10KSB

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-KSB

(Mark
One)
ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2005 or
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to

Commission file number 0-17171

URANIUM RESOURCES, INC.

(Name of Small Business Issuer in its Charter)

DELAWARE	75-2212772
(State of Incorporation)	(I.R.S. Employer Identification No.)
650 S. Edmonds Lane, Suite 108
Lewisville, Texas	75067
(Address of principal executive offices)	(Zip code)

(972) 219-3330

(Issuer’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:

	Name of Each Exchange
Title of Each Class	on Which Registered
Common Stock, $.001 par value per share	None

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days. Yes ý  No o

Check if there is no disclosure of delinquent filers pursuant to Item 405 of Regulation S-B contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.  o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

The Issuer’s revenues for the year ended December 31, 2005 were $4.865 million.

The aggregate market value of the Common Stock of the Issuer held by non-affiliates at March 14, 2006 was approximately $118.1 million.

Number of shares of Common Stock outstanding as of March 14, 2005: 163,808,510 shares.

Documents Incorporated by Reference:

Items 9, 10, 11, 12 and 14 of Part III of this Form 10-KSB Report are incorporated by reference to the Registrant’s Definitive Proxy Statement for the Registrant’s 2006 Annual Meeting of Stockholders.

URANIUM RESOURCES, INC.

ANNUAL REPORT ON FORM 10-KSB

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

TABLE OF CONTENTS

Index to Consolidated Financial Statements

Exhibit Index

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URANIUM RESOURCES, INC.

ANNUAL REPORT ON FORM 10 KSB

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2005

PART I

The “Company” or “Registrant” is used in this report to refer to Uranium Resources, Inc. and its consolidated subsidiaries. This 10-KSB contains “forward-looking statements.”  These statements include, without limitation, statements relating to management’s expectations regarding the Company’s ability to remain solvent, capital requirements,  mineralized materials, timing of receipt of mining permits, production capacity of mining operations planned for properties in South Texas and New Mexico and planned dates for commencement of production at such properties, business strategies and other plans and objectives of the Company’s management for future operations and activities and other such matters. The words “believes,” “plans,” “intends,” “strategy,” “projects,” “targets,” or “anticipates” and similar expressions identify forward-looking statements. The Company does not undertake to update, revise or correct any of the forward-looking information. Readers are cautioned that such forward-looking statements should be read in conjunction with the Company’s disclosures under the heading: “Cautionary Statements” beginning on page 11.

Certain terms used in this Form 10-KSB are defined in the “Glossary of Certain Terms” appearing at the end of Part I hereto.

Item 1. Description of Business

The Company and Current Plan of Operation

We were organized in 1977 to mine uranium in the United States using the in situ leach mining process, a process in which groundwater fortified with oxidizing agents is pumped into the ore body causing the uranium contained in the ore to dissolve. The resulting solution is pumped to the surface where it is further processed to a dried form of uranium that is shipped to conversion facilities for sale to our customers. This process is generally more cost effective and environmentally benign than conventional mining techniques.

From 1988 through 1999 we produced about 6.1 million pounds of uranium from two South Texas properties, 3.5 million pounds from Kingsville Dome and 2.6 million pounds from Rosita. In 1999 we shut-in our production because of depressed uranium prices, and from the first quarter of 2000 until December 2004, we had no source of revenue and had to rely on equity infusions to remain in business and maintain the critical employees and assets of the Company until such time that uranium prices reached a level where it was prudent to commence operations.

With the improvement in uranium spot prices to $11.00 per pound by mid 2003, the Company began steps to bring its Vasquez property into production and signed two long-term contracts, calling for deliveries of 600,000 pounds of uranium in each of 2005 through 2008. The source of production for those contracts was the Vasquez property which we expected to produce at an annual volume and for a production cost that would meet the contracted delivery requirements and yield a small gross margin.

During 2005 we were unable to produce sufficient pounds from Vasquez to satisfy our contracted delivery requirements. As a result of the lower production and the fixed costs of operations, our cost of production has exceeded the sales price under the contracts, and we have been losing money on each pound sold. In addition, because of chemical and permeability obstacles in the Vasquez formation we have been experimenting with different oxidizing components that have added to our costs. Our production costs per pound were $20.32 for all of 2005. Because of the high cost of oxidizing agents our production costs were $35.74 per pound in December 2005.

We have taken steps to remedy this situation. We have renegotiated all of our supply contracts with Itochu and UG and have committed to each of them ½ of whatever our production is in Texas at a price that is based on the market price at the time of delivery less a discount. See “Long-Term Delivery Contracts” for a discussion of the terms of the revised contracts, including certain conditions thereto. We now expect our annual production from the Vasquez property to approximate 400,000 pounds, and we expect to receive approximately $30.00 per pound for these sales. We have substantially reduced the use of the high cost oxidizing agents to reduce our production costs at Vasquez and expect our production costs going forward to be in the range of $25.00 to $27.00 per pound.

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Our uranium production in 2006 is forecast at approximately 800,000 pounds. Such production is expected to be 400,000 pounds from each of our Vasquez and Kingsville Dome projects. Our Kingsville Dome project is projected to begin production in April 2006.

On February 22, 2006 we received approval of the Production Area Authorization #3 at Kingsville Dome. We expect to commence production at Kingsville Dome in April 2006, with sales commencing in the second quarter of 2006. We expect the profitability from our Kingsville Dome production will be greater than that seen from our Vasquez production as a result of higher sales prices under our new contracts and lower costs of production than at Vasquez.

During 2006, the Company plans to continue its program begun in 2005 to purchase additional uranium resources through the acquisition of known uranium deposits within the South Texas uranium trend. These small deposits, ranging from 1.5 to 4 million pounds of uranium, are ideally suited for the Company’s satellite plant technology. The Company plans to feed the resulting production together with production from the Rosita property itself, some of which is currently permitted to produce, through the currently idle but fully permitted Rosita Plant. We believe the Rosita property has significant potential for additional production at the current market price for uranium. We plan to upgrade the Rosita Plant by the addition of an additional elution circuit and a yellowcake dryer. In addition, discussions are ongoing to obtain the exploration rights to certain large properties.

We have engaged a placement agent to make a best efforts private placement of a minimum of $25 million and up to $45 million in value of shares of our Common Stock to selected accredited investors. The Company plans to use the proceeds of the offering to pay UG the $12 million discussed under “Long-Term Delivery Contracts” and the remainder for capital costs for upgrades to the Rosita plant, permitting and development drilling for Rosita, delineation drilling for properties contiguous to the Rosita plant, land acquisition and exploration costs and working capital.

As of December 31, 2005, we had 73 employees, including five geologists, nine engineers and two certified public accountants. We have field offices at Kingsville Dome, Vasquez, Rosita and Crownpoint, New Mexico.

Uranium Reserves/Mineralized Material

Based on the report of Richard F. Douglas, Ph.D. dated March 29, 2004 as revised March 30, 2006  (“Douglas Report”) our Vasquez property had proven and probable recoverable reserves of 1.99 million pounds.

In addition, our Kingsville Dome property has 318,000 pounds of probable in place reserves of which 223,000 pounds or 70% is estimated to be recoverable. The Douglas Report also concludes that our New Mexico properties collectively have about 33 million pounds of in-place mineralized uranium materials. We are unable to estimate the amount that may be recoverable. Although not covered by the Douglas Report, we estimate that we have up to an additional 13 million pounds of in-place mineralized uranium materials on our Crownpoint property.

Long-Term Delivery Contracts

The following table provides information as of March 31, 2006 concerning our long-term sales contracts. Prior to March 2006 we had two contracts with Itochu Corporation and two with UG USA, Inc. Under those contracts the Company was obligated to deliver an aggregate of 600,000 pounds in each of the years 2005 through 2008, and the buyer had the right to increase or decrease those deliveries by 15%. The average price for such deliveries was $17.95 in 2005 and was anticipated to have been $14.58 per pound in 2006. These contracts were entered into at a time when the spot price for uranium was less than $15 per pound, substantially below the $40 per pound in effect as of March 25, 2006. Two other contracts with these buyers called for aggregate deliveries of 645,000 pounds by December 31, 2007 priced at the spot price at the time of delivery less an average of $3.80 per pound.

In March 2006 we entered into a new contract with Itochu and a new contract with UG that supersede the existing contracts. Each of the new contracts calls for delivery of one-half of our actual production from our Vasquez property and other properties in Texas currently owned or hereafter acquired by the Company (excluding certain large potential exploration plays). The terms of such contracts are summarized below.

The Itochu Contract. Under the Itochu contract all production from the Vasquez property will be sold at a price equal to the average spot price for the eight weeks prior to the date of delivery less $6.50 per pound, with a floor for the spot price of $37 and a ceiling of $46.50. Other Texas production will be sold at a price equal to the average spot price for the eight weeks prior to the date of delivery less $7.50 per pound, with a floor for the spot price of $37 and a ceiling of $43. On non-Vasquez production the price paid will be increased by 30% of the difference between actual spot price and the $43 ceiling up to and including $50 per pound. If the spot price is over $50 per pound the price on all Texas production will be increased by 50% of such excess. The floor and ceiling and

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sharing arrangement over the ceiling applies to 3.65 million pounds of deliveries, after which there is no floor or ceiling. Itochu has the right to cancel any deliveries on six-month’s notice.

We have also entered into a letter of intent with Itochu to joint venture the development of our Churchrock property in New Mexico. See “Joint Venture for Churchrock Property.”  We anticipate entering into a definitive joint venture agreement with Itochu by July 1, 2006. If the Company fails to use good faith efforts to negotiate and enter into such definitive agreement, the foregoing terms will terminate and the original contract terms will be reinstated effective for all deliveries after the occurrence of such determination. Under the terms of the joint venture, both parties must make an investment decision after the completion of a feasibility study, currently anticipated to occur around the end of 2006. If Itochu should terminate the venture at that time, we would no longer receive the additional price of 30% of the excess over $43 per pound outlined above. If we should terminate the venture at that time, the original contract terms will be reinstated from that time forward.

The UG Contract. Under the UG contract all production from the Vasquez property and other Texas production will be sold at a price equal to the month-end long-term contract price for the second month prior to the month of delivery less $6 per pound until (i) 600,000 pounds have been sold in a particular delivery year and (ii) an aggregate of 3 million pounds of Uranium has been sold. After the 600,000 pounds in any year and 3 million pounds total have been sold, UG will have a right of first refusal to purchase other Texas production at a price equal to the average spot price for a period prior to the date of delivery less 4%. In consideration of UG’s agreement to restructure its previously existing contract, we have agreed to pay UG $12 million in cash, subject to our ability to raise the cash. We are actively seeking the required funding.

Production and Revenue Forecasts. The following table contains the Company’s best estimate as of March 31, 2006 of future deliveries under the foregoing contracts based on current spot and long-term prices held constant.

	2006		2007		2008		2009		Total
Number of customers	2		2		2		2
Total long-term deliveries (000’s of pounds)	840		1,770		2,001		2,007		6,618
Total sales (000’s)	$	25,500	58,740		66,719		66,929		217,887
Average sales price per pound:	$	30.36	$	33.19	$	33.34	$	33.35	$	32.92

Joint Venture for Churchrock Property

We have entered into a non-binding letter of intent with Itochu to joint venture the development of our Churchrock property in New Mexico, under which Itochu will fund all development costs currently estimated at $32 million primarily through a debt facility that it will provide. Itochu and the Company will split the profits 50-50 and the Company will be the Managing Partner and receive a management fee. For revenues in excess of $30 per pound, the Company will receive additional payments under the joint venture. The Company estimates that the Churchrock property will yield about 12 million pounds of uranium. These terms are subject to the parties negotiating and signing a definitive agreement, and the parties are working towards the preparation and signing of the agreement by July 1, 2006. Under the terms of the joint venture, both parties must make an investment decision after the completion of a feasibility study. Itochu is funding $675,000 for the cost of the study.

Overview of the Uranium Industry

The only significant commercial use for uranium is as fuel for nuclear power plants for the generation of electricity. During 2003, 440 nuclear power plants were operating in the world and consumed an estimated 173 million pounds of uranium. Worldwide production of uranium in 2004 (the most recent year for which statistics are available) was only about 102 million pounds. In the United States, there are 104 nuclear power plants that produce about 21% of the electricity used.

Based on reports by the Ux Consulting Company, LLC (“Ux”) and the Uranium Institute (“UI”), since the early 1990s, worldwide uranium production has satisfied only 51% of worldwide demand, and this ratio has also been true in the Western world. Ux reports that the gap has been filled by secondary supplies, such as inventories held by governments, utilities and others in the fuel cycle, including the highly enriched uranium (HEU) inventories which are a result of the agreement between the US and Russia to blend down nuclear warheads.

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Ux reports that secondary sources combined with uranium production from existing uranium mines will not be sufficient to meet the world’s requirements. New production will be needed. Ux projects that the industry will need uranium prices to remain at or near current prices to stimulate the capital investment needed to support such new production.

Spot price is the price at which uranium may be purchased for delivery within one year. Spot prices have been more volatile historically than long-term contract prices, increasing from $6.00 per pound in 1973 to $43.00 per pound in 1978, declining to $7.25 per pound in October 1991, increasing to $16.50 per pound in May 1996 and again declining to $7.10 at December 31, 2000. The spot price was $40.50 at March 20, 2006.

The following graph shows spot prices per pound from 1983 to March 20, 2006, as reported by Trade Tech and Ux.

All prices beginning in 1993 represent U₃O₈ deliveries available to U.S. utilities.

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The In Situ Leach Mining Process

The in situ leach mining process is a form of solution mining. It differs dramatically from conventional mining techniques. The in situ leach technique avoids the movement and milling of significant quantities of rock and ore as well as mill tailing waste associated with more traditional mining methods. It is generally more cost-effective and environmentally benign than conventional mining. Historically, the majority of United States uranium production resulted from either open pit surface mines or underground shaft operations.

The in situ leach process was first tested for the production of uranium in the mid-1960s and was first applied to a commercial-scale project in 1975 in South Texas. It was well established in South Texas by the late 1970’s, where it was employed in about twenty commercial projects, including two operated by us.

In the in situ leach process, groundwater fortified with oxygen and other solubilizing agents is pumped into a permeable ore body causing the uranium contained in the ore to dissolve. The resulting solution is pumped to the surface. The fluid-bearing uranium is then circulated to an ion exchange column on the surface where uranium is extracted from the fluid onto resin beads. The fluid is then reinjected into the ore body. When the ion exchange column’s resin beads are loaded with uranium, they are removed and flushed with a salt-water solution, which strips the uranium from the beads. This leaves the uranium in slurry, which is then dried and packaged for shipment as uranium powder.

We have historically used a central plant for the ion exchange. In order to increase operating efficiency and reduce future capital expenditures, we are now designing and developing wellfields using a wellfield-specific remote ion exchange methodology. Instead of piping the solutions over large distances through large diameter pipelines and mixing the waters of several wellfields together, each wellfield will be mined using a dedicated satellite ion exchange facility. This will allow ion exchange to take place at the wellfield instead of at the central plant. A wellfield consists of a series of injection wells, production (extraction) wells and monitoring wells drilled in specified patterns. Wellfield pattern is crucial to minimizing costs and maximizing efficiencies of production. The satellite facilities allow mining of each wellfield using its own native groundwater. This eliminates problems associated with progressive buildup of dissolved solids in the groundwater, thereby enhancing mining efficiencies and uranium recoveries.

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Environmental Considerations and Permitting

Uranium mining is regulated by the federal government, states and, where conducted in Indian Country, by Indian tribes. Compliance with such regulation has a material effect on the economics of our operations and the timing of project development. Our primary regulatory costs have been related to obtaining licenses and permits from federal and state agencies before the commencement of mining activities.

Radioactive Material License. Before commencing operations in both Texas and New Mexico, we must obtain a radioactive material license. Under the federal Atomic Energy Act, the United States Nuclear Regulatory Commission has primary jurisdiction over the issuance of a radioactive material license. However, the Atomic Energy Act also allows for states with regulatory programs deemed satisfactory by the Commission to take primary responsibility for issuing the radioactive material license. The Commission has ceded jurisdiction for such licenses to Texas, but not to New Mexico. Such ceding of jurisdiction by the Commission is hereinafter referred to as the “granting of primacy.”

The Texas Department of Health is the permitting agency for the radioactive material license. For operations in New Mexico, radioactive material licensing is handled directly by the United States Nuclear Regulatory Commission.

See “Description of Properties” and “Legal Proceedings” for the status of our radioactive material license for New Mexico and our Texas properties.

Underground Injection Control Permits (“UIC”). The federal Safe Drinking Water Act creates a nationwide regulatory program protecting groundwater. This act is administered by the United States Environmental Protection Agency (the “USEPA”). However, to avoid the burden of dual federal and state (or Indian tribal) regulation, the Safe Drinking Water Act allows for the UIC permits issued by states (and Indian tribes determined eligible for treatment as states) to satisfy the UIC permit required under the Safe Drinking Water Act under two conditions. First the state’s program must have been granted primacy. Second, the USEPA must have granted, upon request by the state, an aquifer exemption. The USEPA may delay or decline to process the state’s application if the USEPA questions the state’s jurisdiction over the mine site.

Texas has been granted primacy for its UIC programs, and the Texas Commission on Environmental Quality administers UIC permits. The Texas Commission on Environmental Quality also regulates air quality and surface deposition or discharge of treated wastewater associated with the in situ leach mining process.

New Mexico has also been granted primacy for its program. The Navajo Nation has been determined eligible for treatment as a state, but it has not requested the grant of primacy from the USEPA. Until the Navajo Nation has been granted primacy, in situ leach uranium mining activities within Navajo Nation jurisdiction will require UIC permit from the USEPA. Despite some procedural differences, the substantive requirements of the Texas, New Mexico and USEPA underground injection control programs are very similar.

Properties located in Indian Country remain subject to the jurisdiction of the USEPA. Some of our properties are located in areas that are in dispute. For these properties, we are a bystander in a dispute between New Mexico regulators and the USEPA.

See “Description of Properties” and “Legal Proceedings” for a description of the status of our UIC permits in Texas and New Mexico.

Other. In addition to radioactive material licenses and underground injection control permit, we are also required to obtain from governmental authorities a number of other permits or exemptions, such as for wastewater discharge, for land application of treated wastewater, and for air emissions.

In order for a licensee to receive final release from further radioactive material license obligations after all of its mining and post-mining clean up have been completed in Texas, approval must be issued by the Texas Department of Health along with concurrence from the United States Nuclear Regulatory Commission and in New Mexico by the United States Nuclear Regulatory Commission.

In addition to the costs and responsibilities associated with obtaining and maintaining permits and the regulation of production activities, we are subject to environmental laws and regulations applicable to the ownership and operation of real property in general, including, but not limited to, the potential responsibility for the activities of prior owners and operators.

The current environmental regulatory program for the in situ leach industry is well established. Many in situ leach mines have gone full cycle without any significant environmental impact. However, the public anti-nuclear lobby can make environmental permitting difficult and timing unpredictable.

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Reclamation and Restoration Costs and Bonding Requirements

At the conclusion of mining, a mine site is decommissioned and decontaminated, and each wellfield is restored and reclaimed. Restoration involves returning the aquifer to its pre-mining use and removing evidence of surface disturbance. Restoration can be accomplished by flushing the ore zone with native ground water or using reverse osmosis to remove ions, minerals and salts to provide clean water for reinjection to flush the ore zone. Decommissioning and decontamination entails dismantling and removing the structures, equipment and materials used at the site during the mining and restoration activities.

The Company is required by the State of Texas regulatory agencies to obtain financial surety relating to certain of its future restoration and reclamation obligations. The Company has a combination of bank Letters of Credit (the “L/C’s) and performance bonds issued for the benefit of the Company to satisfy such regulatory requirements. The L/C’s were issued by Bank of America and the performance bonds have been issued by United States Fidelity and Guaranty Company (“USF&G”). The L/C’s relate primarily to our operations at our Vasquez project and amounted to $944,000 and $897,000, at December 31, 2005 and 2004, respectively. The L/C’s are collateralized in their entirety by certificates of deposit.

The performance bonds were $2,835,000 on December 31, 2005 and 2004 and related primarily to our operations at Kingsville Dome and Rosita. USF&G has required that the Company deposit funds collateralizing a portion of the bonds, and we have deposited approximately $344,000 and $335,000 at December 31, 2005 and 2004 respectively, as cash collateral for such bonds. We are obligated by agreement with the bonding company to increase the cash collateral to an amount equal to 50% of the amount of the bonds, plus an additional $0.50 for each pound of uranium produced until the account accumulates an additional $1.0 million.

We estimate that our actual reclamation liabilities for completed operations at Kingsville Dome and Rosita and current operations at Vasquez at December 31, 2005, are about $4.6 million of which the present value of $3.6 million is recorded as a liability as of December 31, 2005. Under an agreement reached on March 1, 2004, with the Texas regulatory agencies and our bonding company we agreed to fund ongoing groundwater restoration at the Kingsville Dome and Rosita mine sites at specified treatment rates, utilizing a portion of our cash flow from sales of uranium from the Vasquez site as a substitute for additional bonding.

These financial surety obligations are reviewed and revised periodically by the Texas regulators.

In New Mexico, surety bonding will be required before commencement of mining and will be subject to annual review and revision by the United States Nuclear Regulatory Commission and the State of New Mexico or the USEPA.

Water Rights

Water is essential to the in situ leach process. It is readily available in South Texas. In Texas, water is subject to capture, and we do not have to acquire water rights through a state administrative process. In New Mexico, water rights are administered through the New Mexico State Engineer and can be subject to Indian tribal jurisdictional claims. New water rights or changes in purpose or place of use or points of diversion of existing water rights, such as those in the San Juan and Gallup Basins where our properties are located, must be obtained by permit from the State Engineer. Applications may be approved subject to conditions that govern exercise of the water rights.

Jurisdiction over water rights becomes an issue in New Mexico when an Indian nation, such as the Navajo Nation, objects to the State Engineer’s authority and claims tribal jurisdiction over Indian Country. This issue may result in litigation between the Indian nation and the state, which may delay action on water right applications, and can require applications to the appropriate Indian nation and continuing jurisdiction by the Indian nation over use of the water. The foregoing issues arise in connection with certain of our New Mexico properties.

In New Mexico, we hold approved water rights to provide sufficient water to conduct mining at the Churchrock project for the projected life of the mine. We also hold three unprotested senior water rights applications that, when approved, would provide sufficient water for the projected life of the Crownpoint project. The water rights for the Crownpoint project are in the review process by the New Mexico State Engineer Offices. We cannot estimate the timing of the completion of such review but do expect a favorable result once the review is completed.

Competition

We market uranium to utilities in direct competition with supplies available from various sources worldwide. The Company competes primarily based on price.

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Item 2. Description of Properties

South Texas

Kingsville Dome

The Property. The Kingsville Dome property consists of mineral leases from private landowners on about 2,354 gross and net acres located in central Kleberg County, Texas. The leases provide for royalties based upon a percentage of uranium sales of 6.25%. The leases have expiration dates ranging from 2000 to 2007. With a few minor exceptions, all the leases contain clauses that permit us to extend the leases not held by production by payment of a per acre royalty ranging from $10 to $30. We have paid such royalties on all material acreage.

Production History. Initial production commenced in May 1988. From then until July 1999, we produced a total of 3.5 million pounds. Production was stopped in July 1999, because of depressed uranium prices.

Further Development Potential. We believe that there is a significant quantity of uranium remaining at Kingsville Dome and we expect to commence production in April 2006. We spent about $900,000 in capital expenditures in 2005, for permitting and licensing, plant and equipment upgrades, wellfield development and land holding costs.

Permitting Status. A radioactive material license and underground injection control permit have been issued. As new areas are proposed for production, additional authorizations under the area permit are required. Approval of our Production Area Authorization #3 was received in February 2006 which allows for the start-up of production at Kingsville Dome. Production is expected to commence in April 2006. See “Legal Proceedings.”

Restoration and Reclamation. During 2005, we conducted restoration activities as required by the permits and licenses on this project, spending approximately $358,000 on such activities. In 2004, we spent about $256,000 in restoration costs.

Rosita

Based on the significant increase in the market price of uranium, we have reevaluated the potential for uranium production at the Rosita project and concluded that the properties contain sufficient uranium to resume production. In order to produce this property, we will need to spend about $3 million to fund the development and plant refurbishment necessary to bring this project back on-line; and we are currently seeking to raise those funds. We are conducting restoration and reclamation, of which $618,000 was spent in 2005. In 2004, we spent about $315,000 for restoration and reclamation activities.

Vasquez

The Property. We have a mineral lease on 872 gross and net acres located in southwestern Duval County, in South Texas. The term expires in February 2008. The lease provides for 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.

Development Plan. We commenced production from this property in October 2004. We spent about $3.9 million in capital expenditures at Vasquez in 2005. We produced 310,000 pounds of uranium in 2005 and sold 271,000 pounds. We spent about $2.7 million in capital expenditures at Vasquez in 2004. We produced 76,200 pounds of uranium in 2004 and sold 72,350 pounds.

Permitting Status. All of the required permits for this property have been received.

New Mexico Properties

General. We have various interests in properties located in New Mexico. We have patented and unpatented mining claims, mineral leases and some surface leases. We have spent $10.9 million to date on permitting for New Mexico. Additional expenditures will be required and could be material. We are unable to estimate the amount. We expect that whatever is spent will occur over multiple years. See “Legal Proceedings” for a discussion of the current status of our license for New Mexico.

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Churchrock

The Property. The Churchrock project encompasses about 2,200 gross and net acres. The properties are located in McKinley County, New Mexico and consist of three parcels, known as Section 8, Section 17 and Mancos. None of these parcels lies within the area generally recognized as constituting the Navajo Reservation. We own the mineral estate in fee for both Section 17 and the Mancos properties. We own patented mining claims on Section 8.

The surface estate on Section 17 is owned by the United States Government and held in trust for the Navajo Nation. We have royalty obligations ranging from 5% to 6  1/4% and a 2% overriding royalty obligation to the Navajo Nation for surface use agreements.

Development Plan. We anticipate that Churchrock will be the first of our New Mexico properties we will develop. We spent about $382,000 in 2005 for permitting activities and land holding costs and about $124,000 in 2004 for permitting activities and land holding costs.

Water Rights. The State Engineer approved our water rights application in October 1999 and granted us sufficient water rights for the life of Churchrock.

Permitting Status. We have the radioactive material license for Section 8. This license is subject to the continuing proceedings described under “Legal Proceedings.”  With respect to the UIC permits, see “Legal Proceedings.”  We do not plan to pursue permits for Mancos at this time.

Crownpoint

The Property. The Crownpoint properties are located in the San Juan Basin, 22 miles northeast of our Churchrock deposits and 35 miles northeast of Gallup, New Mexico, adjacent to the town of Crownpoint. The Properties consist of 619 gross and 521.8 net acres. We are currently in negotiations for a lease on a 60% mineral interest in certain of the acreage.

Development Plan. We spent about $397,000 in 2005 for permitting activities and land holding costs and about $61,000 in 2004 for permitting activities and land holding costs.

Water Rights. We have three pending applications for appropriations of water, which give us the first three “positions in line” on the hearings list for the San Juan Basin. Certain of the water rights may involve a claim of jurisdiction by the Navajo Nation.

Permitting Status. See “Legal Proceedings” for a discussion of the radioactive material license for Crownpoint. The surface estate on Section 19 and 29 is owned by the United States Government and held in trust for the Navajo Nation and may be subject to the same jurisdictional dispute with respect to the UIC permit as for Section 8 and 17 in Churchrock.

West Largo and Roca Honda

In March 1997, we acquired the fee interest in 177,000 acres in northwestern New Mexico. Several significant occurrences of uranium mineralization are known to be within this acreage, including the West Largo property and the Roca Honda property. Uranium exploration was conducted by other companies on these properties in the past, and we own the result of these past drilling and exploration programs.

The West Largo property is about 21 miles north of the town of Milan and about 1.5 miles west of State Highway 509 in McKinley County, New Mexico. The property lies about 3 miles to the northwest of the Ambrosia Lake District, a major producer of uranium by means of underground operations from the late 1950s to the early 1980s.

The Roca Honda property lies about 4 miles northwest of the town of San Mateo in McKinley County, New Mexico. We also own 36 unpatented mining claims encompassing approximately 640 acres that are adjacent to the fee land.

Insurance

Our property is covered by various types of insurance including property and casualty, liability and umbrella coverage. We have not experienced any material uninsured or under insured losses related to our properties in the past and believe that sufficient insurance coverage is in place. Future losses if sustained would not be material.

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Reclaimed Properties

We have completed production and groundwater restoration on our Benavides and Longoria projects in South Texas. We completed the final stages of surface reclamation on these projects and received full and final release for these sites in 1999.

We acquired the Section 17 leases in the New Mexico Churchrock district from United Nuclear Corporation. It had conducted underground mining for uranium on Section 17 and had reclaimed these properties. In the acquisition, we assumed any liability of United Nuclear Corporation for any remaining remediation work that might be required. The New Mexico Energy Minerals and Natural Resources Department has not determined what, if any, additional remediation would be required under the New Mexico Mining Act. If more remediation work is required, we believe it would not involve material expenditures.

Item 3. Legal Proceedings

New Mexico Radioactive Material License

In the State of New Mexico, uranium recovery by in situ leach (“ISL”) technology requires a radioactive material license issued by the United States Nuclear Regulatory Commission (the “NRC” or the “Commission”). We applied for one license covering almost all properties located in both the Churchrock and Crownpoint districts collectively known as the Crownpoint Uranium Project. The Commission issued an operating license for the Crownpoint Uranium Project in January 1998 that allowed ISL uranium recovery operations to begin in the Churchrock district. In mid-1998, the Commission determined that certain Churchrock and Crownpoint residents who requested a hearing had standing to raise certain objections to the license. An Administrative Law Judge conducted a hearing during 1999. The Administrative Law Judge upheld the Churchrock Section 8 license and granted our request to defer any dispute on all but the Churchrock Section 8 property until we make a decision whether to mine these other properties.

The ruling was appealed to the Commission. On January 31, 2000, the Commission issued an order concurring with the technical, substantive and legal findings of the Administrative Law Judge, but the Commission also determined that we must proceed with the hearing process for the other New Mexico properties beyond Churchrock Section 8. Subsequently, the hearing process was held in abeyance until 2004 pursuant to NRC supervised settlement negotiations between the parties

In February 2004, the Administrative Law Judge issued an order, which concluded that we must make three specific changes to our submitted restoration action plan for Churchrock Section 8 in order to commence mining operations at Churchrock. The Commission accepted our petition for review on two of three issues and subsequently overruled the Administrative Law Judge on these issues. The Administrative Law Judge is proceeding with the hearing on the relevant issues at the remaining three mine sites. The parties agreed to truncate the number and scope of the issues remaining for consideration at the three sites, and the Administrative Law Judge is proceeding with the hearing on four remaining issues at the remaining three sites.

