Uranium Resources Inc/DE – ‘DEF 14A’ for 6/18/99

As of:  Tuesday, 5/11/99   ·   For:  6/18/99   ·   Accession #:  950134-99-3806   ·   File #:  0-17171

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Definitive Proxy Solicitation Material   —   Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy Statement                           128    641K 

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DEF 14A
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 PROXY STATEMENT PURSUANT TO SECTION 14(a)
OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO.___________)

Filed by the Registrant                      [X]                                

Filed by a Party other than the Registrant   [ ]                                

Check the appropriate box:                                                      

[ ]      Preliminary Proxy Statement                                            

[ ]      Confidential For Use of the Commission Only (as permitted by Rule      
14a-6(e)(2))                                                  

[X]      Definitive Proxy Statement                                             

[ ]      Definitive Additional Materials                                        

[ ]      Soliciting Material Pursuant to ss. 240.14a - 11(c) or  240.14a-12     

 URANIUM RESOURCES, INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)

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 (Name of Person(s) Filing Proxy Statement if other than the Registrant)

[ ]      Payment of Filing Fee (Check the appropriate box):                     

[X]      No fee required                                                        

[ ]      Fee computed on table below per Exchange Act Rules l4a-6(i)(1) and     
0-11.                                                         

(1) Title of each class of securities to which transaction applies:             

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(2) Aggregate number of securities to which transaction applies:                

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(3)   Per unit price or other underlying value of transaction computed pursuant 
      to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):                        

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(4) Proposed maximum aggregate value of transaction:                            

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(5) Total fee paid:                                                             

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[ ]      Fee paid previously with preliminary materials.                        

[ ]      Check box if any part of the fee is offset as provided by the Exchange 
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was    
paid previously. Identify the previous filing by registration statement number, 
or the Form or Schedule and the date of its filing.                             

(1)  Amount Previously Paid:                                                    

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(2)  Form, Schedule or Registration No.:                                        

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(3)  Filing Party:                                                              

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(4)  Date Filed:                                                                

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 URANIUM RESOURCES, INC.
 12750 MERIT DRIVE, SUITE 1020
 DALLAS, TEXAS 75251

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JUNE 18, 1999

To the Stockholders of                                                          
URANIUM RESOURCES, INC.:                                      

   NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of
Uranium Resources, Inc., a Delaware corporation (the "Company"), will be held at
The Westin Park Central Hotel, 12720 Merit Drive, Dallas, Texas 75251 on Friday,
June 18, 1999, at 9:00 a.m., local time, for the following purposes:            

        1. To elect three (3) directors of the Company to serve until the next
annual meeting of stockholders or until their respective successors shall be    
elected and qualified;                                                          

     2. To approve an amendment to the Company's Restated Certificate of
Incorporation to increase the number of authorized shares of the Company's      
Common Stock, par value $0.001 per share, from the current 25,000,000 shares to 
35,000,000 shares;                                                              

     3. To approve an amendment to the Company's Restated Certificate of
Incorporation to authorize a new class of capital stock consisting of 1,000,000 
shares of Preferred Stock, par value $0.001 per share;                          

        4. To approve a provision in the Uranium Resources, Inc. 1999 Deferred
Compensation Plan that allows directors and certain executive officers to elect 
to receive payment of up to 100% of their compensation deferred under such plan 
in shares of the Company's Common Stock;                                        

    5. To consider and vote upon a proposal to ratify the selection of
Arthur Andersen, LLP, independent accountants, as independent auditors for the  
Company for the fiscal year ending December 31, 1999; and                       

    6. To transact such other business as may properly come before the
Meeting or any adjournment thereof.                                             

       Only stockholders of record at the close of business on May 10, 1999,
are entitled to notice of and to vote at the Meeting or any adjournment thereof.

     STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU PLAN TO BE PRESENT AT THE MEETING, YOU ARE REQUESTED TO SIGN 
AND RETURN THE ENCLOSED PROXY IN THE ENCLOSED ENVELOPE SO THAT YOUR SHARES MAY  
BE VOTED IN ACCORDANCE WITH YOUR WISHES AND IN ORDER THAT THE PRESENCE OF A     
QUORUM MAY BE ASSURED. THE GIVING OF SUCH PROXY WILL NOT AFFECT YOUR RIGHT TO   
VOTE IN PERSON, SHOULD YOU LATER DECIDE TO ATTEND THE MEETING. PLEASE DATE AND  
SIGN THE ENCLOSED PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED ENVELOPE.        
YOUR VOTE IS IMPORTANT.                                                         

              By Order of the Board of Directors

 /s/ Thomas H. Ehrlich
                   ---------------------------------------
        Thomas H. Ehrlich, Secretary

DALLAS, TEXAS                                                                   
May 13, 1999                                                                    

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 URANIUM RESOURCES, INC.
 12750 MERIT DRIVE, SUITE 1020
 DALLAS, TEXAS 75251

 PROXY STATEMENT

 FOR

ANNUAL MEETING OF STOCKHOLDERS

TO BE HELD JUNE 18, 1999

         This Proxy Statement is furnished to stockholders of Uranium Resources,
Inc., a Delaware corporation (the "Company"), in connection with the            
solicitation of proxies by the Board of Directors of the Company for use at the 
Annual Meeting of Stockholders (the "Meeting") to be held at The Westin Park    
Central Hotel, 12720 Merit Drive, Dallas, Texas 75251 on Friday, June 18, 1999, 
at 9:00 a.m., local time, for the purposes set forth in the accompanying Notice 
of Annual Meeting of Stockholders. The approximate date on which this Proxy     
Statement and the enclosed Proxy will first be sent to stockholders is May 13,  
1999.                                                                           

 ACTION TO BE TAKEN AT THE MEETING

         Shares represented by a properly executed proxy, unless the stockholder
otherwise instructs in the Proxy, will be voted (a) for the election of the     
three individuals named under the caption Election of Directors as directors of 
the Company; (b) for the 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 25,000,000 to 35,000,000; (c) for the
amendment to the Company's Restated Certificate of Incorporation to authorize   
the Preferred Stock, par value $0.001 per share (the "Preferred Stock"); (d) for
the Share Election Provision (as defined herein) of the Uranium Resources, Inc. 
1999 Deferred Compensation Plan; (e) for the ratification of the selection of   
Arthur Andersen, LLP, independent accountants, as independent auditors of the   
Company for the fiscal year ending December 31, 1999; and (f) at the discretion 
of the proxy holders on any other matter or business that may be properly       
presented at the Meeting or any adjournment thereof. Where a stockholder        
properly executes a proxy and gives instructions on how his shares are to be    
voted, the shares will be voted in accordance with those instructions.          

  A proxy may be revoked at any time by a stockholder before it is
exercised by giving written notice to the Secretary of the Company, or by       
signing and delivering a proxy which is dated later, or, if the stockholder     
attends the Meeting in person, by either notice of revocation to the inspectors 
of election at the Meeting or by voting at the Meeting.                         

        The only matters that management intends to present at the Meeting are
the five matters referenced in subparagraphs (a) - (e) above. If any other      
matter or business is properly presented at the Meeting, the proxy holders will 
vote upon it in accordance with their best judgment.                            

 VOTING SECURITIES

       The record date for the Meeting is May 10, 1999. Only stockholders of
record at the close of business on that date will be entitled to vote at the    
Meeting. At the close of business on that date, there were issued and           
outstanding 12,053,027 shares of the Company's Common Stock entitled to one vote
per share. In the election of directors, cumulative voting is not allowed. A    
majority of the outstanding Common Stock,                                       

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present in person or by proxy and entitled to vote, will constitute a quorum    
for the transaction of business at the Meeting. Under Delaware law and the      
Company's Bylaws, if a quorum is present at the Meeting: (i) to be elected a    
director, each nominee must receive a plurality of the votes of the shares      
present in person or by proxy at the Meeting and entitled to vote on the matter,
(ii) the affirmative vote of a majority of shares present in person or by proxy 
at the Meeting and entitled to vote on the matter is required to (a) approve the
Share Election Provision of the Uranium Resources, Inc. 1999 Deferred           
Compensation Plan, (b) ratify the selection of Arthur Andersen, LLP as          
independent auditors of the Company for the fiscal year ending December 31,     
1999, and (c) approve any other matter submitted to a vote of stockholders at   
the Meeting and (iii) the affirmative vote of a majority of shares outstanding  
is required to (a) amend the Restated Certificate of Incorporation to increase  
the authorized shares of Common Stock from 25,000,000 to 35,000,000, and (b)    
amend the Restated Certificate of Incorporation to authorize the Preferred      
Stock. In the election of directors, any action other than a vote for a nominee 
will have the practical effect of voting against the nominee. Abstention from   
voting on any matter presented at the Meeting will have the practical effect of 
voting against any such matter since it is one less vote for approval. Broker   
non-votes on any matter will not be considered "shares present" for voting      
purposes.                                                                       

BENEFICIAL OWNERSHIP OF THE COMPANY'S COMMON STOCK                              

The following table sets forth, as of March 31, 1999, certain 
information regarding persons known by the Company to be the beneficial owner of
more than 5% of the outstanding shares of the Company's Common Stock. Shown     
separately in the second table below is certain information regarding the       
beneficial ownership of the Company's Common Stock by (i) each director and     
nominee for director of the Company, (ii) each of the executive officers named  
in the Summary Compensation Table set forth below under the caption Executive   
Compensation, and (iii) all directors and executive officers as a group.        

PRINCIPAL STOCKHOLDERS                                                          

                                                                [Download Table]

                                       AMOUNT AND NATURE OF                       
NAME AND ADDRESS OF BENEFICIAL OWNER  BENEFICIAL OWNERSHIP(1)  PERCENT OF CLASS(2)
------------------------------------  -----------------------  -------------------
                                                                                  
Barry R. Feirstein                           1,260,786                 10.5%      
Feirstein Capital Management Corp.                                                
767 Third Avenue, 28th Floor                                                      
New York, NY 10017                                                                

-------------------                                                             

(1)  Each person has sole voting and investment power with respect to the shares
listed, unless otherwise indicated. Beneficial ownership includes shares over   
which the indicated beneficial owner exercises voting and/or investment power.  

(2)  The shares owned by each person, and the shares included in the total      
number of shares outstanding, have been adjusted, and the percentages owned have
been computed, in accordance with Rule 13d-3(d)(1) under the Securities Exchange
Act of 1934. Shares subject to options or warrants currently exercisable or     
exercisable within 60 days are deemed outstanding for computing the percentage  
ownership of the person holding such options or warrants, but are not deemed    
outstanding for computing the percentage ownership of any other person.         

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                                                        [Enlarge/Download Table]


                                                     AMOUNT AND NATURE OF                   
NAME AND ADDRESS OF BENEFICIAL OWNER                 BENEFICIAL OWNERSHIP  PERCENT OF CLASS 
------------------------------------                 --------------------  -----------------
                                                                                            
Lindner Dividend Fund                                   2,625,000(3),(4)        18.0%       
7711 Carondelet Avenue, Suite 700                                                           
Clayton, MO 63105                                                                           

Lindner Bulwark Fund                                      875,000(5)             6.0%       
7711 Carondelet Avenue, Suite 700                                                           
Clayton, MO 63105                                                                           

The Winchester Group and Rudolph J. Mueller             1,801,350(6)            14.9%       
335 Madison Avenue                                                                          
New York, NY  10017                                                                         

Santa Fe Pacific Gold Corporation                       1,200,000               10.0%       
(a wholly owned subsidiary of Newmont Gold Company)                                         
1700 Lincoln Street                                                                         
Denver, CO  80203                                                                           

----------------------                                                          

(3) Includes 500,000 outstanding shares owned beneficially by Lindner Dividend  
Fund, 1,500,000 shares issuable upon conversion of certain notes and 625,000    
shares issuable upon exercise of certain warrants.                              

(4) Includes 500,000 shares which the Company has been informed Lindner Dividend
Fund sold to Rudolph J. Mueller on April 16, 1999.                              

(5) Includes 500,000 shares issuable upon conversion of certain notes and       
375,000 shares issuable upon exercise of certain warrants.                      

(6) Based on information contained in a Schedule 13G filed by The Winchester    
Group and Mr. Mueller on February 27, 1999 and information provided by The      
Winchester Group, includes (i) 780,800 shares owned directly by Mr. Mueller and 
over which Mr. Mueller exercises sole voting and dispositive power and (ii)     
1,020,550 shares held by The Winchester Group on behalf of its clients and as   
to which Mr. Mueller, as the portfolio manager of The Winchester Group, and The 
Winchester Group share dispostive power. Does not include 500,000 shares which  
the Company has been informed Mr. Mueller acquired from the Lindner Dividend    
Fund on April 16, 1999 or 140,000 shares which the Company has been informed    
Mr. Mueller acquired on April 29, 1999.                                         

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MANAGEMENT                                                                      

                                                                [Download Table]

                        AMOUNT AND NATURE OF                        
                        BENEFICIAL OWNERSHIP(7)  PERCENT OF CLASS(8)
NAME OF                 -----------------------  -------------------
BENEFICIAL OWNER                                                    
----------------                                                    
                                                                    
Paul K. Willmott             278,269(9),(10)               2.1%     
Joe H. Card                   28,028(7),(11)                  *     
Leland O. Erdahl             124,000(7),(12)                  *     
George R. Ireland            155,500(7),(13)               1.2%     
Richard F. Clement, Jr.      235,319(7),(14)               1.8%     

-----------------------                                                         

*  Less than 1%.                                                                

(7) Each person has sole voting and investment power with respect to the shares 
listed, unless otherwise indicated. Beneficial ownership includes shares over   
which the indicated beneficial owner exercises voting and/or investment power.  

(8) The shares owned by each person, and the shares included in the total number
of shares outstanding, have been adjusted, and the percentages owned have been  
computed, in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act 
of 1934. Shares subject to options currently exercisable or exercisable within  
60 days are deemed outstanding for computing the percentage ownership of the    
person holding such options, but not deemed outstanding for computing the       
percentage ownership of any other person.                                       

(9) For each such director or executive officer, does not include any shares to 
be received pursuant to the Company's Deferred Compensation Plan, which shares  
will only be received if the Company's Stockholders approve Proposal 4 described
herein.                                                                         

(10) Includes 276,544 shares that may be obtained by Mr. Willmott through the   
exercise of stock options which are currently exercisable. Does not include     
87,606 shares that may be obtained by Mr. Willmott through the exercise of stock
options exercisable more than 60 days from the date hereof.                     

(11) Includes 28,028 shares that may be obtained by Mr. Card through the        
exercise of stock options which are currently exercisable. Does not include     
24,026 shares that may be obtained by Mr. Card through the exercise of stock    
options exercisable more than 60 days from the date hereof.                     

(12) Includes 122,500 shares that may be obtained by Mr. Erdahl through the     
exercise of stock options which are currently exercisable. Does not include     
3,500 shares that may be obtained by Mr. Erdahl through the exercise of stock   
options exercisable more than 60 days from the date hereof.                     

(13) Includes 116,500 shares that may be obtained by Mr. Ireland through the    
exercise of stock options which are currently exercisable. Does not include     
7,500 shares that may be obtained by Mr. Ireland through the exercise of stock  
options exercisable more than 60 days from the date hereof.                     

(14) Includes 105,189 shares that may be obtained by Mr. Clement through the    
exercise of stock options which are currently exercisable. Does not include     
63,511 shares that may be obtained by Mr. Clement through the exercise of stock 
options exercisable more than 60 days from the date hereof.                     

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                                                                [Download Table]


               NAME OF                AMOUNT AND NATURE OF  PERCENT OF
          BENEFICIAL OWNER            BENEFICIAL OWNERSHIP     CLASS  
          ----------------            --------------------  ----------
                                                                      
         Richard A. Van Horn             20,000(7),(15)           *   
          Craig S. Bartels               28,500(7),(16)           *   

All executive officers and directors  1,183,617(7),(17)        9.2%   
       as a group (9 persons)                                         

-------------------                                                             

(15) Includes 20,000 shares that may be obtained by Mr. Van Horn through the    
exercise of stock options which are currently exercisable. Does not include     
60,000 shares that may be obtained by Mr. Van Horn through the exercise of stock
options exercisable more than 60 days from the date hereof.                     

(16) Includes 28,350 shares that may be obtained by Mr. Bartels through the     
exercise of stock options which are currently exercisable. Does not include     
31,350 shares that may be obtained by Mr. Bartels through the exercise of stock 
options exercisable more than 60 days from the date hereof.                     

(17) Includes 764,113 shares that may be obtained through the exercise of stock 
options which are currently exercisable or will become exercisable within 60    
days.                                                                           

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 ELECTION OF DIRECTORS
(PROPOSAL 1 ON PROXY CARD)

         Under the Company's Bylaws and pursuant to a resolution of the Board of
Directors, the Board of Directors has fixed the size of the Board at three.     
Directors are elected to serve until the next annual meeting of stockholders or 
until their successors are elected and qualified. The Company's Board of        
Directors is not divided into classes; therefore, all three directors are to be 
elected at the Meeting.                                                         

Unless authority is withheld, it is intended that the shares  
represented by a properly executed Proxy will be voted for the election of all  
of the nominees (Paul K. Willmott, Leland O. Erdahl and George R. Ireland) as   
directors. The nominees are currently all the members of the Company's Board of 
Directors. If these nominees are unable to serve for any reason, such Proxy will
be voted for such persons as shall be designated by the Board of Directors to   
replace such nominees. The Board of Directors has no reason to expect that these
nominees will be unable to serve.                                               

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE ELECTION OF THE
NOMINEES FOR DIRECTORS, PAUL K. WILLMOTT, LELAND O. ERDAHL AND GEORGE R.        
IRELAND.                                                                        

   The following table sets forth certain information concerning the
individuals nominated for election as directors of the Company:                 

                                                                [Download Table]

                              Positions and Offices       
       Name        Age           with the Company         
       ----        ---           ----------------         
                                                          
 Paul K. Willmott  59   Chairman, Chief Executive Officer,
                              President and Director      
 Leland O. Erdahl  70                Director             
George R. Ireland  42                Director             


NOMINEES FOR DIRECTOR                                                           

       PAUL K. WILLMOTT has served as a director of the Company since August
1994, as President of the Company since February 1995, and as Chairman of the   
Board and Chief Executive Officer since July 31, 1995. Mr. Willmott served as   
the Company's Chief Financial Officer from April 12, 1995 to September 25, 1995.
Mr. Willmott retired from Union Carbide Corporation ("Union Carbide") where he  
was involved for 25 years in the finance and operation of Union Carbide's       
world-wide mining and metals business. From January 1993 until February 1995,   
Mr. Willmott was engaged by the Concord Mining Unit as a senior vice president  
where he was primarily involved in the acquisition of the uranium and vanadium  
operating assets of UMETCO Minerals Corporation, a wholly-owned subsidiary of   
Union Carbide. Mr. Willmott graduated from Michigan Technological University    
with a Bachelor of Science degree in Mining in 1964 and a Bachelor of Science   
Degree in Engineering Administration in 1967. He has been an active member of   
the American Institute of Mining Engineers, the Canadian Institute of Mining    
Engineers and a number of state professional organizations.                     

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         LELAND O. ERDAHL has served as a director of the Company since July 11,
1994. From 1986 to 1991, Mr. Erdahl served as President and Chief Executive     
Officer for Stolar, Inc., a high-tech company involved in the radio wave imaging
of geologic media and underground radio transmission for voice and data. He was 
also President and CEO of Albuquerque Uranium Corporation, a uranium mining     
company, from 1987 to 1991. He is a Certified Public Accountant and is a        
graduate from the College of Santa Fe. He is currently a director of Hecla      
Mining Company, Canyon Resources Corporation, Original Sixteen to One Mine,     
Inc., AMAX Gold, Inc. and a trustee for a group of John Hancock Mutual Funds. He
is also a director of Santa Fe Ingredients Company of California, Inc. and Santa
Fe Ingredients Company, Inc., both private food processing companies. In March  
1997, Mr. Erdahl entered into a contract with AMAX Gold, Inc. to serve as Vice  
President and Chief Financial Officer. This contract was concluded June 1, 1998.
Mr. Erdahl also serves on the compensation committee of Hecla Mining Company,   
Canyon Resources Corporation, Original Sixteen to One Mine, Inc. and Freeport   
McMoRan Copper & Gold, Inc.                                                     

    GEORGE R. IRELAND has served as a director since May 25, 1995. Mr.
Ireland is a financial analyst for and a partner in Knott Partners L.P., a      
private investment partnership. Mr. Ireland specializes in investing in         
securities of natural resource and other basic industrial companies, both       
domestically and abroad. From 1987 to 1991, he was a Vice President of Fulcrum  
Management, Inc., which was the manager of the VenturesTrident Limited          
Partnerships, (venture capital funds dedicated to investing in the mining       
industry), and Senior Vice President and Chief Financial Officer of MinVen Gold 
Corporation, a company in which the VenturesTrident funds had a significant     
investment. Mr. Ireland graduated from the University of Michigan with degrees  
in Geology and Resource Economics. He also attended the Graduate School of      
Business Administration of New York University. Mr. Ireland is a director of    
Merrill & Ring, Inc., a private land and timber holding company in the state of 
Washington. Mr. Ireland acted as a consultant to Ryback Management Corporation  
and performed due diligence on the Company in connection with Ryback's loan of  
$6 million to the Company on behalf of members of the Lindner Group in 1995     
discussed elsewhere in this Proxy Statement. Mr. Ireland is not otherwise       
affiliated with the Lindner Group or Ryback.                                    

ARRANGEMENTS REGARDING ELECTION OF DIRECTORS                                    

         On May 25, 1995, George R. Ireland and James B. Tompkins were appointed
to the Board of Directors following the closing of certain transactions with the
Lindner Group. In connection with these transactions, the Company has agreed to 
nominate two individuals designated by the Lindner Group for election to the    
Board.                                                                          
Messrs. Ireland and Tompkins were the Lindner Group's designees.                

  Effective July 28, 1998, Mr. Tompkins resigned his position as a
Director of the Company.                                                        

OTHER EXECUTIVE OFFICERS                                                        

      The executive officers of the Company serve at the discretion of the
Board of Directors and are subject to annual appointment by the Board at its    
first meeting following the Annual General Meeting of the Stockholders. The     
officers of the Company hold office until their successors are appointed by the 
Board of Directors. All officers of the Company are employed on a full-time     
basis. There is no family relationship between any director and executive       
officer of the Company.                                                         

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         The following table sets forth certain information concerning executive
officers who are not also directors of the Company:                             

                                                                [Download Table]

                                            Positions and Offices               
          Name          Age                    with the Company                 
          ----          ---                    ----------------                 
                                                                                
      Joe H. Card        46           Senior Vice President - Marketing         

Richard F. Clement, Jr.  55        Senior Vice President - Exploration and      
                                      President - Hydro Resources, Inc.         

  Richard A. Van Horn    52           Senior Vice President - Operations        

   Thomas H. Ehrlich     39   Vice President, Chief Financial Officer, Secretary
                                                and Treasurer                   

    Mark S. Pelizza      46   Vice President - Health, Safety and Environmental 
                                                   Affairs                      

    Craig S. Bartels     50  Vice President - Technology - Hydro Resources, Inc.

      The following sets forth certain information concerning the business
experience of the foregoing executive officers during the past five years.      

       JOE H. CARD joined the Company as Vice President - Marketing in March
1989. In February 1993, he was promoted to Senior Vice President - Marketing.   
Previously, he spent four years with UG U.S.A., Inc., a U.S. marketing          
subsidiary of a major German mining company, most recently as Marketing Manager.
His responsibilities were related to the entire uranium fuel cycle, primarily in
dealing with U.S. nuclear utilities customers. Prior to his work at UG U.S.A.,  
Inc., Mr. Card spent five years with Mitsubishi International Corporation as    
marketing manager. He earned a B.B.A. degree in Finance from the University of  
Georgia in 1975 and an M.B.A. from Georgia State University in 1978.            

RICHARD F. CLEMENT, JR. joined the Company as Vice            
President-Exploration in 1983. In April 1990, he was appointed Senior Vice      
President-Exploration. Mr. Clement was a director of the Company from February  
1985 to July 1994 at which time he resigned his positions as director and       
officer of the Company. During the period from July 1994 to February 1996, Mr.  
Clement remained with the Company as Exploration Manager. In February 1996, he  
was again appointed Senior Vice President-Exploration of the Company as well as 
the President and a Director of Hydro Resources, Inc., a wholly owned subsidiary
of the Company. Prior to joining the Company, he spent 16 years with Mobil Oil  
Corporation, most recently as vice president and exploration manager for Mobil  
Energy Minerals-Australia, where he initiated and managed Mobil's Australian    
coal, uranium and other minerals exploration and acquisition programs. Mr.      
Clement received his B.S. degree in Geology from Boston College in 1965 and his 
M.S. degree in Geology from the University of Vermont in 1967.                  

      RICHARD A. VAN HORN joined the Company in March 1997 and assumed the
position of Senior Vice President of Operations on April 1, 1997. Previously, he
spent three years with Energy Fuels Nuclear, Inc. as General Manager - Colorado 
Plateau Operations with responsibility for the daily management of and planning 
for Energy Fuels Nuclear, Inc. mining activities on the Colorado Plateau. Prior 
to his work at Energy Fuels Nuclear, Inc., Mr. Van Horn spent eighteen years    
with Union Carbide Corporation where he was involved with the finance and       
operation of that company's worldwide mining and metals business.               

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From 1990 to 1994, Mr. Van Horn was Director of Operations of UMETCO Minerals   
Corporation, a wholly owned subsidiary of Union Carbide Corporation, responsible
for all operating aspects of UMETCO's uranium and vanadium business on the      
Colorado Plateau prior to its sale to Energy Fuels Nuclear, Inc. Mr. Van Horn   
graduated from the Colorado School of Mines with a Engineer of Mines degree in  
mining in 1973.                                                                 

        THOMAS H. EHRLICH, a certified public accountant, rejoined the Company
in September 1995 as Vice President and Chief Financial Officer and was         
appointed Secretary and Treasurer of the Company in December 1995. Immediately  
prior to that, Mr. Ehrlich spent nine months as a Division Controller with      
Affiliated Computer Services, Inc., an information technology services provider 
in Dallas, Texas. Mr. Ehrlich originally joined the Company in November 1987 as 
Controller-Public Reporting and was promoted to Controller and Chief Accounting 
Officer in February 1990. In February 1993, Mr. Ehrlich assumed the additional  
duties of Vice President and Secretary of the Company. Prior to joining the     
Company, he spent four years with Deloitte Haskins & Sells and worked primarily 
with clients that were publicly held companies. Prior to his work at Deloitte   
Haskins & Sells, he spent three years in various accounting duties at Enserch   
Exploration, Inc., an oil and gas company in Dallas, Texas. Mr. Ehrlich received
his B.S. B.A. degree in Accounting from Bryant College in 1981.                 

         MARK S. PELIZZA has served as the Company's Environmental Manager since
1980, and as such, he has been responsible for all environmental regulatory     
activities. In February 1996, he was appointed Vice President Health, Safety and
Environmental Affairs of the Company. Prior to joining the Company, he was      
employed for two years by Union Carbide as an Environmental Planning Engineer at
Union Carbide's Palangana solution mining plant in South Texas. Mr. Pelizza     
received a M.S. Degree in Engineering Geology from Colorado School of Mines in  
1978 and a B.S. Degree in Geology from Fort Lewis College in 1974.              

    CRAIG S. BARTELS, a Registered Professional Engineer, rejoined the
Company as Vice President-Technology of Hydro Resources, Inc., a wholly owned   
subsidiary of the Company in July 1996. From January 1995 to July 1996, he was  
Manager of Wellfield Operations for Crow Butte Resources, Inc., a uranium ISL   
mining company. Mr. Bartels originally joined the Company in early 1981 and held
positions with the Company as Reservoir Engineer, Plant Manager, and Manager of 
Wellfield Operations through October 1994. Earlier, he was with Union Carbide,  
eventually becoming Technical and Plant Superintendent for their solution mining
operation. Mr. Bartels also spent six years with Natural Gas Pipeline Company of
America, a major gas transmission company, as drilling and reservoir engineer   
for their gas storage operations. Mr. Bartels received a B.S. Degree in         
Petroleum Engineering from Montana School of Mines in 1972.                     

BOARD AND COMMITTEE MEETINGS                                                    

    The Board of Directors held 10 formal meetings through both direct
meetings and telephonic meetings during the year ended December 31, 1998. All   
directors attended at least 75% of the aggregate of (i) the total number of     
Board of Directors' meetings in 1998 and (ii) the total number of meetings held 
by all committees of the Board on which each served. The Company's officers have
made a practice of keeping directors informed of corporate activities by        
personal meetings and telephone discussions.                                    

      The Company has three standing committees of the Board of Directors.
Leland O. Erdahl and George R. Ireland are the current members of the Audit, the
Employees' Stock Option, and Compensation Committees. The Audit Committee's     
principal functions are to meet with the Company's independent auditors to      
review the financial statements contained in the Annual Report, to review the   
Company's systems of internal controls and to report to the Board of Directors  
thereon. The Employees' Stock Option Committee's principal function is the      
administration of the employees' stock option plans of the Company.             

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The Compensation Committee's function is to determine the compensation of       
executive officers and to set guidelines for compensation for the employees of  
the Company.                                                                    

During 1998, the Audit Committee held two formal meetings, the
Employees' Stock Option Committee held one formal meeting, and the Compensation 
Committee held one formal meeting. The Audit Committee met in February 1999 with
the Company's auditors to review the 1998 fiscal year audit.                    

  At present, the Company has no nominating, executive, or similar
committees.                                                                     

EXECUTIVE COMPENSATION

    The following table sets forth certain information with respect to
annual and long-term compensation for services in all capacities for the years  
ended December 31, 1998, 1997 and 1996 paid to the Company's Chief Executive    
Officer and certain other executive officers of the Company.                    

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SUMMARY COMPENSATION TABLE                                                      

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                                                                               LONG-TERM                     
                                     ANNUAL COMPENSATION                       COMPENSATION                  
                                     ===================                       ============                  

                                                                               AWARDS                        
                                                                               ======                        

                                                                  OTHER          SECURITIES                  
                                                                  ANNUAL         UNDERLYING    ALL OTHER     
                                      SALARY         BONUS   COMPENSATION(18)      OPTIONS   COMPENSATION(19)
  NAME AND PRINCIPAL POSITION  YEAR    ($)            ($)          ($)               (#)          ($)        
  ---------------------------  ----    ---            ---          ---               ---          ---        
                                                                                                             
Paul K. Willmott               1998  $200,701       $     0      $    561           40,000      $ 1,887      
Chairman, President and        1997  $202,200       $     0      $    283           26,280      $ 5,474      
Chief Executive Officer        1996  $166,525       $13,140      $    168           37,670      $ 2,851      

Joe H. Card                    1998  $128,200       $     0      $  2,757           15,000      $ 1,255      
Senior Vice President -        1997  $129,987       $     0      $  3,954           15,800      $ 3,618      
Marketing                      1996  $117,894       $10,500      $145,729           13,440      $ 1,730      

Richard F. Clement, Jr.        1998  $144,045       $     0      $  2,156           10,000      $ 1,027      
Senior Vice President -        1997  $149,743       $     0      $  2,754           15,100      $87,860      
Exploration/President -        1996  $125,247       $10,000      $  2,462           91,130      $13,129      
Hydro Resources, Inc.                                                                                        

Richard A. Van Horn            1998  $132,749       $    0       $  1,960           25,000      $ 1,200      
Senior Vice President -        1997  $104,569       $    0       $    168           55,000      $19,349      
Operations                                                                                                   

Craig S. Bartels               1998  $131,106       $    0       $  2,211            6,000      $ 1,022      
Vice President -               1997  $130,791       $    0       $    168            3,700      $ 3,010      
Technology - Hydro             1996  $56,809        $3,700       $     42           50,000      $   567      
Resources, Inc.                                                                                              

---------------                                                                 

(18) Represents amount paid for out-of-pocket medical and dental expenses under 
the Company's Supplemental Health Care Plan and for Mr. Card, in 1996           
compensation from the exercise of employee stock options.                       

(19) Represents contributions made by the Company under the Company's 401(k)    
Profit Sharing Plan (see "401(k) Profit Sharing Plan" below); and for Mr.       
Clement in 1997 includes moving costs received upon his relocation to           
Albuquerque, New Mexico ($84,281) and for Mr. Van Horn in 1997 includes moving  
costs received upon his relocation to Corpus Christi, Texas ($19,349).          

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SUPPLEMENTAL HEALTH CARE PLAN                                                   

      The Company has adopted a health care plan (the "Supplemental Plan")
for the officers of the Company and certain of the employees of the Company who 
are also stockholders, which supplements the standard health care plan available
to all eligible employees of the Company (the "Standard Plan"). The Supplemental
Plan pays directly to the participant 80% of all out-of-pocket medical and      
dental expenses not covered under the Standard Plan, including deductibles and  
co-insurance amounts. Additionally, the Supplemental Plan provides to each      
participant $100,000 of accidental death and dismemberment insurance protection 
and a world wide medical assistance benefit. Each participant in the            
Supplemental Plan may receive a maximum annual benefit of $50,000 or $100,000,  
at the Company's option. The Company pays an annual premium under the           
Supplemental Plan equal to $210 per participant plus 10% of claims paid. There  
are currently ten officers and employees covered by the Supplemental Plan.      

401(k) PROFIT SHARING PLAN                                                      

      The Company maintains a defined contribution profit sharing plan for
employees of the Company (the "401(k)") that is administered by a committee of  
trustees appointed by the Company. All Company employees are eligible to        
participate upon the completion of six months of employment, subject to minimum 
age requirements. Each year the Company makes a contribution to the 401(k) out  
of its current or accumulated net profits (as defined) in an amount determined  
by the Board of Directors but not exceeding 15% of the total compensation paid  
or accrued to participants during such fiscal year. The Company's contributions 
are allocated to participants in amounts equal to 25% (or a higher percentage,  
determined at the Company's discretion) of the participants' contributions, up  
to 4% of each participant's gross pay. For the plan year ended July 31, 1998,   
the Company contributed amounts equal to 25% of the participant's contributions,
up to 4% of gross pay. For the plan year ended July 31, 1997, the Company       
contributed amounts equal to 50% of the participants' contribution, up to 4% of 
gross pay. For the plan year ended July 31, 1996, the Company contributed       
amounts equal to 75% of the participants' contributions, up to 4% of gross pay. 
Participants become 20% vested in their Company contribution account for each   
year of service until full vesting occurs upon the completion of five years of  
service. Distributions are made upon retirement, death or disability in a lump  
sum or in installments.                                                         

STOCK OPTION PLANS                                                              

    On December 19, 1995, the Company's Stockholders approved the 1995
Stock Incentive Plan (the "1995 Plan") for key employees of the Company. The    
1995 Plan initially authorized grants of incentive stock options and            
non-qualified options to purchase up to an aggregate of 750,000 shares of Common
Stock. On February 23, 1998 the Board approved an amendment to the 1995 Plan,   
adopted by the stockholders on June 5, 1998, which increased the number of      
shares of Common Stock authorized to be issued to 1,250,000 shares. The         
Employees' Stock Option Committee of the Board of Directors is responsible for  
the administration of the 1995 Plan and has the full authority, subject to the  
provisions of the 1995 Plan, to determine to whom and when to grant options and 
the number of shares of Common Stock covered by each grant. As of February 28,  
1999, a total of 670,030 shares are reserved for issuance upon exercise of      
options granted under the 1995 Plan and 579,970 shares were reserved for        
exercise upon the future grant of options under the 1995 Plan. No shares have   
been issued upon the exercise of options under the 1995 Plan.                   

   The 1995 Plan replaced the Company's previous plan maintained for
employees under which the Company was authorized to grant non-qualified options.
All outstanding options under that plan will remain in effect but no new options
will be granted under that plan. As of February 28, 1999, a total of 104,623    
shares are reserved for issuance under that plan.                               

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DEFERRED COMPENSATION PLAN                                                      

   Effective January 11, 1999, the Company adopted the 1999 Deferred
Compensation Plan (the "Deferred Compensation Plan") for the benefit of         
executive officers and directors of the Company and its subsidiaries. Under the 
Deferred Compensation Plan, for calendar year 1999 Participants may elect to    
defer up to 100% of their salary for the duration of the year. Salary deferred  
will be paid to each participant on January 11, 2006. Once made, the election to
defer the amount of compensation may not be changed for the duration of 1999.   
Upon termination of employment with the Company or its subsidiaries, a          
participant's account is frozen and the participant is entitled to receive the  
deferred amount on January 11, 2006. The Deferred Compensation Plan is          
administered by the Company's Board of Directors.                               

  At the time of the deferral election, a participant may elect to
receive payment of up to 100% of the deferred amount of salary in shares of the 
Company's Common Stock. An aggregate of 454,846 shares of Common Stock may be   
issued under the Deferred Compensation Plan. The number of shares to be received
pursuant to any election will be based on the closing market price of the       
Company's Common Stock on January 11, 1999 of $0.375 per share. At the end of   
each quarter, a participant will receive any shares of Common Stock he or she   
has so elected to receive in lieu of deferred salary and may make a new election
for the next quarter to increase or decrease the percent of deferred salary to  
be received in shares of Common Stock. The portion of the Deferred Compensation 
Plan that permits a participant to make an election to receive shares of Common 
Stock is subject to stockholder approval at the June 18, 1999 Annual Meeting of 
the Company's Stockholders. For more information concerning the Deferred        
Compensation Plan and the stockholder vote, see "Approval of Share Election     
Provision of Uranium Resources, Inc. 1999 Deferred Compensation Plan" beginning 
on page 26.                                                                     

         The Company's directors and executive officers have elected to defer an
aggregate amount of $238,067 of their 1999 salaries pursuant to the Deferred    
Compensation Plan, $170,567 of which will be received by such directors and     
executive officers in shares of the Company's Common Stock (based on a value of 
$0.375 per share, the closing price on the Nasdaq National Market on January 11,
1999).                                                                          

OPTION GRANTS IN LAST FISCAL YEAR                                               

    The following table sets forth certain information with respect to
options granted to the executive officer named in the Summary Compensation Table
in the fiscal year ended December 31, 1998.                                     

