Forward Looking Statements

The following summary is qualified in its entirety by, and should be read in conjunction with, the more detailed information and any financial data incorporated herein by reference to the Company's reports filed with the Securities and Exchange Commission under the Securities Exchange Act of 1934. Except for historical information contained in this report, the matters discussed herein contain forward-looking statements, made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, including management's expectations regarding the Company's reserves and mineralized uranium materials, timing of receipt of mining permits, production capacity of mining operations planned for properties in South Texas and New Mexico and planned dates for commencement of production at such properties. Such forward-looking statements are inherently uncertain, and investors must recognize that actual results may differ from management's expectations. Key factors impacting current and future operations of the Company include the price of uranium, weather conditions, operating conditions at the Company's mining projects, government regulation of the mining industry and the nuclear power industry, the world-wide supply and demand of uranium, availability of capital, timely receipt of mining and other permits from regulatory agencies and other matters indicated in "Cautionary Statement," found in the Company's 2008 Annual Report on Form 10K.

Overview

URI also has an estimated 101.4 million pounds of in place mineralized uranium material on 183,000 acres in New Mexico and a Nuclear Regulatory Commission (NRC) license to produce up to 3 million pounds per year at our New Mexico licensed properties, including our Churchrock property. URI has also produced uranium in South Texas where it has three projects that are now in restoration:
Kingsville Dome, Vasquez and Rosita. Our operations are heavily influenced by the price of uranium both on the spot and long-term markets. The spot price of uranium, which has fluctuated from a high of $136/lb in June 2007 to its recent price level of $48.50/lb, has been the primary driver of the strategic decisions of the Company. At August 3, 2009 the current spot price was $48.50, compared to a recent high of $54.00-$55.00 in mid-June 2009. The long-term price for uranium has remained level for several months and stands at $65.00 per pound at July 31, 2009.

We have among the largest uranium asset bases in the United States. Our strategy is to grow the value of the Company by accomplishing the following:

† Build our in place mineralized uranium material to 200 to 300 million pounds. In July 2009, the Company entered into a definitive agreement to purchase from NZ Uranium, LLC (NZU) 113,000 acres of mineral rights in the Crownpoint area of New Mexico. After closing the transaction, which is expected in September 2009, URI will increase its current New Mexico holdings to approximately 300,000 acres of mineral rights and more than 136 million pounds of in-place mineralized uranium material. The Company will pay $1 million in cash and issue four million shares of the Company's common stock together with a 7.5% royalty on future production from these properties to NZU in consideration of the purchase.

† Resolve the issue in New Mexico with the Navajo Nation regarding their concerns about uranium mining on their lands.

† Develop strategic partnerships with major industry players including electric utilities that have nuclear power operations.

† Become a 10 million pound per year producer.

In 2008, we changed our approach to our Texas operations in response to changes in the uranium market. Operating margins from our production are impacted by uranium prices and costs. Although uranium prices escalated rapidly from 2004 to 2007, so did costs. In 2008, while prices declined, costs did not, leading to a significant decrease in margins. As a result, in October 2008 we decided to suspend new wellfield development at Kingsville and Rosita until sufficient margins can be made to justify the new investment required to bring on additional production.

New Mexico Progress: There has been progress in our efforts to advance our properties toward production in New Mexico. We have had several meetings with various Navajo groups as well as with New Mexico Legislators. We have taken community and political leaders on site tours at our Texas properties to demonstrate the low profile of an ISR mining operation compared with an underground mine. And, we have shown the restoration process and progress at these properties.

In May, URI and the Navajo Nation EPA began a weeklong assessment of the
Section 17 Churchrock property to determine the radiation levels that may exist from previous mining operations and potential impact on the air, soil and water in the area. As part of the field work, background levels will be established under the purview of Navajo EPA. While URI never mined at this site, the assessment is a step toward addressing legacy issues.

We also have moved forward with our drilling plans at Section 13 in the Ambrosia Lake district to assess the feasibility of ISR mining at that location. We expect to complete drilling to recover core samples in September and have results of the testing by the end of the year.