With respect to the four remaining issues for litigation, all briefs have been filed by all parties. On July 20, 2005, the Administrative Law Judge issued a decision in which he determined that groundwater, groundwater restoration and financial assurance issues for the remaining sites did not pose significant, potential impacts to public health and safety or the environment. The Administrative Law Judge’s decision requires one minor amendment to the restoration action plans (the “RAPs”) for the remaining sites that will be addressed this year. On September 16, 2005, the Administrative Law Judge issued a decision in which he determined that the license application and supporting documentation adequately addressed historic and cultural resource preservation issues for the proposed uranium recovery site. The Administrative Law Judge’s decision on this issue did not require any amendments to the existing license. Then, on January 6, 2006, the Administrative Law Judge issued a decision in which he determined that radiological air emissions issues at the Churchrock Section 17 site did not pose significant, potential impacts to public heath and safety or the environment. This decision also did not require any amendments to the existing license.

Currently, one remaining issue is pending before the Administrative Law Judge. Further, each of the three decisions discussed above have been appealed to the full Commission for review. Petitions for review of the Administrative Law Judge’s decisions regarding groundwater, groundwater restoration and financial assurance and historic and cultural resource preservation have been rejected by the Commission. Review of the Administrative Law Judge’s decision regarding Churchrock Section 17 radiological air emissions has been granted and all supplemental briefs have been filed. We anticipate final resolution of this litigation by the end of this year.

New Mexico UIC Permit

The State of New Mexico, the USEPA and the Navajo Nation are engaged in a jurisdictional dispute as to which entity has the authority to issue Underground Injection Control (“UIC”) program permits and, in the case of some of the Churchrock and

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Crownpoint properties, aquifer exemptions required to mine a portion of our Churchrock and Crownpoint properties. The dispute was taken to the Tenth Circuit Court of Appeals, which in January 2000 remanded to the EPA the issue whether the Section 8 Churchrock property was Indian Country. To date, no decision has been issued by USEPA Region 9 regarding this issue. The EPA has invited public comment on the issue, and the time for public comment expired on January 31, 2006. We anticipate that the EPA will now determine whether to hold a public hearing. We cannot predict when a determination will be made.

Kingsville Dome Production Area 3

After a hearing held in August 2005, the Texas Commission on Environmental Quality (“TCEQ”) voted unanimously February 22, 2006 to renew the Company’s disposal well permits, WDW-247 and WDW-248, and to issue Kingsville Dome Production Area Authorization 3 (“PAA 3”). Anyone wishing to challenge the order must file a motion for rehearing by April 10, 2006. If none is filed, the Commission’s action becomes final on that date and cannot be appealed. If one or more motions for rehearing are filed, all are automatically overruled on May 4, 2006; and, the Commission’s action becomes final on that date unless the TCEQ takes the extraordinary step of setting a later deadline or granting a motion for rehearing. If the TCEQ grants any motion for rehearing, new deadlines run from the mailing date of the resulting order.

Texas Department of Health Bonding Issues

On January 16, 2003, the Texas Department of Health (“TDH,” later renamed the Texas Department of State Health Services, “DSHS”) requested that we post $3.5 million in additional financial security and threatened enforcement action if the Company failed to do so. The Company object to the request. After consultation with the TDH and several interim extensions, on March 1, 2004, the Company entered into a Restoration Performance Agreement with the TDH, the Texas Commission on Environmental Quality and United States Fidelity and Guaranty Insurance Company that resolved the bonding issues. Through the Restoration Performance Agreement, the Company agreed to fund ongoing groundwater restoration at the Kingsville Dome and Rosita mine sites at specified treatment rates, utilizing a portion of the Company’s cash flow from sales of uranium from the Vasquez site as a substitute for additional bonding.

Kleberg County and an ad hoc citizen group brought suit challenging the Restoration Agreement. However, Kleberg County has settled with the Company and withdrew its support and funding of the suit. The ad hoc group did not settle, but its counsel, which the group shared with Kleberg County, has withdrawn Kleberg County’s request. The suit has not been dismissed, but it has been inactive for more than a year and seems unlikely to be pursued further.

Other

The Company is subject to periodic inspection by certain regulatory agencies for the purpose of determining compliance by the Company with the conditions of its licenses. In the ordinary course of business, minor violations may occur; however, these are not expected to cause material expenditures.

Item 4. Submission of Matters to a Vote of Security Holders

None

CAUTIONARY STATEMENTS

The factors identified below are important factors (but not necessarily all of the important factors) that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company. Where any such forward-looking statement includes a statement of the assumptions or bases underlying such forward-looking statement, we caution that, while we believe such assumptions or bases to be reasonable and make them in good faith, assumed facts or bases almost always vary from actual results, and the differences between assumed facts or bases and actual results can be material, depending upon the circumstances. Where, in any forward-looking statement, the Company, or its management, expresses an expectation or belief as to the future results, such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result, or be achieved or accomplished. Taking into account the foregoing, the following are identified as important risk factors that could cause actual results to differ materially from those expressed in any forward-looking statement made by, or on behalf of, the Company.

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The Restructured UG Contract is contingent on the payment of $12 million in cash.

We must pay UG $12 million in cash by June 30, 2006 to make the restructured contract effective. Without the receipt of the higher price for uranium sales under the restructured contract, we will operate at a cash loss. Our ability to operate at a positive cash flow is dependent on raising that capital under the private placement.

We need to raise $25 million to $45 million in order implement our business plan.

We are actively seeking a $25 million to $45 million in order to implement our business plan. Without at least the minimum, we will not be able to stay in business.

Our ability to function as an operating mining company is dependent on our ability to mine our properties at a profit sufficient to finance further mining activities and for the acquisition and development of additional properties.

Assuming that we raise the foregoing capital, our ability to operate on a positive cash flow basis is dependent on mining sufficient quantities of uranium at a profit sufficient to finance our operations and for the acquisition and development of additional mining properties.

Our inability to obtain financial surety would threaten our ability to continue in business.

Future bonding requirements will increase significantly when future development and production occurs at our sites in Texas and New Mexico. The amount of the bonding for each producing property is subject to annual review and revision by regulators. We expect that the issuer of the bonds will require us to provide cash collateral equal t the face amount of the bond to secure the obligation.

Because we have limited capital, inherent mining risks pose a significant threat to us.

Because we are small with limited capital, we are unable to withstand significant losses that can result from inherent risks associated with mining, including environmental hazards, industrial accidents, flooding, interruptions due to weather conditions and other acts of nature. Such risks could result in damage to or destruction of our wellfield infrastructure and production facilities, as well as to adjacent properties, personal injury, environmental damage and processing and production delays, causing monetary losses and possible legal liability.

More stringent federal and state regulations could adversely affect our business.

If we are unable to obtain or maintain permits or water rights for development of our properties or otherwise fail to manage adequately future environmental issues, our operations could be materially and adversely affected. We have expended significant resources, both financial and managerial, to comply with environmental protection laws, regulations and permitting requirements and we anticipate that we will be required to continue to do so in the future. Although we believe our properties comply in all material respects with all relevant permits, licenses and regulations pertaining to worker health and safety as well as those pertaining to the environment and radioactive materials, the historical trend toward stricter environmental regulation may continue.

The volatility of uranium prices makes our business uncertain.

The volatility of uranium prices makes long-range planning uncertain and raising capital difficult. The price of uranium is affected by numerous factors beyond our control, including the demand for nuclear power, political and economic conditions, and legislation and production and costs of production of our competitors.

The only market for uranium is nuclear power plants, and there are only a few customers.

We are dependent on a small number of electric utilities that buy uranium for nuclear power plants. Because of the limited market for uranium, a reduction in purchases of newly-produced uranium by electric utilities for any reason (such as plant closings) would adversely affect the viability of our business.

The price of alternative energy sources affects the demand for and price of uranium.

The attractiveness of uranium as an alternative fuel to generate electricity is so some degree dependent on the prices of oil, gas, coal and hydro-electricity and the possibility of developing other low cost sources for energy.

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Public acceptance of nuclear energy is uncertain.

Maintaining the demand for uranium at current levels and future growth in demand will depend upon acceptance of nuclear technology as a means of generating electricity. Lack of public acceptance of nuclear technology would adversely affect the demand for nuclear power and increase the regulation of the nuclear power industry.

Our inability to obtain insurance would threaten our ability to continue in business.

We currently have liability and property damage insurance that we believe is adequate. However, the insurance industry is undergoing change and premiums are being increased. If premiums should increase to a level we cannot afford, we could not continue in business.

If we cannot add additional reserves to replace production in the future, we would not be able to remain in business.

Our future uranium production, cash flow and income are dependent upon our ability to mine our current properties and acquire and develop additional reserves. There can be no assurance that our properties will be placed into production or that we will be able to continue to find and develop or acquire additional reserves.

Competition from better-capitalized companies affects prices and our ability to acquire properties and personnel.

There is global competition for uranium properties, capital, customers and the employment and retention or qualified personnel. In the production and marketing of uranium there are about 15 major producing entities, some of which are government controlled and all of which are significantly larger and better capitalized than we are. We also compete with uranium recovered from the de-enrichment of highly enriched uranium obtained from the dismantlement of United States and Russian nuclear weapons and imports to the United States of uranium from the former Soviet Union.

Competition from over 35 small companies affects our ability to acquire properties and personnel and retain existing personnel.

There are a handful of entities newly entered in the market that compete with us for properties and are attempting to become licensed to operate ISL facilities. In addition, we are aware several entities have expressed interest in hiring certain of our employees. To retain key employees, we may face increased compensation  costs, including, potential new option grants.

Over 44.6% of our shares of Common Stock is controlled by Principal Stockholders and Management

Over 44.6% of our Common Stock is controlled by four stockholders of record. In addition, our directors and officers are the beneficial owners of about 6.9% of our Common Stock. This includes with respect to both groups shares that may be purchased upon the exercise of outstanding options. Such ownership by the Company’s principal shareholders, executive officers and directors may have the effect of delaying, deferring, preventing or facilitating a sale of the Company or a business combination with a third party.

The availability for sale of a large amount of shares may depress the market price for our Common Stock.

The Company has 163,808,510 shares of Common Stock currently outstanding, of which 51.5% or 84,382,035 shares are owned by non-affiliates of the Company and are freely transferable. All of the remaining shares may be sold under a Registration Statement on Form SB-2. The availability for sale of such a large amount of shares may depress the market price for our Common Stock and impair our ability to raise additional capital through the public sale of Common Stock. The Company has no arrangement with any of the holders of the foregoing shares to address the possible effect on the price of the Company’s Common Stock of the sale by them of their shares.

GLOSSARY OF CERTAIN URANIUM INDUSTRY TERMS

claim	A claim is a tract of land, the right to mine of which is held under the federal General Mining Law of 1872 and applicable local laws.
concentrates	A product from a uranium mining and milling facility, which is commonly referred to as uranium concentrate  or U3O8.

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conversion	A process whereby uranium concentrates are converted into forms suitable for use as fuel in commercial nuclear reactors.
cut-off grade	Cut-off grade is determined by the following formula parameters: estimates over the relevant period of mining costs, ore treatment costs, general and administrative costs, refining costs, royalty expenses, process and refining recovery rates and uranium prices.
gross acres	Total acres under which we have mineral rights and can mine for uranium.
Indian Country	A term derived from jurisdictional determinations in criminal law enforcement proceedings under 18 U.S.C. § 1151 and understood to encompass territory situated within Indian reservations, land owned by Indian allottees and land within a dependent Indian community.
lixiviant	When used in connection with uranium in situ leach mining, a solution that is pumped into a permeable uranium ore body to dissolve uranium in order that a uranium solution can be pumped from production wells.
mineralized material	A mineralized body which has been delineated by appropriately spaced drilling and/or underground sampling to support a sufficient tonnage and average grade. Such a deposit does not qualify as a reserve, until a comprehensive evaluation based upon unit cost, grade, recoveries, and other material factors conclude legal and economic feasibility.
net acres	Actual acres under lease which may differ from gross acres when fractional mineral interests are not leased.
ore	Naturally occurring material from which a mineral or minerals of economic value can be extracted at a reasonable profit.
over feeding	Operating enrichment plants in a manner that reduces plant operating costs but increases the amount of uranium required to produce a given quantity of enriched uranium.
probable reserves	Reserves for which quantity and grade and/or quality are computed from information similar to that used for proven (measured) reserves, but the sites for inspection, sampling and measurement are farther apart or are otherwise less adequately spaced. The degree of assurance, although lower than that for proven (measured) reserves, is high enough to assume continuity between points of observation.
proven reserves	Reserves for which (a) quantity is computed from dimensions revealed in outcrops, trenches, workings or drill holes; grade and/or quality are computed from the results of detailed sampling and (b) the sites for inspection, sampling and measurement are spaced so closely and the geologic character is so well defined that size, shape, depth and mineral content of reserves are well-established.
reclamation	Reclamation involves the returning of the surface area of the mining and wellfield operating areas to a condition similar to pre-mining.
recoverable reserves	Reserves that are either proven or probable, are physically minable and can be profitably recovered under conditions specified at the time of the appraisal, based on a positive feasibility study. The calculation of minable reserves is adjusted for potential mining recovery and dilution.
reserve	That part of a mineral deposit which could be economically and legally extracted or produced at the time of the reserve determination.
restoration	Restoration involves returning an aquifer to a condition consistent with our pre-mining use and removing evidences of surface disturbance. The restoration of wellfield can be accomplished by flushing the ore zone with native ground water and/or using reverse osmosis to remove ions to provide clean water for reinjection to flush the ore zone.

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resources	A resource is a concentration of naturally occurring minerals in such a form that economic extraction is potentially feasible.
roll front	The configuration of sedimentary uranium ore bodies as they appear within the host sand. A term that depicts an elongate uranium ore mass that is “C” shaped.
shut in	A term that refers to ceasing production or the absence of production.
shut-in royalty	A lease clause permitting the extension of a lease not held by production by payment of a per acre royalty.
slurry	Fine particles of uranium concentrated and suspended in water.
spot price	The price at which uranium may be purchased for delivery within one year.
surety obligations	A bond, letter of credit, or financial guarantee posted by a party in favor of a beneficiary to ensure the performance of its or another party’s obligations, e.g., reclamation bonds, workers’ compensation bond, or guarantees of debt instruments.
tailings	Waste material from a mineral processing mill after the metals and minerals of a commercial nature have been extracted; or that portion of the ore which remains after the valuable minerals have been extracted.
Trade Tech	A Denver-based publisher of information for the nuclear fuel industry; the successor to the information services business of Nuexco.
uranium or uranium concentrates	U3O8 or triuranium octoxide.
U3O8	Triuranium octoxide equivalent contained in uranium concentrates, referred to as uranium concentrate.
waste	Barren rock in a mine, or uranium in a rock formation that is too low in grade to be mined and milled at a profit.

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PART II

Item 5. Market for Registrant’s Common Equity and Related Stockholder Matters

Our shares have been quoted on the Over the Counter Bulletin Board since October 15, 2004 and we have been dually quoted on both the OTCBB and the Pink Sheets since that date. From January 1, 2003 until June 24, 2003, we were quoted on the OTCBB. From June 25, 2003, until October 15, 2004, we were quoted only on the Pink Sheets.

The following table sets forth the high and low bid prices for the Common Stock as reported on the applicable markets for the periods indicated:

	Common Stock
Fiscal Quarter Ending	High		Low
December 31, 2005	$	0.82	0.55
September 30, 2005	0.85		0.42
June 30, 2005	0.71		0.40
March 31, 2005	0.97		0.65
December 31, 2004	0.88		0.64
September 30, 2004	0.75		0.36
June 30, 2004	0.33		0.20
March 31, 2004	0.38		0.25

As of December 31, 2005, we had 163,808,510 shares of Common Stock outstanding. On that date, there were 168 holders of record.

On March 29, 2006 the Board of Directors declared a 1 for 4 reverse stock split for stockholders of record on April 10, 2006.  The split was approved by the Company’s Stockholders at the 2005 Annual Meeting of Stockholders.

Dividends

We have never paid any cash or other dividends on our Common Stock, and we do not anticipate paying dividends for the foreseeable future.

Item 6. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward Looking Statements

This Item 6 contains “forward looking statements.”  These statements include, without limitation, statements relating to liquidity, financing of operations, continued volatility of uranium prices and other matters. The words “believes,” “expects,”  “projects,”  “targets,” “estimates” or similar expressions identify forward-looking statements. We do not undertake to update, revise or correct any of the forward-looking information. Readers are cautioned that such forward-looking statements should be read in conjunction with our disclosures under the heading: “Cautionary Statements” beginning on page 11.

RESTATEMENT OF FINANCIAL STATEMENTS

The financial statements for the year ended December 31, 2004 have been restated to give effect for fair value accounting of certain uranium sales contracts under FAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The Company determined that at December 31, 2003, its long-term uranium sales contracts met the definition of derivative financial instruments for financial statement reporting purposes, and the financial statements have been restated as of such date, to record these contracts at fair value.

Financial Condition and Results of Operations

Comparison of Twelve Months Ended December 31, 2005 and 2004

Production and Sales. In 2005, we sold 271,000 pounds of Vasquez production, resulting in revenues of $4.865 million (including $253,000 from the renegotiation of the contract price of sales that were made in the fourth quarter of 2004).  We sold 72,350 pounds in 2004 (having commenced production in October of that year) and had revenues of $1.009 million.

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Net Losses. During 2005, we had a net loss of  $35.0 million compared to a net loss of $15.9 million for the corresponding period of 2004. These losses included non-cash unrealized losses on derivatives of $30.9 million and $13.1 million, respectively.

Operating Expenses. During 2005, operating expenses and related royalties and commissions for Vasquez production sold was $3.702 million. We incurred $73,000 of stand-by costs at the Rosita project that was charged to operations and a lower of cost or market adjustment of $515,000 was charged to operations in December 2005. The cost of sales and related royalties and commissions for Vasquez production sold in 2004 totaled $919,000; and we incurred $607,000 of pre-production and stand-by costs at the Vasquez, Kingsville Dome and Rosita projects that were charged to operations in 2004.

Depreciation and Depletion. During 2005, we incurred depreciation and depletion expense attributable to our Vasquez production of $1.399 million. We incurred $16,000 of stand-by depreciation cost for the Kingsville Dome and Rosita projects and a lower of cost or market adjustment of $245,000 was charged to operations in December 2005.  In 2004, we incurred depreciation related to stand-by activities of $21,000 and $8,000, respectively.

Accretion and Amortization of Future Restoration Costs. During 2005, the accretion and amortization of future restoration costs was $348,000. In 2004, these expenses were $242,000.

General and Administrative Charges. In 2005, general and administrative charges and corporate depreciation were $3,209,339. In 2004, these expenses were $1,999,000.  The increase in these charges in 2005 resulted primarily from stock compensation expense of $582,000 incurred in the second and fourth quarters of 2005 (see Note 6. “Stock Based Compensation”) and increased personnel costs related to Vasquez, increases in insurance premiums and legal fees.

Cash Sources and Uses. In 2005 we had a negative cash flow from operations of $1.7 million. We spent $6.4 million in investing activities, and we raised $13.7 million from financing activities. Our net cash flow for 2005 was $5.6 million. In 2005 we spent $3.9 million at Vasquez for property, plant and equipment, $889,000 at Kingsville Dome and $1.5 million for other property additions in Texas and New Mexico. We also increased by $56,000 our restricted cash used to collateralize letters of credit pledged to secure our reclamation obligations.

In 2004 we had a negative cash flow from operations of $2.5 million. We spent $4.8 million in investing activities, and we raised $7.3 million from financing activities. In 2004 we spent $2.7 million at Vasquez for property, plant and equipment, $905,000 at Kingsville Dome and $316,000 for other property additions in Texas and New Mexico. We also increased by $831,000 our restricted cash used to collateralize letters of credit pledged to secure our reclamation obligations.

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Selected Production, Price and Cost of Uranium Sold Data

 for the years ended December 31, 2005 and 2004.

	December 31,
	2005		2004
Pounds of uranium produced	310,044		76,186
Pounds of uranium sold	271,000		72,350
Average sales price per pound (1)	$	17.95	$	13.95
Cost of produced pounds sold (2)(3)	$	20.32	$	11.76
Royalties/commissions per pound	$	1.31	$	0.94

(1) Average sales price per pound in 2005 includes approximately $253,000 in revenue recorded in 2005 related to the renegotiation of the contract prices completed in the first quarter of 2005 for pounds that were sold in 2004.

(2)The cost per pound excludes standby costs incurred in of $73,000 in 2005 and standby costs of $440,000 and pre-production operational costs at Vasquez of $167,000 in 2004. Such standby and pre-production costs were charged to operating expense in 2004. It also excludes any amortization of $2.7 million of Vasquez costs capitalized in prior periods and written off prior to 2004.

(3)The cost per pound of produced pounds sold in 2005 includes plant and wellfield operations costs ($12.35), depreciation and depletion of capital costs ($5.16) and a lower of cost or market (“LCM”) adjustment to uranium inventory at December 31, 2005 ($2.81). The LCM adjustment was comprised of $1.90 per pound of operating costs and $0.91 per pound of depreciation and depletion costs.

Cost of produced pounds sold in 2004 includes plant and wellfield operations costs ($8.50) and depreciation and depletion of capital costs ($3.26).

The estimated future costs of restoring the groundwater and the reclamation and decommissioning of surface and facilities ($1.20/lb.) are treated as a period cost and are not included herein as a cost of production.

Liquidity – Cash Sources and Uses for 2006

During the fourth quarter of 2004 we commenced mining operations at our Vasquez property after a period beginning in mid 1999 when our mining operations were shut down due to low uranium prices. During that five-year shut in period we had no revenues and were able to maintain minimal operations, primarily reclamation activities in South Texas, largely as a result of equity infusions. With the improvement in uranium spot prices by mid 2003, the Company began steps to bring its Vasquez property into production and signed two long-term contracts, calling for deliveries of 600,000 pounds of uranium in each of 2005 through 2008. The source of production for those contracts was the Vasquez property which we expected to produce at an annual volume and for a production cost that would meet the contracted delivery requirements and yield a small gross margin.

During 2005 we were unable to produce sufficient pounds from Vasquez to satisfy our contracted delivery requirements. As a result of the lower production and the fixed costs of operations, our cost of production has exceeded the sales price under the contracts, and we have been losing money on each pound sold. In addition, because of chemical and permeability obstacles in the Vasquez formation we have been experimenting with different oxidizing components that have added to our costs. Our production costs per pound were $20.32 for all of 2005. Because of the high cost of oxidizing agents our production costs were $35.74 per pound in December 2005.

We have taken steps to remedy this situation. We have renegotiated all of our supply contracts with Itochu and UG and have committed to each of them ½ of whatever our production is in South Texas at a price that is the average spot price for the eight weeks prior to the date of delivery less a discount. See “Long-Term Delivery Contracts” for a discussion of the terms of the revised contracts.

Our uranium production in 2006 is forecast at approximately 840,000 pounds. Such production is expected to be 420,000 pounds from each of our Vasquez and Kingsville Dome projects. Our Kingsville Dome project is projected to begin production in April 2006.

Our restructured contract with UG is contingent on our payment to it of $12 million in cash. We have engaged a placement agent to make a best efforts private placement of a minimum of $25 million and up to $45 million in value of shares of our Common Stock to selected accredited investors. Assuming that the Company raises only the minimum offering of $25 million, we project that we have cash needs of $48.6 million in 2006 to be used for the matters set forth in the following paragraph. We project that these funds will be supplied by $24.25 million from the equity offering (net of commission), $5.9 million from

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cash on hand at December 31, 2005 and $25.5 million from revenues from sales of our Vasquez and Kingsville Dome production (assuming the current market price for uranium sales held constant for the year).

In addition to the $12 million paid to UG, we expect to use $10.6 million for ongoing Vasquez new wellfield development and related activities (including financial surety requirements of $1.8 million); $9.6 million for development and production activities to start-up production at Kingsville Dome (including financial surety requirements of $1.4 million); $8.3 million for refurbishment and expansion of the Rosita production plant and for Rosita wellfield development and production start-up; $.8 million for land acquisition and holding costs for our Texas and New Mexico properties; $.7 million for groundwater restoration at our Kingsville Dome and Rosita projects; $2.1 million for equipment and South Texas working capital; and $4.5 million to cover working capital deficits prior to the end of the third quarter.

Assuming our financing raises the $25 million minimum, we expect to have positive cash flow from operations by the end of the third quarter as a result of the restructuring of the sales contract, but prior to then we will have months where our cash flow from operations is negative until the full effect of the restructuring is realized. Cash on hand at year end 2006 is projected at approximately $7 million.

If we do not raise the minimum, we may be unable to continue operations.

If our equity offering raises in excess of $25 million, the additional proceeds will be used for exploration, development and permitting in South Texas and further development of our South Texas and New Mexico properties.

Derivative Financial Instruments

The Company has determined that its long-term uranium sales contracts meet the definition of derivative financial instruments for financial statement reporting purposes, and as of such date, are recorded on the balance sheet at fair value. Changes in the fair value of such derivatives recorded on the balance sheet are recorded in the consolidated statements of operations in current earnings as they occur. Such changes in the Company’s derivatives represent non-cash charges to earnings for the present value of the loss the Company would incur in the event it would be required to purchase uranium in the spot market to satisfy the deliveries under both of its long-term uranium sales contracts.

Management applies significant judgment in estimating the fair value of instruments that are highly sensitive to assumptions regarding uranium prices and market volatilities. Future factors, such as changes in uranium market price, changes in pricing and delivery terms and the physical delivery of produced uranium under the contracts, among others, may impact the amount of the liability. Variations in these factors could materially affect amounts credited or charged to operations to reflect the changes in fair market value of derivatives.

Contingent Liabilities—Off Balance Sheet Arrangements

The Company has obtained financial surety relating to certain of its future restoration and reclamation obligations as required by the State of Texas regulatory agencies. The Company has bank Letters of Credit (the “L/C’s) and performance bonds issued for the benefit of the Company to satisfy such regulatory requirements. The L/C’s were issued by Bank of America and the performance bonds have been issued by United States Fidelity and Guaranty Company (“USF&G”). L/C’s for $944,000 and $897,000 were issued at December 31, 2005 and 2004, respectively such L/C’s are collateralized in their entirety by certificates of deposit.

Performance bonds totaling $2,835,000 were issued for the benefit of the Company at December 31, 2005 and 2004. USF&G has required that the Company deposit funds collateralizing a portion of the bonds. The amount of bonding issued by USF&G exceeded the amount of collateral by $2,491,000 and $2,500,000 at December 31, 2005 and 2004, respectively. In the event that USF&G is required to perform under its bonds or the bonds are called by the state agencies, the Company would be obligated to pay any expenditure in excess of the collateral.

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Critical Accounting Policies

Our significant accounting policies are described in Note 1 to the consolidated financial statements beginning on page F-8 of this Annual Report on Form 10-KSB. We believe our most critical accounting policies involve those requiring the use of significant estimates and assumptions in determining values or projecting future costs.

Specifically regarding our uranium properties, significant estimates were utilized in determining the carrying value of these assets. All properties with significant acquisition or incurred costs are evaluated for their realizability on a property by property basis.  Any impairment of such costs is recognized through a reduction in the net carrying value of the asset. The actual value realized from these assets may vary significantly from these estimates based upon market conditions, financing availability and other factors.

Regarding our reserve for future restoration and reclamation costs, significant estimates were utilized in determining the future costs to complete groundwater restoration and surface reclamation at our mine sites. The actual cost to conduct these activities may vary significantly from these estimates.

Such estimates and assumptions affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of expenses during the reporting period.

Impact of Recent Accounting Pronouncements

In March 2004, the EITF reached consensus on Issue 04-3, “Mining Assets: Impairment and Business Combinations.”  EITF 04-3 relates to estimating cash flows used to value mining assets or assess those assets for impairment. The Company assesses impairment on the projected mine life of each project utilizing existing technology. The release, which was effective for business combinations and impairment testing after March 31, 2004, did not have a significant impact on the Company’s consolidated financial results.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” which amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing.”  SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (“spoilage”) and requires such costs to be recognized as current-period charges. Additionally, SFAS No. 151 requires that allocation of fixed production overhead costs be based on normal capacity. The Statement is effective for years beginning after June 15, 2005, with early adoption permitted. Implementation of the Statement is not expected to have a significant effect on the Company’s financial statements.

In December 2004, the Financial Accounting Standard Board (“FASB”) issued SFAS No. 153, “Exchange of Nonmonetary Assets an amendment of APB Opinion No. 29.”  SFAS No. 153 eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets and replaces it with an exception for exchanges that do not have commercial substance. The Statement is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. Implementation of the Statement is not expected to have a significant effect on the Company’s financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004) (SFAS No. 123R) “Share-Based Payments.”  SFAS No. 123R requires that the cost from all share-based payment transactions, including stock options, be recognized in the financial statements at fair value. SFAS No. 123R is effective for the Company in the first interim period after December 15, 2005. SFAS No. 123R requires measurement and recording to the financial statements of the costs of employee services received in exchange for a grant of equity instruments based on the grant-date fair value of the award, recognized over the period during which an employee is required to provide services in exchange for such award. The Company will adopt the provisions of SFAS No. 123R on January 1, 2006. Compensation expense will be recognized for all newly granted options after January 1, 2006. Compensation expense for the unvested portion of awards that are outstanding as of January 1, 2006, based on the fair value at date of grant as calculated for our pro forma disclosure under SFAS No. 123R, will be recognized ratably over the remaining vesting period. The implementation of SFAS No. 123R expected to result in a non-cash charge against earnings in the first quarter of 2006 of approximately $320,000.

In March 2005, the FASB ratified Emerging Issues Task Force Issue No. 04-6, “Accounting for Stripping Costs Incurred during Production in the Mining Industry,” (EITF 04-6) which addresses the accounting for stripping costs incurred during the production phase of a mine and refers to these costs as variable production costs that should be included as a component of inventory to be recognized in operating costs in the same period as the revenue from the sale of inventory. The EITF 04-6 applies specifically to conventional mining operations (open pit mining), and as a result the company does not believe it is applicable to the Company’s in situ recovery mining operations.

20

Item 7. Financial Statements

The information called for by this item appears on pages F-1 through F-26.

Item 8. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 8A. Controls and Procedures.

