Property, Plant and Equipment

12 Months Ended

Dec. 31, 2015

Property, Plant and Equipment Assets Held-for-sale Disclosure [Abstract]

Property, Plant and Equipment

4. PROPERTY, PLANT AND EQUIPMENT

	Net Property, Plant and Equipment at December 31, 2015
(thousands of dollars)	Turkey		Texas		New Mexico		Corporate		Net book value
Uranium plant	$	-	$	8,653	$	-	$	-	$	8,653
Mineral rights and properties		17,968		1,513		16,996		-		36,477
Other property, plant and equipment		22		1,352		-		202		1,576
Total net book value	$	17,990	$	11,518	$	16,996	$	202	$	46,706

	Net Property, Plant and Equipment at December 31, 2014
(thousands of dollars)	Turkey		Texas		New Mexico		Corporate		Net book value
Uranium plant	$	-	$	8,921	$	-	$	-	$	8,921
Mineral rights and properties		-		2,313		19,750		-		22,063
Other property, plant and equipment		-		1,490		-		256		1,746
Total net book value	$	-	$	12,724	$	19,750	$	256	$	32,730

Uranium Properties

Temrezli Project

As discussed in Note 3 above, the Temrezli project was acquired as part of the Anatolia Transaction. The Company controls six licenses that make up the Temrezli project area that were granted to our Turkey-based subsidiary Adur Madencilik Ltd Sti. by the Turkish General Directorate of Mining Affairs. The granted licenses cover an area of about 13,490 acres. We hold these licenses through the payment of fees to the Turkish government and the fulfillment of certain physical work obligations on an annual basis. Uranium production from the licenses is subject to the payment of a sliding scale royalty, ranging from 2% to 16% depending upon the sales price of uranium, as defined by Turkish mining law. The sliding scale royalty payments are to be made to certain agencies of the local and Turkish governments. A further 1% royalty is payable to the General Directorate of Mining Affairs, who discovered the Temrezli uranium deposit.

Kingsville Dome Project

The Kingsville Dome project consists of mineral leases from private landowners on about 2,434 gross and 2,227 net acres located in central Kleberg County, Texas. The leases provide for payment to the landowners of royalties based upon a percentage of uranium sales of 6.25% to 9.375%. The leases have expiration dates ranging from 2000 to 2007 however, we hold most of these leases by production and with a few minor exceptions all the leases contain clauses that permit us to extend the leases not held by production by payment of an annual per acre royalty ranging from $10 to $30. We have paid such royalties on all material acreage.

Rosita Project

The Rosita project consists of mineral leases from private landowners on about 3,377 gross and net acres located in north-central Duval County, Texas. The Rosita South property consists of mineral leases from private land owners on about 1,795 gross acres and 1,479 net acres located in Duval County near the Company’s Rosita project. The leases provide for the payment to the landowners of sliding scale royalties based on a percentage of uranium sales. Royalty percentages on average increase from 6.25% up to 18.25% when uranium prices reach $80.00 per pound. The leases have primary and secondary terms to 2015, and provisions to extend the leases for an additional twenty years. We are holding these leases by payment of rentals ranging from $10 to $30 per acre.

Vasquez Project

The Vasquez project is comprised of a mineral lease on 872 gross and net acres located in southwestern Duval County, in South Texas. The primary term expired in February 2008; however we hold the lease by production and reclamation activities. The lease provides for the payment to the landowner royalties based upon 6.25% of uranium sales below $25.00 per pound and royalty rate increases on a sliding scale up to 10.25% for uranium sales occurring at or above $40.00 per pound.

Butler Ranch Project

As discussed in Note 3 above, the Butler Ranch exploration project was acquired as part of the Company’s Asset Exchange Agreement. The property is comprised of nine fee leases that cover an area of about 2,653 gross or 2,592 net acres of mineral rights. We can hold the leases by payment of annual rental fees, ranging from $10 to $25 per acre. Each of the leases makes provision for the payment of royalties of 10% of sales to the property owners. Leases have initial terms of 8 to 10 years and have provisions to “hold by drilling” and identifying uranium mineralization on the specific properties.