South Texas Production: During June 2009, we completed production at our two remaining operating wellfields at Kingsville Dome. We produced 49,200 pounds of uranium from Kingsville Dome during the first half of 2009. Current activity at Kingsville Dome is focused on the restoration of depleted wellfields. We are also studying the potential of uranium recovery from the by-product material that was generated from prior uranium processing at our Kingsville Dome plant. Such activities may reduce our restoration costs and may result in the recovery of uranium that could be processed into a saleable product. The last wellfield at Vasquez was fully depleted in October 2008 and the project is now undergoing restoration. Production from Rosita was started in June 2008, but was suspended in October 2008 due to poor economics driven by increased operating costs as a result of technical operating challenges and the decreased price of uranium. We are currently conducting restoration and reclamation activities at each of our three South Texas projects. The projected cash cost for these activities for the next twelve months is approximately $1.4 million.

The Company believes it has sufficient in-place mineralized uranium material to produce a total of 300,000 to 500,000 pounds U3O8 over a one to two year period should realized uranium prices recover to the level of $70 per pound U3O8. A new wellfield typically requires 4 to 5 months to install and 9 to 12 months to mine out. The Company has deferred all activities for delineating or developing wellfields until a stronger pricing environment is realized. The Company continues to look for opportunities to acquire additional reserves.

Reserve development: A significant portion of the cash on hand at December 31, 2008 was generated from the $12.8 million in net proceeds received from the sale of common stock and warrants in a private placement in May 2008. The equity was raised to fund the acquisition, exploration, permitting and development of new and existing properties in South Texas to increase our resource base in an effort to extend production at our Texas operations beyond 2009 as well as for general corporate purposes.

Financial Condition and Results of Operations

Comparison of Three and Six Months Ended June 30, 2009 and 2008

Production and production costs. In the first half of 2009, we produced 49,200 pounds and received positive inventory adjustments of 2,700 pounds. Production in the first half of 2008 was 196,900 pounds; 24,000 pounds from Vasquez and 172,900 from Kingsville Dome. We ceased production at Vasquez and deferred additional development of new wellfields at Kingsville Dome in the fourth quarter of 2008. This resulted in the reduction in production in the first half of 2009 compared to 2008. We ceased production at the final two wellfields at Kingsville Dome in mid-June 2009.

The following table details our production and production cost breakdown for the three and six months ended June 30, 2009 and 2008.

                                      Three Months Ended          Six Months Ended
                                           June 30,                   June 30,
                                      2009         2008          2009          2008
Kingsville Dome production             19,400        93,700        49,200       172,900

Vasquez production                        450        19,800         2,200        24,000

Rosita production                         450             -           450             -

Total production                       20,300       113,500        51,850       196,900

Total operating costs               $ 589,000   $ 1,938,000   $ 1,224,000   $ 3,850,000
Per pound operating costs           $   28.95   $     17.07   $     23.57   $     19.56
Total deprec. and depletion costs   $ 158,000   $ 2,606,000   $   319,000   $ 4,843,000
Per pound DD&A cost                 $    7.76   $     22.96   $      6.15   $     24.60
Total production cost               $ 747,000   $ 4,544,000   $ 1,543,000   $ 8,693,000
Production cost per pound           $   36.71   $     40.03   $     29.73   $     44.16

Total operating costs, total depreciation and depletion costs and total production costs incurred for the periods presented above differ from the cost of uranium sales recorded in consolidated statements of operations because of changes in the amounts recorded to inventory for the same periods. The cost of uranium sales includes the sales of uranium inventory on hand at the beginning of the period and does not include certain uranium produced during the period that was not sold at period end.