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                                                        [Enlarge/Download Table]


                                                                            POTENTIAL REALIZABLE     
                                                                               VALUE AT ASSUMED      
                                                                            ANNUAL RATES OF STOCK    
                                                                            PRICE APPRECIATION FOR   
                           INDIVIDUAL GRANTS                                     OPTION TERM         
                           =================                                     ===========         
                                       PERCENT OF                                                    
                         NUMBER OF        TOTAL                                                      
                        SECURITIES       OPTIONS                                                     
                        UNDERLYING     GRANTED TO                                                    
                          OPTIONS       EMPLOYEES  EXERCISE OF                                       
                          GRANTED      IN FISCAL   BASE PRICE   EXPIRATION                           
         NAME               (#)          YEAR        ($/SH)        DATE        5% ($)         10%($) 
         ----               ---          -----       ------        ----        ------         ------ 
                                                                                                     
   Paul K. Willmott       40,000           23%      $2.9375      02/23/08     $191,900       $303,900

      Joe H. Card         15,000            9%      $2.9375      02/23/08     $ 71,963       $113,963

Richard F. Clement, Jr.   10,000            6%      $2.9375      02/23/08     $ 47,975       $ 75,975

  Richard A. Van Horn     25,000           15%      $2.9375      02/23/08     $119,938       $189,938

   Craig S. Bartels        6,000            3%      $2.9375      02/23/08     $ 28,785       $ 45,585

EXERCISE OF STOCK OPTIONS AND YEAR-END VALUE                                    

       The following sets forth information with respect to each exercise of
stock options during the fiscal year ended December 31, 1998 and the year-end   
value of unexercised options held by each of the executive officers named in the
Summary Compensation Table.                                                     

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                                                        [Enlarge/Download Table]

                                                               NUMBER OF                       
                                                               SECURITIES          VALUE OF    
                                                               UNDERLYING        UNEXERCISED   
                                SHARES                        UNEXERCISED        IN-THE-MONEY  
                             ACQUIRED ON   VALUE REALIZED  OPTIONS AT FISCAL  OPTIONS AT FISCAL
              NAME           EXERCISE (#)        ($)          YEAR END (#)       YEAR END ($)  
              ----           ------------        ---          ------------       ------------  

                                                              EXERCISABLE/       EXERCISABLE/  
                                                             UNEXERCISABLE      UNEXERCISABLE  
                                                             -------------      -------------- 

                                                                                               
Paul K. Willmott(20)              --              --         75,000/25,000            **       
                                                             75,000/25,000            **       
                                                             30,150/10,050            **       
                                                             18,836/18,834            **       
                                                              6,570/19,710            **       
                                                                0/40,000              **       
                                                                19,000/0              **       
                                                                1,000/0               **       

Joe H. Card(21)                   --              --            1,750/0               **       
                                                              4,548/1,516             **       
                                                              6,720/6,720             **       
                                                              3,950/11,850            **       
                                                                0/15,000              **       

Richard F. Clement, Jr.(22)       --              --            24,750/0              **       
                                                              20,790/6,930            **       
                                                              8,066/8,064             **       
                                                             37,500/37,500            **       
                                                              3,775/11,325            **       
                                                                0/10,000              **       

Richard A. Van Horn(23)           --              --         13,750/41,250            **       
                                                                0/25,000              **       

Craig S. Bartels(24)              --              --         25,000/25,000            **       
                                                               925/1,775              **       
                                                                0/6,000               **       

-----------------                                                               

** Represents an option whose grant price is above the December 31, 1998 closing
price on the NASDAQ-NMS.                                                        

(20) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)  
less the grant prices of $4.13, $8.38, $6.88, $9.75, $7.125, $2.9375, $4.25 and 
$5.88, respectively.                                                            

(21) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)  
less the grant prices of $2.94, $6.88, $9.75, $7.125 and $2.9375, respectively. 

(22) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)  
less the grant price of $2.94, $6.88, $9.75, $16.13, $7.125 and $2.9375,        
respectively.                                                                   

(23) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)  
less the grant price of $5.50 and $2.9375, respectively.                        

(24) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)  
less the grant price of $11.13, $7.125, and $2.9375, respectively.              

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DIRECTOR COMPENSATION                                                           

       Under the Company's Directors' Stock Option Plan ("Directors' Plan"),
each new non-employee director elected or appointed to the Board of Directors   
for the first time shall be granted an option to purchase 20,000 shares of      
Common Stock as of the date of such election or appointment and, upon the       
re-election of a non-employee director at an annual meeting of the Company's    
stockholders, such director will be granted an option to purchase an additional 
1,000 shares as of the date of such election. As of February 28, 1999, a total  
of 69,000 shares are reserved for issuance upon exercise of options granted     
under the Directors' Plan and 79,000 shares were reserved for exercise upon the 
future grant of options under the Directors' Plan. Mr. Erdahl holds options     
covering 25,000 shares under the Directors' Plan and Mr. Ireland holds options  
covering 25,000 shares under the Directors' Plan. Mr. Willmott holds options    
covering 20,000 shares under the Directors' Plan. In addition, Messrs. Ireland  
and Erdahl each hold options to purchase 100,000 shares of Common Stock. Those  
options were not granted under the Directors' Plan. On November 17, 1997, the   
Company entered into agreements with each of its non-employee directors to amend
the terms of these nonqualified stock options such that the expiration date of  
the option was extended for three years until 2001 and the exercise price was   
increased by $0.25 per share to $4.75. Cash compensation for 1998 to the        
non-employee directors was paid at the rate of $3,000 per quarter plus $1,000   
per meeting attended of the Board and committees of the Board.                  

COMPENSATION AGREEMENTS WITH KEY EXECUTIVES                                     
         In June 1997, the Company entered into Compensation Agreements with six
of its key executives. Each of these agreement provide that in the event of a   
change in control of the Company, the executive will have certain rights and    
benefits for a period of either twenty-four or thirty-six months following such 
change in control. In particular, the agreements specify that the executive will
continue to receive compensation and benefits for the remainder of the          
applicable period if the Company terminates the executive or if the executive   
terminates his employment following the occurrence of certain actions without   
the executive's consent. However, the Company is not obligated to provide such  
rights and benefits to the executive if the executive was terminated for cause  
or does not resign as an officer and/or director promptly after receiving       
written request from the Company to do so.                                      

 STOCK PRICE PERFORMANCE GRAPH

      The following graph compares the performance of the Company's Common
Stock to the CRSP Total Return Index for The NASDAQ Stock Market (U.S.          
Companies) and to a self-determined peer group comprised of United States Energy
Corp. and Rio Algom Mines, Ltd. for the Company's last five fiscal years. The   
graph assumes that the value of an investment in the Company's Common Stock and 
each index was $100 at December 31, 1993, and that all dividends were           
reinvested.                                                                     

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COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN(25) 
 1993-1998

                                                        [Enlarge/Download Table]


Total Returns Index for:            12/31/93  12/31/94  12/31/95  12/31/96  12/31/97  12/31/98
-------------------------           --------  --------  --------  --------  --------  --------
                                                                                              
NASDAQ Stock Market                                                                           
     (U.S. Companies)(26)             100.0     97.8     138.3      170.0     209.0    293.8  
Self-Determined Peer Group(27)(28)    100.0    113.1     115.1      147.1     114.4     71.4  
Uranium Resources, Inc.               100.0    168.5     130.1      186.2      91.6     11.8  

[CHART] 

---------------------                                                           

(25) Total return assumes reinvestment of dividends.                            

(26) Source: National Association of Securities Dealers, Inc. All dividends are 
reinvested on the ex-dividend date. The CRSP Total Return Index includes all    
domestic common shares traded on the NASDAQ National Market and the NASDAQ      
Small-Cap Market.                                                               

(27) Comprised of United States Energy Corp. and Rio Algom Mines, Ltd.          

(28) Source: The Center for Research in Security Prices (affiliated with the    
University of Chicago Graduate School of Business). All dividends are reinvested
on ex-dividend date.                                                            

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COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

In August 1994, the Company formed a Compensation Committee to
determine the compensation of the executive officers and to set the guidelines  
for compensation for the employees of the Company. During the fiscal year ended 
December 31, 1998, the Compensation Committee was comprised of Leland O. Erdahl,
George R. Ireland and James B. Tompkins (until his resignation on July 28,      
1998). No member of the Compensation Committee has been or was during the fiscal
year ended December 31, 1998, an officer or employee of the Company or any of   
the Company's subsidiaries. In addition, no member of the Compensation Committee
during the fiscal year ended December 31, 1998, had any relationship requiring  
disclosure under the caption "Certain Relationships and Related Transactions."  
No executive officer of the Company serves or served on the compensation        
committee of another entity during the fiscal year ended December 31, 1998 and  
no executive officer of the Company serves or served as a director of another   
entity who has or had an executive officer serving on the Compensation Committee
of the Company.                                                                 

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 COMPENSATION COMMITTEE REPORT

        Under rules established by the Securities and Exchange Commission, the
Company is required to provide certain information regarding the compensation of
its Chief Executive Officer and other executive officers whose salary and bonus 
exceed $100,000 per year. Disclosure requirements include a report explaining   
the rationale and considerations that lead to fundamental executive compensation
decisions. The following report has been prepared to fulfill this requirement.  

         The Compensation Committee ("Committee") of the Board of Directors sets
and administers the policies that govern the annual compensation and long-term  
compensation of executive officers of the Company. None of the members of the   
Committee is currently an employee of the Company. The Committee makes all      
decisions concerning compensation of all executive officers as defined by the   
Securities and Exchange Commission and all awards of stock options under the    
Company's 1995 Stock Incentive Plan. The Committee's policy is to offer         
executive officers competitive compensation packages that will permit the       
Company to attract and retain highly qualified individuals and to motivate and  
reward such individuals on the basis of the Company's performance.              

         At present, the executive compensation package consists of base salary,
bonus awards and long-term incentive opportunities in the form of stock options.
Executive salaries are reviewed by the Committee on an annual basis and are set 
for individual executive officers based on subjective evaluations of each       
individual's performance, the Company's performance and a comparison to base    
salary ranges for executives in comparable positions at mid-size mining         
companies in the United States, primarily involved in the mining of precious    
metals. Within the U.S. uranium mining companies, there are no public companies 
which the Committee views as comparable in terms of revenues, reserve base and  
type of operations. Although the mid-size precious metal mining companies are   
for the most part larger than the Company, the Committee views this group as    
being comparable to the Company in terms of the administrative, financial and   
operating skills required of the Company's senior executives. The compensation  
of the Chief Executive Officer, Mr. Willmott, is determined in the same manner  
as the compensation of other executive officers as described above. As a result,
Mr. Willmott's compensation is largely dependent upon the overall performance of
the Company as well as comparison to compensation being paid by comparable      
companies to their chief executive officers.                                    

      Bonuses may be awarded to executive officers and other employees for
their performance. The Committee determines the appropriate level of bonuses    
based upon the Committee's assessment of each person's contributions to the     
Company's success in terms of income and use of cash, corporate management and  
increase in shareholder value.                                                  

      Key employees, including executive officers may be granted incentive
stock options, pursuant to the Company's Stock Incentive Plan and based upon a  
review of the Company's performance. Such stock based awards will continue to be
an important element of the executive compensation package because they aid in  
the objective of aligning the officers' interests with those of the stockholders
by giving the officers a direct stake in the performance of the Company.        

The Committee recognized that the efforts of the Company's key
executives have been, and will continue to be substantial. The Committee further
recognized that the difficult market conditions have created uncertainties to   
its key executives. Therefore, the Committee recommended that the Company enter 
into Compensation Agreements with each of the Company's key executives to enable
the Company to retain its key executives and to allow such key executives to    
focus on their operating responsibilities.                                      

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         The Company's overall performance in the fiscal year ended December 31,
1998 was disappointing. Based on this, the Committee recommended that the       
Company not increase the annual base salary of the Company's senior executives, 
including the Chief Executive Officer, award any cash bonuses or award any      
options. The Compensation Committee approved the Deferred Compensation Plan     
which has been submitted for shareholder approval under Item 4 of this proxy    
solicitation.                                                                   

April 29, 1999                                                

 MEMBERS OF THE COMPENSATION COMMITTEE

Leland O. Erdahl  

George R. Ireland 

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

EXTENSION OF MATURITY DATE AND ADJUSTMENT OF CONVERSION PRICE OF LINDNER LOAN   

        On May 25, 1995, the Company received $6,000,000 in cash (the "Lindner
Loan") through the issuance of 6.5% secured convertible notes in the aggregate  
principal amounts of $1,500,000 and $4,500,000 to Lindner Investments (on behalf
of Lindner Bulwark Fund) ("Lindner Bulwark") and Lindner Dividend Fund, Inc.    
("Lindner Dividend"), respectively. The Lindner Loan was initially convertible  
at $4.00 per share into 375,000 and 1,125,000 shares of Common Stock. In        
addition, the Company issued immediately exercisable warrants (the "Lindner     
Warrants") to purchase 375,000 shares and 1,125,000 shares of the Company's     
Common Stock at an initial exercise price of $4.00 per share to Lindner Bulwark 
and Lindner Dividend, respectively. Lindner Dividend has exercised its right to 
purchase 500,000 shares under the Lindner Warrants.                             

    In March 1998, the Company entered into an agreement to extend the
maturity date of its $6,000,000 secured convertible note from May 31, 1998 to   
May 31, 2000. In return for the extension in the maturity of the note, the      
conversion price was adjusted from $4.00 per share to $3.00 per share. The      
exercise price of the remaining Lindner Warrants to purchase 1,000,000 shares of
the Company's Common Stock was adjusted from $4.00 per share to $3.00 per share,
and the expiration date of the Lindner Warrants was extended by two years, to   
May 31, 2000.                                                                   

 SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

   Section 16(a) of the Securities Exchange Act of 1934, as amended,
requires the Company's officers and directors, and persons who own more than 10%
of a registered class of the Company's equity securities, to file reports of    
ownership and changes in ownership with the SEC and the National Association of 
Securities Dealers, Inc. Officers, directors, and greater than 10% stockholders 
are required by SEC regulation to furnish the Company with copies of all Section
16(a) filings.                                                                  

       Based solely on its review of copies of such forms received by it and
written representations from certain reporting persons that no Forms 5 were     
required for those persons, the Company believes that, during the year ended    
December 31, 1998, its officers, directors, and greater than 10% beneficial     
owners complied with all applicable filing requirements.                        

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 APPROVAL OF AMENDMENT
TO RESTATED CERTIFICATE OF INCORPORATION
 TO INCREASE AUTHORIZED COMMON STOCK
(PROPOSAL 2 ON PROXY CARD)

   The Board of Directors recommends that Article 4 of the Company's
Restated Certificate of Incorporation be amended in order to increase the number
of authorized shares of Common Stock which the Company is authorized to issue,  
from 25,000,000 shares to 35,000,000 shares.                                    

         As of April 27, 1999 the Company's authorized capital stock consisted
of 25,000,000 shares of Common Stock, of which 12,053,027 shares were issued and
outstanding. As of such date, 1,361,237 shares of Common Stock were subject to  
issuance upon the exercise of outstanding options previously issued by the      
Company, 3,000,000 shares of Common Stock were subject to issuance pursuant to  
the Lindner Loan and the Lindner Warrants and 454,846 shares of Common Stock    
were subject to issuance pursuant to the Company's 1999 Deferred Compensation   
Plan. The holders of Common Stock have no preemptive rights to subscribe for any
securities of the Company.                                                      

VOTING ON AMENDMENT; FILING                                                     

   On April 28, 1999, the Board of Directors adopted an amendment to
Article 4 of the Restated Certificate of Incorporation, subject to stockholder  
approval at the Annual Meeting, to increase the number of authorized shares of  
Common Stock to 35,000,000 shares from 25,000,000 shares. At the Annual Meeting,
the stockholders of the Company will be asked pursuant to Proposal 2 to consider
and vote on the proposed amendment to Article 4.                                

        The form of Article 4 of the Restated Certificate of Incorporation, as
it is proposed to be amended, is attached to this Proxy Statement as Annex A.   
Annex A also contemplates approval of Proposal 3 to authorize 1,000,000 shares  
of Preferred Stock, with a resulting increase in the Company's total authorized 
shares of capital stock to 36,000,000 from 25,000,000 as of the date of this    
Proxy Statement. If Proposal 2 is approved and Proposal 3 is not approved,      
appropriate adjustments to the form of the amendment set forth in Annex A will  
be made.                                                                        

      If Proposal 2 is approved by the stockholders at the Annual Meeting,
the proposed amendment to the Restated Certificate of Incorporation will become 
effective upon the filing of a Certificate of Amendment of Certificate of       
Incorporation with the Secretary of State of the State of Delaware, which is    
expected to occur promptly after the Annual Meeting. Unless otherwise instructed
on the proxy, properly executed proxies will be voted in favor of approving the 
proposed amendment to Article 4 of the Restated Certificate of Incorporation to 
increase the number of authorized shares of Common Stock to 35,000,000.         

REASONS FOR INCREASING AUTHORIZED COMMON STOCK                                  

The Board of Directors believes that increasing the number of 
authorized shares of Common Stock is in the best interest of the Company and its
stockholders and therefore recommends that the stockholders approve Proposal 2. 
The Company is currently exploring the possibility of converting the $6,000,000 
Lindner Loan into equity of the Company. The Company is considering this        
conversion in order to (i) significantly reduce the Company's interest payments 
on its debt and (ii) improve the Company's balance sheet in anticipation of     
obtaining financing to commence operations at certain of the Company's uranium  
properties. The Company is negotiating with Lindner Bulwark and Lindner         
Dividend, the holders of the notes issued in connection with the Lindner Loan,  
regarding the terms of a conversion, although the Company has not reached any   
agreement on such a conversion. While the Company currently has 8,130,890 shares
of Common Stock authorized but not issued (or reserved for issuance) which it   
could issue in                                                                  

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exchange for outstanding debt, the Board believes that the current authorized   
capital stock of the Company may be insufficient to implement any future plans  
to convert equity into debt.                                                    

       In addition, the proposed increase in the authorized shares of Common
Stock is desirable to enhance the Company's flexibility in connection with      
possible future actions, such as stock splits, stock dividends, acquisitions,   
financing transactions, employee benefit plan issuances, and such other         
corporate purposes as may arise. Having such authorized Common Stock available  
for issuance in the future will give the Company greater flexibility and will   
allow additional shares of Common Stock to be issued without the expense and    
delay of a stockholders' meeting. Such a delay might deny the Company the       
flexibility the Board views as important in facilitating the effective use of   
the Company's securities.                                                       

OTHER CONSIDERATIONS                                                            

      If the proposal to increase the authorized shares of Common Stock is
approved, the additional authorized shares will be part of the existing class of
such Common Stock and will increase the number of shares of Common Stock        
available for issuance by the Company, but will have no effect upon the terms of
the Common Stock or the rights of the holders of such shares. If and when       
issued, the proposed additional authorized shares of Common Stock will have the 
same rights and privileges as the shares of Common Stock currently outstanding. 
Holders of Common Stock will not have preemptive rights to purchase additional  
shares of Common Stock.                                                         

     Despite the belief of the Board of Directors of the Company that an
increase in the authorized shares of Common Stock is in the best interest of the
Company and its stockholders, the future issuance of additional shares of Common
Stock on other than a pro rata basis would dilute the ownership and voting power
of current stockholders. Such additional shares also could be used to block an  
unsolicited acquisition through the issuance of large blocks of stock to persons
or entities considered by the Company's officers and directors to be opposed to 
such acquisition, which might impede the completion of a merger, tender offer or
other takeover attempt. In fact, the mere existence of such a block of          
authorized but unissued shares, and the Board's ability to issue such shares    
without stockholder approval, might deter a bidder from seeking to acquire      
shares of the Company on an unfriendly basis. While the authorization of        
additional shares of Common Stock might have such effects, the Board of         
Directors of the Company does not intend or view the proposed increase in       
authorized Common Stock as an anti-takeover measure, nor is the Company aware of
any proposed transactions of this type.                                         

REQUIRED VOTE OF STOCKHOLDERS                                                   

     The increase in the authorized shares of the Company's Common Stock
requires amending the Company's Restated Certificate of Incorporation. The      
Company is a Delaware corporation and under the laws of the State of Delaware   
the Company is required to obtain the approval of its stockholders to any       
amendment to the Company's Restated Certificate of Incorporation. The Company is
seeking stockholder approval of the increase in the authorized shares of Common 
Stock pursuant to this Proxy Statement in order to satisfy this requirement.    
Approval of the amendment to the Company's Restated Certificate of Incorporation
requires the affirmative vote of the holders of a majority of the Company's     
outstanding Common Stock.                                                       

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO INCREASE AUTHORIZED   
COMMON STOCK. PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR THIS
PROPOSAL UNLESS A VOTE AGAINST THE PROPOSAL OR ABSTENTION IS SPECIFICALLY       
INDICATED.                                                                      

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APPROVAL OF AMENDMENT TO
 RESTATED CERTIFICATE OF INCORPORATION
TO AUTHORIZE PREFERRED STOCK
(PROPOSAL 3 ON PROXY CARD)

   The Board of Directors recommends that Article 4 of the Company's
Restated Certificate of Incorporation be amended in order to authorize a new    
class of capital stock of the Company consisting of 1,000,000 shares of         
preferred stock, par value $0.001 per share (the "Preferred Stock"). The        
Preferred Stock would be authorized without any rights and designations. The    
Company's Board of Directors would fix such rights and designations of the      
Preferred Stock at the time of issuance without subsequent approval by the      
Company's stockholders.                                                         

    The Preferred Stock would be of the type of shares known as "blank
check preferred." Such Preferred Stock would be available for issuance at any   
time, but the terms of such securities would not be established until the time  
of issuance. The Board of Directors would, if the proposal is adopted by the    
stockholders, have the authority, within its sole discretion, to issue the      
Preferred Stock in one or more series, and to fix for each such series the      
designations and relative rights and preferences, including conversion rights   
and prices, voting powers, restrictions, limitations as to dividends,           
qualifications or terms or conditions of redemption and redemption prices, as   
are permitted by the Delaware General Corporation Law.                          

    Subject to the requirements of applicable law and regulations, the
Board of Directors generally will have the sole discretion to issue authorized  
Preferred Stock without further stockholder approval.                           

VOTING ON AMENDMENT; FILING                                                     
   On April 28, 1999, the Board of Directors adopted an amendment to
Article 4 of the Restated Certificate of Incorporation, subject to stockholder  
approval at the Annual Meeting, to authorize a new class of capital stock of the
Company consisting of 1,000,000 shares of Preferred Stock. At the Annual        
Meeting, the stockholders of the Company will be asked pursuant to Proposal 3 to
consider and vote on the proposed amendment to Article 4.                       

        The form of Article 4 of the Restated Certificate of Incorporation, as
it is proposed to be amended, is attached to this Proxy Statement as Annex A.   
Annex A also contemplates approval of Proposal 2 to increase the Company's      
authorized shares of Common Stock from 25,000,000 to 35,000,000. If Proposal 3  
is approved and Proposal 2 is not approved, appropriate adjustments to the form 
of the amendment set forth in Annex A will be made.                             

      If Proposal 3 is approved by the stockholders at the Annual Meeting,
the proposed amendment to the Restated Certificate of Incorporation will become 
effective upon the filing of a Certificate of Amendment of Certificate of       
Incorporation with the Secretary of State of the State of Delaware, which is    
expected to occur promptly after the Annual Meeting. Unless otherwise instructed
on the proxy, properly executed proxies will be voted in favor of approving the 
proposed amendment to Article 4 of the Restated Certificate of Incorporation to 
authorize a new class of capital stock of the Company consisting of 1,000,000   
shares of Preferred Stock.                                                      

REASONS FOR AUTHORIZING PREFERRED STOCK                                         

       The Board of Directors believes that authorizing the Board to issue a
series or series of Preferred Stock would be in the best interest of the        
stockholders and therefore recommends that the stockholders approve Proposal 3. 
As discussed previously in Proposal 2, the Company is exploring the possibility 
of                                                                              

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converting the $6,000,000 Lindner Loan into equity of the Company. The Company  
is considering this conversion in order to (i) significantly reduce the         
Company's interest payments on its debt and (ii) improve the Company's balance  
sheet in anticipation of obtaining financing to commence operations at certain  
of the Company's uranium properties. The Company is negotiating with Lindner    
Bulwark and Lindner Dividend, the holders of the notes issued in connection with
the Lindner Loans, regarding the terms of a conversion, although the Company has
not reached any agreement on such a conversion. While the Company currently has 
8,130,890 shares of Common Stock authorized but not issued (or reserved for     
issuance) which it could issue in exchange for outstanding debt, the Board      
believes that the current authorized capital stock of the Company may be        
insufficient to implement any future plans to convert equity into debt. Further,
the Board believes that in order to convince certain debt holders to convert    
their debt into equity of the Company, it may be necessary to offer such debt   
holders shares of Preferred Stock with relative rights and preferences superior 
to the rights of holders of Common Stock.                                       

         In addition, the proposed authorization of Preferred Stock is desirable
to enhance the Company's flexibility in connection with possible future actions,
such as stock splits, stock dividends, acquisitions, financing transactions,    
employee benefit plan issuances and other corporate purposes as may arise.      
Having such authorized Preferred Stock (in addition to the increased authorized 
Common Stock) available for issuance in the future will give the Company greater
flexibility and will allow shares of Preferred Stock to be issued without the   
expense and delay of a stockholder meeting. Such a delay might deny the Company 
the flexibility the Board views as important in facilitating the effective use  
of the Company's securities.                                                    

OTHER CONSIDERATIONS                                                            

  Despite the belief of the Board of Directors of the Company that
authorizing shares of Preferred Stock is in the best interest of the Company and
its stockholders, the future issuance of shares of Preferred Stock would dilute 
the ownership and voting power of current stockholders. Such additional shares  
(like additional shares of Common Stock) also could be used to block an         
unsolicited acquisition through the issuance of large blocks of stock to persons
or entities considered by the Company's officers and directors to be opposed to 
such acquisition, which might impede the completion of a merger, tender offer or
other takeover attempt. As discussed above, the mere existence of such a block  
of authorized but unissued shares, and the Board's ability to issue such shares 
without stockholder approval, might deter a bidder from seeking to acquire      
shares of the Company on an unfriendly basis. While the authorization of        
additional shares of Preferred Stock might have such effects, the Board of      
Directors of the Company does not intend or view the proposed Preferred Stock as
an anti-takeover measure, nor is the Company aware of any proposed transactions 
of this type.                                                                   

        In addition, if Proposal 3 is approved, the Company could issue one or
more additional series of Preferred Stock with liquidation or other rights      
senior to the Common Stock. For example, any series of Preferred Stock with     
liquidation rights senior to the Common Stock would be entitled to a            
distribution, upon any potential liquidation of the Company, prior to a         
distribution to the holders of Common Stock. In the event the Company were      
liquidated, dissolved or wound up and the Company had assets insufficient to pay
all holders of its capital stock, the holders of Common Stock could receive     
smaller distributions than they otherwise would or even no distributions at all.
In addition, the Company may issue a series of Preferred Stock with a higher or 
lower number of votes per share than the Common Stock. The Company could also   
issue a series of Preferred Stock with conversion, redemption, dividend or other
rights or a combination of some or all of the rights discussed above. If the    
stockholders of the Company approve the authorization of Preferred Stock, the   
Company may issue shares of Preferred Stock with rights and preferences senior  
to the Common Stock in an equity-for-debt exchange, to raise additional funds or
for other corporate purposes.                                                   

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REQUIRED VOTE OF STOCKHOLDERS                                                   

The authorization of the Preferred Stock requires amending the
Company's Restated Certificate of Incorporation. The Company is a Delaware      
corporation and under the laws of the State of Delaware the Company is required 
to obtain the approval of its stockholders to any amendment to the Company's    
Restated Certificate of Incorporation. The Company is seeking stockholder       
approval of the authorization of the Preferred Stock pursuant to this Proxy     
Statement in order to satisfy this requirement. Approval of the amendment to the
Company's Restated Certificate of Incorporation requires the affirmative vote of
the holders of a majority of the Company's outstanding Common Stock.            

    THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE APPROVAL OF THE
AMENDMENT TO THE RESTATED CERTIFICATE OF INCORPORATION TO AUTHORIZE A NEW CLASS 
OF CAPITAL STOCK CONSISTING OF 1,000,000 SHARES OF PREFERRED STOCK. PROXIES     
SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED FOR THIS PROPOSAL UNLESS A    
VOTE AGAINST THE PROPOSAL OR ABSTENTION IS SPECIFICALLY INDICATED.              

APPROVAL OF SHARE ELECTION PROVISION
OF URANIUM RESOURCES, INC.
 1999 DEFERRED COMPENSATION PLAN
(PROPOSAL 4 ON PROXY CARD)

  The Board of Directors approved the Uranium Resources, Inc. 1999
Deferred Compensation Plan (the "Deferred Compensation Plan") effective January 
11, 1999. A copy of the Deferred Compensation Plan is attached hereto as Annex  
B. The Company is seeking approval by its stockholders of the Share Election    
Provision of the Deferred Compensation Plan. The Share Election Provision, as   
more fully described below, permits a participant to elect to receive shares of 
Common Stock in lieu of his or her compensation.                                

        The Deferred Compensation Plan is designed to induce the directors and
certain executive officers of the Company to defer their 1999 salary and reduce 
the current financial obligations of the Company in light of the Company's      
current financial position.                                                     

GENERAL PROVISIONS                                                              

  The summary of the Deferred Compensation Plan set forth below is
qualified in its entirety by the Deferred Compensation Plan, attached hereto as 
Annex B.                                                                        

       Under the Deferred Compensation Plan, directors and certain executive
officers of the Company and its wholly-owned subsidiaries ("Participants") could
voluntarily elect to defer all or a portion of their salaries, cash directors'  
fees or other compensation for calendar year 1999. Participants could elect to  
defer up to 100% of their compensation for the duration of the year.            
Participants have commenced participation in the Deferred Compensation Plan by  
completing a deferred compensation election and filing such election with the   
Board of Directors, which serves as the Deferred Compensation Plan's            
administrator. Any compensation deferred (and not converted into Common Stock as
described below) will be paid to each Participant on January 11, 2006. The      
amounts deferred by a Participant will not earn any interest during the period  
of the deferral.                                                                

       The Deferred Compensation Plan also provides that, at the time of the
deferral election, a Participant could elect to receive payment of up to 100% of
the deferred amount of compensation in shares of the Company's Common Stock (the
"Share Election Provision"). The number of shares to be received pursuant to any
election will be based on the closing market price of the Company's Common Stock
on January 11, 1999.                                                            

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At the end of each quarter of 1999, a Participant will receive any new shares of
Common Stock he or she has so elected to receive in lieu of deferred            
compensation and may make a new election for the next quarter during 1999 to    
increase or decrease the percent of deferred compensation to be received in     
shares of Common Stock.                                                         

        Upon termination of employment with the Company or its subsidiaries, a
Participant's account is frozen and the Participant is entitled to receive the  
deferred amount on January 11, 2006 (less any deferred amount received in shares
of Common Stock). Each Participant or beneficiary will be an unsecured creditor 
of the Company with respect to any payments due and owing to such Participant   
pursuant to the Deferred Compensation Plan.                                     

        The Board of Directors will administer the Deferred Compensation Plan.
The Board of Directors can amend or terminate the Deferred Compensation Plan at 
any time. However, no amendment may operate retroactively to affect adversely   
such Participant's rights pursuant to the Deferred Compensation Plan as in      
effect prior to such action.                                                    

   A maximum of 454,846 shares of Common Stock will be available for
issuance under the Deferred Compensation Plan. The Company's directors and      
executive officers have elected to defer an aggregate amount of $238,067 of     
their 1999 compensation pursuant to the Deferred Compensation Plan, and have    
elected to receive $170,567 of the amount in shares of the Company's Common     
Stock (based on a value of $0.375 per share, the closing price on the Nasdaq    
National Market on January 11, 1999). On April 27, 1999, the closing price of a 
share of the Company's Common Stock on the Over-the-Counter Bulletin Board was  
$0.19.                                                                          

    The following executive officers and directors of the Company have
elected to receive the number of shares of Common Stock set forth below, in lieu
of a portion of their compensation, through June 30, 1999:                      

                                                                [Download Table]

                                                  NUMBER OF SHARES OF
PARTICIPANT                                         COMMON STOCK(29) 
-----------                                         ---------------- 
                                                                     
Paul K. Willmott                                         30,000      
Chairman, President, Chief Executive Officer                         
and Nominee for Director                                             

Joe H. Card                                              32,000      
Senior Vice President - Marketing                                    

Richard F. Clement, Jr.                                  37,483      
Senior Vice President - Exploration                                  
President - HydroResources, Inc.                                     

Richard A. VanHorn                                       27,734      
Senior Vice President - Operations                                   

Craig S. Bartels                                         42,667      
Vice President - Technology -                                        
HydroResources, Inc.                                                 

All executive officers as a group                       205,551      

All current non-executive officers and directors         21,874      

George R. Ireland                                        10,937      
Director and Nominee for Director                                    

Leland O. Erdahl                                         10,937      
Director and Nominee for Director                                    

-------------------------                                                       

(29) All amounts have been rounded to the nearest share.                        

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The table above only shows shares elected to be received by   
Participants in lieu of compensation through June 30, 1999. The number of shares
to be received after June 30, 1999 is not currently determinable because such   
Participants may increase or decrease the amount to be received in shares of    
Common Stock in each quarter after June 30, 1999.                               

CERTAIN FEDERAL INCOME TAX CONSEQUENCES                                         

      The following is a brief summary of the principal federal income tax
consequences of the Deferred Compensation Plan based upon current federal tax   
laws. The summary is not intended to be exhaustive and, among other things, does
not describe state, local or employment tax consequences.                       

         Any Participant that participates in the Deferred Compensation Plan and
is paid in cash will not be subject to federal income tax or related withholding
until the cash is received. Amounts voluntarily deferred pursuant to the        
Deferred Compensation Plan and paid in the form of Common Stock will not be     
taxable to the Participant until the date of receipt, which is the end of the   
applicable quarter. When Common Stock is received, a Participant will recognize 
ordinary income in an amount equal to the fair market value of the shares of    
Common Stock received. The Company will be entitled to take a corresponding tax 
deduction for the tax year in which the Participant recognizes ordinary income. 
Any appreciation in value of Common Stock, from the distribution date to the    
date the Participant disposes of such Common Stock, will be taxed as capital    
gain (short-term or long-term, depending on the length of time the Common Stock 
was held).                                                                      

REQUIRED VOTE OF STOCKHOLDERS                                                   

       Although directors and executive officers of the Company have elected
to receive shares of Common Stock in lieu of a portion of their salary and other
compensation pursuant to the terms of the Deferred Compensation Plan, no shares 
of Common Stock may be issued to such Participants until the stockholders of the
Company approve the Share Election Provision of the Deferred Compensation Plan. 
Pursuant to Section 9.12 of the Deferred Compensation Plan, the Company is      
required to obtain the approval of its stockholders for implementation of the   
Share Election Provision. Specifically, the Company is asking stockholders to   
vote on all of the articles and/or sections of the Deferred Compensation Plan   
that permit Participants to make a share election, including, but not limited   
to, Article V of the Deferred Compensation Plan, which is the operative         
provision for making such share election. The Company is seeking stockholder    
approval of the Share Election Provision pursuant to this Proxy Statement in    
order to satisfy this requirement. Approval of the Share Election requires the  
affirmative vote of the holders of a majority of the shares present in person or
by proxy at the Meeting and entitled to vote on the matter. If the Stockholders 
do not approve the Share Election Provision, the Share Election Provision will  
be removed from the Deferred Compensation Plan and the remainder of the Deferred
Compensation Plan will continue in effect, including any elections to defer a   
portion of any Participant's compensation and receive the deferred amount in    
cash.                                                                           

  THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE COMPANY'S
SHAREHOLDERS VOTE "FOR" APPROVAL OF THE SHARE ELECTION PROVISION OF THE DEFERRED
COMPENSATION PLAN.                                                              

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PROPOSAL TO RATIFY THE SELECTION
 OF ARTHUR ANDERSEN, LLP AS AUDITORS
(PROPOSAL 5 ON PROXY CARD)

The Board of Directors voted to engage Arthur Andersen, LLP as
independent accountants to audit the accounts and financial statements of the   
Company for the fiscal year ending December 31, 1999, and directed that such    
engagement be submitted to the stockholders of the Company for ratification. In 
recommending ratification by the stockholders of such engagement, the Board of  
Directors is acting upon the recommendation of the Audit Committee, which has   
satisfied itself as to the firm's professional competence and standing. Although
ratification by stockholders of the engagement of Arthur Andersen, LLP is not   
required by Delaware corporate law or the Company's Restated Certificate of     
Incorporation or Bylaws, management feels a decision of this nature should be   
made with the consideration of the Company's stockholders. If stockholder       
approval is not received, management will reconsider the engagement.            

         It is expected that one or more representatives of Arthur Andersen, LLP
will be present at the Meeting and will be given the opportunity to make a      
statement if they so desire. It also is expected that the representatives will  
be available to respond to appropriate questions from the stockholders.         

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE RATIFICATION OF THE
APPOINTMENT OF ARTHUR ANDERSEN, LLP AS INDEPENDENT AUDITORS.

BOARD OF DIRECTORS' RECOMMENDATIONS; VOTE REQUIRED

  The Board of Directors unanimously recommends a vote (i) FOR the
election as director of each of the nominees named in the proxy; (ii) FOR the   
approval of the amendment to the Restated Stock Certificate of Incorporation to 
increase the authorized Common Stock from 25,000,000 to 35,000,000; (iii) FOR   
the approval of the amendment to the Restated Certificate of Incorporation to   
authorize a new class of capital stock consisting of 1,000,000 shares of        
Preferred Stock; (iv) FOR the approval of the Share Election Provision of the   
Deferred Compensation Plan; and (v) FOR the ratification of the appointment of  
Arthur Andersen, LLP as independent auditors.                                   

        The affirmative vote of the holders of (i) a plurality of the votes of
the outstanding shares of Common Stock present at the Meeting, either in person 
or represented by proxy, is required to elect each nominee as a director, (ii)  
a majority of the shares present in person or by proxy at the Meeting and       
entitled to vote on the matter is required to (a) approve the Share Election    
Provision to the Uranium Resources, Inc. 1999 Deferred Compensation Plan and    
(b) ratify the appointment of Arthur Andersen, LLP, and (iii) a majority of the 
outstanding shares of Common Stock is required to (a) approve the amendment to  
the Company's Restated Certificate of Incorporation to increase the authorized  
Common Stock from 25,000,000 to 35,000,000 shares; and (b) approve the          
amendment to the Company's Restated Certificate of Incorporation to authorize a 
new class of capital stock consisting of 1,000,000 shares of Preferred Stock.   

 COST AND METHOD OF PROXY SOLICITATION

     The accompanying Proxy is being solicited on behalf of the Board of
Directors of the Company. All expenses for soliciting Proxies, including the    
expense of preparing, printing and mailing the form of Proxy and the material   
used in the solicitation thereof, will be borne by the Company. In addition to  
the use of the mails, Proxies may be solicited by personal interview, telephone 
and facsimile by directors and regular officers and employees of the Company.   
Such persons will receive no additional compensation for such                   

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services. Arrangements may also be made with brokerage houses and other         
custodians, nominees and fiduciaries for the forwarding of solicitation material
to the beneficial owners of stock held of record by such persons, and the       
Company may reimburse them for reasonable out-of-pocket expenses incurred by    
them in connection therewith.                                                   

ANNUAL REPORTS AND CONSOLIDATED FINANCIAL STATEMENTS

         You are referred to the Company's annual report, including consolidated
financial statements, for the year ended December 31, 1998, enclosed herewith   
for your information.                                                           

INCORPORATION BY REFERENCE

Certain information required by Item 13(a) of Schedule 14A is 
incorporated by reference to the Company's 1999 Annual Report on Form 10-K to be
mailed on approximately May 13, 1999, including the information in the Annual   
Report under the captions "Item 6. Selected Financial Data," "Item 7.           
Management's Discussion and Analysis of Financial Condition and Results of      
Operation," "Item 7a. Quantitative and Qualitative Disclosures About Market     
Risk," "Item 8. Financial Statements and Supplementary Data," and "Item 9.      
Changes in and Disagreements With Accountants on Accounting and Financial       
Disclosure."                                                                    

 DEADLINE FOR RECEIPT OF STOCKHOLDER
 PROPOSALS FOR 2000 ANNUAL MEETING

         Any proposals that stockholders of the Company desire to have presented
at the 2000 Annual Meeting of Stockholders must be received by the Company at   
its principal executive offices no later than December 31, 1999.                

