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Uranium Resources Inc. (NASDAQ:URRE)

Q1 2008 Earnings Call

May 13, 2008 8:30 am ET

Executives

Deborah Pawlowski - IR

Dave Clark - President and CEO

Rick Van Horn - EVP and COO

Tom Ehrlich - CFO

April Wade - VP of Communications and Government Relations

Analysts

David Snow - Energy Equities

Steven Hart - Heller Capital Partners

Jimmy Gilbert - Rice Voelker

Operator

Greetings and welcome to the Uranium Resources Incorporated first quarter 2008 Earnings Call. (Operator Instructions).

It is now my pleasure to introduce your host, Ms. Deborah Pawlowski, Investor Relations for Uranium Resources. Thank you, you may begin.

Deborah Pawlowski

Thank you, Diego. Good morning, everyone. We certainly appreciate your time and your interest in Uranium Resources. On the call today we have President and CEO, Dave Clark; with Rick Van Horn, Executive Vice President and Chief Operating Officer; Tom Ehrlich, the Chief Financial Officer; and April Wade, VP of Communications and Government Relations.

You should have the press release that went out last night. I mean, if you don't have it, you can find it at www.uraniumresources.com.

As you are aware, we may make some forward looking statements during the formal presentation and the Q&A portion of this teleconference. 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 our earnings release, as well as in documents filed by the company with the Securities and Exchange Commission. You can find those at our website or the SEC’s website which is www.sec.gov. Please review our forward looking statements in conjunction with these precautionary factors.

With that let me turn it over to Dave to begin the discussion. Dave?

Dave Clark

Good morning, everyone. Thanks again for your interest in the company and my apologies for the early hour. The primary shareholder interest is these days focused on our acquisition of Rio Algom. And it should be, since this is a company transforming event, as well as a transforming event for the uranium industry in New Mexico as a whole.

So I want to begin by discussing the RAML transaction and trying to speak as simply and succinctly as I can, because I am constrained of what I can say about the negotiations that are ongoing with individual companies for obvious business reasons.

There is no doubt it has been a long and frustrating process for the company and our shareholders. The main source of frustration for us has been the lack of visibility of the closing date, as I am sure you all feel. The original expectations were to close this deal by the end of the first quarter, which obviously passed several weeks ago.

The first major hurdle we faced was completing an audit of Rio Algom; the audit that was done for BHP had to be redone by our auditors. We worked closely with BHP Billiton on that process. It took three months for us to complete that and it was finished by the end of February.

The last real major hurdle of significance, because we can't close without it, is getting the concurrence of NRC. Our understanding is that the review has been completed and that they are in the step of filing a public notice in the Federal Register, and that filing is forthcoming.

So, we don't know at this point, whether it will be a short 25-day review or a second version that can be slightly longer. Based on our expectation that this NRC concurrence will be done fairly soon, we agreed with BHP Billiton last week to extend the closing date by 60 days. I think this is an appropriate date, given what we are expecting from the NRC and that is the last main hurdle. I also think this is time frame when we get these things done. Given the premise that the process will take the time as you get, I think six days is an appropriate time.

Obviously there is a delay in closing, and it's carried us into a more volatile stock market environment, one in which all deal would then be very difficult to finance. We are also seeing a lot of weakness in the uranium market since the beginning of the year. It sounds for us it has been difficult to have any kind of ability, with lack of visibility in the closing date, to figure out what the market environment is going to be facing, when we do move towards closing. The fact is, our ability to finance is depended on the near-term outlook for uranium.

While the benefits of RAML acquisitions won't be realized until the mill is built four or five years down line. And many of you heard me speak lately about my own views of where the market is going. I think in the time frame we will be building this mill, the market will be substantially better. It will be in the next leg of the bull market. The reality is that the short-term weakness will impact the long-term fundamentals of our company though. The reality is the price that we can finance now will impact long-term returns.