The principal executive and principal financial officers of the Company have evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report (evaluation date) and have concluded that the disclosure controls and procedures are adequate and effective based upon their evaluation as of the evaluation date with the exception of a weakness in awareness of proper GAAP reporting for FAS No. 133 Accounting for Derivative Instruments and Hedging Activities which resulted in restatement of the Company’s financial statements for the year ended December 31, 2004. The Company intends to work more diligently to assure that errors of this type do not recur in the future.

There were no significant changes in our internal controls or in other factors that could significantly affect these internal controls subsequent to the date of the most recent evaluation.

Item 8B. Other Information.

None.

21

PART III

Pursuant to Instruction E(3) to Form 10-KSB, Items 9, 10, 11, 12 and 14 are omitted because we intend to file a definitive proxy statement pursuant to Regulation 14A under the Securities Exchange Act of 1934 not later than 120 days after the close of our fiscal year. The information required by such items will be included in the definitive proxy statement filed for our 2006 Annual Meeting of Stockholders and is hereby incorporated by reference.

Item 9. Directors, Executive Officers, Promoters and Control Persons: Compliance with Section 16(a) of the Exchange Act

Item 10. Executive Compensation

Item 11. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Item 12. Certain Relationships and Related Transactions.

Item 13. Exhibits

See Index to Exhibits on page E-1 for a listing of the exhibits filed as part of this Annual Report.

Item 14. Principal Accountant Fees and Services.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: March 29, 2006
	URANIUM RESOURCES, INC.
	By:	/s/ PAUL K. WILLMOTT
		Paul K. Willmott, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

Signature	Date
/s/ PAUL K. WILLMOTT
Paul K. Willmott,	March 29, 2006
Director, President and Chief Executive Officer
/s/ THOMAS H. EHRLICH
Thomas H. Ehrlich,	March 29, 2006
Vice President—Finance and Chief Financial Officer
(Principal Financial and Accounting Officer)
/s/ LELAND O. ERDAHL
Leland O. Erdahl, Director	March 29, 2006
/s/ GEORGE R. IRELAND
George R. Ireland, Director	March 29, 2006

22

URANIUM RESOURCES, INC. AND CONSOLIDATED SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Consolidated Financial Statements For The Years Ended December 31, 2005 and 2004 (Restated)

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations

Consolidated Statements of Common Shareholders’ Deficit

Consolidated Statements of Cash Flows

Notes to Consolidated Financial Statements

The accounts of the Company are maintained in United States dollars. All dollar amounts in the financial statements are stated in United States dollars except where indicated.

F-1

Report of Independent Registered Public Accounting Firm

To the Board of Directors

Uranium Resources, Inc.

Lewisville, TX  75067

We have audited the consolidated balance sheets of Uranium Resources, Inc. as of December 31, 2005 and 2004, and the related consolidated statements of operations, common shareholders’ deficit and cash flows for each of the two years in the period ended December 31, 2005. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provided a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Uranium Resources, Inc. as of December 31, 2005 and 2004, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2005, in conformity with U.S. generally accepted accounting principles.

As discussed in Note 13 to the consolidated financial statements, the Company restated the financial statements for the year ended December 31, 2004.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company has suffered recurring losses from operations and its total liabilities exceed its total assets. This raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 14. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Hein & Associates, LLP

Dallas, TX

March 10, 2006, except for Note 14 as to which the date is March 30, 2006

F-2

URANIUM RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

ASSETS

	December 31,
	2005			2004
				(Restated)
Current assets:
Cash and cash equivalents	$	5,852,716		$	268,866
Receivables, net	32,940			369,494
Uranium and materials/supplies inventory	707,949			45,151
Prepaid and other current assets	269,835			108,799
Total current assets	6,863,440			792,310
Property, plant and equipment, at cost:
Uranium properties	51,662,223			45,456,483
Other property, plant and equipment	302,164			276,271
Less-accumulated depreciation, depletion and impairment	(43,275,660		)	(41,424,883		)
Net property, plant and equipment	8,688,727			4,307,871
Other assets	1,072,026			259,532
Long-term investment:
Certificate of deposit, restricted	1,288,411			1,232,067
	$	17,912,604		$	6,591,780

The accompanying notes to financial statements are an integral part of these consolidated statements.

F-3

URANIUM RESOURCES, INC.

CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDERS’ DEFICIT

	December 31,
	2005			2004
				(Restated)
Current liabilities:
Accounts payable	$	1,139,005		$	505,591
Current portion of restoration reserve	1,061,491			1,200,327
Accrued interest and other accrued liabilities	432,683			195,604
Unrealized loss on derivatives, current portion	20,424,291			4,406,134
Current portion of long-term debt	175,833			135,000
Total current liabilities	23,233,303			6,442,656
Other long-term liabilities and deferred credits	3,823,015			3,551,844
Unrealized loss on derivatives, net of current portion	26,396,656			11,439,976
Long-term debt, less current portion	450,000			450,000
Commitments and contingencies (Notes 1, 2, 3, 4,5, and 11)
Shareholders’ equity (deficit):
Common stock, $.001 par value, shares authorized: 200,000,000; shares issued and outstanding (net of treasury shares): 2005—163,808,510; 2004–134,507,263	163,961			134,660
Paid-in capital	74,890,697			60,530,994
Accumulated deficit	(111,035,610		)	(75,948,932		)
Less: Treasury stock (152,500 shares), at cost	(9,418		)	(9,418		)
Total shareholders’ deficit	(35,990,370		)	(15,292,696		)
	$	17,912,604		$	6,591,780

The accompanying notes to financial statements are an integral part of these consolidated statements.

F-4

URANIUM RESOURCES, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31,
	2005			2004
				(Restated)
Revenues:
Uranium sales—	$	4,865,156		$	1,009,283
Total revenue	4,865,156			1,009,283
Costs and expenses:
Cost of uranium sales—
Royalties and commissions	355,011			67,956
Operating expenses	3,935,225			1,194,938
Provision (credit) for restoration and reclamation costs	—			—
Accretion/amortization of restoration reserve	348,415			241,810
Depreciation and depletion	1,660,219			263,380
Unrealized loss on derivatives	30,974,837			13,111,772
Writedown of uranium properties and other uranium assets	—			46,188
Total cost of uranium sales	37,273,707			14,926,044
Loss from operations before corporate expenses	(32,408,551		)	(13,916,761		)
Corporate expenses—
General and administrative	3,191,312			1,999,394
Depreciation	18,027			7,033
Total corporate expenses	3,209,339			2,006,427
Loss from operations	(35,617,890		)	(15,923,188		)
Other income (expense):
Interest expense	(93,418		)	(8,122		)
Interest and other income, net	624,630			66,554
Net loss	$	(35,086,678	)	$	(15,864,756	)
Net loss per common share:
Basic	$	(0.24	)	$	(0.14	)
Diluted	$	(0.24	)	$	(0.14	)

The accompanying notes to financial statements are an integral part of these consolidated statements.

F-5

URANIUM RESOURCES, INC.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ DEFICIT

	Common Stock			Paid-In Capital			Accumulated Deficit			Treasury Stock
	Shares	Amount
Balances, December 31, 2003 (Restated)	81,824,193	$	81,977	$	53,211,487		$	(60,084,176	)	$	(9,418	)
Net loss (Restated)	—	—		—			(15,864,756		)	—
Common stock issuance	52,206,570	52,206		7,224,634			—			—
Common stock issued for deferred compensation	476,500	477		94,823			—			—
Balances, December 31, 2004 (Restated)	134,507,263	$	134,660	$	60,530,994		$	(75,948,932	)	$	(9,418	)
Net loss	—	—		—			(35,086,678		)	—
Common stock issuance	27,333,333	27,333		13,042,781			—			—
Common stock issued for services	448,000	448		(448		)	—			—
Common stock issued for debt conversion	1,256,664	1,257		627,076			—			—
Stock compensation expense	—	—		581,960			—			—
Beneficial conversion on debt modification	—	—		55,947			—			—
Common stock issued for deferred compensation	263,250	263		52,387			—			—
Balances, December 31, 2005	163,808,510	$	163,961	$	74,890,697		$	(111,035,610	)	$	(9,418	)

The accompanying notes to financial statements are an integral part of these consolidated statements.

F-6

URANIUM RESOURCES, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31,
	2005			2004
				(Restated)
Cash flows from operations:
Net loss	$	(35,086,678	)	$	(15,864,756	)
Reconciliation of net loss to cash used in operations —
Unrealized loss on derivatives	30,974,837			13,111,772
Accretion/amortization of restoration reserve	348,415			241,810
Depreciation and depletion	1,678,246			270,413
Writedown of uranium properties and other assets	—			46,188
Decrease in restoration and reclamation accrual	(974,161		)	(571,705		)
Stock compensation expense	581,960			—
Deferred compensation	—			181,888
Other non-cash items, net	433,636			226,253
Effect of changes in operating working capital items —
(Increase) decrease in receivables	336,554			(344,244		)
Increase in inventories	(446,769		)	(19,644		)
Increase in prepaid and other current assets	(507,563		)	(272,765		)
Increase in payables and accrued liabilities	939,659			453,666
Net cash used in operations	(1,721,864		)	(2,541,124		)
Investing activities:
Increase in certificate of deposit, restricted	(56,344		)	(830,947		)
Additions to property, plant and equipment —
Kingsville Dome	(889,479		)	(905,001		)
Rosita	(279,975		)	(43,448		)
Vasquez	(3,915,760		)	(2,724,312		)
Churchrock	(382,147		)	(124,037		)
Crownpoint	(396,523		)	(61,157		)
Other property	(444,172		)	(87,573		)
Net cash used in investing activities	(6,364,400		)	(4,776,475		)
Financing activities:
Proceeds from borrowings	600,000			—
Issuance of Common Stock, net	13,070,114			7,276,840
Net cash provided by financing activities	13,670,114			7,276,840
Net increase (decrease) in cash and cash equivalents	5,583,850			(40,759		)
Cash and cash equivalents, beginning of year	268,866			309,625
Cash and cash equivalents, end of year	$	5,852,716		$	268,866

The accompanying notes to financial statements are an integral part of these consolidated statements.

F-7

URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2004

1. DESCRIPTION OF THE COMPANY

Uranium Resources, Inc. (“URI”) was formed in 1977 and domesticated in Delaware in 1987. The Company is primarily engaged in the business of acquiring, exploring, developing and mining uranium properties, using the in situ leach (“ISL”) or solution mining process. Historically, the primary customers of the Company have been major utilities who utilize nuclear power to generate electricity. At present the Company owns producing and undeveloped uranium properties in South Texas and undeveloped uranium properties in New Mexico.

The Company resumed uranium production in the fourth quarter of 2004 at its Vasquez project in South Texas and began wellfield development in the fourth quarter of 2005 at its Kingsville Dome project, in South Texas, in anticipation of production from this project in April 2006. Prior to resuming Vasquez production, the Company had been in production stand-by since the first quarter of 1999 at its Kingsville Dome and Rosita projects. Groundwater restoration activities have been conducted and are currently ongoing at both the Kingsville Dome and Rosita projects.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation and Description of Company

The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America and include the accounts of URI and its wholly owned subsidiaries (collectively “the Company”). All significant intercompany transactions have been eliminated in consolidation.

Inventories

Uranium and materials and supplies inventory for each of the Company’s projects are valued at the lower of average cost or market.

Uranium Properties

Capitalization of Development Costs. All acquisition and development costs (including financing, salary and related overhead costs) incurred in connection with the various uranium properties are capitalized. Exploration and evaluation costs associated with uranium properties are expensed as incurred until such time that the existence of a commercially minable uranium deposit is confirmed. All properties with significant acquisition or incurred costs are evaluated for their realizability on a property-by-property basis. Any impairment of such costs is recognized through a reduction in the net carrying value of the asset. (See Note 3—”Uranium Properties—Property Realizability”).

Depreciation and Depletion. Depletion of uranium mineral interests, permits, licenses and related development costs are computed on a property-by-property basis using the units-of-production method based on each projects pounds of recoverable uranium. Depreciation and depletion are provided on the investment costs, net of salvage value, of the various uranium properties’ production plants and related equipment using the estimated production life of the uranium reserves. During the periods that our facilities are not in production, depletion on our mineral interests, permits, licenses and development properties are ceased. Depreciation and depletion of our plant facilities, machinery and equipment continues, at significantly reduced amounts, in accordance with the level of stand-by activity being conducted at each site. Other ancillary plant equipment and vehicles are depreciated using a straight line method based upon the estimated useful lives of the assets.

Other Property, Plant and Equipment

Other property, plant and equipment consists of corporate office equipment, furniture and fixtures and transportation equipment. Depreciation on other property is computed based upon the estimated useful lives of the assets. Repairs and maintenance costs are expensed as incurred. Gain or loss on disposal of such assets is recorded as other income or expense as such assets are disposed.

F-8

Capitalization of Interest

The Company capitalizes interest cost with respect to properties undergoing exploration or development activities that are not subject to depreciation or depletion. The average interest rate on outstanding borrowings during the period is used in calculating the amount of interest to be capitalized. No interest was capitalized in the twelve months ended December 31, 2005 and 2004. Total interest costs in these periods were $37,000 and $8,000, respectively.

Restoration and Remediation Costs (Asset Retirement Obligations)

Various federal and state mining laws and regulations require the Company to reclaim the surface areas and restore underground water quality for its mine projects to the pre-existing mine area average quality after the completion of mining. In August 2001, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations,” which established a uniform methodology for accounting for estimated reclamation and abandonment costs. The statement was adopted January 1, 2003, when the Company recorded the estimated present value of reclamation liabilities and increased the carrying amount of the related asset, which resulted in a net expense for the cumulative effect of a change in accounting principle of $1,447,000. Reclamation costs are allocated to expense over the life of the related assets and are periodically adjusted to reflect changes in the estimated present value resulting from the passage of time and revisions to the estimates of either the timing or amount of the reclamation and remediation costs.

In March 2005, the FASB issued Interpretation 47 (“FIN 47”), “Accounting for Conditional Asset Retirement Obligations”—an interpretation of FASB No. 143. FIN 47 clarifies that the term “conditional asset retirement obligation” as used in SFAS No. 143 refers to a legal obligation to perform an asset retirement activity in which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the entity. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. FIN 47 requires a liability to be recognized for the fair value of a conditional asset retirement obligation if the fair value of the liability can be reasonably estimated. FIN 47 was effective for fiscal years ending after December 15, 2005. The adoption of FIN 47 is not expected to have a material impact on our consolidated financial position, results of operations or cash flows.

Future reclamation and remediation costs are accrued based on management’s best estimate at the end of each period of the costs expected to be incurred at each project. Such estimates are determined by the Company’s engineering studies calculating the cost of future of surface and groundwater activities. During the years ended December 31, 2005 and 2004 the Company increased its accrual for restoration and reclamation costs by $620,774 and $318,000, respectively.

Contingent Liabilities—Off Balance Sheet Arrangements

The Company has obtained financial surety relating to certain of its future restoration and reclamation obligations as required by the State of Texas regulatory agencies. The Company has bank Letters of Credit (the “L/C’s) and performance bonds issued for the benefit of the Company to satisfy such regulatory requirements. The L/C’s were issued by Bank of America and the performance bonds have been issued by United States Fidelity and Guaranty Company (“USF&G”). L/C’s for $944,000 and $897,000 were issued at December 31, 2005 and 2004, respectively such L/C’s are collateralized in their entirety by certificates of deposit.

Performance bonds totaling $2,835,000 were issued for the benefit of the Company at December 31, 2005 and 2004. USF&G has required that the Company deposit funds collateralizing a portion of the bonds. The amount of bonding issued by USF&G exceeded the amount of collateral by $2,491,000 and $2,500,000 at December 31, 2005 and 2004, respectively. In the event that USF&G is required to perform under its bonds or the bonds are called by the state agencies, the Company would be obligated to pay any expenditures in excess of the collateral.

Revenue Recognition for Uranium Sales

The Company delivers uranium to its customers at third-party conversion facilities. The third-party converters warehouse our uranium and transfer title to our customers via book transfer upon instructions supplied by the

F-9

Company. The Company recognizes revenue from the sale of uranium when title to the uranium transfers and delivery is completed through such book transfer.

Earnings Per Share

Net earnings (loss) per common share—basic has been calculated based on the weighted average shares outstanding during the year and net earnings (loss) per common share—diluted has been calculated assuming the exercise or conversion of all dilutive securities. Due to net losses incurred for the two years presented there were no dilutive securities included in any of these years.

The weighted average number of shares used to calculate basic and diluted loss per share was 146,577,874 and 114,901,282 in 2005 and 2004, respectively. The potential Common Stock that was excluded from the calculation of diluted earnings per share was 17,611,938 and 9,758,763 in 2005 and 2004, respectively.

Consolidated Statements of Cash Flows

The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.

Additional disclosures of cash flow information follow:

	Year Ended December 31,
	2005		2004
Cash paid during the period for:
Interest	$	0	$	0
The following non-cash transactions occurred in 2005 and 2004 and such transactions are summarized as follows:
The Company issued 263,250 and 476,500 shares of Common Stock in 2005 and 2004, respectively in satisfaction of the conversion of deferred compensation	$	52,649	$	95,300

In the fourth quarter of 2005, the Company issued 1,256,664 shares of Common Stock in satisfaction of the conversion of $600,000 in principal and $28,333 in accrued interest for borrowings made pursuant to a Note Purchase Agreement dated March 24, 2005.

In connection with a $12 million private placement in August 2005 the Company paid a fee of $336,000 in cash and 448,000 shares of Common Stock to a placement agent.

In June 2005, the Company recorded $443,960 in stock compensation expense related to stock options granted to employees and directors of the Company that were contingent upon shareholder approval of amendments to the stock option plans under which the grants were issued.

In September 2005, the Company recorded $138,000 in stock compensation expense for stock options granted to a non-employee for services provided to the Company.

Restricted Cash

At December 31, 2005 and 2004, the Company had pledged certificates of deposit of $1,288,000 and $1,232,000, respectively, in order to collateralize letters of credit required for future restoration and reclamation obligations related to the Company’s South Texas production and development properties. These funds are not readily available to the Company and are not included in cash equivalents.

Stock-Based Compensation

In accordance with the Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation, the Company has elected to apply the provisions of Accounting Principles Board Opinion

F-10

(“APB”) No. 25, Accounting for Stock Issued to Employees, and related interpretations, in accounting for its stock-based compensation plans. Under APB No. 25, compensation is measured as the excess, if any, of the quoted market price of the Company’s Common Stock over its exercise price at the date of grant.

On June 2, 2004, 6,750,000 options were granted to officers at an exercise price of $0.29 per share. Stock compensation expense of $444,000 was recorded in June 2005 (the date an amendment to the stock option plan was approved by the Company’s stockholders) and is reflected in the Consolidated Statements of Operations under general and administrative expenses for the year ended December 31, 2005.

On September 28, 2005, 200,000 options were granted to a non-employee of the Company for services provided to the Company. Stock compensation expense of $138,000 is reflected in the Consolidated Statements of Operations under general and administrative expenses for the year ended December 31, 2005.

Derivative Financial Instruments

The Company has determined that its long-term uranium sales contracts meet the definition of derivative financial instruments for financial statement reporting purposes, and as of such date, are recorded on the balance sheet at fair value. Changes in the fair value of such derivatives recorded on the balance sheet are recorded in the consolidated statements of operations in current earnings as they occur. Such changes in the Company’s derivatives represent non-cash charges to earnings for the present value of the loss the Company would incur in the event it would be required to purchase uranium in the spot market to satisfy the deliveries under both of its long-term uranium sales contracts.  See note 14 for discussion of renegotiated sales contracts.

Management applies significant judgment in estimating the fair value of instruments that are highly sensitive to assumptions regarding uranium prices and market volatilities. Variations in these factors could materially affect amounts credited or charged to operations to reflect the changes in fair market value of derivatives.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make certain estimates and assumptions. Such estimates and assumptions may affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Specifically regarding the Company’s uranium properties, significant estimates were utilized in determining the carrying value of these assets and in the case of producing and development properties the pounds of uranium to be recovered. The actual values received from the disposition of these assets and the amount of uranium recovered from these projects may vary significantly from these estimates based upon market conditions, financing availability and other factors.

Regarding the Company’s reserve for future restoration and reclamation costs, significant estimates were utilized in determining the future costs and timing to complete the groundwater restoration and surface reclamation at the Company’s mine sites. The actual cost to conduct these activities may vary significantly from these estimates.

Risks and Uncertainties

Historically, the market for uranium has experienced significant price fluctuations. Prices are significantly impacted by global supply and demand, which is affected by the demand for nuclear power, political, and economic conditions, governmental legislation in uranium producing and consuming countries, and production levels and costs of production of other producing companies. Increases or decreases in prices received could have a significant impact on the Company’s future results of operations.

The Company has outstanding surety bonds issued on its behalf by USF&G at December 31, 2005 and 2004. The Company has deposited funds collateralizing a portion of these bonds. In the event that USF&G is required to perform under the bonds or the bonds are called by the state agencies, the Company would be obligated to pay USF&G for its expenditures in excess of the collateral. See “Summary of Significant Accounting Policies—Restoration and Reclamation Costs” for further discussion.

F-11

Impact of Recent Accounting Pronouncements

In March 2004, the EITF reached consensus on Issue 04-3, “Mining Assets: Impairment and Business Combinations.” EITF 04-3 relates to estimating cash flows used to value mining assets or assess those assets for impairment. The Company assesses impairment on the projected mine life of each project utilizing existing technology. The release, which was effective for business combinations and impairment testing after March 31, 2004, did not have a significant impact on the Company’s consolidated financial results.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs,” which amends the guidance in ARB No. 43, Chapter 4, “Inventory Pricing.” SFAS No. 151 clarifies the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material (“spoilage”) and requires such costs to be recognized as current-period charges. Additionally, SFAS No. 151 requires that allocation of fixed production overhead costs be based on normal capacity. The Statement is effective for years beginning after June 15, 2005, with early adoption permitted. Implementation of the Statement is not expected to have a significant effect on the Company’s financial statements.

In December 2004, the Financial Accounting Standard Board (“FASB”) issued SFAS No. 153, “Exchange of Nonmonetary Assets an amendment of APB Opinion No. 29.” SFAS No. 153 eliminates the exception from fair value measurement for nonmonetary exchanges of similar productive assets and replaces it with an exception for exchanges that do not have commercial substance. The Statement is effective for nonmonetary exchanges occurring in fiscal periods beginning after June 15, 2005. Implementation of the Statement is not expected to have a significant effect on the Company’s financial statements.

In December 2004, the FASB issued SFAS No. 123 (revised 2004) (SFAS No. 123R) “Share-Based Payments.” SFAS No. 123R requires that the cost from all share-based payment transactions, including stock options, be recognized in the financial statements at fair value. SFAS No. 123R is effective for the Company in the first interim period after December 15, 2005. SFAS No. 123R requires measurement and recording to the financial statements of the costs of employee services received in exchange for a grant of equity instruments based on the grant-date fair value of the award, recognized over the period during which an employee is required to provide services in exchange for such award. The Company will adopt the provisions of SFAS No. 123R on January 1, 2006. Compensation expense will be recognized for all newly granted options after January 1, 2006. Compensation expense for the unvested portion of awards that are outstanding as of January 1, 2006, based on the fair value at date of grant as calculated for our pro forma disclosure under SFAS No. 123R, will be recognized ratably over the remaining vesting period. The implementation of SFAS No. 123R is expected to result in a non-cash charge against earnings in the first quarter of 2006 of approximately $320,000.

In March 2005, the FASB ratified Emerging Issues Task Force Issue No. 04-6, “Accounting for Stripping Costs Incurred during Production in the Mining Industry,” (EITF 04-6) which addresses the accounting for stripping costs incurred during the production phase of a mine and refers to these costs as variable production costs that should be included as a component of inventory to be recognized in operating costs in the same period as the revenue from the sale of inventory. The EITF 04-6 applies specifically to conventional mining operations (open pit mining) and as a result the Company does not believe it is applicable to the Company’s in situ recovery mining operations.

3. GOING CONCERN

The financial statements of the Company have been prepared on the basis of accounting principles applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

Should the Company be unable to achieve profitable operations or raise additional capital to bring on new uranium projects, it may not be able to continue operations. These factors raise substantial doubt concerning the ability of the Company to continue as a going concern. The accompanying financial statements do not purport to reflect or provide for the consequences of discontinuing operations. In particular, such financial statements do not purport to show (a) as to assets, their realizable value on a liquidation basis or their availability to satisfy liabilities; (b) as to liabilities, the amount that may be allowed for claims and contingencies, or the status and priority thereof; (c) as to

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shareholder accounts, the effect of any changes that may be made in the capitalization of the Company; and (d) as to operations, the effect of any changes that may be made in its business.

4. URANIUM PROPERTIES

Property, Plant and Equipment

	Property, Plant and Equipment Balances (net) At December 31,
	2005		2004
Uranium plant	$	2,315,000	$	1,873,000
Uranium wellfield development	3,592,000		1,670,000
Permits and licenses	1,308,000		284,000
Mineral rights	659,000		274,000
Exploration	56,000		—
Vehicles/depreciable equipment	247,000		24,000
Other	512,000		183,000
Total	$	8,689,000	$	4,308,000

Property Realizability

Uranium Properties

The Company reviews and evaluates its long-lived assets for impairment when events or changes in circumstances indicate that the related carrying amounts may not be recoverable. An impairment is considered to exist if the total estimated future cash flows on an undiscounted basis are less than the carrying amount of the assets. An impairment loss is measured and recorded based on discounted estimated future cash flows. Future cash flows are estimated based on quantities of recoverable minerals, expected uranium prices, production levels and operating costs of production and capital, based upon the projected remaining future uranium production from each project. The Company’s estimates of future cash flows are based on numerous assumptions and it is possible that actual future cash flows will be significantly different than the estimates, as actual future quantities of recoverable minerals, uranium prices, production levels and operating costs of production and capital are each subject to significant risks and uncertainties.

The Company recorded an impairment and reduced the carrying value of its uranium properties by $46,000 in 2004.

Vasquez Property

The Company has a mineral lease on 872 gross and net acres located in southwestern Duval County, in South Texas. The term expires in February 2008. The lease provides for 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.

The net carrying value of the property was approximately $4,611,000 at December 31, 2005. Such assets consisted of mineral rights, permits/licenses, wellfield development, plant buildings/uranium processing/drying facilities and restoration and other equipment of $104,000, $60,000, $3,395,000, $963,000 and $89,000 respectively. The net carrying value of the property was approximately $2,477,000 at December 31, 2004. Such assets consisted of mineral rights, permits/licenses, wellfield development, plant buildings/uranium processing/drying facilities and restoration and other equipment of $91,000, $49,000, $1,670,000, $641,000 and $26,000 respectively.

Kingsville Dome Property

The Kingsville Dome property consists of mineral leases from private landowners on about 2,354 gross and net acres located in central Kleberg County, Texas. The leases provide for royalties based upon a percentage of uranium sales of 6.25%. The leases have expiration dates ranging from 2000 to 2007. With a few minor exceptions,

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all the leases contain clauses that permit us to extend the leases not held by production by payment of a per acre royalty ranging from $10 to $30.

The net carrying value of the property was approximately $2,110,000 at December 31, 2005. Such assets consisted of mineral rights, permits/licenses, plant buildings/uranium processing/drying facilities, wellfield development and restoration and other equipment of $239,000, $379,000, $1,179,000, $197,000 and $116,000, respectively. The net carrying value of the property was approximately $1,298,000 at December 31, 2004. Such assets consisted of mineral rights, permits/licenses, plant buildings/uranium processing/drying facilities and restoration and other equipment of $127,000, $91,000, $1,056,000 and $24,000, respectively. The Company recorded an impairment provisions in the year ended December 31, 2004 of approximately $13,000 for the Kingsville Dome property.

Rosita Property

The Company holds several lease holdings in a uranium prospect (“Rosita”) in Duval County, Texas. The Company has produced over 3 million pounds of uranium from this property in the early to mid 1990’s but the property was placed on stand-by in 1999 because of low uranium prices. With the significant increase in uranium prices the company is re-evaluating this property for additional future uranium production.

Cost of uranium sales in 2005 and 2004 in the Consolidated Statements of Operations includes $83,000 and $105,000, respectively of costs incurred to maintain the facility while Rosita was on standby and not in production. The Company recorded impairment provisions in the year ended December 31, 2004 of approximately $34,000, for the Rosita property.

The net carrying value of the property at December 31, 2005 and 2004 was approximately $173,000 and $184,000, respectively. Such assets consisted of plant buildings and uranium processing equipment of $173,000 and $175,000 in 2005 and 2004 respectively and restoration and other equipment of $9,000 in 2004.

South Rosita

In the fourth quarter of 2005, the Company entered into leases on approximately 1,300 acres in Duval County near its Rosita property. Evaluation of the uranium mineralization potential of this property will be conducted in 2006.

Churchrock Properties

The Churchrock project encompasses about 2,200 gross and net acres. The properties are located in McKinley County, New Mexico and consist of three parcels, known as Section 8, Section 17 and Mancos. None of these parcels lies within the area generally recognized as constituting the Navajo Reservation. We own the mineral estate in fee for both Section 17 and the Mancos properties. We own patented mining claims on Section 8.

The surface estate on Section 17 is owned by the United States Government and held in trust for the Navajo Nation. We have royalty obligations ranging from 5% to 6¹/₄% and a 2% overriding royalty obligation to the Navajo Nation for surface use agreements.

Permitting activities are currently ongoing on both of these properties. The net carrying value of these properties was $506,000 and $124,000 at December 31, 2005 and 2004, respectively. The assets consisted of mineral rights and permitting/licensing at December 31, 2005 and 2004.

Crownpoint Property

The Crownpoint properties are located in the San Juan Basin, 22 miles northeast of our Churchrock deposits and 35 miles northeast of Gallup, New Mexico, adjacent to the town of Crownpoint. The Properties consist of 619 gross and 521.8 net acres.

The net carrying value of these properties was $518,000 and $122,000 at December 31, 2005 and 2004 and consisted primarily of mineral rights, permits/licenses and plant buildings and equipment.

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West Largo and Roca Honda

In March 1997, we acquired the fee interest in 177,000 acres in northwestern New Mexico. Several significant occurrences of uranium mineralization are know to be within this acreage, including a uranium mineralized property called the West Largo and a uranium mineralized property called the Roca Honda.

The West Largo property is about 21 miles north of the town of Milan and about 1.5 miles west of State Highway 509 in McKinley County, New Mexico. The property lies about 3 miles to the northwest of the Ambrosia Lake District, a major producer of uranium by means of underground operations from the late 1950s to the early 1980s.