Churchrock Project

The Churchrock project encompasses about 3,458 gross and net acres. The properties that comprise the Churchrock project are located in McKinley County, New Mexico and consist of three targets, known as Section 8, Section 17 and Mancos. None of these targets lies within the area generally recognized as constituting the Navajo Nation. We own the mineral estate in fee for both Section 17 and part of the the Mancos target (Sections 7 and 13). We also own patented and unpatented lode mining claims on the Section 8 target and unpatented lode mining claims on the remainder of the Mancos target. The assets and liabilities associated with the Churchrock project have been classified as held-for-sale as of December 31, 2015 and 2014. See Note 5 below.

The surface estate on Section 17, Mancos Section 13 and Mancos Section 7 is owned by the U.S. Government and held in trust for the Navajo Nation (the “Nation”). On those sections we have royalty obligations ranging from 5% to 6¹/₄% and a 2% overriding royalty obligation to the Nation for surface use agreements. The total royalties on Section 8 depend on the sales’ price of uranium. All of the Churchrock properties are subject to the payment of a sliding-scale (based upon the selling price of uranium) that ranges up to 25%, and in aggregate royalties are potentially as much as 33% at the current price of uranium.

Crownpoint Project

The Crownpoint project is located in the San Juan Basin, 22 miles northeast of the Company’s Churchrock project and 35 miles northeast of Gallup, New Mexico, adjacent to the town of Crownpoint. The Crownpoint project consists of 640 gross and 556 net acres. The Company holds the mineral rights in the northwest ¹/₄ of Section 9, Township 17 North, Range 13 West with 9 unpatented lode mining claims, and the mineral rights in the southwest ¹/₄ of Section 24, Township 17 North, Range 13 West with 10 unpatented lode mining claims. In the southeast ¹/₄ of Section 24, Township 17 North, Range 13 West, the Company owns in fee a 40% interest in the minerals on approximately 140 acres and hold 100% of the minerals on 20 additional acres with two unpatented lode mining claims. In the northeast ¹/₄ of Section 25, Township 17 North, Range 13 West, the Company holds the minerals with eight unpatented lode mining claims. The unpatented lode mining claims are held through the payment of an annual maintenance fee of $155 per claim to the BLM. While the rights to the minerals on the unpatented lode mining claims are subject to annual renewal through the payment of the annual maintenance fees, the rights to the minerals on the fee-owned lands are not subject to any renewal process as long as the Company maintains its ownership of the subject property. The assets and liabilities associated with the Crownpoint project have been classified as held-for-sale as of December 31, 2015 and 2014. See Note 5 below.

Cebolleta Project

In connection with the merger of Neutron (and its wholly-owned subsidiary Cibola Resources LLC (“Cibola”)) we acquired the Cebolleta Lease with La Merced del Pueblo de Cebolleta (the “Cebolleta Land Grant”), a privately held land grant, to lease the Cebolleta Project, which is composed of approximately 6,717 acres of fee (deeded) surface and mineral rights. The Cebolleta Lease provides for: (i) a term of ten years and so long thereafter as Cibola is conducting operations on the Cebolleta Project; (ii) initial payments to the Cebolleta Land Grant of $5.0 million; (iii) a recoverable reserve payment equal to $1.00 multiplied by the number of pounds of recoverable uranium reserves upon completion of a feasibility study to be completed within six years, less (a) the $5.0 million referred to in (ii) above, and (b) not more than $1.5 million in annual advance royalties previously paid pursuant to (iv); (iv) annual advanced royalty payments of $0.5 million; (v) gross proceeds royalties from 4.50% to 8.00% based on the then current price of uranium; (vi) employment opportunities and job-skills training for the members of the Cebolleta Land Grant and (vii) funding of annual higher education scholarships for the members of the Cebolleta Land Grant. The Cebolleta Lease provides Cibola with the right to explore for, mine, and process uranium deposits present on the Cebolleta Project. In February 2012, Cibola entered into an Amendment of its Mining Lease Agreement (the “Cebolleta Lease Amendment”) amending the Cebolleta Lease, subject to approval of the Thirteenth Judicial District. Pursuant to the Cebolleta Lease Amendment, the date for the completion of the feasibility study was extended from April 2013 to April 2015. In addition, the date may be further extended subject to a reduction in the $6.5 million initial payment and annual advance royalty payments deduction to the recoverable reserve payment.

