Enhanced Investments - Financial Portal

Published: 2021-03-04




		ANNUAL CONSOLIDATED FINANCIAL STATEMENTS
			FOR THE YEAR ENDED DECEMBER 31, 2020

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

Responsibility for Financial Statements

The Company’s management is responsible for the integrity and fairness of presentation of these consolidated financial

statements. The consolidated financial statements have been prepared by management, in accordance with

International Financial Reporting Standards as issued by the International Accounting Standards Board, for review by

the Audit Committee and approval by the Board of Directors. The preparation of financial statements requires the selection of appropriate accounting policies in accordance with

International Financial Reporting Standards and the use of estimates and judgements by management to present fairly

and consistently the consolidated financial position of the Company. Estimates are necessary when transactions

affecting the current period cannot be finalized with certainty until future information becomes available. In making

certain material estimates, the Company’s management has relied on the judgement of independent specialists.

The Company’s management has developed and maintains a system of internal accounting controls to ensure, on a

reasonable and cost-effective basis, that the financial information is timely reported and is accurate and reliable in all

material respects and that the Company’s assets are appropriately accounted for and adequately safeguarded.

The consolidated financial statements have been audited by KPMG LLP, our independent auditor. Its report outlines

the scope of its examination and expresses its opinions on the consolidated financial statements and internal control

over financial reporting.

/s/ “David D.Cates”

/s/ “Gabriel (Mac) McDonald”

David D. Cates

Gabriel (Mac) McDonald

President and Chief Executive Officer

Vice-President Finance and Chief Financial Officer

March 4, 2021

Management’s Report on Internal Control over Financial Reporting

The Company’s management is responsible for establishing and maintaining an adequate system of internal control

over financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial

reporting based on the Internal Control – Integrated Framework, 2013 issued by the Commit ee of Sponsoring

Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company’s

internal control over financial reporting was effective as of December 31, 2020.

The effectiveness of the Company’s internal control over financial reporting as at December 31, 2020 has been audited

by KPMG LLP, our independent auditor, as stated in its report which appears herein.

Changes to Internal Control over Financial Reporting

There has not been any change in the Company’s internal control over financial reporting that occurred during 2020

that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial

reporting.


	KPMG LLP
	Bay Adelaide Centre
	333 Bay Street, Suite 4600
	Toronto, ON M5H 2S5
	Canada
	Tel 416-777-8500
	Fax 416-777-8818


Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors of Denison Mines Corp.:
Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated statement of financial position of Denison
Mines Corp. (the Company) as of December 31, 2020, the related consolidated statements of
income (loss) and comprehensive income (loss), changes in equity, and cash flows for the year
then ended, and the related notes (collectively, the consolidated financial statements). In our
opinion, the consolidated financial statements present fairly, in all material respects, the
financial position of the Company as of December 31, 2020 and its financial performance and its
cash flows for the year then ended, in conformity with International Financial Reporting
Standards as issued by the International Accounting Standards Board. We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the Company’s internal control over financial
reporting as of December 31, 2020, based on criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission, and our report dated March 4, 2021 expressed an unqualified opinion on the
effectiveness of the Company’s internal control over financial reporting.
Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management.
Our responsibility is to express an opinion on these consolidated financial statements based on
our audit. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws
and the applicable rules and regulations of the Securities and Exchange Commission and the
PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement, whether due to error or
fraud. Our audit included performing procedures to assess the risks of material misstatement of
the consolidated financial statements, whether due to error or fraud, and performing procedures
that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audit also
included evaluating the accounting principles used and significant estimates made by
management, as well as evaluating the overall presentation of the consolidated financial
statements. We believe that our audit provides a reasonable basis for our opinion.

		KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent
		member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
		KPMG Canada provides services to KPMG LLP.



