UEX responds to Denison’s JCU (Canada) offer

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UEX Corp. [UEX-TSX; UEXCF-OTC] has responded to Denison Mines Corp.‘s [DML-TSX; DNN-NYSE American] May 4, 2021, announcement, which said it has delivered a binding offer to Overseas Uranium Resources Development Co. Ltd. (OURD). If the bid succeeds, it will result in Denison acquiring 100% ownership of OURD’s wholly-owned subsidiary, JCU (Canada) Exploration Co. Ltd.

In its press release Wednesday, UEX said it has the right to acquire JCU, not Denison. UEX went on to say that as announced on April 22, 2021, it entered into a binding agreement with OURD to acquire its wholly-owned JCU unit.

It said OURD cannot deal with or respond to the Denison offer and is bound to complete the sale of JCU to UEX, pursuant to the terms of the UEX agreement, which it said is subject only to the approval of shareholders of OURD at a meeting which is scheduled to be held on June 18, 2021.

It also said the UEX transaction was approved by the board of directors of OURD who are obligated to recommend its acceptance to OURD shareholders. As those directors represent shareholders of OURD who hold the majority of shares of OURD, UEX said it is confident that shareholders of OURD will approve the UEX agreement.

UEX is a Canadian uranium and cobalt exploration and development company involved in an portfolio of uranium projects. Its portfolio of projects is located in the eastern, western, and northern perimeters of the Athabasca Basin in Saskatchewan.

On Wednesday, UEX shares rose 2.6% or $0.01 to 39 cents on volume of 3.2 million. The shares are trading in a 52-week range of 49.5 cents and 11.5 cents.

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 Saskatchewan.

Under the terms of its offer, Denison said it 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.

Denison is focused in the Athabasca Basin region of northern Saskatchewan, including its 90%-owned Wheeler River Project which hosts the high-grade Phoenix and Gryphon uranium deposits (on the Wheeler River property).

Proven and probable reserves stand at 109.4 million lbs U3O8. That includes 141,000 tonnes at 19.1% U3O8 or 59.7 million lbs in the Phoenix Zone, and 1.26 million tonnes at 1.8% U3O8 or 49.7 million lbs in the Gryphon Zone.

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