Juan Tafoya Project

In connection with the merger with Neutron we acquired the fee interest in 4,097 acres in northwestern New Mexico of fee (deeded) surface and mineral rights owned by the Juan Tafoya Land Corporation (“JTLC”). The Juan Tafoya Project is located approximately 45 miles west-northwest of the city of Albuquerque, and 25 miles northeast of the town of Laguna. The lease has a term of ten years, and it can be extended on a year-to-year basis thereafter, so long as we are conducting operations on the property. Additionally, the lease required: (i) an initial payment of $1.25 million; (ii) annual rental payments of $0.2 million for the first five years of the lease and $0.3 million for the second five years; (iii) after the second five years, annual base rent of $75 per acre; (iv) a gross proceeds royalty of 4.65% to 6.5% based on the then current price of uranium; (v) employment opportunities and job-skills training programs for shareholders of the JTLC or its heirs, (vi) periodic contributions to a community projects fund if mineral production commences from the Juan Tafoya property and (vii) funding of a scholarship program for the shareholders of the JTLC or its heirs. The Company is obligated to make the first ten years’ annual rental payments notwithstanding the right to terminate the JT Lease at any time, unless (a) the market value of uranium drops below $25 per pound, (b) a government authority bans uranium mining on the Juan Tafoya property, or (c) the deposit is deemed uneconomical by an independent engineering firm.

Impairment of Property, Plant and Equipment

The Company recorded the following impairment charges for 2015 and 2014 related to its uranium projects and processing facilities:

	For the years ended December 31,
	2015		2014
Kingsville Dome project	$	160	$	160
Alta Mesa Este project		800		-
Total Impairment	$	960	$	160

The Company’s recorded impairment charge for 2015 and 2014 of $0.2 million on its Kingsville Dome project was due to the physical deterioration of its processing plant equipment resulting from the plant’s idled status and its proximity to the Texas coastline. The net carrying value of the Kingsville Dome plant equipment after impairment is $0.2 million which is calculated as $2.2 million book value less a $2.0 million liability related to dismantling and decontaminating. The Company also used a third-party estimate of resale value to determine that no further impairment was needed as the Company’s third-party estimate of resale value exceeded the $0.2 million net carrying value of the Kingsville Dome plant equipment.

The Company’s recorded impairment charge for 2015 of $0.8 million on its Alta Mesa Este project was the result of URI’s Board of Directors and management determining that recent exploration results indicated that the Alta Mesa Este Project should be terminated. As a result, the carrying value of the Alta Mesa Este Project was written down to nil.

Mineral Property Expenses

During the years ending December 31, 2015 and 2014, the Company’s mineral property expenses were $4.5 million and $3.5 million, respectively. Included within mineral property costs are standby costs for our three idled South Texas ISR projects along with holding and evaluation costs for all properties. The Company spent the following amounts for each of its material properties:

	For the years ended December 31,
	2015		2014
	(thousands of dollars)
Temrezli project, Turkey	$	407	$	-
Total Turkey projects		407		-
Kingsville Dome project, Texas		812		862
Rosita project, Texas		711		817
Vasquez project, Texas		510		518
Butler Ranch project, Texas		443		32
Other projects, Texas		553		12
Total Texas projects		3,029		2,241
Crownpoint project, New Mexico		5		5
Churchrock project, New Mexico		21		109
Cebolleta project, New Mexico		537		571
Juan Tafoya project, New Mexico		384		413
Other projects, New Mexico		87		163
Total New Mexico projects		1,034		1,261
Total expense for the period	$	4,470	$	3,502