Denison Announces CAD$43.5M Financing Arrangement with Anglo Pacific Group Plc
Denison Mines Corp.
1100 – 40 University Ave
Toronto, ON M5J 1T1
www.denisonmines.com
@DenisonMinesCo
PRESS RELEASE
DENISON ANNOUNCES CAD$43.5M FINANCING
ARRANGEMENT WITH ANGLO PACIFIC GROUP PLC
Toronto, ON – February 1, 2017 Denison Mines Corp. (“Denison” or the “Company”) (DML: TSX, DNN:
NYSE MKT) is pleased to announce that Denison Mines Inc. (“DMI”) and 9373721 Canada Inc. (“SPV”),
both of which are wholly owned subsidiaries of the Company, have entered into definitive agreements with
Anglo Pacific Group PLC (“APG”) and/or its wholly owned subsidiary Centaurus Royalties Ltd. (“Centaurus”)
which are expected to raise aggregate gross proceeds to Denison of CAD$43,500,000 (the “Financing”).
The Financing is comprised of (1) a 13-year limited recourse lending arrangement involving a loan from
APG to SPV (the “APG Loan”) and a further loan from SPV to DMI (the “SPV Loan”), each for
CAD$40,800,000 (the “Lending Arrangement”), and (2) CAD$2,700,000 in proceeds from the sale, to
Centaurus, of a stream equal to Denison’s 22.5% share of the proceeds from the toll milling of certain Cigar
Lake ore by the McClean Lake mill (“Streaming Agreement”). Additional details are provided below.
Denison’s President & CEO, David Cates, commented, “ This Financing represents a truly creative
partnership between Denison and APG – whereby Denison is able to use its existing asset base to provide
the Company with the financial flexibility needed t o advance our flagship Wheeler River project toward s a
development decision. With recourse being limited to the proceeds from Denison’s interest in the toll milling
revenues from the processing of Cigar Lake ore at t he McClean Lake mill, this Financing allows Denison
to benefit immediately from the cash flow expected to be produced from the McClean Lake mill over the
next several years, without the overhang of a bulle t payment or convert at the end of a debt, and with out
selling its strategic ownership stake in the McClean Lake mill or the McClean Lake Joint Venture (“MLJV”).”
Commenting on the Financing, Julian Treger, Chief Executive Officer of APG, noted, “This transaction ticks
all the boxes for APG and moves forward our growth and diversification in a material way. The transaction
should be accretive to our 2017 income, building on the more than doubling of income in 2016, which we
now estimate to be in the range of £19.5m to £20.5m , following receipt of the final payment amount fro m
Rio Tinto in respect of our Kestrel royalty. We ar e looking forward to working in partnership with De nison,
and are pleased the structure of the transaction will facilitate its continued development.”
The Financing is expected to close in early Februar y, and is conditional upon APG obtaining sufficient
financing. APG is a publicly listed company, which trades on the London Stock Exchange (LSE: APF) and
on the Toronto Stock Exchange (TSX: APY), and has a nnounced (concurrently, with its own news release
regarding the Financing) that it will launch an acc elerated equity placement book building process, wh ich
is expected to close no later than 3:00PM (GMT) today.
CAD$40,800,000 Lending Arrangement
The proceeds from the APG Loan will be on-loaned by SPV to DMI under the SPV Loan, and will be
available for use by DMI and/or Denison, as the Com pany continues to advance its 60% owned Wheeler
River uranium development project towards the completion of a Pre-Feasibility Study (“PFS”).
Importantly, the SPV Loan is limited in its recours e against DMI, such that it is generally repayable only to
the extent of Denison’s share of the toll milling r evenues earned by the MLJV from the processing of t he
first 215 million lbs U 3O8, from ore received from the Cigar Lake mine on or after July 1, 2016, under the
terms of the current Cigar Lake Toll Milling Agreement (the “TMA”).
The APG Loan will accrue interest at a rate of 10% per annum, but does not have a predetermined principal
repayment schedule. The APG Loan is secured by a first priority interest in the assets of SPV – which will
essentially consist of the SPV Loan to DMI. The SP V Loan will accrue interest at a rate of approximat ely
10% per annum, and also does not have a predetermin ed principal repayment schedule. Denison will
guarantee the limited recourse loan repayments and will grant a second ranking pledge of its shares of DMI
to secure performance by DMI of its obligations to pay the SPV Loan (on the limited recourse basis
described above). The share pledge is second ranki ng to Denison’s existing pledge of the shares of DMI
to The Bank of Nova Scotia (“BNS”) under the terms of its CAD$24,000,000 Letters of Credit Facility
(“BNS Facility”).
Both the APG Loan and the SPV Loan provide for regular payments against accrued and capitalized interest
and principal balances to the extent payable in respect of Denison’s share of the toll milling revenue earned
by the MLJV from the Cigar Lake TMA.
CAD$2,700,000 Streaming Agreement
The Streaming Agreement entitles Centaurus to recei ve a stream from DMI equal to the amount of the tol l
milling revenue received by DMI under the TMA, once throughput from the McClean Lake mill exceeds
215 million lbs U3O8, from ore received from the Cigar Lake mine, on or after July 1, 2016.
Other Financing Highlights
• No Warranty of the Future Rate of Production – In addition to the limited recourse nature of both
the Lending Arrangement and the Streaming Agreement, no warranty is provided by Denison, DMI
or SPV to APG or Centaurus regarding the future rate of production at the Cigar Lake Mine and/or
the McClean Lake mill, or the amount or collectabil ity of proceeds to be received or receivable by
the MLJV in respect of toll milling Cigar Lake ore.
