Denison Reports Q1 2017 Results Including Highlights from Successful Winter 2017 Exploration Programs
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Denison Mines Corp.
1100 – 40 University Ave
Toronto, ON M5J 1T1
www.denisonmines.com
PRESS RELEASE
DENISON REPORTS Q1 2017 RESULTS INCLUDING HIGHLIGHTS FROM
SUCCESSFUL WINTER 2017 EXPLORATION PROGRAMS
Toronto, ON – May 2, 2017 Denison Mines Corp. (“Denison” or the “Company”) (DML: TSX, DNN: NYSE MKT) today
filed its Consolidated Financial Stat ements and Management’s Discussion & Analysis (“MD&A”) for the period ended
March 31, 2017. Both documents are available on the Company’s website at www.denisonmines.com or on SEDAR
(at www.sedar.com) and EDGAR (at www.sec.gov/edgar.shtml). The highlights provided below are derived from these
documents and should be read in conjunction with them. All amounts in this release are in U.S. dollars unless
otherwise stated.
David Cates, President and CEO of Denison commented “Denison was very active in the first quarter of 2017 on
multiple fronts. In the field at Wheeler River, we are cont inuing to see very encouraging results from the Gryphon D
series of lenses – where we intersected over 22 metres of high-grade uranium mineralization in a single hole. This
supports our view that the Gryphon D series lenses could provide a meaningful increase to the resources currently
estimated at Gryphon and may ultimately also enhance what are already compelling project economics. Infill drilling at
Gryphon, required for the completion of a Pre-Feasibility Study, has also returned encouraging results and remains on
track for completion during the summer exploration program.
Beyond our successes in the field, the Company completed three very important transactions during the first quarter –
bringing considerable financial stability to the Company, despite what continues to be a turbulent uranium market. With
an agreement to increase our interest in our flagship Whee ler River project to up to approximately 66% by the end of
2018, we have provided shareholders with increased leverage to the project, while still retaining the support of our
existing joint venture partners. In addition, we have fort ified our balance sheet by raising over CAD$63.5M in capital
during the quarter – with the large majority from a non-dilutive source.”
Q1 2017 PERFORMANCE HIGHLIGHTS
Extended high-grade mineralization within the Gryphon D series of lenses at Wheeler River
Drill holes testing for additional mineralization within the D series lenses intersected significant radiometric equivalent
grades (“eU3O8”) including 1.9% eU3O8 over 18.7 metres and 3.1% eU 3O8 over 3.4 metres in drill hole WR633-D3,
and 2.9% eU3O8 over 1.7 metres and 7.5% eU 3O8 over 1.2 metres in drill hole WR-689. Drill holes WR-633D3 and
WR-689 are located approximately 26 metres down-dip and 17 metres up-dip, respectively, of WR-641, a previous
drill hole which intersected 5.3% U 3O8 over 11.0 metres. As the D series of mineralized lenses are not included in
the current resources estimated for the Gryphon deposit, these results continue to ill ustrate the potential for a
meaningful increase in estimated resources at the Gryphon deposit.
Continued infill drilling, to increase the confidence of current resources estimated for the Gryphon deposit,
returned confirmatory high-grade and thick intersections
A total of 22 infill holes, of approximately 40 holes required to upgrade the current Gryphon resource to an indicated
level of confidence, have been completed to date – with the balance expected to be completed as part of the
Company’s upcoming summer drill program. The radiometric equivalent grade results received from the winter 2017
drill program continued to confirm continuity and high-grades of the Gryphon A, B and C series of mineralized lenses
that are included in the current resource estimate for the deposit. Highlight intersections from infill drilling, completed
during Q1 2017, include 5.9% eU3O8 over 6.2 metres and 3.9% eU3O8 over 7.1 metres.
Executed Agreement to Increase Ownership of Wheeler River Project Up to 66%
In January 2017, the Company executed an agreement with t he partners of the Wheeler River Joint Venture that is
expected to result in an increase in Denison's ownership of the Wheeler River project to up to approximately 66%
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(currently 60%) by the end of 2018. Under this agreement, Denison will fund 50% of Cameco Corp.’s ordinary 30%
share of joint venture expenses in 2017 and 2018.