UNDERTAKING TO PROVIDE DOCUMENTS

THE COMPANY WILL PROVIDE TO EACH PERSON TO WHOM A COPY OF THIS PROXY STATEMENT  
IS DELIVERED, UPON THE WRITTEN OR ORAL REQUEST OF ANY SUCH PERSON AND WITHOUT   
CHARGE, A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED   
DECEMBER 31, 1998 AND UPON THE PAYMENT OF A REASONABLE FEE WHICH SHALL BE       
LIMITED TO THE COMPANY'S REASONABLE EXPENSES, A COPY OF ANY EXHIBIT TO SUCH     
ANNUAL REPORT ON FORM 10-K. WRITTEN REQUESTS FOR SUCH COPIES SHOULD BE DIRECTED 
TO THOMAS H. EHRLICH, URANIUM RESOURCES, INC., 12750 MERIT DRIVE, SUITE 1020, LB
12, DALLAS, TEXAS 75251, (972) 387-7777.                                        

 MISCELLANEOUS

   The Board of Directors is not aware of any matter, other than the
matters described above, to be presented for action at the Meeting. However, if 
any other business properly comes before the Meeting, the person or persons     
named in the enclosed form of proxy will vote the proxy in accordance with his  
or their best judgment on such matters.                                         

 DALLAS, TEXAS

May 13, 1999                                                                    

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 ANNEX A

 PROPOSED AMENDMENT TO THE URANIUM RESOURCES, INC.
 RESTATED CERTIFICATE OF INCORPORATION

  Article 4 of the Uranium Resources, Inc. Restated Certificate of
Incorporation shall be deleted in its entirety and replaced with the following: 

 ARTICLE 4

(a)      Authorized Stock.                                                      

                The total number of shares of all classes of stock which the
Corporation has authority to issue is 36,000,00 shares, of which 35,000,000     
shares shall be Common Stock, with a par value of $0.001 per share, and         
1,000,000 shares shall be Preferred Stock, with a par value of $0.001 per share.
The holders of the stock of the Corporation shall have no preemptive rights to  
subscribe for any securities of the Corporation.                                

(b)      Common Stock                                                           

              Any unissued shares of the Common Stock may be issued from
time to time for such consideration, having a value of not less than the par    
value thereof, as may be fixed from time to time by the Board of Directors. Each
share of Common Stock shall be of equal rank and shall be identical to every    
other share of Common Stock. Holders of Common Stock shall have such rights as  
are provided herein and by law.                                                 

                  Except as otherwise provided by the General Corporation Law of
the State of Delaware, by this Certificate of Incorporation or any amendments   
thereto or by resolutions adopted by the Board of Directors providing for the   
issuance of Preferred Stock, the entire voting power and all voting rights shall
be vested exclusively in the Common Stock. The holders of Common Stock shall be 
entitled to one vote per share on all matters to be voted on by the             
Corporation's stockholders.                                                     

                  If and when dividends are declared or paid thereon, whether in
cash, property, or securities of the Corporation, the holders of Common Stock   
shall be entitled to participate in such dividends ratably on a per share basis;
provided, that the rights of the holders of Common Stock to receive dividends   
are subject to the provisions of any series of Preferred Stock which may at the 
time be outstanding.                                                            

             Except as otherwise provided by applicable law, or by any
amendments to this Certificate of Incorporation, in the event of any            
liquidation, dissolution, or winding up of the Corporation, whether voluntary or
involuntary, after payment shall have been made, or set apart for such payment, 
to the holders, if any, of Preferred Stock at the time outstanding of the full  
amounts to which they shall be entitled, the holders of Common Stock, to the    
exclusion of holders, if any, of Preferred Stock at the time outstanding, shall 
be entitled to share, ratably according to the number of shares of Common Stock 
held by them, in all remaining assets of the Corporation available for          
distribution to its stockholders.                                               

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(b)      Preferred Stock                                      

            The Board of Directors of the Corporation (the "Board of
Directors") is expressly authorized, at any time from time to time, to provide  
for the issuance of shares of Preferred Stock in one or more series with such   
designations, preferences, relative, participating, optional or other special   
rights, including, but not limited to voting and conversion rights, and such    
qualifications, limitations or restrictions thereof, as shall be expressed in   
the resolution or resolutions providing for the issuance thereof adopted by the 
Board of Directors (a "Preferred Stock Designation") as are not inconsistent    
with this Certificate of Incorporation or any amendment hereto, as may be       
permitted by the General Corporation Law of the State of Delaware. Except as    
otherwise expressly required by law and except for such voting powers as may be 
stated in the Preferred Stock Designation relating to any series of Preferred   
Stock, the holders of any such series shall have no voting power whatsoever.    

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 ANNEX B

URANIUM RESOURCES, INC

 1999 DEFERRED COMPENSATION PLAN

 ARTICLE I
INTRODUCTION

         1.1 This 1999 Deferred Compensation Plan (the "Plan") provides selected
executive employees and directors of Uranium Resources, Inc. and its wholly     
owned subsidiaries an opportunity to defer a portion of their compensation for  
calendar year 1999.                                                             

 This document constitutes the entire Plan. Any and all prior or
contemporaneous oral or written communications hereby are superseded and        
abolished.                                                                      

ARTICLE II
DEFINITIONS AND GENERAL PROVISIONS

    2.1 "ACCOUNT" or "ACCOUNTS" means the individual deferral accounts
separately maintained under this Plan on the books of the Corporation for the   
benefit of each Participant. Each Account shall be credited with a Participant's
Earned Compensation less any portion of such Earned Compensation as to which    
shares of Common Stock have been distributed in accordance with Article V.      

         2.2 "CODE" means the Internal Revenue Code of 1986, as amended and then
in effect.                                                                      

   2.3 "COMMITTEE" means the Plan Committee described in Article VII
hereof.                                                                         

        2.4 "COMMON STOCK" means the shares of the Corporation's common stock,
$0.001 par value per share.                                                     

         2.5 "CORPORATION" means Uranium Resources, Inc, a Delaware corporation,
together with any successor thereto which adopts this Plan by appropriate       
written action.                                                                 

        2.6 "COMPENSATION" means those amounts otherwise payable in cash or by
check or electronic deposit by the Corporation to an Eligible Person as salary  
for a Plan Year, which amounts are includable in his gross income for federal   
income tax purposes (without regard to Compensation deferred under this or any  
other plan maintained by the Corporation), including but not limited to         
directors' fees, salary and bonus, but excluding any and all nonelective        
contributions (including matching contributions) made by the Corporation to any 
employee benefit plan (within the meaning of Section 3(3) of the Employee       
Retirement Income Security Act of 1974, as amended). Without limiting the       
generality of the foregoing, the limitations imposed by Code Section 401(a)(17) 
do not apply to Compensation as defined under the Plan.                         

       2.7. "DEFERRAL PERCENT" means the portion (expressed as a percentage)
of the Compensation that a Participant elects to defer pursuant to Section 4.1  
hereof.                                                                         

2.8 "DEFERRED AMOUNT" means the amount of Compensation that a 
Participant elects to defer pursuant to Section 4.1 hereof.                     

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     2.9 "DESIGNATED RECIPIENT" means any person who becomes entitled to
receive any distribution hereunder by reason of the death of a Participant.     

         2.10 "EARNED COMPENSATION" means at any date the amount of Compensation
that the Corporation is obligated to pay Participant for services rendered      
before giving effect to the Participant's deferral election.                    

2.11     "EFFECTIVE DATE" of the Plan means January 11, 1999. 

2.12 "ELIGIBLE PERSON" means any employee or director of the  
Corporation or any of its wholly owned subsidiaries, but only so long as such   
person meets all of the requirements of Section 3.1(a) of the Plan.             

         2.13 "ERISA" means The Employee Retirement Income Security Act of 1974,
as amended and then in effect.                                                  

      2.14 "PARTICIPANT" means any Eligible Person who defers Compensation
under the Plan.                                                                 

       2.15 "PLAN YEAR" means the period of time commencing January 11, 1999
and ending on December 31, 1999.                                                

       2.16 "SHARE PERCENT" means the portion (expressed as a percentage) of
the Deferred Amount that a Participant elects to receive in shares of Common    
Stock.                                                                          

 2.17 "VESTED SHARES" means the number of shares of Common Stock
determined in accordance with Section 5.4.                                      

   2.18 GENERAL PROVISIONS. The masculine wherever used herein shall
include the feminine and singular and plural forms are interchangeable. Certain 
terms of more limited application have been defined in the provisions to which  
they are principally applicable. The division of the Plan into Articles and     
Sections with captions has been done for convenience only and is not to be taken
as limiting or extending the meaning of any of its provisions.                  

 ARTICLE III
 ELIGIBILITY AND PARTICIPATION

3.1  General Eligibility Conditions.                          

             (a) To become eligible to participate in this Plan, an individual
       must be (i) an executive employee or a director of the Corporation or
         any of its wholly owned subsidiaries and (ii) designated as an Eligible
Person on Exhibit A.                                          

              (b) Once an Eligible Person becomes a Participant, such individual
        shall continue to be eligible to defer Compensation under the terms of
   this Plan until such individual fails to meet at least one of the
  conditions described above. If a Participant ceases to meet such
        conditions, his interest in the Plan and amounts deferred prior to the
   date he ceases to be an Eligible Person shall continue to be held
  subject to the terms of the Plan, and Vested Shares and Deferred
      Amounts shall be distributable to him in accordance with Article VI.
 For the purposes of Deferred Amounts that are to be distributed
        thereafter and for such purpose only, such person shall continue to be
a Participant.                                                

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         3.2 Deadline For Participation. To actively participate in the Plan, an
Eligible Person must execute a Deferred Compensation Election in the form       
attached hereto as Exhibit C and shall file such election with the Committee on 
or before January 11, 1999.                                                     

ARTICLE IV
DEFERRAL OF COMPENSATION

         4.1 Deferral Elections. For any Plan Year, an Eligible Person may elect
to defer receipt of up to 100% of his Compensation. Once made the Compensation  
deferral elections shall be irrevocable for the Plan Year unless the Corporation
and the Participant agree otherwise.                                            

    4.2 Period of Deferral. All amounts that the Participant elects to
defer shall be paid on January 11, 2006, subject to the Participant's right to  
receive all or any portion of the amount deferred in shares of Common Stock as  
set forth in Article V.                                                         

       4.3 Vesting. A Participant shall always be one hundred percent (100%)
vested in amounts credited to his Account.                                      

   4.4 Base Salary for Other Purposes. Except as otherwise expressly
prohibited by law or the terms of a benefit plan, any Deferred Amounts shall    
continue to be counted as part of the Participant's base salary for purposes of 
any other contracts between Participant and the Corporation, including, without 
limitation, those certain compensation agreements dated June 2, 1997 between the
Corporation and certain of the Participants.                                    

 ARTICLE V
ELECTION TO RECEIVE COMMON STOCK

   5.1 Share Election. For any Plan Year, a Participant may elect to
receive up to 100% of his Deferred Amount in shares of Common Stock. Once made  
the Participant may not change the share election without the consent of the    
Committee, except on the last day of each calendar quarter during the Plan Year.
Any such change shall be effective only with respect to Deferred Amounts        
credited for the calendar quarters following such change.                       

     5.2 Number of Shares to be Received. The number of shares of Common
Stock to be credited shall equal the Deferred Amount, multiplied by the Share   
Percent and divided by $0.375, which was the price of the last trade of the     
Common Stock on NASDAQ on January 11, 1999, the effective date of this Plan. No 
fractional shares shall be issued.                                              

5.3 Distribution of Shares. As of the last day of March, June,
September and December (each a "Distribution Date") during the Plan Year the    
Corporation shall issue to each Participant his Vested Shares as set forth in   
Section 5.4; provided, however, that the first distribution shall not occur     
until the stockholders of the Corporation shall have approved the Plan; and     
provided, further, however, that the Committee may elect to distribute shares of
Common Stock at different times in its sole and absolute discretion.            

       5.4 Vested Shares. A Participant shall have a vested interest only in
that number of shares of Common Stock determined in accordance with the         
following formula: Vested Shares = Earned Compensation, Multiplied by Deferral  
%, Multiplied by Share Percent and divided by $0.375.                           

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        5.5 Limitation on Sale of Shares. All certificates representing any of
the shares of Common Stock shall have endorsed thereon the following legend:    

        "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
        SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THEY
 MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR
HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE 
     REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO THE CORPORATION THAT SUCH   
REGISTRATION IS NOT REQUIRED."              

        5.6 Withholding. The Corporation will make appropriate withholding for
all relevant federal, state and local tax purposes from the non-deferred portion
of Compensation for any Participant with respect to the shares of Common Stock  
that a Participant has elected to receive based on a per share value of $0.375. 
On each Distribution Date if the fair market value of the Common Stock is in    
excess of $0.375 per share, the Corporation will be required to withhold        
additional amounts based upon such excess. The source of such additional amounts
will be Compensation otherwise payable to the Participant on a Distribution     
Date, to the extent sufficient. If such amounts are insufficient, the           
Participant will be required to pay to the Corporation the appropriate amounts  
as a condition to receipt of the shares.                                        

ARTICLE VI
 DISTRIBUTIONS

    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; provided that the Committee may elect, in its sole and        
absolute discretion, to distribute such Deferred Amounts at an earlier date.    

      6.2. Distribution of Shares of Common Stock. Any amounts as to which
the Participant has elected to receive shares of Common Stock as provided in    
Article V shall be distributed to the Participant or his Designated Recipient as
provided in Article V.                                                          

     6.3 If No Designated Recipient. If Participant has not designated a
Designated Recipient, any distribution hereunder after the death of a           
Participant shall be payable first to his surviving spouse, if any, and if none,
to his estate.                                                                  

         6.4 Effect of Termination of Employment. Upon termination of employment
of a Participant for any reason, including death, such Participant's Account    
will be frozen on the date of termination. The Account shall be credited with a 
Participant's Deferred Amount of the Earned Compensation through the date of    
termination, and the Participant shall be entitled to receive on January 11,    
2006 the Deferred Amount of the Earned Compensation less any of the Deferred    
Amount received in shares of Common Stock pursuant to Article V.                

 ARTICLE VII
 PLAN ADMINISTRATION

      7.1 Administration. The Plan shall be administered by a committee as
provided in Section 7.2 hereof, as an unfunded deferred compensation plan.      

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7.2 Plan Committee.                                           

         (a) The Committee shall be the Corporation's Board of
       Directors. No member of the Committee shall act or participate in any
      action of the Committee directly affecting his own Account under the
         Plan, unless such action is of general application to all Participants.
     The Committee is authorized to interpret the Plan and, from time to
 time, may adopt such rules and regulations, consistent with the
   provisions of the Plan, as it may deem advisable to carry out the
purposes of the Plan.                                         

        (b) The Committee shall have all powers necessary to
        accomplish the purpose of the Plan, including, but not limited to, (i)
the discretionary authority to interpret the Plan; (ii) the   
    discretionary authority to determine all questions relating to the
    rights and status of Eligible Persons, Participants and Designated
       Recipients; and (iii) the discretionary authority to make any and all
         rules and regulations needed or advisable for the administration of the
    Plan as are not inconsistent with the terms and provisions hereof.

         (c) Without limiting the powers set forth herein, the
       Committee shall have the power to: (i) change or waive in writing any
 requirements of the Plan to conform with law or to meet special
      circumstances not anticipated or covered in the Plan; (ii) determine
    the times and places for holding meetings of the Committee and the
       notice to be given of such meetings; (iii) employ or otherwise retain
   such agents and assistants, counsel (who may be of counsel to the
      Corporation herein), and clerical and other service providers as the
       Committee may require in carrying out the provisions of the Plan; and
      (iv) authorize one or more of their number, or any agent thereof, to
execute or deliver any instrument on behalf of the Committee. 

7.3 Statement of Participant's Account. As soon as practicable
following the close of each Plan Year, and otherwise from time to time as the   
Committee in its sole discretion may direct, the Committee shall mail, via first
class mail, to each Participant a written statement setting forth the Account of
such Participant as of the end of a Plan Year. Any statement provided in        
accordance with this Section shall be deemed to have been accepted as correct,  
unless written notice to the contrary is received by the Committee within thirty
(30) days after the mailing of such statement to the Participant.               

7.4 Payment of Expenses. All costs and expenses incurred in   
administering the Plan shall be paid by the Corporation.                        

ARTICLE VIII
 AMENDMENT AND TERMINATION

       8.1 Amendment. The Corporation hereby reserves the right, at any time
and from time to time, by written action of its Board of Directors (or by       
written action of an officer or officers of the Corporation to whom such Board  
of Directors has expressly delegated the authority to amend the Plan), to amend,
modify or alter any or all of the provisions of the Plan without the consent of 
any Eligible Person, Participant, Designated Recipient or other person; however,
no amendment shall operate retroactively so as to affect adversely any rights to
which a Participant may be entitled under the provisions of the Plan as in      
effect prior to such action. Any such amendment, modification or alteration     
shall be expressed in an instrument executed by an authorized officer or        
officers of the Corporation, and shall become effective as of the date          
designated in such instrument.                                                  

 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.                                                      

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ARTICLE IX
MISCELLANEOUS PROVISIONS

         9.1 Employment Remains At Will. Nothing in the adoption, maintenance or
operation of the Plan shall confer on any employee, Eligible Person or          
Participant the right to continued employment by the Corporation or by any      
affiliate or subsidiary corporation thereof, or be treated or considered        
evidence of an intent to provide continued employment to such individual, or    
affect in any way the right of the Corporation or such affiliate or subsidiary, 
to terminate such individual's employment, at any time and for any reason. Any  
question as to whether and when there has been a termination of a Participant's 
employment, and the cause of such termination, shall be determined by the       
Committee; any such determination by the Committee shall be final, binding and  
conclusive.                                                                     

        9.2 Facility of Payments. Whenever, in the opinion of the Committee, a
person entitled to receive any payment, or installment thereof, is under a legal
disability or is unable to manage his financial affairs, the Committee shall    
have the discretionary authority to direct payments to such person's legal      
representative, or to a relative or friend of such person for his benefit.      
Alternatively, the Committee may in its discretion apply the payment for the    
benefit of such person in such manner as the Committee deems advisable. Any such
payment or application of benefits, made in good faith and in accordance with   
the provisions of this Section, shall completely discharge any liability of the 
Plan, the Corporation and the Committee with respect to such payment or         
application of benefits.                                                        

        9.3 Plan Is Unfunded; No Obligation to Fund. All Accounts or interests
in the Plan are unfunded and the Corporation shall have no obligation to        
establish any special or separate fund, or segregate any of its assets in order 
to assure the payment of any amounts due or becoming due and payable under the  
Plan; however, to provide for the discharge of its obligations under the Plan,  
the Corporation may in its sole discretion establish a fund in its name, or     
acquire property or contract rights in its name; provided that no Participant or
other person (other than the Corporation) shall acquire a legal or equitable    
interest in any such fund, property or contract. The right of a Participant or  
his Designated Recipient to receive a distribution hereunder shall constitute an
unsecured claim against the general assets of the Corporation, and no           
Participant or Designated Recipient or other person shall have any right in or  
against any amounts credited under the Plan or any other specific assets of the 
Corporation. All amounts credited under the Plan to any Accounts maintained for 
or on behalf of a Participant shall constitute general assets of the Corporation
and may be disposed of by the Corporation at such time and for such purposes as 
it may deem appropriate.                                                        

         9.4 Anti-Alienation. No right, benefit or interest in the Plan shall be
subject to anticipation, alienation, sale, assignment, pledge, partition, lien, 
levy, encumbrance or charge; and any attempt to anticipate, alienate, sell,     
assign, pledge, partition, lien, levy, encumber or charge the same shall be     
void. No such right, benefit or interest shall be liable for or subject to the  
debts, contracts, liabilities, or torts of the person entitled to such benefits,
including claims for alimony, marital assets or property, support, or separate  
maintenance by the spouse of the Participant. If a Participant should become    
insolvent or bankrupt, or attempt to anticipate, alienate, sell, assign, pledge,
encumber or charge any right to benefits under this Plan, such Participant's    
interest in the Plan, in the discretion of the Committee, shall be extinguished;
in such event, the Committee in its sole discretion may hold or apply the       
interest at issue, or any part thereof, for the benefit of such Participant,    
such Participant's spouse, or such Participant's Designated Recipient, in such  
manner as the Committee in its sole discretion may deem proper. Notwithstanding 
the generality of the foregoing, the Corporation shall have the unrestricted    
right to set off against or recover out of any payments                         

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or benefits becoming payable to or for the benefit of a Participant, at the time
such payments or benefits otherwise become payable hereunder, any amounts owed  
or owing to the Corporation by such Participant.                                

    9.5 Indemnification. Each Participant, by executing a Compensation
Deferral Agreement and becoming a Participant hereunder, acknowledges and agrees
to indemnify and hold the Corporation harmless from and against any damages,    
losses and expenses (including without limitation litigation costs incurred by  
the Corporation in connection with the administration of the Plan) arising from 
third-party claims disputes involving such Participant's Plan interest          
(including without limitation, tax liens and levies, creditors' claims,         
garnishment and bankruptcy proceedings, and proceedings in domestic relations   
court).                                                                         

       9.6 Unclaimed Interests. If the Committee shall at any time be unable
to make distribution or payment of benefits hereunder to a Participant or any   
Designated Recipient of a Participant by reason of the fact that such           
Participant's or Designated Recipient's whereabouts is unknown, the Committee   
shall so certify, and thereafter the Committee shall attempt to locate such     
missing person. In the event that such missing person is not located with seven 
(7) years, then the Committee shall cause the Corporation to pay over to the    
Secretary of State of the state whose law has jurisdiction over such matters any
and all amounts then owed to such person, in accordance with the unclaimed funds
law of such state, and the Corporation's obligations thereto shall thereupon be 
considered fully and completely discharged and satisfied.                       

9.7 References to Code, Statutes and Regulations. Any and all 
references in this Plan to any provision of the Code, ERISA, or any other       
statute, law, regulation, ruling or order shall be deemed to refer also to any  
successor statute, law, regulation, ruling or order.                            

 9.8 Liability. The Corporation, and its directors, officers and
employees, shall be free from liability, joint or several, for personal acts,   
omissions, and conduct, and for the acts, omissions and conduct of duly         
appointed agents, in the administration of this Plan.                           

        9.9 Governing Law; Severability. The Plan shall be construed according
to the laws of the State of Texas, and all provisions hereof shall be           
administered according to the laws of that State, except to the extent preempted
by federal law (including, without limitation, ERISA). In the event that any one
or more of the provisions of the Plan shall for any reason be held to be        
invalid, illegal, or unenforceable, such invalidity, illegality or              
unenforceability shall not affect any other provision of the Plan; rather, the  
Plan shall be construed as if such invalid, illegal, or unenforceable provisions
had never been contained herein, and there shall be deemed substituted such     
other provision as will most nearly accomplish the intent of the parties to the 
extent permitted by applicable law.                                             

         9.10 Taxes. The Corporation shall be entitled to withhold and remit any
federal, state and local taxes from any distribution made hereunder which the   
Corporation believes are necessary, appropriate or required by relevant law,    
regulation or ruling.                                                           

       9.11 Tax Consequences of Participation. While the Plan is designed to
provide Eligible Persons the opportunity to defer Compensation on a tax-deferred
basis, the Corporation makes no representation, warranty or guarantee of any    
federal, state or local tax consequences of participation in the Plan to any    
Participant or Designated Recipient (or personal representative or              
attorney-in-fact for such Participant or Designated Recipient).                 

       9.12 Stockholder Approval. Implementation of the portion of this Plan
that allows a Participant to make a share election is subject to the approval of
the stockholders of the Corporation. In the event that the stockholders of the  
Corporation do not approve the share election aspect of this Plan, such aspect  
of the Plan will be deleted and the remainder of the Plan shall continue to be  
in full force and effect.                                                       

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       IN WITNESS WHEREOF, URANIUM RESOURCES, INC, by action of its Board of
Directors, has duly adopted Uranium Resources, Inc. 1999 Deferred Compensation  
Plan, effective as of the 11th day of January, 1999.                            

                                URANIUM RESOURCES, INC

                                   By:  /s/ Paul K. Willmott
                                                 -----------------------------
                                    Paul K. Willmott
                                                 Director, President and Chief
                                     Executive Officer

--------------------------------------------------------------------------------
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ANNEX C   

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 UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 FORM 10-K

(Mark One)                                                                      
[X]      ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES        
EXCHANGE ACT OF 1934                                          
[Fee required]                                                

For the fiscal year ended December 31, 1998 or                

[ ]      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES    
ACT OF 1934                                                   
[No fee required]                                             

For the transition period from __________ to __________       

Commission file number 0-17171                                

 URANIUM RESOURCES, INC.
(Exact name of Registrant as specified in its Charter)

DELAWARE                                75-2212772
      (State of Incorporation)          (I.R.S. Employer Identification No.)

12750 MERIT DRIVE, SUITE 1020, DALLAS, TEXAS 75251
(Address of principal executive offices, including zip code)

(972) 387-7777
(Registrant'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:

 Common Stock, $.001 par value per share

Indicate by check mark whether the registrant (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 registrant was     
required to file such reports) and (2) has been subject to such filing          
requirements for the past 90 days. Yes [X] No [ ].                              

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405  
of Regulation S-K (ss. 229.405 of this chapter) is not 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-K or any amendment to this Form 10-K. [ ]                               

The aggregate market value of the Common Stock of the Registrant held by        
nonaffiliates at March 25, 1999 was approximately $1,096,839.                   

Number of shares of Common Stock outstanding as of March 25, 1999: 12,053,027   
shares.                                                                         

Documents Incorporated by Reference:

None

================================================================================

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 URANIUM RESOURCES, INC.
ANNUAL REPORT ON FORM 10-K
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

 TABLE OF CONTENTS

                                                        [Enlarge/Download Table]
                                                                                                                    
PART I............................................................................................................1 

   ITEM 1. BUSINESS...............................................................................................1 
     The Company..................................................................................................1 
        Marketing Strategy/Uranium Sales Contracts................................................................2 
        Reserves..................................................................................................4 
        The ISL Mining Process....................................................................................4 
        Environmental Considerations and Permitting; Water Rights.................................................6 
     The Uranium Industry.........................................................................................8 
        General...................................................................................................8 
        Market Price Formation....................................................................................9 
        Sources of Supply........................................................................................10 
        Required Primary Production..............................................................................12 
        Uranium Prices...........................................................................................13 
        Competition..............................................................................................13 

   ITEM 2. PROPERTIES............................................................................................13 
        South Texas Producing Properties.........................................................................13 
        South Texas Development Properties.......................................................................15 
        New Mexico Development Properties........................................................................16 
        Santa Fe Properties......................................................................................20 
        Reclaimed Properties.....................................................................................20 
        Reclamation and Restoration Costs and Bonding Requirements...............................................21 

   ITEM 3. LEGAL PROCEEDINGS.....................................................................................21 
        Longoria.................................................................................................21 
        ProBank..................................................................................................22 
        Benton Bankruptcy........................................................................................22 
        Indian Lands Jurisdictional Dispute......................................................................23 

   ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................................................23 

PART II..........................................................................................................32 

   ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.................................32 
        Market Information.......................................................................................32 
        Holders..................................................................................................32 
        Dividends................................................................................................32 

   ITEM 6. SELECTED FINANCIAL DATA...............................................................................33 

   ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.................35 
        Forward Looking Statements...............................................................................35 
        Capital Resources and Liquidity..........................................................................35 
        Writedown of Uranium Properties..........................................................................38 
        Environmental Aspects....................................................................................39 
        Results of Operations....................................................................................39 

   ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK...........................................42 

   ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA...........................................................43 

   ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE..................43 

PART III.........................................................................................................44 

   ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT...................................................44 

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                                                        [Enlarge/Download Table]
                                                                                                                   
   ITEM 11. EXECUTIVE COMPENSATION...............................................................................47

   ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......................................52

   ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................................................54

PART IV..........................................................................................................55

   ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K......................................55

         SIGNATURES..............................................................................................59

Index to Consolidated Financial Statements,                   
Auditors' Report, Financial Statements                        
       and Supplemental Data                                     F-1 to F-23

      Index to Exhibits.                                        E-1 to E-3

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 URANIUM RESOURCES, INC.

ANNUAL REPORT ON FORM 10-K
 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1998

PART I

  The "Company" or "Registrant" is used in this report to refer to
Uranium Resources, Inc. and its consolidated subsidiaries. Items 1 and 2 contain
"forward-looking statements" and are made pursuant to the "safe harbor"         
provisions of the Private Securities Litigation Reform Act of 1995. These       
statements include, without limitation, statements relating to management's     
expectations regarding the Company's reserve base, 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 Statement for the Purposes of the `Safe Harbor'        
Provisions of the Private Securities Litigation Reform Act of 1995" beginning on
page 24.                                                                        

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

ITEM 1. BUSINESS                                                                

THE COMPANY                                                                     
      Uranium Resources, Inc., a Delaware corporation (the "Company"), was
formed in 1977 to acquire, explore and develop properties for the mining of     
uranium in the United States using the in situ leach ("ISL") mining process. The
Company is recognized as a leader in the field of ISL mining.                   

    In the ISL process, 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 which is shipped to conversion facilities for sale to   
the Company's customers. The ISL process is generally a more cost effective and 
environmentally benign mining method than conventional mining techniques.       

     In March 1988, the Company commenced production from its Kingsville
Dome property in South Texas and produced a total of approximately 1.5 million  
pounds of uranium from that property prior to September 1990 when it was shut-in
because of low uranium prices. Production was reestablished in March 1996 and an
additional 1.9 million pounds of uranium have been produced through 1998.       
Additional reserves exist at Kingsville Dome, but additional capital investment 
will be required in order to develop those reserves.                            

   In October 1990, the Company commenced production from its Rosita
property in South Texas and produced a total of approximately 1.1 million pounds
of uranium from that property prior to March 1992 when it was shut-in because of
low uranium prices. Production was reestablished in June 1995 and an additional 
1.5 million pounds of uranium have been produced through 1998. The Rosita       
property is essentially at the end of its productive capacity, although some    
minor reserves still remain to be produced.                                     

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       The volatility of the uranium market saw spot prices that ranged from
$12.00 per pound in January to lows at year-end of $8.75. The steady decline    
during the year, which was attributed primarily to low utility demand, has begun
to firm somewhat to the current $10.85, but remains below the level needed by   
the Company to obtain the necessary financing to allow development of new       
production areas at its Kingsville Dome and Vasquez sites.                      

  In response, during the fourth quarter of 1998 the Company began
implementation of the shut-in and placement of its Kingsville Dome and Rosita   
production facilities on stand-by in response to market conditions. The Company 
intends to maintain nominal production from each of these sites for as long as  
the incremental production cost of operating is at or below the cost of         
purchasing uranium to fulfill its 1999 delivery requirements.                   

       The Company is also implementing cost reduction initiatives to reduce
expenditures below 1998 levels throughout the Company. These include a targeted 
33% reduction in total corporate overhead. Expenditures in New Mexico are       
projected to be reduced by between 60%-70% to those levels consistent with      
remaining permitting and land holding costs. With the shut-in of production in  
South Texas, capital expenditures are expected to be reduced by approximately   
90%. Subject to the successful implementation of the cost cutting measures, the 
Company projects its ability to maintain a positive liquidity position through  
at least 1999.                                                                  

    The Company has entered into discussions with various domestic and
international uranium companies regarding the possible divestment or joint      
venturing of all or a portion of its assets. To date no expressions of interest 
have been received. The Company plans to continue to pursue these efforts.      

 The Company has relinquished its mineral lease on the Alta Mesa
property located in South Texas which contained 6.2 million pounds of in-place  
proven and probable uranium reserves (estimated 4.0 million pounds recoverable).
Efforts in 1998 to renegotiate the lease to defer a delay rental of             
approximately $530,000 were not successful and in January 1999 the Company      
relinquished its rights to this property, which resulted in a pre-tax write-off 
of approximately $5.0 million in the fourth quarter of 1998.                    

        The Company continues to hold its Vasquez development project in South
Texas and has three development projects in two districts in New Mexico, the    
Churchrock district and the Crownpoint district. Permitting and licensing is in 
process at all such projects. Commencement of production at these properties is 
subject to a rebound in uranium prices to profitable levels, timely permitting, 
the availability of sales contracts and the availability of capital.            

      As of February 28, 1999, the Company had 54 employees, including its
professional staff consisting of 8 geologists, 5 engineers and two certified    
public accountants. To support its production, exploration and permitting       
activities, the Company maintains a regional office in Albuquerque, New Mexico, 
and field offices at the Kingsville Dome site, the Rosita site and in           
Crownpoint, New Mexico.                                                         

MARKETING STRATEGY/URANIUM SALES CONTRACTS                                      

       Long-term contracts are the primary source of revenue to the Company.
Spot sales will be utilized to manage inventories and optimize revenues. The    
Company intends to use matched sales in amounts up to its available quotas      
through 2003 to maximize profitability. All contracts together will result in a 
portfolio that is targeted to provide upside market price participation while   
limiting down-side price risk.                                                  

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       As of December 31, 1998, based on prices escalated in accordance with
the contract terms through that date, the Company had long-term contracts for   
approximately $26,873,000 of future sales for deliveries through 2002, as       
compared with contracts for approximately $54,542,000 as of December 31, 1997.  
The Company's long-term sales contract portfolio includes a mix of various      
pricing terms. The Company has contracts that have a market-related price, with 
a price ceiling and price floor subject to escalation for between 80%-100% of   
future inflation. The Company also has contracts with fixed prices which are    
also subject to escalation for between 80%-100% of future inflation. These      
contracts contain sales prices in excess of $15.00 per pound at December 31,    
1998. One other contract is based upon 99% of market price without a floor or a 
ceiling.                                                                        

   The following table provides information concerning the Company's
long-term sales contracts from January 1, 1999 through 2002 with prices         
escalated through December 31, 1998 and using the December 31, 1998 spot price  
of uranium for the market price based contracts:                                

                                                        [Enlarge/Download Table]

                                                               1999     2000     2001     2002    Total 
                                                             -------  -------  -------  -------  -------
                                                                                                        
Number of customers                                                4        4        3        2      N/A
Total long-term contracted Deliveries (thousands of pounds)      532      808      622      481    2,443
Total sales (thousands)                                      $ 6,286  $ 8,868  $ 6,384  $ 5,335  $26,873
Average minimum sales price per pound                        $ 11.81  $ 10.98  $ 10.27  $ 11.09  $ 11.00

       For deliveries in periods subsequent to 1999, certain buyers have the
option to adjust deliveries between 10% to 20%. In general, except for the      
options of the buyers to decrease deliveries by a specified percentage, and     
except for force majeure events, the buyers either must take delivery and pay   
for the entire amount contracted for or, if delivery is refused on any portion  
of the contract, pay to the Company the difference between the minimum contract 
price and the amount received by the Company upon the sale of the uranium to a  
third party. Certain of the contracts also provide the buyer with options to    
renew beyond the periods reflected in the table.                                

Should any of the Company's customers be unable to perform its
obligations to purchase and pay for the uranium because of force majeure or     
otherwise, this could have a material adverse effect on the Company's results of
operations if the Company would not be able to sell such material under another 
long-term contract or in a spot market sale.                                    

        The Company's contracted sales of uranium from January 1, 1999 through
December 31, 2002 are represented by long-term contracts with four different    
customers. In 1998 and 1997, the Company had sales to three customers that      
amounted to more than 10% of total sales. These customers represented 27%, 18%  
and 14% of sales in 1998 and 18%, 15% and 13% of sales in 1997.                 

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RESERVES                                                                        

        The following table sets forth the Company's total in-place proven and
probable uranium reserves as of December 31, 1998. The reserves are generally   
based on estimated recovery factors of 65%-75%, certain cut-off grades and a    
price of $16 per pound.                                                         

                                                        [Enlarge/Download Table]

                                                    In-Place Reserves                            
                                                          As of                      Recoverable 
                                                    December 31, 1998              Reserves as of
                           Producing (P) /    ----------------------------          December 31, 
               Properties  Development (D)    Proven(1)         Probable(1)            1998      
               ----------  ---------------    ---------        ------------        --------------
                                            (Amounts in thousands of pounds of U(3)O(8))         
                                                                                                 
Texas                                                                                            
     Kingsville Dome               P               80              2,239              1,763      
     Rosita                        P               --                348                261      
     Vasquez                       D            2,248              1,439              2,397      
New Mexico                                                                                       
     Churchrock                                                                                  
          Section 8                D            6,529                 --              4,244      
          Section 17               D            3,451              4,992              5,488      
          Mancos                   D            4,164                 --              2,707      
     Crownpoint                    D           30,758              8,201             25,323      
     Santa Fe                      D            1,418             13,306              9,571      
                                               ------             ------             ------      
               TOTALS                          48,648             30,525             51,754      
                                               ======             ======             ======      

(1) The Company has historically established the timing of its proven reserves  
at Kingsville Dome preceding the development of its wellfields. The activities  
to determine proven reserves involves drilling of delineation holes to define   
the geologic character of the ore body. The Company has done this activity close
to the timing of expected production to make efficient use of its capital       
resources. See Glossary of Certain Terms for definition of Proven and Probable  
Reserves.                                                                       

        The foregoing table does not include approximately 27.0 million pounds
of proved and probable in-place reserves (estimated 17.6 million pounds         
recoverable) contained on acreage adjoining the Crownpoint property for which   
the Company executed leases with the landowners in 1992. These leases are       
subject to ratification by the U.S. Bureau of Indian Affairs (the "BIA"). See   
Item 2. Properties - New Mexico Development Properties - Crownpoint District.   

THE ISL MINING PROCESS                                                          

         The ISL mining process, a form of solution mining, differs dramatically
from conventional mining techniques. The ISL technique avoids the movement and  
milling of significant quantities of rock and ore as well as mill tailings waste
associated with more traditional mining methods and generally results in a more 
cost-effective and more environmentally-benign extraction operation in          
comparison to conventional uranium mining. Historically, the majority of U.S.   
uranium production resulted from either open pit surface mines or underground   
shaft operations. These conventional mining methods are, in many cases, capital 
and labor intensive and are not cost competitive with the majority of non-U.S.  
conventional producers.                                                         

       The ISL process was first tested for the production of uranium in the
mid-1960's and was first applied to a commercial-scale project in 1975 in South 
Texas. The ISL process had become well established in the South Texas uranium   
district by the late 1970's, where it was employed in connection with           
approximately twenty commercial projects, including two operated by the Company.

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 In the ISL 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 where the uranium is removed from the solution and processed to a dried 
form of uranium which is shipped to conversion facilities for sale to the       
Company's customers.                                                            

An ISL project involves several major components:             

ORE BODY EVALUATION                                           

   Ore bodies which are currently being mined by the ISL process are
associated with groundwater saturated permeable sandstone formations typically  
located between 100 and 2,000 feet below the surface. The uranium ore is        
deposited in a roll front configuration where the groundwater passing through   
the sandstone passes from a natural oxidizing environment to a naturally        
occurring reducing environment. This change causes the dissolved uranium in the 
groundwater to become insoluble, and it then attaches to the grains of the      
sandstone. Some important factors in evaluating an ore body for the ISL process 
are permeability, the thickness of the ore zone, depth, size, grade of ore,     
shape of the ore body, nature of uranium mineralization, host rock mineralogy,  
and the hydrology. These factors are important in determining the design of the 
wellfield, the type and flow of the leaching solution, and the nature of the    
surface ISL facilities.                                                         

WELLFIELD DESIGN                                              

   The wellfield is the mechanism by which the leaching solution, or
lixiviant, is circulated through the ore body. The wellfield consists of a      
series of injection, production (extraction) and monitoring wells drilled in    
specified patterns. These patterns will vary primarily with the configuration of
the ore and the hydrologic characteristics of each deposit. Determining the     
wellfield pattern is crucial to minimizing costs and maximizing efficiencies of 
production. Injection and production wells vary in diameter from four to six    
inches. Generally, these wells are drilled down to the bottom of the ore zone   
(through which the lixiviant must be circulated to achieve production).         
Injection and production wells are cased with polyvinyl chloride ("PVC") or     
fiberglass casings which are cemented in place from the bottom of the ore zone  
to the surface. The wells are then completed into the ore zone.                 

