TORONTO, April 1, 2021 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE American:
DNN) is pleased to announce that it has successfully secured 2.5
million pounds of uranium concentrates ("Uranium" or
"U3O8"), at a weighted average price of
USD$29.61 per pound
U3O8 and a total cost of approximately
USD$74 million, as part of its
previously announced project financing initiative in support of the
future advancement and/or construction of the Company's flagship
90% owned Wheeler River Uranium Project ("Wheeler River" or the
"Project"). All purchases were made in the uranium spot market,
with delivery dates ranging from April
2021 to October 2021. View PDF
version.
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 could eventually market its physical Uranium
investments to its future customers along with the mine production
from Wheeler River.
David Cates, President and CEO of
Denison, commented, "We're pleased with the result of our
recent uranium procurement process – having secured a significant
quantity of material, to meet our target of 2.5 million pounds
U3O8, at an average price of USD$29.61 per pound. This material was
secured amidst a tightening market, which has seen the spot price
of uranium rise approximately 15% within the month of March, in
response to various new sources of demand.
Upon completion of our various commitments, Denison's
physical uranium holdings will represent a sizeable asset for the
Company, with a current market value of approximately USD$78 million (CAD$98
million), which represents greater than one-third of the
expected CAD$290 million (Denison's
share, from the 2018 Pre-Feasibility Study) of initial capital
costs for Wheeler River. This investment in Uranium enhances
the long-term financial stability of the company, as we advance
towards a definitive development decision for the Project.
More specifically, the Company's Uranium holdings have the
potential to de-risk the process of future project financing
efforts 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 an established base of physical Uranium before achieving first
production from Wheeler River."
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 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 commitments to purchase 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 and the Company's
expectations regarding negotiating supply contracts with future
customers; 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, the commitments to acquire uranium are subject to
entering into formal purchase and sale agreements with the sellers
of such uranium, and the parties could fail to agree to, and
execute, such agreements; if market conditions remain volatile
and/or COVID-19 mitigation measures result in more social and
economic disruptions, Denison may not be able to pursue its
evaluation and environmental assessment activities necessary to
advance the Wheeler River project, which could have significant
impacts on Denison. 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. Should a decision be made to advance to a FS,
construction or production, the costs to Denison of doing so could
materially exceed expectations as set forth in the Wheeler
PFS. Should Wheeler River not proceed as currently
anticipated, the potential benefits of holding physical uranium
described herein, such as use as collateral, may never be
realized. 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 Denison's Annual
Information Form dated March 29, 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.
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SOURCE Denison Mines Corp.