I know the proceeds throughout [parabuck] dilution, if we were to finance this transaction at any cost. The question is, will dilution kill long-term benefits that we received? But I can tell you, as we are engaged with every interested party in New Mexico, we have the same need as we do and that's the access to a local mill.

There is a general agreement with the RAML mill, that it's the best site because of the time saved in licensing and building a new mill. We are working together with others and we will continue to work together to satisfy our mutual needs. It is in our interest to close this RAML transaction and I am confident that we can get this done, because it is in everybody's interest to do so.

That said, we know that RAML is the best site, but it's not the only site in New Mexico. And we will proceed merely as beneficial to our shareholders and not getting prices.

We are aware that as we have been moving forward with the RAML transaction, we've also been trying to rebuild in Texas. That is the core of our business, and it has been the core of our business. It does come across as human and financial resources, that some may feel is better to be utilized in New Mexico. But what we have seen over the last year, when we first did a drill out program, we discovered we had enough reserves to continue to prove 450,000 pounds through 2009. We then moved to acquire properties. Last year, we acquired Mosser and Marshall. We began exploration of those properties and expect to complete that by the end of this year.

As we said in the last call, we are seeing a lot of increased opportunities to acquire, not only known reserves in South Texas, but properties that had a lot of potential as exploration targets. As these opportunities become available, we are moving to acquire these and we do face a lot of competition in Texas, and when they become available we need to move quickly. Not only because we are at a risk of losing them, but because of the development exploration, licensing and probably lead times.

Given all the above, we think it's prudent to rebuild Texas as we continue to move towards production in New Mexico, and we will continue to do so. Our near-term goal is be able to increase and extend our production past 2009. Our long-term goal is to rebuild this business back to a level which corresponds to 2 million pounds a year. Given all the opportunities we have been seeing and the actions we have been taking, I am confident we can get to that level.

As for the production outlook, as we've said in our last call, our businesses volume is sensitive. As volume dropped off in the fourth quarter and first quarter, the costs increased.

We have seen increased production levels in the second quarter. We do have a leader coming on in a week's time and that will help too. We're now seeing production that expects to increase from 95,000 pound to 105,000 pounds this year, and we are still on track to produce 400 pounds to 450 pounds this year.

Now moving on to New Mexico: There are two big areas that I'd like to discuss, or we'd like to discuss. The first is an overview of project development and the second is community development. As I discussed project development, I'm going to have April Wade to speak for two minutes on our efforts to address the political and social issues that we're facing in New Mexico, I think you will find that very helpful.

As far as our projects in New Mexico, our objective has been to look at projects that we can get online as quickly as possible. And there are three areas we believe we can get in production within three years. The first one is the Church Rock Crown Point project. As many of you may know, there was a hearing in the Tenth Circuit Court of Appeals in Denver yesterday.

This was a case I know a lot of our shareholders have followed in the past. I was briefed briefly last night by our lawyers. They said, to our safety, no surprises in the hearing. It went as they expected. Part of our argument was to point out the Tenth Circuit that there had been several decisions that have been written since they said that the Jantz case would not include the community of reference as far as their client HRI. And there have been several other cases I've discussed just that in deference to what the Tenth Circuit court has said.

We expect to hear decisions or getting a decision out of the court within three to twelve months. There is no timeframe for appeal courts decisions but that's certainly the timeframe that it takes. It is an important issue because once we get this resolved these in court or with a settlement, we can be a producing a 1 million pounds a year at Church Rock within 18 months getting the permits.

We also announced in the last call, the 10-K that we were looking at developing ISR capability in the Ambrosia Lake District. We will be filing today a permit, for permits to drill up to 10 holes in the Ambrosia Lake District on properties we have of ₤200 million holding. Our objective is to collect ore samples, so we can perform bench tests to see if the properties’ ore ISR is amenable. The permits should take a few months to get and we plan on doing the drilling and quarrying in the fall.

We are also looking at old stope leaching and the process there is to evaluate reopening of shafts and vent holes in company-owned properties and other properties in the Ambrosia Lake District, and then evaluating the technical and economic feasibility of moving forward with this. And all these three projects had a potential to be in production in three years, and therefore, would come online before any convention mill to come on.