Closed non-dilutive financing for gross proceeds of CAD$43.5 million, providing financial flexibility to fund
future project development activities
In February 2017, Denison closed a financing arrangement for gross proceeds of CAD$43.5 million, which has
monetized Denison’s future share of the toll milling revenue earned by the McClean Lake mill from the processing of
certain ore from the Cigar Lake mine (the “Toll Milling Transaction”). Through this transaction, Denison retains its
22.5% ownership of the McClean Lake Joint Venture (“MLJV”) and the McClean Lake mill, but has de-risked its
income from certain toll milling revenue, as the Company is not providing any warranty to the future rate of production
at the Cigar Lake mine or the McClean Lake mill. The proceeds from the financi ng are expected to fund the
Company’s project development costs for Wheeler River to the completion of a bank able feasibility study and
ultimately project financing for the Wheeler River project.
Obtained financing for the Company’s 2018 Canadian exploration activities
In March 2017, Denison completed a private placement of 18,337,000 common shares for gross proceeds of
$14,806,000 (CAD$20,000,290). The financing included (1) a “Common Share” offering of 5,790,000 common
shares of Denison at a pr ice of CAD$0.95 per share; (2) a “Tranc he A Flow-Through” offering of 8,482,000 flow-
through shares at a price of CAD$1. 12 per share; and (3) a “Tranche B Flow-Through” offering of 4,065,000 flow-
through shares at a price of CAD$1.23 per share. The proceeds from the flow-through tranches of the financing will
be used to fund Canadian exploration activities through to the end of 2018.
ABOUT DENISON
Denison is a uranium exploration and development company wi th interests focused in the Athabasca Basin region of
northern Saskatchewan, Canada. In addition to its 60% owned Wheeler River project, which hosts the high grade
Phoenix and Gryphon uranium deposits, Denison's explorat ion portfolio consists of numerous projects covering
approximately 360,000 hectares in the Athabasca Basin region , including 337,000 hectares in the infrastructure rich
eastern portion of the Athabasca Basin. Denison's interests in Saskatchewan also include a 22.5% ownership interest
in the MLJV, which includes several uranium deposits and the McClean Lake 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 Waterbury La ke 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 enviro nmental services through its Denison Environmental
Services division (“DES”) and is the manager of Uranium Participation Corp. (“UPC”), a publicly traded company, which
invests in uranium oxide and uranium hexafluoride.
SELECTED QUARTERLY FINANCIAL INFORMATION
(in thousands)
As at
March 31,
2017
As at
December 31,
2016
Financial Position of Continuing Operations:
Cash and cash equivalents $ 43,548 $ 11,838
Working capital $ 38,128 $ 9,853
Property, plant and equipment $ 188,776 $ 187,982
Total assets $ 260,146 $ 217,423
Total long-term liabilities $ 64,035 $ 37,452
2017 2016
(in thousands, except for per share amounts) Q1 Q1
Continuing Operations:
Total revenues $ 2,601 $ 3,330
Net loss $ (646) $ (4,445)
Basic and diluted loss per share $ - $ (0.01)
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RESULTS OF CONTINUING OPERATIONS
Revenues
On February 13, 2017, Denison closed the Toll Milling Transaction under which Denison received an upfront payment
of $32,860,000 (CAD$43,500,000), in exchange for its right to receive future toll milling cash receipts from the MLJV
under the current toll milling agreement with the Cigar Lake Joint Venture (“CLJ V”) from July 1, 2016 onwards. The
upfront payment has been accounted for as deferred revenue. The Company’s share of toll milling revenue for January
2017, prior to the closing of the Toll Milling Transaction, of $444,000 was recognized as toll milling revenue in Q1 2017.
Following the closing of the arrangement, the Company recognized $354,000 in additional toll milling revenue from the
draw-down of deferred revenue.
Revenue from DES during Q1 2017 was $1,496,000, while re venue from the Company’s management contract with
UPC was $307,000.
Operating expenses
Operating expenses in the Canadian mining segment include depreciation, mining and other development costs.
Operating expenses during Q1 2017 were $1,056,000, including $932,000 of depreciation from the McClean Lake mill,
associated with the processing of U3O8 for the CLJV.
Operating expenses at DES during Q1 2017 totaled $1,378, 000 and relate primarily to care and maintenance and
environmental consulting services provided to clients and includes labour and other costs.
Exploration and Evaluation
The Company’s focus remains on the infrastructure rich eastern portion of the Athabasca Basin region in northern
Saskatchewan, Canada, with a significant portfolio of projects covering over 337,000 hectares in the region. Denison’s
share of exploration and evaluation expenditures was $4,210,000 during Q1 2017.
Wheeler River Project
Denison’s share of exploration costs at Wheeler River amounted to $1,934,000 during Q1 2017. The winter 2017 drilling
program was focused on two objectives: continued infill a nd delineation drilling on the Gryphon deposit, in order to
upgrade the current inferred resources to an indicated level of confidence, and exploration drilling outside of the current
resources estimated for the Gryphon deposit, with the aim of discovering additional resources. The winter 2017 drilling
program was completed in early April 2017, with a total of 14,732 metres drilled in 26 holes. Further details of the winter
2017 result are provided in Denison’s press releases dated March 29, 2017 and April 20, 2017.