LIXIVIANT CHEMISTRY                                           

   The lixiviant, consisting of native groundwater fortified with an
oxidant and an anionic complexing agent, is introduced via the injection wells  
to the ore bearing aquifer. The oxidant (gaseous oxygen) changes the uranium    
valence state making the uranium soluble in the lixiviant. The lixiviant (sodium
bicarbonate) complexes the original uranium to a soluble ion, uranyl            
dicarbonate, which dissolves the uranium. The dissolved uranium then flows to   
the surface with the lixiviant fluid which is circulated through the ore body   
until economic recovery is achieved.                                            

URANIUM RECOVERY PROCESS                                      

  The uranium recovery process consists of a lixiviant circuit, an
elution/precipitation circuit and a drying and packaging process. The lixiviant 
circuit flows from the ore body, where the uranium is dissolved. The lixiviant  
stream is then circulated to an ion exchange column on the surface where uranium
is extracted from the lixiviant by absorption onto the resin beads of the ion   
exchange columns. The lixiviant is then refortified and reinjected into the ore 
body. When the ion exchange column's resin beads are loaded with uranium, the   
loaded uranium is removed and placed into the elution circuit where the uranium 
is flushed with a salt water solution which precipitates the uranium from the   
beads. This leaves the uranium in a slurry, which is then dried and packaged for
shipment as uranium powder.                                                     

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   The Company has historically utilized a central plant for the ion
exchange portion of the production process. In order to increase operating      
efficiency and reduce future capital expenditures, the Company began the design 
and development of wellfield-specific remote ion exchange methodology. Instead  
of piping the solutions over large distances through large diameter pipe lines  
and mixing the waters of several wellfields together, each wellfield will be    
mined using a dedicated satellite ion exchange facility. This will allow for ion
exchange to take place at the wellfield instead of at the central plant.        

       Nominal design for the remote ion exchange facilities flow will be in
the range of 1,200 gpm, about 25% of the design flow of the central plant at the
Kingsville Dome project. Each of these units will consist of several            
ion-exchange columns and a resin transfer facility. When fully loaded with      
uranium, the resin will be transferred to a trailer and the resin trucked to the
central plant for elution. After stripping the uranium from the resin, the resin
will be transferred into the trailer and transported back to the satellite plant
at the wellfield.                                                               

        These satellite facilities will allow each wellfield to be mined using
its own native groundwater only, thus eliminating the problems associated with  
progressive buildup of dissolved solids in the groundwaters and thereby         
enhancing mining efficiencies and uranium recoveries.                           

WELLFIELD RESTORATION                                         

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

ENVIRONMENTAL CONSIDERATIONS AND PERMITTING; WATER RIGHTS                       

The production of uranium is subject to extensive regulations,
including federal and state (and potentially tribal) environmental regulations, 
that have a material effect on the economics of the Company's operations and the
timing of project development. The Company's primary regulatory costs have been 
related to obtaining and complying with the regulatory licenses and permits that
must be obtained from federal and state agencies prior to the commencement of   
uranium mining activities.                                                      

    Environmental considerations include the prevention of groundwater
contamination by vertical or horizontal escape of leaching solution (through    
proper design and operation of the wellfield and the use of monitoring wells to 
detect any potential excursions from the mining area) and the treatment and     
disposal of liquid and/or solid discrete surface waste or by-product materials  
(so-called "11e. (2) by-product material" under federal law). The majority of   
by-product material that is generated is liquid and generally is disposed of by 
a combination of reverse osmosis, brine concentration and evaporation or, after 
treatment, by surface deposition or discharge or through underground injection  
wells. Any such disposal must be approved by the governing authority having     
jurisdiction over that aspect of the Company's activities. Once mining is       
completed, the Company is required to reclaim the surface areas and restore     
underground water quality to the level of quality mandated by applicable        
regulations or license requirements. A small amount of solid discrete surface   
waste materials generated by the ISL process is disposed of by delivery to a    
licensed by-product material disposal site or to a licensed conventional uranium
mill tailings pile. While such sites may not be readily available in the future,
the Company believes that any increase in the cost of such disposal will        
continue to be insignificant relative to total costs of production and will not 
be a material portion of restoration/reclamation costs.                         

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In both Texas and New Mexico there are two primary regulatory 
authorizations required prior to operations: a radioactive material license and 
underground injection control ("UIC") permits which relate both to the injection
of water for production purposes and to the disposal of by-product material     
through underground injection wells. Uranium mining is subject to regulation by 
the U.S. Nuclear Regulatory Commission ("NRC") under the federal Atomic Energy  
Act ("AEA"); however, the AEA also allows for states with regulatory programs   
deemed satisfactory by the NRC to take primary responsibility for licensing and 
regulating certain activities, such as uranium recovery operations. When a state
seeks this responsibility, it enters into an agreement with the NRC whereby the 
NRC agrees to recede from the exercise of most of its counterpart jurisdiction, 
leaving the matters to be administered by the state. Texas has entered into such
an agreement; however, New Mexico is not a party to such an agreement.          

   The federal Safe Drinking Water Act ("SDWA") creates a nationwide
regulatory program protecting groundwater which is administered by the U.S.     
Environmental Protection Agency ("EPA"). To avoid the burden of dual federal and
state (or Indian tribal) regulation, the SDWA allows for the permits issued by  
the UIC regulatory programs of states and Indian tribes determined eligible for 
treatment as states to suffice in place of a UIC permit required under the SDWA.
A state whose UIC program has been determined sufficient for this purpose is    
said to have been granted "primary enforcement responsibility" or "primacy," and
a UIC permit from a state with primacy suffices in lieu of an EPA-issued permit,
provided the EPA grants, upon request by the permitting state, an "aquifer      
exemption" or "temporary aquifer designation" modifying the permitting state's  
UIC program to recognize the temporary placement of mining fluids into the      
intended mining zone within the horizontal confines of the proposed mining area.
Although the EPA's consent to aquifer exemptions or temporary aquifer           
designations for certain mineral deposits is often issued almost automatically, 
the EPA may delay or decline to process the state's application if the EPA      
questions the state's jurisdiction over the mine site. Both Texas and New Mexico
have been granted "primacy" for their UIC programs, and the Navajo Nation has   
been determined eligible for treatment as a state but is not due to submit its  
program for EPA approval for several years. Until such time as the Navajo Nation
has been granted "primacy," ISL uranium mining activities within Navajo Nation  
jurisdiction will require a UIC permit from the EPA. Despite some procedural    
differences, the substantive requirements of the Texas, New Mexico and EPA UIC  
programs are very similar.                                                      

       In addition to its radioactive materials licenses and UIC permit, the
Company is also required to obtain from appropriate governmental authorities a  
number of other permits or exemptions, such as for waste water discharge, land  
application of treated waste water, or for air emissions.                       

      The current environmental regulatory program for the ISL industry is
well established. Many ISL mines have gone full cycle through the               
permit-operating-restoration cycle without any significant environmental impact.
However, the public anti-nuclear lobby can make environmental permitting        
difficult and permit timing less than predictable.                              

      In Texas, the radioactive materials license required for ISL uranium
mining is granted by the Texas Department of Health ("TDH") and the UIC permits 
are granted by the Texas Natural Resource Conservation Commission ("TNRCC"). The
TNRCC also regulates air quality and surface deposition or discharge of treated 
wastewater associated with the ISL mining process. In order for a licensee to   
receive final release from further radioactive materials license obligations    
after all of its mining and post-mining clean-up has been completed, approval   
must be issued by the TDH along with concurrence from the NRC.                  

        In New Mexico, radioactive materials' licensing is handled directly by
the NRC, rather than by the State of New Mexico. Furthermore, depending upon    
whether a site located within New Mexico falls under state or Navajo Nation     
jurisdiction, the permitting of the UIC aspects of ISL mining may be conducted  
by either the New Mexico Environmental Department ("NMED") or the EPA or        
possibly both in case of jurisdictional conflict. The jurisdictional issue when 
raised as to any development property, could result in litigation between the   
state and the EPA, with the possibility of delays in the issuance of affected   
UIC permits. The Company is currently a party to such litigation with respect to
certain of its New Mexico properties. See "Litigation".                         

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         Water is essential to the ISL process. It is readily available in South
Texas for the Company's operations and obtaining water rights is not required   
because water is subject to capture. In New Mexico the use of water rights is   
administered through the New Mexico State Engineer subject to Indian tribal     
jurisdictional claims. The State Engineer carefully and strictly regulates      
obtaining new water rights, and the transfer or change in use of existing water 
rights. The State Engineer may also grant an application for a "temporary water 
right" which will not establish a vested right but may provide a sufficient     
quantity of water to fulfill the applicant's needs. The State Engineer exercises
jurisdiction over underground water basins with "reasonably ascertainable       
boundaries." Accordingly, new appropriations 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 the Company's properties are located, must be      
obtained by permit from the State Engineer. Applications are required to be     
published and are subject to hearing if protested. There are three criteria for 
decision, that the application: (1) not impair existing water rights, (2) not be
contrary to the conservation of water within New Mexico, and (3) not be         
detrimental to the public welfare. Applications may be approved subject to      
conditions that govern exercise of the water rights. Appeals from decisions of  
the State Engineer are to the district court of the county in which the work or 
point of desired appropriation is situated and from there to the New Mexico     
Court of Appeals. Finally, jurisdiction over water rights may become an issue in
New Mexico when an Indian nation, such as the Navajo Nation, objects to the     
State Engineer's authority to grant or transfer a water right or to award a     
temporary water right, claiming tribal jurisdiction over Indian country. This   
issue could result in litigation between the Indian nation and the state which  
may delay action on water right applications, and, depending on who prevails as 
to any particular property, could result in a requirement to make applications  
to the appropriate Indian nation and continuing jurisdiction by the Indian      
nation over use of the water. All of the foregoing issues arise to a greater or 
lesser extent in connection with the Company's New Mexico properties.           

      There can be no assurance that the regulatory permits or licenses in
Texas or New Mexico, or the applications for water rights in New Mexico,        
required for any project of the Company will be approved by the necessary       
governing authority in the form contemplated by management, or in any other     
form, or within the time periods necessary to commence timely production.       
Additionally, regulations and permit requirements are subject to revisions and  
changes that may materially affect the Company's operations. Any delay or       
failure in obtaining such permits or water rights could materially and adversely
affect the business and operations of the Company.                              

         In addition to the costs and responsibilities associated with obtaining
and maintaining permits, and the regulation of production activities, the       
Company is subject to those 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 URANIUM INDUSTRY                                                            

GENERAL                                                                         

    The only significant commercial use for uranium is to fuel nuclear
power plants for the generation of electricity. At November 30, 1998, 429       
nuclear power plants were operating in the world including 104 in the United    
States. It is estimated that these plants consumed 163 million pounds of uranium
during the year.                                                                

       Nuclear plants generated approximately 17% of the world's electricity
in 1997 up from less than 2% in 1970. In the United States nuclear power plants 
generated approximately 20.1% of the country's electricity needs and 36% of the 
electricity needs of the European Union. According to the Uranium Institute,    
nuclear generating capacity is expected to grow at an approximate 1% rate       
through the year 2005 and annual consumption of uranium is projected to range   
between 164 - 176 million pounds.                                               

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MARKET PRICE FORMATION                                                          

       At December 31, 1998 the spot price was $8.75 per pound U(3)O(8) (the
form in which the Company sells its production) compared to $12.05 at December  
31, 1997. As the following graph depicts, 1998 represented the lowest level of  
utility contracting for U(3)O(8) for any year to date during the 1990's. This   
lack of contract demand was a direct result of extremely heavy demand that      
occurred during 1996; a period in which spot prices rose to $16.50 per pound. In
1999 there is expected to be a solid recovery in utility contract activity which
the Company believes will fuel a recovery in spot prices. In January 1999, the  
spot price increased to $10.50 per pound, the price has increased to $10.85 at  
March 22, 1999.                                                                 

UTILITY LONG-TERM CONTRACTING VOLUME OVER THE 1990-1999 PERIOD

 [GRAPH]

COPYRIGHT 1999, THE UX CONSULTING COMPANY, LLC
 SOURCE: THE URANIUM MARKET OUTLOOK - JANUARY 1999

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     A large percentage of utility U(3)O(8) requirements to fuel reactor
operations for 2000 and beyond is uncontracted as set forth in the following    
graph. Utilities typically become active in covering a majority of their        
uncontracted needs 12 to 18 months in advance. Therefore, the Company believes  
that it will witness a significant increase in contracting activity during 1999.

UNCONTRACTED UTILITY REQUIREMENTS, 1999-2008

 [GRAPH]

COPYRIGHT 1999, THE UX CONSULTING COMPANY, LLC
 SOURCE: THE URANIUM MARKET OUTLOOK - JANUARY 1999

SOURCES OF SUPPLY                                                               

Traditional Supply Sources                                                      

   Based on reports by the Ux Consulting Company, LLC ("Ux") and the
Uranium Institute ("UI"), worldwide production of uranium (U(3)O(8)) for 1998 is
estimated to be approximately 88.7 million pounds down from 92.8 million pounds 
in 1997. A significant reduction to approximately 77 million pounds is expected 
in 1999 based upon cutbacks announced by major uranium producers as a result of 
depressed market prices during 1998. At this rate, production will meet only 47%
of estimated consumption by utilities during 1999 of approximately 164 million  
pounds.                                                                         

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         Production from existing mines is projected by Ux to decline during the
next few years as lower cost reserves are exhausted. Accordingly, production    
from existing mines in the year 2005 is projected by Ux to be only 50 million   
pounds. This represents less than 30% of consumption as projected by the UI for 
2005 of approximately 175 million pounds. Consumption has outstripped production
in each year since 1985 with the shortfalls filled by drawdowns of inventories  
amassed prior to that time. The UI estimates that excess utility inventory      
(inventory in excess of preferred inventory) at the end of 1998 was             
approximately 105 million pounds, less than one year of forward reactor         
requirements. Preferred inventory is by nature influenced by price. In rising   
markets utilities tend to build inventory as a hedge against future price       
increases. Conversely, utilities tend to reduce inventory in falling markets.   
Both actions exaggerate price movement. Producers, traders and other market     
participants were judged to have approximately 78 million pounds of inventory at
the end of 1997. A significant portion of this total is normal inventory levels,
but it can serve to reduce production requirements. The Company believes that   
approximately 50% or 39 million pounds may be considered excess to normal       
inventory levels. The total "excess inventory" of utilities and producers,      
therefore is estimated to be approximately 144 million pounds.                  

Non-Traditional Supply Sources                                                  

     As excess inventory is reduced, the availability of non-traditional
supplies will play an increasingly important role in establishing market        
equilibrium. These supplies consist of Government stockpiles, Russian and U.S.  
highly enriched uranium ("HEU"), inventory of the United States Enrichment      
Corporation ("USEC"), tails re-enrichment, and savings achieved through the     
reprocessing of spent fuel. The following chart represents the rate at which the
Company believes non-traditional supplies could be available to the market place
through 2005:                                                                   

                                                        [Enlarge/Download Table]

                                     AVAILABILITY OF NON-TRADITIONAL SUPPLY                
                                            (MILLION POUNDS U(3)O(8))                      
       SOURCE          1999    2000        2001       2002         2003       2004    2005 
       ------         ------  ------      ------     ------       ------     ------  ------
                                                                                           
     RUSSIAN HEU        24.0    24.0        24.0       24.0         24.0       24.0    24.0
      U.S. HEU           2.6     2.6         2.6        2.6          2.6        2.6     2.6

   USEC INVENTORY        5.2    12.8        14.9       21.4         13.1        0.0     0.0
REPROCESSING SAVINGS     5.0     5.0         5.0        6.0          6.0        6.0     7.0
 TAILS RE-ENRICHMENT     6.0     6.0         6.0        6.0          6.0        6.0     6.0
                      ------  ------      ------     ------       ------     ------  ------
        TOTAL           42.8    50.4        52.5       60.0         57.7       38.6    39.6

DESCRIPTIONS:                                                                   

        Russian HEU: In 1993, the U.S. and Russia entered into an Agreement to
convert highly enriched uranium ("HEU") derived from dismantling Russian nuclear
weapons into fuel suitable for use in commercial reactors. At a maximum         
conversion rate of 30 metric tons HEU per annum approximately 24 million pounds 
of U(3)O(8) would be available in each year of which approximately 6.7 million  
pounds per year will be used internally by Russia.                              

    U.S. HEU: Rate of sale estimated by the UI. Sales are subject to a
determination to be made by the Secretary of Energy, as required under the USEC 
Privatization Act, that such sales will have no adverse impact on the domestic  
mining industry or the U.S./Russia HEU Agreement.                               

         USEC Inventory: In July 1998, USEC consummated its privatization with a
public offering of stock. In its prospectus USEC disclosed that it had inventory
of approximately 75 million pounds U(3)O(8) equivalent of which approximately 61
million pounds would be available to sell through 2005. This                    

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inventory represents amounts of uranium transferred to it by the DOE. Additional
inventory may be realized through USEC's ability to underfeed its enrichment    
plants through the same period. The rate of USEC's sales as indicated in the    
above chart were determined by Nuclear Assurance Corp. - a leading industry     
consultant.                                                                     

        Reprocessing: It is expected that reprocessing of spent fuel will save
5-7 million pounds of demand in each year through 2005. This activity is        
primarily focused in Europe and Japan.                                          

         Tails Re-enrichment: This is a new activity primarily pursued by Russia
in order to utilize their excess enrichment capacity. The Company estimates that
this activity could yield approximately 6.0 million pounds U(3)O(8) per annum   
through 2005.                                                                   

 The potential disposition of Government inventories is the most
significant non-traditional supply factor effecting the market. On March 24,    
1999 an agreement between Tenex, the commercial arm of the Russian Federations' 
Ministry of Atomic Energy, and three Western commercial entities was executed   
that will provide more certainty regarding the disposition of Russian HEU       
derived uranium. In an effort to support this transaction and the continuation  
of the U.S./Russia HEU Agreement, DOE budgeted $325 million to pay for          
approximately 28 million pounds of HEU derived uranium delivered to the U.S.    
during 1997-1998. As part of this agreement, DOE will hold this purchased       
uranium, and its own remaining inventory (approximately 30 million pounds) off  
the market for a ten year period beginning in 1999. The Company believes that   
these events will have a positive impact on current market conditions.          

REQUIRED PRIMARY PRODUCTION                                                     

      New production will be needed to fill the gap between utility demand
and the estimated supply sources. The following table represents the Company's  
estimate of new production required to reach market equilibrium through 2005:   

                                                        [Enlarge/Download Table]

                                                PRIMARY PRODUCTION REQUIREMENTS           
                                ----------------------------------------------------------
                                                 (MILLION POUNDS U(3)O(8))                
            SOURCE               1999     2000    2001     2002     2003     2004     2005
            ------              -----    -----   -----    -----    -----    -----    -----
                                                                                          
         CONSUMPTION            164.0    167.9   166.2    168.8    171.6    176.5    175.4
(1) EXISTING MINES PRODUCTION    77.0     70.6    65.3     49.4     49.7     49.3     49.3
 (2) NON-TRADITIONAL SUPPLIES    42.8     50.4    52.5     60.0     57.7     38.6     39.6
(3) EXCESS INVENTORY DRAWDOWN*   44.2     32.0    22.0     16.0     11.0     10.0      8.8
  NEWLY REQUIRED PRODUCTION                                                               
(CONSUMPTION LESS ITEMS 1+2+3)    0.0     14.9    26.4     43.4     53.2     78.6     77.7
  TOTAL PRODUCTION REQUIRED                                                               
       (EXISTING + NEW)          77.0     85.5    91.7     92.8    102.9    127.9    127.0

*Represents the Company's estimate of annual timing of excess inventory         
drawdowns totaling 144 million pounds from 1999-2005.                           

         The above table indicates that new production will be required starting
in 2000. This production, however, will not be forthcoming at current market    
prices. Further, any reduction or delay in the availability of non-traditional  
supplies will increase the need for new production. There can be no assurance   
that the Company can successfully compete against larger and better capitalized 
producers for a share of such production.                                       

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URANIUM PRICES                                                                  

     Spot prices reflect the price at which uranium may be purchased for
delivery within one year. Historically, spot prices have been more volatile than
long-term contract prices, increasing from $6.00 per pound in 1973 to $43.00 per
pound in 1978, then declining to a low of $7.25 per pound in October 1991. The  
spot price per pound as of March 22, 1999 was $10.85.                           

        The following graph shows spot prices per pound from 1978 to March 22,
1999, as reported by Trade Tech.                                                

[GRAPH] 

---------                                                                       
All prices beginning in 1993 represent U(3)O(8) deliveries available to U.S.    
utilities.                                                                      

COMPETITION                                                                     

     The Company markets uranium to utilities in direct competition with
supplies available from various sources worldwide. The Company competes         
primarily on the basis of price.                                                

ITEM 2. PROPERTIES                                                              

SOUTH TEXAS PRODUCING PROPERTIES                                                

         The Company currently has two producing properties which are located in
South Texas, Rosita and Kingsville Dome. The following is a description of those
properties.                                                                     

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KINGSVILLE DOME                                                                 

       The Property. The Kingsville Dome property consists of mineral leases
from private landowners (and a small portion owned in fee) on 3,068 gross (3,043
net) acres located in central Kleberg County, Texas. The leases provide for     
royalties based upon uranium sales. The leases have expiration dates ranging    
from 1999 to 2007. With a few minor exceptions, all the leases contain shut-in  
royalty clauses which permit the Company to extend the leases not held by       
production by payment of a royalty.                                             

         Reserves. As of December 31, 1998, the property contained approximately
2.3 million pounds of in-place proven and probable uranium reserves (estimated  
1.8 million pounds recoverable).                                                

      Production History. Initial production commenced in May 1988. In May
1989, due to the continuing decline in the spot price of uranium, the Company   
deferred development of the next wellfield, and the plant was shut-in in        
September 1990. Total production from May 1988 through September 1990 was       
approximately 1.5 million pounds.                                               

Wellfield development activities resumed in December 1995, and
production commenced in March 1996. Production at Kingsville Dome was           
approximately 1.9 million pounds from recommencement of production in March 1996
through December 31, 1998 with 445,000 pounds produced in 1998.                 

      The Company plans to shut-in and place on stand-by production at the
Kingsville Dome site in early 1999 because of the outlook for near-term uranium 
market conditions. Nominal production from this site is expected to continue    
provided the incremental production costs at this facility are at or below the  
cost of purchasing uranium in the marketplace.                                  

    Further Development Potential. As part of the Company's historical
production activities, it has engaged in significant development and exploration
efforts at Kingsville Dome. Additional exploration activities are not currently 
planned and are not anticipated until uranium market conditions firm. The       
Company spent approximately $3.0 million in capital expenditures in 1998 and    
does not project to make significant expenditures in 1999.                      

  Permitting Status. Radioactive material licensing and UIC permit
hearings for currently producing areas have been completed, and the necessary   
permits have been issued. Some minor amendments to the license and permit for   
further production within the permit area will be required as development       
proceeds. The term of the license and UIC permit is effectively open-ended.     

       Restoration and Reclamation. Restoration of groundwater was conducted
during 1998 and is expected to continue in 1999.                                

ROSITA                                                                          

       The Property. The Rosita property consists of mineral leases on 3,359
gross and net acres located in northeastern Duval County, Texas. All the leases,
except minor leases, are held by production. The leases provide for royalties   
based upon uranium sales.                                                       

         Reserves. As of December 31, 1998, the property contained approximately
348,000 pounds of in-place proven and probable uranium reserves (estimated      
261,000 pounds recoverable).                                                    

       Production History. The Company began initial production at Rosita in
October 1990. Total production from Rosita for the eighteen months through March
31, 1992 was approximately 1.1 million pounds. In March 1992, due to depressed  
uranium prices, the Company shut-in production.                                 

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      Wellfield development activities resumed at Rosita in March 1995 and
production recommenced in June 1995. From that date through December 31, 1998   
approximately 1.5 million pounds were produced with 178,000 pounds produced in  
1998.                                                                           

      The Company plans to shut-in and place on stand-by production at the
Rosita site in early 1999 because of the outlook for near-term uranium market   
conditions. Nominal production from this site is expected to continue provided  
the incremental production costs at this facility are at or below the cost of   
purchasing uranium in the marketplace.                                          

     Further Development Potential. The Company estimates that there are
approximately 261,000 pounds of uranium remaining to be produced from the Rosita
project. The timing of production from this property will be dependent upon     
future uranium prices, the availability of sales contracts and the availability 
of capital. The Company spent approximately $244,000 for development activities,
permitting and land holding costs in 1998. Significant expenditures for these   
activities are not expected in 1999.                                            

   Permitting Status. Radioactive materials licensing and UIC permit
hearings for currently producing areas have been completed, and the necessary   
permits have been issued. Some minor amendments for further production within   
the permit area will be required as development proceeds. The term of the       
license and UIC permit is effectively open-ended.                               

        Restoration and Reclamation. The Company began groundwater restoration
during 1998 and expects to continue these activities in 1999.                   

SOUTH TEXAS DEVELOPMENT PROPERTIES                                              

VASQUEZ                                                                         

        The Property. The property consists of two mineral leases on 842 gross
and net acres located in southwestern Duval County, Texas. These leases expire  
in February 2000, subject to extension for permitting delays. The leases provide
for royalties based on uranium sales. The Company leases are with the owner of  
both the surface of the land and the uranium estate. As a result of these       
leases, the Company has the right to mine 100% of the uranium on this property. 

         Reserves. As of December 31, 1998, the property contained approximately
3.7 million pounds of in-place proven and probable uranium reserves (estimated  
2.4 million pounds recoverable).                                                

   Development Plan. The timing of production will be dependent on a
number of factors. The Company spent approximately $440,000 in capital          
expenditures in 1998 and does not anticipate significant expenditures in 1999.  
Prior to the commencement of production at Vasquez the Company anticipates      
having to demonstrate financial surety of approximately $1.0 million which it   
expects to meet by posting a bond collateralized by cash in an amount equal to  
50% of the bond.                                                                

         Permitting Status. All of the required permits for this property except
the Production Area Authorization ("PAA") have been received from the TNRCC and 
the TDH. The permit application for the PAA has been completed and submitted to 
the TNRCC. This application is currently under review and the Company expects   
the permit to be in place in 1999.                                              

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NEW MEXICO DEVELOPMENT PROPERTIES                                               

GENERAL                                                                         

The Company has various interests in properties located in the
Churchrock and Crownpoint districts in New Mexico. As to these properties, the  
Company holds both patented and unpatented mining claims, mineral leases and    
some surface leases from private parties, the Navajo Nation and Navajo          
allottees. In addition, in March 1997, the Company acquired from Santa Fe       
certain uranium mineral interests and exploration rights for uranium on         
significant acreage in New Mexico, a small portion of which falls within the    
Churchrock district.                                                            

In keeping with its overall corporate strategy, the Company's 
development plan for its New Mexico properties will proceed incrementally,      
subject to timely permitting, the availability of water rights, the availability
of sales contracts and the availability of capital. The Company plans to develop
the Churchrock district first and the Crownpoint district next.                 

REGULATORY FRAMEWORK                                                            

       NRC License. In New Mexico, uranium production requires a radioactive
materials license issued by the NRC. The Company has applied for one NRC license
covering all properties located in both the Churchrock and Crownpoint districts 
(except the Mancos property) and has included the properties in both districts  
(except the Mancos leases) under one Final Environmental Impact Statement       
("FEIS") which is a prerequisite for the NRC license.                           

        The NRC has finalized and completed the publication of the FEIS in the
first quarter of 1997. The NRC issued an operating license in January 1998 that 
would allow operations to begin in the Churchrock district. In mid-1998, the NRC
determined that certain Churchrock and Crownpoint residents who requested a     
hearing were qualified as to standing. Under the source materials licensing     
procedures of the NRC, hearings are accomplished as informal legal              
presentations. As of March 1, 1999, intervenors have presented briefs covering  
nine areas of contention within the license. The administrative law judge has   
ruled on four of the contentions and has found in favor of the Company in each  
of his decisions. The judge was directed by the Commission to complete the      
hearing process by the end of June 1999. Although all the decisions to date have
been favorable to the Company, there can be no assurance that the license will  
be maintained in its current form; allowing the Company to proceed with its     
planned operations or that the NRC process will be concluded on a timely basis. 

      UIC Permit. NMED has jurisdiction under the New Mexico Water Quality
Act to regulate UIC activities within the State of New Mexico, and the New      
Mexico UIC program has received "primary enforcement responsibility" from the   
EPA under the federal SDWA. However, by the terms of regulations issued by the  
EPA and the primacy determination made for the State of New Mexico, New Mexico's
UIC primacy does not extend to New Mexico's exercise of UIC regulation or       
permitting over facilities located on "Indian lands," a term whose geographic   
reach the EPA has defined as coextensive with that of "Indian country". Because 
even a permit issued by a state holding UIC primacy cannot suffice in lieu of a 
federal UIC permit issued under the SDWA unless the EPA issued a corresponding  
aquifer exemption or temporary aquifer designation, the EPA's opinion that a    
site lies within Indian country virtually compels a state UIC applicant to      
secure an EPA UIC permit for UIC activities to be conducted on such a site.     

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In addition to the EPA's assertions, the Navajo Nation claims 
regulatory jurisdiction over a significant portion of the Company's New Mexico  
development properties. These claims subject the development of those properties
within the area claimed as "Indian country" to further uncertainties, including 
a potential for delays in UIC permitting. For certain properties not permitted  
by the EPA at the time a Navajo regulatory program is promulgated and accepted  
by the EPA for a determination of primacy, the Company would then apply to the  
Navajo EPA for its UIC permits. Although a Navajo UIC program may adopt unique  
application, permitting, and enforcement procedures, it would, nonetheless, be  
required to impose virtually the same substantive requirements as the Company is
prepared to satisfy under existing New Mexico and EPA UIC programs.             

         This dispute over UIC jurisdiction is currently focused on a portion of
the Churchrock and Crownpoint properties. Despite this current jurisdictional   
dispute among the EPA, the State of New Mexico, and the Navajo Nation, the      
Company maintains good relations with the State of New Mexico, the Navajo       
Nation, and the EPA. However, there can be no assurance that the jurisdictional 
dispute will not have a material adverse effect on the Company's development    
plans in New Mexico.                                                            

       In February 1998, the United States Supreme Court in Alaska v. Native
Village of Venetie Tribal Government interpreted the terms "Indian country" and 
"dependent Indian Communities". Such interpretation stated that "Indian country"
includes "all dependent Indian communities within the United States" and that   
such lands refer to a specific category of Indian lands that are not reservation
nor allotted lands. Such lands must meet the following two criteria; (i) they   
must have been set aside by the Federal Government for the use of Indians as    
Indian land; and (ii) they must be under federal superintendence. On the basis  
of this ruling the Company believes that its private fee lands and federal      
claims positions in New Mexico may fall under the jurisdiction of the State of  
New Mexico for regulatory purposes.                                             

      Water Rights. For general information on water rights in New Mexico,
see "Business-Environmental Considerations and Permitting; Water Rights."       

CHURCHROCK DISTRICT                                                             

       The Property. The Churchrock properties encompass 2,225 gross and net
acres and include mineral leases, patented mining claims and unpatented mining  
claims. 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. The Company owns the mineral estate in fee for both Sections 17 and
the Mancos properties. The surface estate on Section 17 is owned by the U.S.    
Government and held in trust for the Navajo Nation. The Company owns patented   
and unpatented mining claims on Section 8. The Company is obligated to pay      
certain royalties based on uranium sales. The unpatented claims currently       
require an annual payment of $100 per claim payable to the Bureau of Land       
Management to remain in full force and effect and are subject to certain        
overrides. On March 25, 1997, the Company acquired from Santa Fe, the fee       
mineral interests in Section 17 and Mancos thereby acquiring the position owned 
by the lessor and extinguished certain of the royalty obligations on those      
properties.                                                                     

      Reserves. As of December 31, 1998, Section 8 contained approximately
6.5 million pounds of in-place proven and probable uranium reserves (estimated  
4.2 million pounds recoverable), Section 17 contained approximately 8.4 million 
pounds of in-place proven and probable uranium reserves (estimated 5.5 million  
pounds recoverable), and the Mancos property contained approximately 4.2 million
pounds of in-place proven and probable uranium reserves (estimated 2.7 million  
pounds recoverable).                                                            

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  Development Plan. The New Mexico properties will be developed in
accordance with the licenses issued by the NRC. It is anticipated that the first
property to be licensed and developed will be Churchrock. Costs related to      
permitting activities and land holding costs were approximately $1.0 million in 
1998. The Company does not anticipate significant spending for permitting and   
land holding costs in 1999. The Company anticipates having to demonstrate       
financial surety in connection with production activities which it expects to   
meet by posting a bond collateralized by cash in an amount equal to 50% of the  
bond.                                                                           

         Exploration Potential. The measured in-place reserves in Sections 8 and
17 and Mancos encompass only a small portion of the properties owned by the     
Company. The Company believes that substantial additional mineralization exists 
on these properties. Because of greater depths, this mineralization is estimated
to be recoverable at a higher cost and accordingly require higher uranium prices
to make them economical to produce.                                             

 Water Rights. The Company originally acquired mineral leases on
Sections 8 and 17 from United Nuclear Corporation ("UNC") and, in connection    
therewith, acquired certain rights to use water from UNC. An application to use 
one of these rights has been the subject of extensive administrative proceedings
and litigation with the New Mexico State Engineer and the Navajo Nation over the
nature and extent of UNC's water rights. The State Engineer determined that the 
consumptive use and diversion amount UNC originally sought to transfer for use  
by the Company were in excess of the rights held by UNC and denied the          
application on the grounds that the UNC rights were insufficient to support the 
Company's mining operations. The Company has since reapplied and revised its    
water budget to be consistent with the rights of UNC as determined by the State 
Engineer. The State Engineer conducted a hearing in March 1998 regarding the    
application for the transfer of the water rights. A claim by the Navajo Nation  
to jurisdiction over these water rights was denied by the State Engineer's      
hearing officer and in the prior proceeding, the state district court. These    
decisions do not preclude a contrary claim from being made in another           
proceeding. No decision on the water right has been made as of February 28,     
1999.                                                                           

Permitting Status. On June 21, 1989 the EPA issued its aquifer
exemption covering that portion of the Churchrock site known as Section 8, and  
on November 1, 1989, NMED issued its permit, covering UIC activities on Section 
8. On October 7, 1994, NMED issued an amended permit covering UIC activities on 
both Section 8 and Section 17. The permit for Section 17 was contested by the   
Navajo Nation which claimed UIC regulatory jurisdiction over the site, based on 
the fact that the surface estate is owned by the Navajo Nation. The EPA, acting 
as an advocate for the Navajo Nation, has asserted the Navajo Nation's claim and
has refused to amend its previously issued aquifer exemption covering Section 8 
to add the portion of the Churchrock facility on Section 17. The Navajo Nation  
has asserted jurisdiction over Section 8 as being a "dependent Indian           
community". The EPA has informed the Company that the regulatory jurisdiction of
the property is considered to be in "dispute" and would require an EPA-issued   
permit prior to the commencement of mining. The Company does not plan to pursue 
permits for Mancos at this time.                                                

         In June 1996, the Company filed with the NMED two applications to renew
the permit in two distinct parts, one covering the Section 8 portion and the    
other the Section 17 portion of Churchrock. This was to assure that the Company 
maintained a "clear" UIC authorization on the Section 8 portion of the site. The
surface estate on Section 8 is not owned by the Navajo Nation or Navajo         
allottees. Because the renewal application was timely filed, the permit covering
the Section 8 property has remained continuously in effect pending final        
determination on the renewal application by the NMED. The Navajo Nation has     
asserted jurisdiction over the UIC for Section 8, claiming that the land lies   
within a "dependent Indian community." While the EPA has not yet taken a final  
position on this issue, they have determined that a dispute does exist between  
the NMED and the Navajo tribe. As a result of this dispute, the EPA has         
indicated that an EPA permit will be required on this property. This situation  
could potentially delay or obstruct development of Section 8. The State of New  
Mexico and the Company have appealed the action of the EPA to the United States 
Court of Appeals for the Tenth Circuit. Oral arguments were presented to        

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the Court on January 21, 1999. A decision by the Court is pending. The outcome  
of this suit may ultimately affect UIC jurisdiction on all Indian lands.        

CROWNPOINT DISTRICT                                                             

     The Property. The Crownpoint properties are located in the San Juan
Basin, 22 miles northeast of the Company's Churchrock deposits and 35 miles     
northeast of Gallup, New Mexico, adjacent to the town of Crownpoint. The        
Properties consist of 1,578 gross and net acres, as follows:                    

              (a) 162 gross and net acres on Section 24. The Company has
         100% of the mineral estate on this acreage pursuant to a combination of
     a 40% fee interest, a mineral lease on the other 60% of the mineral
estate unpatented mining claims. This acreage is subject to an
    obligation of the Company to pay a production payment on the first
    50,000 pounds of uranium produced and an override based on uranium
sales;                                                        

                 (b) 959 gross and net acres on Sections 19 and 29 pursuant to
  a lease from private mineral owners (expiring August 2007) which
    provides for royalties and an override based on uranium sales; and

              (c) 457 gross and net acres of unpatented mining claims in
Sections 9, 24 and 25.                                        

         In addition to the foregoing, the Company has 1,440 gross and net acres
of mineral leases (hereinafter referred to as "Unit 1") from Navajo allottees   
who are the beneficial owners of the surface and mineral rights. The leases are 
subject to approval by the Bureau of Indian Affairs (the "BIA"). The BIA Area   
Director is expected to approve the leases after completion of the license.     
These leases expire 10 years after the approval by the BIA.                     

        Reserves. With respect to all the Crownpoint acreage except Unit 1, as
of December 31, 1998, the property contained approximately 39.0 million pounds  
of in-place proven and probable reserves (estimated 25.3 million pounds         
recoverable). The Company estimates that Unit 1 contains approximately 27.0     
million pounds of in-place proven and probable reserves (estimated 17.6 million 
pounds recoverable). The Unit 1 reserves are not included as part of the        
Company's reserve base.                                                         

         Development Plan. The New Mexico properties will be developed according
to the license conditions issued by the NRC. Under the license, the first       
operating property will be Churchrock followed by Unit 1 and Crownpoint. Costs  
relating to permitting activities and land holding costs for Crownpoint were    
$876,000 in 1998, and are not expected to be significant in 1999.               