Now looking at the bigger picture in Mexico, I don't think it's any secret to anybody that our near and long term value in the company is largely based on our ability to resolve any country issues, principally with the Navajo. Their primary concern has been about the safety of uranium mining in the future, that it can be done safely environmentally, in an environmentally sound way. There are also several key issues with the Navajo which were sensitive too and henceforth. I think, what we need to do as a company is prove that uranium mining can be done safely and that it will not lead the future legacy problems that came with uranium mining in the past. The company approach has always been a legal one and firstly I don't think that's the best way to build trust with people who oppose it.

I believe we've made great strides over the past year, but particularly over the last seven months, and that's really been with the help of April Wade, first an outside consultant and then recently she joined the company as VP Communications in Government Affairs.

And just to tell you, change in public opinion does take a concerted effort. It doesn’t happen overnight. The initiatives we are now making, principally led by April are one to the company and the industry as a whole have not taken place in the past in Mexico. And I think we are moving in the right direction and I think a lot of great strides have been made. The best person described is before you far more articulate than I can is April, so I would like to turn over to April for a few minutes to describe the initiatives we have been making and the progress we've been making in Mexico. April?

April Wade

Thank you, Dave. I just want to talk about what was enduring in our grassroots campaign as a company and as an industry, and what we've been doing with couple of relations. We have been actively communicating with the local media and residents of McKinley and Cibola County in New Mexico. And we've held a variety of meetings with local economic development groups, community leaders, Rotary, Chambers of Commerce.

We found that we had lot of support in those organization and we have also found that they are willing come out and support us publicly more and more so as we've progressed the last few months.

We also have conducted a statewide poll to get a perception of what the state and the community has for the mining industry and what we found is two thirds of the state believe that uranium mining is not safer and can be done in an environmentally responsible manner compared with the past and that uranium mining will bring better paying jobs and improve the overall economic economy for the state.

There are those that oppose uranium industry because of its size, health, and safety concerns. What was down there is that we do have a lot of support, but what was down is the education will be getting us more support. With the industry, we have been leading up a group as other companies develop an education campaign plus arrange public meetings.

One other thing we are working on together is an economic impact study to the region, once the mining industry is up and running. We’ve done that as a company and as an industry group. We hope to have that done in the next couple of weeks and we will start presenting it to leaders, local leaders, the Governor and to the community.

We also are working with the state, which has put together a study on banning mines in the area, and to get an idea what the legacy issue really is out there. That study will not be done. That was firstly done by the end of this month, but it won’t be done until some time in June. But, it is also helps us with the legacy issue and with working with the Governor’s office on the legacy bill, which we did this past session. And the Governor has encouraged us to work with him again, and the speaker of the house and the President of the Senate also talks to the governor. They have all encouraged us to work together and to develop another piece of legislation that they can get through for the next session.

We've also continued to working with Senator Domenici, Senator Bingaman's office, our Congresswoman Heather Wilson, and Congressman Pierce's office and keeping them up-to-date on the projects and our education efforts in the communities. They just asked that we continue it and keep it going, because they found that it has been pretty successful for the last two months. We did a letter writing campaign for the Senate at a treaty meeting about a month ago, as a member of Duval County. We came up with 800 letters of support of the industry which was huge. Dave, I believe that's all I have.

Dave Clark

Okay. Thank you, April. Now I'll turn it to Tom Ehrlich to just discuss the financials for the first quarter.

Tom Ehrlich

Thank you, Dave. I'll be going over the financial highlights for the first quarter of 2008, including items, such as our production, our revenues and our costs to quarter.

Starting with production, we had just over 83,000 pounds produced in the first quarter. The vast majority of that or 79,000 of those pounds were produced from our Kingsville Dome project, with the balance sourced from Vasquez. This quarter's production compares to the 68,000 pounds that we produced in the fourth quarter of last year.

