Denison Mines invests $15 million in F3 Uranium
Denison Mines Corp. [DML-TSX] has struck a binding agreement that will see the company making a $15 million strategic investment in F3 Uranium Corp. [FUU-TSXV]. The investment will take the form of an unsecured convertible debenture.
Proceeds will be used primarily for the advancement and development of F3’s its Patterson Lake North uranium property in Saskatchewan’s Athabasca Basin where F3 is exploring the newly discovered high-grade JR Zone. It is an area that is poised to become a major uranium producing region and is home to large deposits, including Triple R, Arrow and Shea Creek. F3 currently holds 18 projects across the Athabasca Basin.
F3 shares advanced on the news, rising 2.5% or $0.01 to 41 cents on volume of 306,550, while Dension eased 1.4% or $0.03 to $2.13 on volume of 238,740.
“F3’s technical team has an incredible track record of exploration success including the discover of the JR Zone on the Patterson Lake North property, which represents one of the top new uranium discoveries globally,’’ said Denison President and CEO David Cates. “We are pleased to be investing in F3, supporting the further assessment of the PLN property, and providing Denison shareholders with exposure to this exciting new discovery in the Athabasca Basin,’’ he said.
F3 CEO Dev Randhawa welcomed Denison’s strategic investment. “We highly value Denison’s perspectives on uranium exploration, and look forward to pursuing a production relationship.’’
The debentures will carry a 9.0% coupon, payable quarterly over a 5.0-year term and will be convertible at Denison’s option into common shares of F3 at a conversion price of 56 cents per share. That represents 30% premium to F3’s five-day volume weighted average (VWAP) share price on the TSX Venture Exchange as at October 5, 2023.
F3 will have, at its sole discretion, the right to pay up to one third of the interest in common shares of F3 issued at a price per common share equal to the VWAP of the shares for the 20 days ending on the day prior to the date on which such payment of interest is due.
On or after the third anniversary of the date of issuance of the debentures, at any time that F3’s 20-day VWAP exceeds 130% of the conversion price, F3 will be entitled to redeem the debentures at par plus accrued and unpaid interest. Also, in the event of an F3 change of control transaction, F3 can redeem the debentures at par plus accrued interest plus an amount equal to the greater of (i) 15% of the principal amount of the debentures being redeemed and (ii) the amount of the remaining unpaid interest that would be payable during the initial three-year term of the debentures being redeemed.
Denison has a 95% interest in its flagship Wheeler River Uranium Project. It ranks as the largest undeveloped uranium project in the eastern portion of the Athabasca Basin.