TORONTO, April 28, 2021 /PRNewswire/ - Denison
Mines Corp. ("Denison" or the "Company") (TSX: DML)
(NYSE American: DNN) congratulates Uranium Participation Corp.
("UPC") (TSX: U) and Sprott Asset Management LP ("Sprott") on
having reached an agreement to convert UPC into the Sprott Physical
Uranium Trust (the "Trust") – effectively aligning UPC's business
with the world's leading physical commodity investment vehicles and
making it eligible to pursue a listing in the United States (the "Transaction").
Upon completion of the Transaction, Sprott will become the manager
of the Trust and the Management Services Agreement ("MSA") between
Denison Mines Inc. (the "Manager", a wholly owned subsidiary of
Denison) and UPC will be terminated. View PDF
version
The current MSA was entered into as of April 1, 2019 with a five-year term ending
March 31, 2024. The MSA includes a
termination provision whereby, subject to certain exceptions, if
the MSA is terminated early by UPC, the Manager will receive a
termination payment equal to the base and variable management fees
that would otherwise be payable to the Manager (calculated based on
UPC's Net Asset Value ("NAV") at the time of termination) for the
lesser period of (a) three years; or (b) the remaining term of the
MSA. Denison estimates the termination payment due from UPC
to be approximately $5.3
million. The actual termination payment may differ, as
it will be based on UPC's NAV as of the month-end immediately prior
to the date of a formal notice of termination to Denison by UPC in
accordance with the MSA.
David Cates, Denison's President
& CEO, commented, "As the Manager of UPC since inception,
Denison has worked hand-in-hand with the UPC Board for nearly two
decades to manage the world's pre-eminent physical uranium
investment vehicle. Over that time, UPC has executed on an
accretion model that has delivered long-term value to UPC
shareholders in the form of increased exposure to physical uranium
on a 'pounds U3O8 equivalent per share' basis
over a period where ordinary storage and operating costs should
have resulted in significant natural dilution to UPC's holdings.
UPC's track record of accretion is truly remarkable, and Denison is
proud to have executed on the corporation's unique
strategy.
An important element of the Transaction is the pursuit of
a U.S. listing for the Trust. As we have witnessed with
Denison's recent increase in trading liquidity, the United States represents a powerful
marketplace with a uniquely global reach – offering the potential
to significantly increase trading liquidity and access to
investors. We believe this is an exciting development for UPC
shareholders and the broader uranium market – potentially making
investments in physical uranium holdings, through the Trust, more
accessible to investors at a time when (1) uranium market
fundamentals are progressing towards recovery and (2) investor and
public appreciation of the critical role that nuclear energy must
play in the clean energy transition is rapidly
increasing.
With Denison's involvement in UPC coming to an end, we
would like to thank UPC and its shareholders for their years of
trust and support. The Denison team is looking forward to
focusing our full attention on our exciting multi-asset
Athabasca Basin uranium
development portfolio – including the high-grade Phoenix in-situ recovery uranium project,
which has the potential to be one of the lowest cost uranium mines
in the world."
In its current corporate form, UPC is not eligible to complete a
listing in the United States. Transitioning to a Trust
structure, in which form UPC is expected to be eligible to pursue a
listing in the United States,
requires management also be transitioned to a registered investment
fund manager. Sprott, as a registered investment fund
manager, is expected to integrate the Trust into its existing
portfolio of physical commodity trust products (all of which are
dual listed on the Toronto Stock Exchange and NYSE Arca).
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 that is contracted to process the ore from the
Cigar Lake mine under a toll milling agreement, plus a 25.17%
interest in the Midwest Main 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
Main, Midwest A, THT and Huskie are located within 20 kilometres of
the McClean Lake mill.
Denison is also 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.
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 following: the Transaction and
anticipated elements and benefits thereof, including the
termination of the MSA; Denison's development and expansion plans
and objectives; and expectations regarding its joint venture
ownership interests and the continuity of its agreements with its
partners.
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, the Transaction may not be completed or, if completed,
may not be on the terms described herein or otherwise achieve the
objectives stated herein, such as the US listing and other
potential benefits; and/or the termination payment may be
materially different than the amount stated herein, more or less
than the amount estimated herein. Denison believes that the
expectations reflected in this forward-looking information are
reasonable but 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 Denison's Annual Information Form dated March 26, 2021 or subsequent quarterly financial
reports 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.
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SOURCE Denison Mines Corp.