Friday, March 11, 2016

Denison retains Canadian focus

Denison Mines will focus on its activities in Canada's Athabasca Basin in 2016, according to the company's end-of-year analysis. The company sold its Mongolian assets in December and hopes to spin out or sell its African portfolio when market conditions permit.

The company reiterated its intention to focus on increasing its resource base in the Athabasca Basin and advancing the Wheeler River in a management's discussion and analysis (MD&A) document for the 2015 financial year filed alongside the company's financial statements for the year.

In the MD&A document the company confirmed that the sale of its interests in the Gurvan Saihan joint venture (GSJV) in Mongolia to Uranium Industry a.s. of the Czech Republic for a total consideration of up to $13.5 million - $1.25 million in initial payments and up to $12 million in additional proceeds conditional on the achievement of certain milestones associated with the Mongolian projects. The sale was initially announced in June 2015 for a total consideration of $20 million, but the companies entered into an "amended and restated" share purchase agreement in November 25, 2015.

On 2 December 2015 - the day after the completion of the sale - Uranium Industry submitted applications for mining licences for all four GSJV projects to the Mongolian government, Denison said.

Denison said that it is maintaining its interests in its African uranium projects - Falea in Mali, Dome in Namibia and Mutanga in Zambia - in preparation for a potential spinout or sale "when market conditions permit." The company had budgeted to spend between $750,000 and $1.3 million in Africa this year on activities "designed to keep the company's interests in good standing and continuation of community programs".

Last year, Denison recorded a significant increase in estimated mineral resources at its 60%-owned Wheeler River project in Canada, which is now estimated to contain indicated mineral resources of 70.2 million pounds U3O8 (27,000 tU) and inferred resources of 44.1 million pounds (16,960 tU) U3O8. A preliminary economic assessment of Wheeler River's Gryphon and Phoenix deposits is expected to be completed in the first half of 2016, after which the company plans to begin a prefeasibility study and environmental assessment work.

Denison CEO and president David Cates said: "In 2015, Denison achieved a key milestone with the completion of a maiden resource estimate for our Gryphon deposit on the Wheeler River property - which was already host to the exceptionally high-grade Phoenix deposit. The addition of the Gryphon deposit represents a significant increase in the estimated mineral resources at Denison's 60% owned Wheeler River property, and establishes the project as one of the largest and highest grade undeveloped uranium projects in the Athabasca Basin region."

Denison also holds a 22.5% interest in the McClean Lake joint venture in Saskatchewan, including several uranium deposits and the McClean Lake mill, plus interests in the nearby Midwest and J Zone deposits.

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