Reconciliation of production costs to cost of uranium sales:

                                         Three Months Ended          Six Months Ended
                                              June 30,                   June 30,
                                         2009         2008          2009          2008
Operating costs                        $ 589,000   $ 1,938,000   $ 1,224,000   $ 3,850,000
Change in uranium inventory              174,000      (127,000 )     409,000        88,000
Operating expense for uranium
production sold                        $ 763,000   $ 1,811,000   $ 1,633,000   $ 3,938,000
Depreciation and depletion costs       $ 158,000   $ 2,606,000   $   319,000   $ 4,843,000
Change in uranium inventory               24,000      (292,000 )      94,000      (598,000 )
Depreciation and depletion for
uranium production sold                $ 182,000   $ 2,314,000   $   413,000   $ 4,245,000
Total production costs                 $ 747,000   $ 4,544,000   $ 1,543,000   $ 8,693,000
Change in uranium inventory              198,000      (419,000 )     503,000      (510,000 )
Direct cost of uranium production
sold                                   $ 945,000   $ 4,125,000   $ 2,046,000   $ 8,183,000

Uranium Sales. In the first half of 2009, we sold 64,200 pounds, generating revenue of $3.2 million ($49.99 per pound), compared with sales of 180,500 pounds in the same period of 2008, for revenue of $12.3 million ($68.32 per pound). The decrease in sales revenue was the result of the reduction in pounds sold, as well as from lower prices we received as a result of lower uranium market prices in the first half of 2009 compared to the prior year's period.

Cost of Uranium Sales. Our cost of uranium sales from the sale of produced uranium in the first half of 2009 was $4.0 million compared with $10.3 million in the same period of 2008. Total cost of uranium sales includes royalties and commissions related to our uranium sales, production costs, including operating expenses, depreciation and depletion expenses, amortization of our restoration and reclamation cost estimates, exploration costs and impairment costs for the write-down of uranium assets. The following table details the direct cost of uranium sales and royalties and commissions breakdown for the three and six months ended June 30, 2009 and 2008.

                                   Three Months Ended             Six Months Ended
                                        June 30,                      June 30,
                                  2009           2008           2009           2008
Total pounds sold                   36,600         99,400         64,200        180,500
Total operating expenses       $   763,000    $ 1,811,000    $ 1,633,000    $ 3,938,000
Per pound operating expense    $     20.85    $     18.23    $     25.43    $     21.82
Depreciation and depletion     $  182,,000    $ 2,314,000    $   413,000    $ 4,245,000
Per pound DD&A expense         $      4.97    $     23.29    $      6.44    $     23.52
Direct cost of uranium
production sold                $   945,000    $ 4,125,000    $ 2,046,000    $ 8,183,000
Direct cost of sales per
pound                          $     25.83    $     41.52    $     31.87    $     45.34

Royalties and commissions      $   167,000    $   576,000    $   306,000    $ 1,137,000
Royalties and commissions
per pound                      $      4.56    $      5.80    $      4.76    $      6.30

We saw a decrease in our overall production costs in the first half of 2009 compared to 2008. Our 2009 production was sourced from the remaining two wellfields at Kingsville Dome and was supplemented by nominal amounts derived from finalized assaying of prior Vasquez and Rosita shipments. The cost decreases seen in the first six months of 2009 resulted from significant operating cost reductions made beginning in the fourth quarter of 2008 along with the impact of the impairment of our uranium assets in 2008 and 2009. The impairment provisions reduced the amount of capital costs attributable to our uranium properties and resulted in the lower cost per pound attributable to depreciation and depletion in the current period.

The 2008 production from Kingsville Dome was sourced from wellfields in their latter stages of production as well as from new less prolific wellfields compared to prior production. These changes resulted in an increase in our costs. Also contributing to higher costs in 2008 was initial production from a new wellfield at Vasquez, which began production in March 2008. Historically Vasquez has had lower recovery factors than Kingsville Dome and this factor has contributed to increased operating and capital costs. Our average cost of pounds sold in the first half of 2008 was $45.34 per pound with Kingsville Dome production contributing approximately 90% and Vasquez pounds totaling approximately 10% of total pounds sold during the first half of the year.

Royalties and Commissions. During the first half of 2009, royalties and commissions for Vasquez and Kingsville Dome production sold totaled $306,000, representing 9.5% of sales. During the first half of 2008, royalties and commissions for Vasquez and Kingsville Dome production sold totaled $1.1 million, representing 9.2% of sales.

