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TORONTO, March 15, 2021 /CNW/ - Denison Mines Corp.
("Denison" or the "Company") (TSX: DML) (NYSE American: DNN) is
pleased to announce that it has entered into an agreement with
Cantor Fitzgerald Canada Corporation ("CFCC"), as lead underwriter
and sole book-runner, on behalf of themselves and a syndicate of
underwriters (collectively with CFCC, the "Underwriters"), under
which the Underwriters have agreed to purchase, on a bought deal
basis, 68,200,000 units of the Company (the "Units") at the
price of USD$1.10 per Unit (the
"Issue Price") for aggregate gross proceeds of approximately
USD$75 million (the "Unit
Offering"). View PDF Version.
Net proceeds of the Unit Offering are anticipated to be used to
fund the strategic purchase of uranium concentrates
("U3O8" or "Uranium") to be held by Denison
as a long-term investment, intended to support the potential future
financing of the advancement and/or construction of the Company's
flagship 90% owned Wheeler River Uranium Project ("Wheeler River").
Uranium purchases are planned to be made in the uranium spot
market, with a target of accumulating approximately 2.5 million
pounds U3O8.
The purchased Uranium is expected to strengthen the Company's
balance sheet and enhance its ability to access future project
financing, with the potential collateralization of the Uranium
holdings. In addition, the purchased Uranium could provide the
Company with increased flexibility to negotiate long-term Uranium
supply arrangements with future customers. If a future decision is
made to advance Wheeler River into construction, the Company would
eventually market its physical Uranium holdings to its future
customers along with the mine production from Wheeler River.
This press release constitutes a "designated news release"
for the purposes of the Company's prospectus supplement dated
November 13, 2020 to its short form
base shelf prospectus dated June 2,
2020.
David Cates, President and CEO of
Denison, commented, "Public support for carbon-free,
base-load nuclear energy continues to grow as part of the clean
energy-transition movement. Denison is well positioned to
participate in this exciting narrative through the potential future
development of our flagship Wheeler River uranium project. With the
uranium market showing continued signs of incremental improvement
in supply and demand fundamentals, this strategic financing is
being undertaken at an ideal time for Denison – supporting the
opportunistic acquisition of physical Uranium to hold as a
long-term strategic capital asset.
The physical Uranium holdings that we expect to acquire
will represent a sizeable portion of Denison's share (2018
Pre-Feasibility Study) of the expected CAD$290 million of initial capital costs for
Wheeler River. As a result, we expect this transaction to enhance
the long-term financial stability of the company, as we advance
towards a definitive development decision. From a project finance
standpoint, the physical Uranium holdings could potentially de-risk
the process by representing a meaningful source of collateral.
Similarly, we expect that our future customers will value, as part
of potential future discussions regarding off-take or long-term
contracting arrangements, the fact that our Company will already
have a sizeable base of physical Uranium before achieving first
production from Wheeler River.
Importantly, with this transaction, Denison's joins other
major publicly-traded uranium companies that have disclosed
sizeable physical uranium purchases in recent years, and we have
broken the conventional equity dilution model for mining
development companies – as our shareholders will benefit from the
additional financial stability of our Uranium holdings, while
remaining fully leveraged to any future appreciation of uranium
prices during the balance of the environmental assessment and
feasibility study processes currently planned for Wheeler
River."
Unit Offering
Each Unit will consist of one common share in the capital of the
Company (a "Common Share") and one-half of one transferable common
share purchase warrant of the Company (each whole warrant, a
"Warrant"). Each Warrant is exercisable to acquire one Common Share
(a "Warrant Share") at an exercise price of USD$2.25 per Warrant Share for 24 months after
issuance. The Warrants will not be listed.
In addition, Denison has agreed to grant to the Underwriters an
over-allotment option (the "Over-Allotment Option") exercisable, in
whole or in part, at the sole discretion of the Underwriters
(subject to certain agreed upon limitations), to purchase up to
approximately an additional 10,230,000 Units at the Issue Price for
a period of up to 30 days after the closing of the Unit Offering,
for potential additional gross proceeds to Denison of up
to approximately USD$11.25
million.
Denison will pay to the Underwriters a cash commission equal to
5% of the gross proceeds of the Unit Offering, including any
proceeds received from the exercise of the Over-Allotment
Option.
The Unit Offering will be made by way of a prospectus supplement
(the "Prospectus Supplement") to the Company's existing Canadian
short form base shelf prospectus dated June
2, 2020 (the "Base Shelf Prospectus"). The Prospectus
Supplement will be filed with the securities commissions in each of
the provinces and territories of Canada, except Quebec and is available on the SEDAR website
maintained by the Canadian Securities Administrators at
www.sedar.com. Alternatively, the Prospectus Supplement and related
Base Shelf Prospectus may be obtained upon request by contacting
the Company or Cantor Fitzgerald Canada Corporation in Canada,
attention: Equity Capital Markets, 181 University Avenue, Suite
1500, Toronto, ON, M5H 3M7, email: ecmcanada@cantor.com.
The Unit Offering is expected to close on or about March 22, 2021.
