Exhibit 12

DENISON MINES CORP.
Interim Consolidated Balance Sheets
(Unaudited — Expressed in thousands of U.S. dollars)

	At March 31			At December 31			At January 1
	2011			2010			2010
ASSETS
Current
Cash and cash equivalents	$	158,706		$	97,554		$	19,804
Trade and other receivables (note 5)		8,425			20,236			13,773
Inventories (note 6)		33,071			29,133			52,216
Prepaid expenses and other		1,477			1,910			1,604
		201,679			148,833			87,397
Non-Current
Inventories — ore in stockpiles (note 6)		2,261			2,204			1,530
Investments (note 7)		1,481			2,955			10,605
Prepaid expenses and other		54			107			287
Restricted cash and investments (note 8)		25,875			22,946			21,656
Property, plant and equipment (note 9)		352,465			342,164			321,395
Intangibles (note 10)		3,664			3,794			4,436
Total assets	$	587,479			523,003		$	447,306
LIABILITIES
Current
Accounts payable and accrued liabilities	$	13,009		$	13,753		$	9,726
Current portion of long-term liabilities:
Post-employment benefits (note 11)		412			402			380
Reclamation obligations (note 12)		658			641			752
Debt obligations (note 13)		113			200			869
Other long-term liabilities (note 14)		—			—			313
		14,192			14,996			12,040
Non-Current
Deferred revenue		3,499			3,339			3,187
Post-employment benefits (note 11)		3,688			3,617			3,426
Reclamation obligations (note 12)		17,226			16,924			17,154
Debt obligations (note 13)		184			205			195
Other long-term liabilities (note 14)		1,131			1,105			1,051
Deferred income tax liability (note 21)		13,120			13,408			14,062
Total liabilities		53,040			53,594			51,115
EQUITY
Share capital (note 15)		974,364			911,681			850,336
Share purchase warrants (note 16)		—			5,830			5,830
Contributed surplus (note 17)		46,445			41,658			39,922
Deficit		(515,894	)		(508,827	)		(503,481	)
Accumulated other comprehensive income		29,524			19,067			3,584
Total equity		534,439			469,409			396,191
Total liabilities and equity	$	587,479		$	523,003		$	447,306
Issued and outstanding common shares (Note 15)		384,660,915			366,200,665			339,720,415
Commitments and contingencies (note 22)
Subsequent events (note 23)

The accompanying notes are integral to the consolidated financial statements

DENISON MINES CORP.
Interim Consolidated Statement of Income (Loss) and Comprehensive Income (Loss)
(Unaudited — Expressed in thousands of U.S. dollars except for per share amounts)

	Three Months Ended
	March 31			March 31
	2011			2010
REVENUES (note 19)	$	26,768		$	21,975
EXPENSES
Operating expenses (note 18)		26,487			17,466
Mineral property exploration		3,185			1,697
General and administrative (note 17)		4,378			3,650
Other expense (note 18)		1,991			6,116
		36,041			28,929
Loss before finance charges		(9,273	)		(6,954	)
Finance income (expense) (note 18)		276			188
Loss before taxes		(8,997	)		(6,766	)
Income tax recovery (expense) (note 21):
Current		—			—
Deferred		1,930			(413	)
Net loss for the period	$	(7,067	)	$	(7,179	)
Comprehensive income (loss):
Unrealized gain (loss) on investments-net of tax		(1,390	)		2,144
Foreign currency translation change		11,847			10,457
Comprehensive income (loss) for the period	$	3,390		$	5,422
Net loss per share:
Basic	$	(0.02	)	$	(0.02	)
Diluted	$	(0.02	)	$	(0.02	)
Weighted-average number of shares
outstanding (in thousands):
Basic		369,370			339,720
Diluted		369,370			339,720

The accompanying notes are integral to the consolidated financial statements

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DENISON MINES CORP.
Interim Consolidated Statement of Changes in Equity
(Unaudited — Expressed in thousands of U.S. dollars)

	Three Months Ended
	March 31			March 31
	2011			2010
Share capital
Balance–beginning of period		911,681			850,336
Share issues-net of issue costs		62,166			(4	)
Employee share option exercises-cash		328			—
Employee share option exercises–non-cash		189			—
Balance–end of period		974,364			850,332
Share purchase warrants
Balance–beginning of period		5,830			5,830
Warrant expiries		(5,830	)		—
Balance–end of period		—			5,830
Contributed surplus
Balance–beginning of period		41,658			39,922
Stock-based compensation expense		607			395
Employee share option exercises-non-cash		(189	)		—
Warrant expiries		5,830			—
Warrant expiries–tax effect		(1,461	)		—
Balance–end of period		46,445			40,317
Deficit
Balance–beginning of period		(508,827	)		(503,481	)
Net loss		(7,067	)		(7,179	)
Balance-end of period		(515,894	)		(510,660	)
Accumulated other comprehensive income
Balance–beginning of period		19,067			3,584
Unrealized gain (loss) on investments		(1,390	)		2,144
Foreign currency translation change		11,847			10,457
Balance–end of period		29,524			16,185
Total Equity
Balance–beginning of period	$	469,409		$	396,191
Balance–end of period	$	534,439		$	402,004

The accompanying notes are integral to the consolidated financial statements

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DENISON MINES CORP.
Interim Consolidated Statements of Cash Flow
(Unaudited — Expressed in thousands of U.S. dollars)

	Three Months Ended
	March 31			March 31
CASH PROVIDED BY (USED IN):	2011			2010
OPERATING ACTIVITIES
Net loss for the period	$	(7,067	)	$	(7,179	)
Items not affecting cash:
Depletion, depreciation, amortization and accretion		9,751			8,064
Investments impairment		—			177
Stock-based compensation		607			395
Losses (gains) on asset disposals		7			(122	)
Losses (gains) on restricted investments		127			(13	)
Non-cash inventory adjustments		1,346			(7,218	)
Deferred income tax expense (recovery)		(1,930	)		413
Foreign exchange		2,567			6,263
Net change in non-cash working capital items:
Trade and other receivables		11,164			(2,245	)
Inventories		(11,286	)		(2,935	)
Prepaid expenses and other assets		448			442
Accounts payable and accrued liabilities		(879	)		4,818
Post-employment benefits		(89	)		(53	)
Reclamation obligations		(262	)		(461	)
Deferred revenue		160			—
Net cash provided by operating activities		4,664			346
INVESTING ACTIVITIES
Decrease (increase) in notes receivable		779			(46	)
Proceeds on sale of investments		—			198
Expenditures on property, plant and equipment		(6,266	)		(7,313	)
Proceeds on sale of property, plant and equipment		37			—
Decrease (increase) in restricted cash and investments		(2,989	)		318
Net cash provided used in investing activities		(8,439	)		(6,843	)
FINANCING ACTIVITIES
Increase (decrease) in debt obligations		(117	)		(320	)
Issuance of common shares for:
New share issues		62,166			—
Exercise of stock options		328			—
Net cash provided by (used in) financing activities		62,377			(320	)
Increase (decrease) in cash and cash equivalents		58,602			(6,817	)
Foreign exchange effect on cash and cash equivalents		2,550			33
Cash and cash equivalents, beginning of period		97,554			19,804
Cash and cash equivalents, end of period	$	158,706		$	13,020

The accompanying notes are integral to the consolidated financial statements

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DENISON MINES CORP.
Notes to the interim consolidated financial statements for the three months ended March 31, 2011 and 2010
(Unaudited — Expressed in thousands of U.S. dollars)

1. NATURE OF OPERATIONS

Denison Mines Corp. (“DMC”) is incorporated under the Business Corporations Act (Ontario) (“OBCA”). The address of its registered head office is 595 Bay Street, Suite 402, Toronto, Ontario, Canada, M5J 2C2. Denison Mines Corp. and its subsidiary companies and joint ventures (collectively, the “Company”) are engaged in uranium mining and related activities, including acquisition, exploration and development of uranium bearing properties, extraction, processing and selling of uranium . The environmental services division of the Company provides mine decommissioning and decommissioned site monitoring services for third parties.

The Company has a 100% interest in the White Mesa mill located in Utah, United States and a 22.5% interest in the McClean Lake mill located in the Athabasca Basin of Saskatchewan, Canada. The Company has interests in a number of nearby mines at both locations, as well as interests in development and exploration projects located in Canada, the United States, Mongolia and Zambia, some of which are operated through joint ventures and joint arrangements. Uranium, the Company’s primary product, is produced in the form of uranium oxide concentrates (“U₃O₈”) and sold to various customers around the world for further processing. Vanadium, a co-product of some of the Company’s mines is also produced and is in the form of vanadium pentoxide (“V₂O₅”). The Company is also in the business of processing uranium bearing waste materials, referred to as “alternate feed materials”.

Denison Mines Inc. (“DMI”), a subsidiary of DMC, is the manager of Uranium Participation Corporation (“UPC”), a publicly-listed investment holding company formed to invest substantially all of its assets in U₃O₈ and uranium hexafluoride (“UF₆”). The Company has no ownership interest in UPC but receives various fees for management services and commissions from the purchase and sale of U₃O₈ and UF₆ by UPC.

2. BASIS OF PRESENTATION AND ADOPTION OF IFRS

These unaudited consolidated financial statements have been prepared by management in U.S. dollars in accordance with Canadian generally accepted accounting principles as set out in the Handbook of the Canadian Institute of Chartered Accountants (“CICA Handbook”). In 2010, the CICA Handbook was revised to incorporate International Financial Reporting Standards (“IFRS”), and require publicly accountable enterprises to apply such standards effective for years beginning January 1, 2011. Accordingly, the Company has commenced reporting on this basis in these interim consolidated financial statements. In the financial statements, the term “Canadian GAAP” refers to Canadian GAAP before the adoption of IFRS.