    Water Rights. With respect to Crownpoint, the Company has acquired
three applications for appropriations of water which give the Company the first 
three "positions in line" on the hearings list for the San Juan Basin. Certain  
aspects of all three applications were protested and are subject to hearings.   
Water rights relating to Unit 1 may likely involve the claim of the jurisdiction
of the Navajo Nation, and this jurisdictional issue might also be present for   
other parts of Crownpoint. The Company plans to proceed with water rights for   
Crownpoint at a future date.                                                    

       Permitting Status. The NRC license is part of the overall development
plan for both the Churchrock and Crownpoint districts discussed above. The      
Company has recently submitted a revised UIC permit application for Section 24. 
There can be no assurance that the UIC permit will be granted. The surface      
estate on Section 19 and 29 is owned by the U.S. Government and held in trust   
for the Navajo Nation and may be subject to the same jurisdictional dispute as  
for Section 17 in Churchrock.                                                   

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SANTA FE PROPERTIES                                                             

GENERAL                                                                         

  In March 1997 the Company acquired from Santa Fe certain uranium
mineral interests and exploration rights for uranium in New Mexico.             

         The Properties. The properties consist of: (a) 37,000 acres as to which
the Company has acquired a fee interest in the entire mineral estate, excluding 
coal ("Category I Properties"); (b) approximately 140,000 acres as to which the 
Company has acquired the fee interest in uranium (the "Category II Properties");
and (c) approximately 346,000 acres as to which the Company has acquired the    
exclusive right to explore for uranium and other minerals excluding coal (the   
"Category III Properties").                                                     

        The Company is obligated to spend on exploration $200,000 per year for
the ten-year period starting in March 1997 and $400,000 per year for the        
seven-year period starting in March 2007. This expenditure can be made on any of
the Category II or Category III properties.                                     

        The license is for 17 years, expiring in March 2014. In the event that
the sale price of uranium shall exceed $25 per pound for any twelve-month period
URI has committed to spend on exploration (or pay to Santa Fe) during the       
following 5 years an aggregate of $5 million; and in the event that the sale    
price of uranium shall exceed $30 per pound for any twelve-month period URI has 
committed to spend on exploration (or pay to Santa Fe) during the following 5   
years an aggregate of $10 million.                                              

       With respect to Category II and Category III properties, at such time
as URI shall apply for a mining permit with respect to any such properties Santa
Fe has the right to put the remaining mineral interests owned by it (excluding  
coal) to the Company at a price of $200 per acre for any acreage in any section 
which is covered by the mining application. The acreage price shall be increased
by the same percentage as the percentage increase in the price of uranium on the
date of such application over $15.80 per pound. URI has the option to purchase  
at any time the entire mineral estates (excluding coal) on such properties on   
the same terms.                                                                 

        Reserves. The Company estimates that the Category I Properties contain
14.7 million pounds of proven in-place uranium reserves (estimated 9.6 million  
pounds recoverable).                                                            

    Development Plan. The planned development strategy is to integrate
qualified properties from the Santa Fe lands into the production plans for      
Churchrock and Crownpoint.                                                      

       Exploration Potential. There is significant exploration potential for
the Santa Fe properties. Numerous ore grade holes drilled on the properties     
demonstrates this potential; however, because the deposits are not delineated,  
development costs are uncertain.                                                

RECLAIMED PROPERTIES                                                            

         The Company has completed production and groundwater restoration on its
Benavides and Longoria projects in South Texas. The Company is currently        
completing the final stages of surface reclamation on these projects which the  
Company believes will not involve material expenditures.                        

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On August 28, 1995, Manuel T. Longoria, as owner of the ranch 
containing the site of the Company's Longoria mine, brought suit against the    
Company in state district court in Duval County, Texas, asserting claims said to
have arisen at various times over the last eighteen years. See "Business-Legal  
Proceedings."                                                                   

         The Company acquired the Section 17 leases in the New Mexico Churchrock
district from United Nuclear Corporation ("UNC"). UNC had conducted underground 
mining for uranium on Section 17 and had reclaimed these properties. In         
connection with the acquisition, the Company assumed any liability of UNC for   
any remaining remediation work that might be required. NMED has not determined  
what, if any, additional remediation will be required under the New Mexico      
Mining Act. If more remediation work is required, the Company believes it will  
not involve material expenditures.                                              

RECLAMATION AND RESTORATION COSTS AND BONDING REQUIREMENTS                      

Upon completion of production from a wellfield, the Company is
obligated under state and federal law to restore the aquifer to a condition     
consistent with its pre-mining use. This involves restoration of the aquifer,   
plugging and abandoning the injection and production wells and reclaiming the   
surface. With respect to operations at Kingsville Dome and Rosita, as well as   
reclamation and restoration of the Benavides and Longoria projects, the TNRCC   
and TDH requires the Company to provide financial surety to cover the costs of  
such restoration and reclamation. The surety bond requirement at December 31,   
1998 was approximately $6.2 million. The Company fulfills this requirement      
through the issuance of surety bonds from the United States Fidelity and        
Guaranty Company ("USF&G") and has deposited as collateral for such bonds cash  
of approximately $3.6 million. The Company is obligated to fund the cash        
collateral account with an additional $0.50 for each pound of uranium production
until the account accumulates an additional $1.0 million. The Company estimates 
that its future reclamation liabilities with respect to current operations at   
December 31, 1998 approximates $5.2 million, which has been charged to earnings.
These financial surety obligations are reviewed and revised annually by the     
TNRCC and TDH.                                                                  

       The Company anticipates that it will be required to provide financial
surety of approximately $1.0 million as a condition to receipt of the requisite 
permits for the mining of the Vasquez project. The Company anticipates that     
USF&G or other bonding entities will provide the requisite bond under           
arrangements similar to those in place for Rosita and Kingsville Dome.          

       In New Mexico surety bonding will be required prior to development of
the properties. The Company anticipates that it will be required to provide     
financial surety as a condition to receipt of the requisite permits for the     
Churchrock project which it anticipates will be provided by USF&G, or other     
bonding entities under arrangements similar to those in place for Rosita and    
Kingsville Dome. The amount of the surety bond will be subject to annual review 
and revision by the NRC and State of New Mexico.                                

ITEM 3. LEGAL PROCEEDINGS                                                       

LONGORIA                                                                        

On August 28, 1995, Manuel T. Longoria, as owner of the ranch 
containing the site of the Company's Longoria mine near Bruni in Duval County,  
Texas, brought suit against the Company in state district court in Duval County,
Texas asserting claims said to have arisen at various times over the last 18    
years. In the action styled Longoria v. Uranium Resources, Inc., et al.,        
Longoria claims the Company has leased the site knowing that the proposed mining
would contaminate the site; that the Company had knowingly or negligently       
conducted mining operations in a manner which contaminated the Longoria property
with toxic and hazardous material which present a serious health hazard. The    
suit asks for remediation of the Longoria property and for unspecified actual   
and punitive damages.                                                           

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 With regard to the claim for remediation, the Company, upon the
conclusion of mining at the Longoria site and the nearby sites, began           
reclamation in the manner required by its permits and by state and federal      
regulations. Such reclamation has been completed and the Company has made       
application to the TDH for final release of its obligations on the property and 
anticipates to receive such release in early 1999.                              

        The suit is pending at March 31, 1999 and the Company does not believe
the conclusion of this lawsuit will have a material operating or financial      
impact on the Company.                                                          

PROBANK                                                                         

       On July 12, 1995, the Company filed a lawsuit in the federal district
court in Colorado against Professional Bank, a Colorado chartered bank          
("ProBank"). In the action styled Uranium Resources, Inc. v. Professional Bank, 
the Company alleged that ProBank transferred $1,080,000, without the Company's  
authorization, from the Company's account at ProBank to the accounts maintained 
at ProBank of various entities and an individual affiliated with Oren L. Benton.
The Company recovered $300,000 of the total in 1995 and recovered $575,000 from 
ProBank in June 1997 in settlement of the action against ProBank.               

BENTON BANKRUPTCY                                                               

       During 1994, the Company encountered liquidity problems that resulted
in the Company entering into certain transactions with companies controlled by  
Mr. Benton (the "Benton Companies"). On February 23, 1995, Benton and various of
the Benton Companies filed for protection under Chapter 11 of the Federal       
Bankruptcy Code (the "Benton Bankruptcy"). On February 19, 1998, David J.       
Beckman, as Liquidating Trustee for the CSI Liquidating Trust and the NTC       
Liquidating Trust commenced an action against the Company in the United States  
Bankruptcy Court for the District of Colorado seeking to recover certain        
transfers made from CSI Enterprises, Inc. ("CSI") and Nuexco Trading Corporation
("NTC") to the Company. The Adversary Proceeding is styled David J. Beckman v.  
Uranium Resources, Inc., Adversary Proceeding No. 98-1131 SBB ("Adversary       
Proceeding"). Specifically, the Liquidating Trustee seeks to recover (a)        
$1,400,000 paid by NTC to the Company on or about November 7, 1994 and (b)      
transfers by CSI to the Company of $80,000 (12/2/94), $40,000 (12/9/94), $45,000
(12/16/94), $36,150 (2/10/95) and $1,900 (2/14/95). The Liquidating Trustee     
seeks to recover these amounts pursuant to 11 U.S.C. ss. 547, 11 U.S.C. ss.     
544(b), 11 U.S.C. ss. 550 and state law. The Adversary Proceeding was originally
set for trial commencing March 8, 1999. Based upon the status of settlement     
negotiations, the parties filed a Joint Motion to Vacate Trial and Related      
Matters on November 25, 1998. On December 4, 1998, the court entered an order   
vacating the March 8, 1999 trial date and all related deadlines. Settlement     
negotiations between the parties are presently ongoing. The Company does not    
believe any such settlement or other outcome from this matter will have a       
material adverse impact on the operating results or financial position of the   
Company.                                                                        

       The Company has asserted certain claims against Benton and the Benton
Companies in the bankruptcy proceedings. The Adversary Proceeding was set for   
trial beginning on November 16, 1998. As a result of ongoing settlement         
negotiations between the parties, the trial date was vacated. The parties are   
currently in the process of finalizing their settlement agreement and pleadings 
to be filed in the Bankruptcy Court in connection with the settlement.          

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.      

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INDIAN LANDS JURISDICTIONAL DISPUTE                                             

     See "Churchrock District-Permitting Status" for a discussion of the
Company's Appeals for the Tenth Circuit relating to permitting jurisdiction over
certain of the Company's mineral properties in New Mexico.                      

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                     

None                                                          

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--------------------

CAUTIONARY STATEMENT FOR THE PURPOSES OF THE "SAFE HARBOR"
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

     The Company is including the following cautionary statement to take
advantage of the "safe harbor" provisions of the Private Securities Litigation  
Reform Act of 1995 for any forward-looking statement made by, or on behalf of,  
the Company. The factors identified in this cautionary statement 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, the Company cautions that, while it believes such    
assumptions or bases to be reasonable and makes 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:                

COMPANY LIQUIDITY                                                               

As a result of the volatility of spot prices in the uranium   
marketplace, the Company has begun implementing plans to shut-in and place on   
stand-by its two South Texas facilities in early 1999. Nominal production from  
these sites is expected to continue provided their incremental production costs 
remain at or below the cost of purchasing uranium in the marketplace. The       
Company will continue to maintain certain activities at these locations         
including its ongoing groundwater restoration efforts. The Company has also     
begun implementing additional steps for 1999 to preserve cash by reducing       
expenses and maximizing the cash flow from its existing sales contracts. The    
Company accelerated the 1999 delivery under one of its contracts to December    
1998.                                                                           

      The Company is consolidating certain of its administrative locations
and reducing its workforce. These measures were initiated in the fourth quarter 
of 1998 and will continue in 1999. The Company projects that upon the successful
implementation of these strategies it will be able to maintain a continued      
positive liquidity position through at least 1999. However, there can be no     
assurances that the Company will be able to fully implement these strategies. If
certain of these strategies cannot be implemented and if alternatives are not   
available, the Company's operations and liquidity would be negatively impacted  
and the Company may be unable to continue operating as a going concern. Even if 
the market price of uranium increases and the demand for new production meets   
the industry's expectations, there can be no assurance that the Company can     
survive long enough to participate in meeting such demand or that it will have  
access to the capital necessary to bring new production on line.                

CONTINUING SIGNIFICANT CAPITAL REQUIREMENTS                                     

        An ISL mining operation requires a substantial amount of capital prior
to the commencement of, and in connection with, production of uranium, including
costs related to acquiring the rights to mine uranium, securing regulatory      
permits and licenses, exploration and definitional drilling to determine the    
underground configuration of the ore body, designing and constructing the       
uranium processing plant, drilling and developing in order to establish the     
infrastructure for the production wells for each wellfield and complying with   
financial surety requirements established by various regulatory agencies        
regarding the future restoration and reclamation activities for each property.  

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     The Company expects to fund its 1999 capital requirements from cash
flow from operations and existing working capital financing arrangements.       
However, certain capital requirements for new development projects in 1999 and  
beyond may require additional sources of capital. There can be no assurance that
the Company will raise sufficient capital to fund these capital requirements.   

POTENTIAL ADVERSE EFFECT OF FEDERAL AND STATE REGULATIONS                       

   The development and production of uranium is subject to extensive
governmental regulations that materially affect the economics of the Company's  
operations and the timing of project development. To produce uranium, the       
Company must secure and maintain multiple permits, obtain adequate water rights 
and comply with extensive federal, state and potential tribal regulations for   
environmental protection, including regulations relating to air and water       
quality, the prevention of groundwater contamination, the reclamation and       
restoration of wellfield aquifers and the treatment, transportation and disposal
of liquid and/or byproduct material and solid wastes generated by the Company's 
uranium mining and processing activities. To date, the Company's operations have
not been materially and adversely affected by the inability to obtain or        
maintain required permits or water rights, or by any groundwater contamination  
or the disposal of waste or byproduct material. However, should the Company be  
unable to obtain or maintain permits or water rights for development of its     
properties or otherwise fail to adequately handle future environmental issues,  
the Company's operations could be materially and adversely affected by          
expenditures or delays in the Company's ability to initiate or continue         
production at its properties.                                                   

    The Company must obtain all necessary permits from the appropriate
governmental agency before it can commence production at any of its development 
properties. The Company's future production is highly dependent on its ability  
to bring these development properties into production. Applications for         
permitting of certain of these properties have been filed. There can be no      
assurances that all the necessary permits will be obtained or that such permits 
will be obtained in a timely manner. Any significant delays in obtaining the    
necessary permits could have a material adverse effect upon the Company and its 
developmental plans for these properties.                                       

    The Company has expended significant resources, both financial and
managerial, to comply with environmental protection laws, regulations and       
permitting requirements and anticipates that it will be required to continue to 
do so in the future. Although the Company believes its producing properties     
comply in all material respects will all relevant permits, licenses and         
regulations pertaining to worker health and safety as well as those pertaining  
to the environment, the historical trend toward stricter environmental          
regulation may continue. The uranium industry is subject to not only the worker 
health and safety and environmental risks associated with all mining businesses,
but also to additional risks uniquely associated with uranium mining and        
processing. The possibility of more stringent regulations exists in the areas of
worker health and safety, the disposal of wastes and byproduct material, the    
decommissioning, decontamination and reclamation of mining, milling, refining   
and conversion sites, and other environmental matters, each of which could have 
a material adverse effect on the costs or the viability of a particular project.

The Company is required to provide financial surety to state  
environmental agencies for plugging wells, groundwater restoration and site     
decommissioning, decontamination and reclamation. The Company estimates that its
current restoration, decommissioning, decontamination and reclamation costs are 
approximately $5.2 million, which amount the Company has accrued as a liability 
on its financial statements. The Company satisfied its financial surety         
requirements imposed by environmental regulators with surety bonds totaling     
approximately $6.2 million at December 31, 1998, $3.6 million of which is       
collateralized by the Company with cash. The Company anticipates that its future
financial surety requirements will increase significantly when future           
development and production occurs at its sites in Texas and New Mexico. The     
amount of the financial surety for each producing property is subject to        

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annual review and revision by regulators. There can be no assurance that the    
Company will have sufficient capital to meet these future financial surety      
obligations.                                                                    

RESERVE ESTIMATES                                                               

       Reserve estimates are necessarily imprecise and depend to some extent
on statistical inferences drawn from limited drilling, which may prove          
unreliable; and there can be no assurance that the indicated level of recoveries
will be realized. Should the Company encounter mineralization or formations at  
any of its mines or projects different from those predicted by drilling,        
sampling and similar examinations, uranium reserve estimates may have to be     
adjusted and mining plans may have to be altered in a way that could adversely  
affect the Company's operations. Moreover, short-term operating factors relating
to the uranium reserves, such as the need for sequential development of ore     
bodies and the processing of new or different uranium grades, may adversely     
affect the Company's profitability in any particular accounting period.         

NEED TO REPLACE RESERVES                                                        

         The Company's producing uranium mines are, in general, characterized by
a series of individual wellfields that produce at differing declining production
rates. Each wellfield's production decline rate depends on ore reserve          
characteristics, and, in the case of the Company, varies from a steep decline   
rate of six months, to a relatively slow production decline rate of eighteen    
months. The Company's future uranium reserves and production, and therefore cash
flow and income, are highly dependent upon the Company's level of success in    
exploiting its current reserves and acquiring or developing additional reserves.
Proven reserves at the Company's currently producing sites are expected to be   
depleted in 1999, although there is the potential for developing additional     
wellfields at Kingsville Dome. There can be no assurance that the Company's     
development properties will be placed into production or that the Company will  
be able to continue to find and develop or acquire reserves.                    

COMPETITION                                                                     

 There is global competition in the uranium industry for mineral
properties, capital, customers and the employment and retention or qualified    
personnel. In the production and marketing of uranium concentrates there are    
approximately 15 major uranium-producing entities, some of which are government 
controlled and some of which are significantly larger and better capitalized    
than the Company.                                                               

     The Company competes with larger producers in Canada, Australia and
Africa, as well as with other United States ISL producers of uranium and other  
producers that recover uranium as a by-product of other mineral recovery        
processes. The Company also expects to compete with uranium recovered from the  
de-enrichment of highly enriched uranium obtained from the dismantlement of U.S.
and Russian nuclear weapons and sold in the market by the United States         
Enrichment Corporation and/or the United States Department of Energy, as well as
from imports to the United States of uranium from the CIS. The amount of uranium
produced by competitors or imported into the United States may have a material  
impact on uranium prices.                                                       

URANIUM PRICE VOLATILITY                                                        

        The Company's earnings are dependent on the price of uranium, which is
determined primarily by global supply and demand and by the relationship of that
price to the Company's costs of production. Historically, uranium prices have   
been subject to fluctuation, and the price of uranium has been and will continue
to be affected by numerous factors beyond the Company's control, including the  
demand for nuclear power, political and economic conditions, and governmental   
legislation in uranium producing and consuming countries and production levels  
and costs of production of other producing companies. Certain of the Company's  
current long and medium-term contracts have pricing mechanisms related to spot  
market prices. In recent year's, prior to 1996, imports of uranium, including   
imports of uranium from the CIS, have resulted in significant downward pressure 
on uranium prices.                                                              

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        The spot market price for uranium has demonstrated a large range since
January 1995. Prices have risen from $9.65 per pound as of January 31, 1995 to a
high of $16.50 per pound as of May 31, 1996. The spot price as of December 31,  
1998 and March 22, 1999 was $8.75 and $10.85 per pound, respectively.           

URANIUM CONTRACTS PROFITABILITY                                                 

       As of December 31, 1998, the Company had contracts for delivery of an
estimated 2.4 million pounds of uranium to domestic utilities from January 1,   
1999 through 2002. Profitability to the Company on these deliveries will depend 
on the cost of purchasing uranium in the marketplace and the cost of producing  
uranium at the Company's mining properties, the Company's ability to produce    
uranium to meet its sales commitments and the spot market price of uranium.     

LIMITED MARKET; DEPENDENCE ON A FEW CUSTOMERS                                   

     The Company's primary source of revenue is derived from its sale of
uranium to U.S. nuclear power plants. Uranium's only current commercial use is  
as fuel for nuclear power reactors. Accordingly, the Company's present and      
potential customers are electric utilities that operate nuclear power plants.   
The United States is the world's largest producer of nuclear-generated          
electricity. As of November 1998, there were 104 nuclear units in the United    
States. Currently, there are no new nuclear power plants under construction in  
the U.S. As of November 1998, there were 429 nuclear power plants in the World, 
with 30 power plants being constructed in parts of the world other than the U.S.
There can be no assurance that the Company can continue to compete successfully 
for such customers.                                                             

         A significant portion of the Company's contracted sales of uranium from
January 1, 1999 through December 31, 2002 are represented by long-term contracts
with four different customers. In 1998 and 1997, the Company had sales to three 
customers that amounted to more than 10% of total sales. These customers        
represented 27%, 18% and 14% of sales in 1998 and 18%, 15% and 13% of sales in  
1997. In 1996, the Company had sales to five customers that amounted to more    
than 10% of total sales. Those customers represented 20%, 16%, 15%, 12% and 11% 
of sales in that year. The loss of any of these customers or curtailment of     
purchases by such customers could have a material adverse effect on the         
Company's financial condition and results of operations.                        

COMPETITION FROM ALTERNATIVE ENERGY SOURCES AND PUBLIC ACCEPTANCE OF NUCLEAR    
ENERGY                                                                          

         Nuclear energy competes with other sources of energy, including oil and
gas, coal and hydro-electricity. These alternative energy sources are to some   
extent interchangeable with nuclear energy, particularly over the longer term.  
Lower prices of oil, gas, coal and hydro-electricity for an extended period of  
time, as well as the possibility of developing in the future other low cost     
sources for energy, have made and could continue to make nuclear power a less   
attractive fuel source for the generation of electricity, thus resulting in     
lower demand for uranium. Furthermore, the growth of the uranium and nuclear    
power industry beyond or maintenance at its current level will depend upon      
continued and increased acceptance of nuclear technology as a means of          
generating electricity. Because of unique political, technological and          
environmental factors that affect the nuclear industry, the industry is subject 
to public opinion risks which have and could continue to have an adverse impact 
on the demand for nuclear power and increase the regulation of the nuclear power
industry.                                                                       

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POTENTIAL ADVERSE IMPACT OF LOSS OF KEY PERSONNEL                               

       Certain of the Company's employees have significant experience in the
uranium ISL mining industry. The number of individuals with ISL experience is   
small. The continued success of the Company is dependent upon the efforts of    
these key individuals, and the loss of any one or more of such persons' services
could have a material adverse effect on the Company's business operations and   
prospects. The Company has not entered into employment contracts with or        
purchased key man life insurance for any of these individuals.                  

MINING RISKS AND INSURANCE                                                      

    The business of uranium mining generally is subject to a number of
risks and hazards, 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 the Company's wellfield       
infrastructure and production facilities, as well as to adjacent properties,    
personal injury, environmental damage and processing and production delays,     
causing the Company monetary losses and possible legal liability. While the     
Company maintains, and intends to continue to maintain, liability, property     
damage and other insurance consistent with industry practice, no assurance can  
be given that such insurance will continue to be available, be available at     
economically acceptable premiums or be adequate to cover any resulting          
liability.                                                                      

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 GLOSSARY OF CERTAIN 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
         U(3)O(8).

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 the Company has 
                                        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.
                                    ss. 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.

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.

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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
                               its pre-mining use and removing
                                     evidences of surface disturbance. The
                                   restoration of the 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.

resources...........................    A resource is a concentration of        
                                      naturally occurring minerals in such a
                                form that economic extraction is
                                  currently or 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.

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.

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uranium or uranium                                                              
concentrates........................    U(3)O(8), or triuranium octoxide.       

U(3)O(8)............................    Triuranium octoxide equivalent contained
                                       in uranium concentrates, referred to as
                    uranium concentrate.

waste...............................    Barren rock in a mine, or mineralized   
                                       material 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   

MARKET INFORMATION                                                              

    Prior to March 24, 1999 the Company's Common Stock was traded on
Nasdaq under the trading symbol URIX. The following table sets forth the high   
and low sales prices for the Common Stock as reported through Nasdaq for the    
periods indicated:                                                              

                                                                [Download Table]

                                            Common Stock      
Fiscal Quarter Ending                   High              Low 
---------------------                   ----              --- 
                                                              
December 31, 1998                       25/32             5/32
September 30, 1998                      2-3/8             7/32
June 30, 1998                               3                2
March 31, 1998                          4-3/8            2-1/8
December 31, 1997                       7-1/8            2-1/2
September 30, 1997                          7            3-7/8
June 30, 1997                           6-3/8            4-3/4
March 31, 1997                              8                5

     The high and low sales prices for the common stock for the period
January 1, 1999 through March 23, 1999, was $0.50 and $0.125, respectively.     

       On March 23, 1999, the Company's common stock was delisted from the
Nasdaq National Market. Effective March 24, 1999, the Company's common stock    
began being quoted on the OTC Bulletin Board.                                   

HOLDERS                                                                         

        As of December 31, 1998, the Company had 12,053,027 shares of Common
Stock outstanding held of record by 127 persons.                                

DIVIDENDS                                                                       

         The Company did not declare or pay any cash or other dividends on its
Common Stock during the years ending December 31, 1996, 1997 or 1998. The       
Company does not anticipate paying dividends for the foreseeable future.        

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ITEM 6. SELECTED FINANCIAL DATA                                                 

                                                        [Enlarge/Download Table]

                                                           Year Ended December 31,                 
                                          -------------------------------------------------------- 
                                            1998        1997        1996        1995        1994   
                                          --------    --------    --------    --------    -------- 
                                           (In thousands, except per share and per pound amounts)  
                                                                                                   
CONSOLIDATED STATEMENTS OF                                                                         
   OPERATIONS DATA                                                                                 
Uranium sales:                                                                                     
   Produced uranium                       $ 10,984    $ 14,737    $ 17,827    $  7,195    $    959 
   Purchased uranium                        12,363      15,003       6,437      14,634      16,375 
Cost of uranium sales                      (21,286)    (29,269)    (20,122)    (17,235)    (13,466)
                                          --------    --------    --------    --------    -------- 
Earnings from operations before                                                                    
   writedown of uranium properties           2,061         471       4,142       4,594       3,868 
Writedown of uranium properties            (23,112)         --          --        (163)         -- 
                                          --------    --------    --------    --------    -------- 
Earnings (loss) from operations                                                                    
   before corporate expenses               (21,051)        471       4,142       4,431       3,868 
Corporate expenses                          (2,730)     (2,937)     (3,055)     (3,496)     (2,177)
                                          --------    --------    --------    --------    -------- 
Earnings (loss) from operations            (23,781)     (2,466)      1,087         935       1,691 
Interest and other, net                         56         868        (328)       (324)        163 
Loss on acceleration of uranium contract        --          --          --          --        (349)
Loss on termination of joint venture                                                               
   and transfer to stockholders                 --          --          --      (1,781)         -- 
                                          --------    --------    --------    --------    -------- 
Earnings (loss) before income taxes        (23,725)     (1,598)        759      (1,170)      1,505 
Federal income tax (benefit)                (4,745)       (273)         --        (234)        300 
                                          ========    ========    ========    ========    ======== 
Net earnings (loss)                       $(18,980)   $ (1,325)   $    759    $   (936)   $  1,205 
                                          ========    ========    ========    ========    ======== 
Earnings (loss) per common share:                                                                  
   Basic                                  $  (1.57)   $  (0.11)   $   0.09    $  (0.12)   $   0.17 
                                          ========    ========    ========    ========    ======== 
   Diluted                                $  (1.57)   $  (0.11)   $   0.08    $  (0.12)   $   0.17 
                                          ========    ========    ========    ========    ======== 
Weighted average common stock                                                                      
   and equivalents outstanding:                                                                    
   Basic                                    12,053      11,760       8,789       8,098       6,929 
   Diluted                                  12,053      11,760      10,031       8,098       7,193 
CONSOLIDATED OPERATING AND OTHER DATA                                                              
Cash provided by operations               $  8,201    $  4,931    $  9,294    $  5,301    $  5,080 
Pounds of uranium produced                     623         871       1,360         612          -- 
Pounds of uranium purchased                    865       1,275         488         660       1,329 
Pounds of uranium delivered                  1,586       2,240       1,656       1,633       1,081 
Capital expenditures                      $  6,168    $ 14,901    $ 14,607    $  3,583    $  3,183 
Average sales price per pound(1)          $  15.13    $  13.71    $  16.35    $  15.64    $  16.03 
Average cost of produced                                                                           
   pounds sold (2)                        $  16.58    $  15.61    $  11.34    $  10.28    $  13.60 
Average cost of purchased                                                                          
   pounds sold                            $  10.12    $  10.40    $  10.21    $   9.41    $  10.68 
Cash cost per produced pound(3)           $  13.17    $  12.17    $   8.51    $   7.11         N/A 
Average cost per produced                                                                          
   pound(2)                               $  17.11    $  15.85    $  12.12    $  10.09         N/A 
Average cost per purchased                                                                         
   pound                                  $  10.12    $  10.40    $  10.21    $   9.52    $  10.07 

(1) Excludes sales of the Russian component of deliveries made under the matched
sales amendment. The economic benefit of such sales are treated as              
"pass-through" sales.                                                           

(2) Average cost per produced pound consists of all operating costs, depletion, 
depreciation and accrued restoration and reclamation costs.                     

(3) Cash cost per pound consists of all operating costs and wellfield           
development costs associated with producing wellfields.                         

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                                                                [Download Table]

                                            Year Ended December 31,              
                            ---------------------------------------------------- 
                                1998       1997       1996       1995       1994 
                            --------   --------   --------   --------   -------- 
                                               (In thousands)                    
                                                                                 
CONSOLIDATED BALANCE                                                             
   SHEET DATA                                                                    
Cash and cash equivalents   $  3,714   $  2,325   $ 16,934   $  4,716   $  2,528 
Working capital (deficit)      5,198      5,999     15,269      4,710     (2,545)
Uranium properties (net)      39,472     61,303     42,444     37,200     37,230 
Total assets                  49,696     74,864     68,794     48,085     44,850 
Total debt (1)                 7,882      8,419     12,577      7,487      9,227 
Total liabilities             16,363     22,959     23,497     18,214     16,632 
Total shareholders' equity    33,333     51,905     45,297     29,872     28,218 

(1) Includes current portion of long-term debt and notes payable.               

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS 
OF OPERATIONS                                                   

FORWARD LOOKING STATEMENTS                                                      

    This Item 7 contains "forward-looking statements" which are made
pursuant to the "safe harbor" provisions of the Private Securities Litigation   
Reform Act of 1995. These statements include, without limitation, statements    
relating to liquidity, financing of operations, continued volatility of uranium 
prices and estimate of future net cash flows attributable to proved undeveloped 
reserves and other such matters. The words "believes," "expects," "projects,"   
"targets," or "estimates" 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 Statement for the Purposes of the `Safe Harbor'        
Provisions of the Private Securities Litigation Reform Act of 1995" beginning on
page 24.                                                                        

CAPITAL RESOURCES AND LIQUIDITY                                                 

Operating Cash Flows                                                            

      At December 31, 1998, the Company's cash and cash equivalents were
$3,714,000 compared to $2,325,000 at year end 1997. Cash and cash equivalents in
1997 decreased by $14,609,000 from 1996 year end levels. The Company's uranium  
operations generated positive cash flow of $8,201,000 for the year ended        
December 31, 1998, in comparison to positive cash flow from operations in 1997  
and 1996 of $4,931,000 and $9,294,000, respectively. The Company's net working  
capital at December 31, 1998 and 1997 was $5,198,000 and $5,999,000,            
respectively.                                                                   

As a result of the volatility of spot prices in the uranium 
marketplace, the Company has begun implementing plans to shut-in and place on   
stand-by its two South Texas facilities by early 1999. Nominal production from  
these sites is expected to continue provided their incremental production costs 
remain at or below the cost of purchasing uranium in the marketplace. The       
Company will continue to maintain certain activities at these locations         
including its ongoing groundwater restoration efforts. The Company has also     
begun implementing additional steps for 1999 to preserve cash by reducing       
expenses and maximizing the cash flow from its existing sales contracts. The    
Company accelerated the 1999 delivery under one of its contracts to December    
1998.                                                                           

         The Company is consolidating certain of its administrative locations,
and reducing its workforce. The implementation of these measures were initiated 
in the fourth quarter of 1998 and continue in 1999. The Company projects that   
upon the successful implementation of these strategies it will be able to       
maintain a continued positive liquidity position through at least 1999. However,
there can be no assurances that the Company will be able to fully implement     
these strategies. If certain of these strategies cannot be implemented and if   
alternative options are not available, the Company's operations and liquidity   
would be negatively impacted and the Company may be unable to continue operating
as a going concern.                                                             

      In March 1998, the Company entered into an agreement to extend the
maturity date of its $6,000,000 secured convertible note from May 31, 1998 to   
May 31, 2000. As a result of this two year extension, the Company reclassified  
this obligation as a long-term obligation and had a positive impact of          
$6,000,000 to its net working capital at December 31, 1997. The note is         
convertible into shares of the Company's common stock. In return for the        
extension in the maturity of the note, the conversion price was adjusted from   
$4.00 per share to $3.00. The exercise price of certain outstanding warrants    
held by the noteholder to purchase 1,000,000 shares of the Company's common     
stock was also adjusted from $4.00 per share to $3.00 per share, and the        
expiration date of the warrants was extended by two years, to May 31, 2000.     

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         During January 1995, when companies controlled by Oren L. Benton (the
"Benton Companies") held effective control of the common stock of the Company,  
the Company transferred $1 million to the Benton Companies in connection with a 
planned joint venture to process uranium at a Benton Companies' mill. Shortly   
thereafter, an additional $1,080,000 was transferred to or for the benefit of   
Mr. Benton or certain Benton Companies without the authorization of the         
Company's Board of Directors. In February 1995, Mr. Benton and certain of the   
Benton Companies filed for bankruptcy. The Company has recovered $875,000       
related to the unauthorized transfer ($300,000 in 1995 and $575,000 in 1997);   
however, the remaining $1.2 million will not be recovered. A loss for these     
transactions of $1.78 million was recorded in 1995 and the recovery of the      
$575,000 resulted in an increase to other income in 1997.                       

Investing Cash Flows                                                            

      The Company resumed development activities at its Rosita site during
the second quarter of 1995 and uranium production began in June 1995. During    
1997 and 1998, $2,450,000 and $244,000 in capital expenditures were incurred at 
Rosita, respectively. Capital expenditures to be incurred for 1999 at Rosita are
expected to be minimal.                                                         

     Significant development activities at the Company's Kingsville Dome
facility began in December 1995 and resulted in commencement of production at   
this site in March 1996. Capital expenditures at Kingsville Dome during 1997 and
1998 totaled $8,998,000 and $2,999,000, respectively and are expected to be     
minimal in 1999. The Company expects to fund its 1999 activities at its         
Kingsville Dome and Rosita projects from cash on hand, sales proceeds under     
uranium deliveries and through existing financing arrangements. See "Operating  
Cash Flows" for discussion of operating plans for Rosita and Kingsville Dome.   

        In June 1996, the Company acquired the rights to a significant uranium
deposit in South Texas known as the Alta Mesa project. The Company spent        
$4,000,000 to acquire the uranium rights to the property which contains         
approximately 6.2 million pounds of in-place proven and probable reserves. The  
primary term of the lease was to expire in December 1999 and required either    
minimum production from the property or a payment of approximately $530,000 . In
December 1998, the Company attempted to renegotiate the lease. The renegotiation
was not successful and in January 1999 the Company relinquished its rights to   
this property which resulted in a pre-tax write-off of approximately $5.0       
million in the fourth quarter of 1998. Capital expenditures related primarily to
permitting activities and land holding costs have totaled approximately $515,000
and $103,000, respectively in 1997 and 1998.                                    

  The initial capital costs to acquire the rights to the Alta Mesa
property were obtained through a one-year note from the Lindner Dividend Fund.  
This $4.0 million note was repaid in January 1997 from the proceeds from the    
Company's equity placement completed in December 1996.                          

  Capital expenditures at the Company's Churchrock, Crownpoint and
Vasquez projects for permitting and land holding costs totaled approximately    
$2,900,000 and $2,800,000 in 1997 and 1998, respectively and are not expected to
be significant in 1999. Capital requirements for 1999 and beyond for these      
projects are expected to be met through future sales proceeds from current and  
additional uranium delivery contracts and through future sources of debt and/or 
equity financing.                                                               

    Cash used for other investing activities for 1997 and 1998 totaled
$524,000 and $345,000, respectively and was for the purchase of certificates of 
deposit to fund certain bonding requirements at the Company's producing and     
development properties. These certificates of deposit are pledged under these   
bonding requirements and therefore are not readily available to the Company. See
Note 1 - "Restricted Cash" of the Notes to Consolidated Financial Statements.   

Financing Cash Flows                                                            

         In May 1996, the Company entered into a one-year $3.0 million revolving
credit facility. This facility was renewed and expanded to a $5.0 million credit
facility which concludes July, 1999. This agreement is secured by the Company's 
uranium inventory and/or by receivables from its uranium sales contracts.       
Principal and interest payments under the loan are due monthly, with interest on
the loan accruing at the prime rate plus 1%. Principal advances, net of         
repayments, under the facility amounted to $1,685,000 in 1998.                  

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      In June 1996, the Company received $4.0 million in proceeds from the
one-year note entered into with the Lindner Dividend Fund, noted previously. The
terms of the note provided for the payment of both the principal and accrued    
interest by June 1997 with interest on the note accruing at a rate of 6.5% per  
annum. The principal and accrued interest on this note was paid in January 1997.

      In December 1996, the Company completed an equity placement in which
2,000,000 shares of the Company's common stock were sold in a public offering.  
Net proceeds to the Company totaled over $14,000,000 with $4,900,000 of the     
proceeds used in January 1997 to repay the $4.0 million note from the Lindner   
Dividend Fund and to pay certain other long-term obligations. The balance of the
proceeds was used for working capital purposes and to fund development          
activities at the Company's projects.                                           

        The Company was obligated to pay a production payment royalty of $1.00
per pound on the first three million pounds of uranium produced and sold from   
either Kingsville Dome or Rosita. The Company has cumulatively produced in      
excess of three million pounds of uranium from these properties and made the    
final payment of approximately $730,000 on this obligation in January 1997.     

    In 1997 the Company generated $133,000 from the issuance of 40,000
shares of common stock associated with the exercise of certain stock warrants.  
In 1996, the Company also generated approximately $630,000 from the issuance of 
approximately 167,000 shares of common stock upon the exercise of certain stock 
options and stock warrants.                                                     

Other Non-Cash Transactions                                                     

In March 1997, the Company acquired from Santa Fe Pacific Gold
Corporation ("Santa Fe") certain mineral interests covering approximately       
500,000 acres in northwestern New Mexico in exchange for 1.2 million shares of  
the Company's common stock and a commitment for certain exploration             
expenditures. Approximately one-third of the acreage comprises uranium mineral  
rights and the remaining acreage comprises exploration rights with rights to    
purchase and develop any uranium mineral interests found. Included in the       
purchase was an existing royalty obligation from the Company to Santa Fe on     
certain properties then under lease from Santa Fe. The Company estimates that   
there is approximately 14.7 million pounds of proven in-place uranium reserves  
on 37,000 acres of the property on which it acquired the entire mineral estate  
(excluding coal). Also included in the 500,000 acres is the fee interest in     
uranium on approximately 140,000 acres and the right to explore for uranium, for
17 years, on approximately 346,000 acres.                                       

DEPENDENCE ON URANIUM PRICES                                                    

        The Company's operations are dependent on the price of uranium and its
relationship to the Company's cost of production. Historically, uranium prices  
have demonstrated significant volatility and have been and will continue to be  
affected by factors outside of the Company's control.                           