Denison Mines Corp
March 4, 2021





	Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of
	the consolidated financial statements that was communicated or required to be communicated
	to the audit committee and that: (1) relates to accounts or disclosures that are material to the
	consolidated financial statements and (2) involved our especially challenging, subjective, or
	complex judgments. The communication of a critical audit matter does not alter in any way our
	opinion on the consolidated financial statements, taken as a whole, and we are not, by
	communicating the critical audit matter below, providing a separate opinion on the critical audit
	matter or on the accounts or disclosures to which it relates. Evaluation of indicators of impairment for mineral properties As discussed in note 2H. to the consolidated financial statements, a mineral property is
	assessed at the end of each reporting period to determine if there is any indication that mineral
	property may be impaired. A mineral property is tested for impairment using the impairment
	indicators under IFRS 6 - Exploration for and evaluation of mineral resources up until the
	commercial and technical feasibility for the property is established. As discussed in Note 10 to
	the consolidated financial statements, the Company’s mineral properties balance as of
	December 31, 2020 was $179,743 thousand. We identified the evaluation of indicators of impairment for mineral properties as a critical audit
	matter. Assessing the Company’s determination of whether various internal and external
	factors, individually or in the aggregate, result in an impairment indicator involves the application
	of a higher degree of auditor judgment. Specifically, judgment is required to evaluate the facts
	and circumstances related to the Company’s mineral properties, including assessing the
	Company’s future plans for each property and exploration results. The following are the primary procedures we performed to address this critical audit matter. We
	evaluated the design and tested the operating effectiveness of certain internal controls over the
	Company’s impairment indicator assessment process, including controls related to the
	Company’s impairment indicator review for each property. We assessed the Company’s future
	plans by comparing them to the most recent exploration program and budget approved by the
	Board of Directors and evaluating the time period remaining for the Company’s right to explore
	them by inspecting governmental filings. We evaluated the Company’s exploration results by
	comparing them to relevant technical reports. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants We have served as the Company’s auditor since 2020. Toronto, Canada
	March 4, 2021
		2


	KPMG LLP
	Bay Adelaide Centre
	333 Bay Street, Suite 4600
	Toronto, ON M5H 2S5
	Canada
	Tel 416-777-8500
	Fax 416-777-8818


Report of Independent Registered Public Accounting Firm
To the Shareholders and Board of Directors Denison Mines Corp.:
Opinion on Internal Control Over Financial Reporting We have audited Denison Mines Corp.’s (the Company) internal control over financial reporting
as of December 31, 2020, based on the criteria established in Internal Control – Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. In our opinion, the Company maintained, in all material respects, effective internal
control over financial reporting as of December 31, 2020, based on the criteria established in
Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting
Oversight Board (United States) (PCAOB), the consolidated statement of financial position of
the Company as of December 31, 2020, the related consolidated statements of income (loss)
and comprehensive income (loss), changes in equity, and cash flows for the year then ended,
and the related notes (col ectively, the consolidated financial statements), and our report dated
March 4, 2021 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion The Company’s management is responsible for maintaining effective internal control over
financial reporting and for its assessment of the ef ectiveness of internal control over financial
reporting, included in the accompanying Management’s Report on Internal Control over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal
control over financial reporting based on our audit. We are a public accounting firm registered
with the PCAOB and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards
require that we plan and perform the audit to obtain reasonable assurance about whether
effective internal control over financial reporting was maintained in all material respects. Our
audit of internal control over financial reporting included obtaining an understanding of internal
control over financial reporting, assessing the risk that a material weakness exists, and testing
and evaluating the design and operating effectiveness of internal control based on the assessed
risk. Our audit also included performing such other procedures as we considered necessary in
the circumstances. We believe that our audit provides a reasonable basis for our opinion.


		KPMG LLP is a Canadian limited liability partnership and a member firm of the KPMG network of independent
		member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity.
		KPMG Canada provides services to KPMG LLP.



Denison Mines Corp
March 4, 2021





	Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide
	reasonable assurance regarding the reliability of financial reporting and the preparation of
	financial statements for external purposes in accordance with generally accepted accounting
	principles. A company’s internal control over financial reporting includes those policies and
	procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately
	and fairly reflect the transactions and dispositions of the assets of the company; (2) provide
	reasonable assurance that transactions are recorded as necessary to permit preparation of
	financial statements in accordance with generally accepted accounting principles, and that
	receipts and expenditures of the company are being made only in accordance with
	authorizations of management and directors of the company; and (3) provide reasonable
	assurance regarding prevention or timely detection of unauthorized acquisition, use, or
	disposition of the company’s assets that could have a material effect on the financial
	statements. Because of its inherent limitations, internal control over financial reporting may not prevent or
	detect misstatements. Also, projections of any evaluation of ef ectiveness to future periods are
	subject to the risk that controls may become inadequate because of changes in conditions, or
	that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants Toronto, Canada
	March 4, 2021



		2





	Report of Independent Registered Public Accounting Firm

	To the Board of Directors and Shareholders of Denison Mines Corp.