These interim consolidated financial statements have been prepared in accordance with IFRS applicable to the preparation of interim financial statements, including IAS 34 and IFRS 1. Subject to certain transition elections disclosed in note 4, the Company has consistently applied the same accounting policies in its opening IFRS balance sheet at January 1, 2010 and throughout all periods presented, as if these policies had always been in effect. Note 4 discloses the impact of the transition to IFRS on the Company’s reported financial position, financial performance and cash flows, including the nature and effect of significant changes in accounting policies from those used in the Company’s consolidated financial statements for the year ended December 31, 2010. Comparative figures for 2010 in these interim consolidated financial statements have been restated to give effect to those changes.

The policies applied in these interim consolidated financial statements are based on IFRS policies as of May 11, 2011, the date the Board of Directors approved the statements. Any subsequent changes to IFRS that are given effect in the Company’s annual consolidated financial statements for the year ending December 31, 2011 could result in restatement of these interim consolidated financial statements, including the transition adjustments recognized on change-over to IFRS.

The interim consolidated financial statements should be read in conjunction with the Company’s Canadian GAAP annual financial statements for the year ended December 31, 2010. Note 4 discloses IFRS information for the year ended December 31, 2010 not provided in the 2010 annual financial statements and is material to the understanding of these consolidated financial statements.

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3. SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies used in the preparation of these interim consolidated financial statements are described below:

(a) Principles of consolidation

The financial statements of the Company consolidate the accounts of DMC and its subsidiaries. All intercompany transactions, balances and unrealized gains and losses from intercompany transactions are eliminated on consolidation.

Subsidiaries are those entities which DMC controls by having the power to govern the financial and operating policies. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether DMC controls another entity. Subsidiaries are fully consolidated from the date on which control is obtained by DMC and are de-consolidated from the date that control ceases.

The Company has various interests in development and exploration projects which are held through option or joint agreements. These have been classified as joint ownership interests under IFRS. These joint ownership interests have been accounted for using the undivided interest method.

(b) Use of estimates

The presentation of consolidated financial statements in conformity with IFRS requires the Company’s management to make estimates and assumptions that affect the amounts reported in these financial statements and related note disclosures. Although the Company regularly reviews the estimates and assumptions that affect these financial statements, actual results may be materially different. Significant estimates and assumptions made by management relate to:

• the quantities and net realizable value of inventories as to the timing of sales, costs to complete and sales prices;

• the recoverable amounts of cash generating units (“CGU”) used in impairment testing of long-lived assets including estimates of reserves and resources, production costs, foreign exchange rates, discount rates, inflation and income tax rates;

• the determination of useful lives, units of production and residual values of property, plant and equipment;

• the recoverability of and reclamation obligations for property, plant and equipment, including estimation of reclamation costs and timing of expenditures that are impacted by changes in discount rates, foreign exchange rates and environmental and regulatory requirements;

• the estimated cost of providing post-employment benefits actuarially determined using the projected benefits method;

• the recognition of deferred income taxes based on estimated tax bases using substantively enacted tax rates expected to apply to taxable income during the years in which the differences are expected to be recovered or settled; and

• the fair value of stock-based compensation determined using the Black-Scholes option pricing model using expected option forfeitures.

(c) Foreign currency translation

(i) Functional and presentation currency

Items included in the financial statements of each entity in the DMC group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). Primary and secondary indicators are used to determine the functional currency (primary indicators have priority over secondary indicators). Primary indicators include the currency that mainly influences sales prices and the currency that mainly influences labour, material and other costs. Secondary indicators include the currency in which funds from financing activities are generated and the currency in which receipts from operating activities are usually retained. For our Canadian, Zambian and Mongolian entities, the local currency has been determined to be the functional currency.

The consolidated financial statements are presented in U.S. dollars, unless otherwise stated.

The financial statements of entities that have a functional currency different from the presentation currency of DMC (“foreign operations”) are translated into U.S. dollars as follows: assets and liabilities — at the closing rate at the date of the statement of financial position, and income and expenses — at the average rate of the period (as this is considered a reasonable approximation to actual rates). All resulting changes are recognized in other comprehensive incomes as cumulative translation adjustments.

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When an entity disposes of its entire interest in a foreign operation, or loses control, joint control, or significant influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive income related to the foreign operation are recognized in profit or loss. If an entity disposes of part of an interest in another entity which remains a subsidiary, a proportionate amount of foreign currency gains or losses accumulated in other comprehensive income related to the subsidiary is reallocated between controlling and non-controlling interests.

(ii) Transactions and balances

Foreign currency transactions are translated into an entity’s functional currency using the exchange rates prevailing at the dates of the transactions. Generally, foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than an operation’s functional currency are recognized in the statement of income.

(d) Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held with banks, and other short-term highly liquid investments with original maturities of three months or less.

(e) Financial instruments

Financial assets and financial liabilities are recognized on the consolidated balance sheet when the Company becomes a party to the contractual provisions of the financial instrument. All financial instruments are required to be measured at fair value on initial recognition. Measurement in subsequent periods is dependent upon the classification of the financial instrument as financial assets and liabilities at fair value through profit and loss (“FVPL”), available-for-sale, loans and receivables, held-to-maturity, or other financial liabilities.

Financial assets and financial liabilities classified as FVPL are measured at fair value with changes in those fair values recognized on the consolidated statement of operations. Financial assets classified as available-for-sale are measured at fair value with changes in those fair values recognized in other comprehensive income. Financial assets classified as loans and receivables, held to maturity or other financial liabilities are measured at amortized cost using the effective interest rate method of amortization. Where a financial asset classified as held-to-maturity or available-for-sale has a loss in value which is considered to be other than temporary, the loss is recognized in the results of operations.

For financial instruments measured at amortized cost, transaction costs or fees, premiums or discounts earned or incurred are recorded, at inception, net against the fair value of the financial instrument. Interest expense is recorded using the effective interest method.

The Company has designated its financial assets and liabilities as follows:

• Cash and cash equivalents (including restricted cash and investments) are classified as FVPL and any period change in fair value is recorded through the results from operations.

• Trade and other receivables and Notes receivable are classified as loans and receivables and are measured at amortized cost using the effective interest rate method. Interest income is recorded in net income, as applicable.

• Investments are classified as available-for-sale and any period change in fair value is recorded through other comprehensive income. Where the investment experiences an other than temporary decline in value, the loss is recognized in the results of operations.

• Accounts payable and accrued liabilities and Debt obligations are classified as other financial liabilities and are measured at amortized cost using the effective interest rate method. Interest expense is recorded in other income, as applicable.

(f) Impairment of financial assets

At each reporting date, the Company assesses whether there is objective evidence that a financial asset is impaired. If such evidence exists, the Company recognized an impairment loss, as follows:

(i) Financial assets carried at amortized cost: The loss is the difference between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account.

(ii) Available-for-sale financial assets: The impairment loss is the difference between the original cost of the asset and its fair value at the measurement date, less any impairment losses previously recognized in the statement of income. This amount represents the cumulative loss in accumulated other comprehensive income that is reclassified to net income.

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(g) Inventories

Expenditures, including depreciation, depletion and amortization of production assets, incurred in the mining and processing activities that will result in the future concentrate production are deferred and accumulated as ore in stockpiles and in-process and concentrate inventories. These amounts are carried at the lower of average costs or net realizable value (“NRV”). NRV is the difference between the estimated future concentrate price (net of selling costs) and estimated costs to complete production into a saleable form.

Stockpiles are comprised of coarse ore that has been extracted from the mine and is available for further processing. Mining production costs are added to the stockpile as incurred and removed from the stockpile based upon the average cost per ton or tonne of ore produced from mines considered to be in commercial production. The current portion of ore in stockpiles represents the amount expected to be processed in the next twelve months.

In-process and concentrate inventories include the cost of the ore removed from the stockpile, a pro-rata share of the amortization of the associated mineral property, as well as production costs incurred to process the ore into a saleable product. Processing costs typically include labor, chemical reagents and directly attributable mill overhead expenditures. Items are valued according to the first-in first-out method (FIFO) or at weighted average cost, depending on the type of inventory or work-in-process.

Materials and other supplies held for use in the production of inventories are carried at average cost and are not written down below that cost if the finished products in which they will be incorporated are expected to be sold at or above cost. However, when a decline in the price of concentrates indicates that the cost of the finished products exceeds net realizable value, the materials are written down to net realizable value. In such circumstances, the replacement cost of the materials may be the best available measure of their net realizable value.

(h) Property, plant and equipment

Property, plant and equipment are recorded at acquisition or production cost and carried net of depreciation and impairments. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the statement of income during the period in which they are incurred.

Depreciation is calculated on a straight line or unit of production basis as appropriate. Where a straight line methodology is used, the assets are depreciated to their estimated residual value over an estimated useful life which ranges from three to fifteen years depending upon the asset type. Where a unit of production methodology is used, the assets are depreciated to their estimated residual value over the useful life defined by management’s best estimate of recoverable reserves and resources in the current mine plan. When assets are retired or sold, the resulting gains or losses are reflected in current earnings as a component of other income or expense. The Company allocates the amount initially recognized in respect of an item of property, plant and equipment to its significant parts and depreciates separately each such part. Residual values, method of depreciation and useful lives of the assets are reviewed annually and adjusted if appropriate.

(i) Mineral property acquisition, exploration and development costs

Costs relating to the acquisition of acquired mineral rights and acquired exploration rights are capitalized.

Exploration and evaluation expenditures are expensed as incurred on mineral properties not sufficiently advanced. At the point in time that a mineral property is considered to be sufficiently advanced, it is classified as a development mineral property and all further expenditures for the current year and subsequent years are capitalized as incurred. These costs will include costs of maintaining the site until commercial production, costs to initially delineate the ore body, costs for shaft sinking and access, lateral development, drift development and infrastructure development. Such costs represent the net expenditures incurred and capitalized as at the balance sheet date and do not necessarily reflect present or future values.

Once a development mineral property goes into commercial production, the property is classified as “Producing” and the accumulated costs are amortized over the estimated recoverable resources in the current mine plan using a unit of production basis. Commercial production occurs when a property is substantially complete and ready for its intended use.

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(j) Impairment of non-financial assets

Property, plant and equipment and intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units or CGUs). The recoverable amount is the higher of a CGU’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the CGU’s carrying amount exceeds its recoverable amount.