• Denison Retains Ownership of its 22.5% Interest in the MLJV – While the Financing is limited in
recourse to Denison’s share of the toll milling revenues earned from the MLJV from the processing
of Cigar Lake ores under the TMA, Denison continues to own its 22.5% strategic interest in the
MLJV, including the fully licensed and operating Mc Clean Lake uranium mill, which is situated in
the infrastructure rich eastern portion of the Athabasca Basin region in northern Saskatchewan.
• Potential for an Additional CAD$2,124,808 in Proce eds from the Exercise of Warrants – In
connection with the closing of the Financing, Denison will grant 1,673,077 share purchase warrants,
subject to receipt of regulatory approvals (includi ng the approval of the Toronto Stock Exchange
and the NYSE MKT), in satisfaction of a CAD$435,000 arrangement fee payable to APG. The
warrants are expected to have an exercise price of CAD$1.27 per share, and will be exercisable
for a period of 3 years immediately following the closing of the Financing. As a result, Denison may
receive a further CAD$2,124,808 in proceeds from the exercise of the warrants.
• Amendment and Extension of BNS Facility – The term s of the BNS Facility have been amended to
reflect certain changes required to facilitate an I ntercreditor Agreement between APG, Centaurus,
BNS, DMI and SPV. Amongst those changes, BNS and D MI have agreed, on the closing of the
Financing, to replace a restrictive covenant to maintain CAD$5,000,000 on deposit with BNS (under
the previous BNS Facility) with a pledge of CAD$9,000,000 in restricted cash or GIC’s as collateral.
Under the amended BNS Facility, Denison will pay le tter of credit fees of 0.4% on the first
CAD$9,000,000 (associated with the restricted cash), and 2.4% on the remaining CAD$13,000,000
of letters of credit issued under the facility. Th is is expected to result in savings to Denison of
approximately CAD$180,000 per annum in letters of c redit fees. In addition to the amendments,
the maturity date under the BNS Facility has been extended to January 31, 2018.
• Use of Proceeds – The net proceeds of the Financin g are expected to be used to fund development
and exploration expenditures at the Company’s proje cts and for general corporate and working
capital purposes.
• Advisors & Counsel – Denison's financial advisor i n respect of the Financing is Pareto Securities
Limited, and its legal counsel is Blake, Cassels & Graydon LLP.
About Denison
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin
region of northern Saskatchewan. Including its 60% owned Wheeler River project, which hosts the high
grade Phoenix and Gryphon uranium deposits, Denison 's exploration portfolio consists of numerous
projects covering over 350,000 hectares in the infr astructure rich eastern Athabasca Basin. Denison's
interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake joint venture, which
includes several uranium deposits and the McClean L ake uranium mill, which is currently processing ore
from the Cigar Lake mine under a toll milling agreement, plus a 25.17% interest in the Midwest deposit and
a 63.01% interest in the J Zone deposit on the Wate rbury Lake property. Both the Midwest and J Zone
deposits are located within 20 kilometres of the McClean Lake mill.
Denison is also engaged in mine decommissioning and environmental services through its Denison
Environmental Services division and is the manager of Uranium Participation Corp., a publicly traded
company which invests in uranium oxide and uranium hexafluoride.
For more information, please contact
David Cates (416) 979-1991 ext. 362
President and Chief Executive Officer
Sophia Shane (604) 689-7842
Investor Relations
Follow Denison on Twitter @DenisonMinesCo
Cautionary Statement Regarding Forward-Looking Statements
Certain information contained in this press release constitutes “forward-looking information”, within the meaning of the United States
Private Securities Litigation Reform Act of 1995 an d similar Canadian legislation concerning the busin ess, operations and financial
performance and condition of Denison. Generally, th ese forward-looking statements can be identified by the use of forward-looking
terminology such as “plans”, “expects”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “believes”, or the
negatives and/or variations of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might”
or “will be taken”, “occur”, “be achieved” or “has the potential to”. In particular, this press release contains forward-looking information
pertaining to the following: the Financing and its anticipated completion, receipt of required regulatory approvals, the material terms
of the Financing, anticipated use of proceeds and Denison’s ability to derive the anticipated benefits thereof.
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, uncert ainties and other factors that may cause the actual results, level of activity,
performance or achievements of Denison to be materi ally different from those expressed or implied by s uch forward-looking
statements. Denison believes that the expectations reflected in this forward-looking information are r easonable but there can be no
assurance that such statements will prove to be acc urate and may differ materially from those anticipa ted in this forward looking
information. For a discussion in respect of risks and other factors that could influence forward-looking events, please refer to the “Risk
Factors” in Denison’s Annual Information Form dated March 24, 2016 available under its profile at www.sedar.com and in its Form
40-F available at www.sec.gov/edgar.shtml . These factors are not, and should not be construed as being, exhaustive.
Accordingly, readers should not place undue relianc e on forward-looking statements. The forward-lookin g information contained in
this press release is expressly qualified by this cautionary statement. Denison does not undertake any obligation to publicly update or
revise any forward-looking information after the date of this press release to conform such information to actual results or to changes
in its expectations except as otherwise required by applicable legislation.
Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: This
press release may use the terms “measured”, “indicated” and “inferred” mineral 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.