Operating Expenses. During the first half of 2009, operating expenses for Kingsville Dome, Vasquez and Rosita operations and production sold was $1.6 million. Included in this amount was $90,000 of stand-by costs related to our Vasquez and Rosita projects During the first half of 2008, operating expenses for Vasquez and Kingsville Dome production sold was $3.9 million. This total included approximately $536,000 of stand-by costs related to our Vasquez and Rosita projects.

Depreciation and Depletion. During the first half of 2009, we incurred depreciation and depletion expense attributable to our Vasquez and Kingsville Dome production of $413,000. During the same period in 2008, we incurred depreciation and depletion expense attributable to our Vasquez and Kingsville Dome production of $4.2 million.

Impairment of Uranium Properties. During the first half of 2009 and 2008, we determined the carrying value of our uranium assets exceeded their fair value as provided in SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets". Such determination resulted in an impairment provision of approximately $1.4 million and $296,000 in 2009 and 2008, respectively.

Accretion and Amortization of Future Restoration Costs. Accretion and amortization of future restoration costs in the first half of 2009 and 2008 was $258,000 and $384,000, respectively.

General and Administrative Charges. We incurred general and administrative charges and corporate depreciation of $3.1 million and $7.3 million, respectively in the six months ended June 30, 2009 and 2008.

Significant expenditures for general and administrative expenses for the three and six months ended June 30, 2009 and 2008 were:

                                      Three Months Ended           Six Months Ended
                                           June 30,                    June 30,
                                      2009          2008          2009          2008
Stock compensation expense         $   222,000   $   896,000   $   382,000   $ 1,550,000
Salaries and payroll burden            512,000       821,000     1,107,000     1,661,000
Legal, accounting, public
company expenses                       297,000       484,000       585,000       767,000
Insurance and bank fees                109,000       145,000       241,000       288,000
Consulting and professional
services                               274,000       439,000       431,000       940,000
Office, travel and other
expenses                               165,000       303,000       274,000       584,000

Total                              $ 1,579,000   $ 3,088,000   $ 3,020,000   $ 5,790,000

The non-cash compensation expense recorded for the six months ended June 30, 2009 and 2008 resulted from the adoption of SFAS 123(R) in January 2006, requiring the recognition of expense related to the Company's stock option and restricted stock grants.

Salary and payroll costs decreases for the six months presented resulted primarily from a reduction in salaried positions primarily in South Texas and New Mexico in conjunction with cost cutting moves which began in the fourth quarter of 2008.

The costs for consulting and professional services decreased in the first half of 2009 compared with 2008 and resulted from the cost cutting moves which began in the fourth quarter of 2008. The activities incurred in the first half of 2008 included work performed in the review and assessment of our New Mexico property data bases to evaluate their potential as conventional mining projects and other costs related to community outreach and information campaigns designed to enhance public awareness of our planned New Mexico operations. In the 2008 period, we also incurred increased costs for environmental, health and safety training, investor relations and media relations activities and for human resources and computer networking consultants.

Decreased office costs incurred in the first six months of 2009 compared to 2008 resulted primarily from the closure of our corporate offices in Corpus Christi, Texas and Albuquerque, New Mexico in the third and fourth quarters of 2008, respectively.

Write-off of Target Acquisition Costs. In June 2008, we decided along with Billiton Investment 15 B.V. to terminate our agreement to purchase Rio Algom Mining, LLC, which was entered into on October 12, 2007. In connection with the targeted acquisition, we incurred costs of $1.437 million dollars which were originally recorded as a pre-acquisition cost asset. Upon the termination of the agreement these pre-acquisition costs were expensed in the second quarter of 2008.

Net Losses. For the six months ended June 30, 2009 and 2008, we had net losses of $3.8 million and of $4.9 million, respectively.

Cash Flow. At of June 30, 2009 we had a cash balance of approximately $9.3 million compared with $16.0 million at the same date in 2008.