(k) Borrowing costs

Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as interest expense in the statement of income in the period in which they are incurred.

(l) Reclamation provisions

Reclamation provisions, any legal and constructive obligation related to the retirement of tangible long-lived assets, are recognized when such obligations are incurred, if a reasonable estimate of the value can be determined. These obligations are measured initially at the present value of expected cash flows using a pre-tax discount rate reflecting risks specific to the liability and the resulting costs are capitalized and added to the carrying value of the related assets. In subsequent periods, the liability is adjusted for the accretion of the discount and the expense is recorded in the income statement. Changes in the amount or timing of the underlying future cash flows are immediately recognized as an increase or decrease in the carrying amounts of the liability and related assets. These costs are amortized to the results of operations over the life of the asset. Reductions in the amount of the liability are first applied against the amount of the net reclamation asset on the books with any residual value being recorded in the statement of operations.

The Company’s activities are subject to numerous governmental laws and regulations. Estimates of future reclamation liabilities for asset decommissioning and site restoration are recognized in the period when such liabilities are incurred. These estimates are updated on a periodic basis and are subject to changing laws, regulatory requirements, changing technology and other factors which will be recognized when appropriate. Liabilities related to site restoration include long-term treatment and monitoring costs and incorporate total expected costs net of recoveries. Expenditures incurred to dismantle facilities, restore and monitor closed resource properties are charged against the related reclamation and remediation liability.

(m) Post-employment benefit obligations

The Company assumed the obligation of a predecessor company to provide life insurance, supplemental health care and dental benefits, excluding pensions, to its former Canadian employees who retired from active service prior to 1997. The estimated cost of providing these benefits was actuarially determined using the projected benefits method and is recorded on the balance sheet at its estimated present value. The interest cost on this unfunded liability is being accreted over the remaining lives of this retiree group.

(n) Stock-based compensation

The Company uses a fair value-based method of accounting for stock options to employees, including directors, and to non-employees. The fair value is determined using the Black-Scholes option pricing model on the date of the grant. The cost is recognized on a straight-line graded method basis, adjusted for expected forfeitures, over the applicable vesting period as an increase in stock-based compensation expense and the contributed surplus account. When such stock options are exercised, the proceeds received by the Company, together with the respective amount from contributed surplus, are credited to share capital.

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(o) Provisions

Provisions for restructuring costs and legal claims, where applicable, are recognized in other liabilities when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period, and are discounted to present value where the effect is material. The Company performs evaluations to identify onerous contracts and, where applicable, records provisions for such contracts.

(p) Income tax

Income taxes are accounted for using the liability method of accounting for deferred income taxes. Under this method, current income taxes are recognized for the estimated income taxes payable for the current period. Deferred income tax assets and liabilities are recognized based on temporary differences between the financial statement carrying values of the existing assets and liabilities and their respective income tax bases using enacted or substantively enacted tax rates expected to apply to taxable income during the years in which the differences are expected to be recovered or settled. The recognition of deferred income tax assets are limited to the amount that is considered “probable” to be realized.

(q) Flow-Through Common Shares

The Company’s Canadian exploration activities have been financed in part through the issuance of flow-through common shares whereby the tax benefits of the eligible exploration expenditures incurred under this arrangement are renounced to the subscribers. The proceeds from issuing flow-through shares are allocated between the offering of shares and the sale of tax benefits. The allocation is based on the difference (“premium”) between the quoted price of the Company’s existing shares and the amount the investor pays for the actual flow-through shares. A liability is recognized for the premium, and is extinguished when the tax effect of the temporary differences, resulting from the renunciation, is recorded — with the difference between the liability and the value of the tax assets renounced being recorded as a deferred tax expense. The tax effect of the renunciation is recorded at the time the Company makes the renunciation — which may differ from the effective date of renunciation. If the flow-through shares are not issued at a premium, a liability is not established, and on renunciation the full value of the tax assets renounced is recorded as a deferred tax expense.

(r) Revenue recognition

Revenue from the sale of mineral concentrates is recognized when it is probable that the economic benefits will flow to the Company and delivery has occurred, the sales price and costs incurred with respect to the transaction can be measured reliably and collectability is reasonable assured. For uranium, revenue is typically recognized when delivery is effected by book transfer at the applicable uranium storage facility. For vanadium related products, revenue is typically recognized at the time of shipment to the customer.

Revenue from toll milling services is recognized as material is processed in accordance with the specifics of the applicable toll milling agreement. Revenue and unbilled accounts receivable are recorded as related costs are incurred using billing formulas included in the applicable toll milling agreement.

Revenue from alternate feed process milling is recognized as material is processed, in accordance with the specifics of the applicable processing agreement. In general, the Company collects a recycling fee for receipt of the material and/or receives the proceeds from the sale of any uranium concentrate and other metals produced. Deferred revenues represent processing proceeds received on delivery of materials but in advance of the required processing activity.

Revenue on environmental service contracts is recognized using the percentage of completion method, whereby sales, earnings and unbilled accounts receivable are recorded as related costs are incurred. Earnings rates are adjusted periodically as a result of revisions to projected contract revenues and estimated costs of completion. Losses, if any, are recognized fully when first anticipated. Revenues from engineering services are recognized as the services are provided in accordance with customer agreements.

Management fees from UPC are recognized as management services are provided under the contract on a monthly basis. Commission revenue earned on acquisition or sale of U₃O₈ and UF₆ on behalf of UPC (or other parties where Denison acts as an agent) is recognized on the date when title passes.

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(s) Earnings (loss) per share

Basic earnings per share (“EPS”) is calculated by dividing the net income (loss) for the period attributable to equity owners of DMC by the weighted average number of common shares outstanding during the period.

Diluted EPS is calculated by adjusting the weighted average number of common shares outstanding for dilutive instruments. The number of shares included with respect to options, warrants and similar instruments is computed using the treasury stock method. DMC’s potentially dilutive common shares comprise stock options granted to employees, and warrants.

(t) Accounting standards issued but not yet applied

International Financial Reporting Standard 9, Financial Instruments (“IFRS 9”)

IFRS 9 was issued in November 2009 and contained requirements for financial assets. This standard addresses classification and measurement of financial assets and replaces the multiple category and measurement models in IAS 39 for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. IFRS 9 also replaces the models for measuring equity instruments, and such instruments are either recognized at fair value through profit or loss or at fair value through other comprehensive income. Where such equity instruments are measured at fair value through other comprehensive income, dividends are recognized in profit or loss to the extent not clearly representing a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income indefinitely.

Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, Financial Instruments — Recognition and Measurement, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income.

This standard is required to be applied for accounting periods beginning on or after January 1, 2013, with earlier adoption permitted. The Company has not yet assessed the impact of the standard or determined whether it will adopt the standard early.

4. TRANSITION TO IFRS

These are the first financial statements issued by the Company that will comply with International Financial Reporting Standards (“IFRS”). These financial statements were prepared as described in note 2, including the application of IFRS 1. IFRS 1 sets out the procedures that the Company must follow when it adopts IFRS for the first time as the basis for preparing its consolidated financial statements. The Company is required to establish its IFRS accounting policies for 2011 and, in general, apply these retrospectively to determine the IFRS opening balance sheet as at the transition date of January 1, 2010. The IFRS accounting policies for 2011 include both IFRS in effect currently or those standards expected to be in effect as of December 31, 2011.

IFRS 1 also requires that comparative financial information be provided. As a result, the first date at which the Company has applied IFRS was January 1, 2010 (the “Transition Date”). IFRS 1 requires first-time adopters to retrospectively apply all effective IFRS standards as of the reporting date, December 31, 2011. The standard also permits a number of optional and mandatory exemptions from full retrospective application.

The Company is required to use the following mandatory exemptions as follows:

• Estimates cannot be created or revised using hindsight. The estimates previously made by the Company under Canadian GAAP (“CGAAP”) were not revised for the application of IFRS except where necessary to reflect any difference in accounting policies.

• For non-controlling interests, IFRS 1 lists specific requirements of IAS 27 Consolidated and Separate Financial Statements which are applied prospectively.

The Company has elected to use the following optional exemptions and has made the following adjustments to transition from Canadian GAAP to IFRS:

a) Business Combinations

The Company elected to apply IFRS relating to business combinations prospectively from January 1, 2010. As such, Canadian GAAP balances relating to business combinations entered into before that date have been carried forward.

- 11 -

b) Cumulative Translation Adjustment

The Company has elected to reset the cumulative translation adjustment account, which includes gains and losses arising from the translation of foreign operations, to zero at the date of transition to IFRS as an alternative to calculating the retrospective cumulative translation adjustments required to be in compliance with the principles of IAS 21 for the periods prior to transition.

c) Impairment testing under IAS 36 and IFRS 1 elections

In accordance with IAS 36, the Company performed impairment tests of its Canadian and United States Cash Generating Units (CGU) which includes inventories, mineral properties, plant and equipment, goodwill and reclamation liabilities. The Company estimated fair values using a combination of a discounted cash flow model using the fair value less cost to sell basis (at a discount rate of 10%) and independent valuations to determine the recoverable amount of these CGUs. The recoverable amounts determined for both CGUs were less than the carrying amounts. For the Canadian CGU, the carrying value of the mineral properties and plant and equipment were reduced to estimated fair value and, as a result, the carrying value of goodwill was fully written off. For the United States CGU, the carrying values of the plant and equipment and mineral properties were reduced to estimated fair value.

IFRS 1 allows an entity to elect to measure an item of property, plant and equipment at the date of transition to IFRS at its fair value and use that fair value as its deemed cost at that date. The first time adopter may elect to use a previous CGAAP revaluation of an item of property, plant and equipment at, or before, the date of transition to IFRS as deemed cost at the date of the revaluation, if the revaluation was, at the date of the revaluation, broadly comparable to fair value. The Company has elected to take the lower of cost or fair value of certain of its property, plant and equipment as deemed cost based on appraisal reports prepared by independent third party valuators.