	Opinion on the Financial Statements We have audited the accompanying consolidated statements of financial position of Denison Mines Corp.
	and its subsidiaries (together, the Company) as of December 31, 2019, and the related consolidated
	statement of income (loss) and comprehensive income (loss), changes in equity and cash flow for the year
	then ended, including the related notes (collectively referred to as the consolidated financial statements).

	In our opinion, the consolidated financial statements referred to above present fairly, in all material
	respects, the financial position of the Company as of December 31, 2019, and its financial performance and
	its cash flows for the year then ended in conformity with International Financial Reporting Standards as
	issued by the International Accounting Standards Board.

	Substantial Doubt About the Company’s Ability to Continue as a Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will
	continue as a going concern. As discussed in note 2 (not presented herein) to the consolidated financial
	statements, appearing in Exhibit 99.3 of Company’s annual report on Form 40-F for the year ended
	December 31, 2019, the Company has suffered recurring losses from operations and negative cash
	outflows from operating activities that raise substantial doubt about its ability to continue as a going
	concern. Management’s plans in regard to these matters are also described. The consolidated financial
	statements do not include any adjustments that might result from the outcome of this uncertainty.

	Basis for Opinion The Company’s management is responsible for the consolidated financial statements. Our responsibility is
	to express opinions on the Company’s consolidated financial statements based on our audit. We are a
	public accounting firm registered with the Public Company Accounting Oversight Board (United States)
	(PCAOB) and are required to be independent with respect to the Company in accordance with the U.S.
	federal securities laws and the applicable rules and regulations of the Securities and Exchange
	Commission and the PCAOB.

	We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we
	plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
	statements are free of material misstatement, whether due to error or fraud.

	Our audit of the consolidated financial statements included performing procedures to assess the risks of
	material misstatement of the consolidated financial statements, whether due to error or fraud, and
	performing procedures that respond to those risks. Such procedures included examining, on a test basis,
	evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also
	included evaluating the accounting principles used and significant estimates made by management, as
	well as evaluating the overall presentation of the consolidated financial statements. Our audit also

	PricewaterhouseCoopers LLP
	PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2
	T: +1 416 863 1133, F: +1 416 365 8215

	“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.





	included performing such other procedures as we considered necessary in the circumstances. We believe
	that our audit provides a reasonable basis for our opinion.

	/s/ PricewaterhouseCoopers LLP
	Chartered Professional Accountants, Licensed Public Accountants
	Toronto, Canada
	March 5, 2020

	We served as the Company’s auditor from at least 1996 to 2020. We were not able to determine the
	specific year we began serving as auditor of the Company.


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

		(Expressed in thousands of Canadian dollars (“CAD”) except for share amounts)
									At December 31
			At December 31
				2020		2019

		ASSETS
		Current
		Cash and cash equivalents (note 4)			$	24,992 $		8,190
		Trade and other receivables (note 5)					3,374		4,023
		Inventories (note 6)					3,015		3,352
		Investments (note 7)					16,657	-
		Prepaid expenses and other					1,373		978
							49,411		16,543
		Non-Current
		Inventories-ore in stockpiles (note 6)					2,098		2,098
		Investments (note 7)					293		12,104
		Restricted cash and investments (note 9)			12,018		11,994
		Property, plant and equipment (note 10)					256,870		257,259
		Total assets			$	320,690 $		299,998

		LIABILITIES
		Current
		Accounts payable and accrued liabilities			$	7,178 $		7,930
		Current portion of long-term liabilities:
		Deferred revenue (note 11)					3,478		4,580
		Post-employment benefits (note 12)					120		150
		Reclamation obligations (note 13)					802		914
		Other liabilities (note 14)					262		1,372
							11,840		14,946
		Non-Current
		Deferred revenue (note 11)					33,139		31,741
		Post-employment benefits (note 12)					1,241		2,108
		Reclamation obligations (note 13)					37,618		31,598
		Other liabilities (note 14)					375		532
		Deferred income tax liability (note 15)					9,192		8,924
		Total liabilities					93,405		89,849