In the first half of 2009, we had cash used in operations of $2.3 million. We used $359,000 in investing activities during the first half of 2009. We increased the collateral supporting our South Texas financial surety requirements by $84,000 and made additions to our South Texas and New Mexico property, plant and equipment of $274,000 during the quarter. These expenditures were primarily for land and mineral lease payments during the quarter.

In the first half of 2008, we had net cash flow provided by operations of $2.9 million. We used $8.9 million in investing activities during the first six months of 2008. We increased the collateral supporting our South Texas financial surety requirements by $414,000 and also made significant additions to our South Texas and New Mexico property, plant and equipment of $8.5 million during the period. These expenditures were primarily for wellfield development, evaluation drilling and plant and dryer upgrades at Kingsville Dome of $3.2 million and wellfield development, evaluation drilling and plant and dryer upgrades at Rosita of $3.8 million, additional wellfield development at Vasquez of $167,000, New Mexico property additions of $350,000 and other Texas property and other assets of $849,000.

Liquidity-Cash Sources and Uses for 2009

As of June 30, 2009 we had $9.3 million in cash compared to $12.0 million at December 31, 2008. The cash at June 30, 2009 was generated from operations as well as the $12.8 million in net proceeds received from the sale of common stock and warrants in a private placement in May 2008.

The Company used $2.3 million in cash from operations during the first half of 2009. With falling sales prices and higher production costs, the Company decided to suspend the development of new wellfields at Kingsville Dome and Rosita as of October 2008. The primary source of our remaining sales revenue will be generated by uranium sales scheduled for early August 2009. Such sales will be generated from uranium production from the Kingsville Dome project which ceased in mid-June 2009, plus inventory adjustments related to prior period uranium shipments. The sales total volume available for sale will be approximately 22,600 pounds and is expected to generate revenue of approximately $1.0 million.

In the second half of 2008, we took significant steps to decrease our cost structure by implementing tighter spending controls, closing two offices, reducing employment, limiting exploration activities, and reducing public and government relations activities in New Mexico and Texas. With the termination of our production activities in June 2009, we have implemented additional cost reductions to further slow down our cash outflows and we continue to assess all areas of the Company to determine where further cost reductions may be made. Our objective is to reduce our cash requirements to a level that allows us to sustain our reclamation activities and continue the requisite activities in New Mexico to advance our projects toward production without needing outside sources of capital through 2010. The Company is also evaluating certain assets to determine if they can be better utilized and/or monetized.

Contingent Liabilities-Off Balance Sheet Arrangements

The Company has obtained financial surety relating to certain of its future restoration and reclamation obligations as required by the State of Texas regulatory agencies. The Company has bank Letters of Credit (the "L/C's) and performance bonds issued for the benefit of the Company to satisfy such regulatory requirements. The L/C's were issued by Bank of America and the performance bonds have been issued by United States Fidelity and Guaranty Company ("USF&G"). L/C's for $5.7 million and $5.6 million were issued at June 30, 2009 and December 31, 2008, respectively. Such L/C's are collateralized in their entirety by certificates of deposit.

Performance bonds totaling $2.8 million were issued for the benefit of the Company at June 30, 2009 and December 31, 2008. USF&G has required that the Company deposit funds collateralizing a portion of the bonds. The amount of bonding issued by USF&G exceeded the amount of collateral by $2.5 million at June 30, 2009 and December 31, 2008, respectively. In the event that USF&G is required to perform under its bonds or the bonds are called by the state agencies, the Company would be obligated to pay any expenditure in excess of the collateral.

Critical Accounting Policies

Our significant accounting policies are described in Note 2 to the consolidated financial statements included in the Company's 2008 Annual Report on Form 10-K. We believe our most critical accounting policies involve those requiring the use of significant estimates and assumptions in determining values or projecting future costs.

Specifically regarding our uranium properties, significant estimates were utilized in determining the carrying value of these assets. These assets have been recorded at their estimated net realizable value for impairment purposes on a discounted cash flow analysis, which is less than our cost. The actual value realized from these assets may vary significantly from these estimates based upon market conditions, financing availability and other factors.

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

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