Final Results

Ownership Uranium & Related Minerals 

Uranium Resources

IDG

Local partner

Rio Tinto

Current interest

Interest following completion of the Agreement*

Current interest

Interest following completion of the Agreement*

Farm-in Areas (subject to Rio Tinto agreement)

40%

100%

60%

0%

0%

0%

JV Areas Kapinga (Ruvuma and Bindi)

42.5%

85%

42.5%

0%

15%

0%

JV Areas Makweba (Ngaka)

45%

90%

45%

0%

10%

0%

Ownership Coal Rights 

Uranium Resources

IDG

Local partner

Rio Tinto

Current interest

Interest following completion of the Agreement*

Current interest

Interest following completion of the Agreement*

Farm-in Areas (subject to Rio Tinto agreement)

100%

100%

0%

0%

0%

0%

JV Areas Kapinga (Ruvuma and Bindi)

85%

85%

0%

0%

15%

0%

JV Areas Makweba (Ngaka)

90%

90%

0%

0%

10%

0%

2009

£

2008

£

Notes

Administrative expenses

Share-based payments charge

Impairment charge

Foreign exchange (loss) / gain

14

9

(618,544)

(720,000)

(32,778)

(48,054)

(396,335)

-

-

223,381

Total administrative expenses

(1,419,376)

(172,954)

Group operating loss

3

(1,419,376)

(172,954)

Interest receivable

4

48,752

112,298

Loss before taxation

(1,370,624)

(60,656)

Taxation

5

-

-

Loss for the year

(1,370,624)

(60,656)

Attributable to:

Equity holders of the Company

(1,370,624)

(60,656)

Loss per share (pence)

6

Basic 

(0.47p)

(0.02p)

Diluted

(0.47p)

(0.02p)

2009

2008

Notes

£

£

Assets

Non-current assets

Exploration and evaluation assets

9

1,235,866

708,253

Current assets

Receivables

11

25,505

3,366

Cash and cash equivalents

699,269

1,810,971

724,774

1,814,337

Total Assets

1,960,640

2,522,590

Liabilities

Current liabilities

Trade and other payables

12

(113,047)

(24,373)

Total Liabilities

(113,047)

(24,373)

Net Assets

1,847,593

2,498,217

Equity

Capital and reserves attributable to equity holders

Share capital

13

291,000

291,000

Share premium

3,094,360

3,094,360

Share-based payments reserve

1,869,879

1,149,879

Retained losses

(3,407,646)

(2,037,022)

Total Equity

1,847,593

2,498,217

2009

2008

Notes

£

£

Assets

Non-current assets

Investments in subsidiaries

10

1,270,626

710,234

Current assets

Receivables

11

25,505

3,366

Cash and cash equivalents

699,269

1,810,971

724,774

1,814,337

Total Assets

1,995,400

2,524,571

Liabilities

Current liabilities

Trade and other payables

12

(113,047)

(24,373)

Total Liabilities

(113,047)

(24,373)

Net Assets

1,882,353

2,500,198

Equity

Capital and reserves attributable to equity holders

Share capital

13

291,000

291,000

Share premium

3,094,360

3,094,360

Share-based payments reserve

1,869,879

1,149,879

Retained losses

(3,372,886)

(2,035,041)

Total Equity

1,882,353

2,500,198

Share

Share

Share based

Retained

Total

capital

premium

payments reserve

losses

Equity

£

£

£

£

£

Year ended 30 June 2008

At 1 July 2007

291,000

3,094,360

1,149,879

(1,976,366)

2,558,873

Loss for the year

-

-

-

(60,656)

(60,656)

At 30 June 2008

291,000

3,094,360

1,149,879

(2,037,022)

2,498,217

Year ended 30 June 2009

At 1 July 2008

291,000

3,094,360

1,149,879

(2,037,022)

2,498,217

Share-based payments cost

-

-

720,000

-

720,000

Loss for the year

-

-

-

(1,370,624)

(1,370,624)

At 30 June 2009

291,000

3,094,360

1,869,879

(3,407,646)

1,847,593

Share

Share

Share based

Retained

Total

capital

premium

payments reserve

losses

Equity

£

£

£

£

£

Year ended 30 June 2008

At 1 July 2007

291,000

3,094,360

1,149,879

(1,974,385)

2,560,854

Loss for the year

-

-

-

(60,656)

(60,656)

At 30 June 2008

291,000

3,094,360

1,149,879

(2,035,041)

2,500,198

Year ended 30 June 2009

At 1 July 2008

291,000

3,094,360

1,149,879

(2,035,041)

