Exhibit 99.1
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Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
@DenisonMinesCo
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PRESS
RELEASE
DENISON
TO INCREASE ITS INTEREST IN
THE WHEELER RIVER URANIUM
PROJECT
Toronto, ON –
September 4, 2018 Denison
Mines Corp. (“Denison” or the “Company”)
(TSX: DML) (NYSE American: DNN) is pleased to announce that
it has entered into an agreement with
Cameco Corp. (“Cameco”) to increase its ownership in
the Wheeler River Uranium Project (“Wheeler River” or
the “Project”) through the acquisition of
Cameco’s minority interest in the Project (the
“Transaction”).
Pursuant
to the terms of the Transaction, and subject to certain rights of
first refusal (“ROFR”) in favor of JCU (Canada)
Exploration Company Limited (“JCU”), Denison has agreed
to acquire 100% of Cameco’s interest (expected to be
approximately 24% by the end of 2018) in the Wheeler River Joint
Venture (“Wheeler River JV”), in exchange for the
issuance of 24,615,000 common shares of Denison (the
“Consideration Shares”) at a deemed price of $0.65 per
share, for total consideration valued at approximately $16 million
(the “Purchase Price”). The acquisition of
Cameco’s interest in the Wheeler River JV will increase
Denison’s interest in the Project to 90% (or approximately
86.84% if JCU exercises its ROFR).
David Cates, President and CEO of Denison,
commented “We
are pleased to have reached an agreement with Cameco to acquire
their remaining minority interest in Wheeler River. Denison, Cameco
and JCU have worked together, since 2004, to advance Wheeler River
to the point of being the largest undeveloped uranium project in
the eastern Athabasca Basin. We believe
this transaction represents a unique opportunity to add to our
existing controlling interest in the Project and offer significant
value accretion to Denison shareholders.” Mr. Cates further added, “We
are eager to continue advancing the Project towards a development
decision – with the next step being the planned completion of
a Pre-Feasibility Study before the end of the third
quarter.”
Wheeler River is host to the Phoenix and Gryphon
uranium deposits, which are estimated to contain combined Indicated
Mineral Resources of 132.1 million pounds U3O8
at an average grade of 3.3%
U3O8,
plus combined Inferred Mineral Resources of 3.0 million pounds
U3O8
at an average grade of 1.7%
U3O8.
The Project is situated along the road and power line that runs
between Cameco’s McArthur River mine and Key Lake mill
complex in northern Saskatchewan, and is a joint venture between
Denison (63.3%, increasing to approximately 66% by the end of 2018
under a previously announced earn-in agreement), Cameco (26.7%,
decreasing to approximately 24% by the end of 2018), and JCU
(10%).
Restriction on Denison Shares
The
Consideration Shares will be subject to a six month escrow period,
during which time Cameco has agreed to not, directly or indirectly,
transfer any Consideration Shares without the prior written consent
of Denison. The transfer of the Consideration Shares is also
restricted for a further six month period, where Denison retains
the right, under certain circumstances, to designate a purchaser
upon notice from Cameco of the intent to transfer or sell all or a
portion of the Consideration Shares. The issuance of the
Consideration Shares is subject to the receipt of regulatory
approvals from the TSX and NYSE American stock
exchanges.
Rights of First Refusal
Under
the terms of the Wheeler River JV, JCU’s ROFR allows for JCU
to purchase its proportional interest of Cameco’s share of
the Wheeler River JV alongside of Denison. Based on Denison’s
expected ownership interest of approximately 66%, and JCU’s
ownership interest of 10%, JCU would have the right to purchase
approximately 13.16% of Cameco’s expected 24% interest in the
Wheeler River JV.
The
Transaction is not conditional on JCU waiving its ROFR.
Accordingly, should JCU elect to exercise the ROFR, the Purchase
Price to be paid to Cameco by Denison shall be reduced to
approximately $13.9 million and Denison will own approximately
86.84% (rather than 90%) of the Wheeler River JV on completion of
the Transaction.
Advisors & Counsel
Haywood
Securities Inc. is acting as financial adviser to Denison in
connection with the transaction, and Blake, Cassels & Graydon
LLP is acting as legal counsel to Denison.
About Wheeler River
Wheeler River is the largest
undeveloped uranium project in the infrastructure rich eastern
portion of the Athabasca Basin region, in northern Saskatchewan
– including combined Indicated Mineral Resources of 132.1
million pounds U3O8
at an average grade of 3.3%
U3O8,
plus combined Inferred Mineral Resources of 3.0 million pounds
U3O8
at an average grade of 1.7%
U3O8.
The project is host to the high-grade Gryphon and Phoenix uranium
deposits (discovered by Denison in 2014 and 2008, respectively),
and is a joint venture between Denison (63.3% and operator), Cameco
(26.7%), and JCU (10%).
A Pre-Feasibility Study ("PFS") was
initiated for the Wheeler River project in Q3'2016 and is expected
to be completed during Q3’2018. Prior to initiation of the
PFS, a Preliminary Economic Assessment ("PEA") was completed in
2016, which considered the potential economic merit of
co-developing the high-grade Gryphon and Phoenix deposits as a
single underground mining operation. The PEA returned a base case
pre-tax Internal Rate of Return ("IRR") of 20.4% based on the then
current long term contract price of uranium (US$44.00 per pound
U3O8),
and Denison's 60% share of estimated initial capital expenditures
("CAPEX") of CAD$336M (CAD$560M on 100%
basis).