The Company wrote down the carrying value of its Zambian mineral properties to its fair value in the 2009 fiscal year as part of its impairment assessment under Canadian GAAP. The fair value was calculated using most recent comparable transactions at such point in time. This fair value has been used as the ‘deemed cost’ going forward upon transition to IFRS. The impact of this is that no reversal of impairment loss previously taken would be required even if there was an increase in fair value in subsequent periods. There are no other significant assets in the Zambian CGU.

As a result of the transition to IFRS and the reduction of the carrying amounts of PP&E and mineral properties, management recognized the related decrease in deferred tax liability as of January 1, 2010.

A summary of the impairment charges recorded by each CGU on January 1, 2010, by asset class, is as follows:

	Canadian		United States
	Mining		Mining
(in thousands)	Segment		Segment		Total
Property, plant and equipment
Plant and equipment	$	13,009	$	927	$	13,936
Mineral properties		252,267		59,645		311,912
Goodwill		51,028		—		51,028
Transitional impairment loss-pre tax	$	316,304	$	60,572	$	376,876

The Company amortizes its mineral property assets on a units of production basis and includes that amount in the valuation of work-in-progress and concentrate inventories. Since the value of the Company’s mineral property assets is less under IFRS than Canadian GAAP, the amount amortized to inventory is also less. As a result the carrying value of inventory also tends to be less to reflect the lower mineral property amortization cost.

The lower carrying values for the Company’s inventory under IFRS also result in lower net realizable value adjustments being recorded in a particular period when compared to Canadian GAAP.

- 12 -

d) Adoption of IFRS 6 for Exploration and Evaluation Expenditures

The Company has elected to adopt the provisions of IFRS 6 which allow the Company to continue with the current accounting policies regarding the accounting for exploration and evaluation expenditures, with the exception of capitalizing a portion of its exploration spending. Under Canadian GAAP, the Company capitalized a portion of its exploration spending as a component of its carrying value of mineral properties.

Under IFRS, this practice has been discontinued and mineral property exploration expense has increased accordingly. This adjustment has impacted the cash flow split between operating and investing activities for IFRS when compared to Canadian GAAP.

e) Change in foreign exchange translation methodology

Under Canadian GAAP, the Company used the temporal method of foreign exchange translation for its fully-integrated subsidiaries. This included its Zambian and Australian subsidiaries. Under the temporal method, non-monetary assets were converted to the presentation currency using historical foreign exchange rates and the resulting difference between the translation of the balance sheet and income statement was recorded in the statement of operations.

Under IFRS, the temporal method is not recognized and translation occurs using the equivalent of the current rate method under Canadian GAAP. Under this method, all assets and liabilities are treated as monetary and translated to the presentation currency using the foreign exchange rate at the end of the reporting period. Differences between the translation of the balance sheet and the statement of operations are accumulated in an account in equity. The change in translation methodology has resulted in some significant changes in the presentation currency amounts for the Company’s Zambian subsidiary and has also resulted in the reversal of translation foreign exchange income / expense in the statement of operations.

f) Acquisition of OmegaCorp Limited

The Company completed the acquisition of OmegaCorp Limited in 2007 under which it acquired its Zambian subsidiary. Under Canadian GAAP at the time, the Company treated the transaction as an asset acquisition and was required to gross-up the Mutanga project mineral property value and the deferred tax liability by an equal and offsetting amount. In 2009, the Company impaired the value of the Mutanga project to its fair value at the time. As at January 1, 2010, a portion of the deferred tax liability associated with the initial acquisition of the Mutanga project in 2007 still remained under Canadian GAAP. This remaining deferred tax liability has been reversed on the transition to IFRS as IAS 12 does not permit the recognition of a deferred tax liability on the initial recognition of an asset in a transaction that is not a business combination.

g) Flow-through share accounting

Under Canadian GAAP, the Company would record the gross proceeds relating to flow-through _____shares to share capital at the time of issuance. It would then record a charge (reduction) to share capital at the time the tax benefits of the flow-through shares were renounced to the subscribers. The charge was calculated by multiplying the amount of the renounced tax benefits (which are equal to the proceeds of the flow-through share issue) by the effective tax rate at the time. The offset would go to the deferred tax liability to reflect the fact that the Company could no longer use the tax attributes for its benefit.

Under IFRS, the proceeds from issuing flow-through shares are allocated between the offering of shares and the sale of tax benefits. The allocation is based on the difference (“premium”) between the quoted price of the Company’s existing shares, at the date of closing, and the amount the investor pays for the actual flow-through shares. A liability is recognized for the premium, and is extinguished when the tax effect of the temporary differences, resulting from the renunciation, is recorded. The difference between the liability and the value of the tax assets renounced is recorded as a deferred tax expense. There is no subsequent reduction in share capital.

h) Other transitional items

The income statement has been adjusted for the following additional items not discussed above:

• Depreciation expense — increase due to componentization adjustments on assets at the McClean Lake and White Mesa mills;

• Reclamation asset amortization and liability adjustments — Upon transition, the Company impaired the value of its reclamation assets to nil. As a result, any resulting amortization has been reversed. The change in the net asset value of the reclamation assets has also impacted the amount of the liability adjustment recorded under Canadian GAAP at December 31, 2010;

• Gain / loss on asset disposals — the Company has reversed plant and equipment impairment charges recorded in fiscal 2010 and recalculated the gain / loss on plant and equipment disposals as a result of having adjusted carrying values for its plant and equipment assets;

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In preparing its IFRS balance sheets for fiscal 2010, the Company has adjusted amounts previously reported in financial statements prepared in accordance with Canadian GAAP. An explanation of how the transition from Canadian GAAP to IFRS has affected the Company’s balance sheets is set out in the following tables and notes that accompany the tables:

a) Reconciliation of Consolidated Balance Sheets from Canadian GAAP to IFRS:

As at January 1, 2010

		Canadian						IFRS
(in thousands)	Table	GAAP			ADJUST			GAAP
ASSETS
Current
Cash and cash equivalents		$	19,804		$	—		$	19,804
Trade and other receivables			13,773			—			13,773
Inventories	A		52,216			—			52,216
Prepaid expenses and other	B		1,607			(3	)		1,604
			87,400			(3	)		87,397
Non-Current
Inventories — ore in stockpiles			1,530			—			1,530
Investments			10,605			—			10,605
Prepaid expenses and other			287			—			287
Restricted cash and investments			21,656			—			21,656
Property, plant and equipment	C		691,039			(369,644	)		321,395
Intangibles			4,436			—			4,436
Goodwill	D		51,028			(51,028	)		—
Total assets		$	867,981			(420,675	)	$	447,306
LIABILITIES
Current
Accounts payable and accrued liabilities	E	$	9,508		$	218		$	9,726
Current portion of long-term liabilities:
Post-employment benefits			380			—			380
Reclamation obligations			752			—			752
Debt obligations			869			—			869
Other long-term liabilities			313			—			313
			11,822			218			12,040
Non-Current
Deferred revenue			3,187			—			3,187
Post-employment benefits			3,426			—			3,426
Reclamation obligations			17,154			—			17,154
Debt obligations			195			—			195
Other long-term liabilities			1,051			—			1,051
Deferred income tax liability	F		102,918			(88,856	)		14,062
Total liabilities			139,753			(88,638	)		51,115
EQUITY
Share capital	G		849,488			848			850,336
Share purchase warrants			5,830			—			5,830
Contributed surplus			39,922			—			39,922
Deficit
Opening	H		(242,494	)		(260,987	)		(503,481	)
Accumulated other comprehensive income
Opening	I		75,482			(71,898	)		3,584
Total equity			728,228			(332,037	)		396,191
Total liabilities and equity		$	867,981		$	(420,675	)	$	447,306

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As at March 31, 2010

		Canadian						IFRS
(in thousands)	Table	GAAP			ADJUST			GAAP
ASSETS
Current
Cash and cash equivalents		$	13,020		$	—		$	13,020
Trade and other receivables			16,301			—			16,301
Inventories	A		57,218			930			58,148
Prepaid expenses and other	B		1,181			(3	)		1,178
			87,720			927			88,647
Non-Current
Inventories — ore in stockpiles			1,716			—			1,716
Investments			13,023			—			13,023
Prepaid expenses and other			248			3			251
Restricted cash and investments			21,412			—			21,412
Property, plant and equipment	C		706,294			(376,313	)		329,981
Intangibles			4,371			—			4,371
Goodwill	D		52,792			(52,792	)		—
Total assets		$	887,576			(428,175	)	$	459,401
LIABILITIES
Current
Accounts payable and accrued liabilities	E	$	14,498		$	—		$	14,498
Current portion of long-term liabilities:
Post-employment benefits			394			—			394
Reclamation obligations			778			—			778
Debt obligations			581			—			581
Other long-term liabilities			323			—			323
			16,574			—			16,574
Non-Current
Deferred revenue			3,187			—			3,187
Post-employment benefits			3,573			—			3,573
Reclamation obligations			17,306			—			17,306
Debt obligations			186			—			186
Other long-term liabilities			1,084			—			1,084
Deferred income tax liability	F		104,906			(89,419	)		15,487
Total liabilities			146,816			(89,419	)		57,397
EQUITY
Share capital	G		849,135			1,197			850,332
Share purchase warrants			5,830			—			5,830
Contributed surplus			40,317			—			40,317
Deficit
Opening	H		(242,494	)		(260,987	)		(503,481	)
Net income (loss)	J		(9,089	)		1,910			(7,179	)
Accumulated other comprehensive income
Opening	I		75,482			(71,898	)		3,584
Comprehensive income (loss)	J		21,579			(8,978	)		12,601
Total equity			740,760			(338,756	)		402,004
Total liabilities and equity		$	887,576		$	(428,175	)	$	459,401