IMPACT OF URANIUM PRICE DECLINES                                                

         While the ultimate impact and timing to the uranium markets of the USEC
privatization and the potential disposition of their newly disclosed uranium    
inventory levels is uncertain, there is potential for this event along with the 
ultimate disposition of the highly enriched Russian uranium and U.S. Government 
uranium stockpiles to continue to depress uranium prices or to inhibit prices   
from rising to higher levels over the next several years. The prospect of       
potentially depressed uranium prices for continued periods could adversely      
impact the Company's ability to secure additional long-term sales contracts at  
prices that exceed the Company's overall costs.                                 

     The market price of uranium has fallen to levels that are currently
below the Company's cost of uranium production. The outlook for uranium prices  
through the end of 1999 indicates that a price rebound to levels which would    
enable the Company to obtain the necessary financing to allow development of new
production areas in South Texas during this period is uncertain.                

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        In order for the Company to maximize the existing and future cash flow
projected from its existing sales contracts and in light of the Company's       
current operating position, its uranium sales contract portfolio and the current
and projected uranium market prices, a number of decisions have been made       
regarding the Company's operating plans for 1999. The Company will satisfy the  
delivery requirements under its 1999 sales contracts through incremental        
production from Kingsville Dome and Rosita, its existing inventory position and 
by taking advantage of the low uranium prices and arbitraging its contractual   
position in the market. The production operations in South Texas at the         
Kingsville Dome and Rosita facilities will be shut-in and placed on stand-by in 
early 1999. Nominal production from these sites will continue to be maintained  
provided their incremental production costs are at or below the cost of         
purchasing uranium in the marketplace. The timing of the resumption of          
full-scale production from these sites will be dependent upon future uranium    
prices, the availability of sales contracts and the availability of capital.    
While on stand-by, the Company will continue to maintain certain activities at  
these locations including its ongoing restoration efforts.                      

   In connection with the shut-in of production, the Company will be
making additional cost reductions at all levels. These cost savings will include
the consolidation of certain administrative locations, personnel reductions in  
both its operating and its general and administrative workforce and reductions  
in compensation for the Company's executive management.                         

        The Company continues to evaluate its core uranium assets in Texas and
New Mexico in order to optimize the value of these assets to the Company.       
Possible alternatives for these uranium assets may include the sale or joint    
venturing of certain of these projects or the termination of the Company's      
rights for those properties whose holding costs are determined to be in excess  
of their expected value.                                                        

WRITEDOWN OF URANIUM PROPERTIES                                                 

PRODUCING PROPERTIES                                          

   In view of the continuing weakness in uranium prices, the Company
reviewed the carrying values of its uranium properties and determined that a    
writedown was required at September 30, 1998 with respect to its existing       
producing properties of approximately $18,000,000. The writedown was recorded as
a non-cash charge against earnings in the third quarter of 1998. The writedown  
in the carrying value of the Kingsville Dome and Rosita properties totaled      
$12,300,000 and $5,600,000, respectively. The net carrying value of these       
properties at December 31, 1998 (after giving effect to the writedown) was      
approximately $6,106,000 for Kingsville Dome and $900,000 for Rosita.           

      The review utilized a number of estimates and assumptions, including
current and projected uranium prices (which assumes higher prices in the future)
and the timing and costs of future production activities. The estimates also    
assumed that the Company is able to operate each of its production sites in the 
future at production rates that are higher than the Company's production rate   
for 1998 and as a result operate at costs that are significantly below those    
experienced for 1998. The inability of the Company to achieve such assumptions  
would have an impact on the Company's ability to recover its current and future 
investments in its uranium properties.                                          

ALTA MESA                                                     

    In June 1996, the Company acquired the Alta Mesa property in South
Texas for $4 million. In 1998, the Company determined that this project would   
not be pursued toward development and the Company terminated the lease agreement
and wrote off the net carrying value of the property in 1998 of $5,021,000.     

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ENVIRONMENTAL ASPECTS                                                           

        The Company utilizes ISL solution mining technology as its only mining
method. Unlike conventional uranium mining companies, the Company's mining      
technology does not create "tailings". Nevertheless, the Company is highly      
regulated. Its primary environmental costs to date have been related to         
obtaining and complying with environmental mining permits and, once mining is   
completed, the reclamation and restoration of the surface areas and underground 
water quality to a condition consistent with applicable requirements. Accruals  
for the estimated future cost of such activities are made on a per-pound basis  
as part of production costs. See the Consolidated Statements of Operations for  
the applicable provisions for such future costs. See also Note 1 - "Restoration 
and Reclamation Costs" of Notes to Consolidated Financial Statements.           

RESULTS OF OPERATIONS                                                           

       Revenues, earnings from operations and net income for the Company can
fluctuate significantly on a quarter to quarter basis during the year because of
the timing of deliveries requested by its utility customers. The Company's      
customers have generally elected, where possible, to take delivery of the bulk  
of the annual deliveries under their long-term sales contracts later in each    
year. Accordingly, operating results for any quarter or year-to-date period are 
not necessarily comparable and may not be indicative of the results which may be
expected for future quarters or for the entire year.                            

Years Ended December 31, 1998, 1997 and 1996                                    

   The following is a summary of the key operational and financial
statistics related to the Results of Operations:                                

                                                        [Enlarge/Download Table]

                                                 1998           1997           1996   
                                            ------------   ------------   ------------
                                               (In thousands, except per pound data)  
                                                                                      
Uranium sales revenue (1)                   $     23,347   $     29,741   $     24,264
Total pounds delivered                             1,586          2,240          1,656
Average sales price/pound(2)                $      15.13   $      13.71   $      16.35
Pounds produced                                      623            871          1,360
Pounds purchased                                     865          1,275            488
Average production cost of produced pounds  $      17.11   $      15.85   $      12.12
Average cost of purchased pounds            $      10.12   $      10.40   $      10.21
Average cost of produced pounds sold        $      16.58   $      15.61   $      11.34
Average cost of purchased pounds sold       $      10.12   $      10.40   $      10.21

(1) 1998, 1997 and 1996 uranium sales revenues include approximately $1.5       
million, $2.8 million and $4.5 million, respectively, from the sale of Russian  
uranium which is sold under the matched sales Amendment.                        

(2) Average sales price does not include the sales of Russian material sold as a
"pass through" sale under the matched sales Amendment.                          

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      Revenue from uranium sales in 1998 decreased by $6,394,000 from 1997
amounts. This decrease resulted primarily from lower uranium deliveries this    
year (1,586,000 pounds) compared to 1997 (2,240,000 pounds). Deliveries were    
comprised of produced pounds, purchased uranium sold into existing contracts and
purchased uranium whose economic benefit is essentially treated as a "pass      
through" sale (this includes the delivery of Russian origin uranium under the   
Company's matched sales contracts). The quantity of the pass through sales      
increased from 685,000 pounds in 1997 to 717,000 pounds in 1998 and while such  
sales have a positive impact on revenues they have virtually no impact on       
earnings from operations or net income.                                         

      The deliveries of the Company's produced pounds and non-pass through
purchased pounds in 1996 was approximately 1,266,000 pounds compared to         
1,555,000 in 1997. The average sales price for such sales in 1996 was $16.35 per
pound compared to $14.68 in 1997. The deliveries in 1996 included 250,000 pounds
of spot sales made pursuant to matched sale agreements, the average price for   
these deliveries was $17.95 per pound. No spot sales under the matched sales    
agreements were made in 1997. The average sales price for total uranium         
deliveries (including Russian origin uranium) in 1997 and 1996 was $13.28 per   
pound and $14.65 per pound, respectively.                                       

       Revenue from uranium sales in 1996 was $24,264,000 on deliveries of
1,656,000 pounds. Sales made in 1996 under the matched sales agreements totaled 
780,000 pounds during the year. The deliveries in 1996 also included 250,000    
pounds sold in the spot market.                                                 

Details of the cost of uranium sales were as follows:       

                                                        [Enlarge/Download Table]

                                                       1998           1997           1996   
                                                  ------------   ------------   ------------
                                                                (In thousands)              
                                                                                            
Cost of purchased uranium                         $      8,745   $     13,258   $      4,979
Royalties                                                  580            834          1,198
Operating expenses                                       5,347          6,564          4,866
Provision for restoration and reclamation costs            692          1,032          1,480
Depreciation and depletion of uranium properties         5,923          7,581          7,599
Writedown of uranium properties                         23,112             --             --
                                                  ------------   ------------   ------------
          Total cost of uranium sales             $     44,399   $     29,269   $     20,122
                                                  ============   ============   ============

      Combined production for the year from Kingsville Dome and Rosita was
623,000 pounds which approximated the Company's "produced pound" delivery       
requirements under its 1998 uranium sales contracts. A result of these decreased
production levels was an increase in the 1998 per pound costs of uranium        
production to an average cost of $17.11 per pound from the two facilities. This 
increase in unit costs resulted from the fixed costs of operations remaining at 
levels which were not absorbed as efficiently by the fewer pounds that were     
produced during the year.                                                       

         In the fourth quarter of 1998 the Company announced its Kingsville Dome
and Rosita production facilities would be shut-in and placed on stand-by early  
in 1999. Nominal production from these sites will continue to be maintained     
provided their incremental production costs are at or below the cost of         
purchasing uranium in the marketplace. The timing of the resumption of          
full-scale production from these sites will be dependent upon future uranium    
prices, the availability of sales contracts and the availability of capital.    

      In 1997, a number of organizational and operating changes, including
plant design modifications, were implemented to address specific production     
inefficiencies. The main operating changes related to the water quality of the  
mine areas under wellfield at each site. Certain redesign of the plants and     
wellfield patterns were performed to mitigate the effects of continuously       
recycled ground water utilized in the production process by minimizing the      
amount of mine water that previously was used in multiple wellfields.           

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         The average cost of uranium purchases made in 1998 was $10.12 per pound
compared to $10.40 in 1997 and $10.21 in 1996. Total deliveries in 1998 were    
1,586,000 pounds of which 865,000 were purchased pounds and 721,000 were        
produced pounds (average cost of $16.58 per pound). Deliveries in 1997 consisted
of 1,275,400 purchased pounds, at an average cost per pound of $10.40, and      
965,000 produced pounds at $15.61 per pound. During 1996, the Company delivered 
487,500 purchased pounds at an average cost per pound of $10.21 and 1,168,000   
pounds of produced uranium at an average cost of $11.34 per pound.              

 Operating expenses totaled $5,347,000 ($7.41 per pound) in 1998
compared to $6,564,000 ($6.80 per pound) in 1997 and $4,866,000 ($4.92 per      
pound) for produced pounds that were sold in 1996. Total operating expenses and 
depreciation and depletion include standby costs for the Kingsville Dome and    
Rosita facilities when these facilities are not in production. These costs have 
been recorded as direct charges to operations. Standby costs for 1996 was       
$313,000.                                                                       

   The provision for restoration and reclamation in 1998 of $692,000
consists primarily of costs from produced pounds sold during the year ($0.95 per
pound). Restoration and reclamation in 1997 was $910,000 ($0.95 per pound) for  
production sold in 1997 and $120,000 for costs associated with reclamation      
activities related to the Benavides project (a previous mining location). The   
provision for restoration and reclamation in 1996 consists of $1,100,000 ($0.94 
per pound) for production sold during 1996 and $380,000 for costs associated    
with reclamation activities related to the Benavides project.                   

 The depreciation and depletion provision in 1998 was $5,923,000
(average rate of $8.21 per pound) compared to $7,580,000 in 1997 (an average    
rate of $7.86 per pound) and $7,578,000 in 1996 (an average rate of $6.49 per   
pound).                                                                         

  Royalties in 1998 were $579,000 compared to $834,000 in 1997 and
$1,198,000 in 1996. The decrease in 1998 and 1997 is directly attributable to   
the lower production from Rosita and Kingsville Dome and the corresponding      
reduction in sales of produced uranium compared to each prior year.             

     Corporate expenses consisting of general and administrative ("G&A")
expenses decreased to $2,672,000 in 1998 from $2,914,000 in 1997 and $3,055,000 
in 1996. The reduction in 1998 from 1997 costs reflected primarily from lower   
overall compensation levels and cost reductions that were implemented in 1998.  
The decrease in 1997 from 1996 resulted primarily from legal and accounting fees
and other expenses incurred in 1996 associated with the unsuccessful acquisition
bid for a significant uranium production company and continuing legal costs     
associated with the unauthorized transfer of funds in 1995.                     

    Interest and other income in 1998 totaled $208,000, down from 1997
levels. Interest and other income increased by $754,000 in 1997 compared to     
1996. This change in 1997 resulted primarily from the settlement in June 1997 of
the Company's lawsuit against the Professional Bank of Denver, Colorado         
($575,000) and an increase in interest income for that year. The higher interest
income resulted from higher average available cash and investment balances that 
were generated from the Company's equity placement in December 1996.            

Total interest cost for 1998, net of capitalized amount, were 
comparable to those levels experienced in 1997. Total interest costs for 1997,  
net of capitalized amounts decreased from 1996. This decrease resulted from the 
repayment in January 1997 of the additional $4.0 million borrowed in June 1996  
to finance the purchase of the Alta Mesa property ($134,000 reduction in        
interest cost). Interest cost in 1997 increased as a result of the Company      
entering into a financial surety agreement with USF&G for the issuance of surety
bonds related to the Company's reclamation and restoration commitments at its   
current and prior mine locations (increase of $85,000). Net interest cost in    
1997 also decreased compared to 1996 because of higher capitalized interest     
during the current year (approximately $367,000). The increase in permitting and
development activities in New Mexico and Texas properties required the          
additional capitalization of interest related to these projects. Total interest 
costs for 1996 including capitalized amounts increased from the prior year      
primarily because of the $4.0 million borrowings received in June               

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1996 and from advances received under the Company's credit facility with        
NationsBank which commenced May 1996.                                           

YEAR 2000 READINESS                                                             

       The Company currently utilizes computer software in the management of
its operations and in accounting for its operating results that could be        
affected by the date change in the year 2000 (the "Y2K issue"). All critical    
information technology software and systems utilized by the Company has been    
purchased from and are supported by third party vendors. The Company has        
conducted a review of the potential impact of the year 2000 on such systems, and
believes that it will not encounter significant operational or financial costs  
related to compliance with this issue.                                          

       The Y2K issue also involves the impact of the date change in the year
2000 on machines and process controls which may utilize embedded technology as a
part of their components. The Company relies on certain non-information         
technology systems such as telephones, facsimile machines, and other equipment  
which may have embedded technology such as microprocessors, which may or may not
be year 2000 compliant. The assessment of this technology is outside of the     
Company's control and such technology could adversely affect the Company's      
ability to conduct business. Management believes any such disruption is not     
likely to have a significant effect on the Company's financial position or      
operations.                                                                     

      The Company may also be impacted by the Y2K issues of certain of the
Company's third-party suppliers and its customers. The third-party suppliers,   
vendors, and customers area is currently in the assessment phase. Formal        
communications have been initiated with the Company's vendors, customers and    
others with whom the Company has significant business relationships. The Company
continues to evaluate responses and make additional inquiries as needed. As the 
Company is in the process of collecting this information from third parties,    
management cannot currently determine whether third party compliance issues will
materially affect its operations. However, the Company is not currently aware of
any third party issues that would cause a significant business disruption.      
Management anticipates a complete evaluation to conclude by the end of the      
second quarter 1999.                                                            

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK             

URANIUM PRICE VOLATILITY                                                        

      The Company is subject to market risk related to the market price of
uranium. The Company's earnings are dependent on the price of uranium, which is 
determined primarily by global supply and demand and by the relationship of that
price to the Company's costs of production. Historically, uranium prices have   
been subject to fluctuation, and the price of uranium has been and will continue
to be affected by numerous factors beyond the Company's control, including the  
demand for nuclear power, political and economic conditions, and governmental   
legislation in uranium producing and consuming countries and production levels  
and costs of production of other producing companies. Certain of the Company's  
current long and medium-term contracts have pricing mechanisms related to spot  
market prices. In recent year's, prior to 1996, imports of uranium, including   
imports of uranium from the CIS, have resulted in significant downward pressure 
on uranium prices.                                                              

        The spot market price for uranium has demonstrated a large range since
January 1995. Prices have risen from $9.65 per pound as of January 31, 1995 to a
high of $16.50 per pound as of May 31, 1996. The spot price as of March 22, 1999
was $10.85 per pound.                                                           

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URANIUM CONTRACTS PROFITABILITY                                                 

     As of December 31, 1998, the Company had contracts for delivery of an
estimated 2.4 million pounds of uranium to domestic utilities from January 1,   
1999 through 2002. Profitability to the Company on these deliveries will depend 
on the cost of purchasing uranium in the marketplace and the cost of producing  
uranium at the Company's mining properties, the Company's ability to produce    
uranium to meet its sales commitments and the spot market price of uranium.     

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA                             

      The information called for by Item 8 appears on pages F-1 through F-23
of this Annual Report on Form 10-K.                                             

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND         
FINANCIAL DISCLOSURE                                            

None.                                                         

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PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT                     

DIRECTORS                                                                       

         The Board of Directors of the Company consists of the three individuals
shown below. Directors hold office until the next annual meeting of stockholders
and until their successors are elected and qualified. Directors are elected by  
plurality vote.                                                                 

   The following table sets forth certain information concerning the
individuals nominated for election as directors of the Company:                 

                                                                [Download Table]

                              Positions and Offices       
       Name        Age           with the Company         
       ----        ---        ---------------------       
                                                          
 Paul K. Willmott  59   Chairman, Chief Executive Officer,
                              President and Director      

 Leland O. Erdahl  70                Director             

George R. Ireland  42                Director             

NOMINEES FOR DIRECTOR                                                           

       PAUL K. WILLMOTT has served as a director of the Company since August
1994, as President of the Company since February 1995 and as Chairman of the    
Board and Chief Executive Officer since July 31, 1995. Mr. Willmott served as   
the Company's Chief Financial Officer from April 12, 1995 to September 25, 1995.
Mr. Willmott retired from Union Carbide Corporation ("Union Carbide") where he  
was involved for 25 years in the finance and operation of Union Carbide's       
world-wide mining and metals business. Most recently, Mr. Willmott was President
of UMETCO Minerals Corporation, a wholly-owned subsidiary of Union Carbide, from
1987 to 1991, where he was responsible for Union Carbide's uranium and vanadium 
businesses. From January 1993 until February 1995, Mr. Willmott was engaged by  
the Concord Mining Unit as a senior vice president where he was primarily       
involved in the acquisition of UMETCO Minerals Corporation's uranium and        
vanadium operating assets. Mr. Willmott graduated from Michigan Technological   
University with a Bachelor of Science degree in Mining in 1964 and a Bachelor of
Science Degree in Engineering Administration in 1967. He has been an active     
member of the American Institute of Mining Engineers, the Canadian Institute of 
Mining Engineers and a number of state professional organizations.              

         LELAND O. ERDAHL has served as a director of the Company since July 11,
1994. From 1986 to 1991, Mr. Erdahl served as President and Chief Executive     
Officer for Stolar, Inc., a high-tech company involved in the radio wave imaging
of geologic media and underground radio transmission for voice and data. He was 
also President and CEO of Albuquerque Uranium Corporation, a uranium mining     
company, from 1987 to 1991. He is a Certified Public Accountant and is a        
graduate from the College of Santa Fe. He is currently a director of Hecla      
Mining Company, Canyon Resources Corporation, Original Sixteen to One Mine, Inc.
and a trustee for a group of John Hancock Mutual Funds. In March 1997, Mr.      
Erdahl entered into a contract with AMAX Gold, Inc. to serve as Vice President  
and Chief Financial Officer. This contract was concluded June 1, 1998. Mr.      
Erdahl also serves on the compensation committee of Hecla Mining Company, Canyon
Resources Corporation, Original Sixteen to One Mine, Inc. and Freeport McMoRan  
Copper & Gold, Inc.                                                             

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    GEORGE R. IRELAND has served as a director since May 25, 1995. Mr.
Ireland is a financial analyst for and a partner in Knott Partners L.P., a      
private investment partnership. Mr. Ireland specializes in investing in         
securities of natural resource and other basic industrial companies, both       
domestically and abroad. From 1987 to 1991, he was a Vice President of Fulcrum  
Management, Inc., which was the manager of the VenturesTrident Limited          
Partnerships, (venture capital funds dedicated to investing in the mining       
industry), and Senior Vice President and Chief Financial Officer of MinVen Gold 
Corporation, a company in which the VenturesTrident funds had a significant     
investment. Mr. Ireland graduated from the University of Michigan with degrees  
in Geology and Resource Economics. He also attended the Graduate School of      
Business Administration of New York University. Mr. Ireland is a director of    
Merrill & Ring, Inc., a private land and timber holding company in the state of 
Washington. Mr. Ireland acted as a consultant to Ryback Management Corporation  
and performed due diligence on the Company in connection with Ryback's loan of  
$6 million to the Company on behalf of members of the Lindner Group in 1995. Mr.
Ireland is not otherwise affiliated with the Lindner Group or Ryback.           

ARRANGEMENTS REGARDING ELECTION OF DIRECTORS                                    

         On May 25, 1995, George R. Ireland and James B. Tompkins were appointed
to the Board of Directors following the closing of certain transactions with the
Lindner Group. In connection with these transactions, the Company has agreed to 
nominate two individuals designated by the Lindner Group for election to the    
Board. Messrs. Ireland and Tompkins were the Lindner Group's designees.         

    Effective July 28, 1998, Mr. Tompkins resigned his position as a
Director of the Company.                                                        

OTHER EXECUTIVE OFFICERS                                                        

      The executive officers of the Company serve at the discretion of the
Board of Directors and are subject to annual appointment by the Board at its    
first meeting following the Annual General Meeting of the Stockholders. The     
officers of the Company hold office until their successors are appointed by the 
Board of Directors. All officers of the Company are employed on a full-time     
basis. There is no family relationship between any director and executive       
officer of the Company.                                                         

         The following table sets forth certain information concerning executive
officers who are not also directors of the Company:                             

                                                                [Download Table]

                                            Positions and Offices               
          Name          Age                    with the Company                 
          ----          ---                 ---------------------               
                                                                                
      Joe H. Card        45           Senior Vice President - Marketing         

Richard F. Clement, Jr.  55        Senior Vice President - Exploration and      
                                      President - Hydro Resources, Inc.         

  Richard A. Van Horn    52           Senior Vice President - Operations        

   Thomas H. Ehrlich     39   Vice President, Chief Financial Officer, Secretary
                                                and Treasurer                   

    Mark S. Pelizza      46   Vice President - Health, Safety and Environmental 
                                                   Affairs                      

    Craig S. Bartels     50  Vice President - Technology - Hydro Resources, Inc.

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      The following sets forth certain information concerning the business
experience of the foregoing executive officers during the past five years.      

       JOE H. CARD joined the Company as Vice President - Marketing in March
1989. In February 1993, he was promoted to Senior Vice President - Marketing.   
Previously, he spent four years with UG U.S.A., Inc., a U.S. marketing          
subsidiary of a major German mining company, most recently as Marketing Manager.
His responsibilities were related to the entire uranium fuel cycle, primarily in
dealing with U.S. nuclear utilities customers. Prior to his work at UG U.S.A.,  
Inc., Mr. Card spent five years with Mitsubishi International Corporation as    
marketing manager. He earned a B.B.A. degree in Finance from the University of  
Georgia in 1975 and an M.B.A. from Georgia State University in 1978.            

RICHARD F. CLEMENT, JR. joined the Company as Vice            
President-Exploration in 1983. In April 1990, he was appointed Senior Vice      
President-Exploration. Mr. Clement was a director of the Company from February  
1985 to July 1994 at which time he resigned his positions as director and       
officer of the Company. During the period from July 1994 to February 1996, Mr.  
Clement remained with the Company as Exploration Manager. In February 1996, he  
was again appointed Senior Vice President-Exploration of the Company as well as 
the President and a Director of Hydro Resources, Inc., a wholly owned subsidiary
of the Company. Prior to joining the Company, he spent 16 years with Mobil Oil  
Corporation, most recently as vice president and exploration manager for Mobil  
Energy Minerals-Australia, where he initiated and managed Mobil's Australian    
coal, uranium and other minerals exploration and acquisition programs. Mr.      
Clement received his B.S. degree in Geology from Boston College in 1965 and his 
M.S. degree in Geology from the University of Vermont in 1967.                  

      RICHARD A. VAN HORN joined the Company in March 1997 and assumed the
position of Senior Vice President of Operations on April 1, 1997. Previously, he
spent three years with Energy Fuels Nuclear, Inc. as General Manager - Colorado 
Plateau Operations with responsibility for the daily management of and planning 
for Energy Fuels Nuclear, Inc. mining activities on the Colorado Plateau. Prior 
to his work at Energy Fuels Nuclear, Inc., Mr. Van Horn spent eighteen years    
with Union Carbide Corporation where he was involved with the finance and       
operation of that company's worldwide mining and metals business. From 1990 to  
1994, Mr. Van Horn was Director of Operations of UMETCO Minerals Corporation, a 
wholly owned subsidiary of Union Carbide Corporation, responsible for all       
operating aspects of UMETCO's uranium and vanadium business on the Colorado     
Plateau prior to its sale to Energy Fuels Nuclear, Inc. Mr. Van Horn graduated  
from the Colorado School of Mines with a Engineer of Mines degree in mining in  
1973.                                                                           

        THOMAS H. EHRLICH, a certified public accountant, rejoined the Company
in September 1995 as Vice President and Chief Financial Officer and was         
appointed Secretary and Treasurer of the Company in December 1995. Immediately  
prior to that, Mr. Ehrlich spent nine months as a Division Controller with      
Affiliated Computer Services, Inc., an information technology services provider 
in Dallas, Texas. Mr. Ehrlich originally joined the Company in November 1987 as 
Controller-Public Reporting and was promoted to Controller and Chief Accounting 
Officer in February 1990. In February 1993, Mr. Ehrlich assumed the additional  
duties of Vice President and Secretary of the Company. Prior to joining the     
Company, he spent four years with Deloitte Haskins & Sells and worked primarily 
with clients that were publicly held companies. Prior to his work at Deloitte   
Haskins & Sells, he spent three years in various accounting duties at Enserch   
Exploration, Inc., an oil and gas company in Dallas, Texas. Mr. Ehrlich received
his B.S. B.A. degree in Accounting from Bryant College in 1981.                 

         MARK S. PELIZZA has served as the Company's Environmental Manager since
1980, and as such, he has been responsible for all environmental regulatory     
activities. In February 1996, he was appointed Vice President - Health, Safety  
and Environmental Affairs of the Company. Prior to joining the Company, he was  
employed for two years by Union Carbide as an Environmental Planning Engineer at
Union Carbide's Palangana solution mining plant in South Texas. Mr. Pelizza     
received a M.S. Degree in Engineering Geology from Colorado School of Mines in  
1978 and a B.S. Degree in Geology from Fort Lewis College in 1974.              

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    CRAIG S. BARTELS, a Registered Professional Engineer, rejoined the
Company as Vice President-Technology of Hydro Resources, Inc., a wholly owned   
subsidiary of the Company in July 1996. From January 1995 to July 1996, he was  
Manager of Wellfield Operations for Crow Butte Resources, Inc., a uranium ISL   
mining company. Mr. Bartels originally joined the Company in early 1981 and held
positions with the Company as Reservoir Engineer, Plant Manager, and Manager of 
Wellfield Operations through October 1994. Earlier, he was with Union Carbide,  
eventually becoming Technical and Plant Superintendent for their solution mining
operation. Mr. Bartels also spent six years with Natural Gas Pipeline Company of
America, a major gas transmission company, as drilling and reservoir engineer   
for their gas storage operations. Mr. Bartels received a B.S. Degree in         
Petroleum Engineering from Montana School of Mines in 1972.                     

ITEM 11. EXECUTIVE COMPENSATION                                                 

    The following table sets forth certain information with respect to
annual and long-term compensation for services in all capacities for the years  
ended December 31, 1998, 1997 and 1996 paid to the Company's Chief Executive    
Officer and certain other executive officers of the Company.                    

SUMMARY COMPENSATION TABLE                                                      

                                                        [Enlarge/Download Table]

                             ANNUAL COMPENSATION                                   LONG-TERM COMPENSATION     
                             --------------------                               ---------------------------   
                                                                    OTHER        SECURITIES                   
                                                                    ANNUAL       UNDERLYING      ALL OTHER    
                                        SALARY         BONUS     COMPENSATION(1)   OPTIONS     COMPENSATION(2)
NAME AND PRINCIPAL POSITION  YEAR         ($)           ($)           ($)            (#)            ($)       
---------------------------  -----   ------------  ------------  ------------   ------------   ------------   
                                                                                                              
Paul K. Willmott              1998   $    200,701  $          0  $        561         40,000   $      1,887   
Chairman, President and       1997   $    202,200  $          0  $        283         26,280   $      5,474   
Chief Executive Officer       1996   $    166,525  $     13,140  $        168         37,670   $      2,851   

Joe H. Card                   1998   $    128,200  $          0  $      2,757         15,000   $      1,255   
Senior Vice President -       1997   $    129,987  $          0  $      3,954         15,800   $      3,618   
Marketing                     1996   $    117,894  $     10,500  $    145,729         13,440   $      1,730   

Richard F. Clement, Jr        1998   $    144,045  $          0  $      2,156         10,000   $      1,027   
Senior Vice President -       1997   $    149,743  $          0  $      2,754         15,100   $     87,860   
Exploration/President -       1996   $    125,247  $     10,000  $      2,462         91,130   $     13,129   
Hydro Resources, Inc.                                                                                         

Richard A. Van Horn           1998   $    132,749  $          0  $      1,960         25,000   $      1,200   
Senior Vice President -       1997   $    104,569  $          0  $        168         55,000   $     19,349   
Operations                                                                                                    

Craig S. Bartels              1998   $    131,106  $          0  $      2,211          6,000   $      1,022   
Vice President -              1997   $    130,791  $          0  $        168          3,700   $      3,010   
Technology - Hydro            1996   $     56,809  $      3,700  $         42         50,000   $        567   
Resources, Inc.                                                                                               

----------                                                                      
(1) Represents amount paid for out-of-pocket medical and dental expenses under  
the Company's Supplemental Health Care Plan and for Mr. Card in 1996            
compensation from the exercise of employee stock options.                       

(2) Represents contributions made by the Company under the Company's 401(k)     
Profit Sharing Plan (see "401(k) Profit Sharing Plan" below); and for Mr.       
Clement in 1997 includes moving costs received upon his relocation to           
Albuquerque, New Mexico ($84,281) and for Mr. Van Horn in 1997 includes moving  
costs received upon his relocation to Corpus Christi, Texas ($19,349).          

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SUPPLEMENTAL HEALTH CARE PLAN                                                   

      The Company has adopted a health care plan (the "Supplemental Plan")
for the officers of the Company and certain of the employees of the Company who 
are also stockholders, which supplements the standard health care plan available
to all eligible employees of the Company (the "Standard Plan"). The Supplemental
Plan pays directly to the participant 80% of all out-of-pocket medical and      
dental expenses not covered under the Standard Plan, including deductibles and  
co-insurance amounts. Additionally, the Supplemental Plan provides to each      
participant $100,000 of accidental death and dismemberment insurance protection 
and a world wide medical assistance benefit. Each participant in the            
Supplemental Plan may receive a maximum annual benefit of $50,000 or $100,000,  
at the Company's option. The Company pays an annual premium under the           
Supplemental Plan equal to $210 per participant plus 10% of claims paid. There  
are currently ten officers and employees covered by the Supplemental Plan.      

401(k) PROFIT SHARING PLAN                                                      

      The Company maintains a defined contribution profit sharing plan for
employees of the Company (the "401(k)") that is administered by a committee of  
trustees appointed by the Company. All Company employees are eligible to        
participate upon the completion of six months of employment, subject to minimum 
age requirements. Each year the Company makes a contribution to the 401(k) out  
of its current or accumulated net profits (as defined) in an amount determined  
by the Board of Directors but not exceeding 15% of the total compensation paid  
or accrued to participants during such fiscal year. The Company's contributions 
are allocated to participants in amounts equal to 25% (or a higher percentage,  
determined at the Company's discretion) of the participants' contributions, up  
to 4% of each participant's gross pay. For the plan year ended July 31, 1998,   
the Company contributed amounts equal to 25% of the participant's contributions,
up to 4% of gross pay. For the plan year ended July 31, 1997, the Company       
contributed amounts equal to 50% of the participants' contribution, up to 4% of 
gross pay. For the plan year ended July 31, 1996, the Company contributed       
amounts equal to 75% of the participants' contributions, up to 4% of gross pay. 
Participants become 20% vested in their Company contribution account for each   
year of service until full vesting occurs upon the completion of five years of  
service. Distributions are made upon retirement, death or disability in a lump  
sum or in installments.                                                         

STOCK OPTION PLANS                                                              

    On December 19, 1995, the Company's Stockholders approved the 1995
Stock Incentive Plan (the "1995 Plan") for key employees of the Company. The    
1995 Plan initially authorized grants of incentive stock options and            
non-qualified options to purchase up to an aggregate of 750,000 shares of Common
Stock. The Company adopted an amendment to the 1995 Plan which increased the    
number of shares of Common Stock authorized to be issued to 1,250,000 shares.   
The Employees' Stock Option Committee of the Board of Directors is responsible  
for the administration of the 1995 Plan and has the full authority, subject to  
the provisions of the 1995 Plan, to determine to whom and when to grant options 
and the number of shares of Common Stock covered by each grant. As of February  
28, 1999, a total of 670,030 shares are reserved for issuance upon exercise of  
options granted under the 1995 Plan and 579,970 shares were reserved for        
exercise upon the future grant of options under the 1995 Plan. No shares have   
been issued upon the exercise of options under the 1995 Plan.                   

   The 1995 Plan replaced the Company's previous plan maintained for
employees under which the Company was authorized to grant non-qualified options.
All outstanding options under that plan will remain in effect but no new options
will be granted under that plan. As of February 28, 1999, a total of 104,623    
shares are reserved for issuance under that plan.                               

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DEFERRED COMPENSATION PLAN                                                      

   Effective January 11, 1999, the Company adopted the 1999 Deferred
Compensation Plan (the "Deferred Compensation Plan") for the benefit of         
executive officers and directors of the Company and its subsidiaries. Under the 
Deferred Compensation Plan, each year participants may elect to defer up to 100%
of their salary for the duration of the year. Salary deferred will be paid to   
each participant on January 11, 2006. Upon termination of employment with the   
Company or its subsidiaries, a participant's account is frozen and the          
participant is entitled to receive the deferred amount on January 11, 2006. The 
Deferred Compensation Plan is administered by the Company's Board of Directors. 

  At the time of the deferral election, a participant may elect to
receive payment of up to 100% of the deferred amount of salary in shares of the 
Company's Common Stock. An aggregate of 454,846 shares of Common Stock may be   
issued under the Deferred Compensation Plan. The number of shares to be received
pursuant to any election will be based on the closing market price of the       
Company's Common Stock on January 11, 1999. At the end of each quarter, a       
participant will receive any shares of Common Stock he or she has so elected to 
receive in lieu of deferred salary and may make a new election for the next     
quarter to increase or decrease the percent of deferred salary to be received in
shares of Common Stock. The portion of the Deferred Compensation Plan that      
permits a participant to make an election to receive shares of Common Stock is  
subject to stockholder approval.                                                

         The Company's directors and executive officers have elected to defer an
aggregate amount of $238,067 of their 1999 salaries pursuant to the Deferred    
Compensation Plan, $170,567 of which will be received by such directors and     
executive officers in shares of the Company's Common Stock (based on a value of 
$0.375 per share, the closing price on the Nasdaq National Market on January 11,
1999).                                                                          

OPTION GRANTS IN LAST FISCAL YEAR                                               

    The following table sets forth certain information with respect to
options granted to the executive officer named in the Summary Compensation Table
in the fiscal year ended December 31, 1998.                                     

                                                        [Enlarge/Download Table]

                                                                                            POTENTIAL REALIZABLE VALUE  
                                                                                            AT ASSUMED ANNUAL RATES OF  
                                                                                             STOCK PRICE APPRECIATION   
                                 INDIVIDUAL GRANTS                                               FOR OPTION TERM        
                           ----------------------------                                  -------------------------------
                                           PERCENT OF                                                                   
                             NUMBER OF       TOTAL                                                                      
                            SECURITIES      OPTIONS                                                                     
                            UNDERLYING     GRANTED TO                                                                   
                             OPTIONS      EMPLOYEES IN     EXERCISE OF                                                  
                             GRANTED         FISCAL        BASE PRICE      EXPIRATION                                   
            NAME              (#)(1)          YEAR           ($/SH)           DATE            5% ($)           10%($)   
-------------------------  -----------   --------------  --------------  --------------  --------------   --------------
                                                                                                                        
   Paul K. Willmott             40,000        23%        $       2.9375        02/23/08  $      191,900   $      303,900

      Joe H. Card               15,000         9%        $       2.9375        02/23/08  $       71,963   $      113,963

Richard F. Clement, Jr          10,000         6%        $       2.9375        02/23/08  $       47,975   $       75,975

  Richard A. Van Horn           25,000        15%        $       2.9375        02/23/08  $      119,938   $      189,938

   Craig S. Bartels              6,000         3%        $       2.9375        02/23/08  $       28,785   $       45,585

(1) Options were granted under the Company's Stock Incentive Plan and vest 25%  
one year after grant and 25% after each succeeding year.                        

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AGGREGATED STOCK OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES                                                                          

       The following sets forth information with respect to each exercise of
stock options during the fiscal year ended December 31, 1998 and the year-end   
value of unexercised options held by each of the executive officers named in the
Summary Compensation Table.                                                     

                                                        [Enlarge/Download Table]

                                                              NUMBER OF                       
                                                              SECURITIES          VALUE OF    
                                                              UNDERLYING        UNEXERCISED   
                               SHARES                        UNEXERCISED        IN-THE-MONEY  
                            ACQUIRED ON   VALUE REALIZED  OPTIONS AT FISCAL  OPTIONS AT FISCAL
              NAME          EXERCISE (#)        ($)          YEAR END (#)       YEAR END ($)  
              ----          ------------  --------------  -----------------  -----------------
                                                                                              
                                                             EXERCISABLE/       EXERCISABLE/  
                                                            UNEXERCISABLE      UNEXERCISABLE  
Paul K. Willmott(1)              --              --         75,000/25,000            **       
                                                            75,000/25,000            **       
                                                            30,150/10,050            **       
                                                            18,836/18,834            **       
                                                             6,570/19,710            **       
                                                               0/40,000              **       
                                                               19,000/0              **       
                                                               1,000/0               **       

Joe H. Card(2)                   --              --            1,750/0               **       
                                                             4,548/1,516             **       
                                                             6,720/6,720             **       
                                                             3,950/11,850            **       
                                                               0/15,000              **       

Richard F. Clement, Jr.(3)       --              --            24,750/0              **       
                                                             20,790/6,930            **       
                                                             8,066/8,064             **       
                                                            37,500/37,500            **       
                                                             3,775/11,325            **       
                                                               0/10,000              **       

Richard A. Van Horn(4)           --              --         13,750/41,250            **       
                                                               0/25,000              **       

Craig S. Bartels(5)              --              --         25,000/25,000            **       
                                                              925/1,775              **       
                                                               0/6,000               **       

----------------------                                                          
** Represents an option whose grant price is above the December 31, 1998 closing
price on the NASDAQ-NMS.                                                        

(1) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)   
less the grant prices of $4.13, $8.38, $6.88, $9.75, $7.125, $2.9375, $4.25 and 
$5.88, respectively.                                                            

(2) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)   
less the grant prices of $2.94, $6.88, $9.75, $7.125 and $2.9375, respectively. 

