Uranium Resources, Inc. (URRE)
Q3 2012 Earnings Call
November 09, 2012, 11:00 am ET
Deborah Pawlowski - IR, Kei Advisors LLC
Terence Cryan - Interim President & CEO
Tom Ehrlich - VP & CFO
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It is now my pleasure to introduce your host, Deborah Pawlowski, Investor Relations for Uranium Resources Incorporated. Thank you, Ms. Pawlowski. You may now begin.
Thank you, Rob, and good morning everyone. We certainly appreciate your time today and your interest in Uranium Resources.
On the call, I have with me Interim President and CEO, Terence Cryan, who will review the recent events of the last quarter and what our focus and strategic initiatives are for the company as we move forward. Tom Ehrlich, Chief Financial Officer will review our current financial position and also available on the call is Mark Pelizza, Senior Vice President of Environment, Safety and Public Affairs. After formal remarks we will open the call for questions-and-answers. If you don't have this morning’s news release it can be found on our website at www.uraniumresources.com.
As you are aware, we may make some forward-looking statements during the formal presentation and Q&A portion of this teleconference. Those 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.
With that, I would like to turn the call over to Terence to begin the discussion. Terence?
Thank you, Debby. And good morning everyone. We appreciate your time today. Before I get started, I would like to comment on the resignation of our President and Chief Executive Officer, Don Ewigleben, effective at the end of September. We were disappointed with Don’s departure and made a concerted effort to retain him as our CEO. Ultimately, it was a lifestyle decision, not a monetary one that Don made for himself and his family. Immediately, after his departure, we began actively searching for replacement and are interviewing potential candidates. Ideally, we will be in a position to identify a candidate as soon as possible though of course as the Board, we must be diligent in our search to find the best possible leader for URI.
As you may have seen in this morning’s release, there are near term decisions that we need to make. We are narrowing our priorities and focusing on specific areas that we believe will position us for the long run. Ultimately, we remain confident in the long-term fundamentals for the nuclear industry and the outlook for URI.
Our strategic intent is to have URI in a strong position to capitalize on the potential surge in pricing when it happens. As experienced in 2005 to 2007, we know the market can move quickly. Nonetheless, there has been a steady decline in uranium prices with the spot price dropping over 20% in the last six months. Uranium spot price closed under $41 at the end of October. Many industry observers now consider that prices may remain depressed through 2013 until the effects of the Fukushima related nuclear plant slowdowns dissipate. As a result, an increasing number of global uranium producers are announcing cutbacks in production plans and canceling expansions.
In New Mexico, we are delaying construction plans for our Churchrock Section 8 Project. This is significant because it eliminates the near-term requirement to raise the $50 million we have targeted in financing for the project. While we are delaying construction, we will continue with actions that improve the economics of the project, and facilitate future development options for it. One option we are studying is a phase development plan that would reduce our upfront capital requirements.
Importantly, we are continuing to advance the negotiations with the Navajo. We believe the conversations are going well. Although, we have mentioned it before, it is a major accomplishment just to be in these discussions and we appreciate the Navajo Nation and it's government for their recognition that we are truly interested in keeping the environment protected and protecting the welfare of the people in the region and believe that our project can. Our objective is to reach a comprehensive agreement, mutually beneficial to both parties regarding ISR mining of uranium in New Mexico.
At the end of October, we released the results of a ground water report we developed in conjunction with the Navajo Nation in the City of Gallup. Study was very positive and substantiates our belief that ISR mining, specifically at our Churchrock project, is a safe, ground water friendly way to extract uranium.
Specifically, the study demonstrated that there is no discernible risk that ISR activities would adversely affect groundwater available to the city of Gallup and the Navajo Nation and indicates that current and future water supply wells for the area will not be impacted by Section 8 ISR activities. We believe this jointly developed study is a solid step forward to help address mining concerns in the area.