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As at December 31, 2010

		Canadian						IFRS
(in thousands)	Table	GAAP			ADJUST			GAAP
ASSETS
Current
Cash and cash equivalents		$	97,554		$	—		$	97,554
Trade and other receivables			20,236			—			20,236
Inventories	A		32,387			(3,254	)		29,133
Prepaid expenses and other	B		1,917			(7	)		1,910
			152,094			(3,261	)		148,833
Non-Current
Inventories — ore in stockpiles			2,204			—			2,204
Investments			2,955			—			2,955
Prepaid expenses and other			104			3			107
Restricted cash and investments			22,946			—			22,946
Property, plant and equipment	C		714,458			(372,294	)		342,164
Intangibles			3,794			—			3,794
Goodwill	D		53,919			(53,919	)		—
Total assets		$	952,474			(429,471	)	$	523,003
LIABILITIES
Current
Accounts payable and accrued liabilities	E	$	13,753		$	—		$	13,753
Current portion of long-term liabilities:
Post-employment benefits			402			—			402
Reclamation obligations			641			—			641
Debt obligations			200			—			200
Other long-term liabilities			—			—			—
			14,996			—			14,996
Non-Current
Deferred revenue			3,339			—			3,339
Post-employment benefits			3,617			—			3,617
Reclamation obligations			16,924			—			16,924
Debt obligations			205			—			205
Other long-term liabilities			1,105			—			1,105
Deferred income tax liability	F		106,183			(92,775	)		13,408
Total liabilities			146,369			(92,775	)		53,594
EQUITY
Share capital	G		910,484			1,197			911,681
Share purchase warrants			5,830			—			5,830
Contributed surplus			41,658			—			41,658
Deficit
Opening	H		(242,494	)		(260,987	)		(503,481	)
Net income (loss)	J		(14,235	)		8,889			(5,346	)
Accumulated other comprehensive income
Opening	I		75,482			(71,898	)		3,584
Comprehensive income (loss)	J		29,380			(13,897	)		15,483
Total equity			806,105			(336,696	)		469,409
Total liabilities and equity		$	952,474		$	(429,471	)	$	523,003

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b) Reconciliation Tables of Consolidated Balance Sheet Line Items from Canadian GAAP (“CGAAP”) to IFRS:

Table A-Inventories-current

		January 1,		March 31,			December 31,
(in thousands)	Notes	2010		2010			2010
Balance-CGAAP		$	52,216	$	57,218		$	32,387
Change in absorption	4c		—		(3,748	)		(14,948	)
Change in cost of goods sold	4c		—		60			11,690
Change in NRV provisions	4c		—		4,618			4
Balance-IFRS			52,216		58,148			29,133

Table B-Prepaid expenses and other

		January 1,			March 31,			December 31,
(in thousands)	Notes	2010			2010			2010
Balance-CGAAP		$	1,607		$	1,181		$	1,917
Translation methodology	4e		(3	)		(3	)		(7	)
Balance-IFRS			1,604			1,178			1,910

Table C-Property, plant and equipment

		January 1,			March 31,			December 31,
(in thousands)	Notes	2010			2010			2010
Balance-CGAAP		$	691,039		$	706,294		$	714,458
Transition impairment	4c		(325,848	)		(335,021	)		(340,875	)
Change in translation methodology	4e		(43,795	)		(45,227	)		(47,084	)
Change in depreciation, amortization	4c,h		—			3,762			14,718
Change in exploration absorption	4d		—			(12	)		(96	)
Change in disposals and other	4h		(1	)		185			1,043
Balance-IFRS			321,395			329,981			342,164

Table D-Goodwill

		January 1,			March 31,			December 31,
(in thousands)	Notes	2010			2010			2010
Balance-CGAAP		$	51,028		$	52,792		$	53,919
Transition impairment	4c		(51,028	)		(52,792	)		(53,919	)
Balance-IFRS			—			—			—

Table E-Accounts payable and accrued liabilities

		January 1,		March 31,		December 31,
(in thousands)	Notes	2010		2010		2010
Balance-CGAAP		$	9,508	$	14,498	$	13,753
Flow-through share premium liability	4g		218		—		—
Balance-IFRS			9,726		14,498		13,753

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Table F-Deferred tax liability

		January 1,			March 31,			December 31,
(in thousands)	Notes	2010			2010			2010
Balance-CGAAP		$	102,918		$	104,906		$	106,183
Transition impairment-tax effect	4c		(70,701	)		(73,146	)		(74,706	)
Acquisition tax liability un-wind	4f		(20,218	)		(19,874	)		(19,433	)
Other adjustments			2,063			3,601			1,364
Balance-IFRS			14,062			15,487			13,408

Table G-Share capital

		January 1,		March 31,		December 31,
(in thousands)	Notes	2010		2010		2010
Balance-CGAAP		$	849,488	$	849,135	$	910,484
Flow-through shares — life-to-date adjustment to US GAAP on transition	4g		848		848		848
Reverse flow-through share renunciation recorded under Canadian GAAP	4g		—		349		349
Balance-IFRS			850,336		850,332		911,681

Table H-Deficit-opening

		January 1,			March 31,			December 31,
(in thousands)	Notes	2010			2010			2010
Balance-CGAAP		$	(242,494	)	$	(242,494	)	$	(242,494	)
Transition impairments
Property, plant and equipment	4c		(325,848	)		(325,848	)		(325,848	)
Goodwill	4c		(51,028	)		(51,028	)		(51,028	)
Deferred tax	4c		70,701			70,701			70,701
Translation methodology
Prepaids and other current assets	4e		(3	)		(3	)		(3	)
Property, plant and equipment	4e		(43,795	)		(43,795	)		(43,795	)
Acquisition tax liability un-wind	4f		20,218			20,218			20,218
Flow-through share adjustments	4g		(1,067	)		(1,067	)		(1,067	)
Other			(2,063	)		(2,063	)		(2,063	)
Reset of cumulative translation account	4b		71,898			71,898			71,898
Balance-IFRS			(503,481	)		(503,481	)		(503,481	)

Table I-Accumulated other comprehensive income (loss)-opening

		January 1,			March 31,			December 31,
(in thousands)	Notes	2010			2010			2010
Balance-CGAAP		$	75,482		$	75,482		$	75,482
Reclass CTA to retained earnings on transition	4b		(71,898	)		(71,898	)		(71,898	)
Balance-IFRS			3,584			3,584			3,584

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Table J-Net income (loss) and Comprehensive income (loss)

		Three months			Twelve months
		March 31,			December 31,
(in thousands)	Notes	2010			2010
Net income (loss)-CGAAP		$	(9,089	)	$	(14,235	)
Operations
Depreciation expense	4c,h		(441	)		(1,820	)
Mineral property amortization	4c		4,053			16,082
Concentrate absorption change	4c		(3,656	)		(14,658	)
COGS change	4c		53			11,422
NRV provision changes	4c		4,512			(18	)
Reclamation asset amortization	4h		60			174
Reclamation liability adjustment	4h		—			330
Exploration
Exploration absorption	4d		(12	)		(92	)
Other expense (income)
Gain/loss on asset disposals	4h		180			692
Foreign exchange — translational	4e		(1,270	)		(3,923	)
Taxes
Future taxes			(1,569	)		700
Net income (loss)-IFRS			(7,179	)		(5,346	)
Comprehensive income (loss)-CGAAP			12,490			15,145
Change in net income (loss)			1,910			8,889
Change in foreign currency translation			(8,978	)		(13,897	)
Comprehensive income (loss)-IFRS			5,422			10,137

Table K-Consolidated Statement of Cash Flow adjustments

		Three months			Twelve months
		March 31,			December 31,
(in thousands)	Notes	2010			2010
Net cash provided by (used in) operating activities:
Under Canadian GAAP		$	357		$	35,551
Change in exploration absorption	4d		(11	)		(93	)
Under IFRS		$	346		$	35,458
Net cash provided by (used in) investing activities:
Under Canadian GAAP		$	(6,854	)	$	(19,472	)
Change in exploration absorption	4d		11			93
Under IFRS		$	(6,843	)	$	(19,379	)

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5. TRADE AND OTHER RECEIVABLES

The trade and other receivables balance consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Trade receivables — mineral concentrate sales	$	2,948	$	5,631	$	9,422
Trade receivables — other		4,262		6,903		2,114
Trade and other receivables in joint ventures		515		375		928
Sales tax receivables		467		228		1,127
Sundry receivables		135		6,242		182
Notes and lease receivables		98		857		—
	$	8,425	$	20,236	$	13,773

6. INVENTORIES

The inventories balance consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Uranium concentrates and work-in-progress (1)	$	16,328	$	6,707	$	19,921
Vanadium concentrates and work-in-progress (2)		1,680		4,198		442
Inventory of ore in stockpiles		11,447		14,772		28,366
Mine and mill supplies		5,877		5,660		5,017
	$	35,332	$	31,337	$	53,746
Inventories — by duration:
Current		33,071	$	29,133	$	52,216
Long-term — ore in stockpiles		2,261		2,204		1,530
	$	35,332	$	31,337	$	53,746

(1)	The uranium concentrates and work-in-progress inventory is presented net of a provision of $nil as at March 31, 2011 and $nil as at December 31, 2010.
(2)	The vanadium concentrates and work-in-progress inventory is presented net of a provision of $885,000 as at March 31, 2011 and $17,000 as at December 31, 2010.

Operating expenses include write-downs of $868,000 and recoveries of $7,264,000 relating to the net realizable value of the Company’s uranium and vanadium inventories for the three months ended March 2011 and March 2010, respectively.

Long-term ore in stockpile inventory represents an estimate of the amount of ore on the stockpile in excess of the next twelve months of planned mill production.

7. INVESTMENTS

The investments balance consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Investments:
Available for sale securities at fair value	$	1,481	$	2,955	$	10,605
	$	1,481	$	2,955	$	10,605

At March 31, 2011, investments consist of equity instruments of three publicly-traded companies at a fair value of $1,481,000 (December 31, 2010: $2,955,000).