Exploration Drilling Outside of the Gryphon Resource
Nine holes totalling 6,330 metres were completed outside of the mineralized zones making up the current resources
estimated for the Gryphon deposit, including four holes targeting the horizon of the Gryphon D series lenses, and five
holes down-dip of the A and B series lens mineralization in cluded in the resource estimate. The four holes completed
within the D series lenses were designed to test the continuity of mineralization between the previous exploration holes,
which were completed on an approximate 50 x 50 metre spaci ng. The D series lenses are not included in the current
resource estimate for the Gryphon deposit and occur footwall, and within 200 metres to the north and northwest, of the
A, B and C series lenses. The four holes were centred around previous drill hole WR-641, which intersected 5.3%
U3O8 over 11.0 metres, including 12.6% U3O8 over 4.5 metres (see Denison’s press release dated May 26, 2016). Drill
holes WR-633D3 and WR-689, located approximately 26 metres down-dip and 17 metres up-dip of WR-641
respectively, returned multiple intersections of high-grade mineralization within the D series lenses, including 1.9%
eU3O8 over 18.7 metres and 3.1% eU 3O8 over 3.4 metres in drill hole WR63 3-D3. Additionally, new mineralization
within the A, B and C series planes has been discovered while testing the D series of lenses. This includes a B series
lens intersection of 2.7% eU 3O8 over 1.9 metres in drill hole WR-689, located approximately 125 metres southwest
along strike of WR-507D2, which included an intersection of 19.31% U3O8 over 1.0 metre (see Denison’s press release
dated November 17, 2016).
Evaluation Program / PFS Activities
Denison’s share of evaluation costs at Wheeler River amou nted to $287,000 for Q1 2017, and mainly related to the
various engineering data collection activities, including geotechnical and hydrogeological work, engineering
investigations into alternate mining methods at Phoenix, and options for shaft and vent raise excavation at both Gryphon
and Phoenix. The Company also advanc ed its environmental baseline programs, and continued with the community
consultation and engagement process.
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Exploration Pipeline Properties
During the 2017 winter season, eight other exploration pr ograms on Denison properties (outside of Wheeler River)
were carried out, with seven operated by Denison. These incl uded four drilling programs (three operated by Denison)
as well as geophysical surveying. While spending on these exploration pipeline projects has generally been reduced,
exploration activities continue to deliver encouraging results – in many cases, warranting follow-up. Highlights include
the following:
At Waterbury Lake (Denison 63.01% interest and operator), nine drill holes totaling 4,803 metres were completed in
Q1 2017 to test targets at the unconformity along the Hamilton Lake trend. The results confirmed strike continuity of a
significant graphitic fault zone in the basement rocks, with associated structured and altered overlying sandstone. Drill
hole WAT17-438, which optimally intersected the basement graphitic fault zone at the unconformity, intersected 0.09%
eU3O8 over 0.6 metres at the unconformity, with an associated alteration plume. The Hamilton Lake trend is interpreted
to extend over 13 kilometres in strike, and remains a high priority for exploration in the future.
At Murphy Lake (Denison 78.96% interest and operator), Denison completed a nine hole drill program, totaling 3,433
metres, with a primary focus on testing the Dalton Lake trend both to the east and west along strike where alteration
remained open and untested targets were evident in the ground geophysical and geochemical datasets. Additional
drilling was completed to evaluate other high priority targets associated with parallel trends in the area. The winter 2017
drilling program successfully extended the known alteration sy stem over a continuous stri ke length of 1.8 kilometres,
though no significant radioactivity or uranium mineralization was encountered.
At Crawford Lake (Denison 100% interest), one 519 metre drill hole (CR-17-29) was completed during winter 2017 to
utilize ice formation to test a target occurring below a lake. The single hole was completed on the CR-3 conductive
trend targeting a ‘structural bend’ interpreted from ground geophysical data. Drill hole CR-17-29 intersected weakly
elevated total gamma radioactivity (280 counts per second) at the unconformity and a graphitic unit with faults at 43
metres and 52 metres below the unconformity.
General and administrative expenses
Total general and administrative expenses were $2,331,000 during Q1 2017. Thes e costs are mainly comprised of
head office salaries and benefits, office costs in multiple regions, audit and r egulatory costs, legal fees, investor
relations expenses, project costs, and all other costs related to operating a public company with listings in Canada and
the United States. It also includes $1,049,000 in non-recurring project costs associated with the Toll Milling Transaction.