The Roca Honda property lies about 4 miles northwest of the town of San Mateo in McKinley County, New Mexico. We also own 36 unpatented mining claims encompassing approximately 640 acres that are adjacent to the fee land.

The net carrying value of the property was $29,000 and $15,000 at December 31, 2005 and 2004, respectively.

5. CONTRACT COMMITMENTS

Sales Contracts

Long-term contracts have historically been the primary source of revenue to the Company.

In August 2003, we signed a sales contract to deliver approximately 300,000 pounds of uranium annually for the years 2005-2008. In January 2004, we signed a second uranium supply contract to deliver approximately 300,000 pounds annually for the years 2005-2008.

In 2004, the Company amended one of the sales contracts to accelerate a portion of the 2005 deliveries into 2004 to provide cash flow from its uranium inventory. Deliveries under these contracts in 2005 and 2004 totaled approximately 271,000 and 72,000 pounds respectively and  generated approximately $4.9 million and $1 million in revenue respectively, from such sales.

The following table provides information at December 31, 2005 concerning the expected quantities under our two long-term sales contracts from January 1, 2006 through 2008. In both contracts the fixed purchase price is escalated based upon the increase from the fourth quarter of 2003 in the Gross Domestic Product Implicit Price Deflator Index published by the US Department of Commerce. The Index has increased 5.64% since the fourth quarter of 2003 through the first quarter of 2006.

	2006		2007		2008		Total
Number of customers	2		2		2
Total long-term deliveries (000’s of pounds)	*1,037		690		690		2,417
Total sales (000’s)	$	15,112	$	9,567	$	9,567	$	34,246
Average sales price per pound	$	14.58	$	13.87	$	13.87	$	14.17

*2005 contract obligations of 347,000 pounds not delivered in 2005 have been added to the 2006 contractual delivery requirements, such deliveries are limited to actual production

In addition to the foregoing, the Company has entered into two contracts that call for deliveries of 645,000 pounds in the aggregate by December 31, 2007 at the current spot price on the date of delivery less an average of $3.80 per pound.

In March, 2006 the Company executed agreements significantly amending  the sales contracts noted above. (See Footnote 14. “Subsequent Events”  for additional information about these amended contracts.)

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Derivative Financial Instruments

The Company has determined that its long-term uranium sales contracts meet the definition of derivative financial instruments for financial statement reporting purposes, and the financial statements have been restated as of January 1, 2004, to record these contracts at fair value. The Company does not enter into hedge transactions with respect to its uranium sales contracts and the fair value loss represents the present value of the loss the Company would incur in the event it would be required to purchase uranium in the spot market to satisfy the deliveries under both of its long-term uranium sales contracts.

6. LONG-TERM DEBT

Convertible Notes

In 2000, the Company issued a $135,000 Convertible Note due July 17, 2005 in settlement of certain outstanding claims. Interest of 6% per annum was due at maturity. The Company could prepay the Note at any time and the holder of the Note had the right to convert all principal and accrued interest into shares of the Company’s Common Stock at a conversion price of $0.75 per share. In the third quarter of 2005, the maturity was extended to July 17, 2006, and the accrued and unpaid interest of $40,833 was added to the principal of the Convertible Note. The conversion price was reduced to $0.44 per share. In connection with these amended terms, the Company recorded interest expense of approximately $56,000 related to the beneficial conversion terms of the modified Note. In the first quarter of 2006, all of the principal and accrued interest under the note were converted in shares in March, 2006.

On March 28, 2005 the Company borrowed $600,000 from five (5) stockholders of the Company, each of whom may be considered an affiliate. The Notes were unsecured, with a maturity date of March 24, 2006 and bore interest at the rate of 10% per annum. Each of the Notes carried conversion rights entitling the holder the right to convert the face value of the Note plus accrued interest into shares of common stock of the Company at a price equal to the share price the Company received under subsequent debt or equity offerings. In the fourth quarter of 2005 each lender elected to convert their note and accrued interest into common stock of the Company. A total of 1,256,664 shares were issued at a share price of $0.50 per share.

Summary of Long-Term Debt

	At December 31,
	2005		2004
Long-term debt of the Company consists of:
Crownpoint property (Note 3)	$	450,000	$	450,000
Convertible Note	175,833		135,000
	625,833		585,000
Less—Current portion	175,833		135,000
Total long-term debt	$	450,000	$	450,000

Maturities of long-term debt are as follows:

For the Twelve Months Ended:
December 31, 2006	$	175,833
December 31, 2007	$	—
December 31, 2008	$	—
December 31, 2009	$	—
December 31, 2010 and beyond	$	450,000

7. RELATED-PARTY TRANSACTIONS

In August 2005 and May 2005 the Company issued shares of its common stock in private placement transactions. Two private investment partnerships managed by George R. Ireland, a director of the Company, purchased 1,600,000 shares out of 24,000,000 shares in the August 2005 offering and all of the 3,333,333 shares in the May 2005 offering. The Company has filed a registration statement under the Securities Act of 1933, as amended, to register the resale of the shares issued in these private placements.

In September 2005, the Company issued a total of 38,250 shares of Common Stock at $0.20 per share to a director of the Company upon his election to convert deferred compensation into shares under the terms of the deferred compensation plans.

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On March 28, 2005 the Company borrowed $600,000 pursuant to a Note Purchase Agreement dated March 24, 2005. The lenders were five (5) stockholders of the Company, each of whom may be considered an affiliate. In the fourth quarter of 2005 each lender elected to convert their note and accrued interest in common stock of the Company. A total of 1,256,664 shares were issued at a share price of $0.50 per share in connection with the conversion of the Notes.

In January 2005, the Company issued a total of 225,000 shares of Common Stock at $0.20 per share to a former director and holder of in excess of 5% of outstanding common shares of the Company upon his election to convert deferred compensation.

In November 2004, the Company raised an additional $100,000 of equity by the issuance of 514,565 shares of Common Stock at $0.20 and $0.19 per share to an executive officer and director of the Company upon the exercise of outstanding stock options.

In June and December 2004, the Company issued a total of 476,500 shares of Common Stock at $0.20 per share to a director of the Company upon his election to convert deferred compensation.

8. SHAREHOLDERS’ EQUITY (DEFICIT)

Equity Infusions

In 2005 and 2004 the Company sold shares of common stock in the following private placements:

Date	Price per Share		Amount		Shares Issued
August 2005	$	0.50	$	12,000,000	24,000,000
May 2005	$	0.45	$	1,499,999	3,333,333
May 2004	$	0.15	$	5,897,550	39,317,005
February 2004	$	0.10	$	325,000	3,250,000
January 2004	$	0.10	$	350,000	3,500,000

In connection with the August 2005 placement the Company paid a fee of $336,000 in cash and 448,000 shares of Common Stock to a placement agent.

Two private investment partnerships managed by George R. Ireland, a director of the Company, purchased 1,600,000 shares in the offering. In the May 2005 placement, two private investment partnerships managed by George R. Ireland, a director of the Company, purchased all of the shares in the offering.

The Company has filed a registration statement under the Securities Act of 1933, as amended, to register the resale of the shares issued in these private placements.

Common Stock Issued Upon Conversion of Warrants/Options

In September 2005, the Company issued 38,250 shares of Common Stock of the Company at $0.20 per share to a  director of the Company upon his election to convert deferred compensation. In January 2005, the Company issued 225,000 shares of Common Stock of the Company at $0.20 per share to a former director of the Company upon his election to convert deferred compensation.

In November 2004, the Company raised $100,000 of equity by the issuance of 223,265 and 291,300 shares of Common Stock at $0.20 and $0.19 per share respectively, to an executive officer and director of the Company upon the exercise of outstanding stock options.

In the fourth quarter of 2004, the Company raised $675,000 of equity by the issuance of 5,625,000 shares of Common Stock at $0.12 upon the exercise of Warrants that were issued in August 2000.

In June and December 2004, the Company issued a total of 476,500 shares of Common Stock at $0.20 per share to a director of the Company upon his election to convert deferred compensation.

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Increase in Authorized Shares

In January 2004, the Company’s stockholders approved an amendment to the Company’s Restated Certificate of Incorporation to increase the authorized shares of Common Stock, par value $0.001 per share (the “Common Stock”), from 100,000,000 to 200,000,000.

Stock Options

Employee Stock Options

On June 2, 2004, the Board of Directors of the Company, adopted an amendment to the Company’s 1995 Stock Incentive Plan (the “1995 Plan”) to increase the number shares of Common Stock subject to the 1995 Plan to 12,000,000. The amendment was approved by the Shareholders of the Company in June 2005. Also on June 2, 2004, the Compensation Committee of the Board of Directors issued to executive officers, incentive stock options under the 1995 Plan, to purchase 6,028,000 shares at a price of $0.29 per share and non-qualified options to purchase 722,000 shares at $0.29 per share. In September 2005 the Compensation Committee issued under the 1995 Plan, incentive stock options to purchase 571,400 shares at a price of $0.70 per share and non-qualified options to purchase 428,600 shares at $0.70 per share to an executive officer of the Company. In September 2005, the Compensation Committee also issued non-qualified options to purchase 200,000 shares at $0.70 per share under the 1995 Plan to a non-employee of the Company. At December 31, 2005, no additional shares were available for future grants under the 1995 Plan.

On June 2, 2004, the Board of Directors, adopted and approved the Company’s 2004 Stock Incentive Plan (the “2004 Plan”) for key employees of the Company. The 2004 Plan originally authorized grants of incentive stock options and non-qualified options to purchase up to an aggregate of 2,000,000 shares of Common Stock. On December 9, 2004, the Board of Directors adopted an amendment increasing the number of shares subject to the 2004 Plan to 7,000,000. In November 2004, incentive options to purchase 988,000 shares at a price of $0.74 were granted to non-executive employees of the Company. In December 2004, an incentive option to purchase 476,188 shares and a non-qualified option to purchase 1,523,812 shares at a price of $0.84 was granted to an executive employee of the Company. At December 31, 2005, 4,282,000 shares were available for future grants under the 2004 Plan.

Directors Stock Options

On June 19, 2001, the Company granted options to certain directors of URI to purchase 300,000 shares of the Company’s Common Stock at an exercise price of $0.22 per share. The grants were comprised of 200,000 options to replace the options that expired and were canceled in 2001 and 100,000 options granted to a newly elected director. All such options are immediately exercisable and are scheduled to expire June 19, 2011 or 30 days after the holder ceases to be a director of the Company or one year after such holder’s death, whichever occurs first. None of these options have been exercised and 100,000 of these options were cancelled as of December 31, 2005.

On June 2, 2004 the Company adopted the 2004 Directors’ Stock Option Plan (the “2004 Directors’ Plan”). Under the 2004 Directors’ Plan, each non-employee director on the date the Plan was adopted was granted an option to purchase three hundred thousand (300,000) shares of Common Stock. Each non-employee Director elected or appointed to the Board of Directors for the first time will be granted an option to purchase 100,000 shares of Common Stock and, each Non-Employee Director shall be granted an option to purchase one hundred thousand (100,000) shares either, (a) upon his or her reelection at an annual meeting of the Company’s stockholders or (b) in any calendar year in which an annual meeting of stockholders is not held, on June 1 of such year. The 2004 Directors’ Plan replaces an earlier plan that expired in 2004. At December 31, 2004, there were outstanding options for the exercise of 10,000 shares under the old plan.

In June 2005, at the annual meeting of the stockholders of the Company, each of the non-employee directors of the Company was granted an option under the 2004 Directors Plan to purchase 100,000 shares of the Company’s common stock at an exercise price of $0.45 per share. Each of the two non-employee directors holds options covering 400,000 shares under the 2004 Directors’ Plan at December 31, 2005. At December 31, 2005, 4,200,000 shares were available for future grants under the 2004 Directors’ Plan.

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Options Issuable for Deferred Compensation

The Company has a 1999 Deferred Compensation Plan (the “1999 Plan”) and Deferred Compensation Plans for 2000-2001, 2002, 2003 and 2004 (the “2000-2004 Plans”) whereby executive officers and directors were permitted to defer up to 100% of their compensation for the years 1999-2004.

Under the 1999 Deferred Compensation Plan (the “1999 Plan”), executive officers and directors of the Company and its subsidiaries were permitted to defer until January 11, 2006 up to 100% of their 1999 salary. At the time of the deferral election, a participant could elect to receive payment of up to 100% of the deferred amount of salary in shares of our Common Stock. A total of approximately $242,000 was deferred under the 1999 Plan of which $133,450 was paid by issuing 355,861 shares of Common Stock at $0.375 per share. As of December 31, 2005, approximately $108,000 remains outstanding as deferred compensation under the 1999 Plan.

Under the 2000-2004 Plans, the executive officers and directors were permitted to defer up to 100% of their 2000, 2001, 2002, 2003 and 2004 salary with payment thereof to be made on January 11, 2006. On or before that date, the participant may elect to receive the deferred amount in shares of our Common Stock valued at $0.20 per share. A total of $829,000 was deferred under the 2000-2004 Plans of which $95,300 was paid in 2004 by issuing 476,500 shares of Common Stock at $0.20 per share. As of December 31, 2005, approximately $681,000 remains outstanding as deferred compensation under the 2000-2004 Plans.

In December 2005, the 1999 Plan and the 2000-2004 Plans were amended, extending the election of the participants under the plans to receive their deferred compensation until January 11, 2011. All of the participants elected to defer their election to such date.

Market for Common Stock

From August 22, 2001 until June 24, 2003, we were quoted on the OTC Bulletin Board (“OTCBB”). From June 25, 2003 until October 14, 2004 we were quoted on the Pink Sheets. Since October 15, 2004, we have been quoted on both the OTCBB and the Pink Sheets.

9. STOCK-BASED COMPENSATION PLANS

The Company maintains four stock option plans,  the 1995 Stock Incentive Plan, the 2004 Stock Incentive Plan, the Directors’ Stock Option Plan and the 2004 Directors’ Stock Option Plan. The Company accounts for these plans under APB Opinion No. 25, under which no compensation cost is generally recognized. Had compensation cost for these plans been determined consistent with FAS 148, the Company’s net loss and loss per share (“EPS”) for each of the years ended December 31, 2005 and 2004, respectively, would have been adjusted to the following pro forma amounts:

	2005			2004
				(Restated)
Net Loss: As reported	$	(35,030,731	)	$	(15,864,756	)
Pro forma stock based compensation costs under the fair value method, net of tax	(430,255		)	(27,458		)
Pro forma	$	(35,460,986	)	$	(15,892,214	)
Basic EPS:
As reported	$	(0.24	)	$	(0.14	)
Pro forma	$	(0.24	)	$	(0.14	)
Diluted EPS:
As reported	$	(0.24	)	$	(0.14	)
Pro forma	$	(0.24	)	$	(0.14	)

The fair value of each option is estimated on the date of grant using the Black-Scholes option-pricing model.

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The following are the weighted average ranges for assumptions used for grants in 2005:  Expected volatility of 150% and risk-free interest rates of 4.0%-4.5%. An expected life of 9.2 years was used for options granted to the employees and directors. The weighted average fair value of options granted in 2005 ranged from $0.45 to $0.78 per share.

The following are the weighted average ranges for assumptions used for grants in 2004:  Expected volatility of 149%-179% and risk-free interest rates of 4.2%-5.0%. The range of the expected life of 5.7-9.4 years was used for options granted to the employees and directors. The weighted average fair value of options granted in 2004 ranged from $0.29 to $0.84 per share.

On June 2, 2004, 6,750,000 options were granted to officers at an exercise price of $0.29 per share. Stock compensation expense of $444,000 was recorded in June 2005 (the date an amendment to the stock option plan was approved by the Company’s stockholders) and is reflected in the Consolidated Statements of Operations under general and administrative expenses for the year ended December 31, 2005. On September 28, 2005, 200,000 were granted to a non-employee of the Company for services provided to the Company. Stock compensation expense of $138,000 is reflected in the Consolidated Statements of Operations under general and administrative expenses for the year ended December 31, 2005.

The Directors’ Stock Option Plan provides for the grant of 20,000 stock options to each of the non-employee directors along with additional annual grants of stock options upon re-election as directors at the Company’s annual meeting or at June 1 of each year if no annual meeting is held. Also, on January 15, 1992, the Board of Directors approved the grant of 577,248 stock options under the Employees’ Stock Option Plan. All of the previously outstanding options were canceled upon the effectiveness of the new options. All of the options covered by this grant have been exercised or have expired unexercised at December 31, 2004.

On June 2, 2004 the Company adopted the 2004 Directors’ Stock Option Plan (the “2004 Directors’ Plan”). Under the 2004 Directors’ Plan, each non-employee director on the date the Plan is adopted shall be granted an option to purchase three hundred thousand (300,000) shares of Common Stock. Each non-employee Director elected or appointed to the Board of Directors for the first time is granted an option to purchase 100,000 shares of Common Stock and, each Non-Employee Director shall be granted an option to purchase one hundred thousand (100,000) shares either (a) upon his or her reelection at an annual meeting of the Company’s stockholders or (b) in any calendar year in which an annual meeting of stockholders is not held, on June 1 of such year.

On August 10, 1994, the Board of Directors increased the available options under the Employees’ Stock Option Plan and the Directors’ Stock Option Plan to 850,000 and 150,000 options, respectively. All of the options covered by this grant have been exercised or have expired unexercised at December 31, 2005. On October 11, 1995, the Board of Directors elected to discontinue grants under the Employees’ Stock Option Plan with the adoption of a stock incentive plan covering key employees (the “1995 Stock Incentive Plan”). The 1995 Stock Incentive Plan provides for the grant of a maximum of 750,000 stock options. These options may be qualified or nonqualified. On June 5, 1998, the Company’s stockholders elected to increase the available options under the 1995 Stock Incentive Plan to 1,250,000 options. During 2000, the Company’s board of directors elected to increase the available options under the 1995 Stock Incentive Plan to 4,000,000, subject to stockholder approval. Such approval was received in March 2001. During 2004, the Company’s board of directors elected to increase the available options under the 1995 Stock Incentive Plan to 12,000,000, subject to stockholder approval. Such approval was received in June 2005.

On June 2, 2004, the Board of Directors, subject to obtaining the approval of stockholders, adopted and approved the Company’s 2004 Stock Incentive Plan (the “2004 Plan”) for key employees of the Company. The 2004 Plan enables the Company to provide incentives to employees to perform well in a difficult and rapidly changing environment in the Uranium mining industry. The 2004 Plan originally authorized grants of incentive stock options and non-qualified options to purchase up to an aggregate of 2,000,000 shares of Common Stock. On December 9, 2004, the Board of Directors adopted an amendment increasing the number of shares subject to the 2004 Plan to 7,000,000. Such approval was received in June 2005.

As of December 31, 2005, there are 11,444,255 options outstanding under the 1995 Stock Incentive Plan and 4,282,000 granted under the 2004 Stock Incentive Plan.

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Additional details about the options granted under the stock option plans are as follows:

				At December 31, 2005
Date of Grant	Exercise Price		Options Granted	Options Available for Exercise	Options Exercised	Options Canceled	Options Outstanding
January 15, 1992	$	2.94	617,248	—	327,625	289,623	—
May 22, 1992	$	3.00	2,000	—	1,000	1,000	—
Balances at Dec. 31, 1992			619,248	—	328,625	290,623	—
February 26, 1993	$	2.50	10,000	—	2,500	7,500	—
May 27, 1993	$	3.50	2,000	—	500	1,500	—
Balances at Dec. 31, 1993			631,248	—	331,625	299,623	—
July 11, 1994	$	4.38	20,000	—	—	20,000	—
August 10, 1994	$	4.25	140,000	—	1,000	139,000	—
December 15, 1994	$	5.88	3,000	—	—	3,000	—
Balances at Dec. 31, 1994			794,248	—	332,625	461,623	—
February 24, 1995	$	4.13	210,000	—	—	210,000	—
April 12, 1995	$	3.88	10,000	—	—	10,000	—
May 26, 1995	$	3.75	40,000	—	—	40,000	—
August 16, 1995	$	8.38	100,000	—	—	100,000	—
August 31, 1995	$	6.88	127,508	—	—	127,508	—
October 11, 1995	$	6.94	35,000	—	—	35,000	—
December 19, 1995	$	5.50	3,000	—	—	3,000	—
Balances at Dec. 31, 1995			1,319,756	—	332,625	987,131	—
February 22, 1996	$	9.75	178,810	58,420	—	120,390	58,420
May 29, 1996	$	17.00	3,000	2,000	—	1,000	2,000
May 30, 1996	$	16.13	75,000	—	—	75,000	—
July 22, 1996	$	11.13	50,000	—	—	50,000	—
Balances at Dec. 31, 1996			1,626,566	60,420	332,625	1,233,521	60,420
February 10, 1997	$	7.125	182,405	57,300	—	125,105	57,300
April 1, 1997	$	5.50	55,000	55,000	—	—	55,000
May 1, 1997	$	5.00	3,000	2,000	—	1,000	2,000
Balances at Dec. 31, 1997			1,866,971	174,720	332,625	1,359,626	174,720
February 23, 1998	$	2.9375	172,000	94,000	—	78,000	94,000
June 5, 1998	$	2.50	3,000	2,000	—	1,000	2,000
Balances at Dec. 31, 1998			2,041,971	270,720	332,625	1,438,626	270,720
June 18, 1999	$	0.25	2,000	2,000	—	—	2,000
Balances at Dec. 31, 1999			2,043,971	272,720	332,625	1,438,626	272,720
September 27, 2000	$	0.20	2,250,000	2,026,735	223,265	—	2,026,735
Balances at Dec. 31, 2000			4,293,971	2,299,455	555,890	1,438,626	2,299,455
February 28, 2001	$	0.19	475,500	152,800	291,300	31,400	152,800
June 19, 2001	$	0.22	20,000	—	—	20,000	—

F-21

				At December 31, 2005
Date of Grant	Exercise Price		Options Granted	Options Available for Exercise	Options Exercised	Options Canceled	Options Outstanding
Balances at Dec. 31, 2001			4,789,471	2,452,255	847,190	1,490,026	2,452,255
Balances at Dec. 31, 2002			4,789,471	2,452,255	847,190	1,490,026	2,452,255
June 1, 2003	$	0.04	3,000	800	—	1,000	2,000
Balances at Dec. 31, 2003			4,792,471	2,453,055	847,190	1,491,026	2,454,255
June 2, 2004	$	0.29	600,000	150,000	—	—	600,000
June 2, 2004	$	0.29	6,750,000	2,611,532	—	—	6,750,000
November 12, 2004	$	0.74	988,000	359,000	—	270,000	718,000
December 7, 2004	$	0.84	2,000,000	1,000,000	—	—	2,000,000
Balances at Dec. 31, 2004			15,130,471	6,573,587	847,190	1,761,026	12,522,255
June 1, 2005	$	0.45	200,000	—	—	—	200,000
September 28, 2005	$	0.70	1,200,000	450,000	—	—	1,200,000
October 6, 2005	$	0.78	1,050,000	262,500	—	—	1,050,000
Balances at Dec. 31, 2005			17,580,471	7,286,087	847,190	1,761,026	14,972,255

The exercise price for the options granted under the stock option plans has been the fair market value of the Common Stock on the date granted. The terms of the options provide that no options may be exercised for one year after grant, and then for ratable exercise over the subsequent four-year period, with a total exercisable period of ten years.

The exercise price for the options granted under the 1995 Stock Incentive Plan has been the fair market value of the Common Stock on the date granted. The terms of the options are determined by the Board of Directors upon grant; however, no options may be exercised after a period of ten years. The weighted average fair value of options granted in 2005 and 2004 was $0.71 and $0.45, respectively.

10. FEDERAL INCOME TAXES

The deferred federal income tax asset (liability) consists of the following:

	December 31,
	2005			2004
Property development costs—net of amortization	$	7,552,000		$	7,860,000
Accelerated depreciation	62,000			75,000
Restoration reserves	1,087,000			812,000
Derivative valuation allowance	15,919,000			5,388,000
Net operating loss and percentage depletion carryforwards	51,343,000			47,593,000
Valuation allowance and other — net	(75,963,000		)	(61,728,000		)
Total deferred income tax asset (liability)	$	0		$	0

F-22

Major items causing the Company’s tax provision to differ from the federal statutory rate of 34% were:

	For the Twelve Months Ended December 31,
	2005					2004 (Restated)
	Amount			Amount		Amount			% of Pretax Income
Pretax loss	$	(35,086,678	)	—		$	(15,864,756	)	—
Pretax loss times statutory tax rate	(11,929,000		)	(34	)%	(5,394,000		)	(34	)%
Increases in taxes resulting from:
Change in valuation allowance	11,929,000			34	%	5,394,000			34	%
Income tax benefit	$	0		0	%	$	0		0	%

The Company’s net operating loss carryforwards generated in 2005 and in prior years have generally been valued, net of valuation allowance, at Alternative Minimum Tax (“AMT”) rates imposed by the Tax Reform Act of 1986. It is assumed that these deferred tax assets will be realized at such rates.

At December 31, 2005, approximately $67,773,000 of percentage depletion (available for regular tax purposes) had not been utilized to offset book income and is available to carry forward to future accounting periods.

The Company also has available for regular federal income tax purposes at December 31, 2005 estimated net operating loss (“NOL”) carryforwards of approximately $51,287,000 which expire primarily in 2006 through 2026, if not previously utilized. Following the issuance of the Company’s Common Stock in 2001, use of the Company’s NOL will be severely limited on an annual and aggregate basis. For this reason, the NOL is not included as a deferred tax asset in the table above.

11. OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS

Other long-term liabilities and deferred credits on the balance sheet consisted of:

	December 31,
	2005		2004
Reserve for future restoration and reclamation costs (Asset Retirement Obligations), net of current portion of $1,061,491 in 2005 and $1,200,327 in 2004 (Note 1)	$	2,533,787	$	2,209,966
Royalties payable	500,000		500,000
Deferred compensation	789,228		841,878
	$	3,823,015	$	3,551,844

The following table shows the change in the balance of the restoration and reclamation liability (Asset Retirement Obligation) during the years ended December 31, 2005 and 2004:

	Year Ended December 31
	2005			2004
Reserve for future restoration and reclamation costs at January 1,	$	3,410,293		$	3,480,656
Additions	339,771			317,675
Changes in cash flow estimates	620,774			—
Costs incurred	(975,924		)	(571,705		)
Accretion expense	200,364			183,667
Reserve for future restoration and reclamation costs at December 31,	$	3,595,278		$	3,410,293

F-23

12. COMMITMENTS AND CONTINGENCIES

The Company’s mining operations are subject to federal and state regulations for the protection of the environment, including water quality. These laws are constantly changing and generally becoming more restrictive. The ongoing costs of complying with such regulations have not been significant to the Company’s annual operating costs. Future mine closure and reclamation costs are provided for as each pound of uranium is produced on a unit-of-production basis. The Company reviews its reclamation obligations each year and determines the appropriate unit charge. The Company also evaluates the status of current environmental laws and their potential impact on their accrual for costs. The Company believes its operations are in compliance with current environmental regulations.

The Company is from time to time involved in various legal proceedings of a character normally incident to its business. Management does not believe that adverse decisions in any pending or threatened proceedings will have a material adverse effect on the Company’s financial condition or results of operations.

13. RESTATEMENT OF FINANCIAL STATEMENTS

The financial statements for the year ended December 31, 2004 have been restated to give effect for fair value accounting of certain uranium sales contracts under FAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The Company determined that its long-term uranium sales contracts meet the definition of derivative financial instruments for financial statement and reporting purposes, and the financial statements have been restated as December 31, 2004, to record these contracts at fair value.

F-24

The impact of such restatement to the financial statements at December 31, 2004 are:

	As Originally Presented			As Restated
Consolidated Balance Sheet
Liabilities and Shareholders Equity (Deficit)
Unrealized loss on derivatives, current portion	$	—		$	4,406,134
Total current liabilities	$	2,036,522		$	6,442,656
Unrealized loss on derivatives, net of current portion	$	—		$	11,439,976
Accumulated deficit	$	(60,102,822	)	$	(75,948,932	)
Total shareholders equity (deficit)	$	553,414		$	(15,292,696	)
Consolidated Statement of Operations
Unrealized loss on derivatives	$	—		$	13,111,772
Total cost of uranium sales	$	1,814,272		$	14,926,044
Loss from operations before corporate expenses	$	(804,989	)	$	(13,916,761	)
Loss from operations	$	(2,811,416	)	$	(15,923,188	)
Loss before accounting change	$	(2,752,984	)	$	(15,864,756	)
Net loss	$	(2,752,984	)	$	(15,864,756	)
Loss before accounting change per common share:
Basic and Fully Diluted	$	(0.02	)	$	(0.14	)
Net loss per common share:
Basic and Fully Diluted	$	(0.02	)	$	(0.14	)
Consolidated Statement of Shareholders Equity (Deficit)
Net loss	$	(2,752,984	)	$	(15,864,756	)
Accumulated deficit	$	(60,102,822	)	$	(75,948,932	)
Consolidated Statement of Cash Flows
Net loss	$	(2,752,984	)	$	(15,864,756	)
Unrealized loss on derivatives	$	—		$	13,111,772

14. SUBSEQUENT EVENTS

Amendment to Uranium Sales Contracts

In March 2006 we entered into a new contract with Itochu and a new contract with UG that supersede the existing contracts. Each of the new contracts calls for delivery of one-half of our actual production from our Vasquez property and other properties in Texas currently owned or hereafter acquired by the Company (excluding certain large potential exploration plays). The terms of such contracts are summarized below.

The Itochu Contract. Under the Itochu contract all production from the Vasquez property will be sold at a price equal to the average spot price for the eight weeks prior to the date of delivery less $6.50 per pound, with a floor for the spot price of $37 and a ceiling of $46.50. Other Texas production will be sold at a price equal to the average spot price for the eight weeks prior to the date of delivery less $7.50 per pound, with a floor for the spot price of $37 and a ceiling of $43. On non-Vasquez production the price paid will be increased by 30% of the difference between actual spot price and the $43 ceiling up to and including $50 per pound. If the spot price is over $50 per pound the price on all Texas production will be increased by 50% of such excess. The floor and ceiling and sharing arrangement over the ceiling applies to 3.65 million pounds of deliveries, after which there is no floor or ceiling. Itochu has the right to cancel any deliveries on six-month’s notice.

We have also entered into a letter of intent with Itochu to joint venture the development of our Churchrock property in New Mexico. See “Joint Venture for Churchrock Property.”  We anticipate entering into a definitive joint venture agreement with Itochu by July 1, 2006. If the Company fails to use good faith efforts to negotiate and enter into such definitive agreement, the foregoing terms will terminate and the original contract terms will be reinstated effective for all deliveries after the occurrence of such determination. Under the terms of the joint venture, both parties must make an investment decision after the completion of a feasibility study, currently anticipated to occur around the end of 2006. If Itochu should terminate the venture at that time, we would no longer receive the additional price of 30% of the excess over $43 per pound outlined above. If we should terminate the venture at that time, the original contract terms will be reinstated from that time forward.