		EQUITY
		Share capital (note 16)					1,366,710		1,335,467
		Share purchase warrants (note 17)						-	435
		Contributed surplus					67,387		65,417
		Deficit					(1,208,587)			(1,192,304)
		Accumulated other comprehensive income (note 19)					1,775		1,134
		Total equity					227,285		210,149
		Total liabilities and equity			$	320,690 $		299,998

		Issued and outstanding common shares (note 16)		678,981,882		597,192,153
		Commitments and contingencies (note 24)
		Subsequent events (note 26)

										The accompanying notes are an integral part of the consolidated financial statements

		On behalf of the Board of Directors:

		/s/ ‘Catherine J.G. Stefan									/s/ ‘Brian D. Edgar’

		Catherine J.G. Stefan									Brian D. Edgar
		Director										Director
	3


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Consolidated Statements of Income (Loss) and
		Comprehensive Income (Loss)

						Year Ended December 31
		(Expressed in thousands of CAD dollars except for share and per share amounts)	2020	2019


		REVENUES (note 21)			$	14,423 $		15,549

		EXPENSES
		Operating expenses (note 20, 21)				(10,594)			(14,436)
		Exploration and evaluation (note 21)				(9,032)		(15,238)
		General and administrative (note 21)				(7,609)		(7,811)
		Other income (expense) (note 20)				(95)		2,970
						(27,330)			(34,515)
		Loss before net finance expense, equity accounting			(12,907)			(18,966)

		Finance expense, net (note 20)				(4,236)		(4,125)
		Equity share of loss of associate (note 8)					-	(426)
		Loss before taxes									(17,143)			(23,517)
		Income tax recovery (note 15):
		Deferred				860		5,376
		Net loss for the period			$	(16,283) $			(18,141)

		Other comprehensive income (loss) (note 19):
		Items that may be reclassified to loss:
						Unamortized experience gain – post employment liability				638	-
						Foreign currency translation change						3	7
		Comprehensive loss for the period			$	(15,642) $			(18,134)


		Basic and diluted net loss per share			$	(0.03) $		(0.03)


		Weighted-average number of shares outstanding (in thousands):
		Basic and diluted				628,441			590,343

							The accompanying notes are an integral part of the consolidated financial statements


	4


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Consolidated Statements of Changes in Equity

				Year Ended December 31
		(Expressed in thousands of CAD dol ars)								2020	2019

		Share capital (note 16)
		Balance-beginning of period	$ 1,335,467 $ 1,331,214
		Shares issued for cash, net of issue costs				30,825		4,292
		Flow-through share premium				(22)		(902)
		Shares issued on acquisition of additional mineral property interests (note 10)	-	19
		Share options exercised-cash				148		405
		Share options exercised-fair value adjustment				50		140
		Share units exercised-fair value adjustment				242		299
		Balance-end of period	1,366,710 1,335,467

		Share purchase warrants (note 17)
		Balance-beginning of period				435		435
		Share purchase warrants expired				(435)	-
		Balance-end of period					-	435

		Contributed surplus
		Balance-beginning of period				65,417		63,634
		Share-based compensation expense (note 18)				1,827		2,222
		Share options exercised-fair value adjustment				(50)		(140)
		Share units exercised-fair value adjustment				(242)		(299)
		Share warrants expired				435	-
		Balance-end of period				67,387		65,417

		Deficit
		Balance-beginning of period	(1,192,304) (1,174,163)
		Net loss		(16,283)					(18,141)
		Balance-end of period	(1,208,587) (1,192,304)

		Accumulated other comprehensive income (note 19)
		Balance-beginning of period				1,134		1,127
		Unamortized experience gain – post employment liability			638	-
		Foreign currency translation					3	7
		Balance-end of period				1,775		1,134

		Total Equity
		Balance-beginning of period	$ 210,149 $					222,247
		Balance-end of period	$ 227,285 $					210,149

					The accompanying notes are an integral part of the consolidated financial statements


	5


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Consolidated Statements of Cash Flow

						Year Ended December 31
		(Expressed in thousands of CAD dol ars)						2020	2019
		CASH PROVIDED BY (USED IN):