The Company's at-the market equity offering program qualified
under a supplement dated November 13,
2020 to the Base Shelf Prospectus (the "ATM Offering") will
terminate in connection with the Unit Offering and the Company will
no longer offer or sell any common shares through the facilities of
the Toronto Stock Exchange and/or NYSE American pursuant to such
ATM Offering.
This press release does not constitute an offer to sell or
the solicitation of an offer to buy securities, nor will there be
any sale of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to the registration or
qualification under the securities laws of any such jurisdiction.
The securities being offered have not been approved or disapproved
by any regulatory authority, nor has any such authority passed upon
by the accuracy or adequacy of the Prospectus Supplement or the
Base Shelf Prospectus.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy any of the securities in
the United States. The securities
have not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or
any state securities laws and may not be offered or sold within
the United States or to or for the
account or benefit of a U.S. person (as defined in Regulation S
under the U.S. Securities Act) unless registered under the U.S.
Securities Act and applicable state securities laws or an exemption
from such registration is available.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. The Company's flagship project is the 90% owned
Wheeler River Uranium Project, which is the largest undeveloped
uranium project in the infrastructure rich eastern portion of the
Athabasca Basin region of northern
Saskatchewan. Denison's interests
in Saskatchewan also include a
22.5% ownership interest in the McClean Lake joint venture
("MLJV"), which includes several uranium deposits and the McClean
Lake uranium mill, which is contracted to process the ore from the
Cigar Lake mine under a toll milling agreement, plus a 25.17%
interest in the Midwest and Midwest A deposits, and a 66.90%
interest in the Tthe Heldeth Túé ("THT," formerly J Zone) and
Huskie deposits on the Waterbury Lake property. Each of Midwest,
Midwest A, THT and Huskie are located within 20 kilometres of the
McClean Lake mill.
Denison is engaged in mine decommissioning and environmental
services through its Closed Mines group (formerly Denison
Environmental Services), which manages Denison's Elliot Lake reclamation projects and provides
post-closure mine care and maintenance services to a variety of
industry and government clients.
Denison is also the manager of Uranium Participation Corp., a
publicly traded company which invests in uranium oxide and uranium
hexafluoride.
Follow Denison on Twitter
@DenisonMinesCo
Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this news release constitutes
'forward-looking information', within the meaning of the applicable
United States and Canadian
legislation concerning the business, operations and financial
performance and condition of Denison. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as 'plans', 'expects', 'budget',
'scheduled', 'estimates', 'forecasts', 'intends', 'anticipates', or
'believes', or the negatives and/or variations of such words and
phrases, or state that certain actions, events or results 'may',
'could', 'would', 'might' or 'will be taken', 'occur', 'be
achieved' or 'has the potential to'.
In particular, this news release contains forward-looking
information pertaining to: the likelihood of completion of the Unit
Offering and estimated timing for completion; the ability to obtain
the necessary regulatory authority and approvals to complete the
Unit Offering; the use of proceeds of the Unit Offering, including
the acquisition of approximate quantities of Uranium; the strategic
objectives of Denison, including the potential advancement of the
Wheeler River project through project evaluation and de-risking to
construction and production; the potential benefits to Denison of
holding physical uranium, including as financial de-risking,
collateral and/or appreciation in value; Denison's joint venture
interests, and the continuation of its contracts with third
parties.
Forward looking statements are based on the opinions and
estimates of management as of the date such statements are made,
and they are subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of Denison to be materially different
from those expressed or implied by such forward-looking statements.
For example, if market conditions remain volatile and/or COVID-19
mitigation measures result in more social and economic disruptions,
Denison may not be able to complete the Unit Offering on the terms
herein described or at all or pursue its evaluation and
environmental assessment activities necessary to advance the
Wheeler River project, which could have significant impacts on
Denison. Denison may not be able to deploy the proceeds as
intended, if Uranium is not available to be purchased at all or at
prices deemed appropriate. Further, should the price of uranium
materially decline, Denison's strategy of acquiring and holding
physical uranium could expose Denison to significant losses and
adversely impact the financial position of the Company. In
addition, the currently anticipated evaluation and environmental
assessment activities may not be maintained after further testing
or Denison may decide or otherwise be required to alter or
discontinue testing, evaluation and development work, if it is
unable to maintain or otherwise secure the necessary approvals or
resources (such as testing facilities, capital funding, etc.) and
the Company may not be able to, or may choose not to, proceed to a
FS, construction or production for Wheeler River. Denison believes
that the expectations reflected in this forward-looking information
are reasonable and no assurance can be given that these
expectations will prove to be accurate and results may differ
materially from those anticipated in this forward-looking
information. For a discussion in respect of risks and other factors
that could influence forward-looking events, please refer to the
factors discussed in the Management's Discussion & Analysis
dated March 4, 2021 under the heading
"Risk Factors". These factors are not, and should not be construed
as being exhaustive.
Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking information
contained in this news release is expressly qualified by this
cautionary statement. Any forward-looking information and the
assumptions made with respect thereto speaks only as of the date of
this news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news release to conform such information to actual
results or to changes in Denison's expectations except as otherwise
required by applicable legislation.
SOURCE Denison Mines Corp.