2,500,198

Share-based payments cost

-

-

720,000

-

720,000

Loss for the year

-

-

-

(1,337,845)

(1,337,845)

At 30 June 2009

291,000

3,094,360

1,869,879

(3,372,886)

1,882,353

2009

2008

£

£

Cash flows from operating activities

Group operating loss for the year

(1,419,376)

(172,954)

Share based payments charge

720,000

-

Impairment charge

32,778

-

Increase in receivables

(22,139)

-

Increase / (decrease) in payables

43,618

(1,158)

Net cash used in operating activities

(645,119)

(174,112)

Investing activities

Funds used for exploration and evaluation

(515,335)

(198,582)

Interest received

48,752

112,298

Net cash used in investing activities

(466,583)

(86,284)

Decrease in cash and cash equivalents 

(1,111,702)

(260,396)

Cash and cash equivalents at beginning of the year

1,810,971

2,071,367

Cash and cash equivalents at the end of the year

699,269

1,810,971

2009

2008

£

£

Cash flows from operating activities

Company operating loss for the year

(1,386,597)

(172,954)

Share based payments charge

720,000

-

Increase in receivables

(22,139)

-

Increase / (decrease) in payables

88,674

(1,158)

Net cash used in operating activities

(600,062)

(174,112)

Investing activities

Loans granted to subsidiaries

(560,392)

(198,582)

Interest received

48,752

112,298

Net cash used in investing activities

(511,640)

(86,284)

Decrease in cash and cash equivalents 

(1,111,702)

(260,396)

Cash and cash equivalents at beginning of the year 

1,810,971

2,071,367

Cash and cash equivalents at the end of the year

699,269

1,810,971

1.

Accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below. These policies have been applied to all years presented, unless otherwise stated below.

1.1

Adoption of International Financial Reporting Standards

The Company's and Group's financial statements for the year ended 30 June 2009 and for the comparative year ended 30 June 2008 have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union ("IFRS") and IFRIC (International Financial Reporting Interpretations Committee) interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

1.2

Basis of preparation

The Group financial statements are prepared on the going concern basis, under the historical cost convention and in accordance with IFRS, including IFRS6 'Exploration for and Evaluation of Mineral Resources'... The Parent Company's financial statements have also been prepared in accordance with IFRS and the Companies Act 2006.

The Group and Parent Company financial statements are presented in UK Pounds Sterling.

1.3

Going concern

During the year ended 30 June 2009 the Group made a loss of £1,370,624 (2008 - £60,656). Included in this loss is a share based payments charge of £720,000 (2008: £Nil). At the balance sheet date the Group had net assets of £1,847,593 (2008 - £2,498,217) and cash balances of £699,269 (2008: £1,810,971). 

On 30 October 2009 the Group entered into a conditional share sale and purchase agreement to buy IDG's joint venture interests in the Company's Tanzanian uranium portfolio for AUD $2,500,000 cash plus AUD $400,000 in share consideration. This is conditional upon the Company raising at least £1,600,000 by 28 December 2009. An AUD$250,000 deposit has been paid to IDG and will be forfeited if the Group does not complete the transaction within the terms of the agreement. At the date of this report, the Group has not raised this equity.

Due to the proposed sale of the joint venture assets by IDG to the Company, an exploration programme has not been agreed by the joint venture partners. The Company expects that the costs to fund its share of joint venture costs will be minimal for the next 12 months while IDG are its primary joint venture partner.

The operations of the Group are currently being financed from funds which the Company raised from private and public placings of its shares in the prior years. The Group has not yet earned revenue as it is still in the exploration phase of its business. The Group is reliant on the continuing support from its existing and future shareholders. 

The Board are continuing to pursue further finance to allow them to complete the share sale and purchase agreement and provide additional working capital. If the Company is unsuccessful in raising additional funds to close the sale and purchase agreement, the Board believes that the Group will have sufficient cash and other resources to fund its activities and to continue its operations for the foreseeable future and for the Group to continue to meet its liabilities as they fall due, and for at least the next twelve months from the date of approval of these financial statements. The financial statements have, therefore, been prepared on the going concern basis.

1.4

Basis of consolidation

The consolidated financial statements incorporate the accounts of the Company and its subsidiaries and have been prepared by using the principles of acquisition accounting ("the purchase method"), which includes the results of the subsidiaries from their dates of acquisition. Intra-group sales, profits and balances are eliminated fully on consolidation.

