Denison Mines Corp.

Denison Mines Corp.

February 27, 2007 09:15 ET

Denison to Acquire U.S. Uranium Deposits and Sign Uranium Sales Contract

TORONTO, ONTARIO--(CCNMatthews - Feb. 27, 2007) - Denison Mines Corp. ("Denison" or the "Company") (TSX:DML) is pleased to announce that it has signed an agreement with Pathfinder Mines Corporation ("Pathfinder"), a subsidiary of the AREVA Group, to acquire 5 uranium deposits located in the Arizona Strip district in northeastern Arizona for a cash consideration of US$5.5 million plus a 1% royalty.

In aggregate, the historical resource estimates at the Pathfinder deposits are 1.3 million tons at an average grade of 0.28% U3O8, containing an estimated 7.1 million lbs of U3O8. The deposits are located within hauling distance of Denison's White Mesa Mill and near its Arizona Strip mines providing a synergistic opportunity to significantly increase production in the near term from this mining district (please see attached map).

Denison intends to initiate the necessary permitting required to develop these deposits in parallel with the ramping up of the Company's existing operations in the Arizona Strip.

Four of the mineral deposits (EZ 1, EZ 2, WHAT and DB 1) are breccia pipe type deposits. In the 1980's, (Denison's predecessor company, Energy Fuels Nuclear Inc., mined over 18 million pounds of U3O8 (from breccia) pipes exhibiting similar tons and grade. Mining from these deposits, if feasible, would be by underground mining methods. The fifth deposit, Moonshine Springs, is sandstone hosted with uranium mineralization in reduced zones along oxidation-reduction fronts occurring at surface and gradually becoming deeper towards the north. It is contemplated that this deposit would initially be developed as a small open-pit to supplement the higher grade breccia pipe production. Potential exists to expand the Moonshine Springs deposit at depth.

The breccia pipe deposits are held by mining claims and Moonshine Springs is held by a mining lease with a third party.

Historical resource estimates of the deposits, as presented by Pathfinder to Denison and estimated in 1996, are shown below. No cutoff grades have been reported for the breccia pipe deposits, while a 0.05% U3O8 (cutoff has) been used for Moonshine Springs. Pathfinder used a 25 foot radius of influence of each drill hole when assigning grades to the breccia pipe deposits, while that of the Moonshine Springs deposit was a minimum of approximately 141 feet. The average grade of the pipes was based on the following numbers of drill holes: 35 drill holes at EZ 1, 44 drill holes at EZ 2, 19 drill holes at DB 1, 18 holes at WHAT, and 298 holes at Moonshine Spring.

Lbs U3O8
Deposit Tons % U3O8 (Millions)
EZ1 106,250 0.66% 1.4
EZ2 216,480 0.44% 1.9
DB1 103,550 0.44% 0.9
WHAT 89,800 0.25% 0.4
Moonshine Springs 775,000 0.16% 2.5
TOTAL 1,291,080 0.28% 7.1

All resource estimates quoted herein are based on data, reports and documentation obtained from and prepared by previous operators, including AREVA. Denison has not completed the work necessary to independently verify the classification of the mineral resource estimates and is not treating the historical mineral resource estimate as National Instrument 43-101 defined resources verified by a qualified person. The historical estimates should not be relied upon. The properties will require considerable further evaluation which Denison's management and consultants intend to carry out in due course.

In conjunction with the closing of property acquisition, Denison will also commit to sell to the AREVA Group up to 6.5 million pounds of production from the Company's White Mesa Mill. The sales agreement will provide for a price equal to 95% of the month end long-term prices for U3O8 published the month prior to delivery with a floor price of US$ 45.00 per pound. Both parties will have the option to suspend deliveries under certain conditions.

The foregoing transaction is subject to all requisite regulatory approvals. Dundee Securities Corporation assisted Denison with the transaction. Denison expects to close the transaction within the next 7 to 10 days.

