thank you Louis and good morning everyone. We certainly appreciate your time today and your interest in Uranium Resources. I am sure you've seen the news release that we put out late last night regarding our acquisition, our signing of the definitive agreement to acquire Neutron Energy Inc. as well as the financing agreement with RCF. Don Ewigleben who is with me this morning, President and CEO of Uranium Resources will discuss the acquisition financing and we've also got Tom Ehrlich, Chief Financial Officer and Matt Lueras, Vice President of Business Development on the line with us as well.

So let me just mention that as you are aware we may make some forward-looking statements during the formal presentation and the Q&A of this teleconference. These statements apply to future events which are subject to risks and uncertainties as well as other factors that could cause the actual results to differ materially from where we are today. These factors are outlined in the news release as well as in documents filed by the company with the Securities and Exchange Commission. You can find those on our website where we regularly post information about the company as well as on the SEC’s website at sec.gov. So please review our forward-looking statements in conjunction with these precautionary factors. So with that let me turn the call over to Don to begin the discussion. Don?

Don Ewigleben

Thanks Debby. And first I would like to thank everyone for joining us today. As you know last night we announced the signing of a definitive agreement to acquire Neutron Energy, Inc. and a funding agreement with Resource Capital Funds. Before we open it up for Q&A I would like to provide a brief overview of the transaction and why we believe it makes strategic sense and also want to discuss the funding component that was completed.

We start with the transaction. URI is going to acquire at closing a 100% of the equity in Neutron on a debt-free basis and I would go into a bit more detail with the funding in just a moment. A total of 37 million URI common shares will be issued for the merger resulting in a total consideration of about $38 million based on URI’s closing stock price at the end of last week February 24


, that was at a $1.03.

In addition RCF will invest $10 million in URI in exchange for 10.3 million URI common shares within the next ten days. The 37 million shares of URI common stock to be issued will be distributed along these lines. 24.6 million URI shares will go to RCF, 8.4 million URI shares will go to RMB and if you are not familiar with RMB, that is Rand Merchant Bank, Australia Holdings actually the entity that we are talking with. 3.8 million URI shares to be distributed to current shareholders of Neutron and 0.2 million URI shares to be used to satisfy some obligation that Neutron had that we will be picking up.

The Boards of Directors of both URI and Neutron unanimously approved the transaction, but it is subject to shareholder approval. We will be holding a special shareholder meeting sometime in the not-so-distant future and we expect the transaction to close in the third quarter of 2012. I would like to give you a little background on Neutron and just exactly what we are acquiring.

Neutron is a private uranium exploration and development company with significant assets located in the Grants Mineral Belt of New Mexico where of course we also have holdings. They have a position in South Dakota and Wyoming as well. In total, Neutron owns interest in over 63,000 net acres of leased or state properties in these three states with nearly 24,000 acres in New Mexico, where of course we already have a measurable land position.

Their focus has been on the exploration of the Cibola project which consists of the Cebolleta and the Juan Tafoya properties. Combined, they cover an area of approximately 10,800 acres located West Northwest of the City of Albuquerque in New Mexico and just east of Mt. Taylor. They’re located on private land and are planned to be mined conventionally. The Cebolleta property contains 11.2 million tons of mineralized material at weighted average grade of about 0.14% U3O8.

While Juan Tafoya property contains about 4.2 million tons of mineralized material at a weighted average grade around 0.15% U3O8. Neutron also holds a suite of properties west of Mt. Taylor in what is known as the Ambrosia Lake region. That holds 3.2 million tons of mineralized material at a grade of 0.15%. Be aware that this is in the same locale as our Roca Honda properties.

With this acquisition, we gain a previously permitted mill site that was once constructed back in the 80s, but never operated. It has since been torn down as most of these mills had been around that time period when the company that had been providing funding at that time for that project decided to stop its nuclear projects. Most of the material at the Ambrosia Lake project is planned to be mined using conventional techniques.

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