		OPERATING ACTIVITIES
		Net loss for the period		$	(16,283) $			(18,141)
		Items not affecting cash and cash equivalents:
		Depletion, depreciation, amortization and accretion				7,145		8,711
		Share-based compensation (note 18)				1,827		2,222
		Recognition of deferred revenue (note 11)				(2,762)		(4,609)
		Losses on reclamation obligation revisions (note 13)				3,595		845
		Gains on debt obligation revisions (note 14)				(2)		(26)
		Losses (gains) on property, plant and equipment disposals (note 20)	(405)		37
		Losses (gains) on investments (note 20)				(5,046)		1,085
		Equity loss of associate (note 8)					-	678
		Dilution gain of associate (note 8)					-	(252)
		Gain on deconsolidation of associate					-	(5,267)
		Foreign exchange losses (gains) (note 20)				529	(2)
		Deferred income tax recovery (note 15)				(860)		(5,376)
		Post-employment benefits (note 12)				(90)		(107)
		Reclamation obligations (note 13)				(826)		(855)
		Change in non-cash working capital items (note 20)				(307)		2,256
		Net cash used in operating activities			(13,485)			(18,801)

		INVESTING ACTIVITIES
		Decrease in loans receivable (note 23)					-	250
		Sale of investments (note 7)				477	-
		Purchase of investments (note 7)				(7)		(511)
		Expenditures on property, plant and equipment (note 10)				(278)		(929)
		Proceeds on sale of property, plant and equipment	137	8
		Decrease (increase) in restricted cash and investments	(24)		261
		Net cash provided by (used in) investing activities				305		(921)

		FINANCING ACTIVITIES
		Issuance of debt obligations (note 14)					-	670
		Repayment of debt obligations (note 14)				(467)		(662)
		Issuance of common shares for:
		New share issues-net of issue costs (note 16)				30,825		4,292
		Share options exercise proceeds (note 16)				148		405
		Net cash provided by financing activities				30,506		4,705

		Increase (decrease) in cash and cash equivalents				17,326	(15,017)
		Foreign exchange effect on cash and cash equivalents				(524)	-
		Cash and cash equivalents, beginning of period				8,190		23,207
		Cash and cash equivalents, end of period		$		24,992 $		8,190
		Supplemental cash flow disclosure (note 20)

						The accompanying notes are an integral part of the consolidated financial statements


	6


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Notes to the consolidated financial statements for the years ended
		December 31, 2020 and 2019

		(Expressed in CAD dollars except for shares and per share amounts)

		1. NATURE OF OPERATIONS

		Denison Mines Corp. (“DMC”) and its subsidiary companies and joint operations (collectively, “Denison” or the
		“Company”) are engaged in uranium mining related activities, which can include acquisition, exploration and
		development of uranium properties, as well as the extraction, processing and sel ing of uranium.

		The Company has a 90.0% interest in the Wheeler River Joint Venture (“WRJV”), a 66.90% interest in the
		Waterbury Lake Uranium Limited Partnership (“WLULP”), a 22.5% interest in the McClean Lake Joint Venture
		(“MLJV”) (which includes the McClean Lake mil ) and a 25.17% interest in the Midwest Joint Venture (“MWJV”),
		each of which are located in the eastern portion of the Athabasca Basin region in northern Saskatchewan, Canada.
		The McClean Lake mil is contracted to provide toll milling services to the Cigar Lake Joint Venture (“CLJV”) under
		the terms of a toll mil ing agreement between the parties (see note 11). In addition, the Company has varying
		ownership interests in a number of other development and exploration projects located in Canada.

		The Company provides mine decommissioning and other services (collectively “environmental services”) to third
		parties through its Denison Closed Mines Group (formerly Denison Environmental Services) and is also the
		manager of Uranium Participation Corporation (“UPC”), a publicly-listed company formed to invest substantially all
		of its assets in uranium oxide concentrates (“U3O8“) and uranium hexafluoride (“UF6”). The Company has no
		ownership interest in UPC but receives fees for management services and commissions from the purchase and
		sale of U3O8 and UF6 by UPC.

		DMC is incorporated under the Business Corporations Act (Ontario) and domiciled in Canada. The address of its
		registered head office is 40 University Avenue, Suite 1100, Toronto, Ontario, Canada, M5J 1T1.

		References to “2020” and “2019” refer to the year ended December 31, 2020 and the year ended December 31,
		2019 respectively.


		2. STATEMENT OF COMPLIANCE AND ACCOUNTING POLICIES

		Statement of Compliance

		These consolidated financial statements have been prepared in accordance with International Financial Reporting
		Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

		These financial statements were approved by the board of directors for issue on March 4, 2021.