The UG Contract. Under the UG contract all production from the Vasquez property and other Texas production will be sold at a price equal to the month-end long-term contract price for the second month prior to the month of delivery less $6 per pound until (i) 600,000 pounds have been sold in a particular delivery year and (ii) an aggregate of 3 million pounds of Uranium has been sold. After the 600,000 pounds in any year and 3 million pounds total have been sold, UG will have a right of first refusal to purchase other Texas production at a price equal to the average spot price for a period prior to the date of delivery less 4%. In consideration of UG’s agreement to restructure its previously existing contract, we have agreed to pay UG $12 million in cash, subject to our ability to raise the cash. We are actively seeking the required funding.

Joint Venture for Churchrock Property

We have entered into a non-binding letter of intent with Itochu to joint venture the development of our Churchrock property in New Mexico, under which Itochu will fund all development costs currently estimated at $32 million, primarily through a debt facility that it will provide. Itochu and the Company will split the profits 50-50 and the Company will be the Managing Partner and receive a management fee. For revenues in excess of $30 per pound, the Company will receive additional payments under the joint venture. The Company estimates that the Churchrock property will yield about 12 million pounds of uranium. These terms are subject to the parties negotiating and signing a definitive agreement, and the parties are working towards the preparation and signing of the agreement by July 1, 2006. Under the terms of the joint venture, both parties must make an investment decision after the completion of a feasibility study. Itochu is funding $675,000 for the cost of the study.

Impact of Amended Sales Contracts on Derivatives

The Company’s long-term uranium sales contracts prior to their amendment in March 2006 met the definition of derivative financial instruments for financial statement reporting purposes and are recorded on the balance sheet at December 31, 2005 at fair value. Changes in the Company’s derivatives represent non-cash charges to earnings for the present value of the loss the Company would incur in the event it would be required to purchase uranium in the spot market to satisfy the delivery obligations under the uranium sales contracts. Both of the amended contracts obligate the Company to deliver 50% of its uranium production to each customer, and is does not obligate the Company to deliver any uranium in excess of it’s production.

The Company is currently assessing the impact these amendments will have on its financial statements for 2006, including the impact on the recorded valuation of derivatives associated with the Company’s existing sales contracts prior to their amendment.

Reverse Stock Split

On March 29, 2006 the Company's Board of Directors declared a 1 for 4 reverse stock split for stockholders of record on April 10, 2006.  The split was approved by stockholders at the 2005 Annual Meeting of Stockholders.

F-25

EXHIBIT INDEX

Exhibit Number	Description
3.1*	Restated Certificate of Incorporation of the Company dated February 15, 2004 (filed with the Company’s Registration Statement on Form SB-2 dated July 26, 2004, SEC File Number 333-117653).
3.2*	Restated Bylaws of the Company (filed with the Company’s Form  8-K on April 14, 2005).
4.1*	Common Stock Purchase Agreement dated February 28, 2001 between the Company and Purchasers of the Common Stock of the Company (filed with the Company’s Annual Report on Form 10-KA dated July 26, 2001, SEC File Number 000-17171).
10.1*	Amended and Restated Directors Stock Option Plan (filed with the Company’s Form S-8 Registration No. 000-17171 on January 22, 1996).
10.2*	Amended and Restated Employee’s Stock Option Plan (filed with the Company’s Form S-8 Registration No. 333-00403 on January 24, 1996).
10.3*	Amended and Restated 1995 Stock Incentive Plan (filed with the Company’s Form SB-2 Registration No. 333-117653 on July 26, 2004).
10.4*	Non-Qualified Stock Option Agreement dated June 19, 2001 between the Company and Leland O. Erdahl (filed with the Company’s 10-QSB dated August 13, 2001, SEC File Number 000-17171).
10.5*	Non-Qualified Stock Option Agreement dated June 19, 2001 between the Company and George R. Ireland (filed with the Company’s 10-QSB dated August 13, 2001, SEC File Number 000-17171).
10.7*	Summary of Supplemental Health Care Plan (filed with Amendment No. 1 to the Company’s Form S-1 Registration Statement (File No. 33-32754) as filed with the Securities and Exchange Commission on February 20, 1990).
10.9*	License to Explore and Option to Purchase dated March 25, 1997 between Santa Fe Pacific Gold Corporation and Uranco, Inc. (filed with the Company’s Annual Report on Form 10-K dated June 30, 1997, SEC File Number 000-17171).
10.12*	Compensation Agreement dated June 2, 1997 between the Company and Paul K. Willmott (filed with the Company’s Annual Report on Form 10-K dated June 300, 1998, SEC File Number 000-17171).
10.13*	Compensation Agreement dated June 2, 1997 between the Company and Richard A. Van Horn (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).
10.14*	Compensation Agreement dated June 2, 1997 between the Company and Thomas H. Ehrlich (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).
10.15*	Compensation Agreement dated June 2, 1997 between the Company and Mark S. Pelizza (filed with the Company’s Annual Report on Form 10-K dated June 30, 1998, SEC File Number 000-17171).
10.16*	Uranium Resources, Inc. 1999 Deferred Compensation Plan (filed with the Company’s Annual Report on Form 10-K dated June 30, 1999, SEC File Number 000-17171).
10.16.1	Amendment No. 1 to the Uranium Resources, Inc. Deferred Compensation Plan for 1999.
10.17*	2000-2001 Deferred Compensation Plan (filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, SEC File Number 000-17171).

E-1

Exhibit Number	Description
10.17.1	Amendment No. 2 to the Uranium Resources, Inc. Deferred Compensation Plan for 2000-2001.
10.22*	Uranium Resources, Inc. Deferred Compensation Plan for 2002 (filed with the Company’s Quarterly Report on Form 10-QSB dated November 13, 2003, SEC File Number 000-17171).
10.23*	Uranium Resources, Inc. Deferred Compensation Plan for 2003 (filed with the Company’s Quarterly Report on Form 10-QSB dated November 13, 2003, SEC File Number 000-17171).
10.24*	Uranium Resources, Inc. Deferred Compensation Plan for 2004 (filed with the Company’s Quarterly Report on Form 10-QSB dated May 14, 2004, SEC File Number 000-17171).
10.24.1	Amendment No. 2 to the Uranium Resources, Inc. Deferred Compensation Plan for 2002, Deferred Compensation Plan for 2003, Deferred Compensation Plan for 2004.
10.26*	2004 Directors Stock Option Plan dated June 2, 2004 (filed with the Company’s Registration Statement on Form SB-2 dated July 26, 2004, SEC File Number 333-117653).
10.27*	Contract with UG U.S.A., Inc. for the Purchase of Natural Uranium Concentrates (U3O8) dated August 12, 2003 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106). (1)
10.27.1*	Amendment No. 1 with UG U.S.A., Inc. dated August 30, 2004 to Exhibit 10.27 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106). (1)
10.27.2*	Amendment No. 2 with UG U.S.A., Inc. dated April 29, 2005 to Exhibit 10.27 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106). (1)
10.28*	Amended and Restated Uranium Supply Contract with Itochu Corporation dated June 7, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106). (1)
10.31*	Note Purchase Agreement dated March 24, 2005 and promissory notes issued thereunder (filed with the Company’s Annual Report on Form 10-K for the year ended December 31, 2004, SEC File Number 000-17171).
10.32*	Uranium Supply Contract with UG U.S.A., Inc. dated April 29, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106). (1)
10.33*	Uranium Supply Contract with Itochu Corporation dated June 15, 2005 (filed with the Company’s Pre-Effective Amendment No. 2 to Registration Statement on Form SB-2 dated September 20, 2005, SEC File Number 333-125106). (1)
10.34*	Stock Purchase Agreement by and between Uranium Resources, Inc. and accredited investors (filed with the Company’s Current Report on Form 8-K dated August 12, 2005, SEC File No. 000-17171).
10.35*	Uranium Resources, Inc. 2004 Stock Incentive Plan (filed with the Company’s Quarterly Report on Form 10-QSB/A dated November 18, 2005, SEC File Number 333-125106. (1)
10.36	Feasibility Study Funding Agreement between Itochu Corporation, Uranium Resources, Inc. and Hydro Resources, Inc. effective March 29, 2006.

E-2

Exhibit Number	Description
10.37	Amended and Restated Uranium Supply Contract between Itochu Corporation and Uranium Resources, Inc. effective March 1, 2006.
10.38	Agreement for the Sale of Uranium Concentrates between UG U.S.A., Inc. and Uranium Resources, Inc. dated March 31, 2006.
14*	Uranium Resources, Inc. Code of Ethics for Senior Executives. filed with the Company’s Annual Report on Form 10-KSB dated March 30, 2004, SEC File Number 000-17171).
23	Consent of Richard A. Douglas.
31.1	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*Not filed herewith. Incorporated by reference pursuant to Rule 12b-32 under the Securities Exchange Act of 1934.

(1)Certain provisions have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

E-3

EX-10.16.1

Exhibit 10.16.1

Amendment Number One

to the

Uranium Resources, Inc.

Amended and Restated Deferred Compensation Plan For 1999

WHEREAS, Uranium Resources, Inc., a Delaware corporation currently maintains the Amended and Restated Deferred Compensation Plan for 1999 adopted effective September 17, 1999 (the “Plan”); and

WHEREAS, the Plan has not previously been amended, but is subject to amendment in accordance with Section 8.1 of the Plan; and

WHEREAS, the Plan currently provides that individuals currently participating in the Plan (“Participants”) are scheduled to receive a distribution of their Plan benefits on January 11, 2006. Certain Participants, however, wish to elect a new distribution date for their deferred compensation, and the Corporation has determined that it is in the best interests of the Corporation to amend the Plan  in order to provide for a new distribution date; and

WHEREAS, Internal Revenue Code (“Code”) Section 409A generally exempts from its requirements deferred compensation plans in effect prior to October 4, 2004, with respect to amounts otherwise earned and vested as of December 31, 2004. Code Section 409A further provides that, in the event, any such plan is materially modified, such plan  is no longer exempt from Code Section 409A’s requirements and, therefore, must satisfy Code Section 409A’s requirements; and

WHEREAS, the Corporation’s Board of Directors understands that an amendment to the Plan changing the distribution date from January 11, 2006, will constitute a material modification of the Plan for Code Section 409A purposes, but nevertheless believes that such modification is beneficial to the Corporation and is in the best interests of its shareholders, and accordingly desires to amend the Plan  to bring their provisions into compliance with the requirements of Code Section 409A and the related regulations and rulings;

NOW, THEREFORE, the Plan is hereby amended as set forth below. Unless otherwise specifically indicated, all provisions of this Amendment Number One shall take effect January 1, 2005.

1.Revise Section 2.8, Corporation, to read in its entirety as follows:

“2.8‘Corporation’ means Uranium Resources, Inc., a Delaware corporation, including any corporation, limited liability company, partnership, or other business organization that is part of a “controlled group of corporations,” which includes Uranium Resources, Inc. (within the meaning of Code Section 414(b) and the related regulations), or is “under common control” with Uranium Resources, Inc. (within the meaning of Code Section 414(c) and the related regulations), together with any successor thereto which adopts this Plan  by appropriate written action.”

2.Revise Section 2.10, Designated Recipient, to read in its entirety as follows:

“2.10‘Designated Recipient’ (or in the alternative, “Designated Beneficiary”) means any person, or entity (including without limitation, an estate, trust, foundation or other organization) designated by a Participant as entitled to receive any distribution hereunder by reason of the death of such Participant.”

3.General Revision:  All references to January 11, 2006 are hereby amended to read “January 11, 2006, or such later date as may be elected by a Participant in his or her Deferral Election Form”

4.Article II, Definitions and General Provisions, is hereby amended to add (new) Sections 2.23 and 2.24 to the end thereto, as set forth below:

“2.23‘Separation from Service’ means an Eligible Person’s termination from employment with the Corporation on account of such Eligible Person’s death, permanent and total disability, retirement, or other such termination of employment. An Eligible Person will not be deemed to have experienced a Separation from Service if such Eligible Person is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six (6) months or, if longer, such longer period of time as is protected by either statute or contract. An Eligible Person will not be deemed to have experienced a Separation from Service, if such Eligible Person continues to provide “significant services” to the Corporation. For purposes of the preceding sentence, an Eligible Person will be considered to provide “significant services” if such Eligible Person provides continuing services that average at least twenty percent (20%) of the services provided by such Eligible Person to the Corporation during the immediately preceding three (3) full calendar years of employment and the annual remuneration paid for such services is at least twenty percent (20%) of the average annual compensation earned during the final three (3) full calendar years of employment (or, if less, the period of employment).”

“2.24‘Specified Employee’ means any Eligible Person for which the following two (2) conditions are satisfied: (a) at any time during the twelve (12) month period ending on the December 31st preceding the calendar year in which a given distribution is to occur, such Eligible Person (i) is one of the top fifty (50) compensated officers of the Corporation and has annual “W-2” compensation of at least One Hundred Thirty Thousand Dollars ($130,000); or (ii) owns more than five percent (5%) of the Corporation’s stock; or (iii) owns more than one percent (1%) of the Corporation’s stock and has annual “W-2” compensation in excess of One Hundred Fifty Thousand Dollars ($150,000); and (b) the Corporation’s stock is publicly traded on the date such Eligible Person Separates from Service. The foregoing compensation amounts shall be adjusted from time to time in accordance with the cost-of-living adjustments under Code Section 416(i), and an individual who qualifies as a Specified Employee under this Section 2.17 shall be treated as a Specified Employee for the twelve (12) month period beginning on the April 1st next following the date he or she so qualifies.”

2

5.Article IV, Deferral of Compensation, is hereby amended to add (new) Section 4.5 thereto, as set forth below:

“4.5         Early Distribution of Certain Amounts. Notwithstanding a Participant’s Distribution Date, or the provisions of Section 4.7 hereof, any or all of such Participant’s interest in the Plan  may be paid and distributed prior to such Distribution Date to the extent necessary to comply with any one (1) or more of the following obligations: (a) the terms of a court order, issued by a court of competent jurisdiction and satisfying the requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p) and related regulations; (b) the obligation to withhold and remit employment taxes imposed under the Federal Income Contributions Act (“FICA”) with respect to such Participant’s Plan  interest, together with any related federal state or local income tax withholding obligation(s); (c) any tax liability resulting from a failure to satisfy the requirements of Code Section 409A with regard to all or a portion of such Participant’s interest herein; or (d) any other provision permitting early distribution of all or part of a participant’s interest in a deferred compensation Plan  subject to Code Section 409A to satisfy an obligation, as further described in Prop. Income tax Regulations §1.409A-3(h)(2).”

6.Article IV, Deferral of Compensation, is hereby amended to add (new) Sections 4.6 and 4.7 to the end thereto, as set forth below:

“4.6Election of New Deferral Period. Notwithstanding the provisions of Section 4.2 hereof, a Participant may elect a new Distribution Date by completing a New Deferral Election Form (hereinafter referred to as the “Election Form”) and filing such Election Form with the Corporation. The new Distribution Date shall be a date certain, as specified on an Election Form, which such Participant shall make and file with the Corporation no later than December 31, 2005. Except as otherwise provided for under Sections 4.3 and 4.6 herein, a Participant’s Deferral Amount shall be paid in accordance with the Distribution Date specified on his or her Election Form.”

“4.7Accelerated Payment of a Participant’s Deferred Amount Upon Death or Separation from Service. A Participant’s entire Deferred Amount shall be payable prior to the Participant’s Distribution Date or New Distribution Date, as applicable, upon the earlier to occur of such Participant’s Separation from Service or death; in such event, such Participant’s interest shall be distributed as soon as practicable to such Participant (or his or her Designated Recipient, in the event of death, as further provided in Article VI hereof), subject to the satisfaction of any applicable withholding or similar obligations relating to such amount. Notwithstanding any Plan provision to the contrary, in the event that a Participant is a Specified Employee (as defined herein), and such Participant’s Deferred Amount becomes distributable by reason of such Participant’s Separation from Service, in no event shall such distribution occur prior to the earlier of such Specified Employee’s (a) death, or (b) the date that is six (6) months from the date of such Specified Employee’s Separation from Service.”

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7.             Section 5.3(b) is amended by restating said Section in its entirety to read as follows:

(b)           With respect to any election to receive shares for all or any portion of the Additional Deferred Amount, there shall be issued to Participant, within 30 days after the Distribution Date, his Vested Shares as set forth in Section 5.4.

8.             Section 5.6, Withholding, is hereby amended to read in its entirety as follows:

“5.6Withholding. With respect to distribution made to any Participant that constitutes “wages” subject to withholding, the Corporation will make all necessary arrangements to withhold and remit any and all relevant federal, state and local taxes applicable to such distribution from the non-deferred portion of Compensation then due and payable to such Participant; provided, that in the event such arrangements cannot reasonably be made, such Participant will be required to pay to the Corporation the appropriate amounts, as a condition to receiving any shares pursuant to this Article.”

9.Section 6.1 is hereby amended to read in its entirety as follows:

6.1           Distribution of Cash. All amounts credited to an Account as to which a Participant has not elected to take such amount in shares of Common Stock shall be distributed to the Participant or his Designated Recipient on January 11, 2006 or such later date as may be elected by a Participant in his or her Deferral Election Form.

10.Section 8.2, Termination, is hereby amended to read in its entirety as follows:

“8.2Termination. The Corporation reserves the right to suspend, discontinue or terminate the Plan , at any time, in whole or in part, by written action of its Board of Directors, effective as of the date designated in such written action, without the consent any Eligible Person, Participant, Designated Recipient or other person; provided, that in the event the Plan  is terminated prior to any Distribution Date specified by a Participant, such Participant’s interest shall continue to be held and distributed strictly in accordance with such Participant’s Election Form, unless an earlier distribution is required in accordance with Sections 4.3 and 4.6 hereof.”

11.Section 9.4, Anti-Alienation., is hereby amended by adding the following paragraph to the end thereto:

“Notwithstanding the foregoing, a Participant’s Deferred Amount shall be subject to division and partition under any one (1) or more of the following three (3) circumstances: (a) an order, issued by a court of competent jurisdiction, determined by the Committee to satisfy the requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p)(1)(B) and related regulations; provided, that (i) a separate benefit shall be recognized and maintained for any spouse or former spouse determined to have an interest in the Plan  as a result of a QDRO; and (ii) all costs and expenses incurred by the Corporation or Committee in connection with such QDRO (including any determination that a court order qualifies as a QDRO) shall be charged against such Participant’s Deferred Amount, as an offset in accordance with the provisions of this Section 9.4; (b) a federal, state, or local tax liability that attaches to a Participant’s Deferred Amount, but only to the extent of such liability; and (c) any tax liability

4

resulting from the Participant’s Deferred Amount failing to satisfy the requirements of Code Section 409A, but only to the extent of such liability.”

12.Article IX, Miscellaneous Provisions, is hereby amended by adding Section 9.13 to the end thereto, which shall provide as follows:

“9.13       Compliance with Code Section 409A. The Plan is intended to be operated in compliance with the provisions of Code Section 409A (including any rulings or regulations promulgated thereunder). In the event that any Plan provision fails to satisfy the provisions of Code Section 409A and related regulations, in form or in operation, such provision shall be void and shall not apply to a Participant’s Deferred Amount, to the extent practicable. In the event that it is determined to not be feasible to so void any such Plan provision as such provision applies to a Participant’s Deferred Amount, such Plan provision shall be construed in a manner so as to comply with the requirements of Code Section 409A and related regulations.”

IN WITNESS HEREOF, the Corporation, by its duly authorized officer, has caused this Amendment Number One to the Plan to be executed on this 30th day of November, 2005.

URANIUM RESOURCES, INC.

By:

Its:

5

EX-10.17.1

Exhibit 10.17.1

Amendment Number Two

to the

Uranium Resources, Inc.

Deferred Compensation Plan For 2000-2001

WHEREAS, Uranium Resources, Inc., a Delaware corporation currently maintains the Deferred Compensation Plan for 2000-2001 adopted effective as of January 1, 2000 (the “Plan”); and

WHEREAS, the Plan was previously amended on September 9, 2004 to amend the definition of “Distribution Date” and is subject to further amendment in accordance with

Section 8.1 of the Plan; and

WHEREAS, the Plan currently provides that individuals currently participating in the Plan (“Participants”) are scheduled to receive a distribution of their Plan benefits on January 11, 2006. Certain Participants, however, wish to elect a new distribution date for their deferred compensation, and the Corporation has determined that it is in the best interests of the Corporation to amend the Plan  in order to provide for a new distribution date; and

WHEREAS, Internal Revenue Code (“Code”) Section 409A generally exempts from its requirements deferred compensation plans in effect prior to October 4, 2004, with respect to amounts otherwise earned and vested as of December 31, 2004. Code Section 409A further provides that, in the event, any such plan is materially modified, such plan  is no longer exempt from Code Section 409A’s requirements and, therefore, must satisfy Code Section 409A’s requirements; and

WHEREAS, the Corporation’s Board of Directors understands that an amendment to the Plan changing the distribution date from January 11, 2006, will constitute a material modification of the Plan for Code Section 409A purposes, but nevertheless believes that such modification is beneficial to the Corporation and is in the best interests of its shareholders, and accordingly desires to amend the Plan  to bring their provisions into compliance with the requirements of Code Section 409A and the related regulations and rulings;

WHEREAS, the definition of “Additional Deferred Amount” has been discovered to be in error and needs to be amended to correct the definition.

NOW, THEREFORE, the Plan is hereby amended as set forth below. Unless otherwise specifically indicated, all provisions of this Amendment Number One shall take effect January 1, 2005.

1.Revise Section 2.2, Additional Deferred Amount to read in its entirety as follows:

2.2 “Additional Deferred Amount” means the Initial Deferred Amount deferred under the 1999 Plan but as to which the Participant has not made a share election under the 1999 Plan.

2.Revise Section 2.7, Corporation, to read in its entirety as follows:

“2.7‘Corporation’ means Uranium Resources, Inc., a Delaware corporation, including any corporation, limited liability company, partnership, or other business organization that is part of a “controlled group of corporations,” which includes Uranium Resources, Inc. (within the meaning of Code Section 414(b) and the related regulations), or is “under common control” with Uranium Resources, Inc. (within the meaning of Code Section 414(c) and the related regulations), together with any successor thereto which adopts this Plan  by appropriate written action.”

3.Revise Section 2.10, Designated Recipient, to read in its entirety as follows:

“2.10‘Designated Recipient’ (or in the alternative, “Designated Beneficiary”) means any person, or entity (including without limitation, an estate, trust, foundation or other organization) designated by a Participant as entitled to receive any distribution hereunder by reason of the death of such Participant.”

4.Revise Section 2.11, Distribution Date, to read in its entirety as follows:

“2.11‘Distribution Date’ means January 11, 2006, or such later date as may be elected by a Participant in his or her Deferral Election Form.”

5.Article II, Definitions and General Provisions, is hereby amended to add (new) Sections 2.18 and 2.19 to the end thereto, as set forth below:

“2.18‘Separation from Service’ means an Eligible Person’s termination from employment with the Corporation on account of such Eligible Person’s death, permanent and total disability, retirement, or other such termination of employment. An Eligible Person will not be deemed to have experienced a Separation from Service if such Eligible Person is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six (6) months or, if longer, such longer period of time as is protected by either statute or contract. An Eligible Person will not be deemed to have experienced a Separation from Service, if such Eligible Person continues to provide “significant services” to the Corporation. For purposes of the preceding sentence, an Eligible Person will be considered to provide “significant services” if such Eligible Person provides continuing services that average at least twenty percent (20%) of the services provided by such Eligible Person to the Corporation during the immediately preceding three (3) full calendar years of employment and the annual remuneration paid for such services is at least twenty percent (20%) of the average annual compensation earned during the final three (3) full calendar years of employment (or, if less, the period of employment).”

“2.19‘Specified Employee’ means any Eligible Person for which the following two (2) conditions are satisfied: (a) at any time during the twelve (12) month period ending on the December 31st preceding the calendar year in which a given distribution is to occur, such Eligible Person (i) is one of the top fifty (50) compensated officers of the Corporation and has annual “W-2” compensation of

2

at least One Hundred Thirty Thousand Dollars ($130,000); or (ii) owns more than five percent (5%) of the Corporation’s stock; or (iii) owns more than one percent (1%) of the Corporation’s stock and has annual “W-2” compensation in excess of One Hundred Fifty Thousand Dollars ($150,000); and (b) the Corporation’s stock is publicly traded on the date such Eligible Person Separates from Service. The foregoing compensation amounts shall be adjusted from time to time in accordance with the cost-of-living adjustments under Code Section 416(i), and an individual who qualifies as a Specified Employee under this Section 2.17 shall be treated as a Specified Employee for the twelve (12) month period beginning on the April 1st next following the date he or she so qualifies.”

6.Article IV, Deferral of Compensation, is hereby amended by revising Section 4.2 in its entirety to read as set forth below and to add (new) Section 4.3 thereto, as set forth below:

“4.2         Period of Deferral. All amounts that the Participants elect to defer shall be paid in cash on the Distribution Date or in shares of Common Stock as set forth in Article V within thirty days after the Distribution Date. Upon death or termination of employment, the Participant shall have a vested interest in Earned Compensation.”

“4.3         Early Distribution of Certain Amounts. Notwithstanding a Participant’s Distribution Date, or the provisions of Section 4.6 hereof, any or all of such Participant’s interest in the Plan  may be paid and distributed prior to such Distribution Date to the extent necessary to comply with any one (1) or more of the following obligations: (a) the terms of a court order, issued by a court of competent jurisdiction and satisfying the requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p) and related regulations; (b) the obligation to withhold and remit employment taxes imposed under the Federal Income Contributions Act (“FICA”) with respect to such Participant’s Plan  interest, together with any related federal state or local income tax withholding obligation(s); (c) any tax liability resulting from a failure to satisfy the requirements of Code Section 409A with regard to all or a portion of such Participant’s interest herein; or (d) any other provision permitting early distribution of all or part of a participant’s interest in a deferred compensation Plan  subject to Code Section 409A to satisfy an obligation, as further described in Prop. Income tax Regulations §1.409A-3(h)(2).”

7.Article IV, Deferral of Compensation, is hereby amended to add (new) Sections 4.5 and 4.6 to the end thereto, as set forth below:

“4.5Election of New Deferral Period. Notwithstanding the provisions of Section 4.2 hereof, a Participant may elect a new Distribution Date by completing a New Deferral Election Form (hereinafter referred to as the “Election Form”) and filing such Election Form with the Corporation. The new Distribution Date shall be a date certain, as specified on an Election Form, which such Participant shall make and file with the Corporation no later than December 31, 2005. Except as otherwise provided for under Sections 4.3 and 4.6 herein, a Participant’s Deferral Amount shall be paid in accordance with the Distribution Date specified on his or her Election Form.”

3

“4.6Accelerated Payment of a Participant’s Deferred Amount Upon Death or Separation from Service. A Participant’s entire Deferred Amount shall be payable prior to the Participant’s Distribution Date or New Distribution Date, as applicable, upon the earlier to occur of such Participant’s Separation from Service or death; in such event, such Participant’s interest shall be distributed as soon as practicable to such Participant (or his or her Designated Recipient, in the event of death, as further provided in Article VI hereof), subject to the satisfaction of any applicable withholding or similar obligations relating to such amount. Notwithstanding any Plan  provision to the contrary, in the event that a Participant is a Specified Employee (as defined herein), and such Participant’s Deferred Amount becomes distributable by reason of such Participant’s Separation from Service, in no event shall such distribution occur prior to the earlier of such Specified Employee’s (a) death, or (b) the date that is six (6) months from the date of such Specified Employee’s Separation from Service.”

8.             Section 5.3, Withholding, is hereby amended to read in its entirety as follows:

“5.3Withholding. With respect to distribution made to any Participant that constitutes “wages” subject to withholding, the Corporation will make all necessary arrangements to withhold and remit any and all relevant federal, state and local taxes applicable to such distribution from the non-deferred portion of Compensation then due and payable to such Participant; provided, that in the event such arrangements cannot reasonably be made, such Participant will be required to pay to the Corporation the appropriate amounts, as a condition to receiving any shares pursuant to this Article.”

9.Section 8.2, Termination, is hereby amended to read in its entirety as follows:

“8.2         Termination. The Corporation reserves the right to suspend, discontinue or terminate the Plan , at any time, in whole or in part, by written action of its Board of Directors, effective as of the date designated in such written action, without the consent any Eligible Person, Participant, Designated Recipient or other person; provided, that in the event the Plan  is terminated prior to any Distribution Date specified by a Participant, such Participant’s interest shall continue to be held and distributed strictly in accordance with such Participant’s Election Form, unless an earlier distribution is required in accordance with Sections 4.3 and 4.6 hereof.”

10.Section 9.4, Anti-Alienation., is hereby amended by adding the following paragraph to the end thereto:

“Notwithstanding the foregoing, a Participant’s Deferred Amount shall be subject to division and partition under any one (1) or more of the following three (3) circumstances: (a) an order, issued by a court of competent jurisdiction, determined by the Committee to satisfy the requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p)(1)(B) and related regulations; provided, that (i) a separate benefit shall be recognized and maintained for any spouse or former spouse determined to have an interest in the Plan  as a result of a QDRO; and (ii) all costs and expenses incurred by the Corporation or Committee in connection with such QDRO (including any

4

determination that a court order qualifies as a QDRO) shall be charged against such Participant’s Deferred Amount, as an offset in accordance with the provisions of this Section 9.4; (b) a federal, state, or local tax liability that attaches to a Participant’s Deferred Amount, but only to the extent of such liability; and (c) any tax liability resulting from the Participant’s Deferred Amount failing to satisfy the requirements of Code Section 409A, but only to the extent of such liability.”

11.Article IX, Miscellaneous Provisions, is hereby amended by adding Section 9.12 to the end thereto, which shall provide as follows:

“9.12       Compliance with Code Section 409A. The Plan  is intended to be operated in compliance with the provisions of Code Section 409A (including any rulings or regulations promulgated thereunder). In the event that any Plan  provision fails to satisfy the provisions of Code Section 409A and related regulations, in form or in operation, such provision shall be void and shall not apply to a Participant’s Deferred Amount, to the extent practicable. In the event that it is determined to not be feasible to so void any such Plan  provision as such provision applies to a Participant’s Deferred Amount, such Plan  provision shall be construed in a manner so as to comply with the requirements of Code Section 409A and related regulations.”