Again, as Dave said, the production rates that we saw are less than our optimum production. Our production costs in the quarter rose to just under $50 a pound. Our operating costs were making $23 a pound of that and depreciation and depletion contributed just under $27 a pound. This compared to our production costs in the fourth quarter, which were in the $45 to $46 a pound range, with operating costs being in the $34 and change and our depreciation and depletion in the low $11 to $12 a pound range.

The production increases that we saw, again this quarter compared to last, resulted from the new production we saw from the wellfield brought on Kingsville Dome in December of last year; from the new wellfield brought on at Vasquez at mid-quarter February of '08; and another wellfield brought on at Kingsville late March of this quarter. We are also projecting start-up of production at Rosita in the next week or two.

As Dave said, we are expecting our second quarter production to range in the 95,000 to 105,000 pound range, again with these increases coming from the new wellfields at Kingsville, Vasquez and Rosita.

At the end of the quarter, we had just over 23,000 pounds of inventory and we were carrying that inventory at an average cost of $36.41. Our sales for the quarter, we had $5.7 million of revenue on 81,100 pounds, with an average sales price we received of $70.66. This compares to last quarter where we had 113,000 pounds of sales at an average price of $72.72 break, which again contributed $8.2 million from revenue.

So far in the second quarter of '08, our sales basically in April, we have averaged just under $70 a pound, for what we sold this quarter.

Moving down to our costs of uranium sales: Our direct costs of uranium that were sold in the first quarter, these costs are comprised of operating expenses and depreciation and depletion and totaled just over $50 a pound, $26 of which were operating and $23.80 which were depreciation and depletion. These per pound costs compared to the roughly $39 a pound we saw in the fourth quarter.

Our royalties and commissions for the quarter were $560,000, roughly 9.8% of our sales and it costing us $6.91 a pound.

Our general and administrative costs for the first quarter were about $2.7 million, compared to $3.4 million in the fourth quarter of 2007. The major categories of the G&A expenses we had during the quarter were our personnel costs of about $840,000; our stock compensation expense, which is again a non-cash item of $654,000; consulting and professional services of just over a $0.5 million; and legal, accounting, and other public expenses of $283,000.

Our cash flow; We had the cash balance of just over $5 million at the end of March. During the quarter, we generated positive cashflow from operations of $808,000 and we had capital expenditures for basically uranium property, plant, and equipment; the majority of those being Kingsville Dome of 2.2 million, or wellfield development evaluation drilling, plant and drive upgrades; and we also had costs to resume production activities at our Rosita project of about 1.8 million.

With these developments at Vasquez, again to putting on that new wellfields of 200,000, and then other costs related to our New Mexico and Texas projects. In addition, as part of our investment activities, we contributed $300,000 to additional financial surety requirements related to posting with our Texas agencies and our Texas regulators. Dave.

Dave Clark

I think we are ready for questions.

Question-and-Answer Session

Operator

(Operator Instructions). Our first question comes from David Snow with Energy Equities. Please state your question.

David Snow - Energy Equities

Yes. Hi Dave, first of all I have some potential sources for financing if you do decide to go forward with the mill and I would love to catch up with you offline to go over those and see if they would fit with the company’s profile. Could I catch up afterwards or some time in the near term?

Dave Clark

You could do that. Best way obviously is to get hold me and I should there be, I think that sounds best.

David Snow - Energy Equities

Al right.

Dave Clark

But thank you for the comment.

David Snow - Energy Equities

Okay. And then, I am trying to just look at the annual report. Apparently the water rights are contestable by the Navajos. Is that going to be jeopardizing the company's long ballyhooed as strength of having water rights? It sound like it will come under their preview if I am reading the page 15 of the annual report growth?

Dave Clark

Are you talking about water rights for RAML acquisition?

David Snow - Energy Equities

No, generally it appears that they can contest the state engineers granting a water rights and jurisdiction over the water rights and it becomes an issue in New Mexico when an Indian nation objects to the State Engineer’s authority, and brings it to tribal jurisdiction. Does that potentially put all of your water rights in play with the Navajo issue?