1.5

New IFRS standards and interpretations not applied

At the date of approval of these financial statements, the following Standards and Interpretations which may be applicable to the Group, but have not been applied in these financial statements, were in issue but not yet effective:

International Financial Reporting Standards (IFRS/IAS)

Effective date - financial periods beginning on or after

IAS 39

Financial Instruments: Recognition and measurement (Amendment)

1 July 2009

IFRS 3

Business Combinations (Revised)

1 July 2009

IAS 27

Consolidated and Separate Financial Statements (Revised)

1 July 2009

IAS 1

Presentation of Financial Statements (Amendment)

1 January 2009

IAS 23

Borrowing costs (Amendment)

1 January 2009

IFRS 8

Operating segments

1 January 2009

IFRS 2

Share based payments (Amendment)

1 January 2009

The Group does not anticipate that the adoption of these standards will have a material effect on its financial statements in the period of initial adoption, except for additional disclosures on operating segments when IFRS 8 comes into force for the financial year ended 30 June 2010. There will be no effect on reported income or net assets and changes to the presentation of the financial statements when IAS 1 (Amendments) comes into force.

1.6

Exploration and evaluation expenditure

All licence acquisitions and exploration and evaluation costs incurred or acquired on the acquisition of subsidiary undertaking are accumulated in respect of each identifiable project area. These costs, which are classified as intangible assets are only carried forward to the extent that they are expected to be recouped through the successful development of the areas or where activities in the areas have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves (successful efforts). Pre-licence costs are written off immediately. Other costs are also written off unless commercial reserves have been established or the determination process has not been completed. Accumulated costs in relation to an abandoned area are written off in full against results in the year in which the decision to abandon the area is made.

When production commences the accumulated costs for the relevant area of interest are transferred from intangible assets to tangible assets as "Developed Uranium Assets" and amortised over the estimated life of the commercial reserves on a unit of production basis, as discussed in note 1.9 below. 

1.7

Impairment of exploration and evaluation expenditure

The carrying value of unevaluated areas is assessed on at least an annual basis or when there has been an indication that impairment in value may have occurred. The impairment of unevaluated prospects is assessed as based on the Directors' intention with regard to future exploration and development of individual significant areas and the ability to obtain funds to finance such exploration and development.

1.8

Impairment of developed uranium assets

When events or changes in circumstances indicate that the carrying amount of developed uranium assets included within tangible assets may not be recoverable from future net revenues from uranium reserves attributable to that asset, a comparison between the net book value of the asset and the discounted future cash flows from the estimated recoverable uranium reserves is undertaken. To the extent that the carrying amount exceeds the recoverable amount, the asset is written down to its recoverable amount, with the write off charged to the income statement.

1.9

Amortisation of developed uranium assets

Developed uranium assets are amortised on a unit of production basis using the ratio of uranium production in the period to the estimated quantity of commercial reserves at the end of the period plus production in the period. Changes in estimates of commercial reserves or future development costs are dealt with prospectively.

1.10

Decommissioning costs

Where a material liability for the removal of production facilities and site restoration at the end of the field life exists, a provision for decommissioning is recognised. The amount recognised is the present value of estimated future expenditure determined in accordance with local conditions and requirements. An asset of an amount equivalent to the provision is also created and depreciated on a unit of production basis. Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and the associated asset.

1.11

Investments

Investments in subsidiary companies are stated at cost less provision for impairment in the Company's balance sheet.

1.12

Share based payments

The Company has made share-based payments to certain directors and employees by way of share options. The fair value of these payments is calculated by the Company using the Black Scholes option pricing model, as the Directors believe that the options are likely to be exercised nearer their expiry dates. The expense is recognised on a straight line basis over the period from the date of award to the date of vesting, based on the Company's best estimate of shares that will eventually vest.

1.13

Foreign currencies

(i) Functional and presentational currency

Items included in the Group's and Parent Company's financial statements are measured using the currency of the primary economic environment in which the Group operates ("the functional currency"). The Directors consider the Pound Sterling to be the Group's and Parent Company's functional and presentational currency.

 (ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

Transactions in the accounts of individual Group companies are recorded at the rate of exchange ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date. All differences are taken to the income statement.

1.14

Turnover

The Group has not yet commenced commercial production from its exploration sites and therefore had no turnover in the year.

1.15

Deferred taxation

Deferred income taxes are provided in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income taxes are determined using tax rates that have been enacted or substantially enacted and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled.

The principal temporary differences arise from depreciation or amortisation charged on assets and tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised. 

1.16

Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost and comprise cash in hand, cash at bank, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are included within borrowings in current liabilities on the balance sheet. For the purposes of the cash flow statement, cash and cash equivalents also include the bank overdrafts.