IN WITNESS HEREOF, the Corporation, by its duly authorized officer, has caused this Amendment Number Two to the Plan  to be executed on this 30th day of November, 2005.

URANIUM RESOURCES, INC.

By:

Its:

5

EX-10.24.1

Exhibit 10.24.1

Amendment Number Two

to the

Uranium Resources, Inc.

Deferred Compensation Plan For 2002

Deferred Compensation Plan For 2003

Deferred Compensation Plan For 2004

WHEREAS, Uranium Resources, Inc., a Delaware corporation currently maintains the following deferred compensation plans (a) Deferred Compensation Plan for 2002 adopted effective January 1, 2002, (b) Deferred Compensation Plan for 2003 adopted effective January 1, 2003 and (c) Deferred Compensation Plan for 2004 adopted effective January 1, 2004 (collectively the “Plans”); and

WHEREAS, the Plans were previously amended on September 9, 2004 to amend the definition of “Distribution Date” and is subject to further amendment in accordance with

Section 8.1 of the Plan; and

WHEREAS, the Plans currently provide that individuals currently participating in the Plans (“Participants”) are scheduled to receive a distribution of their Plan benefits on January 11, 2006. Certain Participants, however, wish to elect a new distribution date for their deferred compensation, and the Corporation has determined that it is in the best interests of the Corporation to amend the Plans  in order to provide for a new distribution date; and

WHEREAS, Internal Revenue Code (“Code”) Section 409A generally exempts from its requirements deferred compensation plans in effect prior to October 4, 2004, with respect to amounts otherwise earned and vested as of December 31, 2004. Code Section 409A further provides that, in the event, any such plan is materially modified, such Plan  is no longer exempt from Code Section 409A’s requirements and, therefore, must satisfy Code Section 409A’s requirements; and

WHEREAS, the Corporation’s Board of Directors understands that an amendment to the Plans  changing the distribution date from January 11, 2006, will constitute a material modification of the Plans  for Code Section 409A purposes, but nevertheless believes that such modification is beneficial to the Corporation and is in the best interests of its shareholders, and accordingly desires to amend the Plans  to bring their provisions into compliance with the requirements of Code Section 409A and the related regulations and rulings;

NOW, THEREFORE, each of the Plans is hereby amended as set forth below. Unless otherwise specifically indicated, all provisions of this Amendment Number One shall take effect January 1, 2005.

1.Revise Section 2.5, Corporation, to read in its entirety as follows:

“2.5‘Corporation’ means Uranium Resources, Inc., a Delaware corporation, including any corporation, limited liability company, partnership, or other business organization that is part of a “controlled group of corporations,” which includes Uranium Resources, Inc. (within the meaning of Code Section 414(b) and the related regulations), or is “under common control” with Uranium Resources, Inc. (within the meaning of Code Section 414(c) and the related regulations), together with any successor thereto which adopts this Plans  by appropriate written action.”

2.Revise Section 2.8, Designated Recipient, to read in its entirety as follows:

“2.8‘Designated Recipient’ (or in the alternative, “Designated Beneficiary”) means any person, or entity (including without limitation, an estate, trust, foundation or other organization) designated by a Participant as entitled to receive any distribution hereunder by reason of the death of such Participant.”

3.Revise Section 2.9, Distribution Date, to read in its entirety as follows:

“2.9‘Distribution Date’ means January 11, 2006, or such later date as may be elected by a Participant in his or her Deferral Election Form.”

4.Article II, Definitions and General Provisions, is hereby amended to add (new) Sections 2.16 and 2.17 to the end thereto, as set forth below:

“2.16‘Separation from Service’ means an Eligible Person’s termination from employment with the Corporation on account of such Eligible Person’s death, permanent and total disability, retirement, or other such termination of employment. An Eligible Person will not be deemed to have experienced a Separation from Service if such Eligible Person is on military leave, sick leave, or other bona fide leave of absence, to the extent such leave does not exceed a period of six (6) months or, if longer, such longer period of time as is protected by either statute or contract. An Eligible Person will not be deemed to have experienced a Separation from Service, if such Eligible Person continues to provide “significant services” to the Corporation. For purposes of the preceding sentence, an Eligible Person will be considered to provide “significant services” if such Eligible Person provides continuing services that average at least twenty percent (20%) of the services provided by such Eligible Person to the Corporation during the immediately preceding three (3) full calendar years of employment and the annual remuneration paid for such services is at least twenty percent (20%) of the average annual compensation earned during the final three (3) full calendar years of employment (or, if less, the period of employment).”

“2.17‘Specified Employee’ means any Eligible Person for which the following two (2) conditions are satisfied: (a) at any time during the twelve (12) month period ending on the December 31st preceding the calendar year in which a given distribution is to occur, such Eligible Person (i) is one of the top fifty (50) compensated officers of the Corporation and has annual “W-2” compensation of at least One Hundred Thirty Thousand Dollars ($130,000); or (ii) owns more than five percent (5%) of the Corporation’s stock; or (iii) owns more than one percent

2

(1%) of the Corporation’s stock and has annual “W-2” compensation in excess of One Hundred Fifty Thousand Dollars ($150,000); and (b) the Corporation’s stock is publicly traded on the date such Eligible Person Separates from Service. The foregoing compensation amounts shall be adjusted from time to time in accordance with the cost-of-living adjustments under Code Section 416(i), and an individual who qualifies as a Specified Employee under this Section 2.17 shall be treated as a Specified Employee for the twelve (12) month period beginning on the April 1st next following the date he or she so qualifies.”

5.Article IV, Deferral of Compensation, is hereby amended by revising Section 4.2 in its entirety to read as set forth below and to add (new) Section 4.3 thereto, as set forth below:

“4.2         Period of Deferral. All amounts that the Participants elect to defer shall be paid in cash on the Distribution Date or in shares of Common Stock as set forth in Article V within thirty days after the Distribution Date. Upon death or termination of employment, the Participant shall have a vested interest in Earned Compensation.”

“4.3         Early Distribution of Certain Amounts. Notwithstanding a Participant’s Distribution Date, or the provisions of Section 4.6 hereof, any or all of such Participant’s interest in the Plan  may be paid and distributed prior to such Distribution Date to the extent necessary to comply with any one (1) or more of the following obligations: (a) the terms of a court order, issued by a court of competent jurisdiction and satisfying the requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p) and related regulations; (b) the obligation to withhold and remit employment taxes imposed under the Federal Income Contributions Act (“FICA”) with respect to such Participant’s Plan  interest, together with any related federal state or local income tax withholding obligation(s); (c) any tax liability resulting from a failure to satisfy the requirements of Code Section 409A with regard to all or a portion of such Participant’s interest herein; or (d) any other provision permitting early distribution of all or part of a participant’s interest in a deferred compensation Plan  subject to Code Section 409A to satisfy an obligation, as further described in Prop. Income tax Regulations §1.409A-3(h)(2).”

6.Article IV, Deferral of Compensation, is hereby amended to add (new) Sections 4.5 and 4.6 to the end thereto, as set forth below:

“4.5Election of New Deferral Period. Notwithstanding the provisions of Section 4.2 hereof, a Participant may elect a new Distribution Date by completing a New Deferral Election Form (hereinafter referred to as the “Election Form”) and filing such Election Form with the Corporation. The new Distribution Date shall be a date certain, as specified on an Election Form, which such Participant shall make and file with the Corporation no later than December 31, 2005. Except as otherwise provided for under Sections 4.3 and 4.6 herein, a Participant’s Deferral Amount shall be paid in accordance with the Distribution Date specified on his or her Election Form.”

“4.6Accelerated Payment of a Participant’s Deferred Amount Upon Death or Separation from Service. A Participant’s entire Deferred Amount shall be

3

payable prior to the Participant’s Distribution Date or New Distribution Date, as applicable, upon the earlier to occur of such Participant’s Separation from Service or death; in such event, such Participant’s interest shall be distributed as soon as practicable to such Participant (or his or her Designated Recipient, in the event of death, as further provided in Article VI hereof), subject to the satisfaction of any applicable withholding or similar obligations relating to such amount. Notwithstanding any Plans  provision to the contrary, in the event that a Participant is a Specified Employee (as defined herein), and such Participant’s Deferred Amount becomes distributable by reason of such Participant’s Separation from Service, in no event shall such distribution occur prior to the earlier of such Specified Employee’s (a) death, or (b) the date that is six (6) months from the date of such Specified Employee’s Separation from Service.”

7.             Section 5.3, Withholding, is hereby amended to read in its entirety as follows:

“5.3Withholding. With respect to distribution made to any Participant that constitutes “wages” subject to withholding, the Corporation will make all necessary arrangements to withhold and remit any and all relevant federal, state and local taxes applicable to such distribution from the non-deferred portion of Compensation then due and payable to such Participant; provided, that in the event such arrangements cannot reasonably be made, such Participant will be required to pay to the Corporation the appropriate amounts, as a condition to receiving any shares pursuant to this Article.”

8.Section 8.2, Termination, is hereby amended to read in its entirety as follows:

“8.2Termination. The Corporation reserves the right to suspend, discontinue or terminate the Plans , at any time, in whole or in part, by written action of its Board of Directors, effective as of the date designated in such written action, without the consent any Eligible Person, Participant, Designated Recipient or other person; provided, that in the event the Plans  is terminated prior to any Distribution Date specified by a Participant, such Participant’s interest shall continue to be held and distributed strictly in accordance with such Participant’s Election Form, unless an earlier distribution is required in accordance with Sections 4.3 and 4.6 hereof.”

9.Section 9.4, Anti-Alienation., is hereby amended by adding the following paragraph to the end thereto:

“Notwithstanding the foregoing, a Participant’s Deferred Amount shall be subject to division and partition under any one (1) or more of the following three (3) circumstances: (a) an order, issued by a court of competent jurisdiction, determined by the Committee to satisfy the requirements of a “qualified domestic relations order” (“QDRO”), as defined in Code Section 414(p)(1)(B) and related regulations; provided, that (i) a separate benefit shall be recognized and maintained for any spouse or former spouse determined to have an interest in the Plans  as a result of a QDRO; and (ii) all costs and expenses incurred by the Corporation or Committee in connection with such QDRO (including any determination that a court order qualifies as a QDRO) shall be charged against such Participant’s Deferred Amount, as an offset in accordance with the provisions of this Section 9.4; (b) a federal, state, or local tax liability that attaches to a Participant’s

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Deferred Amount, but only to the extent of such liability; and (c) any tax liability resulting from the Participant’s Deferred Amount failing to satisfy the requirements of Code Section 409A, but only to the extent of such liability.”

10.Article IX, Miscellaneous Provisions, is hereby amended by adding Section 9.12 to the end thereto, which shall provide as follows:

“9.12       Compliance with Code Section 409A. The Plans  is intended to be operated in compliance with the provisions of Code Section 409A (including any rulings or regulations promulgated thereunder). In the event that any Plans  provision fails to satisfy the provisions of Code Section 409A and related regulations, in form or in operation, such provision shall be void and shall not apply to a Participant’s Deferred Amount, to the extent practicable. In the event that it is determined to not be feasible to so void any such Plans  provision as such provision applies to a Participant’s Deferred Amount, such Plans  provision shall be construed in a manner so as to comply with the requirements of Code Section 409A and related regulations.”

IN WITNESS HEREOF, the Corporation, by its duly authorized officer, has caused this Amendment Number Two to the Plans  to be executed on this 30th day of November, 2005.

URANIUM RESOURCES, INC.

By:

Its:

5

EX-10.36

Exhibit 10.36

FEASIBILITY STUDY FUNDING AGREEMENT

This AGREEMENT (“Agreement”) is made as of March     , 2006 (“Effective Date”), by and between ITOCHU CORPORATION, a Japanese corporation, having its principal offices in Tokyo, Japan (“Itochu”); and URANIUM RESOURCES, INC., a Delaware corporation, having its principal offices in Lewisville, Texas (“URI”), and URI’s wholly-owned subsidiary, HYDRO RESOURCES, INC., a Delaware corporation, having its principal offices in Albuquerque, New Mexico (“HRI”) (together, “URI/HRI”).

W I T N E S S E T H

WHEREAS, Itochu desires to enter into this Agreement with URI and HRI, both of which agree that they are jointly and severally responsible for performing the obligations of URI and HRI pursuant to this Agreement, to provide for payments by Itochu as contributions to the cost of a feasibility study of developing and conducting in situ leach (“ISL”) uranium mining operations at the Churchrock Property in New Mexico (“Churchrock Property”) to be performed by URI/HRI (“Feasibility Study”).

WHEREAS, the Churchrock Property is the subject of a Term Sheet dated as of March 2, 2006, as executed by Itochu and URI/HRI (“Term Sheet”), which will serve as the basis for a joint venture agreement (“Joint Venture Agreement”) for such uranium mining (“Transaction”).

WHEREAS, the Feasibility Study is described in greater detail on Exhibit A as appended hereto, and the terms, conditions, and definitions, found on Exhibit A,, shall be part of this Agreement.

WHEREAS, Itochu, URI, and HRI are collectively referred to as the “Parties.”

WHEREAS, the Parties desire for the Feasibility Study to be commenced by URI/HRI before execution of the Joint Venture Agreement that is the subject of the Term Sheet.

NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein and intending to be legally bound to the extent provided below, the Parties agree as follows:

ARTICLE I

GENERAL PROVISIONS

1.1.The matters set forth in Article 2 are not intended to and do not constitute a binding agreement of the Parties with respect to the Transaction; any such binding agreement will arise only upon the negotiation, execution and delivery of mutually satisfactory definitive agreements and the satisfaction of the conditions set forth therein, including, without limitation, obtaining all required third party consents, regulatory approvals, and approvals

of such definitive agreements and the Transaction by the respective governing authority of each Party.

1.2The matters set forth in Article 3 and Article 4 shall constitute binding agreements of the Parties.

ARTICLE 2

THE TRANSACTION

2.1Development of the Proposed Project. The Parties will make good faith efforts to enter into the Joint Venture Agreement. The Parties intend to complete the Joint Venture Agreement on or before July 1, 2006. This July 1, 2006, date supersedes the June 1, 2006, date in the Term Sheet.

ARTICLE 3

FUNDING OF FEASIBILITY STUDY

3.1To defray the cost of the Feasibility Study, Itochu agrees to pay URI/HRI a total of $675,000 (“Funding”), in four equal installments (each, an “Installment”) pursuant to the following schedule:

(a)The first Installment (“First Installment”) shall be paid by Itochu to URI within seven (7) business days from the date of execution of this Agreement. Upon receipt of the First Installment, URI/HRI shall notify Itochu of such receipt of payment, and URI/HRI shall immediately commence the Feasibility Study.

(b)The second, third, and fourth Installments shall be paid by Itochu to URI on May 1, June 1 and July 1, 2006, respectively.

3.2The Funding shall be used solely to fund URI/HRI’s overhead and third-party costs incurred in the Feasibility Study and for no other purpose without Itochu’s written consent.

3.3URI/HRI shall use reasonable efforts to complete the Feasibility Study and deliver it to Itochu within eight (8) months from the date of URI’s receipt of the First Installment and shall in any event deliver the Feasibility Study within nine (9) months from the First Installment (the “Outside Date”); provided, however, that if URI/HRI is unable to complete the Feasibility Study by the Outside Date due to the loss of the services of Craig S. Bartels (the “Local Manager”),  URI/HRI shall not be deemed in default hereunder but shall consult with Itochu to set a new Outside Date. If the Parties cannot agree on a new Outside Date, Itochu shall have the right to terminate this Agreement, at which time URI will refund to Itochu, within seven (7) business days of receipt of written notice from Itochu of such termination, or any later date that is mutually agreed, the aggregate amount of the Installments paid by Itochu in respect of the Funding.

3.4If, for whatever reason, the Joint Venture Agreement is not executed by the Parties by July 1, 2006, or any later date that is mutually agreed by the Parties in writing, URI will

2

refund to Itochu, within seven (7) business days following July 1, 2006, or any later date that is mutually agreed, the aggregate amount of the Installments paid by Itochu in respect of the Funding.

3.5HRI shall, within five (5) business days following the end of every month, submit to Itochu a written monthly progress report, which shall include an estimate of the progress  toward completion of each of the items shown on Exhibit A and a good faith approximation of the aggregate amount expended during such month and to date for each such item. Each such report shall be signed by the Local Manager, who is an officer of both URI and HRI.

3.6At Itochu’s request, the Local Manager shall meet with Itochu in Albuquerque, New Mexico, or in Dallas, Texas (such location to be determined by HRI), every month to discuss the progress on the Feasibility Study. No such meeting shall last more then eight (8) hours. The dates of such meetings shall be set at least 10 days in advance and no such meeting shall occur sooner than four (4) business days following the delivery of the report described in Section 3.5 above with respect to the preceding month.

3.7Upon the completion of the Feasibility Study, URI/HRI shall submit a final written report to Itochu and meet with Itochu, upon Itochu’s request, to discuss the Feasibility Study and respond to Itochu’s questions and requests.

ARTICLE 4
OTHER BINDING AGREEMENTS

4.1Exclusivity.                           &# 160;       URI and HRI shall not directly or indirectly solicit, pursue, negotiate for, commit to, or engage in any business arrangements with any third party relating to the Transaction (excluding in furtherance of the Feasibility Study) or otherwise relating to the disposal of any assets contemplated to be part of the Joint Venture in accordance with the Term Sheet, during the period from the date of execution of this Agreement through and including July 1, 2006, or such later date mutually agreed upon by Itochu and URI/HRI (“Exclusivity Period”).

4.2Confidentiality. The Parties have heretofore entered into a confidentiality agreement dated February 24, 2005 (the “Confidentiality Agreement”). The terms of the Confidentiality Agreement will continue to apply with respect to the Parties’ negotiations concerning the Transaction and the Joint Venture Agreement and are incorporated herein by reference.

4.3Ownership of the Feasibility Study. All property rights to the Feasibility Study shall be owned by URI/HRI and upon execution of the Joint Venture Agreement will be conveyed to the Joint Venture, under such terms and conditions as are established in the Joint Venture Agreement.

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4.4Events of Default. The following shall constitute events of default:

(a)Itochu shall be in default for its failure to pay the Funding in the manner specified in this Agreement; provided, that Itochu shall not be in default if it withholds payments as a result of any default on the part of URI/HRI.

(b)URI/HRI shall be in default upon its (i) failure to submit a monthly written progress report as required by Section 3.5 above, unless Itochu has given its prior and written consent to such non-submission; (ii) failure to consent to or attend a monthly progress meeting with Itochu as required by Section 3.6 above; (iii) breach of the exclusivity provisions in Section 4.1 above; (iv) insolvency or inability to make payments to its creditors as and when payment of such sums become due; (v) becoming bankrupt or, going into liquidation; or (vi) failure to perform its other material obligations specified in this Agreement. URI/HRI shall not be deemed in default hereunder if it is unable to deliver the Feasibility Study due to Itochu’s own default in making the payments required hereunder.

4.5Consequences of Default.

(a)In the event of default by Itochu, URI/HRI shall have the right, upon written notice to Itochu and failure by Itochu to cure its default as provided in Section 4.5(c), to (i) terminate this Agreement or suspend its performance of the Feasibility Study; and (ii) refuse to submit a written monthly progress report as required by Section 3.5 above, and consent to or attend a monthly progress meeting as required by Section 3.6 above. Upon termination of this Agreement pursuant to this Section 4.5(a), the Joint Venture shall be deemed terminated and Itochu shall have no further rights to joint venture the Churchrock property. In the event Itochu fails to perform any of its obligation, Itochu shall reimburse URI/HRI forthwith upon demand for all costs, attorney’s fees and other expenses incurred by URI/HRI in the enforcement of the obligation of Itochu.

(b)In the event of default by URI/HRI, Itochu shall have the right, upon written notice to URI/HRI and failure by URI/HRI to cure its default as provided in Section 4.5(c), to (i) terminate this Agreement; and (ii) demand a full refund of the Funding; and in such event and upon demand by Itochu, URI/HRI shall refund to Itochu all of the Funding. In addition, in the event URI/HRI fails to perform any of their obligations hereunder, URI/HRI shall reimburse Itochu forthwith on demand for all costs, attorneys’ fees and other expenses incurred by Itochu in the enforcement of the obligations of URI/HRI.

(c)In the event of default by a Party (“Defaulting Party”), the Party that is not in default (“Non-defaulting Party) shall give written notice to the Defaulting Party of the default and the Defaulting Party shall have the opportunity to cure its default within ten (10) business days of its receipt of such notice.

4.6Expenses. Each Party shall bear its own costs associated with negotiating and performing under this Agreement.

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4.7Entire Agreement. This Agreement constitutes the entire agreement of the Parties relating to the subject matter hereof and supersedes all prior discussions, agreements or understandings, whether oral or written, relating to such subject matter. Except for the the Confidentiality Agreement and the Amended and Restated Uranium Supply Contract among Itochu, URI and URI, Inc., of even date herewith, there are no other written or oral agreements or understandings between the Parties. In addition, the parties acknowledge the existence of the Term Sheet. Any amendment of this Agreement must be written and signed by all Parties.

4.8Governing Law; Consent to Jurisdiction. This Agreement shall be governed and construed in accordance with the laws of the State of New York, without giving effect to any conflict of law principles that would result in the application of the law of a jurisdiction other than the State of New York. The Parties hereto agree that any legal action or proceeding arising out of or in any manner relating to this Agreement shall be brought in any court of the State of New York or in any United States District Court in the State of New York. The Parties hereto consent and submit to nonexclusive personal jurisdiction of any such court in any action or proceeding.

4.9Non-Inclusive; Non-Binding. This Agreement does not contain all matters upon which agreement must be reached in order for the Joint Venture Agreement and the Transaction to be completed. With respect to the provision of Article 2,this Agreement does not create and is not intended to create a binding and enforceable contract between the Parties and may not be relied upon by a Party as the basis for a contract by estoppel or otherwise. A binding commitment with respect to the Transaction can only result from the execution and delivery of definitive agreements. For the avoidance of doubt, Articles 3 and 4 create a binding and enforceable contract between the Parties.

4.10Relationship of Parties. The Parties shall not be deemed to be in a relationship of partners or joint venturers by virtue of this Agreement, nor shall either Party be an agent, representative, trustee or fiduciary of the other. Neither Party shall have any authority to bind the other to any agreement.

4.11Assignment. Neither party may assign any of its rights or obligations under this Agreement, without the prior written consent of the other party, such consent should not be unreasonably withheld or delayed.

4.12Severability. If any provision of this Agreement or the application thereof to any person or circumstance is held invalid or unenforceable in any jurisdiction, the remainder of this Agreement, and the application of such provision to such person or circumstance in any other jurisdiction or to other persons or circumstances in any jurisdiction, shall not be affected thereby, and to this end the provisions of this Agreement shall be severable. If any provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, it is the Parties’ intention that such provision shall be reformed and construed by the court to provide the protected party the maximum protection permissible by law. No waiver of any provision of this Agreement shall constitute a waiver of any other provision or of the same provision on another occasion.

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4.13Attorneys’ Fees. In the event it becomes necessary for either Party to file a suit to enforce the binding provisions of this Agreement, the prevailing Party shall be entitled to recover, in addition to all other remedies or damages, reasonable attorney’s fees and costs incurred.

4.14Counterparts. This Agreement may be executed in counterparts, each of which, when executed and delivered, shall be deemed to constitute an original but all of which together shall constitute one and the same instrument.

4.15Guarantee. In consideration of the sum of One Dollar ($1.00) and other good valuable consideration paid by Itochu to URI, receipt of which hereby acknowledged, as well as for the purpose of inducing Itochu to pay the Funding to defray the cost of the Feasibility Study, URI hereby absolutely, unconditionally and irrevocably, jointly and severally guarantees to Itochu the full and complete performance by HRI of any obligation of HRI under this Agreement. In the event HRI fails to perform any obligation of HRI, URI shall forthwith, upon demand by Itochu, perform such obligation of HRI. URI shall also reimburse Itochu forthwith upon demand for all costs, attorney’s fees and other expenses incurred by Itochu in the enforcement of the obligation of HRI or in the enforcement of this guaranty. URI hereby waives any defense to its obligations under this Section 4.15 arising from (a) a lack of diligence on the part of Itochu in the enforcement of the obligations of HRI, (b) Itochu’s failure to provide notice of default, protest or notice of protest with respect to HRI’s obligations or (c) any other defense available to a guarantor at law or in equity other than full performance of the guaranteed obligations. URI hereby acknowledges and agrees that any waiver, modification or amendment of HRI’s obligations shall not abrogate its obligations hereunder, provided that is shall have the benefit of such waiver, modification or amendment.

4.16Survival. This Agreement shall remain in full force and effect until the Parties have fully performed their obligations provided hereunder. The following listed provisions shall continue and survive the expiration or termination of this Agreement: Section 4.2 (Confidentiality), Section 4.3 (Ownership of the Feasibility Study), Section 4.5 (Consequences of Default), Section 4.8 (Governing Law; Consent to Jurisdiction), and Section 4.15 (Guarantee).

* * * * *

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and delivered as of the Effective Date by their respective duly authorized representatives.

ITOCHU CORPORATION

By:

Name:

Title:

Date:

URANIUM RESOURCES, INC.

By:

Name:

Title:

Date:

HYDRO RESOURCES, INC.

By:

Name:

Title:

Date:

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Exhibit A

FEASIBILITY STUDY

The Parties shall conduct a feasibility study and it will focus on detailed, pre-construction, revisions to the existing designs, and to cost estimates. All aspects of the design and materials need to be considered as follows:

•review documents pertaining to Church Rock (applications, license, culturally sensitive areas,  FEIS, COP, SERP, RAP (as such terms are defined below)) to ensure that regulatory commitments and obligations are incorporated in the design and construction of the Church Rock plant and wellfield; this is a critical part of the economic update, and critical in the training of new engineers and others expected to be in supervisory roles;

•update plant design with downflow versus upflow columns, and revise design to allow “satellite” IX plant technology;

•re-design wellfield patterns with current geologic interpretation of fronts; cost estimates will be more specific, made for particular wellfields, including specific number of wells, depths, number of pounds under wellfield per front, recovery by front, etc.;

•determine amount and type of instrumentation for both plant and wellfield; cost versus operational usefulness must be evaluated;

•start preliminary discussions with engineering/construction firms to estimate costs for actual construction (drawings, soil testing, concrete, piping, electrical, instrumentation, ponds, etc); wellhouse and associated instrumentation & piping, etc.).

FEIS means Final Environmental Impact Statement.

COP means Crownpoint Uranium Project Consolidated Operation Plan.

SERP means Safety and Environmental Review Panel.

RAP means Restoration Action Plan.

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EX-10.37

Exhibit 10.37

AMENDED AND RESTATED

URANIUM SUPPLY CONTRACT

BETWEEN

ITOCHU CORPORATION

AND

URI, INC.

EFFECTIVE AS OF MARCH 1, 2006

TABLE OF CONTENTS

	Page
Preamble – Object of the Contract	1
RECITALS:	1
Article I – Definitions	2
Article II – Annual Quantities and Delivery Schedule of Concentrates	4
Article III – Delivery	5
Article IV – Specifications	6
Article V – Warranty and Limitation of Liability	6
Article VI – Price of Concentrates	6
Article VII –Contract Terms Upon Occurrence of a Condition Subsequent Specified in Section 7.3	8
Article VIII – Taxes	8
Article IX – Invoicing and Payment	8
Article X – Force Majeure	9
Article XI – Non Compliance	10
Article XII – Governing Law And Arbitration	11
Article XIII – Governmental Permits	13
Article XIV – Safeguards-Use of Concentrates	13
Article XV – General and Notices	13

i

Preamble – Object of the Contract

This Amended and Restated Contract is for the sale of Uranium Concentrates and is made and entered into this        day of March, 2006, to be effective as of this 1st day of March 2006 (the “Effective Date”).

Between:ITOCHU Corporation having its principal office at 5-1, Kita-Aoyama 2-chome, Minato-ku, Tokyo 107-8077, JAPAN (hereinafter in this Contract called “Buyer”) on the one part.

And:URI, Inc., a wholly-owned subsidiary of Uranium Resources, Inc. ( hereinafter in this Contract called “Seller’s Parent Company”) and a corporation incorporated in the state of Delaware, and having its principal office at 650 South Edmonds Lane, Suite 108, Lewisville, TX, USA 75067 (hereinafter in this Contract called “Seller”) on the other part.

Each of Seller and Buyer is hereinafter referred to sometimes as a “Party” and collectively as the “Parties.”

RECITALS:

Whereas:Seller and Buyer have heretofore entered into an Amended and Restated Uranium Supply Contract dated as of June 7, 2005, as amended by Amendment #1 dated December 28, 2005, and a second Uranium Supply Contract dated as of June 15, 2005 (copies of the originals of each of which having been initialled by the parties and identified as the contracts referenced hereby) (collectively the “Original Contracts”), pursuant to which Seller has agreed to sell to Buyer and Buyer has agreed to purchase Concentrates (as hereinafter defined) from Seller on the terms and conditions set forth therein;

Whereas:Seller and Buyer desire to incorporate the Original Contracts and further amendments into one document by amending and restating the Original Contracts in their entirety to incorporate the amendments effected hereby;

Whereas:The Parties have executed the Term Sheet regarding the establishment of a Joint Venture to produce uranium through in situ leach (ISL) mining at HRI’s Churchrock property in New Mexico (the “Churchrock Joint Venture”); and

WhereasThe Parties desire to amend the Original Contracts to provide for revised quantity, delivery and price terms, in accordance with the Term Sheet, prior to execution of the definitive agreements regarding the Churchrock Joint Venture.