Other Income
During Q1 2017, the Company recognized gains of $3,508,000 in other income. The gains in the current period were
predominantly due to gains on investments carried at fair va lue, of $2,938,000, driven by favourable mark-to-market
adjustments on the Company’s investments in GoviEx Uranium Inc. and Skyharbour Resources Ltd.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $43,548,000 at March 31, 2017. The Company holds the large majority of its cash,
cash equivalents, and investments in Canadian dollars, amounting to CAD$57.9 million.
Denison has restricted cash of $7,384,000, largely due to the terms of the Company’s revolving term credit facility with
the Bank of Nova Scotia (“BNS”), whic h is restricted to non-financial letters of credit in support of reclamation
obligations. The facility was extended and amended on J anuary 31, 2017, and requires the Company maintain
CAD$9,000,000 pledged restricted cash on deposit at BNS.
OUTLOOK FOR 2017
During Q1 2017, the Company increased its corporate administration and other expenses included in the 2017 Outlook
by $770,000, primarily because of t he non-recurring project costs incurred in Q1 2017 related to the Toll Milling
Transaction. The remainder of the 2017 outlook remains unc hanged from the Company’s previously disclosed 2017
budget.
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
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QUALIFIED PERSON, ASSAY PROCEDURES AND FURTHER DETAILS
The disclosure of scientific or technical information regarding Denison’s properties in this press release was prepared by, or reviewed
and approved by, Dale Verran, MSc, Pr.Sci.Nat., the Company’s Vice President, Exploration, a Qualified Person in accordance wit h
the requirements of NI 43-101.
Grade results reported herein as “eU3O8” refer to radiometric equivalent U3O8 derived from a calibrated total gamma down-hole probe.
Radiometric equivalent U 3O8 results are preliminary in nature and all miner alized intervals have been sampled and submitted for
chemical U3O8 assay in accordance with Denison’s technical procedures. All Gryphon drill holes reported herein were drilled at a high
angle to mineralization to allow for better evaluation of true thicknesses which are expected to be approximately 75% of the intersection
lengths. For further details regarding the description of the data verification, assay procedures and the quality assurance program and
quality control measures applied by Denis on, please see Denison’s Annual Information Form dated March 23, 2017 available under
Denison's profile on SEDAR at www.sedar.com, and its Form 40-F available on EDGAR at www.sec.gov/edgar.shtml.
Further details regarding the Gryphon deposit and the current mineral resource estimates are provided in the NI 43-101 Technica l
Report for the Wheeler River project titled "Preliminary Economic Assessment for the Wheeler River Uranium Project, Saskatchewan,
Canada" dated April 8, 2016 with an effective date of March 31, 2016. A copy of this report is av ailable on Denison's website a nd
under its profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
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 Ac t of 1995 and similar Canadian legislation concerning the business, operations and finan cial
performance and condition of Denison.
Generally, these forward-looking statements can be identified by the use of forward-looking termi nology such as "plans", "expec ts",
"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 likelihood
of completing and benefits to be derived from corporate transactions; use of proceeds from financing activities; expectations regarding
further studies on material properties, including the PFS; expectations regarding t he toll milling of Cigar Lake ores; expectat ions
regarding revenues and expenditure from operations at DES; expectations regarding Denison’s ownership interests and continuity of
agreements with its partners; expectations regarding the provisi on of management services to UPC; capital expenditure programs,
estimated exploration and development exp enditures and reclamation costs and Denis on's share of same; and exploration,
development and expansion plans and objecti ves and statements regarding anticipated budgets. Statements relating to "mineral
reserves" or "mineral resources" are deemed to be forward-look ing information, as they involve the implied assessment, based on
certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future.
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 activi ty,
performance or achievements of Denison to be materially different from those expressed or implied by forward-looking statements .
Denison believes that the expectations reflected in this forwar d-looking information are reasona ble but no assurance can be giv en
that these expectations will prove to be a ccurate and may differ materially from thos e anticipated in this forward looking info rmation.
For a discussion in respect of risks and other factors that could influence forward-looking events, please refer to the factors discussed
in Denison's Annual Information Form dated March 23, 2017 under the heading "Risk Factors". These factors are not, and should not
be construed as being exhaustive. Accordingly, readers should not place undue reliance on forward-looking statements.
The forward-looking information contained in this press release is expressly qualified by this cautionary statement. Any forwa rd-
looking information and the assumptions made wi th respect thereto speaks only as of the date of this press release. Denison do es
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 Denison's 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 thei r
economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgrade d 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.