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8. RESTRICTED CASH AND INVESTMENTS

The Company has certain restricted cash and investments deposited to collateralize its reclamation obligations. The restricted cash and investments balance consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Cash	$	92	$	504	$	23
Cash equivalents		7,766		6,459		3,066
Investments		18,017		15,893		18,567
	$	25,875	$	22,946	$	21,656
Restricted cash and investments — by item:
U.S. mill and mine reclamation	$	23,249	$	20,315	$	19,564
Elliot Lake reclamation trust fund		2,626		2,631		2,092
	$	25,875	$	22,946	$	21,656

U.S. Mill and Mine Reclamation

The Company has cash, cash equivalents and fixed income securities as collateral for various bonds posted in favour of the State of Utah, the applicable state regulatory agencies in Colorado and Arizona and the U.S. Bureau of Land Management for estimated reclamation costs associated with the White Mesa mill and U.S. mining properties. During the three months ended March 2011, the Company has deposited $2,932,000 of additional monies into its collateral account.

Elliot Lake Reclamation Trust Fund

The Company has the obligation to maintain its decommissioned Elliot Lake uranium mine pursuant to a Reclamation Funding Agreement effective September 30, 1994 (“Agreement”) with the Governments of Canada and Ontario. The Agreement requires the Company to deposit 90% of cash flow, after deducting permitted expenses, into the Reclamation Trust Fund. A subsequent amendment to the Agreement provides for the suspension of this obligation to deposit 90% of cash flow into the Reclamation Trust Fund, provided funds are maintained in the Reclamation Trust Fund equal to estimated reclamation spending for the succeeding six calendar years, less interest expected to accrue on the funds during the period. Withdrawals from this Reclamation Trust Fund can only be made with the approval of the Governments of Canada and Ontario to fund Elliot Lake monitoring and site restoration costs. During the three months ended March 2011, the Company has deposited an additional $451,000 (CAD$445,000) into the Elliot Lake Reclamation Trust Fund and has withdrawn $526,000 (CAD$519,000).

9. PROPERTY, PLANT AND EQUIPMENT

The property, plant and equipment balance consists of:

	At March 31			At December 31			At January 1
(in thousands)	2011			2010			2010
Plant and equipment:
Cost	$	175,140		$	171,782		$	161,794
Construction-in-progress		23,498			21,375			11,860
Accumulated depreciation		(46,528	)		(43,314	)		(31,092	)
Net book value	$	152,110		$	149,843		$	142,562
Mineral properties:
Cost	$	202,531		$	193,727		$	178,833
Accumulated amortization		(2,176	)		(1,406	)		—
Net book value	$	200,355		$	192,321		$	178,833
Net book value	$	352,465		$	342,164		$	321,395

- 21 -

The property, plant and equipment continuity summary is as follows:

				Accumulated
				Amortization /			Net
	Cost			Depreciation			Book Value
Balance — January 1, 2010	$	352,487		$	(31,092	)	$	321,395
Additions		30,815			—			30,815
Amortization		—			(1,397	)		(1,397	)
Depreciation		—			(13,150	)		(13,150	)
Disposals		(2,932	)		1,466			(1,466	)
Transfers		(3	)		3			—
Reclamation Adjustment		778			—			778
Foreign exchange		5,739			(550	)		5,189
Balance — December 31, 2010	$	386,884		$	(44,720	)	$	342,164
Additions		7,129			—			7,129
Amortization		—			(782	)		(782	)
Depreciation		—			(3,125	)		(3,125	)
Disposals		(272	)		228			(44	)
Foreign exchange		7,428			(305	)		7,123
Balance — March 31, 2011	$	401,169		$	(48,704	)	$	352,465

Plant and Equipment — Mining

The Company has a 100% interest in the White Mesa mill located in Utah and mines located in Arizona, Colorado and Utah. Mined ore from these mines is processed at the White Mesa mill.

The Company has a 22.5% interest in the McClean Lake mill and mines located in the Athabasca Basin of Saskatchewan, Canada. The mill is currently on stand-by and is scheduled to remain so throughout 2011 and into 2012. A toll milling agreement has been signed with the participants in the Cigar Lake joint venture that provides for the processing of a substantial portion of the future output of the Cigar Lake mine at the McClean Lake mill, for which the owners of the McClean Lake mill will receive a toll milling fee and other benefits. In determining the amortization rate for the McClean Lake mill, the amount to be amortized has been adjusted to reflect Denison’s expected share of future toll milling mill feed.

Plant and Equipment — Services and Other

The environmental services division of the Company provides mine decommissioning and decommissioned site monitoring services for third parties.

Mineral Properties

The Company has various interests in development and exploration projects located in Canada, the U.S., Mongolia and Zambia which are held directly or through option or joint venture agreements. Amounts spent on development projects are capitalized as mineral property assets. Exploration projects are expensed.

The most significant of the Company’s mineral property interests are as follows:

Canada

The Company has a 22.5% interest in the McClean Lake project and a 25.17% interest in the Midwest project located in the Athabasca Basin of Saskatchewan, Canada. These projects are in the development stage.

Other significant mineral property interests that the Company has in Canada but which are not yet in the development stage include:

a) Wheeler River — the Company has a 60% interest in the project (located in the Athabasca Basin);

b) Moore Lake — the Company has a 75% interest in the project (located in the Athabasca Basin) subject to a 2.5% net smelter return royalty;

c) Wolly — the Company has a 22.5% interest in the project (located in the Athabasca Basin); and

- 22 -

d) Park Creek — In the first quarter of 2006, the Company entered into an option agreement to earn up to a 75% interest in the Park Creek project. The Company is required to incur exploration expenditures of CAD$2,800,000 over three years to earn an initial 49% interest and a further CAD$3,000,000 over six years to earn an additional 26% interest. As at March 31, 2011, the Company has incurred a total of CAD$4,218,000 towards the option and has earned a 49% ownership interest in the project under the phase-in ownership provisions of the agreement.

United States

The Company has 100% interests in various mines in the Colorado Plateau, Arizona Strip and Henry Mountains mining districts located in Colorado, Arizona and Utah which are either in operations, development or on standby.

Mongolia

The Company has a 70% interest in and is the managing partner of the Gurvan Saihan Joint Venture in Mongolia. The results of the Gurvan Saihan Joint Venture have been included in these financial statements on a consolidated basis since the Company exercises control.

Zambia

The Company has a 100% interest in the Mutanga project located in Zambia.

10. INTANGIBLES

Intangibles consist of:

	March 31			December 31			January 1
(in thousands)	2011			2010			2010
Cost	$	7,632		$	7,439		$	7,041
Accumulated amortization		(3,968	)		(3,645	)		(2,605	)
Net book value	$	3,664		$	3,794		$	4,436
Net book value-by item:
UPC management services agreement		3,664			3,794			4,436
Net book value	$	3,664		$	3,794		$	4,436

The intangibles continuity summary is as follows:

			Accumulated			Net
	Cost		Amortization			Book Value
Balance — January 1, 2010	$	7,041	$	(2,605	)	$	4,436
Amortization		—		(862	)		(862	)
Foreign exchange		398		(178	)		220
Balance — December 31, 2010	$	7,439	$	(3,645	)	$	3,794
Amortization		—		(225	)		(225	)
Foreign exchange		193		(98	)		95
Balance — March 31, 2011	$	7,632	$	(3,968	)	$	3,664

UPC Management Services Agreement

The UPC management services agreement is associated with the acquisition of DMI in 2006. The contract is being amortized over its 8 year estimated useful life.

- 23 -

11. POST-EMPLOYMENT BENEFITS

The Company provides post employment benefits for former Canadian employees who retired on immediate pension prior to 1997. The post employment benefits provided include life insurance and medical and dental benefits as set out in the applicable group policies but does not include pensions. No post employment benefits are provided to employees outside the employee group referenced above. The post employment benefit plan is not funded.

The effective date of the most recent actuarial valuation of the accrued benefit obligation is December 1, 2008. The amount accrued is based on estimates provided by the plan administrator which are based on past experience, limits on coverage as set out in the applicable group policies and assumptions about future cost trends. The significant assumptions used in the valuation are listed below.

Discount rate	7.50	%
Initial medical cost growth rate per annum	11.00	%
Medical cost growth rate per annum decline to	5.00	%
Year in which medical cost growth rate reaches its final level	2014
Dental cost growth rate per annum	4.00	%

Post-employment benefits consist of:

	March 31		December 31		January 1
(in thousands)	2011		2010		2010
Accrued benefit obligation	$	3,901	$	3,820	$	3,594
Unamortized experience gain		199		199		212
	$	4,100	$	4,019	$	3,806
Post-employment benefits liability-by duration:
Current	$	412	$	402	$	380
Non-current		3,688		3,617		3,426
	$	4,100	$	4,019	$	3,806

The post-employment benefits continuity summary is as follows:

	Three Months			Twelve Months
	Ended			Ended
(in thousands)	March 31, 2011			December 31, 2010
Opening	$	4,019		$	3,806
Benefits paid		(89	)		(266	)
Interest cost		72			286
Amortization of experience gain		(6	)		(24	)
Foreign exchange		104			217
	$	4,100		$	4,019

The unamortized experience gain is being amortized on a straight-line basis over the average life expectancy of the retiree group of 10.7 years as per the December 1, 2008 actuarial valuation.

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12. RECLAMATION OBLIGATIONS

The reclamation obligations balance consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Reclamation liability — by location:
U.S Mill and Mines	$	6,493	$	6,383	$	8,609
Elliot Lake		9,586		9,451		8,155
McClean and Midwest Joint Ventures		1,805		1,731		1,142
	$	17,884	$	17,565	$	17,906
Reclamation and remediation liability — by duration:
Current		658		641		752
Non-current		17,226		16,924		17,154
	$	17,884	$	17,565	$	17,906

The reclamation obligations continuity summary is as follows:

	Three Months			Twelve Months
	Ended			Ended
(in thousands)	March 31, 2011			December 31, 2010
Opening	$	17,565		$	17,906
Accretion		293			1,309
Expenditures incurred		(262	)		(1,249	)
Liability adjustments-income statement		—
Liability adjustments-balance sheet		—			778
Foreign exchange		288			542
	$	17,884		$	17,565

Site Restoration: U.S. Mill and Mines

The decommissioning and reclamation of the White Mesa mill and U.S. mines are subject to legal and regulatory requirements. Estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The above accrual represents the Company’s best estimate of the present value of future reclamation costs, discounted at rates ranging from 6.19% to 7.17%. As at December 31, 2010, the undiscounted amount of estimated future reclamation costs is $34,972,000. Reclamation costs are expected to be incurred between 2012 and 2040.

