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Federal Income Taxes

12 Months Ended

Dec. 31, 2015

Income Tax Disclosure [Abstract]

Federal Income Taxes

11. FEDERAL INCOME TAXES

The Company recognizes future tax assets and liabilities for each tax jurisdiction based on the difference between the financial reporting and tax bases of assets and liabilities using the enacted tax rates expected to be in effect when the taxes are paid or recovered. A valuation allowance is provided against net future tax assets for which the Company does consider the realization of such assets to meet the required “more likely than not” standard.

The Company’s future tax assets and liabilities at December 31, 2015 and 2014 include the following components:

		December 31,
		2015				2014
Deferred tax assets:
Non-Current:
Net operating loss carryforwards		$	80,491			$	71,882
Mineral properties			13,970				11,375
Capital loss carryforwards			618
Restoration reserves			1,478				1,360
Capitalized transaction costs			1,145				-
Other			946				199
Deferred tax assets			98,648				84,816
Valuation allowance			(96,203	)			(82,435	)
Net deferred tax assets			2,445				2,381
Deferred tax liabilities:
Current:
Prepaids and other			68				100
			68				100
Non-Current:
Derivatives			(956	)			(956	)
Property, plant and equipment			(1,557	)			(1,525	)
			(2,513	)			(2,481	)
Deferred tax liabilities			(2,445	)			(2,381	)
Net deferred tax asset (liability)		$	—			$	—

The composition of our valuation allowance by tax jurisdiction is summarized as follows:

		December 31,
		2015				2014

United States		$	87,304			$	82,435
Australia			11,066			$	-
Turkey			(2,167	)		$	-
Total valuation allowance		$	96,203			$	82,435

The valuation allowance increased $13.8 million from the year ended December 31, 2014 to the year ended December 31, 2015. This was the result of an increase in the net deferred tax assets, primarily net operating loss carryforwards (“NOLs”), differences between the fair value amounts recorded for the Anatolia Transaction and the carryover tax basis, equity based compensation, and exploration spending on mineral properties. Because we are unable to determine whether it is more likely than not that the net deferred tax assets will be realized, we continue to record a 100% valuation against the net deferred tax assets.

At December 31, 2015, we had U.S. net operating loss carryforwards of approximately $219.2 million, which expire from 2018 to 2035. This included approximately $32.8 million in net operating loss carryforwards associated with the Neutron merger. In addition, at December 31, 2015 we had Australian net operating loss carryforwards associated with the Anatolia Transaction of approximately $13.3 million, which are available indefinitely, subject to continuing to meet relevant statutory tests, and net operating loss carryforwards in Turkey of approximately $1.2 million, which expire from 2016 to 2019.

Section 382 of the Internal Revenue Code could apply and limit our ability to utilize a portion of the U.S. net operating loss carryforwards. Following the issuance of the Company’s Common Stock in 2001, the Neutron merger in 2012 and the Anatolia Transaction in 2015, the ability to utilize the net operating loss carryforwards will be severely limited on an annual and aggregate basis. A formal Section 382 study has not been completed, therefore the actual usage of US net operating loss carryforwards has not been determined. Similar limitations apply to the state net operating loss carryforwards related to the Neutron acquisition.

For financial reporting purposes, loss from operations before income taxes consists of the following components:

		For the calendar year ended December 31,
		2015				2014

United States		$	(14,858	)		$	(10,684	)
Australia			(76	)			-
Turkey			(209	)			-
		$	(15,143	)		$	(10,684	)

A reconciliation of expected income tax on net income at statutory rates is as follows:

		Year ended December 31,
		2015				2014
Net loss		$	(15,143	)		$	(10,684	)
Statutory tax rate			34	%			34	%
Tax recovery at statutory rate			(5,149	)			(3,633	)
Foreign tax rate			(33	)			—
Mineral property adjustments			(2,394	)			1,975
Foreign deferred costs and other adjustments			(800	)			12
Operating loss carryforward adjustment			(5,488	)			(2,251	)
Nondeductible write-offs			96				6
Change in valuation allowance			13,768				3,891
Income tax expense (recovery)		$	—			$	—

We do not have any uncertain tax positions. Should we incur interest and penalties relating to tax uncertainties, such amounts would be classified as a component of the interest expense and operating expense, respectively.

Uranium Resources, Inc., and its wholly owned subsidiaries, files in the U.S. federal jurisdiction and various state jurisdictions. Anatolia Energy Limited and Anatolia Uranium Pty Ltd file in the Australian jurisdiction and Adur Madencilik files in the Turkish jurisdiction.

The years still open for U.S. audit are generally the current year plus the previous three. However, because we have NOLs carrying forward, certain items attributable to closed tax years are still subject to adjustment by applicable taxing authorities through an adjustment to tax losses carried forward to open years.