TORONTO, June 15, 2021 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE
American: DNN) is pleased to announce that it has entered into a
binding agreement (the "Agreement") to acquire 50% ownership of JCU
(Canada) Exploration Company,
Limited ("JCU") from UEX Corporation ("UEX"), for cash
consideration of $20.5 million,
following UEX's expected acquisition of JCU from Overseas Uranium
Resources Development Co., Ltd. ("OURD"). View PDF Version
UEX has entered into an amended purchase agreement with OURD
("OURD Agreement") to acquire 100% ownership of JCU, a wholly owned
subsidiary of OURD, for cash consideration of $41 million (see UEX press release dated
June 15, 2021).
JCU holds a portfolio of twelve uranium project joint venture
interests in Canada, including a
10% interest in Denison's 90% owned Wheeler River project, a
30.099% interest in the Millennium project (Cameco Corporation
69.901%), a 33.8123% interest in the Kiggavik project (Orano Canada
Inc. 66.1877%), and a 34.4508% interest in the Christie Lake
project (UEX 65.5492%).
David Cates, President and CEO,
stated: "Denison welcomes this new partnership with UEX. We
are pleased with the acquisition terms for this unique and valuable
portfolio of strategic Canadian uranium interests, which have been
meticulously accumulated by JCU over prior decades. Following this
acquisition, Denison will not only increase its indirect ownership
of the Company's flagship Wheeler River project, but will also
expand its asset base to include additional important Canadian
uranium development projects such as Millennium and
Kiggavik."
The key terms of the Agreement are outlined below:
- Denison agrees to provide UEX with an interest-free three-month
term loan of up to $41 million (the
"Term Loan") to facilitate UEX's payment of the $41 million purchase price to OURD for the
purchase of 100% of the shares of JCU pursuant to the OURD
Agreement.
- $20.5 million of the amount drawn
under the Term Loan will be deemed repaid to Denison by UEX on the
transfer of 50% of the JCU shares to Denison immediately following
the closing of the OURD Agreement and the acquisition of the JCU
shares by UEX.
- UEX may extend the Term Loan by an additional three months, in
which case interest will be charged at a rate of 4% from the date
of the initial advance under the Term Loan until maturity.
- All of the shares of JCU owned by UEX will be held by Denison
as security against the Term Loan pursuant to a pledge agreement
until the Term Loan is repaid in full.
- The Term Loan is subject to certain customary terms and
conditions and contains standard events of default that protect
Denison.
- Denison and UEX agree to enter into a shareholders' agreement
governing the relationship of Denison and UEX with respect to the
future management of JCU ("Shareholders' Agreement").
- The Shareholders' Agreement shall include various provisions
regarding future funding and dilution, as well as resolution of
deadlock situations and protections of minority interests in
relation to specific business matters that will require 66.67% or
unanimous support from then JCU shareholders.
- The Agreement is subject to certain conditions precedent,
including the completion of the acquisition of the JCU shares by
UEX, pursuant to the OURD Agreement.
- Should the OURD Agreement be terminated, each of Denison and
UEX have agreed to provide the other party with the opportunity to
participate on a 50/50 basis in subsequent offers made in relation
to an alternative acquisition of JCU.
- UEX and Denison have certain termination rights, including
those in favour of Denison if the OURD Agreement is not completed
by September 30, 2021.
The OURD Agreement, and the completion of the JCU acquisition by
UEX pursuant thereto, remains subject to approval at a meeting of
the shareholders of OURD, which is expected to occur in
Tokyo on June 18, 2021. If the shareholders of OURD
approve the OURD Agreement, the transaction is expected to
close on or before August 3,
2021.
Denison's previously announced offer to acquire 100% of JCU from
OURD (see press release dated May 4,
2021) has been withdrawn.
Haywood Securities Inc. and RCI Capital Group are acting as
financial advisors, and Blake, Cassels & Graydon LLP is acting
as legal counsel to Denison.
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.
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 following: the terms of the Agreement
and the OURD Agreement, including the conditions and other rights
and obligations of the parties and the expectation that UEX, OURD
and Denison will be able to complete the transactions described
herein and therein; 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 conditions to the transactions, including the
approval of OURD shareholders, may not be satisfied or the parties
may negotiate terms materially different than disclosed herein.
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 Annual Information
Form dated March 26, 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.