The PEA is preliminary in nature and includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them to be categorized as
mineral reserves, and there is no certainty that the preliminary
economic assessment will be realized. Mineral resources are not
mineral reserves and do not have demonstrated economic
viability.
In January, 2017, Denison entered into an agreement with its
Wheeler River Joint Venture partners, Cameco and JCU, to fund 75%
of Joint Venture expenses in 2017 and 2018 (ordinarily 60%) in
exchange for an increase in Denison's interest in the project to up
to approximately 66%. Under the terms of the agreement, Cameco will
fund 50% of its ordinary 30% share in 2017 and 2018, and JCU is
expected to continue to fund its 10% interest in the project.
Pursuant to the agreement, as at December 31, 2017, Denison had
increased its interest in the Wheeler River project from 60% to
63.3%.
Further details regarding the Wheeler
River project are provided in the NI 43-101 Technical Report for
the Wheeler River project titled "Technical Report with an Updated
Resource Estimate for the Wheeler River Property, Northern
Saskatchewan, Canada" dated March 15, 2018 with an effective date
of March 9, 2018. A copy of this report is available on
Denison's website and under its profile on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml. Dale Verran, MSc, P.Geo, Pr.Sci.Nat., Denison's
Vice President, Exploration, who is a Qualified Person in
accordance with the requirements of NI 43-101 has reviewed and
approved the technical information contained in this
release.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca Basin region of northern
Saskatchewan, Canada. In addition to its 63.3% owned Wheeler River
project, which ranks as the largest undeveloped high-grade uranium
project in the infrastructure rich eastern portion of the Athabasca
Basin region, Denison's Athabasca Basin exploration portfolio
consists of numerous projects covering approximately 321,000
hectares. Denison's interests in Athabasca Basin also include a
22.5% ownership interest in the McClean Lake joint venture
(“MLJV”), which includes several uranium deposits and
the McClean Lake uranium mill, which is currently processing ore
from the Cigar Lake mine under a toll milling agreement, plus a
25.17% interest in the Midwest and Midwest A deposits, and a 65.45%
interest in the J Zone deposit and Huskie discovery on the
Waterbury Lake property. Each of Midwest, Midwest A, J Zone and
Huskie are located within 20 kilometres of the McClean Lake
mill.
Denison is also engaged in mine decommissioning and environmental
services through its Denison Environmental Services division and is
the manager of Uranium Participation Corp., a publicly traded
company which invests in uranium oxide and uranium
hexafluoride.
For more information, please contact
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David
Cates
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(416) 979-1991
ext. 362
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President and
Chief Executive Officer
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Sophia
Shane
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(604)
689-7842
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Investor
Relations
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Follow Denison on
Twitter
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@DenisonMinesCo
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Cautionary
Statement Regarding Forward-Looking Statements
Certain information contained in this press release constitutes
"forward-looking information", within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and similar
Canadian legislation concerning the business, operations and
financial performance and condition of Denison. Generally, these
forward-looking statements can be identified by the use of
forward-looking terminology such as "plans", "expects", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes", or the negatives and/or variations of such words and
phrases, or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur", "be
achieved" or "has the potential to". In particular, this press
release contains forward-looking information pertaining to the
following: Denison’s percentage interest in its properties
and its plans and agreements with its joint venture partners; the
proposed transaction with Cameco, including its terms, conditions,
and likelihood and anticipated effect of its completion; effect of
completion; the interests of JCU and its rights under the terms of
the Wheeler River JV; estimates of Denison's mineral resources and
the results of its PEA; and plans and objectives with respect to
preparing a PFS to assess on a preliminary basis the potential for
project development. Statements relating to "mineral reserves" or
"mineral resources" are deemed to be forward-looking information,
as they involve the implied assessment, based on certain estimates
and assumptions that the mineral reserves and mineral resources
described can be profitably produced in the future.
Forward looking statements are based on the opinions and estimates
of management as of the date such statements are made, and they are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, performance or achievements of
Denison to be materially different from those expressed or implied
by forward-looking statements. Denison believes that the
expectations reflected in this forward-looking information are
reasonable but no assurance can be given that these expectations
will prove to be accurate and may differ materially from those
anticipated in this forward looking information. For a discussion
in respect of risks and other factors that could influence
forward-looking events, please refer to the factors discussed in
Denison's Annual Information Form dated March 27, 2018 under the
heading "Risk Factors". These factors are not, and should not be
construed as being exhaustive. Accordingly, readers should not
place undue reliance on forward-looking statements.
The forward-looking
information contained in this press release is expressly qualified
by this cautionary statement. Any forward-looking information and
the assumptions made with respect thereto speaks only as of the
date of this press release. Denison does not undertake any
obligation to publicly update or revise any forward-looking
information after the date of this press release to conform such
information to actual results or to changes in Denison's
expectations except as otherwise required by applicable
legislation.
Cautionary Note to United States
Investors Concerning Estimates of Measured, Indicated and Inferred
Mineral Resources: This press release may use the terms
“measured”, “indicated” and
“inferred” mineral resources. United States investors
are advised that while such terms are recognized and required by
Canadian regulations, the United States Securities and Exchange
Commission does not recognize them. “Inferred mineral
resources” have a great amount of uncertainty as to their
existence, and as to their economic and legal feasibility. It
cannot be assumed that all or any part of an inferred mineral
resource will ever be upgraded to a higher category. Under Canadian
rules, estimates of inferred mineral resources may not form the
basis of feasibility or other economic studies. United States
investors are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. United States investors are also cautioned not to
assume that all or any part of an inferred mineral resource exists,
or is economically or legally mineable.