		Significant accounting policies

		These consolidated financial statements are presented in Canadian dol ars (“CAD”) and all financial information is
		presented in CAD, unless otherwise noted.

		The preparation of the consolidated financial statements in conformity with IFRS requires management to make
		judgements, estimates and assumptions that affect the application of accounting policies and the reported amount
		of assets, liabilities, revenue and expenses. Actual results may vary from these estimates.

		Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
		recognized in the period in which the estimates are revised and in any future periods affected. The areas involving
		a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the
		consolidated financial statements are disclosed in note 3.

		The significant accounting policies used in the preparation of these consolidated financial statements are described
		below:

		A. Consolidation principles

		The financial statements of the Company include the accounts of DMC, its subsidiaries, its joint operations and its
		investments in associates.
	7


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Subsidiaries

		Subsidiaries are all entities (including structured entities) over which the DMC group of entities has control. The
		group controls an entity where the group is exposed to, or has rights to, variable returns from its involvement with
		the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
		are fully consolidated from the date on which control is transferred to the group and are deconsolidated from the
		date that control ceases. Intercompany transactions, balances and unrealized gains and losses from intercompany
		transactions are eliminated.

		Joint Operations

		Joint operations are contractual arrangements which involve joint control between the parties. In the mining
		industry, these arrangements govern the formation, ownership and ongoing operation and management of various
		mineral property interests contributed to the joint operation. A joint operation may or may not be structured through
		a separate financial vehicle. The consolidated financial statements of the Company include its share of the assets
		in such joint operations, together with its share of the liabilities, revenues and expenses arising jointly or otherwise
		from those operations. Al such amounts are measured in accordance with the terms of each arrangement.

		Investments in associates

		An associate is an entity over which the Company has significant influence and is neither a subsidiary, nor an
		interest in a joint operation. Significant influence is the ability to participate in the financial and operating policy
		decisions of the entity without having control or joint control over those policies.

		Associates are accounted for using the equity method. Under this method, the investment in associates is initially
		recorded at cost and adjusted thereafter to record the Company’s share of post-acquisition earnings or loss of the
		associate as if the associate had been consolidated. The carrying value of the investment is also increased or
		decreased to reflect the Company’s share of capital transactions, including amounts recognized in other
		comprehensive income, and for accounting changes that relate to periods subsequent to the date of acquisition.
		Dilution gains or losses arising from changes in the interest in investments in associates are recognized in the
		statement of income or loss.

		The Company assesses at each period-end whether there is any objective evidence that an investment in an
		associate is impaired. If impaired, the carrying value of the Company's share of the underlying assets of the
		associate is written down to its estimated recoverable amount, being the higher of fair value less costs of disposal
		or value in use, and charged to the statement of income or loss.

		B. Foreign currency translation

		Functional and presentation currency

		Items included in the financial statements of each entity in the DMC group are measured using the currency of the
		primary economic environment in which the entity operates (“the functional currency”). Primary and secondary
		indicators are used to determine the functional currency. Primary indicators include the currency that mainly
		influences sales prices, labour, material and other costs. Secondary indicators include the currency in which funds
		from financing activities are generated and in which receipts from operating activities are usually retained.
		Typical y, the local currency has been determined to be the functional currency of Denison’s entities.

		The financial statements of entities that have a functional currency different from the presentation currency of DMC
		(“foreign operations”) are translated into Canadian dollars as follows: assets and liabilities-at the closing rate at the
		date of the statement of financial position, and income and expenses-at the average rate of the period (as this is
		considered a reasonable approximation to actual rates). Al resulting changes are recognized in other
		comprehensive income or loss as cumulative foreign currency translation adjustments.

		When the Company disposes of its entire interest in a foreign operation, or loses control, joint control, or significant
		influence over a foreign operation, the foreign currency gains or losses accumulated in other comprehensive
		income or loss related to the foreign operation are recognized in the statement of income or loss as translational
		foreign exchange gains or losses.

		Transactions and balances

		Foreign currency transactions are translated into an entity’s functional currency using the exchange rates prevailing
		at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign
	8


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities
		denominated in currencies other than an operation’s functional currency are recognized in the statement of income
		or loss as transactional foreign exchange gains or losses.