(3) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)   
less the grant price of $2.94, $6.88, $9.75, $16.13, $7.125 and $2.9375,        
respectively.                                                                   

(4) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)   
less the grant price of $5.50 and $2.9375, respectively.                        

(5) Based on the closing price on the NASDAQ-NMS on December 31, 1998 ($0.50)   
less the grant price of $11.13, $7.125, and $2.9375, respectively.              

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DIRECTOR COMPENSATION                                                           

       Under the Company's Directors' Stock Option Plan ("Directors' Plan"),
each new non-employee director elected or appointed to the Board of Directors   
for the first time shall be granted an option to purchase 20,000 shares of      
Common Stock as of the date of such election or appointment and, upon the       
re-election of a non-employee director at an annual meeting of the Company's    
stockholders, such director will be granted an option to purchase an additional 
1,000 shares as of the date of such election. As of February 28, 1999, a total  
of 69,000 shares are reserved for issuance upon exercise of options granted     
under the Directors' Plan and 79,000 shares were reserved for exercise upon the 
future grant of options under the Directors' Plan. Mr. Erdahl holds options     
covering 25,000 shares under the Directors' Plan and Mr. Ireland holds options  
covering 25,000 shares under the Directors' Plan. Mr. Willmott holds options    
covering 20,000 shares under the Directors' Plan. In addition, Messrs. Ireland  
and Erdahl each hold options to purchase 100,000 shares of Common Stock. Those  
options were not granted under the Directors' Plan. On November 17, 1997, the   
Company entered into agreements with each of its non-employee directors to amend
the terms of these nonqualified stock options such that the expiration date of  
the option was extended for three years until 2001 and the exercise price was   
increased by $0.25 per share. Cash compensation for 1998 to the non-employee    
directors was paid at the rate of $3,000 per quarter plus $1,000 per meeting    
attended of the Board and committees of the Board.                              

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION                     

In August 1994, the Company formed a Compensation Committee to
determine the compensation of the executive officers and to set the guidelines  
for compensation for the employees of the Company. During the fiscal year ended 
December 31, 1998, the Compensation Committee was comprised of Leland O. Erdahl,
George R. Ireland and James B. Tompkins (until his resignation on July 28,      
1998). No member of the Compensation Committee has been or was during the fiscal
year ended December 31, 1998, an officer or employee of the Company or any of   
the Company's subsidiaries. In addition, no member of the Compensation Committee
during the fiscal year ended December 31, 1998 had any relationship requiring   
disclosure under the caption "Certain Relationships and Related Transactions."  
No executive officer of the Company serves or served on the compensation        
committee of another entity during the fiscal year ended December 31, 1998 and  
no executive officer of the Company serves or served as a director of another   
entity who has or had an executive officer serving on the Compensation Committee
of the Company.                                                                 

COMPENSATION AGREEMENTS WITH KEY EXECUTIVES                                     

         In June 1997, the Company entered into Compensation Agreements with six
of its key executives. Each of these agreement provide that in the event of a   
change in control of the Company, the executive will have certain rights and    
benefits for a period of either twenty-four or thirty-six months following such 
change in control. In particular, the agreements specify that the executive will
continue to receive compensation and benefits for the remainder of the          
applicable period if the Company terminates the executive or if the executive   
terminates his employment following the occurrence of certain actions without   
the executive's consent. However, the Company is not obligated to provide such  
rights and benefits to the executive if the executive was terminated for cause  
or does not resign as an officer and/or director promptly after receiving       
written request from the Company to do so.                                      

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT         

    The following table sets forth, as of February 27, 1999, certain
information regarding persons known by the Company to be the beneficial owner of
more than 5% of the outstanding shares of the Company's Common Stock.           

                                                                [Download Table]

PRINCIPAL STOCKHOLDERS                                                       

                                      AMOUNT AND                             
                                      NATURE OF                              
                                      BENEFICIAL                             
NAME AND ADDRESS OF BENEFICIAL OWNER  OWNERSHIP(1)        PERCENT OF CLASS(2)
------------------------------------  ----------          -------------------
                                                                             
Barry R. Feirstein                                                           
Feirstein Capital Management Corp.      1,260,786                10.5%       
767 Third Avenue, 28th Floor                                                 
New York, NY 10017                                                           

Lindner Dividend Fund                                                        
7711 Carondelet Avenue, Suite 700       2,625,000(3),(4)         18.0%       
Clayton, MO 63105                                                            

Lindner Bulwark Fund                                                         
7711 Carondelet Avenue, Suite 700         875,000(3),(5)          6.0%       
Clayton, MO 63105                                                            

The Winchester Group                                                         
335 Madison Avenue                      2,239,877                18.6%       
New York, NY 10017                                                           

Santa Fe Pacific Gold Corporation                                            
(a wholly owned subsidiary of           1,200,000                10.0%       
Newmont Gold Company)                                                        
1700 Lincoln Street                                                          
Denver, CO  80203                                                            

----------                                                                      
(1) Each person has sole voting and investment power with respect to the shares 
listed, unless otherwise indicated. Beneficial ownership includes shares over   
which the indicated beneficial owner exercises voting and/or investment power.  

(2) The shares owned by each person, and the shares included in the total number
of shares outstanding, have been adjusted, and the percentages owned have been  
computed, in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act 
of 1934. Shares subject to options or warrants currently exercisable or         
exercisable within 60 days are deemed outstanding for computing the percentage  
ownership of the person holding such options or warrants, but are not deemed    
outstanding for computing the percentage ownership of any other person.         

(3) Lindner Growth Fund, Lindner Dividend Fund, Lindner Bulwark Fund (the       
"Lindner Group") are members of the same family of mutual funds and may be      
deemed collectively as a controlling stockholder of the Company. The Lindner    
Group is managed by Ryback Management Corporation ("Ryback"), an investment     
adviser. Ryback has discretionary authority over the shares owned beneficially  
by the Lindner Group, including the power to vote and dispose of such shares.   

(4) Includes 500,000 outstanding shares owned beneficially by Lindner Dividend  
Fund, 1,500,000 shares issuable upon conversion of certain notes and 625,000    
shares issuable upon exercise of certain warrants.                              

(5) Includes 500,000 shares issuable upon conversion of certain notes and       
375,000 shares issuable upon exercise of certain warrants.                      

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DIRECTORS AND EXECUTIVES                                                        

The following table sets forth as of December 31, 1998 certain
information regarding the beneficial ownership of the Company's Common Stock by 
(i) each director and nominee for director of the Company, (ii) each of the     
executive officers named in the Summary Compensation Table set forth below under
the caption Executive Compensation, and (iii) all directors and executive       
officers as a group.                                                            

                                                                [Download Table]

               NAME OF               AMOUNT AND NATURE OF                       
          BENEFICIAL OWNER          BENEFICIAL OWNERSHIP(1)  PERCENT OF CLASS(2)
          ----------------          -----------------------  -------------------
                                                                                
          Paul K. Willmott                  278,269(3)                     2.1% 
             Joe H. Card                     28,028(4)                       *  
          Leland O. Erdahl                  124,000(5)                       *  
          George R. Ireland                 155,500(6)                     1.2% 
       Richard F. Clement, Jr.              235,319(7)                     1.8% 
           Richard A. Van Horn               20,000(8)                       *  
          Craig S. Bartels                   28,500(9)                       *  
All executive officers and directors      1,183,617(10)                    9.2% 
       as a group (9 persons)                                                   

* Less than 1%.                                                                 

(1) Each person has sole voting and investment power with respect to the shares 
listed, unless otherwise indicated. Beneficial ownership includes shares over   
which the indicated beneficial owner exercises voting and/or investment power.  

(2) The shares owned by each person, and the shares included in the total number
of shares outstanding, have been adjusted, and the percentages owned have been  
computed, in accordance with Rule 13d-3(d)(1) under the Securities Exchange Act 
of 1934. Shares subject to options currently exercisable or exercisable within  
60 days are deemed outstanding for computing the percentage ownership of the    
person holding such options, but not deemed outstanding for computing the       
percentage ownership of any other person.                                       

(3) Includes 276,544 shares that may be obtained by Mr. Willmott through the    
exercise of stock options which are currently exercisable. Does not include     
87,606 shares that may be obtained by Mr. Willmott through the exercise of stock
options exercisable more than 60 days from the date hereof.                     

(4) Includes 28,028 shares that may be obtained by Mr. Card through the exercise
of stock options which are currently exercisable. Does not include 24,026 shares
that may be obtained by Mr. Card through the exercise of stock options          
exercisable more than 60 days from the date hereof.                             

(5) Includes 122,500 shares that may be obtained by Mr. Erdahl through the      
exercise of stock options which are currently exercisable. Does not include     
3,500 shares that may be obtained by Mr. Erdahl through the exercise of stock   
options exercisable more than 60 days from the date hereof.                     

(6) Includes 116,500 shares that may be obtained by Mr. Ireland through the     
exercise of stock options which are currently exercisable. Does not include     
7,500 shares that may be obtained by Mr. Ireland through the exercise of stock  
options exercisable more than 60 days from the date hereof.                     

(7) Includes 105,189 shares that may be obtained by Mr. Clement through the     
exercise of stock options which are currently exercisable. Does not include     
63,511 shares that may be obtained by Mr. Clement through the exercise of stock 
options exercisable more than 60 days from the date hereof.                     

(8) Includes 20,000 shares that may be obtained by Mr. Van Horn through the     
exercise of stock options which are currently exercisable. Does not include     
60,000 shares that may be obtained by Mr. Van Horn through the exercise of stock
options exercisable more than 60 days from the date hereof.                     

(9) Includes 28,350 shares that may be obtained by Mr. Bartels through the      
exercise of stock options which are currently exercisable. Does not include     
31,350 shares that may be obtained by Mr. Bartels through the exercise of stock 
options exercisable more than 60 days from the date hereof.                     

(10) Includes 764,113 shares that may be obtained through the exercise of stock 
options which are currently exercisable or will become exercisable within 60    
days.                                                                           

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                         

  EXTENSION OF MATURITY DATE AND ADJUSTMENT OF CONVERSION PRICE OF
LINDNER LOAN                                                                    

        On May 25, 1995, the Company received $6,000,000 in cash (the "Lindner
Loan") through the issuance of 6.5% secured convertible notes in the aggregate  
principal amounts of $1,500,000 and $4,500,000. The Lindner Loan was initially  
convertible at $4.00 per share into 375,000 and 1,125,000 shares of Common      
Stock, the Lindner Investments (on behalf of Lindner Bulwark Fund) ("Bulwark")  
and Lindner Dividend Fund, Inc. ("Dividend"), respectively. In addition, the    
Company issued immediately exercisable warrants (the "Lindner Warrants") to     
purchase 375,000 shares and 1,125,000 shares of the Company's Common Stock at an
initial exercise price of $4.00 per share to Lindner Investments (on behalf of  
Lindner Bulwark Fund) and Dividend, respectively. Dividend has exercised its    
right to purchase 500,000 shares under the Lindner Warrants.                    

    In March 1998, the Company entered into an agreement to extend the
maturity date of its $6,000,000 secured convertible note from May 31, 1998 to   
May 31, 2000. In return for the extension in the maturity of the note, the      
conversion price was adjusted from $4.00 per share to $3.00 per share. The      
exercise price of the remaining Lindner warrants to purchase 1,000,000 shares of
the Company's common stock was also adjusted from $4.00 per share to $3.00 per  
share, and the expiration date of the warrants was extended by two years, to May
31, 2000.                                                                       

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 PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K        

(a) (1)  Financial Statements.                                                  

      See the Index to Consolidated Financial Statements on page F-1 for a
    listing of those financial statements filed as part of this Annual
Report.                                                       

(a) (2)  Financial Statement Schedules.                                         

      See the Index to Consolidated Financial Statements on page F-1 for a
    listing of those financial statements filed as part of this Annual
Report.                                                       

(a) (3)  Exhibits.                                                              

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

(b)      Reports on Form 8-K                                                    

     The Company filed a report on Form 8-K dated October 27, 1998 which
disclosed that the Nasdaq Stock Market ("Nasdaq") had notified the Company of   
Nasdaq's determination that the Company was not in compliance with the minimum  
bid price for continued listing of the Company's Common Stock on the Nasdaq     
National Market.                                                                

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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 31, 1999                                                           

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                                    March 31, 1999      
-----------------------------------------------------                           
Paul K. Willmott,                                                               
Director, President and Chief Executive Officer                                 

/s/ Thomas H. Ehrlich                                   March 31, 1999      
-----------------------------------------------------                           
Thomas H. Ehrlich,                                                              
Vice President - Finance and Chief Financial Officer                            
(Principal Financial and Accounting Officer)                                    

/s/ Leland O. Erdahl                                    March 31, 1999      
-----------------------------------------------------                           
Leland O. Erdahl, Director                                                      

/s/ George R. Ireland                                   March 31, 1999      
-----------------------------------------------------                           
George R. Ireland, Director                                                     

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 URANIUM RESOURCES, INC. AND CONSOLIDATED SUBSIDIARIES
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

 CONSOLIDATED FINANCIAL STATEMENTS

                                                                [Download Table]
                                                                      
Report of Independent Public Accountants...........................F-2

Consolidated Balance Sheets........................................F-3

Consolidated Statements of Operations..............................F-5

Consolidated Statements of Common Shareholders' Equity.............F-6

Consolidated Statements of Cash Flows..............................F-7

Notes to Consolidated Financial Statements.........................F-8

   The additional financial data referred to below should be read in
conjunction with these financial statements. Schedules not included with this   
additional financial data have been omitted because they are not applicable, or 
the required information is shown in the financial statements or notes thereto. 
The individual financial statements of the subsidiaries of the Company have been
omitted because all such subsidiaries are included in the consolidated financial
statements being filed.                                                         

 ADDITIONAL FINANCIAL DATA

Financial statement schedules for the years ended                               
December 31, 1998, 1997 and 1996                                                

II - Valuation and Qualifying Accounts and Reserves.........F-23  

      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.                                                 

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REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To the Shareholders and Board of Directors of                                   
Uranium Resources, Inc.:                                                        

We have audited the accompanying consolidated balance sheets of Uranium         
Resources, Inc. (a Delaware Corporation) and subsidiaries as of December 31,    
1998 and 1997, and the related consolidated statements of operations,           
shareholders' equity, and cash flows for each of the three years in the period  
ended December 31, 1998. These consolidated financial statements and the        
schedule referred to below are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these consolidated financial     
statements and schedule based on our audits.                                    

We conducted our audits in accordance with generally accepted auditing          
standards. 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 provide a reasonable basis for our opinion.          

In our opinion, the financial statements referred to above present fairly, in   
all material respects, the financial position of Uranium Resources, Inc. and    
subsidiaries as of December 31, 1998 and 1997, and the results of its operations
and its cash flows for each of the three years in the period ended December 31, 
1998, in conformity with generally accepted accounting principles.              

The accompanying financial statements have been prepared assuming the Company   
will continue as a going concern. The Company has incurred operating losses in  
1998 and 1997 due largely to a significant decline in the market price of       
uranium. Further, the Company has limited capital resources available to support
its ongoing operations until such time, if ever, the Company is able to resume  
full-scale operations. These factors among others discussed in Note 2, raised   
substantial doubt concerning the ability of the Company to continue as a going  
concern. The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts or the amount and   
classification of liabilities that might result should the Company be unable to 
continue as a going concern.                                                    

Our audits were made for the purpose of forming an opinion on the basic         
financial statements taken as a whole. The schedule listed in the index of      
financial statements is presented for purposes of complying with the Securities 
and Exchange Commission's rules and is not part of the basic financial          
statements. The schedule has been subjected to the auditing procedures applied  
in the audits of the basic financial statements and, in our opinion, fairly     
state in all material respects the financial data required to be set forth      
therein in relation to the basic financial statements taken as a whole.         

/s/   Arthur Andersen LLP                                                       

ARTHUR ANDERSEN LLP                                                             

Dallas, Texas                                                                   
February 26, 1999                                             

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 URANIUM RESOURCES, INC.

 CONSOLIDATED BALANCE SHEETS

ASSETS

                                                                [Download Table]

                                                         December 31,         
                                                 ---------------------------- 
                                                      1998            1997    
                                                 ------------    ------------ 
                                                                              
Current assets:                                                               
   Cash and cash equivalents                     $  3,713,566    $  2,325,158 
   Short-term investment:                                                     
        Certificate of deposit, restricted            582,623         464,664 
   Receivables, net                                 1,482,806       4,507,090 
   Uranium inventory                                  956,590       2,260,200 
   Materials and supplies inventory                    92,495          91,047 
   Prepaid and other current assets                   244,301         253,910 
                                                 ------------    ------------ 
        Total current assets                        7,072,381       9,902,069 
                                                 ------------    ------------ 

Property, plant and equipment, at cost:                                       
   Uranium properties                              98,073,350      97,100,015 
   Other property, plant and equipment                538,974         580,676 
   Less-accumulated depreciation and depletion    (59,059,968)    (36,235,274)
                                                 ------------    ------------ 
        Net property, plant and equipment          39,552,356      61,445,417 

   Long-term investment:                                                      
        Certificate of deposit, restricted          3,066,703       2,839,531 

Other assets                                            4,299         676,952 
                                                 ------------    ------------ 
                                                 $ 49,695,739    $ 74,863,969 
                                                 ============    ============ 

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

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 URANIUM RESOURCES, INC.

 CONSOLIDATED BALANCE SHEETS

LIABILITIES AND SHAREHOLDERS' EQUITY

                                                        [Enlarge/Download Table]

                                                                   December 31,         
                                                           ---------------------------- 
                                                               1998            1997     
                                                           ------------    ------------ 
                                                                                        
Current liabilities:                                                                    
   Accounts payable                                        $  1,829,255    $  3,233,277 
   Notes payable                                              1,685,000       1,950,000 
   Accrued interest payable                                     113,778           5,035 
   Current portion of long-term debt                              8,000           7,000 
   Royalties payable                                            632,626         630,284 
   Current portion of restoration reserve                       324,000         511,000 
   Other accrued liabilities                                    348,337         405,814 
                                                           ------------    ------------ 
        Total current liabilities                             4,940,996       6,742,410 
                                                           ------------    ------------ 

Other long-term liabilities and deferred credits              4,969,394       4,787,427 

Long-term debt, less current portion                          6,189,007       6,462,343 

Deferred federal income taxes                                   263,810       4,967,000 

Shareholders' equity:                                                                   
        Common stock, $.001 par value, shares authorized:                               
        25,000,000; shares issued and outstanding                                       
        (net of treasury shares):  1998 - 12,053,027                                    
        1997 - 12,053,027                                        12,205          12,205 

        Paid-in capital                                      40,629,923      40,222,359 
        Retained earnings (loss)                             (7,300,178)     11,679,643 
        Less:  Treasury stock (152,500 shares), at cost          (9,418)         (9,418)
                                                           ------------    ------------ 
             Total shareholders' equity                      33,332,532      51,904,789 
                                                           ------------    ------------ 
                                                           $ 49,695,739    $ 74,863,969 
                                                           ============    ============ 

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

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 URANIUM RESOURCES, INC.
 CONSOLIDATED STATEMENTS OF OPERATIONS

                                                        [Enlarge/Download Table]

                                                                    Year Ended December 31,           
                                                         -------------------------------------------- 
                                                             1998            1997            1996     
                                                         ------------    ------------    ------------ 
                                                                                                      
Revenues:                                                                                             
   Uranium sales -                                                                                    
        Produced uranium                                 $ 10,984,040    $ 14,737,579    $ 17,827,204 
        Purchased uranium                                  12,363,274      15,002,838       6,437,105 
                                                         ------------    ------------    ------------ 
            Uranium sales                                  23,347,314      29,740,417      24,264,309 

Costs and expenses:                                                                                   
   Cost of uranium sales -                                                                            
        Direct cost of purchased uranium                    8,745,246      13,257,989       4,979,407 
        Royalties                                             579,439         833,534       1,197,890 
        Operating expenses                                  5,347,145       6,564,363       4,866,436 
        Provision for restoration and reclamation costs       692,317       1,032,587       1,479,939 
        Depreciation and depletion                          5,922,508       7,580,809       7,599,047 
                                                         ------------    ------------    ------------ 
Earnings from operations before                                                                       
   writedown of uranium properties                                                                    
   and other uranium assets                                 2,060,659         471,135       4,141,590 
   Writedown of uranium properties and                                                                
      other uranium assets                                 23,111,956              --              -- 
                                                         ------------    ------------    ------------ 
                Total cost of uranium sales                44,398,611      29,269,282      20,122,719 
                                                         ------------    ------------    ------------ 

   Earnings (loss) from operations                                                                    
      before corporate expenses                           (21,051,297)        471,135       4,141,590 

   Corporate expenses -                                                                               
        General and administrative                          2,672,319       2,913,776       3,033,819 
        Depreciation                                           57,150          22,956          20,875 
                                                         ------------    ------------    ------------ 
                  Total corporate expenses                  2,729,469       2,936,732       3,054,694 
                                                         ------------    ------------    ------------ 
Earnings (loss) from operations                           (23,780,766)     (2,465,597)      1,086,896 

Other income (expense):                                                                               
        Interest expense, net of capitalized interest        (152,009)       (168,789)       (610,403)
        Interest and other income, net                        207,954       1,036,290         282,370 
                                                         ------------    ------------    ------------ 
Earnings (loss) before federal income taxes               (23,724,821)     (1,598,096)        758,863 

Federal income tax provision (benefit):                                                               
   Current                                                         --          44,775          25,000 
   Deferred                                                (4,745,000)       (318,000)        (25,000)
                                                         ------------    ------------    ------------ 
Net earnings (loss)                                      $(18,979,821)   $ (1,324,871)   $    758,863 
                                                         ============    ============    ============ 

Net earnings (loss) per common share:                                                                 
     Basic                                               $      (1.57)   $      (0.11)   $       0.09 
                                                         ============    ============    ============ 
     Diluted                                             $      (1.57)   $      (0.11)   $       0.08 
                                                         ============    ============    ============ 

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

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 URANIUM RESOURCES, INC.

CONSOLIDATED STATEMENTS OF COMMON SHAREHOLDERS' EQUITY

                                                        [Enlarge/Download Table]
                                                Common Stock                                                            
                                       -------------------------------      Paid-In       Retained          Treasury    
                                           Shares           Amount          Capital       Earnings           Stock      
                                       --------------   --------------  --------------  --------------   -------------- 
                                                                                                                        
Balances, December 31, 1995                 8,645,698            8,798      17,626,510      12,245,651           (9,418)
     Net income                                    --               --              --         758,863               -- 
     Common stock issuance                  2,000,000            2,000      14,030,949              --               -- 
     Common stock issuance for                                                                                          
          employee stock option plans         119,329              120         441,219              --               -- 
     Common stock issuance                                                                                              
          for stock warrants                   48,000               48         191,952              --               -- 
                                       --------------   --------------  --------------  --------------   -------------- 
Balances, December 31, 1996                10,813,027   $       10,966      32,290,630  $   13,004,514   $       (9,418)
     Net loss                                      --               --              --      (1,324,871)              -- 
     Common stock issuance for                                                                                          
          employee stock option plans          25,500               25          74,944              --               -- 
     Common stock issuance                                                                                              
          for stock warrants                   14,500               14          57,985              --               -- 
     Common stock issuance                                                                                              
          for property                      1,200,000            1,200       7,798,800              --               -- 
                                       --------------   --------------  --------------  --------------   -------------- 
Balances, December 31, 1997                12,053,027   $       12,205  $   40,222,359  $   11,679,643)  $       (9,418)
     Net loss                                      --               --              --     (18,979,821)              -- 
     Re-valuation of                                                                                                    
          common stock warrants                    --               --         407,564              --               -- 
                                       --------------   --------------  --------------  --------------   -------------- 
Balances, December 31, 1998                12,053,027   $       12,205  $   40,629,923  $   (7,300,178)  $       (9,418)
                                       ==============   ==============  ==============  ==============   ============== 

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

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 URANIUM RESOURCES, INC.

 CONSOLIDATED STATEMENTS OF CASH FLOWS

                                                        [Enlarge/Download Table]

                                                                           Year Ended December 31,            
                                                                 -------------------------------------------- 
                                                                     1998            1997            1996     
                                                                 ------------    ------------    ------------ 
                                                                                                              
Cash flows from operations:                                                                                   
   Net earnings (loss)                                           $(18,979,821)   $ (1,324,871)   $    758,863 
   Reconciliation of net income to cash provided by operations-                                               
        Provision for restoration and reclamation costs               692,317       1,032,587       1,479,939 
        Depreciation and depletion                                  5,979,658       7,603,765       7,619,922 
        Writedown of uranium properties and other assets           23,111,956              --              -- 
        Credit for deferred income taxes                           (4,745,000)       (318,000)        (25,000)
        Decrease in restoration and reclamation accrual               (69,357)       (317,270)       (513,975)
        Other non-cash items, net                                     688,458         205,169         274,243 
                                                                 ------------    ------------    ------------ 
Cash flow provided by operations, before changes in                                                           
   operating working capital items                                  6,678,211       6,881,380       9,593,992 
Effect of changes in operating working capital items-                                                         
   (Increase) decrease in receivables                               3,024,284      (2,677,551)      2,175,652 
   (Increase) decrease in inventories                                 247,334         496,100      (1,000,793)
   Increase in prepaid and other current assets                      (398,040)       (446,910)       (367,894)
   Increase (decrease) in payables and accrued liabilities         (1,350,414)        677,795      (1,107,157)
                                                                 ------------    ------------    ------------ 

Net cash provided by operations                                     8,201,375       4,930,814       9,293,800 

Investing activities:                                                                                         
   Increase in investments                                           (345,131)       (524,355)     (2,067,746)
   Additions to property, plant and equipment -                                                               
        Kingsville Dome                                            (2,998,871)     (8,998,305)     (6,695,472)
        Rosita                                                       (244,290)     (2,450,105)     (2,001,722)
        Vasquez                                                      (439,929)       (384,192)        (94,626)
        Alta Mesa                                                    (103,399)       (514,503)     (4,403,070)
        Churchrock                                                 (1,044,948)     (1,013,257)       (596,725)
        Crownpoint                                                   (876,474)     (1,152,783)       (709,590)
        Other property                                               (460,115)       (387,379)       (105,831)
   Increase in other assets                                           (27,240)        (25,487)       (156,593)
                                                                 ------------    ------------    ------------ 

Net cash used in investing activities                              (6,540,397)    (15,450,366)    (16,831,375)

Financing activities:                                                                                         
   Proceeds from borrowings                                         8,135,000       3,500,000      10,869,000 
   Payments and refinancings of principal                          (8,407,570)     (7,722,535)     (5,779,379)
   Issuance of common stock and warrants, net                              --         132,969      14,666,288 
                                                                 ------------    ------------    ------------ 

Net cash provided by (used in) financing activities                  (272,570)     (4,089,566)     19,755,909 
                                                                 ------------    ------------    ------------ 

Net increase (decrease) in cash and cash equivalents                1,388,408     (14,609,118)     12,218,334 
Cash and cash equivalents, beginning of period                      2,325,158      16,934,276       4,715,942 
                                                                 ------------    ------------    ------------ 

Cash and cash equivalents, end of period                         $  3,713,566    $  2,325,158    $ 16,934,276 
                                                                 ============    ============    ============ 

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

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 URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 DECEMBER 31, 1998

1.       SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES                             

PRINCIPLES OF CONSOLIDATION AND DESCRIPTION OF COMPANY                          

        The consolidated financial statements have been prepared in accordance
with generally accepted accounting principles and include the accounts of       
Uranium Resources, Inc. ("URI") and its wholly owned subsidiaries (collectively 
"the Company"). All significant intercompany transactions have been eliminated  
in consolidation.                                                               

  URI was formed in 1977 and incorporated 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. The primary customers of the Company are major utilities who    
utilize nuclear power to generate electricity. The Company continuously         
evaluates the creditworthiness of its customers. The Company has been, in the   
past, involved in a number of significant ISL uranium mining joint venture      
arrangements and has also provided consulting, plant design and construction    
expertise to other companies. At present the Company owns both producing and    
development properties in South Texas and development properties in New Mexico. 
The Company's Rosita and Kingsville Dome uranium production facilities in South 
Texas resumed operations in June 1995 and March 1996, respectively, and were    
both in operation at December 31, 1998.                                         

INVENTORIES                                                                     

       Uranium inventory consists of uranium concentrates (U(3)O(8)) located
at the Company's Rosita and Kingsville Dome sites and also at converters        
awaiting delivery to customers. All uranium inventories are valued at the lower 
of cost (first-in, first-out) or market. The cost of produced uranium includes  
all operating production costs, and provisions for depreciation, depletion and  
future restoration obligations. Materials and supplies inventory is valued at   
the lower of average cost or market.                                            

BORROWED URANIUM                                                                

   Uranium is occasionally borrowed from other parties to facilitate
deliveries under sales contracts. Repayment of the loan is normally made from   
production or from purchased uranium. The liability for borrowed uranium is     
recorded at the latest spot market price (estimated replacement cost) and the   
cost is adjusted to the actual amount when the borrowed material is repaid.     

PROPERTY, PLANT AND EQUIPMENT                                                   

Uranium Properties                                                              

        Capitalization of Development Costs - All acquisition, exploration and
development costs (including financing, salary and related overhead costs)      
incurred in connection with the various uranium properties are capitalized.     
Gains or losses are recognized upon the sale of individual property interests.  
All costs incurred in connection with unsuccessful acquisition and exploration  
efforts and abandoned properties are charged to expense when known. 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 by providing a valuation allowance (see Note 2 - "Uranium   
Properties - Writedown of Abandoned Property"). Total exploration and evaluation
costs capitalized in 1998, 1997 and 1996 were $327,000, $120,000 and $116,000,  
respectively.                                                                   

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 URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

       Depreciation and Depletion - In general, depletion of uranium mineral
interests and related development costs is computed on a property-by-property   
basis using the units-of-production method based on the proved and probable     
recoverable uranium reserves as estimated periodically by the Company's         
geologists and engineers. Depreciation and depletion is 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. Other ancillary plant equipment and vehicles are          
depreciated using a straight line method based upon the estimated useful lives  
of the assets.                                                                  

Other Property                                                                  

      Other property 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.      

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. Interest capitalized in the twelve months ended December 31, 1998, 
1997 and 1996 amounted to $704,000, $378,000 and $11,000, respectively. Total   
interest costs in these periods were $856,000, $547,000 and $621,000,           
respectively.                                                                   

RESTORATION AND RECLAMATION COSTS                                               

   Various federal and state mining laws and regulations require the
Company to reclaim the surface areas and restore underground water quality to   
the pre-existing mine area average quality. Accruals for the estimated future   
cost of restoration and reclamation are made on a per-pound basis as part of    
production costs, or when it is determined by an engineering study that an      
adjustment to the accrual is required.                                          

REVENUE RECOGNITION FOR CERTAIN URANIUM SALES                                   

     The Company recognizes revenue from the sale of uranium under which
substantially all of its obligations related to the delivery have been          
completed. Under certain uranium sales contracts which contain origin-specific  
delivery requirements, the revenue from the portion of a sale which requires the
satisfaction of future obligations is recorded as unearned revenue until these  
commitments are satisfied. Commitments that are expected to be completed within 
one year are classified as current; all others are recorded as long-term        
deferred credits.                                                               

EARNINGS PER SHARE                                                              

      Effective with the year ended December 31, 1997, the Company adopted
Statement of Financial Accounting Standards No. 128 ("FAS 128"), "Earnings per  
Share", which sets standards for the calculation and presentations of earnings  
per share. FAS 128 supercedes APB Opinion No.15, 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 on January 1 of each year presented or as of the date
of issuance if later.                                                           

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 URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

        The weighted average number of shares used to calculate basic earnings
per share were 12,053,000, 11,760,000 and 8,789,000 in 1998, 1997 and 1996,     
respectively. The weighted average number of shares used to calculate diluted   
earnings per share were 12,053,000, 11,760,000 and 10,031,000 in 1998, 1997 and 
1996, respectively. The potential common stock that was excluded from the       
calculation of diluted earnings per share were 2,405,021, 2,413,977 and 46,000  
in 1998, 1997 and 1996, respectively.                                           

UNAMORTIZED DEBT ISSUANCE COSTS                                                 

      Debt discount and related expenses arising from the issuance of debt
securities are amortized by the effective interest method.                      

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:       

                                                                [Download Table]

                                        Twelve Months Ended December 31,      
                                        1998           1997           1996    
                                    ------------   ------------   ------------
                                                                              
Cash paid during the period for:                                              
     Interest                       $    567,000   $    687,000   $    501,000

        The change in inventories in the Consolidated Statements of Cash Flows
during 1998, 1997 and 1996 excludes the changes in uranium inventories for      
non-cash capitalized restoration and depreciation and depletion provisions. Such
increases (decreases) totaled ($1,088,000), ($816,000) and $1,923,000,          
respectively.                                                                   

    An additional non-cash transaction occurred in 1997 and such major
transaction is summarized as follows:                                           

In March 1997, 1,200,000 common shares were issued to Santa Fe                  
Pacific Gold in exchange for certain uranium mineral interests                  
and exploration rights covering approximately 523,000 acres in                  
New Mexico.                                                         $7,800,000  

RESTRICTED CASH                                                                 

At December 31, 1998, 1997 and 1996, the Company had pledged a
certificate of deposit of $3,649,000, $3,304,000 and $2,780,000, respectively,  
in order to collateralize surety bonds 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.                                           

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

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.                                                                      

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.                           

2.       FUTURE OPERATIONS                                                      

         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. Due to a continued period of depressed prices for uranium as       
compared to the Company's cost to produce uranium, the Company has generated    
operating losses in each of the last two years. Unaudited information subsequent
to December 31, 1998 indicates that operating losses are continuing. Such price 
declines have reduced the market price of uranium to levels that are currently  
below the Company's cost to produce uranium and below levels needed by the      
Company to obtain the necessary financing to allow development of new production
areas at its South Texas sites. Due to circumstances described above, the       
Company has made the decision to shut-in its current producing operations until 
prices recover. The Company has limited financial resources available to support
its ongoing operations, fund payments of debt, potential claims in litigation   
and provide for restoration of its properties until such time, if ever, uranium 
prices recover to profitable levels. Further, the Company will require          
additional capital resources to fund the cost to resume production and to fund  
development of its undeveloped properties. There is no assurance the Company    
will be successful in raising such capital or that uranium prices will recover  
to levels which would enable the Company to operate profitably. These factors,  
raise substantial doubt concerning the ability of the Company to continue as a  
going concern.                                                                  

         The financial statements do not include any adjustments relating to the
recoverability and classification of asset carrying amounts (including          
approximately $39.5 million in net property, plant and equipment) or the amount 
and classification of liabilities that might result should the Company be unable
to continue as a going concern. The ability of the Company to continue as a     
going concern is dependent upon a recovery of uranium prices, its ability to    
successfully produce uranium at economically feasible levels and its ability to 
successfully raise capital to support ongoing operations and future development 
efforts.                                                                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

3.       URANIUM PROPERTIES                                                     

KINGSVILLE DOME PROPERTY                                                        

       In 1981, the Company acquired an exploration property in South Texas,
known as Kingsville Dome, from Exxon Corporation. After significant production  
in 1988-1990, the property was put on a standby basis because of low uranium    
spot prices and production ceased in September 1990.                            

       Wellfield development activities began in December 1995 at Kingsville
Dome which lead to the resumption of production at the property in March 1996.  
Total uranium production for the period March 1996 through December 31, 1996 was
approximately 860,000 pounds at a cost of approximately $12.31 per pound.       
Production in 1997 totaled 640,000 pounds at an average cost of approximately   
$15.47 per pound. Production in 1998 totaled 445,000 pounds at an average cost  
of approximately $16.93 per pound.                                              

 Cost of uranium sales in 1996 in the Consolidated Statements of
Operations includes $293,000 of costs incurred to maintain the facility while   
Kingsville Dome was on standby and not in production. At December 31, 1998 the  
property contained approximately 1.8 million pounds of estimated recoverable    
proved and probable reserves and the net carrying value of the property was     
approximately $6,106,000.                                                       

ROSITA PROPERTY                                                                 

        In late 1985, the Company acquired several lease holdings in a uranium
prospect ("Rosita") in South Texas. Construction and development activities     
began in the first quarter of 1990 and were completed in September 1990 with    
production commencing immediately thereafter. The property was originally put on
a standby basis and production ceased in March 1992.                            

         Wellfield development activity began in early 1995 at Rosita which lead
to the resumption of production at the property in June 1995. Total production  
for the year ended December 31, 1997 was approximately 230,000 pounds at a cost 
of approximately $16.92 per pound. Production in 1998 totaled 178,000 pounds at 
an average cost of approximately $17.55 per pound.                              

    At December 31, 1998, the property contained approximately 261,000
pounds of estimated recoverable proved and probable uranium reserves and the net
carrying value of the property at December 31, 1998 was approximately $900,000. 

ALTA MESA PROPERTY                                                              

         In June 1996, the Company acquired the Alta Mesa property consisting of
4,575 acres of leases in South Texas for a cash payment of $4 million of which  
$1 million was recoverable against one-half of future royalties. In December    
1998, the Company terminated the lease agreement and wrote off the net carrying 
value of $5,021,000.                                                            

CHURCHROCK PROPERTIES                                                           

     In December 1986, the Company acquired properties in the Churchrock
region of New Mexico containing approximately 6,951,000 pounds of estimated     
recoverable proved and probable uranium reserves.                               

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 DECEMBER 31, 1998

       In September 1991, an additional 200 acres of leases were obtained in
exchange for a future production royalty payment which, based upon the expected 
selling price of the uranium production, may vary between 5% and 10%.           
Preliminary analysis of the drilling data of these 200 acres indicates          
approximately 5,488,000 pounds of estimated recoverable proved and probable     
reserves.                                                                       

Permitting activities are currently ongoing on both of these  
properties. The net carrying value of these properties at December 31, 1998 was 
approximately $8,958,000.                                                       

CROWNPOINT PROPERTY                                                             

In August 1988, the Company acquired the Crownpoint property, 
consisting of 163 acres of leases and related equipment and buildings for cash  
payments of $550,000, amounts payable in future years of $950,000 and a sliding 
scale overriding royalty on future production. The present value of the future  
payable amount, $407,054 at December 31, 1996, is recorded as a purchase money  
obligation. Additionally, also in 1988, the Company staked 321 acres of claims  
in the same area. In August 1993, the Company acquired approximately 959 acres  
of leases adjoining the Crownpoint properties. Initial interpretation of the    
drilling data for all the properties acquired in 1988 and 1993 indicate total   
estimated recoverable proved and probable uranium reserves of approximately     
25,323,000 pounds. The net carrying value of these properties at December 31,   
1998 was approximately $9,187,000.                                              

SANTA FE PROPERTIES                                                             

  In March 1997 the Company acquired from Santa Fe certain uranium
mineral interests and exploration rights for uranium in New Mexico. The major   
components of the transaction include the following detail.                     

         The Properties. The properties consist of: (a) 37,000 acres as to which
the Company has acquired a fee interest in the entire mineral estate, excluding 
coal ("Category I Properties"); (b) approximately 140,000 acres as to which the 
Company has acquired the fee interest in uranium (the "Category II Properties");
and (c) approximately 346,000 acres as to which the Company has acquired the    
exclusive right to explore for uranium (the "Category III Properties").         