Now in consideration of the mutual covenants and agreements herein contained it is hereby agreed as follows:

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Article I – Definitions

1.1In this Contract unless the context otherwise requires:

(a)“Agreed Rate” means a rate per annum that is equal to two percentage points (2%) in excess of the prime rate of interest per annum announced by JPMorganChase Bank, at New York, New York, as its prime rate of interest for U.S. Dollar commercial loans;

(b)“Book Transfer” is the transfer of U₃O₈ in the records of the Converter from the Concentrates account of Seller to the Concentrates account of Buyer;

(c)“Business Day” means a day other than a Saturday, Sunday and any other day on which commercial banks are authorized or required to close for business in Texas, New York, Tokyo, or (so long as any of Buyer’s executive, treasury or administrative functions with respect to this Agreement are conducted in Hong Kong) in Hong Kong;

(d)“Concentrates” means natural uranium concentrates containing U₃O₈, which will be supplied from Texas Properties Owned by Seller;

(e)“Contract” means this Contract as the same may be modified or amended from time to time in accordance with its terms and expressions “herein,” “hereto,” “hereunder,” “hereof” and similar expressions refer to in this Contract;

(f)“Converter” means Honeywell International’s facility at Metropolis, Illinois, U.S.A.;

(g)“Delivery Certificate” means a document including the information regarding delivery date, delivered quantity and origin by which the Converter confirms Book Transfer of Concentrates for the account of and on behalf of Buyer, and which has been signed by an authorised person of the Converter;

(h)“Delivery Year” means the calendar year during which delivery of a quantity of Concentrates is made or scheduled to be made pursuant to this Contract;

(i)“HRI” means Hydro Resources, Inc., a Delaware corporation and a subsidiary of Seller’s Parent Company;

(j)“Joint Venture Agreement” shall mean the definitive agreements for the Churchrock Joint Venture;

(k)“Kingsville Production” means all Concentrates, other than Vasquez Production, processed to U₃O₈ at the Kingsville Dome processing facility and whose source is Texas Properties Owned by Seller until operations are ceased and the processing facility is placed in decommissioned status by either or both U.S. Federal and State of Texas Authorities;

(l)“Month” means calendar month;

(m)“Pound (lb)” means 1 pound avoirdupois;

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(n)“Production Certificate” shall mean a certificate prepared by Seller, for the purpose specified in Article 2.3, in certifying the final annual production for Kingsville Production, Rosita Production and Vasquez Production;

(o)“Rosita Production” means all Concentrates, other than Vasquez Production, processed to U₃O₈ at the Rosita processing facility and whose source is Texas Properties Owned by Seller until operations of the processing facility are ceased and the processing facility is placed in decommissioned status by either or both U.S. Federal and State of Texas Authorities;

(p)“Term Sheet” means the non-binding letter of intent signed by both the Parties effective March 2, 2006; and

(q)“Texas Properties Owned by Seller” means properties located in Texas currently owned by Seller or Seller’s Parent Company or any of its subsidiaries and properties located in Texas acquired by any of them in the future, excluding any production from two large ranches, which Seller has identified to Buyer in a letter dated the date hereof and initialed by the parties as establishing the identity of such ranches;

(r)“Specifications” means the requirements of the Converter in effect for each delivery of Concentrates in order to convert from U₃O₈ to UF₆ without any penalty or surcharge or the like imposed by the Converter;

(s)“U₃O₈” means natural triuranium octoxide, the quantity of the element uranium in Concentrates being established by assay and converted to U₃O₈ by multiplying the quantity of uranium by 1.1792;

(t)“UF₆” means natural uranium hexafluoride;

(u)“Vasquez Production” means all Concentrates from the Vasquez mine located in Duval County, Texas operated by Seller that is processed to U₃O₈ at the Kingsville Dome processing facility or Rosita processing facility until operations at the Vasquez mine are ceased and the Vasquez mine is placed in decommissioned status by either or both U.S. Federal and State of Texas Authorities;

(v)“Year” means a period of 12 consecutive calendar months commencing on 1^st January and ending on 31^st December and “Annual” has a corresponding meaning.

1.2The following general rules of construction and calculation shall apply to this Contract:

(a)In this Contract, unless the contrary intention appears, words importing the singular shall include the plural and vice versa, and words importing any gender shall include any other gender;

(b)In this Contract, unless the context requires otherwise, a reference to any statute, statutory rule or regulation shall means that which is amended or substituted if such is amended or substituted during the term of this Contract;

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(c)The Article headings shall not affect the interpretation of this Contract and are used solely for reference purposes;

(d)In making calculations in accordance with the terms of this Contract, unless defined elsewhere, any figure shall be calculated to the nearest second decimal place. Whenever pursuant to this Contract a numerical figure is to be rounded or calculated to fewer digits than the number of digits available, then unless otherwise specified herein, the following procedures shall be applied;

(i)If the first digit discarded is less than 5, the last digit retained shall not be changed;

(ii)If the first digit discarded is equal to or greater than 5, the last digit retained shall be increased by 1.

Article II – Annual Quantities and Delivery Schedule of Concentrates

2.1Commencing March 1, 2006 and subject to the terms and conditions of this Agreement, Seller shall deliver to Buyer, and Buyer shall purchase, quantities of Concentrates from each of the following sources (a) on a monthly basis, one half (50%) of Vasquez Production; (b) on a monthly basis, one-half (50%) of the Kingsville Production and (c) on a monthly basis, one-half of the Rosita Production, until the earlier to occur of the following events with respect to each facility: (a) the facility ceases to operate; or (b) the licences necessary to operate such facility are terminated by the Nuclear Regulatory Commission or the State of Texas, subject to Section 2.3.

Seller has simultaneously herewith furnished to Buyer an estimated production schedule. Seller will periodically, but not less frequently than on the last day of each calendar quarter, update the estimated production schedule in writing to Buyer. It is understood that the estimate is only an estimate and that Seller shall have no liability to Buyer if it fails to meet the estimated production schedule. Seller shall make reasonable efforts to achieve the production schedule as originally furnished by Seller.

Seller shall deliver on a monthly basis in a single shipment. Such delivery will occur during the first week of each month unless otherwise agreed to by Buyer.

Beginning on the date hereof, and continuing as of the first day of each month thereafter, Seller shall provide a rolling ninety-day estimated delivery schedule setting forth estimated dates of delivery and quantities to be delivered (“Estimated Delivery Schedule”). It is understood that the estimate is only an estimate and that Seller shall have no liability to Buyer if it fails to meet the estimated delivery schedule. In addition, if requested by Buyer, Seller shall meet with Buyer on a quarterly basis to review current production and delivery schedules. Such meeting will take place at a mutually agreed to location and time.

2.2Within thirty (30) calendar days from the end of the Year, Seller shall provide a Production Certificate to Buyer, signed by a corporate officer, certifying the production quantities during that year for each of the Vasquez Production, Kingsville Production and Rosita Production.

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2.3If Seller’s operation of the Kingsville Dome processing facility, the Rosita processing facility, or the Vasquez mine should cease and thereafter operation of any such facility shall be restarted, Seller’s obligation to deliver Concentrates to Buyer hereunder with respect to such facility shall be reinstated as of such recommencement of operations.

Article III – Delivery

3.1Seller shall deliver Concentrates to Buyer, and Buyer shall take delivery of Concentrates from Seller by Book Transfer at the Converter.

(a)The delivery shall be deemed to have been made when Concentrates containing a specified quantity of U₃O₈ are transferred to Buyer’s account by Book Transfer.

(b)Seller shall notify Buyer thereof immediately upon transfer of Concentrates.

(c)Seller is responsible for all charges imposed by Converter for the Book Transfer to Buyer.

3.2Title to, and all risks of loss in, and liability for, any personal loss or injury or any property damage caused by Concentrates delivered to Buyer shall pass to Buyer when the Concentrates are transferred to Buyer’s account by Book Transfer.

3.3Subject to this Contract, Seller shall indemnify and hold harmless Buyer from and against all costs, expenses, claims, damages and injuries incurred or arising in respect of the ownership, storage, transportation, possession or use of Concentrates prior to Book Transfer to Buyer by Seller pursuant to this Contract. Buyer shall indemnify and hold harmless Seller from and against all costs, expenses, claims, damages and injuries arising in respect of the ownership, storage, transportation, possession or use of Concentrates subsequent to Book Transfer to Buyer by Seller pursuant to this Contract.

3.4At its discretion, Buyer has the right to terminate a particular delivery  or deliveries, or any and all deliveries yet to be made in accordance herewith, unconditionally and without liability to Seller or Buyer for damages or losses, by providing an advance written notice not less than 180-days prior to the delivery or deliveries to be terminated. Upon receipt of such notice, Seller shall be free to sell such quantities to third parties.

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Article IV – Specifications

4.1The Concentrates delivered hereunder by Seller to Buyer shall conform to the Specifications of the Converter at the time of delivery.

Article V – Warranty and Limitation of Liability

5.1Seller warrants that it will give to Buyer good and marketable title to all Concentrates delivered hereunder and that such Concentrates will be delivered free and clear of all liens, claims, charges and encumbrances of any kind and type whatsoever.

5.2THE EXPRESS WARRANTITIES SET FORTH IN SECTION 5.1 ARE EXCLUSIVE, AND NO OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED (INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY) SHALL APPLY.

5.3Under no circumstances whatsoever and howsoever arising shall either party be entitled to recover indirect or consequential damages of any nature including, but not by way of limitation, any consequential loss or damage incurred by the other party.

Article VI – Price of Concentrates

6.1The purchase price (“Purchase Price”) for Concentrates delivered by Seller to Buyer hereunder shall be the following (all references to prices “per pound” shall mean per pound of U₃O₈ contained in such Concentrates):

(a)Vasquez Production. For all deliveries from Vasquez Production, Buyer shall pay the Market Price less six and 50/100 dollars ($6.50) plus any applicable amounts called for by Section 6.1(c)(i).

(b)Kingsville Production and Rosita Production. For all deliveries from Kingsville Production and Rosita Production, Buyer shall pay the Market Price less seven and 50/100 dollars ($7.50) plus any applicable amounts called for by Section 6.1(c)(ii).

(c)Market Price. “Market Price” shall mean the simple average of 1) the average of U₃O₈ Spot Price Indicator published by TradeTech for the eight (8) weeks prior to the week of delivery and 2) the average of the Ux U₃O₈ Price published by the Ux Consulting Co. for the eight (8) weeks prior to the week of delivery; provided that the Market Price shall be not less than $37 (“Hard Floor”) per pound and shall be subject to the Hard Cap in clauses (i) and (ii) below.

(i)Vasquez Production Ceiling Price: The Market Price for all deliveries to Buyer from Vasquez Production shall not be greater than and shall not escalate beyond (“Hard Cap”) $46.50 per pound. If, however, the Market Price applicable to a delivery is greater than fifty ($50) dollars per pound, the Buyer agrees, notwithstanding the above Hard Cap, to pay the Seller as additional purchase price for such delivery an amount equal to fifty (50%) percent of the amount by which the Market Price exceeds fifty ($50) dollars per pound.

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Example:  If the Market Price is determined to be $51.00 per pound,  Buyer would pay an additional $0.50 ($1.00*.5) resulting in a price of $40.50 per pound [($46.50 - $6.50) +.50].

(ii)Kingsville/Rosita Production Ceiling Price:  The Market Price for all deliveries to Buyer from Kingsville Production or Rosita Production shall be not greater than a Hard Cap of forty-three dollars ($43.00) per pound. Subject to (iii) below, the Buyer agrees to pay Seller as additional purchase price as follows: (a) If the Market Price applicable to a delivery is greater than forty-three dollars ($43.00) per pound but less than or equal to fifty dollars ($50) per pound, the additional purchase price shall be equal to thirty 30% of the amount by which the Market Price exceeds forty-three dollars ($43) per pound up to and including fifty dollars ($50) per pound; and (b) If  the Market Price applicable to a delivery is greater than fifty ($50) dollars per pound, the additional purchase price shall be equal to fifty (50%) percent of the amount by which the Market Price is greater than fifty ($50) dollars per pound. Example: If the Market Price is determined to be $51.00 per pound, Buyer would pay an additional $2.60 [($7*.30) + ($1.00*.5)], resulting in a price of $38.10 per pound [($43.00 – 7.50) + $2.60].

(iii)The Hard Floor and Hard Cap referenced above shall apply to the first 3.65 million pounds of Concentrates delivered after the Effective Date. Once this level is achieved from either or both production facilities, these terms shall expire and there shall no longer be a Hard Floor or Hard Cap on the Market Price.

(iv)The Buyer shall no longer be required to pay Seller the additional purchase price, between $43 and $50, as specified in Clause (ii)(a) of this Section 6.1(c), and such obligation to pay the additional purchase price contained in Clause (ii)(a) shall be deemed to have been terminated upon the occurrence of the Condition Subsequent specified in Section 7.2; provided, however, that payments of the additional purchase price prior to such occurrence shall not be affected or refunded, and the obligation contained in Section 6.1(c)(ii)(b) shall continue in full force and effect.

(v)The Purchase Price is inclusive of:

(aa)Freight, insurance and other transportation charges to the point of delivery at the conversion plant;

(bb)All royalties, environmental control costs, taxes and other imposts until arrival at the conversion plant;

(cc)Weighing, sampling and assaying fees;

(dd)Book transfer fee charged to Seller by converter; and

(ee)Any surcharges assessed by the converter with reference to that converter’s specifications and book transfer fee.

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Article VII - Contract Terms Upon Occurrence of a Condition Subsequent

7.1  Upon the occurrence of a Condition Subsequent specified in Section 7.3 and Buyer’s written notice to Seller invoking this Article VII, this Contract shall have no further force or effect and the Original Contracts shall be reinstated from Seller’s receipt of such notice and thereafter; it being agreed and understood that the terms of this Contract shall govern the pricing and other terms of uranium deliveries prior to the date of Seller’s receipt of such notice. All quantities of U₃O₈ delivered by Seller after the Effective Date and prior to Seller’s receipt of such notice shall count as having been delivered under the Original Contracts.

7.2For the purposes of Section 6.1(c)(iv), a “Condition Subsequent”: will be deemed to have occurred if (a) the Joint Venture Agreement is executed; and (b) Buyer subsequently exercises a right specified in the Joint Venture Agreement not to make further investments in the Churchrock Joint Venture (“Negative Final Investment Decision or FID”). For the avoidance of doubt, if Buyer defaults as specified in section 4.4(a) of the Feasibility Study Funding Agreement (the “Funding Agreement”) executed among Buyer, Seller’s Parent Company and HRI on March      , 2006, and Buyer fails to cure that default in the manner specified in Section 4.5(c) of the Funding Agreement (a “Buyer Funding Default”), Buyer shall not be entitled to advise Seller of the occurrence of a Condition Subsequent, for the purposes of Section 6.1(c)(iv) of this Agreement.

7.3For the purposes of Section 7.1, so long as a Buyer Funding Default has not occurred or a termination of the Funding Agreement by Buyer in accordance with Section 3.3 thereof has not occurred, a Condition Subsequent will be deemed to have occurred if: (a) HRI, Seller, and Seller’s Parent Company fail to make good faith effort to prepare and sign the Joint Venture Agreement; (b) Seller’s Parent Company or HRI have committed or are subject to events of default as specified in Section 4.4(b) of the Funding Agreement and have failed to cure that default in the manner specified in Section 4.5(c) of the Funding Agreement; or (c) upon completion of the Feasibility Study referenced in the Funding Agreement, HRI, or Seller’s Parent Company elect not to pursue the Churchrock Joint Venture.

Article VIII - Taxes

8.1Seller shall be responsible for and bear any and all taxes, duties, and imposts of any kind which are imposed on or with reference to the Concentrates prior to and coincident with Book Transfer.

8.2Buyer shall be responsible for and bear any and all taxes, duties and imposts of any kind which are imposed on or with reference to the Concentrates subsequent to Book Transfer.

Article IX – Invoicing and Payment

9.1In respect of each quantity of Concentrates delivered pursuant to Article 2 and Article 3, Seller shall promptly after delivery forward to Buyer an invoice (in duplicate), together with the back-up data necessary to enable Buyer to verify the price indicators and/or published statistics used to calculate the Purchase Price, and Delivery Certificate.

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9.2Seller shall issue an invoice for 100% of the sum arrived at by multiplying the total quantities of U₃O₈ (expressed in Pounds) contained in such delivery by the applicable Purchase Price.

9.3Buyer shall pay to Seller the invoice value by telegraphic transfer within thirty (30) days from the date when Buyer receives an invoice by fax together with the applicable Book Transfer Certificate, provided that the original invoice follows by mail.

9.4Any other amounts which either party is obliged to reimburse to the other party pursuant to this Contract shall be paid by telegraphic transfer within thirty (30) days after the date of receipt of invoice by fax, provided that the original invoice follows by mail. Invoices not paid when due shall bear interest at the Agreed Rate.

9.5If any invoice due date is not a Business Day, then such invoice shall become payable on the next Business Day.

Article X – Force Majeure

10.1(a)For the purposes of this Contract, a “Force Majeure Event” means an act, event, circumstance, or cause beyond the reasonable control and without the wilful default or negligence of the party concerned including, without limiting the generality of the foregoing;

(i)acts of God, perils of the sea, accidents of navigation, war, sabotage, riot, insurrection, civil commotion, national emergency (whether in fact or law), martial law, fire, flood, cyclone, earthquake, landslide, explosion, strike, lock out, boycott, epidemic, quarantine, radiation or radioactive contamination;

(ii)restriction, restraint, prohibition, requisition, expropriation, direction or embargo by legislation, regulation, decree or other legally enforceable order of any government or governmental or other competent authority (including any court of competent jurisdiction); and

(iii)refusal, revocation or suspension of any permit, licence, authorization or certificate referred to in Article XIV.

(b)Force Majeure means:

(i)in the case of Seller – those Force Majeure acts, events or circumstances which affect the conduct of the Seller’s U.S. mines, the production of Concentrates thereat, or the delivery of U₃0₈ by Seller to Buyer.

(ii)In the case of Buyer – those Force Majeure acts, events or circumstances which affect the taking delivery of Concentrates from Seller.

10.2If either party is prevented or delayed or anticipates that it will be prevented or delayed in the performance of any of its obligations under this Contract by Force Majeure, then subject to that party giving notice to the other party in accordance with Section 10.3 and requesting a suspension of its obligations, the performance of this Contract shall be suspended for any actual

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period of any prevention or delay and the party or parties shall be excused from the performance of the Contract as the case may be.

10.3A notice required by Section 10.2 shall be given as promptly as practicable and in any case within thirty (30) days after the party giving the notice first determines that any act, event or circumstance constitutes or may constitute Force Majeure and the notice shall specify the following details:

(a)the matters constituting or likely to constitute Force Majeure, together with evidence thereof;

(b)an estimate of the period within which the prevention or delay will continue;

(c)the action taken or proposed to be taken to minimise or overcome the prevention or delay;

(d)the extent to which delivery or acceptance of U₃0₈ will be affected.

10.4

(e)During the period of any prevention or delay notified the party giving the notice shall promptly advise the other party of any change in the nature of the Force Majeure.

(f)A party giving the notice under this Article may at any time withdraw or cancel the notice and in such case any right of suspension of performance shall be at an end from the date of cancellation of the notice.

(g)The party giving the notice shall endeavour to minimise the prevention or delay resulting from the Force Majeure.

10.5If, because of Force Majeure, Seller’s ability to deliver Concentrates hereunder is partially affected but not stopped entirely, the parties shall discuss a fair basis upon which deliveries to Buyer will be reduced.

10.6If the disability resulting from Force Majeure lasts for more than 180 days from the date of notice in accordance with Section 10.3, the party receiving the notice, may at any time prior to advice of cessation of that disability (but not after the date of that advice) by notice in writing to the other, cancel the whole or any part of any quantity of Concentrates due to be delivered during the period of Force Majeure.

10.7If the disability resulting from Force Majeure lasts for more than 12 months from the date of notice in accordance with Section  10.3, either party, may at any time prior to advice of cessation of that disability (but not after the date of that advice) by notice in writing to the other, terminate this Contract.

Article XI – Non Compliance

11.1Except as provided in Article X, if either party defaults in the observance of performance of an obligation in a material way under this Contract and such default continues for a period of ninety (90) days after the other party has given written notice to the defaulting

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party specifying such default, then such other party shall have the right to terminate this Contract by notice in writing to the defaulting party.

11.2The measure of damages or compensation payable in the event of breach of this Contract shall not in any circumstances (including circumstances entitling termination of this Contract pursuant to this Article) extend to consequential or indirect damages.

11.3If either party shall be adjudged bankrupt or insolvent under similar proceedings (including without limitation proceedings for the appointment of a trustee or receiver but excluding any proceedings for the purpose of reconstruction only) then the other party shall have the right to terminate this Contract by notice to such first mentioned party.

11.4Subject to the limitations set forth in Section 11.2, a party terminating this Contract pursuant to this Article shall have the rights and remedies provided under applicable law.

Article XII – Term and Termination

12.1Termination of this Contract in accordance with Section 10.7 by a party entitled to effect such termination, shall;

(a)take effect from the date of receipt of the notice of termination by the other party;

(b)operate as a discharge of performance of the unexecuted portion of this Contract, except performance of any obligation outstanding at the date on which the notice of termination takes effect;

(c)not abrogate or prejudice any right (whether conferred by this Contract or existing by law or in equity) of either party in respect of any antecedent breach by the other of any obligations under this Contract.

Article XIII Governing Law And Arbitration

13.1Governing Law

This Agreement shall be governed by, construed, and enforced in accordance with, and its validity shall be determined under, the laws of the State of New York, the United States of America, without giving effect to any conflicts-of-law rules requiring the application of the substantive law of any other jurisdiction, and it shall be deemed to have been executed and performed in the State of New York. The Parties hereby exclude the application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) to this Agreement. The Parties expressly state their intention that the laws of Japan shall not, under any circumstances, apply in any way to the interpretation of this Contract. In the event this Contract is translated and there exists any difference between the foreign language version and this English version, this English version shall prevail.

13.2Arbitration

(a)Any dispute, controversy or claim arising out of or relating to this Agreement shall be finally resolved by arbitration in accordance with the rules of the American Arbitration

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Association then obtaining. Unless otherwise agreed in writing by the Parties hereto, the arbitral panel shall consist of three (3) arbitrators, one to be appointed by each Party and the third to be appointed by the two arbitrators appointed by the Parties. In the event that a Party fails to appoint an arbitrator within fifteen (15) days after any such dispute, controversy or claim has been referred to arbitration hereunder, then, in such event, the other Party may request the American Arbitration Association to appoint an arbitrator for the Party failing to make such appointment. In the event that the third arbitrator has not been appointed within thirty (30) days after any such dispute, controversy or claim has been referred to arbitration hereunder, then, in such event, either Party may request the American Arbitration Association to appoint such third arbitrator. The arbitration proceedings, all documents submitted therein and the award of the arbitral panel shall be in the English language, and all members of the arbitral panel shall be fluent in English. The arbitration proceedings shall be held in New York, New York, the United States of America. The arbitral panel shall apply the rules of procedure applicable to civil actions in the courts of the state of New York; provided, however, that both Parties shall be entitled to representation by counsel, to appear and present written or oral evidence and argument and to cross-examine witnesses presented by the other Party. The arbitral award shall be in writing and the arbitral panel shall provide written reason for its award. The award of the arbitral panel shall be final and binding upon the Parties. The Parties waive any rights to appeal or to review such award by any court or tribunal, and such award shall be final and binding. Each Party agrees that any arbitral award or final judgment rendered against it in any action or proceeding relating in any way to this Agreement shall be conclusive and may be enforced, to the extent permitted by applicable law, in any court in the state of New York, by suit on the arbitral award or judgment, a certified copy of which arbitral award or judgment shall be conclusive evidence thereof, or by such other means provided by applicable law. The Parties further agree to undertake to carry out without delay the provisions of any arbitral award or order. A Party may disclose the contents of an award of the arbitral tribunal only to affiliates, Governmental Authorities or other persons as required by applicable law.

(b)To the extent any Party has or may acquire any immunity (sovereign or otherwise) from jurisdiction of any arbitral tribunal or court in or in connection with any arbitration under this Agreement or any proceeding, action, lawsuit or process (whether through service or notice, attachment in aid of execution, execution or otherwise) pursuant to, in aid of, arising out of, in confirmation or registration of, or to enforce, an award of an arbitration proceeding under this Agreement, each Party, solely for the purpose of such arbitration proceeding, action, lawsuit or process, hereby irrevocably waives such immunity. The foregoing waiver and consent are intended to be effective to the fullest extent now or hereafter permitted by the applicable law of any jurisdiction where any suit, action or proceeding with respect to an arbitration under this Agreement may be commenced, including the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and are intended to be irrevocable and not subject to withdrawal for purposes of such act.

(c)Pending the final decision of the arbitrator of a dispute hereunder, Buyer and Seller shall diligently proceed with the performance of any portion of the Agreement without prejudice to a final adjustment in accordance with the decision rendered by the arbitral tribunal with respect to such dispute.

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Article XIV – Governmental Permits

14.1Deliveries of Concentrates hereunder are subject to the grant and continuance in force of all necessary permits, licenses, authorisations and certificates. Seller shall at its own cost be responsible for obtaining and maintaining all permits, certificates, licenses and authorisations necessary for performing its obligations based on the Contract.

14.2Buyer shall at its own cost be responsible for obtaining and maintaining all permits, certificates, licences and authorisations necessary for performing its obligations based on the Contract.

14.3Each party shall at its own expense afford the other party all reasonable assistance in applying for or obtaining any permit, licence, authorisation or certificate necessary for the purposes of this Contract.

Article XV – Safeguards-Use of Concentrates

15.1Buyer and Seller agree that the Concentrates supplied hereunder, will be used only for peaceful purposes and will be subject to the safeguard provisions of the agreements of the governments involved for the cooperation in the field of nuclear non-proliferation in effect as of the Effective Date, and as the same may be subsequently amended.

Article XVI – General and Notices

16.1The terms and conditions of this Contract and all information flowing to a party by reason of the operation hereof shall be kept and remain confidential and each party undertakes that neither it nor its employees, agents or representatives shall, without the prior written consent of the other party, disclose such terms, conditions or information to third persons unless disclosure relates to information already within the public domain or is;

(a)required by law or by the Government regulation;

(b)reasonably necessary for submission to an arbitrator pursuant to Article XIII  or for the purposes of any administrative or legal proceedings involving both parties;

(c)required by any stock exchange on which the shares of such party may then be listed for quotation;

(d)reasonably necessary for financing purposes; or

(e)made to legal and financial advisers or certified public accountants of either party who are bound to treat any information disclosed to them as confidential.

16.2This Agreement shall not be assigned by either Party without the prior written consent of the other Party, which consent shall not be unreasonably withheld or delayed; provided that either Party may, without such consent, assign this Agreement and its rights or obligations hereunder to its subsidiary, affiliate, trust, or financial institutions. In no event shall any such

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assignment be construed as a novation or discharge of the assigning party’s obligations hereunder. Except as so provided, any purported assignment hereof shall be invalid.

16.3No amendment or modification of this Contract shall be binding on the parties unless made in writing and signed or executed by or on behalf of both parties.

16.4In any event Seller’s Parent Company shall guarantee all the necessary performance of Seller described in this Contract.

16.5(a)All notices, notifications, consents, advices, requests, demands, directions, instructions, reports and other communications (in this Section 16.5 called “Communications”) required, permitted or authorised to be made or given pursuant to this Contract shall be made or given in writing and either personally served or sent airmail letter (postage prepaid) or facsimile addressed as follows:

(i)To Seller:

URI, Inc.

650 S. Edmonds Lane

Suite 108

Lewisville, TX 75067

Attention: Paul K. Willmott

Facsimile:  972-219-3311

(ii)To Buyer:

ITOCHU Corporation

5 – 1, Kita-Aoyama 2-Chome

Minato-Ku, Tokyo 107 – 8077

Japan

Attn:  Nuclear Energy Department

Facsimile:81-3-3497-6655

with copy to:ITOCHU International Inc.

1133 21^st Street NW

Suite 200

Washington, DC 20036

Attn: Nuclear Fuel Group

Facsimile:202-835-9764

(b)Either party may from time to time by notice in writing to the other change its address for receipt of Communications.

(c)For the purposes of this Contract, Communications shall unless otherwise agreed:

(i)Be in the English language;

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(ii)Be deemed to be given only when actually received by the party to which they are addressed;

(iii)Be promptly acknowledged by the party to which they are addressed; and

(iv)Be signed by an authorized person of that party.

IN WITNESS WHEREOF the parties hereto have caused these presents to be executed as attested to by their duly authorised signing officers in that behalf as at the day and year on which the last party signed below, to be effective as of the Effective Date.

	ITOCHU CORPORATION
	By:
	Name  : Haruo Maeda
	Title: Group General Manager,
	Nuclear Energy Group
	Date     :
	URI, INC.
	By:
	Name  : Paul Willmott
	Title    : President
	Date:
Uranium Resources, Inc.
By:
Name:  Paul Willmott
Title:  President
Date:

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EX-10.38

Exhibit 10.38

AGREEMENT FOR THE SALE OF URANIUM CONCENTRATES

THIS AGREEMENT FOR THE SALE OF URANIUM CONCENTRATES (this “Agreement”) is made effective as of the 31st day of March 2006,

BETWEEN:

URI, Inc., a company organized under the laws of the State of Delaware having its principal office in Lewisville, Texas (“URI”);

AND

UG U.S.A., INC., a company organized under the laws of the State of Georgia having its principal office in Atlanta, Georgia (“UG”).

RECITALS:

WHEREAS, URI and UG are Parties to the Contract for the Sale of Uranium Concentrates dated August 12, 2003, as amended on August 30, 2004 and on April 29, 2005, UG-reference V03/020, and to the Contract for the Sale of Uranium Concentrates dated April 29, 2005, UG-reference V05/014 (collectively, the “Original Contracts”);

WHEREAS, URI and UG agree to terminate the Original Contracts and enter into this Agreement as an amendment and restatement thereof upon the terms and conditions set forth herein;

NOW THEREFORE, in consideration of the premises and the mutual obligations hereinafter described and intending to be legally bound, the Parties agree as follows:

ARTICLE I

INTERPRETATION

1.01       Definitions:  In this Agreement the following terms and expressions shall have the following meanings:

(a)          “Agreed Rate” means a rate per annum that is equal to two (2%) percentage points in excess of the prime rate of interest per annum announced by the JP Morgan Chase Bank at New York, New York, as its prime rate of interest for U.S. dollar commercial loans;

(b)          “Base Quantity” shall mean in each Delivery Year one-half of the Concentrates produced by URI from its Texas Properties (up to a maximum of 600,000 pounds per Delivery Year or a total of 3,000,000 pounds for the entire Term of the Agreement);

(c)          “Book Transfer” means the completion of the transfer of U₃O₈ upon delivery of the Concentrates on the books of the Converter from the account of URI, or an account designated by URI, to the account of UG;

(d)          “Business Day” means a day (other than a Saturday or Sunday) on which banks are open for general business in the United States of America;

(e)          “Concentrates” means natural uranium concentrates containing U₃O₈ produced from the Texas Properties;

(f)           “Converter” means the conversion facilities of (i) ConverDyn, located in Metropolis, Ill., and/or (ii) Cameco, located in Blind River, Ontario, as applicable;

(g)          “Converter’s Notice” means a written notice issued by the Converter to URI and UG confirming the Origin and the Delivery Quantity that was delivered to Converter by URI on the applicable Delivery Date by which Converter confirms the Book Transfer of Concentrates for the account of and on behalf of UG, and which has been signed by an authorized person of the Converter;

(h)          “Delivery Date” means any Business Day during the first week of each calendar month, as determined by URI, during the Term, beginning July 1, 2006, upon which URI delivers Concentrates to the applicable Converter for Book Transfer to UG;

(i)           “Delivery Location” means the location of the respective Converter determined by UG pursuant to a Delivery Notice.