Dave Clark

I am not well versed on that issue, though I do know that there is negotiation going on between the state and Navajo Nation over water rights and it primarily refers to the observation itself. We know that it's ongoing, and we monitor that. We don't, at this point, think there is any risk for the water rights we have.

David Snow - Energy Equities

Okay. And, I'm wondering also the expenses definition the EPA adopted is potentially affecting up to 84% of your properties, I guess which one is not effective, read the easiest right asset question.

Dave Clark

That 84% really refers to, if you take restrictive definition of Indian country, as proposed, and all our properties have varying shape degrees. So it is the worst case scenario when opening the same standards that applied everything we have towards the worst case scenario. The properties we have in Ambrosia Lake, the Roca Honda, the Ambrosia Lake ISR properties and again the other projects that we have, have different issues versus what we are dealing with the Church Rock.

David Snow - Energy Equities

Okay. Then so Church Rock would be the main one?

Dave Clark

Church Rock is what's been determined in the quarter because the Section 8 land has never been owned by the Navajo Nation and it's a question of, it is private property. We own the service in the mineral it really is the constitutional issue, do we have the right to mine on something we own.

David Snow - Energy Equities

Okay. And then I'm wondering if the Chinese coming into this BHP real deal could put this whole mill off the market again as has happened in their Wyoming mill in the past?

Dave Clark

I don't, not sure I quite follow that one.

David Snow - Energy Equities

Well, it looks like BHP is looking to any day to wake up to having 10% owned by the Chinese. It would put block the merger which may block the need to dump the US assets at Rio?

Dave Clark

Well, Rio, well that’s Rio made the decision, again I can't speak for them but they were the non-core assets to RTZ. So they made the decision to put those Sweetwater and Kingsville on the market. That was being discussed before BHP moved. So, I'm not sure if it impacts at all.

David Snow - Energy Equities

Okay. And then I am just trying to give an idea as to whether the two new wellfields in Vasquez is a departure from the previous idea of letting out property run down until it went out of uranium. Are you now trying to revive it as an ongoing project?

Dave Clark

No, there was a -- brought on only one for wellfield at Vasquez. That was an extension of wellfield 6, which had a very good recovery on it, the best we had over Vasquez. So it was an extension of that, So we made the discussion within the fall to bring that on. It is a small wellfield.

David Snow - Energy Equities

Okay. And after this, that one was rundown?

Dave Clark

Correct.

David Snow - Energy Equities

Okay. And then the GE/UNC demand for you to be held viable, it's never host coming after you on this Church Rock past contamination, where does that stand, can you give us some color on that one?

Dave Clark

It is on Section 17 at Church Rock. It used to be an underground mine. The only contamination was ore coming to the surface. There was never a processing facility other than that. Maybe Rick can elaborate on that. But you are talking about 21% grade uranium on the surface. It is something we have been working on with the Navajo and GE to resolve. It is not… they came out and tested the site with the lab of EPA, does that find anything that we have not stated in the licensing process. If there is more you can add to that Rick?

Rick Van Horn

Yeah, the material on the site has been, we have tested it before. The NRC knew of it and that was considered as back and as far as the NRC was concerned. This is material, it is an ore material. It is a low grade material from the mines. There are several ways to handle it, we are talking with the EPA and Navajo on potential ways to handle it and we are for the first time, in the long time, having a dialogue with them. So, I think it is going well.

David Snow - Energy Equities

How about the GE engagement in that issue, are they going to put some more pressure on you?

Dave Clark

GE is working with us and in the discussions with Navajo and, like I say, I think they are going well right now. There is no pressure being put on us by GE.

David Snow - Energy Equities

Okay. Well, I will get out of queue for a moment and thank you very much.

Operator

(Operator Instructions) Our next question comes from [Steven Hart] with Heller Capital Partners. Please state your question.