1.17

Receivables

Receivables are carried at original invoice amount less provision made for impairment of these receivables. A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the assets' carrying amount and the recoverable amount. Provisions for impairment of receivables are included in the income statement.

1.18

Payables

Payables are recognised initially at fair values and subsequently measured at amortised cost using the effective interest method.

1.19

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the increase of new shares or options are shown in equity as a deduction from the proceeds.

1.20

Critical accounting judgements and estimates

The preparation of financial statements in conformity with International Financial Reporting Standards requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates. IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.

The prime areas involving a higher degree of judgement or complexity, where assumptions and estimates are significant to the financial statements, are as follows:

Impairment of intangible assets

Determining whether intangible assets are impaired requires an estimation of whether there are any indications that its carrying value is not recoverable. 

2.

Segmental reporting

For the purposes of segmental information, the operations of the Group currently comprise one class of business, being the exploration for uranium. The Group's exploration activities are entirely in one geographical area, Africa.

The Company acts as a holding company. The Group's operating loss arose from its head office activities in the UK. In addition, the Group's exploration and evaluation assets and operations are based in Africa whereas all the other assets are based in United Kingdom.

3.

Group operating loss

4.

Interest receivable

5.

Taxation

At the balance sheet date, the Group has unused tax losses of £1,446,000 (2008: £830,000) available for offset against suitable future profits. A deferred tax asset has not been recognised in respect of such losses due to the uncertainty of future profit streams. The contingent deferred tax asset is estimated to be £405,000 (2008: £232,000).

6.

Loss per share 

The basic loss per ordinary share is 0.47p (2008: 0.02p) and has been calculated using the loss for the financial year of £1,370,624 (2008: loss £60,656) and the weighted average number of ordinary shares in issue of 291,000,000 (2008: 291,000,000).

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 357,857,534 (2008: 302,415,094). The diluted loss per share has been kept the same as the basic loss per share as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

7.

Holding company profit and loss account

In accordance with the provisions of the Section 408 of the Companies Act 2006, the Parent Company has not presented an income statement. A loss for the year ended 30 June 2009 of £1,337,845 (2008:£60,656) has been included in the consolidated income statement.

8.

Directors' emoluments

The Directors' emoluments in respect of the Group are as follows:

There were no employees during the year, apart from the Directors.

Further details of the Directors' emoluments and their interests in shares and share options are shown in the Directors' Report.

9.

Exploration and evaluation assets

The Group's intangible asset consists entirely of capitalised exploration and evaluation expenditure. The exploration and evaluation ("E&E") asset represents costs incurred in relation to the Group's Tanzanian licences. These amounts have not been written off to the income statement as exploration expenses because commercial reserves have not yet been established or the determination process has not been completed. 

The outcome of ongoing exploration and evaluation, and therefore whether the carrying value of E&E assets will ultimately be recovered, is inherently uncertain. The Directors have assessed the value of the uranium exploration and evaluation expenditure carried as intangible assets. In their opinion the value attributed to the Peramiho licence is to be fully impaired as the Group has not renewed its interest in this licence. The costs that were capitalised to this licence included helicopter surveys, access costs and land-owner payments. This impairment of £32,778 has been written off in the income statement for the year ended 30 June 2009.

10.

Investments in subsidiary undertakings

The loans due from subsidiaries are repayable to the Company in more than one year with no fixed repayment terms. 

The Company's subsidiary undertakings as at 30 June 2009 were as follows:

The Directors have assessed the carrying value of the investments in subsidiaries, both of which are incorporated in Tanzania, and in their opinion no impairment provision is considered necessary.

11.

Receivables

12.

Trade and other payables

13.

Share capital and share options

No shares were issued during the year ended 30 June 2009.

The details of share options outstanding at 30 June 2009 are as follows:

The Company's share price ranged between 0.62p and 2.80p during the year. The closing share price as at 30 June 2009 was 1.82p per share.

14.

Share-based payments 

During the year the Company granted 34 million share options to its two new Directors. These share options were granted at exercise prices between 5p and 35p. As the Company's share price ranged between 0.62p and 2.80p during the period, the share options were granted at exercise prices which were substantially greater than the market value of the shares. The share options were therefore "out of the money" and there was no intrinsic value in the options during the period. The Company is required by IFRS 2 'Share Based Payments' to calculate the fair value of the options at the date of grant. The fair value of the options represents the benefit to be gained by the Group from the services provided by the Directors for which the share options granted forms part of their compensation expense. The Company recognises the fair value amount as an expense in the income statement with a corresponding increase in equity. The fair value of the options granted to Directors during the year ended 30 June 2009 was £720,000. The assessed fair value at the grant date was determined using the Black-Scholes Model that takes into account the exercise price, the term of the option, the share price at grant date, the expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option. The volatility measured at the standard deviation of expected share price return is based on statistical analysis of the share price over the period, calculated at 140%. The risk free rate was 4.93% at the option grant date. The estimated fair values and other details which were processed into the model are as follows:

15.