Mr. William C. Kerr, P.Geo., a Qualified Person pursuant to NI 43-101, has reviewed the contents and technical information contained in this news release. Mr. Kerr is Vice President, Exploration and Development for Denison.

Denison Mines Corp. is the premier intermediate uranium producer in North America, with mining assets in the Athabasca Basin Region of Saskatchewan, Canada and the southwest United States including Colorado, Utah, and Arizona. Further, the Company has ownership interests in two of the four uranium mills operating in North America today. The combination of a diversified mining asset base with parallel ownership of milling infrastructure in highly politically stable jurisdictions has uniquely positioned the Company for growth and development into the future. The Company also has a strong exploration portfolio with large land positions in the United States, Canada and Mongolia. Correspondingly, the Company has one of the largest uranium exploration teams among intermediate uranium companies.

Cautionary Statements

This news release contains "forward-looking statements", within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation, concerning the business, operations and financial performance and condition of Denison Mines Corp. ("Denison").

Forward looking statements include, but are not limited to, statements with respect to estimated production, synergies and financial impact of the proposed transaction; the benefits of the proposed transaction and the development potential of Denison's properties; the future price of uranium; the estimation of mineral reserves and resources; the realization of mineral reserve estimates; the timing and amount of estimated future production; costs of production; capital expenditures; success of exploration activities; permitting time lines and permitting, mining or processing issues; currency exchange rate fluctuations; government regulation of mining operations; environmental risks; unanticipated reclamation expenses; title disputes or claims; and limitations on insurance coverage. Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as "plans", "expects" or "does not expect", "is expected", "budget", "scheduled", "estimates", forecasts", "intends", "anticipates" or "does not anticipate", or "believes", or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might" or "will be taken", "occur" or "be achieved".

Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Denison to be materially different from those expressed or implied by such forward-looking statements, including but not limited to risks related to: unexpected events during construction, expansion and start-up; variations in ore grade, tonnes mined, crushed or milled; delay or failure to receive board or government approvals; timing and availability of external financing on acceptable terms; risks related to international operations; actual results of current exploration activities; actual results of current reclamation activities; conclusions of economic evaluations; changes in project parameters as plans continue to be refined; future prices of uranium and vanadium; possible variations in ore reserves, grade or recovery rates; failure of plant, equipment or processes to operate as anticipated; accidents, labour disputes and other risks of the mining industry; delays in the completion of development or construction activities, as well as those factors discussed in or referred to in the current annual Management's Discussion and Analysis of each of Denison Mines Inc. ("DMI") and International Uranium Corporation ("IUC"), the current Annual Information Form of DMI filed with the securities regulatory authorities in Canada and available at and IUC's Annual Report on Form 20-F filed with the securities regulatory authorities in Canada and available at Although management of Denison has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended.

There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Denison does not undertake to update any forward-looking statements that are incorporated by reference herein, except in accordance with applicable securities laws. Mineral resources, which are not mineral reserves, do not have demonstrated economic viability. Readers should refer to the respective Annual Information Forms of DMI and, IUC, each for the year ended December 31, 2005, and other continuous disclosure documents filed by each of them since January 1, 2006 available at, for further information relating to their mineral resources and mineral reserves.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Resources: This news release uses the terms "Measured", "Indicated" and "Inferred" Resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. "Inferred Mineral Resources" have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of Measured or Indicated Mineral Resources will ever be converted into Mineral Reserves. United States investors are also cautioned not to assume that all or any part of an Inferred Mineral Resource exists, or is economically or legally mineable.

To view the Arizona Strip map, please visit the link below:

Contact Information

  • Denison Mines Corp.
    E. Peter Farmer
    (416) 979-1991 ext. 231
    Denison Mines Corp.
    Ron Hochstein
    (604) 689-7842
    Denison Mines Corp.
    James Anderson
    (416) 979-1991 ext. 372
    (416) 979-5893 (FAX)