Steven Hart - Heller Capital Partners

Dave, can you just go over once again some of the expected time line of the BHP as far as what has to happen in what order, the NRC transfer and things like that and finally raising the capital?

Dave Clark

Okay. We obviously need the NRC concurrence before we close, that's the condition of closing and we are not acquiring the NRC license, we are acquiring the company that has a NRC license. So, they have to concur on that. We already have an NRC license, so we have already gone through the evaluating process for that. We have been working with BHP and meeting with the NRC to get that done.

And what we have been told is they are basically again that review process; that the next step is to issue a public notice in the Federal Register and we expect that may be Rick can elaborate on this as well. One procedure is simply a 25-day comment period. And once that comes back, we don't think there is going to be a much more in that process. So once we get that handle or have the ability to identify when that's going to be complete, then we have an idea of when we can close.

Steven Hart - Heller Capital Partners

So issuing a public notice, is that's when it's complete?

Dave Clark

That's part of their requirement.

Steven Hart - Heller Capital Partners

Okay. So that could be any where from what 25 days to what 100 days?

Dave Clark

The second, Rick can you elaborate more on that?

Rick Van Horn

Yeah. This is for change in indirect control of RAML. The license that we changed remains in RAML and they have a 25-day public notice period where they publish in the Federal Register, and give the public a chance to comment.

And then at the end of the comment period, they typically issue unless they say people were standing their issue, the concurrence letter, which basically says that as soon as we postpone, then they will transfer the control of the company or they will allow the transfer of the control of the company.

This can happen any time during the 25-day period or for some period after that as far as under guess, we are not anticipating that. But mostly get it published in the Federal Register so the cost could get picky.

Steven Hart - Heller Capital Partners

Okay. And you expect them to issue that public notice when, what will be the range of when they would issue that?

Rick Van Horn

We were told a couple of weeks ago that it would be this past week, it did not happen. We have another conversation with NRC and they said it will happen within two weeks, no longer than two weeks.

Steven Hart - Heller Capital Partners

Okay. And then that 25, roughly 25-day period then they will issue it once you postpone, is that at the point you would have to close financing?

Rick Van Horn

That will be concurrent with, we are closing our financing. What they are going to do is that they are going to issue a concurrence letter. The letter will state in it that they are in agreement with the transfer of the control of RAML and they will issue a license amendment to that effect, when the appropriate bond is posted. We anticipated that that would be in or around the closing date. They will not actually transfer the control, or allow the transfer of control until they have a good the adequate financial surety posted.

Steven Hart - Heller Capital Partners

Okay. And the financing. Well, first of, on the financing, with this process taking much longer than you expected, and the price of uranium dropping significantly, is there an opportunity to renegotiate the price at this point or the price that is done?

Dave Clark

We are not going to talk about any of our negotiations or any of the company's bond, obviously we are talking to all those in the district to have need for mill and working transaction on RAML side and an ongoing discussions with BHP, I am not going to talk about anything specifically.

Steven Hart - Heller Capital Partners

Okay. So your ongoing discussions, also relate to winding up the capital to be able to do this, right? So you are running the parallel process of winding up the capital to be ready for closing.

Dave Clark

Right. And given our ability to do that obviously, so that's where the visibility comes in. We need to know when closure can take place and saying what is happening in the equity in the uranium market at that point in time is the outlook which had changed to almost on a weekly basis sometimes. Until we get that visibility, it's hard to set that tone.

And as we said back in the beginning, we're trying to work all things against the middle to make the best deal for URI shareholders. So as far as what we do with all parties involved, it depends on what is available at that point in time. That's what makes it complex and frustrating and the structure at the time could not help for sure.

Steven Hart - Heller Capital Partners

Okay. All right, thanks guys.

Dave Clark

Thank you.

Operator

Ladies and Gentlemen, we have time for one more question. Our final question comes from Jimmy Gilbert with Rice Voelker. Please state your question.

Jimmy Gilbert - Rice Voelker

Hey Dave, this is Jimmy Gilbert.

