Underground Energy Corporation reported un-audited consolidated earnings results for the second quarter and six months ended June 30, 2012. For the quarter, the company reported loss and comprehensive loss of $4,907,251 or $0.02 per basic and diluted share on total revenues of $136,390 compared to loss and comprehensive loss of $1,168,560 or $0.01 per basic and diluted share for the last year. The company reported operating loss of $4,904,229 compared to $1,171,769, net cash used in operating activities of $1,974,987 compared to $896,566, additions to property, plant and equipment of $7,161,663 compared to $123,893 and additions to exploration and evaluation assets of $560,691 compared to $965,168 for the last year. Net loss increased by $3,740,000 compared to the same quarter last year due to the impairment of E&E assets and due to the start-up of production operations.

For the six months, the company reported loss and comprehensive loss of $7,457,953 or $0.04 per basic and diluted share on total revenues of $299,928 compared to loss and comprehensive loss of $1,882,810 or $0.02 per basic and diluted share on total revenues of $47,925 for the last year. The company reported operating loss of $7,445,565 compared to $1,874,697, net cash used in operating activities of $4,069,910 compared to $2,000,648, additions to property, plant and equipment of $9,664,409 compared to $131,677 and additions to exploration and evaluation assets of $1,587,397 compared to $1,485,261 for the last year.

The company reported impairment losses on exploration and evaluation assets of $3,482,361 compared to $41,405 last year.