(j)           “Delivery Notice” means the written notice issued by UG and provided to URI at least 15 days prior to a Delivery Date setting forth the Delivery Location for an applicable delivery;

(k)          “Delivery Quantity” means the amount of Concentrates to be delivered on a Delivery Date as set forth in the Invoice from URI to UG as contemplated by Section 4.03.

(l)           “Delivery Year” means each twelve-month period starting July 1 and  ending  June 30 throughout the Term during which the delivery of a quantity of Concentrates is made or scheduled to be made pursuant to this Agreement;

(m)          “GDP-IPD” means the Gross Domestic Product Implicit Price Deflator as published in the Survey of Current Business by the U.S. Department of Commerce, Bureau of Economic Analysis. In the event the basis for the GDP-IPD is substantially modified or such index is discontinued, the appropriate adjustment to the Index Value or selection of a substitute index, as applicable, shall be made by agreement of the Parties. If the index is converted from one base period to a new base period, U.S. Department of Commerce re-basing factors will be applied so that the basis for determining the percentage change between the index is not altered;

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(n)         “Major Uranium Exploration Plays” means properties owned or operated by URI or its affiliates not subject to this Agreement, more specifically described in a letter dated simultaneously herewith from URI to UG;

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 (o)         “Market Price” means the average of the month end long-term prices for U₃O₈ published for the second month immediately preceding the month in which a Delivery Date occurs by TradeTech in its Nuclear Market Review, defined as Long-Term Price Indicator U₃O₈ and the Ux Consulting Co., LLC, in its UX Weekly, defined as UX Price Indicator U₃O₈ Long-Term. Both long-term prices shall be applicable to origins of U₃O₈ legally acceptable for use in US reactors on the applicable Delivery Date;

(p)          “Origin” means the country in which the Delivery Quantity was mined and processed.

(q)          “Party” means either UG or URI and “Parties” means both of them;

(r)           “Shortfall” means the amount by which the Base Quantity in any Delivery Year is less than 600,000 pounds. After any Delivery Year, to the extent that there is a Shortfall, the Shortfall shall be added to the Base Quantity for the next succeeding Delivery Year. If at the end of the Term of this Agreement there is still a Shortfall, the Parties agree to extend the Term of this Agreement accordingly to reach the full 3,000,000 lbs;

(s)           “Suspension Agreement” means the suspension agreement which has been entered into and is still in force as of the date of execution of this Agreement between the United States Department of Commerce and The Russian Federation concerning the import of uranium into the United States of America as such agreement may be amended or replaced;

(t)           “Term” means the period of time from the Effective Date until June 30, 2011, or extended due to a Shortfall, during which URI shall deliver Concentrates to UG pursuant to the terms and conditions of this Agreement; and

(u)          “Texas Properties” means properties located in Texas currently owned by URI or URI’s parent company or any of its subsidiaries and properties located in Texas acquired by any of them in the future, excluding any Major Uranium Exploration Plays. URI will describe the Texas Properties more specifically in a letter to UG on or before the Effective Date;

(v)          “U₃O₈” means natural triuranium octoxide, the quantity of the element uranium in Concentrates being established by assay and converted to U₃O₈ by multiplying the quantity of uranium by 1.1792.

1.02       Headings:  The division of this Agreement into articles and sections, and the insertion of headings, are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. Any reference herein to an article, section or other subdivision is a reference to such provision as contained in this Agreement.

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1.03       Expanded Meanings:  In this Agreement, unless there is something in the subject matter or context inconsistent therewith, the singular shall include the plural and the plural shall include the singular.

1.04       Calculation of Number of Days:  In any case in which a number of days is prescribed in this Agreement, the same shall be determined exclusive of the first day and inclusive of the last day.

1.05       Rounding of Numerical Figures:  Whenever a numerical figure is to be rounded or calculated to fewer digits than the number of digits available, the following procedure shall be applied unless otherwise specified herein:

(a)           if the first digit discarded is less than five (5), the last digit retained will not be changed; and

(b)          if the first digit discarded is equal to or greater than five (5), the last digit retained will be increased by
one (1).

1.06       Currency: All amounts and sums of money referred to in this Agreement are expressed in terms of United States dollars and all amounts and sums payable hereunder shall be paid in lawful money of the United States of America.

1.07       Entire Agreement:  This Agreement contains all the terms of the mutual understanding between the Parties with respect to the subject matter of this Agreement and supersedes and replaces any and all written and oral arrangements, correspondence, conversations, and documents made and exchanged between the Parties with respect to the subject matter of this Agreement prior to the execution of this Agreement except as otherwise specifically provided for herein. Any modification, alteration, or amendment of this Agreement shall be in writing dated after the date hereof and duly executed by both Parties.

ARTICLE II

CONDITIONS PRECEDENT TO TERMINATION OF THE CONTRACTS

2.01       Generally:  The Parties acknowledge and agree that the obligations set forth in subsections (a) and (b) of Section 2.02 shall be conditions precedent to the effectiveness of the terms and conditions of Articles III through VIII hereof and the termination of the Original Contracts. Notwithstanding the foregoing, until the earlier to occur of the Effective Date (as defined below) or the termination of this Agreement in accordance with Section 2.03, the respective rights, duties and obligations of the Parties set forth in the Original Contracts shall be suspended.

2.02       Conditions:  As partial consideration for the termination of the Contracts, URI shall use reasonable efforts to:

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(a)          Deliver to UG by Book Transfer at ConverDyn on or before April 30, 2006, a quantity of 21,075 pounds of Concentrates at US$15.50 per pound to be paid by UG within seven (7) working days after the Book Transfer occurred,

(b)          Pay to UG on or before June 30, 2006, Twelve Million Dollars (US$12,000,000.00); provided, however, that URI’s obligation to pay such amount shall be contingent on its ability to obtain debt and/or equity financing therefor on terms reasonably acceptable to URI.

2.03       Effectiveness:  The date that both of the actions set forth in subsections (a) and (b) of Section 2.02 shall have been effected shall be referred to as the “Effective Date.”  If the Effective Date occurs on or before June 30, 2006, this Agreement shall amend and restate the Original Contracts in their entirety, and the Original Contracts shall terminate and be of no further force and effect. If the Effective Date does not occur on or before June 30, 2006, this Agreement shall terminate and be of no further force and effect and the Original Contracts shall govern the respective rights, duties and obligations of the Parties as more particularly described therein as if this Agreement had not been executed by the Parties; provided, however, that URI shall have the right to extend the June 30 date for up to 45 days if necessary to accommodate the closing of its efforts to raise the $12 million.

2.04       Additional Deliveries Prior to the Effective Date:  Notwithstanding anything to the contrary contained herein, in the event that the Parties agree upon a delivery of Concentrates in addition to the delivery described in Section 2.02(a) prior to the Effective Date, the price therefor shall be in accordance with Section 4.01 and the payment terms therefor shall be in accordance with Section 4.03 through 4.05. Any such delivery will be credited to the amount of the first Delivery Quantity hereunder.

ARTICLE III

TERMS OF PURCHASE AND SALE

3.01       Quantities:

(a)         Base Quantity. Commencing on the Effective Date and subject to the terms and conditions of this Agreement, URI shall sell and deliver to UG during each Delivery Year on the Delivery Dates during the Term of this Agreement, and UG shall purchase, pay for and take delivery from URI of, the Base Quantity. The price for such Base Quantity shall be as set forth in Section 4.01.

(b)         Additional Quantities. If in any Delivery Year, URI has delivered the Base Quantity, and any existing Shortfall, if applicable, and URI has additional production of Concentrates from the Texas Properties available for delivery in such Delivery Year, UG shall have an exclusive right of first refusal (the “Right of First Refusal”) to purchase additional Concentrates (“Additional Quantities”) up to an amount which when added to the Base Quantity equals fifty percent (50%) of the Concentrates produced at the Texas Properties in that Delivery Year.

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Upon the receipt of written notice from URI to UG of a Right of First Refusal, UG shall have a period of 15 Business Days during which it may accept such Right of First Refusal. If UG does not notify URI in writing within such 15 Business Day period, the Right of First Refusal shall terminate for such Delivery Year. If UG accepts the Right of First Refusal, the price for such Concentrates shall be determined pursuant to Section 4.02, and the actual delivery date shall be as mutually agreed upon by URI and UG with payment due in accordance with Sections 4.03 through 4.05.

(c)         Estimated Production Schedule. URI has simultaneously herewith furnished to UG an estimated production schedule. URI will periodically, but not less frequently than on the last day of each calendar quarter, update the estimated production schedule in writing to UG. It is understood that the estimate is only an estimate and that URI shall have no liability to UG if it fails to meet the estimated production schedule or if it fails to deliver 600,000 pounds of Concentrates in any Delivery Year.

3.02       Delivery Notice:At least 15 days prior to each Delivery Date, UG shall provide URI in writing a Delivery Notice containing the Delivery Location to be met by URI for such delivery.

3.03       Delivery, Delivery Location and Delivery Date:  On each Delivery Date, URIshall deliver the Delivery Quantity to UG by Book Transfer with the Converter at the applicable Delivery Location set forth in the Delivery Notice. There shall be not more than 12 deliveries of Concentrates in any given Delivery Year, except pursuant to a Right of First Refusal.

3.04       Source of Supply/Origin:  The Concentrates delivered to UG will be sourced from the Texas Properties.

3.06       Conveyance:  URI shall issue to the Converter an instruction to effect the Book Transfer of the Delivery Quantity on each Delivery Date. URI shall instruct the Converter to provide UG and URI with a copy of the Converter’s Notice by facsimile transmission immediately following the conclusion of such Book Transfer.

3.07       Risk of Loss:  Title to, and all risks of loss in, and liability for, any personal loss or injury or any property damage caused by Concentrates delivered to UG shall pass to UG when the Concentrates are transferred to UG’s account by Book Transfer.

3.08       Permits:  Each Party shall, at its own expense, be responsible for obtaining all approvals, authorization, consents, licenses, and permits necessary to carry out its obligations hereunder, and to the extent necessary, the other party shall co-operate as to the obtaining of such approvals, authorizations, consents, licenses, and permits.

3.09       Costs:  URI will assume any fees, costs or charges incurred in carrying out the Book Transfer.

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ARTICLE IV

PURCHASE PRICE AND PAYMENT

4.01       Price for Base Quantity and Shortfall:  In each Delivery Year, the amount payable per pound of Concentratesby UG for the Base Quantity and Shortfall delivered by URI pursuant to this Agreement shall be the Market Price less a discount of $6.00 per pound; such discount to be escalated with the GDP-IPD last published prior to the applicable Delivery Date as compared to the GDP-IPD last published prior to February 15, 2006.

4.02       Price for Additional Quantities:  For Concentrates delivered pursuant to a Right of First Refusal, the price payable by UG for each pound of Concentrates delivered thereunder shall be the average of the month-end Spot U₃O₈ Price Indicators as published by TradeTech and UxC for the month immediately preceding the month of delivery less a fixed discount of four percent (4%).

4.03       Invoices:  At least ten (10) days prior to each Delivery Date, URI shall send UG an invoice (the “Invoice”) setting forth (i) the actual Delivery Quantity to be delivered on such Delivery Date or (ii) the actual amount to be delivered pursuant to a Right of First Refusal. UG agrees that the original invoice may be sent by facsimile and that the receipt of such facsimile is receipt of the invoice for purposes of payment, provided that the original written invoice is received at least ten (10) days before the Delivery Date.

4.04       Payment:  UG shall pay the Invoice by the end of the month in which the delivery occurs for all deliveries prior to September 1, 2007 and within thirty (30) days after the Delivery Date or the date of delivery pursuant to a Right of First Refusal, as the case may be, subject to UG’s prior receipt of the Converter’s Notice. If such day on which payment is due is not a Business Day, the following Business Day will be substituted. Payment to URI of the full amount invoiced shall be made by electronic transfer of funds immediately available to URI at the bank account designated on the Invoice, free from all charges or deductions.

4.05       Interest:  Any amounts due hereunder from UG to URI not paid at or within the times specified in Section 4.04 shall bear interest from the due date until the actual date of payment at the Agreed Rate.

ARTICLE V

TAXES, DUTIES OR CHARGES

5.01       Taxes, Duties or Charges:  URI shall be responsible for and shall pay any taxes, imposts, or duties imposed or levied by or payable to any taxing authority upon or with respect to any or all of any Delivery Quantity or Concentrates delivered pursuant to a Right of First Refusal, as the case may be, prior to Book Transfer. UG shall be responsible for and shall pay any taxes, imposts, or duties imposed or levied by or payable to any taxing authority upon or with respect to any or all of such delivery, or the use thereof, coincident with or after Book Transfer.

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ARTICLE VI

REPRESENTATION AND WARRANTIES;

INDEMNIFICATION; NO OTHER WARRANTIES

6.01       Representation and Warranties by URI:  URI represents and warrants to UG that:

(a)          URI will have good and marketable title to the Delivery Quantity being sold to UG and will convey good and marketable title thereto, free and clear of any liens, charges or encumbrances of any description;

(b)          The Delivery Quantity will conform to the Origin requirements described in Section 3.04;

(c)          No portion of the Delivery Quantity will have been obtained by URI under or through any arrangement, swap, or exchange that violates any of the laws of the United States of America regarding the importation or use of U₃O₈ or is designed to circumvent the import limits for uranium under the Suspension Agreement; and

(d)          The transaction set forth in this Agreement is not part of any arrangement, swap, or exchange by URI that violates any of the laws of the United States of America regarding the importation or use of U₃O₈ or is designed to circumvent the import limits for uranium under the Suspension Agreement.

The foregoing representations and warranties constitute continuing representations and warranties for the benefit of UG and will survive the completion of the transactions contemplated by this Agreement.

6.02       Representations and Warranties of UG:  UG represents and warrants to URI that:

(a)          The Delivery Quantity will be used exclusively for peaceful, non-explosive purposes in accordance with all applicable laws and regulations;

(b)          The transaction set forth in this Agreement is not part of any arrangement, swap, or exchange by UG that violates any of the laws of the United States of America regarding the importation or use of uranium or which is designed to circumvent the import limits for uranium under the Suspension Agreement; and

(c)          UG will impose the obligations in Section 6.02 (a) and (b) on any person, company or other entity with which UG enters into an arrangement for the sale, transfer exchange or other disposition of any portion of the Delivery Quantity.

The foregoing representations and warranties constitute continuing representations and warranties for the benefit of URI and survive the completion of the transactions contemplated by this Agreement.

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6.03       Indemnification:  Subject to the terms and conditions hereof, URI shall indemnify and hold harmless UG from and against all costs, expenses, claims, damages and injuries incurred or arising in respect of the ownership, storage, transportation, possession or use of Concentrates prior to Book Transfer to UG by URI pursuant to this Agreement. UG shall indemnify and hold harmless URI from and against all costs, expenses, claims, damages and injuries arising in respect of the ownership, storage, transportation, possession or use of Concentrates subsequent to Book Transfer to UG by URI pursuant to this Agreement.

6.04       Exclusivity of Warranties:  THE EXPRESS WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE, AND NO OTHER WARRANTIES OF ANY KIND, WHETHER STATUTORY, WRITTEN, ORAL OR IMPLIED (INCLUDING WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANTABILITY), SHALL APPLY.

ARTICLE VII

DEFAULT

7.01       URI’s default: In the event that URI is in default by failing to materially fulfil a delivery in accordance with an Invoice, provided such failure to deliver is not caused by Force Majeure, and provided such default continues for a period of twenty (20) days after notice from UG to URI specifying the events of default, then UG shall have the option, without prejudice to any other rights and remedies, to terminate such Delivery, and the damages payable to UG by URI shall be limited to the amount, if any, by which the cost of replacement U₃O₈ exceeds the cost of such U₃O₈, if such Delivery had been purchased under this Agreement in accordance with the Invoice; provided, however, that UG shall use its best efforts to obtain such replacement U₃O₈, at the lowest available cost; and

7.02        UG’s default to accept a Delivery: In the event that UG is in default by failing to accept  a delivery in accordance with an Invoice or otherwise as agreed upon by UG with respect to a delivery pursuant to a Right of First Refusal; provided such failure to accept is not caused by Force Majeure, and provided such default continues for a period of twenty (20) days after notice from URI to UG specifying the events of default, then URI shall have the option, without prejudice to any other rights and remedies, to terminate  such Delivery, and the damages payable to URI by UG shall be limited to the amount, if any, by which the resale price of the applicable amount of U₃O₈ is less than the Agreement price of such U₃O₈ , if such Delivery had been accepted under this Agreement; provided, however, that URI shall use its best efforts to resell such U₃O₈ at the highest available price.

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7.03        UG’s default of payment: In the event that UG is in default to pay for a delivery in accordance with an Invoice  and provided such default to pay continues for a period of sixty ( 60 ) days after notice from URI to UG specifying the event of default, then URI shall have the option, without prejudice to any other rights and remedies, to terminate the Agreement and the damages payable to URI by UG shall be limited to the amount, if any, by which the resale price of the thus terminated amount of U3O8 is less than the Agreement price of such U3O8; provided, however, that URI shall use its best efforts to resell such U3O8 at the highest available price.

ARTICLE VIII

LIMITATION OF REMEDIES AND DAMAGES

8.01       No Consequential Damages:  EXCEPT AS OTHERWISE SPECIFICALLY SET FORTH HEREIN, IN NO EVENT, WHETHER UNDER CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY), WARRANTY, OR OTHERWISE, SHALL EITHER PARTY TO THIS AGREEMENT BE LIABLE TO THE OTHER PARTY FOR ANY INCIDENTAL OR CONSEQUENTIAL DAMAGES OR LOSSES OF ANY NATURE ARISING OUT OF OR, CONNECTED WITH OR RESULTING FROM THE PERFORMANCE OF OR FAILURE TO PERFORM THIS AGREEMENT, INCLUDING WITHOUT LIMITATION, LOSS OF PROFITS, LOSS OF USE OF FACILITIES, OR COSTS OF CAPITAL.

ARTICLE IX

FORCE MAJEURE

9.01       Definition:  “Event of Force Majeure” means an event which prevents or delays the performance by a Party of its obligations under this Agreement and arises out of causes beyond the reasonable control and without the fault or negligence of such Party. An Event of Force Majeure includes but is not limited to acts of God, fire, flood, explosion, strikes, labour disputes, sabotage, riots, acts of any civil or military authority, government legislation, regulations, actions or inactions, judgment or decision of a court of law or other authority with the force of law, wars, major equipment failure or unavailability of transportation facilities, including any failure or inability due to claim of Force Majeure by the Converter to comply with the instructions of URI to effect delivery of the Delivery Quantity to UG.

9.02       Non-Liability for Event of Force Majeure:  Subject to the provisions of this Article, where either Party is prevented from performing its obligations hereunder by an Event of Force Majeure, other than the obligation to pay money, the obligations of both Parties are suspended for the duration of such Event of Force Majeure and neither Party shall be liable to the other for such failure to fulfil obligations.

9.03       Notices:  A Party whose performance is affected by an Event of Force Majeure shall promptly give the other Party notice of the occurrence of the Event of Force Majeure and its anticipated effect on the Party’s performance under this Agreement, of any significant change in the nature of the Event of Force Majeure and of any progress made in eliminating it, and of the termination of any Event of Force Majeure and of the anticipated date of resumed performance of contractual obligations.

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9.04       Obligations of Affected Party:  A Party which fails to fulfil its obligations because of an Event of Force Majeure shall use commercially reasonable efforts to minimize or eliminate the Event of Force Majeure but shall not be required to settle a strike, lockout, work slowdown, work stoppage, or other labour dispute, and shall otherwise fulfil its obligations at a time to be agreed upon by the Parties that will be as soon as is reasonably possible after the elimination of the Event of Force Majeure.

9.05       Cancellation of the Delivery:  If the a delivery cannot be made within sixty (60) days of the original Delivery Date because of an Event of Force Majeure, the Party not claiming Force Majeure may, at its option, terminate the affected  Delivery. In case that the event of Force Majeure would continue after the date of termination of the affected Delivery, the Party not claiming Force Majeure may, at its option, reduce or postpone future Deliveries or terminate all or part of the remaining Deliveries. Regarding the terminated Deliveries or this Agreement, neither Party shall have any liability to the other Party due to the transaction contemplated by this Agreement not taking place.

ARTICLE X

NOTICES

10.01     Notices:  Any notice, invoice, or other written communication required or permitted to be given hereunder shall be in writing and either be delivered personally to the Party to whom it is directed or sent by facsimile and shall be effective on the day of receipt of the notice if received during normal business hours of the addressee, and if not received during such normal business hours, then on the first Business Day of the addressee after such receipt.

10.02     Addresses:  The addresses of the Parties to which all such notices shall be forwarded are as follows:

if to UG:	UG U.S.A., Inc. 115 Perimeter Center Place, NE Suite 647 Atlanta, GA 30346 Attention: Manager, Contract Administration Facsimile: (770) 396 - 3974
if to URI:	URI Inc. 650 South Edmonds Lane Suite 108 Lewisville, TX 75067 Attention: Tom Ehrlich Facsimile:(972) 219 - 3311
	with copy to:
	Joe Card 5180 Roswell Road, North Bldg., Suite 203 Atlanta, GA 30342 Facsimile: (404) 947 – 0906

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With an additional copy to:

Alfred C. Chidester, Esq.
Baker & Hostetler LLP
303 E. Seventeenth Avenue, Suite 303
Denver, CO 80203
Facsimile:(303) 861-7805

The address of a Party for notices may be changed by notice given to the other Party in accordance with this Article X.

ARTICLE XI

ASSIGNMENTS; AMENDMENTS

11.01     Consent Required for Assignment:  Neither Party may assign any of its rights under this Agreement without the prior written consent of the other Party, which consent shall not unreasonably be withheld; provided, however, that either Party may assign any of its rights hereunder, without such consent, to its parent company, its affiliates, or its bank or other financial institution. No such assignment shall relieve the assignor from any of its obligations hereunder.

11.02     Inurement:  This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

11.03     Amendments:  No amendment or modification of this Agreement shall be binding on the parties unless made in writing and signed or executed by or on behalf of both parties.

ARTICLE XII

APPLICABLE LAW

12.01     Governing Law:  This Agreement shall be governed by, construed, and enforced in accordance with, and its validity shall be determined under, the laws of the State of New York, the United States of America, without giving effect to any conflicts-of-law rules requiring the application of the substantive law of any other jurisdiction, and it shall be deemed to have been executed and performed in the State of New York. The Parties hereby exclude the application of the United Nations Convention on Contracts for the International Sale of Goods (CISG) to this Agreement. The Parties expressly state their intention that the laws of France and Germany shall not, under any circumstances, apply in any way to the interpretation of this Contract. In the event this Contract is translated and there exists any difference between the foreign language version and the English version, this English version shall prevail.

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12.02     Arbitration:

(a)          Any dispute, controversy or claim arising out of or relating to this Agreement shall be finally resolved by arbitration in accordance with the rules of the American Arbitration Association then obtaining. Unless otherwise agreed in writing by the Parties hereto, the arbitral panel shall consist of three (3) arbitrators, one to be appointed by each Party and the third to be appointed by the two arbitrators appointed by the Parties. In the event that a Party fails to appoint an arbitrator within fifteen (15) days after any such dispute, controversy or claim has been referred to arbitration hereunder, then, in such event, the other Party may request the American Arbitration Association to appoint an arbitrator for the Party failing to make such appointment. In the event that the third arbitrator has not been appointed within thirty (30) days after any such dispute, controversy or claim has been referred to arbitration hereunder, then, in such event, either Party may request the American Arbitration Association to appoint such third arbitrator. The arbitration proceedings, all documents submitted therein and the award of the arbitral panel shall be in the English language, and all members of the arbitral panel shall be fluent in English. The arbitration proceedings shall be held in New York, New York, the United States of America. The arbitral panel shall apply the rules of procedure applicable to civil actions in the courts of the state of New York; provided, however, that both Parties shall be entitled to representation by counsel, to appear and present written or oral evidence and argument and to cross-examine witnesses presented by the other Party. The arbitral award shall be in writing and the arbitral panel shall provide written reason for its award. The award of the arbitral panel shall be final and binding upon the Parties. The Parties waive any rights to appeal or to review such award by any court or tribunal, and such award shall be final and binding. Each Party agrees that any arbitral award or final judgment rendered against it in any action or proceeding relating in any way to this Agreement shall be conclusive and may be enforced, to the extent permitted by applicable law, in any court in the state of New York, by suit on the arbitral award or judgment, a certified copy of which arbitral award or judgment shall be conclusive evidence thereof, or by such other means provided by applicable law. The Parties further agree to undertake to carry out without delay the provisions of any arbitral award or order. A Party may disclose the contents of an award of the arbitral tribunal only to affiliates, Governmental Authorities or other persons as required by applicable law.

(b)          To the extent any Party has or may acquire any immunity (sovereign or otherwise) from jurisdiction of any arbitral tribunal or court in or in connection with any arbitration under this Agreement or any proceeding, action, lawsuit or process (whether through service or notice, attachment in aid of execution, execution or otherwise) pursuant to, in aid of, arising out of, in confirmation or registration of, or to enforce, an award of an arbitration proceeding under this Agreement, each Party, solely for the purpose of such arbitration proceeding, action, lawsuit or process, hereby irrevocably waives such immunity. The foregoing waiver and consent are intended to be effective to the fullest extent now or hereafter permitted by the applicable law of any jurisdiction where any suit, action or proceeding with respect to an arbitration under this Agreement may be commenced, including the fullest extent permitted under the Foreign Sovereign Immunities Act of 1976 of the United States of America and are intended to be irrevocable and not subject to withdrawal for purposes of such act.

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(c)          Pending the final decision of the arbitrator of a dispute hereunder, the Parties shall diligently proceed with the performance of any portion of the Agreement without prejudice to a final adjustment in accordance with the decision rendered by the arbitral tribunal with respect to such dispute.

ARTICLE XIII

WAIVER

13.01     Waiver:  No waiver, alteration, amendment, modification of this Agreement, or any covenant, condition, or limitation herein contained is valid unless in writing and duly executed by the Party to be charged therewith. Furthermore, no evidence of any waiver, alteration, amendment, or modification shall be offered or received in evidence in any proceeding, arbitration, or litigation between the Parties arising out of or affecting this Agreement, or the rights or obligations of any Party hereunder, unless such waiver, alteration, amendment, or modification is in writing, and duly executed. Further, the provisions of this Article may not be waived.

ARTICLE XIV

CONFIDENTIALITY

14.01     Confidentiality:  The Parties shall treat this Agreement as confidential, and neither Party shall disclose its contents without the prior written consent of the other Party to any person except to its affiliates, legal advisors, financers or auditors. If disclosure is required to comply with the laws or regulations of a government or government agency or by a court having jurisdiction over one of the Parties or if a Party is required by the rules of the Securities and Exchange Commission or a stock exchange or if it is necessary in connection with any financing activities to make timely disclosure of developments, such Party may so disclose notwithstanding the foregoing upon prior notice to the other Party.

ARTICLE XV

TERM AND TERMINATION

15.01     Effect:  Termination of this Agreement in accordance with Section 2.03 or Section 7.03 by a Party entitled to effect such termination, shall;

(a)         take effect from the date of receipt of the notice of termination by the other Party;

(b)         operate as a discharge of performance of the unexecuted portion of this Agreement, except performance of any obligation outstanding at the date on which the notice of termination takes effect;

(c)         not abrogate or prejudice any right (whether conferred by this Agreement or existing by law or in equity) of either party in respect of any antecedent breach by the other of any obligations under this Agreement.

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IN WITNESS WHEREOF the Parties have executed this Agreement as at the date first written above.

UG U.S.A., Inc.

By:
	Frederic Patreau	Gerhard Loh
	Vice President	Executive Vice President
URI INC.
By:
Name:
Title:

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EX-23

Exhibit 23

CONSENT OF INDEPENDENT GEOLOGIST

I hereby consent to the incorporation by reference in Annual Report for the year ended December 31, 2005 on Form 10-KSB of Uranium Resources, Inc. and its subsidiaries of information contained in my summary reserve report dated March 29, 2004, as revised March 30, 2006.

	/s/ Richard F. Douglas
	By: Richard F. Douglas
Lakewood, Colorado
March 30, 2006

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Paul K. Willmott, certify that:

1.             I have reviewed this report on Form 10-KSB of Uranium Resources, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter of the annual report) that has materially affected or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: March 29, 2006
	/s/ PAUL K. WILLMOTT
	Title: President and Chief Executive Officer

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas H. Ehrlich, certify that:

1.I have reviewed this report on Form 10-KSB of Uranium Resources, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4.The small business issuer’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Evaluated the effectiveness of the small business issuer’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c)Disclosed in this report any change in the small business issuer’s internal control over financial reporting that occurred during the small business issuer’s most recent fiscal quarter (the small business issuer’s fourth fiscal quarter of the annual report) that has materially affected or is reasonably likely to materially affect, the small business issuer’s internal control over financial reporting; and

5.The small business issuer’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer’s auditors and the audit committee of small business issuer’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether material, that involves management or other employees who have a significant role in the small business issuer’s internal control over financial reporting.

Date: March 29, 2006
	/s/ THOMAS H. EHRLICH
	Title: Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

URANIUM RESOURCES, INC.

650 S. Edmonds Lane, Suite 108, Lewisville, TX 75067

972.219.3330 Phone 972.219.3311 Fax

March 29, 2006

Securities and Exchange Commission

450 5^th Street, N.W.

Washington, D.C. 20549

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003

I, Paul K. Willmott, President and Chief Executive Officer of Uranium Resources, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Annual Report on Form 10-KSB of the Company for the year ended December 31, 2004, which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ PAUL K. WILLMOTT

Paul K. Willmott

President and Chief Executive Officer

March 29, 2006

EX-32.2

Exhibit 32.2

URANIUM RESOURCES, INC.

650 S. Edmonds Lane, Suite 108, Lewisville, TX 75067

972.219.3330 Phone 972.219.3311 Fax

March 29, 2006

Securities and Exchange Commission

450 5^th Street, N.W.

Washington, D.C. 20549

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2003

I, Thomas H. Ehrlich, Vice President—Finance and Chief Financial Officer of Uranium Resources, Inc. (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)           The Annual Report on Form 10-KSB of the Company for the year ended December 31, 2004, which this certification accompanies, fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)           The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ THOMAS H. EHRLICH

Thomas H. Ehrlich

Vice President and Chief Financial Officer

March 29, 2006