Site Restoration: Elliot Lake

The Elliot Lake uranium mine was closed in 1992 and capital works to decommission this site were completed in 1997. The remaining provision is for the estimated cost of monitoring the Tailings Management Areas at the Company and Stanrock sites and for treatment of water discharged from these areas. The Company conducts its activities at both sites pursuant to decommissioning licenses issued by the Canadian Nuclear Safety Commission. The above accrual represents the Company’s best estimate of the present value of the total future reclamation cost based on assumptions as to levels of treatment, which will be required in the future, discounted at 6.48%. As at December 31, 2010, the undiscounted amount of estimated future reclamation costs is $51,080,000 (CAD$50,806,000).

Spending on restoration activities at the Elliot Lake site is funded from monies in the Elliot Lake Reclamation Trust fund (see note 8).

Site Restoration: McClean Lake Joint Venture and Midwest Joint Venture

The McClean Lake and Midwest operations are subject to environmental regulations as set out by the Saskatchewan government and the Canadian Nuclear Safety Commission. Cost estimates of the estimated future decommissioning and reclamation activities are prepared periodically and filed with the applicable regulatory authorities for approval. The above accrual represents the Company’s best estimate of the present value of the future reclamation cost contemplated in these cost estimates discounted at 6.48%. As at December 31, 2010, the undiscounted amount of estimated future reclamation costs is $19,705,000 (CAD$19,599,000). Reclamation costs are expected to be incurred between 2025 and 2052.

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Under the Mineral Industry Environmental Protection Regulations (1996), the Company is required to provide its pro-rata share of financial assurances to the Province. As at March 31, 2011, the Company has provided irrevocable standby letters of credit, from a chartered bank, in favour of Saskatchewan Environment, totalling CAD$9,698,000.

13. DEBT OBLIGATIONS

Debt obligations consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Notes payable and other financing	$	297	$	405	$	1,064
	$	297	$	405	$	1,064
Debt obligations, by duration:
Current		113		200		869
Non-current		184		205		195
	$	297	$	405	$	1,064

Revolving Line of Credit

The Company has in place a $60,000,000 revolving term credit facility (the “facility”) with the Bank of Nova Scotia. The maturity date of the facility is June 30, 2011. Discussions are currently underway for a replacement facility.

The facility contains three financial covenants: one based on maintaining a certain level of tangible net worth, a second requiring a minimum current ratio to be maintained and the other requiring the Company to reduce borrowings under the facility to $35,000,000 for a period of time each quarter before drawing further amounts.

The borrower under the facility is DMI and DMC has provided an unlimited full recourse guarantee and a pledge of all of the shares of DMI. DMI has provided a first-priority security interest in all present and future personal property and an assignment of its rights and interests under all material agreements relative to the McClean Lake and Midwest projects. In addition, each of DMC’s material U.S subsidiaries has provided an unlimited full recourse guarantee secured by a pledge of all of its shares and a first-priority security interest in all of its present and future personal property.

Interest payable under the facility is bankers acceptance or LIBOR rate plus a margin or prime rate plus a margin. The facility is subject to standby fees.

As at March 31, 2011, the Company has no outstanding borrowings under the facility (December 31, 2010 — $Nil). At March 31, 2011, approximately $22,048,000 of the facility is being utilized as collateral for certain letters of credit and is not available to draw upon (December 31, 2010 - $19,816,000). During the three months ending March 31, 2011, the Company has not incurred any interest under the facility.

The Company has deferred $1,289,000 (CAD$1,250,000) of incremental costs associated with the set-up and subsequent amendment of the facility. These costs are being amortized over the three year term of the facility. The unamortized portion of the asset is included in “prepaid expenses and other” on the consolidated balance sheet.

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14. OTHER LONG-TERM LIABILITIES

Other long-term liabilities consists of:

	At March 31		At December 31		At January 1
(in thousands)	2011		2010		2010
Unamortized fair value of toll milling contracts	$	1,031	$	1,005	$	951
Unamortized fair value of sales contracts		—		—		313
Other		100		100		100
	$	1,131	$	1,105	$	1,364
Other long-term liabilities — by duration:
Current		—		—		313
Non-current		1,131		1,105		1,051
	$	1,131	$	1,105	$	1,364

15. SHARE CAPITAL

Denison is authorized to issue an unlimited number of common shares without par value. A continuity summary of the issued and outstanding common shares and the associated dollar amounts is presented below:

	Number of
	Common
(in thousands except share amounts)	Shares		Amount
Balance at January 1, 2010		339,720,415	$	850,336
Issued for cash:
New issue gross proceeds		26,400,000		64,769
New issue gross issue costs		—		(3,678	)
Exercise of stock options		80,250		159
Fair value of stock options exercised		—		95
		26,480,250		61,345
Balance at December 31, 2010		366,200,665	$	911,681
Issued for cash:
New issue gross proceeds		18,300,000		66,024
New issue gross issue costs		—		(3,858	)
Exercise of stock options		160,250		328
Fair value of stock options exercised		—		189
		18,460,250		62,683
Balance at March 31, 2011		384,660,915	$	974,364

New issues

In December 2010, the Company completed a private placement of 25,000,000 special warrants at a price of CAD$2.45 per special warrant for gross proceeds of $60,613,000 (CAD$61,250,000). Each special warrant entitled the holder to receive one common share of the Company within three days after the issuance of a final prospectus receipt by the applicable securities regulatory authorities. The final prospectus receipt was received by the Company on December 20, 2010 and, accordingly, all special warrants were converted into common shares.

In December 2010, the Company completed a private placement of 1,400,000 flow-through special warrants at a price of CAD$3.00 per flow-through special warrant for gross proceeds of $4,156,000 (CAD$4,200,000). Each flow-through special warrant entitled the holder to receive one flow-through common share of the Company within three days after the issuance of a final prospectus receipt by the applicable securities regulatory authorities. The final prospectus receipt was received by the Company on December 20, 2010 and, accordingly, all flow-through special warrants were converted into flow-through common shares.

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In March 2011, the Company completed a financing of 18,300,000 common shares at a price of CAD$3.55 per share for gross proceeds of $66,024,000 (CAD$64,965,000).

Flow-Through Share Issues

The Company finances a portion of its exploration programs through the use of flow-through share issuances. Income tax deductions relating to these expenditures are claimable by the investors and not by the Company.

As at March 31, 2011, the Company estimates that it has spent CAD$1,653,000 of its CAD$4,200,000 December 2010 flow-through share obligation. The Company renounced the income tax benefit of this issue to its subscribers in February 2011.

16. SHARE PURCHASE WARRANTS

A continuity summary of the issued and outstanding share purchase warrants in terms of common shares of the Company and the associated dollar amounts is presented below:

	Number of			Fair Value
	Common Shares			Dollar
(in thousands except share amounts)	Issuable			Amount
Balance at December 31, 2010		6,408,000		$	5,830
Warrants expired — March 2006 Series (1)		(6,408,000	)		(5,830	)
Balance at March 31, 2011		—		$	—

(1) The March 2006 series had an effective exercise price of CDN$10.42 per issuable share (CDN$30.00 per warrant adjusted for the 2.88 exchange ratio associated with the Denison and IUC merger) and expired on March 1, 2011.

17. STOCK OPTIONS

The Company’s stock-based compensation plan (the “Plan”) provides for the granting of stock options up to 10% of the issued and outstanding common shares at the time of grant, subject to a maximum of 20 million common shares. As at March 31, 2011, an aggregate of 13,833,700 options have been granted (less cancellations) since the Plan’s inception in 1997.

Under the Plan, all stock options are granted at the discretion of the Company’s board of directors, including any vesting provisions if applicable. The term of any stock option granted may not exceed ten years and the exercise price may not be lower than the closing price of the Company’s shares on the last trading day immediately preceding the date of grant. In general, the term of stock options granted under the Plan ranges from three to five years and vesting occurs over a three year period.

- 28 -

A continuity summary of the stock options of the Company granted under the Plan is presented below:

				Weighted-
				Average
				Exercise
	Number of			Price per
	Common			Share
	Shares			(CAD$)
Stock options outstanding — beginning of period		6,286,089		$	2.61
Granted		1,889,000			3.19
Exercised (1)		(160,250	)		2.04
Forfeitures		(10,000	)		2.04
Cancellations		(89,825	)		6.71
Stock options outstanding — end of period		7,915,014		$	2.72
Stock options exercisable — end of period		4,134,430		$	2.86

(1) The weighted average share price at the date of exercise was CAD$3.53.

A summary of the Company’s stock options outstanding at March 31, 2011 is presented below:

	Weighted				Weighted-
	Average				Average
	Remaining				Exercise
Range of Exercise	Contractual		Number of		Price per
Prices per Share	Life		Common		Share
(CAD$)	(Years)		Shares		(CAD$)
Stock options outstanding
$1.37 to $2.49		3.21		5,013,376	$	1.99
$2.50 to $4.99		4.89		1,994,199		3.21
$5.00 to $7.49		4.31		827,439		5.40
$7.50 to $8.50		2.13		80,000		7.95
Stock options outstanding — end of period		3.74		7,915,014	$	2.72

Options outstanding at March 31, 2011 expire between April 2011 and October 2016.

The following table outlines the range of assumptions used in the Black-Scholes option pricing model to determine the fair value of options granted for the period:

	Three Months
	Ended
	March 31, 2011
Risk-free interest rate		2.26% – 2.34	%
Expected stock price volatility		91.7% – 92.4	%
Expected life	3.7 years
Expected forfeitures		6.4	%
Expected dividend yield		—
Fair value per share under options granted	CAD$1.47 – CAD$2.04

Stock-based compensation is included as a component of general and administrative expense in the statement of income and is $607,000 for the three months ended March 31, 2011 and $395,000 for the three months ended March 31, 2010.

