DESCRIPTION OF BUSINESS

9 Months Ended

Sep. 30, 2011

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS

2. DESCRIPTION OF BUSINESS

Uranium Resources, Inc. (“URI” or the “Company”) 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 recovery (“ISR”) 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 both developed and undeveloped uranium properties in South Texas and undeveloped uranium properties in New Mexico.

The Company resumed uranium production in 2004 at its Vasquez project, in 2006 at its Kingsville Dome project and in the 3rd quarter of 2008 at its Rosita project, each of such projects are located in South Texas. As a result of declining uranium market prices and high production costs, the Company ceased development of additional wellfields and curtailed production from its South Texas projects as existing production wellfields from each project were depleted. Production at our Vasquez and Rosita projects were shut down in the 4th quarter of 2008 and production was shut-in at the Kingsville Dome project in September 2009. The Vasquez project was mined out in 2008 and is now being restored. At the Kingsville Dome and Rosita projects, our production shut-in was done to conserve the in-place reserve base until higher prices can be realized.

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 and reclamation activities have been conducted at these two sites and are currently ongoing at each of the Kingsville Dome, Vasquez and Rosita projects.

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.  On October 31, 2011, the Company, entered into an At-The-Market Sales Agreement (the “ATM Sales Agreement”) with BTIG, LLC (“BTIG”), pursuant to which the Company may sell up to $15,000,000 in aggregate offering price of its common stock through BTIG, acting as sales agent.  Sales under the ATM program may be made at the Company’s direction from time to time, through an “at-the-market” share offering program under its currently effective registration statement on Form S-3.  The Company believes it will be able to satisfy its 2011 and 2012 working capital needs from its cash on hand and the funds expected to be raised under the ATM program.  The Company also expects that it will need to secure between $30 million and $50 million in additional capital for the development of its Churchrock uranium project in New Mexico in 2012.  There can be no assurance that we will be able to raise sufficient funds under the ATM program or the funds necessary to allow the Company to move forward with its future development plans in New Mexico.