        The Company is obligated to spend on exploration $200,000 per year for
the ten year period starting in March 1997 and $400,000 per year for the seven  
year period starting in March 2007. This expenditure can be made on any of the  
Category II or Category III properties. The net carrying value of the property  
at December 31, 1998 was approximately $11,378,000.                             

WRITEDOWN OF ABANDONED PROPERTY                                                 

         In 1998, the Company determined that the Alta Mesa property and certain
evaluation projects in South Texas would not be pursued toward development and  
acquisition. The costs related to these projects were expensed in 1998 resulting
in a pre-tax charge of approximately $5,240,000.                                

PROPERTY REALIZABILITY                                                          

The Company's ability to recover its investment in its uranium
properties is dependent upon a number of factors, including, the sales price of 
uranium, the Company's ability to deliver profitable uranium production to its  
existing and future sales contracts and the Company's ability to access the     
financing/capital that may be necessary to develop and produce future projects. 
As discussed in Note 1, the market price of uranium has been volatile in recent 
years and there can be no assurance that the Company                            

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 DECEMBER 31, 1998

can continue to enter into new sales contracts at prices that are above the     
Company's existing or future production costs or that it will be able to recover
its investment in its uranium properties.                                       

       In view of the continuing weakness in uranium prices, the Company has
completed a review of the carrying values of its uranium properties and has     
determined that a writedown was required for 1998 with respect to its existing  
producing properties of approximately $18,000,000. The writedown in the carrying
value of the Kingsville Dome and Rosita properties totaled $12,300,000 and      
$5,600,000, respectively. The net carrying value of these properties at December
31, 1998 (after giving effect to the writedown) was approximately $6,106,000 for
Kingsville Dome and $900,000 for Rosita.                                        

      The review utilized a number of estimates and assumptions, including
current and projected uranium prices (which assumes higher prices in the future)
and the timing costs of future production activities. The estimates also assume 
that the Company is able to operate each of its production sites in the future  
at production rates that are higher than the Company's production rate for 1998 
and as a result operate at costs that are significantly below those experienced 
for 1998. The inability of the Company to achieve such assumptions would have an
impact on the Company's ability to recover its current and future investments in
its uranium properties.                                                         

4.       CONTRACT COMMITMENTS                                                   

SALES CONTRACTS                                                                 

        The Company has entered into several long-term contract commitments to
sell uranium. Included in URI's long-term contracts are sales to be made under  
the Amendment to the Russian Suspension Agreements (the "Amendment"). Such sales
involve the sale of Russian origin uranium providing it is matched with U.S.    
uranium mined after March 11, 1994. Under these arrangements, the Russian       
uranium is essentially sold at its approximate purchase price. As a result,     
these "pass-through" sales of specifically Russian origin uranium are not       
expected to have a significant impact on the future profitability of the        
Company's operations but they are an important aspect of the Company's ability  
to sell its uranium at prices that exceed market. Total future sales of uranium 
concentrates (excluding the Russian component of sales made under the Amendment)
of approximately 3,882,000 pounds represent future revenues of approximately    
$54,542,000 over the various contract periods from January 1, 1998 through 2002.
The average current price of such future contracted deliveries, with escalation 
calculated through December 31, 1997, is $14.05. The Company has contracts which
include various pricing provisions including contracts with market related      
prices and price ceilings and price floors which escalate for between 80%-100%  
of future inflation, contracts with fixed prices which escalate for between     
80%-100% of future inflation and another contract whose pricing is based upon   
99% of market prices without a price ceiling or floor.                          

      All revenues for the twelve months ended December 31, 1998 were from
sales to six customers, three of which represented more than 10% of total       
revenues. Sales to these three customers totaled $10,831,000, $4,085,000 and    
$3,375,000 in 1998.                                                             

      All revenues for the twelve months ended December 31, 1997 were from
sales to nine customers, four of which represented more than 10% of total       
revenues. Sales to these four customers totaled $5,500,000, $4,650,000,         
$4,445,000 and $3,851,000 in 1997. All revenues for the twelve months ended     
December 31, 1996 were from sales to nine customers, five of which represented  
more than 10% of total revenues. Sales to these five customers totaled          
$4,860,000, $3,861,000, $3,565,000, $2,790,000 and $2,663,000 during 1996.      

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 DECEMBER 31, 1998

5.       SHORT-TERM DEBT                                                        

NATIONSBANK CREDIT AGREEMENT                                                    

      In May 1996 the Company entered into a $3.0 million revolving-credit
facility with NationsBank, N.A. ("Nations"). In July, 1997 the facility was     
renewed and expanded to $5.0 million and for a two-year term. This facility is  
secured by the Company's uranium inventory and/or its receivables from its      
uranium sales contracts with interest on the loan accruing at the prime rate    
plus 1%. Principal and interest payments under the facility are due monthly. As 
of December 31, 1998, $1,685,000 was outstanding under this facility.           

LINDNER SHORT-TERM NOTE                                                         

 In June 1996 the Company entered into an agreement with Lindner
Dividend Fund for a $4.0 million note to acquire the Alta Mesa property. The    
terms of the note provide for the payment of both the principal and accrued     
interest by June 1997. Interest on the note accrued at a rate of 6.5% per annum.
The entire principal amount plus accrued interest was repaid in January 1997.   

6.       LONG-TERM DEBT                                                         

LINDNER NOTE                                                                    

    On May 25, 1995 the Company entered into an agreement with Lindner
Investments and Lindner Dividend Fund, (the "Lender") two mutual funds managed  
by Ryback & Associates, for a $6 million secured convertible note with the      
Company (the "Lindner Note"). The Lindner Note was initially issued for a term  
of three years and bore interest at an annual rate of 6.5% and was convertible  
at any time during the three-year term into 1.5 million shares of the Company's 
common stock at an initial conversion price of $4.00 per share. The Lender also 
received a three-year warrant to purchase 1.5 million shares of the Company's   
common stock at an initial price of $4.00 per share. In 1995, the Lender        
exercised 500,000 shares of warrants under the agreement for an infusion of $2.0
million to the Company. Certain other financial advisors associated with the    
transaction were granted warrants and options to purchase up to 150,000 shares  
at an initial exercise price of $4.00 per share. As of December 31, 1998, these 
certain other financial advisors have exercised 62,500 shares of warrants under 
the agreement and 37,500 shares of warrants have expired.                       

         In March 1998, the Company entered into an agreement with the Lender to
extend the maturity date of the Lindner Note to May 31, 2000. The note is       
convertible at any time during this term into 2.0 million shares of the         
Company's common stock at a conversion price of $3.00 per share. The exercise   
price and expiration date of the warrant was also adjusted. The remaining       
1,000,000 shares under the warrant can be purchased by the Lender at $3.00 per  
share at any time during the term of the agreement which was extended to May 31,
2000. In connection with this transaction the Company allocated $408,000 for the
value of the warrants resulting in an effective rate of 10% on the refinanced   
note. As of December 31, 1998, $141,000 has been amortized.                     

       The Lindner Note is secured by a mortgage on the Company's Rosita and
Kingsville Dome uranium properties in Texas. Part of the proceeds form the      
Lindner Note were used to pay down existing payables and provide funding to     
complete the production start-up of the Company's Rosita property. The balance  
of the proceeds were used to fund pre-production activities at the Company's    
Kingsville Dome facility to permit commencement of production in 1996.          

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

PURCHASE MONEY OBLIGATION                                                       

         In 1987, the Company acquired certain long-term sales contract delivery
rights in exchange for cash plus an assignment of a $3,000,000 future production
payment, at $1.00 per pound of production sold from the Kingsville Dome and     
Rosita projects, starting in 1988. The production payment was recorded as a     
purchase money obligation at an original calculated present value of $2,379,839.
The balance of the production payment was repaid in January 1997 ($730,074).    

SUMMARY OF LONG-TERM DEBT                                                       

                                                                [Download Table]

                                                 At December 31,    
                                             -----------------------
                                                1998         1997   
                                             ----------   ----------
                                                                    
Long-term debt of the Company consists of:                          
     Lindner Note                            $5,733,520   $6,000,000
     Crownpoint property (Note 2)               450,000      407,054
     Other                                       13,487       62,289
                                             ----------   ----------
                                              6,197,007    6,469,343
     Less - Current portion                       8,000        7,000
                                             ==========   ==========
          Total long-term debt               $6,189,007   $6,462,343
                                             ==========   ==========

Maturities of long-term debt are as follows:                                    

                                                                [Download Table]

For the Twelve Months Ended:           For the Twelve Months Ended:            
---------------------------            ---------------------------             
                                                                               
December 31, 1999            8,000     December 31, 2002                     --
December 31, 2000        6,005,000     December 31, 2003 and beyond   $ 450,000
December 31, 2001              --                                              

7.       RELATED-PARTY TRANSACTIONS                                             

    During January 1995, a control group of companies based in Denver,
Colorado (the "Benton Companies") held effective control of the common stock of 
the Company, the Company transferred $1.0 million to the Benton Companies in    
connection with a planned joint venture to process uranium at a Benton          
Companies' mill. The specific Benton Companies which were to be part of the     
planned joint venture did not receive the transferred funds. In February 1995,  
the Benton Companies filed for bankruptcy (the "Benton Bankruptcy"). Because of 
the bankruptcy, the realizability of the Company's $1.0 million investment is   
doubtful. Shortly thereafter, the then Chairman and CFO of the Company, who were
also officers of the Benton Companies, transferred $1.08 million out of the     
Company without the authorization of the Company's Board of Directors. The      
Company recovered $300,000 in June 1995 and $575,000 in mid-1997 from the $1.08 
million transfer, but $1.2 million of the initial $2.08 has not been recovered. 
The Company recorded losses totaling $1.78 million for these transactions in    
1995. The $575,000 recovered in 1997 was recorded to other income in the second 
quarter of that year.                                                           

     In connection with the Benton Bankruptcy, the bankrupt estates have
commenced an action against the Company in the United Stated Bankruptcy Court   
for the District of Colorado. The action seeks to recover approximately         
$1,600,000 from various transactions entered into with the Benton Companies.    
Settlement negotiations regarding this matter were ongoing at December 31, 1998.
The Company does not                                                            

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 DECEMBER 31, 1998

believe any such settlement or other outcome from this matter will have a       
material adverse impact on the operating results or financial position of the   
Company. The Company has asserted claims against Benton and the Benton Companies
in the bankruptcy proceedings.                                                  

8.       SHAREHOLDERS' EQUITY                                                   

COMMON STOCK                                                                    

Common Stock Issued in 1997                                                     

       In March 1997, the Company issued 1,200,000 shares of common stock to
Santa Fe Pacific Gold Corporation in exchange for certain uranium mineral       
interests in New Mexico. The value of the common stock for the transaction was  
$6.50 per share and resulted in an increase to shareholders equity of $7.8      
million.                                                                        

Issuance of Treasury Shares                                                     

    On May 25, 1995, the Company issued 35,000 shares of the Company's
common stock which were held as treasury shares to financial advisors in        
connection with the Lindner Note as discussed in Note 5.                        

WARRANTS                                                                        

Lindner Warrants                                                                

      In connection with the May 1995 Lindner Note as discussed in Note 5,
the Company issued a three-year warrant to purchase 1,500,000 shares of the     
Company's common stock at an initial conversion price of $4.00 per share. The   
warrants were initially exercisable at any time through May 1998. In 1995,      
500,000 warrants were exercised. In addition, the Lindner Note was convertible  
at any time during the three year term into 1,500,000 shares of the Company's   
common stock at an initial conversion price of $4.00 per share, none of which   
have been converted at December 31, 1998. In March 1998, the Company extended   
the maturity date of the Lindner Note and revised the terms of the warrants and 
the convertible securities. See Note 5 - Long-Term Debt "Lindner Note" for      
further discussion.                                                             

Financial Advisors' Warrants/Options                                            

      On May 25, 1995, the Company issued a three-year warrant to purchase
100,000 shares of the Company's common stock at an initial conversion price of  
$4.00 per share to certain financial advisors associated with the Lindner Note  
transaction. The warrants were convertible at any time through May 1998 and     
62,500 warrants were exercised. In addition, the Company granted options to     
purchase 50,000 shares at an initial conversion price of $4.00 per share. The   
options are immediately exercisable and expire on March 6, 2000. As of December 
31, 1998, none of the warrants have been exercised.                             

STOCK OPTIONS                                                                   

Directors Stock Options                                                         

      On May 25, 1995, the Company granted options to certain directors of
URI, to purchase 200,000 shares of the Company's common stock at an exercise    
price of $4.50 per share. All such options are immediately exercisable and were 
originally scheduled to expire May 24, 1998 or 30 days after the holder         

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 DECEMBER 31, 1998

ceases to be a director of the Company or one year after such holder's death,   
whichever occurs first. In November 1997, the term of these options was revised 
for three years and the exercise price was increased to $4.75 per share. None of
these options have been exercised as of December 31, 1998 and 100,000 of these  
options remain outstanding.                                                     

       On August 16, 1995, the Company granted options to a director of URI,
to purchase 100,000 shares of the Company's common stock at an exercise price of
$8.38 per share which was the fair market value of a share of common stock on   
August 16, 1995. Such options are immediately exercisable and were originally   
scheduled to expire May 24, 1998, 30 days after the holder ceases to be a       
director of the Company or one year after his death, whichever occurs first. In 
November 1997, the term of these options was revised for three years and the    
exercise price was increased to $8.63 per share. none of these options have been
exercised as of December 31, 1998.                                              

Other Stock Options                                                             

      On July 31, 1995, the Company granted options to a former officer of
the Company to purchase 50,000 shares of the Company's common stock at an       
exercise price of $4.75 per share which was the fair market value of a share of 
common stock on that date. All of these options were exercised in 1996.         

Market for Common Stock                                                         

   Prior to March 24, 1999, the Company's Common Stock was traded on
Nasdaq but was delisted for noncompliance with the minimum bid price            
requirements of Nasdaq. Effective March 24, 1999, the Company's Common Stock    
began being quoted on the OTC Bulletin Board.                                   

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 DECEMBER 31, 1998

9.       STOCK-BASED COMPENSATION PLANS                                         

       The Company has three stock option plans, the Employees' Stock Option
Plan, the Stock Incentive Plan and the Directors' Stock Option Plan. The Company
accounts for these plans under APB Opinion No. 25, under which no compensation  
cost has been recognized. Had compensation cost for these plans been determined 
consistent with FASB Statement No. 123 ("FAS 123"), the Company's net earnings  
(loss) and earnings (loss) per share ("EPS") for the year ended December 31,    
1998, 1997 and 1996 would have been reduced to the following pro forma amounts: 

                                                                [Download Table]

                                       1998           1997         1996    
                                   ------------   -----------   ---------- 
                                                                           
Net Earnings (Loss):  As reported  $(18,979,821)  $(1,324,871)  $  758,863 
                        Pro forma  $(19,684,005)  $(2,983,028)  $ (519,164)

          Basic EPS:  As reported  $      (1.57)  $     (0.11)  $     0.08 
                        Pro forma  $      (1.63)  $     (0.25)  $    (0.06)

        Diluted EPS:  As reported  $      (1.57)  $     (0.11)  $     0.08 
                        Pro forma  $      (1.63)  $     (0.25)  $    (0.06)

       The fair value of each option is estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average      
assumptions used for grants in 1997, 1996 and 1995, respectively: expected      
volatility of 68%, 70% and 65% and risk-free interest rates of 5.6%, 6.4% and   
6.0%. An expected life of 5.2, 5.0 and 4.6 years was used for options granted to
the employees and directors, respectively.                                      

  The FAS 123 method of accounting has not been applied to options
granted prior to January 1, 1995, and accordingly the resulting pro forma       
compensation cost may not be representative of that to be expected in future    
years.                                                                          

         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. Currently there are 69,000 stock options outstanding under the         
Directors' Stock Option Plan. 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. 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 options and 150,000 options,            
respectively. 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 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 Stock Incentive Plan to 1,250,000 options. As of
December 31, 1998, there are 688,695 options outstanding under the Stock        
Incentive Plan. Additional details about the options granted under the stock    
option plans are as follows:                                                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

                                                        [Enlarge/Download Table]

                                                       ----------------------------------------------- 
                                                                   At December 31, 1998                
                                                       ----------------------------------------------- 
                                                         Options                                       
                                  Exercise    Options    Available    Options    Options      Options  
Date of Grant                       Price     Granted  for Exercise  Exercised   Canceled   Outstanding
-------------                     ---------  ---------   ---------   ---------   ---------   --------- 
                                                                                                       
January 15, 1992                  $    2.94    617,248     104,623     327,625     185,000     104,623 
May 22, 1992                      $    3.00      2,000          --       1,000       1,000          -- 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1992               619,248     104,623     328,625     186,000     104,623 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
February 26, 1993                 $    2.50     10,000          --       2,500       7,500          -- 
May 27, 1993                      $    3.50      2,000          --         500       1,500          -- 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1993               631,248     104,623     331,625     195,000     104,623 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
July 11, 1994                     $    4.38     20,000      20,000          --          --      20,000 
August 10, 1994                   $    4.25    140,000      19,000       1,000     120,000      19,000 
December 15, 1994                 $    5.88      3,000       2,000          --       1,000       2,000 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1994               794,248     145,623     332,625     316,000     145,623 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
February 24, 1995                 $    4.13    210,000      75,000          --     110,000     100,000 
April 12, 1995                    $    3.88     10,000       7,500          --          --      10,000 
May 26, 1995                      $    3.75     40,000      15,000          --      20,000      20,000 
August 16, 1995                   $    8.38    100,000      75,000          --          --     100,000 
August 31, 1995                   $    6.88    127,508      80,688          --      19,924     107,584 
October 11, 1995                  $    6.94     35,000      26,250          --          --      35,000 
December 19, 1995                 $    5.50      3,000       1,500          --       1,000       2,000 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1995             1,319,756     426,561     332,625     466,924     520,207 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
February 22, 1996                 $    9.75    178,810      75,844          --      27,140     151,670 
May 29, 1996                      $   17.00      3,000       1,000          --       1,000       2,000 
May 30, 1996                      $   16.13     75,000      37,500          --          --      75,000 
July 22, 1996                     $   11.13     50,000      25,000          --          --      50,000 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1996             1,626,566     565,905     332,625     495,064     798,877 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
February 10, 1997                 $   7.125    182,405      39,138          --      25,880     156,525 
April 1, 1997                     $    5.50     55,000      13,750          --          --      55,000 
May 1, 1997                       $    5.00      3,000         500          --       1,000       2,000 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1997             1,866,971     619,293     332,625     521,944   1,012,402 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
February 23, 1998                 $  2.9375    172,000          --          --       6,500     165,500 
June 5, 1998                      $    2.50      3,000          --          --       1,000       2,000 
                                  ---------  ---------   ---------   ---------   ---------   --------- 
   Balances at December 31, 1998             2,041,971     619,293     332,625     529,444   1,179,902 
                                  =========  =========   =========   =========   =========   ========= 

         The exercise price for the options granted under the stock option plans
has been the approximate market price 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 Stock Incentive
Plan has been the approximate market price 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.        

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 URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

10.      FEDERAL INCOME TAXES                                                   

      The deferred federal income tax liability consists of the following:

                                                                [Download Table]

                                                          December 31,        
                                                   -------------------------- 
                                                       1998           1997    
                                                   -----------    ----------- 
                                                                              
Property development costs - net of amortization   $   545,000    $ 6,775,000 
Property acquisition costs                           2,652,000      2,652,000 
Accelerated depreciation                               229,000        210,000 
Restoration reserves                                (1,817,000)    (1,605,000)
Net operating loss and percentage                                             
   depletion carryforwards                          (7,015,000)    (5,396,000)
Valuation allowance and other - net                  5,670,000      2,331,000 
                                                   -----------    ----------- 
     Total deferred income tax liability           $   264,000    $ 4,967,000 
                                                   ===========    =========== 

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

                                                        [Enlarge/Download Table]

                                                        For the Twelve Months Ended December 31,                              
                              ----------------------------------------------------------------------------------------------  
                                          1998                             1997                            1996               
                              ----------------------------     ----------------------------     ----------------------------  
                                               % of Pretax                      % of Pretax                      % of Pretax  
                                 Amount          Income           Amount          Income           Amount           Income    
                              ------------    ------------     ------------    ------------     ------------    ------------  
                                                                                                                              
Pretax income (loss)           (23,724,821)                    $ (1,598,096)                    $    758,863                  
                              ------------    ------------     ------------    ------------     ------------    ------------  
Pretax income (loss)  times                                                                                                   
statutory tax  rate             (8,066,000)            (34%)       (543,000)          (34.0%)        258,000            34.0% 
Increases (reductions) in                                                                                                     
   taxes resulting from:                                                                                                      
Percentage  depletion            8,066,000              34%         543,000            34.0%        (258,000)          (34.0%)
   Alternative minimum  tax     (4,745,000)            0.0%        (273,225)            0.0%              --             0.0% 
                              ------------    ------------     ------------    ------------     ------------    ------------  
Income tax expense (benefit)    (4,745,000)            (20%)   $   (273,225)          (17.1%)   $         --             0.0% 
                              ============    ============     ============    ============     ============    ============  

         The Company's net operating loss carryforwards generated in 1998 and in
prior years have generally been valued, net of valuation allowance, at          
Alternative Minimum Tax ("AMT") rates imposed by the 1986 Tax Reform Act ("the  
86 ACT"). It is expected that these deferred tax assets will be realized at such
rates.                                                                          

         At December 31, 1998, approximately $22,428,000 of percentage depletion
(available for regular tax purposes) had not been utilized to shelter book      
income and is available to carry forward to future accounting periods. The      
Company received a $42,000 refund from prior years federal income payments in   
1998 and paid $45,000 in federal income taxes in 1997. No tax payments were     
required in 1996.                                                               

        The Company also has available for regular federal income tax purposes
at December 31, 1998 estimated net operating loss carryforwards of approximately
$25,046,000 which expire primarily in 1999 through 2014, if not previously      
utilized. At December 31, 1998, the Company had investment tax credit           
carryforwards of approximately $11,000, after adjusting for the reductions      
required by the 86 ACT, which expire for regular tax purposes in 1999 through   
2000.                                                                           

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 URANIUM RESOURCES, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
 DECEMBER 31, 1998

11.      OTHER LONG-TERM LIABILITIES AND DEFERRED CREDITS                       

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

                                                                [Download Table]

                                                              December 31,     
                                                        -----------------------
                                                           1998         1997   
                                                        ----------   ----------
                                                                               
Reserve for future restoration and reclamation costs,                          
   net of current portion of $324,000 and $511,000 in                          
   1998 and 1997 (Note 1)                               $4,968,382   $4,251,108
Unearned revenue from Russian matched sales (Note 1)         1,012      536,319
                                                        ----------   ----------
                                                        $4,969,394   $4,787,427
                                                        ==========   ==========

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 has 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.      DISCLOSURES ABOUT THE FAIR VALUE OF FINANCIAL INSTRUMENTS              

         Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments," requires disclosure about the fair value  
of financial instruments. The Company is unable to assess the fair value of its 
debt instrument at December 31, 1998 due to the Company's financial position and
its inability to secure comparable financing.                                   

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                                                                     SCHEDULE II

 URANIUM RESOURCES, INC.

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

                                                        [Enlarge/Download Table]

                                                                 Additions                                       
                                                          -----------------------                                
                                              Balance at  Charged to   Charged to                                
                                              Beginning   Costs and      Other                     Balance at End
             Description                      of Period    Expenses     Accounts     Deductions(a)   of Period   
             -----------                      ----------  ----------   ----------    ------------  --------------
                                                                                                                 
Year ended December 31, 1998:                                                                                    
   Accrued restoration Costs ................ $4,762,108  $  692,317   $   92,687(b)   $   69,356   $5,292,382(d)

Year ended December 31, 1997:                                                                                    
   Accrued restoration costs ................ $4,136,495  $1,032,587   $   89,703(b)   $  317,271   $4,762,108(d)

Year ended December 31, 1996:                                                                                    
   Accrued restoration costs ................ $2,990,151  $1,479,939   $  180,380(b)   $  513,975   $4,136,495(d)

----------------                                                                

(a)      Deductions represent costs incurred in the restoration process.        

(b)      Increase (decrease) resulted primarily from the change in the amounts  
of restoration provision included in ending uranium inventory.

(c)      Decrease resulted primarily from restoration provision amounts in      
beginning inventory which were expensed in the current year.  

(d)      Amounts recorded as current liabilities at December 31, 1998, 1997 and 
1996 are $324,000, $511,000 and $368,000, respectively.       

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 EXHIBIT INDEX

                                                        [Enlarge/Download Table]

EXHIBIT                                                                        SEQUENTIALLY 
NUMBER                           DESCRIPTION                                   NUMBERED PAGE
------                           -----------                                   -------------
                                                                                            
 3.1*    Restated Certificate of Incorporation of the Company, as amended                   
         (filed with the Company's Annual Report on Form 10-K dated March 27,               
         1997).                                                                             

 3.2*    Restated Bylaws of the Company (filed with the Company's Form S-3                  
         Registration No. 333-17875 on December 16, 1996).                                  

 4.1*    Registration Rights Agreement dated March 25, 1997 between the                     
         Company and Santa Fe Pacific Gold Corporation (filed with the                      
         Company's Annual Report on Form 10-K dated March 27, 1997).                        

10.1*    Amended and Restated Directors Stock Option Plan (filed with the                   
         Company's Form S-8 Registration No. 333-00349 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 22, 1996).                

10.3*    1995 Stock Incentive Plan (filed with the Company's Form S-8                       
         Registration No. 333-00405 on January 22, 1996).                                   

10.4*    Non-Qualified Stock Option Agreement dated August 16, 1995, between                
         the Company and Leland O. Erdahl (filed with the Company's Annual                  
         Report on Form 10-K dated March 27, 1996).                                         

10.5*    Non-Qualified Stock Option Agreement dated May 25, 1995, between the               
         Company and George R. Ireland (filed with the Company's Annual                     
         Report on Form 10-K dated March 27, 1996).                                         

10.6*    Non-Qualified Stock Option Agreement dated May 25, 1995, between the               
         Company and James B. Tompkins (filed with the Company's Annual                     
         Report on Form 10-K dated March 27, 1996).                                         

10.7*    Stock Option Agreement dated March 6, 1995 between the Company and                 
         James P. Congleton, as amended on May 25, 1995 (filed with the                     
         Company's Annual Report on Form 10-K dated March 27, 1996).                        

10.8*    Warrant to Purchase Common Stock dated May 25, 1995, between the                   
         Company and Grant Bettingen, Inc. (filed with the Company's Annual                 
         Report on Form 10-K dated March 27, 1996).                                         

10.9*    Non-Qualified Stock Option Agreement dated July 31, 1995, between                  
         the Company and Wallace M. Mays (filed with the Company's Form S-8                 
         Registration Statement No. 33-64481 on November 21, 1995).                         

10.10*   Contract for the Purchase of Natural Uranium Concentrates (U3O8)                   
         dated April 5, 1994 between Uranium Resources, Inc., URI, Inc. and                 
         Pacific Gas & Electric Company (filed with the Company's Annual                    
         Report on Form 10-K for the year ended December 31, 1994).(1)                      

10.11*   Agreement for the Sale of Uranium Concentrates dated as of August                  
         23, 1990 between OES Fuel, Incorporated, Uranium Resources, Inc. and               
         URI, Inc. (filed with Post-Effective Amendment No. 3 to the                        
         Company's Form S-1 Registration Statement as filed with the                        
         Securities and Exchange Commission on December 7, 1990).(1)                        

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                                                        [Enlarge/Download Table]

EXHIBIT                                                                        SEQUENTIALLY 
NUMBER                           DESCRIPTION                                   NUMBERED PAGE
------                           -----------                                   -------------
                                                                                            
10.12*   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).                                                                             

10.13*   Note and Warrant Purchase Agreement entered into May 25, 1995 by and               
         among Lindner Investments, Lindner Dividend Fund and the Company                   
         (filed with the Company's Current Report on Form 8-K dated May 25,                 
         1995).                                                                             

10.14*   Loan Agreement entered into June 18, 1996 by and between Lindner                   
         Dividend Fund and the Company (filed with the Company's Annual                     
         Report on Form 10-K dated March 27, 1997).                                         

10.15*   Uranium Concentrates Sales Agreement dated August 21, 1996 by and                  
         between the Company and Commonwealth Edison Company (filed with the                
         Company's Quarterly Report on Form 10-Q/A-2 for the quarter ended                  
         September 30, 1996).(1)                                                            

10.16*   Agreement of Santa Fe Pacific Gold Corporation as Uranco, Inc.                     
         Shareholder with the Company and Guarantee of the Company dated as                 
         of March 25, 1997 (filed with the Company's Annual Report on Form                  
         10-K dated March 27, 1997). (1)                                                    

10.17*   Stock Exchange Agreement and Plan of Reorganization dated as of                    
         March 25, 1997 (filed with the Company's Annual Report on Form 10-K                
         dated March 27, 1997).                                                             

10.18*   License to Explore and Option to Purchase dated March 21, 1997                     
         between Santa Fe Pacific Gold Corporation and Uranco, Inc. (filed                  
         with the Company's Annual Report on Form 10-K dated March 27, 1997).               
         (1)                                                                                

10.19*   Amendment #1 to Nonqualified Stock Option Agreement dated November                 
         17, 1997 between the Company and Leland O. Erdahl (filed with the                  
         Company's Annual Report on Form 10-K dated March 27, 1998) .                       

10.20*   Amendment #1 to Nonqualified Stock Option Agreement dated November                 
         17, 1997 between the Company and George R. Ireland (filed with the                 
         Company's Annual Report on Form 10-K dated March 27, 1998).                        

10.21*   Amendment #1 to Nonqualified Stock Option Agreement dated November                 
         17, 1997 between the Company and James B. Tompkins (filed with the                 
         Company's Annual Report on Form 10-K dated March 27, 1998).                        

10.22*   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 March 27, 1998).                                                        

10.23*   Compensation Agreement dated June 2, 1997 between the Company and                  
         Richard F. Clement, Jr. (filed with the Company's Annual Report on                 
         Form 10-K dated March 27, 1998).                                                   

10.24*   Compensation Agreement dated June 2, 1997 between the Company and                  
         Joe H. Card (filed with the Company's Annual Report on Form 10-K                   
         dated March 27, 1998).                                                             

10.25*   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 March 27, 1998).                                                        

10.26*   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 March 27, 1998).                                                        

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                                                        [Enlarge/Download Table]

EXHIBIT                                                                        SEQUENTIALLY 
NUMBER                           DESCRIPTION                                   NUMBERED PAGE
------                           -----------                                   -------------
                                                                                            
10.27*   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 March 27, 1998).                                                             

10.28*   Note and Warrant Exchange Agreement dated March 23, 1998 between the               
         Company and Lindner Investments (filed with the Company's Annual                   
         Report on Form 10-K dated March 27, 1998).                                         

10.29*   6.5% Secured Convertible Note for $1,500,000 dated March 23, 1998                  
         between the Company and Lindner Investments (filed with the                        
         Company's Annual Report on Form 10-K dated March 27, 1998).                        

10.30*   6.5% Secured Convertible Note for $4,500,000 dated March 23, 1998                  
         between the Company and Lindner Investments (filed with the                        
         Company's Annual Report on Form 10-K dated March 27, 1998).                        

10.31*   Warrant to Purchase Common Stock for 625,000 shares dated March 23,                
         1998 between the Company and Lindner Investments (filed with the                   
         Company's Annual Report on Form 10-K dated March 27, 1998).                        

10.32*   Warrant to Purchase Common Stock for 325,000 shares dated March 23,                
         1998 between the Company and Lindner Investments (filed with the                   
         Company's Annual Report on Form 10-K dated March 27, 1998).                        

10.33    Uranium Resources, Inc. 1999 Deferred Compensation Plan.                           

21.1*    Subsidiaries of the Company (filed with the Company's Annual Report                
         on Form 10-K dated March 27, 1998).                                                

23.1     Consent of Arthur Andersen LLP.                                                    

27.1     Financial Schedule.                                                                

*    Incorporated by reference pursuant to Rule 12b-32 under the Securities and 
Exchange Act of 1934, as amended.                                     

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

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 URANIUM RESOURCES, INC.

PROXY FOR ANNUAL MEETING OF STOCKHOLDERS
 TO BE HELD ON JUNE 18, 1999

 THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

        The undersigned stockholder of Uranium Resources, Inc. (the "Company")
hereby constitutes and appoints Paul K. Willmott, George R. Ireland and Leland  
O. Erdahl, or any of them acting singly, each with the power of substitution as 
attorneys and proxies to vote all of the shares which the undersigned is        
entitled to vote at the Annual Meeting of Stockholders of the Company to be held
at The Westin Park Central Hotel, 12720 Merit Drive, Dallas, Texas, 75251 on    
Friday, June 18, 1999, at 9:00 a.m., local time, and at any and all adjournments
thereof, with the same force and effect as if the undersigned were personally   
present, and the undersigned hereby instructs the above-named Attorneys and     
Proxies to vote as follows:                                                     

 1. ELECTION OF DIRECTORS. The following three persons have been
nominated to serve on the Company's Board of Directors: Paul K. Willmott, George
R. Ireland and Leland O. Erdahl.                                                

     [ ] FOR all nominees listed above      [ ] WITHHOLD AUTHORITY
                                                      to vote for all nominees
                                          listed above

       (INSTRUCTION: TO WITHHOLD AUTHORITY TO VOTE FOR ANY ONE OR MORE
       INDIVIDUAL NOMINEES, WRITE THE NAME OF EACH SUCH NOMINEE IN THE
SPACE PROVIDED BELOW.)                                  

           Withhold authority to vote for any individual nominee _____________

         2. INCREASE IN AUTHORIZED COMMON STOCK. Approval of an amendment to the
Company's Restated Certificate of Incorporation to increase the authorized      
shares of Common Stock from 25,000,000 shares to 35,000,000 shares.             

        FOR [ ]                   AGAINST [ ]                ABSTAIN [ ]

      3. AUTHORIZATION OF PREFERRED STOCK. Approval of an amendment to the
Company's Restated Certificate of Incorporation to authorize a new class of     
capital stock consisting of 1,000,000 shares of Preferred Stock                 

        FOR [ ]                   AGAINST [ ]                ABSTAIN [ ]

        4. APPROVAL OF SHARE ELECTION PROVISION OF DEFERRED COMPENSATION PLAN.
Approval of the Share Election Provision (as defined in the Proxy Statement) of 
the Uranium Resources, Inc. 1999 Deferred Compensation Plan.                    

        FOR [ ]                   AGAINST [ ]                ABSTAIN [ ]

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 5. RATIFICATION OF ARTHUR ANDERSEN, LLP. Proposal to ratify the
selection of Arthur Andersen, LLP, independent accountants, as the independent  
auditors of the Company for the fiscal year ending December 31, 1999:           

        FOR [ ]                   AGAINST [ ]                ABSTAIN [ ]

       6. OTHER BUSINESS. In their discretion, the proxies are authorized to
vote upon such other business as may properly come before the Meeting or any    
adjournment of adjournments thereof.                                            

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN 
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE     
VOTED FOR THE NOMINEES SET FORTH IN PROPOSAL 1, FOR PROPOSAL 2, FOR PROPOSAL 3, 
FOR PROPOSAL 4, AND FOR PROPOSAL 5.                                             

                                     DATED:                             , 1999
                                     -----------------------------

                                    ----------------------------------------
       (Signature)

                                    ----------------------------------------
       (Signature)

NOTE: PLEASE SIGN EXACTLY AS YOUR NAME OR NAMES APPEAR ON THIS CARD. JOINT      
OWNERS SHOULD EACH SIGN PERSONALLY. WHEN SIGNING AS ATTORNEY, EXECUTOR,         
ADMINISTRATOR, PERSONAL REPRESENTATIVE, TRUSTEE OR GUARDIAN, PLEASE GIVE YOUR   
FULL TITLE AS SUCH. FOR A CORPORATION OR A PARTNERSHIP, PLEASE SIGN IN THE FULL 
CORPORATE NAME BY THE PRESIDENT OR OTHER AUTHORIZED OFFICER OR THE FULL         
PARTNERSHIP NAME BY AN AUTHORIZED PERSON, AS THE CASE MAY BE. (PLEASE MARK,     
SIGN, DATE, AND RETURN THIS PROXY IN THE ENCLOSED ENVELOPE.)                    

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘DEF 14A’ Filing		Date		First		Last			Other Filings
		1/11/06		15		93			SC 13G/A
		12/31/03		116					10KSB,  5,  5/A
		12/31/02		47		116			10KSB,  4,  NT 10-K
		12/31/01		116					10-K,  10KSB/A
		5/31/00		22		115
		3/6/00		117
		12/31/99		2		128			10-K,  10-K/A,  NT 10-K
		6/30/99		28		29			10-Q
For Period End:		6/18/99		2		127			8-K,  PRE 14A
		5/13/99		2		31
Filed on:		5/11/99
		5/10/99		2		3			SC 13D,  SC 13G/A
		4/29/99		5		22
		4/28/99		23		25
		4/27/99		23		28
		4/16/99		5
		3/31/99		4		100			10-K,  10-Q
		3/25/99		42
		3/24/99		56		118
		3/23/99		76
		3/22/99		53		86			SC 13G/A
		3/8/99		66
		3/1/99		60
		2/28/99		14		95
		2/27/99		5		96
		2/26/99		102
		1/21/99		63
		1/11/99		15		93
		1/1/99		47		87
		12/31/98		11		123			10-K
		12/4/98		66
		11/30/98		52
		11/25/98		66
		11/16/98		66					10-Q
		10/27/98		99					8-K
		9/30/98		82					10-Q
		7/31/98		14		92
		7/28/98		9		95
		6/5/98		14		120			DEF 14A
		6/1/98		9		88
		5/31/98		22		98
		5/24/98		117		118
		3/27/98		125		126
		3/23/98		126
		2/23/98		14		120
		2/19/98		66
		1/1/98		114
		12/31/97		12		123			10-K
		11/17/97		18		125
		7/31/97		14		92
		6/2/97		36		126
		5/1/97		120					DEF 14A
		4/1/97		10		120
		3/27/97		124		125
		3/25/97		61		125
		3/21/97		125
		2/10/97		120
		12/31/96		12		123			10-K405,  10-K405/A
		12/16/96		124					10-Q/A,  8-A12B/A,  8-K,  S-3
		9/30/96		125					10-Q,  10-Q/A
		8/21/96		125
		7/31/96		14		92
		7/22/96		120
		6/18/96		125					S-8 POS
		5/31/96		71		86			8-K
		5/30/96		120
		5/29/96		120					DEF 14A,  PRE 14A
		3/27/96		124
		2/22/96		120
		1/22/96		124					S-8
		12/19/95		14		120			DEF 14A
		11/21/95		124					S-8
		10/11/95		119		120
		9/25/95		8		88
		8/31/95		120
		8/28/95		65
		8/16/95		118		124
		7/31/95		8		124
		7/12/95		66
		5/26/95		120
		5/25/95		9		125			8-K
		4/12/95		8		120
		3/6/95		124
		2/24/95		120
		2/23/95		66
		1/31/95		71		86
		1/1/95		119
		12/31/94		124					10-K/A
		12/15/94		120
		11/7/94		66
		10/7/94		62
		8/10/94		119		120
		7/11/94		9		120
		4/5/94		124
		3/11/94		114
		12/31/93		18
		5/27/93		120
		2/26/93		120
		5/22/92		120
		3/31/92		58
		1/15/92		119		120
									List all Filings