The fair values of stock options with vesting provisions are amortized on a straight-line graded method basis as stock-based compensation expense over the applicable vesting periods. At March 31, 2011, the Company had an additional $4,274,000 in stock-based compensation expense to be recognized periodically to March 2013.

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18. SUPPLEMENTAL FINANCIAL INFORMATION

The elements of operating expenses in the statement of operations are as follows:

	Three Months Ended
	March 31			March 31
(in thousands)	2011			2010
Cost of goods and services sold:
COGS — mineral concentrates	$	20,253		$	18,375
Operating Overheads:
Mining, development expense:
-Depreciation		1,363			1,416
-All other		8,331			7,562
Milling, conversion expense:
-Depreciation		1,576			1,729
-All other		25,666			10,719
Mill feed cost:
-Stockpile depletion		8,623			2,815
-Mineral property amortization		764			142
Less absorption:
-Stockpiles, mineral properties		(9,539	)		(8,782	)
-Concentrates		(36,485	)		(13,921	)
Cost of services		3,635			3,631
Inventory—non-cash adjustments		1,374			(7,219	)
Cost of goods and services sold		25,561			16,467
Reclamation—accretion, adjustments		311			326
Post-employment—accretion, adjustments		66			80
Selling expenses		549			359
Sales royalties and capital taxes		—			234
Operating expenses	$	26,487		$	17,466

The elements of other expense in the statement of operations are as follows:

	Three Months Ended
	March 31			March 31
(in thousands)	2011			2010
Losses (gains) on:
Foreign exchange	$	2,567		$	6,263
Disposal of property, plant and equipment		7			—
Investment disposals		—			(122	)
Investment other than temporary losses		—			177
Restricted cash and investments—fair value change		127			(13	)
Other		(710	)		(189	)
Other expense	$	1,991		$	6,116

The elements of finance income (expense) in the statement of operations are as follows:

	Three Months Ended
	March 31			March 31
(in thousands)	2011			2010
Interest income	$	357		$	194
Interest expense		(81	)		(6	)
Finance income (expense)	$	276		$	188

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A summary of employee benefits recognized in the statement of operations is as follows:

	Three Months Ended
	March 31		March 31
(in thousands)	2011		2010
Salaries and short-term employee benefits	$	7,233	$	6,879
Share-based compensation		607		395
Employee benefits	$	7,840	$	7,274

19. SEGMENTED INFORMATION

Business Segments

The Company operates in two primary segments — the mining segment and the services and other segment. The mining segment, which has been further subdivided by major geographic regions, includes activities related to exploration, evaluation and development, mining, milling and the sale of mineral concentrates. The services and other segment includes the results of the Company’s environmental services business, management fees and commission income earned from UPC and general corporate expenses not allocated to the other segments.

For the three months ended March 31, 2011, business segment results were as follows:

	Canada			U.S.A			Africa			Asia			Services
(in thousands)	Mining			Mining			Mining			Mining			and Other			Total
Statement of Operations:
Revenues		—			22,547			—			—			4,221			26,768
Expenses:
Operating expenses		532			22,321			—			—			3,634			26,487
Mineral property exploration		2,730			36			114			305			—			3,185
General and administrative		—			1,169			246			195			2,768			4,378
		3,262			23,526			360			500			6,402			34,050
Segment income (loss)		(3,262	)		(979	)		(360	)		(500	)		(2,181	)		(7,282	)
Revenues — supplemental:
Uranium concentrates		—			16,870			—			—			—			16,870
Vanadium concentrates		—			5,579			—			—			—			5,579
Environmental services		—			—			—			—			3,484			3,484
Management fees and commissions		—			—			—			—			737			737
Alternate feed processing and other		—			98			—			—			—			98
		—			22,547			—			—			4,221			26,768
Capital additions:
Property, plant and equipment		147			5,769			344			72			797			7,129
Long-lived assets:
Plant and equipment
Cost		93,975			98,348			924			552			4,839			198,638
Accumulated depreciation		(9,055	)		(34,518	)		(528	)		(417	)		(2,010	)		(46,528	)
Mineral properties		75,139			32,683			83,574			8,959			—			200,355
Intangibles		—			—			—			—			3,664			3,664
		160,059			96,513			83,970			9,094			6,493			356,129

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For the three months ended March 31, 2010, business segment results were as follows:

	Canada			U.S.A			Africa			Asia			Services
(in thousands)	Mining			Mining			Mining			Mining			and Other			Total
Statement of Operations:
Revenues		3,186			13,803			—			—			4,986			21,975
Expenses:
Operating expenses		1,110			12,713			—			—			3,643			17,466
Mineral property exploration		1,416			3			—			278			—			1,697
General and administrative		—			897			249			211			2,293			3,650
		2,526			13,613			249			489			5,936			22,813
Segment income (loss)		660			190			(249	)		(489	)		(950	)		(838	)
Revenues — supplemental:
Uranium concentrates		3,186			11,823			—			—			—			15,009
Vanadium concentrates		—			1,917			—			—			—			1,917
Environmental services		—			—			—			—			3,684			3,684
Management fees and commissions		—			—			—			—			1,302			1,302
Alternate feed processing and other		—			63			—			—			—			63
		3,186			13,803			—			—			4,986			21,975
Capital additions:
Property, plant and equipment		390			7,432			322			153			13			8,310
Long-lived assets:
Plant and equipment
Cost		91,867			84,804			763			523			2,929			180,886
Accumulated depreciation		(9,418	)		(23,061	)		(344	)		(313	)		(1,636	)		(34,772	)
Mineral properties		71,427			22,746			81,499			8,195			—			183,867
Intangibles		—			—			—			—			4,371			4,371
		153,876			84,489			81,918			8,405			5,664			334,352

Revenue Concentration

The Company’s business is such that, at any given time, it sells its uranium and vanadium concentrates to and enters into process milling arrangements and other services with a relatively small number of customers. In the three months ended March 2011, three customers from the mining segment accounted for approximately 74% of total revenues. For the comparative three month period ended March 2010, two customers from the mining segment and one customer from the services and other segment accounted for approximately 80% of total revenues.

20. RELATED PARTY TRANSACTIONS

Uranium Participation Corporation

The following transactions were incurred with UPC for the periods noted:

	Three Months Ended
	March 31		March 31
(in thousands)	2011		2010
Revenue:
Management fees	$	551	$	340
Commission and transaction fees		—		962
	$	551	$	1,302

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At March 31, 2011, accounts receivable includes $192,000 due from UPC with respect to the fees and transactions indicated above.

On January 3, 2011, the Company borrowed 150,000 pounds of U₃O₈ from UPC pursuant to a uranium concentrate loan agreement between the parties. As collateral for the loan, the Company issued an irrevocable standby-letter of credit in favour of UPC in the amount of $12,045,000. On March 30, 2011, the Company repaid 150,000 pounds of U₃O₈ to UPC. Loan fees incurred by the Company under the agreement were $91,000. At March 31, 2011, an amount of $91,000 is due to UPC.

Korea Electric Power Corporation (“KEPCO”)

In June 2009, Denison completed definitive agreements with KEPCO. The agreements included a long-term offtake agreement which provides for the delivery to KEPCO of 20% of Denison’s annual U₃O₈ production (±10%) but not less than 350,000 pounds (±10%) per year from 2010 to 2015 inclusive. KEPCO also purchased 58,000,000 common shares of Denison representing approximately 17% of the issued and outstanding capital as at June 2009. Pursuant to a strategic relationship agreement, KEPCO is entitled to subscribe for additional common shares in Denison’s future share offerings and require Denison to nominate two persons designated by KEPCO to Denison’s board of directors if KEPCO holds at least a 15% share interest in Denison (or one director if KEPCO’s share interest is between 5% and 15%). Currently, KEPCO’s interest in Denison has dropped to approximately 15.08%. Under the strategic relationship agreement, two representatives from KEPCO have been appointed to Denison’s board of directors as of the date hereof.

Other

During the three months ended March 2011, the Company has incurred management and administrative service fees and other expenses of $31,000 (three months ended March 2010: $21,000) with a company owned by the Chairman of the Company which provides corporate development, office premises, secretarial and other services. At March 31, 2011, an amount of $nil was due to this company.

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel includes the Company’s executive officers, vice-presidents and members of its Board of Directors.

Compensation awarded to key management personnel were as follows:

	Three Months Ended
	March 31		March 31
(in thousands)	2011		2010
Salaries and short-term employee benefits	$	616	$	667
Share-based compensation		302		120
Termination benefits		—		155
Key management personnel compensation	$	918	$	942

21. INCOME TAXES

For the three months ended March 31, 2011, the Company has recognized deferred tax recoveries of $1,930,000. The deferred tax recovery includes the recognition of previously unrecognized Canadian tax assets of $1,461,000 associated with the taxation of the expired warrants during the quarter.

22. COMMITMENTS AND CONTINGENCIES

General Legal Matters

The Company is involved, from time to time, in various other legal actions and claims in the ordinary course of business. In the opinion of management, the aggregate amount of any potential liability is not expected to have a material adverse effect on the Company’s financial position or results.

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Third Party Indemnities

The Company has agreed to indemnify Calfrac Well Services against certain specified future liabilities it may incur related to the assets or liabilities assumed by Calfrac on March 8, 2004.

23. SUBSEQUENT EVENTS

In February 2011, the Company entered into a Bid Implementation Agreement with White Canyon Uranium Limited (“White Canyon”). Under the agreement, the Company has agreed to make a takeover offer to acquire 100% of the issued and outstanding shares of White Canyon (ASX: WCU, TSX-V: WU) at a price of AUD$0.24 per share for total consideration of approximately AUD$57,000,000. Denison’s offer is subject to a number of conditions including the requirement that Denison acquire a relevant interest in at least 90% of White Canyon’s share capital during or by the end of the offer period. The bidder’s statement to White Canyon’s shareholders has been issued and the offer remains open.

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