Decommissioning expenditure 

The Directors have considered the need for any necessary provision for the cost of rectifying any environmental damage, as might be required under local legislation and the Group's licence obligations. In their view, no provision is necessary at 30 June 2009, for any future costs of decommissioning or any environmental damage.

16.

Financial instruments

Interest rate risk

At 30 June 2009 the Group had Australian Dollar cash deposits of a Sterling equivalent of £685,485 (2008: £1,660,887). The Company's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates on classes of financial assets and financial liabilities, was as follows:

The effective weighted average interest rate was 2% (2008: 3%).

Financial liabilities

At 30 June 2009, the Group had no debt.

Net fair value

The net fair value of financial assets and financial liabilities approximates to their carrying amount as disclosed in the balance sheet and in the related notes.

Currency risk

The functional currency for the Group's operating activities is the British Pound and for drilling activities the US Dollar. The Group's objective in managing currency exposures arising from its net investment overseas is to maintain a low level of borrowings. The Group has not hedged against currency depreciation but continues to keep the matter under review.

Financial risk management

The Directors recognise that this is an area in which they may need to develop specific policies should the Group become exposed to further financial risks as the business develops.

Capital risk management

The Group considers capital to be its equity reserves. At the current stage of the Group's life cycle, the Group's objective in managing its capital is to ensure funds raised meet the exploration expenditure commitments.

The Group ensures it is meeting its objectives by reviewing its KPIs to ensure its exploration activities are progressing in line with expectations, controlling costs and placing unused funds on deposit to conserve resources and increase returns on surplus cash held.

17.

Events after the balance sheet date

On 30 October 2009, the Company announced it had entered into a conditional share sale and purchase agreement ('Agreement') to purchase the joint venture interests of Indago Resources Limited ('Indago') and certain of its group companies (together 'the Indago Group') in the Tanzanian uranium joint ventures between the Indago Group and the Company.

Under the terms of the Agreement, the Company will acquire the share capitals of WML Uranium Holdings Limited and Western Metals Tanzania Limited, subsidiaries of the Indago Group and the holders of the Indago Group's uranium joint venture interests. The consideration is AUD $2.5 million cash and AUD $400,000 worth of new ordinary shares in the Company ('Consideration Shares'). The Agreement is conditional on Uranium Resources raising at least £1.6 million by 28 December 2009 and the Consideration Shares will be issued at the same price at which new equity is raised.

The joint venture interests being acquired include interests in the Company's existing uranium licences at Mtonya, Ruhuhu and Ruvuma covering 12,700 sq. km in the highly prospective Karoo basin in southern Tanzania. This transaction, once completed, will give Uranium Resources significant majority ownership and operational control of all its uranium exploration interests. This will allow the Company to better direct and progress exploration efforts going forward.

18.

Control

The Company is under the control of its shareholders and not any one party.

19.

Related party transactions and compensation of key management personnel

Key management of the Group are considered to be the Directors of the Company. There are no transactions with the Directors other than their remuneration and interests in shares and share options. The remuneration of Directors is set out below in aggregate for each of the categories specified in IAS 24 'Related Party Disclosures'. Further information about the remuneration of individual Directors is shown in the Directors' Report.

20.

Future exploration expenditure 

The Group does not have any contractual commitments required to maintain the Group's licences. Due to the Group entering into an agreement to acquire Indago Group's joint venture interests (see note 17), a joint venture budget and exploration programme had not yet been agreed by the joint venture parties.

Alex Gostevskikh

Uranium Resources plc

Tel: +44 (0) 7997 713377

James Pratt

Uranium Resources plc

Tel: +61 (0) 412 743 382

Ross Warner

Uranium Resources plc

Tel: +44 (0) 7760 487769

Hugh Warner

Uranium Resources plc

Tel: +61 (0) 413 621 652

Richard Swindells

Ambrian Partners Ltd (Nomad)

Tel: +44 (0) 20 7634 4700

Hugo de Salis

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177

Felicity Edwards

St Brides Media & Finance Ltd

Tel: +44 (0) 20 7236 1177