6. PROPERTY, PLANT AND EQUIPMENT

Certain of the balances presented below have been restated as described in Note 2:

	Property, Plant and
	Equipment Balances, net
	At December 31
	2012		2011
Uranium plant	$	9,532,000	$	8,971,000
Permits and licenses	174,000		496,000
Mineral rights and properties	20,872,000		589,000
Evaluation and delineation	2,022,000		2,022,000
Vehicles/depreciable equipment	1,435,000		776,000
Other uranium properties	247,000		661,000
Other property, plant and equipment	458,000		93,000
Total	$	34,740,000	$	13,608,000

Uranium Properties

Impairment of 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.

At December 31, 2012, we determined the carrying value of our project assets at each of our South Texas production locations exceeded their fair value. A decline in the current and projected market price of uranium and an increase in the estimated production costs for each of our South Texas projects resulted in a decrease in the estimated future cash flow to be generated from each site. Such determination resulted in an impairment provision of approximately $1.7 million for the year. The impairment provision for 2012 was approximately $919,000 for the Kingsville Dome project, $139,000 for the Rosita project and $679,000 for the Vasquez project. The impairment provision recorded in 2011 was approximately $1.5 million and included $851,000 for the Kingsville Dome project, $126,000 for the Rosita project and $483,000 for the Vasquez project. The impairment provision recorded in 2010 was approximately $961,000 and included approximately $590,000 million for the Kingsville Dome project, $58,000 for the Rosita project and $313,000 for the Vasquez project.

Kingsville Dome Property

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

Vasquez Property

The Company has a mineral lease on 872 gross and net acres located in southwestern Duval County, in South Texas. The primary term expired in February 2008; however we hold the lease by production and reclamation activities. The lease provides for 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.

Rosita Property

The Rosita property consists of mineral leases from private landowners on about 3,377 gross and net acres located in north-central Duval County, Texas. The leases provide for sliding scale royalties based on a percentage of uranium sales. Royalty percentages on average increase from 6.25% up to 18.25% when uranium prices reach $80.00 per pound. The leases have expiration dates ranging from 2012 to 2015. We are holding these leases by payment of rentals ranging from $10 to $30 per acre.

Rosita South Property

The Rosita South property consists of mineral leases from private land owners on about 1,795 gross acres and 1,479 net acres located in Duval County near the Company’s Rosita property.

Los Finados/Tecolote Project

The Los Finados Project consisted of an exploration lease from private land owners on about 53,524 gross acres located in Kenedy County near the Company’s Kingsville Dome property. The exploration rights to the Los Finados project were acquired in December 2010. The lease option agreement included a $1 million fee paid at signing. The lease option included a three phase exploration program that required a minimum exploration obligation of one hundred exploration wells or $1.0 million investment in the first year, an additional two hundred exploration wells or $1.5 million investment in the second year and, in the third year, an additional two hundred exploration wells or $2.0 million investment. The Company completed phase one of the exploration in 2011 and phase two in 2012.

In December 2012, the Company signed an amendment to the Los Finados exploration lease which added approximately 22,700 net acres north of Los Finados to the exploration program. The additional acreage is identified as the Tecolote project. In addition, the amendment extended the term of the exploration lease by two years, to November 30, 2015 and it also deemed complete the Company’s exploration obligations under the Los Finados program. Under the amendment, the exploration program commitment for the Tecolote project for 2013, 2014 and 2015 was amended to include minimum exploration obligations of one hundred exploration wells or $1.0 million investment for the year ended November 30, 2013, one hundred fifty exploration wells or $1.5 million investment for the year ended November 30, 2014 and two hundred exploration wells or $2.0 million investment for the year ended November 30, 2015. Investment or drilling in excess of the minimum requirement in any year counts toward the following year’s requirements. The expansion of the agreement to the Tecolote project also terminated the Company’s right to exercise its lease option on the Los Finados project.

In May 2011, the Company entered into an exploration agreement with Cameco Texas, Inc. (“CTI”), a subsidiary of Cameco (NYSE: CCJ) on the Los Finados project. The agreement with CTI included a three phase exploration program. In December 2012, the Company amended the agreement with CTI. The amendment extended the term of the exploration lease by two years to November 30, 2015 and included the same minimum exploration commitment terms as the Tecolote project for the phase four and phase five years ending November 30, 2014 and 2015, respectively. Under this agreement, CTI will fund the majority of the exploration costs and can earn up to a 70% interest in the project in consideration for its investment.

At the conclusion of the exploration program, the parties may enter into an operating joint venture to develop and produce any discovered uranium resources and reserves. The uranium would be processed at URI’s Kingsville Dome or Rosita processing facility, with CTI’s share of production being processed under a toll processing agreement with URI.

Churchrock Properties

The Churchrock project encompasses about 3,458 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 and unpatented lode mining claims on Section 8.

The surface estate on Section 17, Mancos Section 13 and Mancos Section 7 is owned by the United States Government and held in trust for the Navajo Nation. On those sections 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. The total royalties on Section 8 depend on the sales’ price of uranium. Aggregate royalties are potentially as much as 33% at the current price of uranium.

Permitting activities are currently ongoing on these properties. See further discussion of permitting activities in Note 13—“COMMITMENTS AND CONTINGENCIES”.

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 640 gross and 556 net acres.

West Largo and Roca Honda Properties

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 a uranium mineralized property called West Largo and a uranium mineralized property called 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.

Juan Tafoya Property

In connection with the acquisition of Neutron Energy, Inc. we acquired the fee interest in 4,097 acres in northwestern New Mexico of fee (deeded) surface and mineral rights owned by the Juan Tafoya Land Corporation. The Juan Tafoya property is located approximately 45 miles west-northwest of the city of Albuquerque, and 25 miles northeast of the town of Laguna.