Denison to increase Wheeler River ownership

Wednesday, 5 September 2018

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 (50,812 tU) at an average grade of 3.3% U3O8, as well as combined inferred resources of 3 million pounds U3O8 at an average grade of 1.7%. 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, whose 63.3% share is to increase to 66% by the end of 2018 under a previously announced earn-in agreement; Cameco, currently with 26.7% (24% by the end of 2018), and JCU Canada Exploration Company Ltd (10%).

Denison has agreed to acquire 100% of Cameco's interest in the Wheeler River Joint Venture in exchange for the issuance of 24,615,000 common shares of Denison at a deemed price of CAD0.65 (USD0.49) per share, for total consideration valued at about CAD16 million.

This is subject to certain rights of first refusal under the terms of the joint venture, which allow for JCU to purchase its proportional interest of Cameco's share of Wheeler River. Based on JCU's ownership interest of 10%, JCU would have the right to purchase about 13.16% of Cameco's expected 24% interest in the Wheeler River JV. The transaction is not conditional on JCU waiving those rights, Denison said. Should JCU choose to exercise its rights, the purchase price would reduce to about CAD13.9 million and Denison would own about 86.84% of the joint venture.

Denison President and CEO David Cates said the three companies had worked together since 2004 to advance Wheeler River to the point of being the largest undeveloped uranium project in the eastern Athabasca Basin.

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," he said.

Cates today also announced the appointment of former Tim Gabruch, Cameco's marketing vice president, as Denison's vice president commercial and also chief commercial officer of uranim investment company Uranium Participation Corp, which is managed by Denison. Gabruch will be tasked with building an "end to end" sales, marketing and commercial function consistent with Denison's long-term strategy surrounding the future development of its flagship Wheeler River uranium project, the company said.