Denison Mines unveils JCU (Canada) uranium offer

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Denison Mines Corp. [DML-TSX; DNN-NYSE American] said Tuesday May 4 that it has delivered a binding offer to Overseas Uranium Resources Development Co. Ltd. (OURD). It will result in Denison acquiring 100% ownership of OURD’s wholly-owned subsidiary, JCU (Canada) Exploration Co. Ltd.

JCU holds a portfolio of uranium project joint venture interests in Canada, including a 10% interest in Denison’s 90%-owned Wheeler River uranium project in the Athabasca basin of northern Saskatchewan.

Under the terms of the offer, Denison will issue a $40.5 million cash payment and assume JCU’s existing liabilities. The cash payment includes a $10 million refundable deposit on signing of a definitive agreement, an additional $28 million on closing, and a further $2.5 million. The $2.5 million is expected to be paid within 45 days of the closing date and is subject to an adjustment based upon JCU’s actual working capital on the closing date.

Other conditions of the deal are as follows:

Regulatory approvals (if applicable) and the termination of OURD’s existing definitive purchase agreement with UEX Corp. [UEX-TSX] in accordance with its terms.

A commitment to OURD that JCU will be maintained as corporate subsidiary in order for JCU to meet its joint venture commitments.

Assumption of JCU’s outstanding liabilities owed to Japan Atomic Energy Agency.

If the Denison offer is accepted by OURD, Denison understands that the transaction will be subject approval by OURD’s shareholders.

Denison shares declined on the news, falling 5.0% or $0.07 to $1.34 on volume of 1.66 million. The shares are trading in a 52-week range of $2.29 and 40 cents.

News of the offer comes after Denison recently secured 2.5 million pounds of uranium concentrates at US$29.61 a pound at a total cost of US$74 million.

The purchase is part of a previously announced project financing advancement and/or construction of the Wheeler River uranium project in Saskatchewan.


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