Dave Clark

I thought you would correct that pronunciation.

Jimmy Gilbert - Rice Voelker

Yeah, yeah you know I find myself doing that always. Can you talk to us a little more about the possible acquisitions in Texas and just looking for maybe some more specifics, some more general specifics, if you could?

Dave Clark

I appreciate the question because I think I fumbled through my notes on that one. We have just seen a lot of opportunity coming principally in the last six months. Our initial hope was to get RAML closed so that we can get to work on rebuilding Texas. And it was a matter of decreased competition that we were seeing in Texas and some other uranium companies did not have the way with dollar to compete there anymore. And the drop in price frankly helped open up opportunities.

People that were not leasing all of a sudden turned around and start to look to lease and there are the two categories of areas that have known reserves on them and areas that really haven’t been explored before, but have great potential for having uranium on them because of the oil and gas below the fall structure for full 9 yards. We are aggressively moving on both fronts. We are seeing a lot of movement there. There is a lot of activity and potential for us to acquire properties.

As we said in the last call that as we pick these things up, we will make the decisions at that point in time on how to work the deals, but it is still a competitive environment. I can't get into specifics on properties because once you set a market (inaudible) lose properties.

Jimmy Gilbert - Rice Voelker

Okay, and also could you, I think last time we want to talk about the cataloguing and digitizing of the database that covers the New Mexico region. Can you talk a little bit where you are on that process?

Dave Clark

We have digitized over 17,000 logs, and we're now going through the process of doing the oil reserve maths and the mine maths, and everything else. The main objective for this is obviously getting information the way we can use it better, but it is also a security of the information itself being all on paper. We're worried about lots of that due to fire in the hill. But that's, let me turn it over to Rick and have him elaborate more on what's going on there. Rick, can tell you about that.

Rick Van Horn

At this stage, we have digitalized most of the logs we have. We are in the process of cataloguing these logs. If you remember, we originally said we have 16,000. We're now somewhere in north of over 18,000 logs, the whole grants mineral belt. While this is winding down, we are ramping up the digitizing of paper maps of mylar and of various reports that have been done on the property.

Again, so we can access some electronically, we can transfer them office to office but mostly, as Dave said, they are for disaster recovery. These files have stayed out there for ten years. We had a good caretaker out there, making sure that nothing happens to them. But as we get a bigger and bigger profile here, we are also the target for mid shift and that's one of the things that concerns me and that's why we are pressing forward with this endeavor.

Jimmy Gilbert - Rice Voelker

Okay, we will appreciate that. Thanks a lot guys. We'll see you soon.

Dave Clark

Thanks Jimmy.

Operator

Thank you, our next question comes from David Snow with Energy Equities, please state your question.

David Snow - Energy Equities

Yeah, the Texas acquisition was right there in the top. So it's been answered. Thanks.

Operator

There are no further questions at this time. I will turn the conference back over to Mr. Clark for closing comments.

Dave Clark

Well thank you. In closing, I just like to talk about what we mentioned earlier. We are obviously moving towards a close with RAML. That depends on NRC concurrence and that's something that we think we’re moving forward with. And finally we can you know this long frustrating process of getting approvals and things in place that we need to be able to close, but we are comfortable we're going to be able to do that. This six day extension gives us the time to do that.

We are also working on the projects in New Mexico to that we can come over the next three years, mainly Church Rock court decisions and whether we can negotiate the settlement. And, as well we will take the Ambrosia Lake ISR project ALISR. As these go on we are also rebuilding our core business in Texas by roughly going after exploration targets and known reserves, so that we can increase and extend our production beyond 2009. That too we think is viable to do and that we will be able to do. With that said, that’s where we stand for now and we thank for your time and interest in URI. Thanks you.

Operator

Thank you. This concludes today’s teleconference. You may disconnect your lines at this time. Thank you all for your participation.

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Source: Uranium Resources Inc.Q1 2008 Earnings Call Transcript
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