		C. Cash and cash equivalents

		Cash and cash equivalents include cash on hand, deposits held with banks, and other short-term highly liquid
		investments with original maturities of three months or less which are subject to an insignificant risk of changes in
		value.

		D. Financial instruments

		Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual
		provisions of a financial instrument. Financial assets are derecognized when the rights to receive cash flows from
		the assets have expired or have been transferred and the Company has transferred substantial y all risks and
		rewards of ownership. Financial liabilities are derecognized when the obligations specified in the contract are
		discharged, cancel ed or expire.

		At initial recognition, the Company classifies its financial instruments in the fol owing categories:

		Financial assets and liabilities at fair value through profit or loss (“FVTPL”)

		A financial asset is classified in this category if it is a derivative instrument, an equity instrument for which the
		Company has not made the irrevocable election to classify as fair value through other comprehensive income
		(“FVTOCI”), or a debt instrument that is not held within a business model whose objective includes holding the
		financial assets in order to collect contractual cash flows that are solely payments of principal and interest.
		Derivative financial liabilities and contingent consideration liabilities related to business combinations are also
		classified in this category. Financial instruments in this category are recognized initially and subsequently at fair
		value. Transaction costs are expensed in the statement of income or loss. Gains and losses arising from changes
		in fair value are presented in the statement of income or loss – within other income (expense) - in the period in
		which they arise.

		Financial assets at amortized cost

		A financial asset is classified in this category if it is a debt instrument and / or other similar asset that is held within
		a business model whose objective is to hold the asset in order to col ect the contractual cash flows (i.e. principal
		and interest). Financial assets in this category are initially recognized at fair value plus transaction costs and
		subsequently measured at amortized cost using the effective interest method less a provision for impairment.
		Interest income is recorded in the statement of income or loss through finance income.

		Financial liabilities at amortized cost

		Al financial liabilities that are not recorded as FVTPL are classified in this category and are initial y recognized less
		a discount (when material) to reduce the financial liabilities to fair value and less any directly attributable transaction
		costs. Subsequently, financial liabilities are measured at amortized cost using the effective interest method. Interest
		expense is recorded in the statement of income or loss through finance expense.

		Refer to the “Fair Value of Financial Instruments” section of note 23 for the Company’s classification of its financial
		assets and liabilities within the fair value hierarchy.

		E. Impairment of financial assets

		At each reporting date, the Company assesses the expected credit losses associated with its financial assets that
		are not carried at FVTPL. Expected credit losses are calculated based on the dif erence between the contractual
		cash flows and the cash flows that the Company expects to receive, discounted, where applicable, based on the
		asset’s original effective interest rate.

		For “Trade and other receivables”, the Company calculates expected credit losses based on historical credit loss
		experience, adjusted for forward-looking factors specific to debtors and the economic environment. In recording
		an impairment loss, the carrying amount of the asset is reduced by this computed amount either directly or indirectly
		through the use of an allowance account.
	9

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

F. Inventories

Expenditures, including depreciation, depletion and amortization of production assets, incurred in the mining and

processing activities that wil result in future concentrate production are deferred and accumulated as ore in

stockpiles, in-process inventories and concentrate inventories. These amounts are carried at the lower of weighted

average cost or net realizable value (“NRV”). NRV is calculated as the estimated future concentrate price (net of

sel ing costs) less the estimated costs to complete production into a saleable form.

Stockpiles are comprised of coarse ore that has been extracted from the mine and is available for further

processing. Mining production costs are added to the stockpile as incurred and removed from the stockpile based

upon the weighted average cost per tonne of ore produced from mines considered to be in commercial production.

The current portion of ore in stockpiles represents the amount expected to be processed in the next twelve months.

In-process and concentrate inventories include the cost of the ore removed from the stockpile, a pro-rata share of

the amortization of the associated mineral property, as well as production costs incurred to process the ore into a

saleable product. Processing costs typically include labor, chemical reagents and directly attributable mil overhead

expenditures. Items are valued at weighted average cost.

Materials and other supplies held for use in the production of inventories are carried at weighted average cost and

are not written down below that cost if the finished products in which they wil be incorporated are expected to be

sold at or above cost. However, when a decline in the price of concentrates indicates that the cost of the finished

products exceeds NRV, the materials are written down to NRV. In such circumstances, the replacement cost of

the materials may be the best available measure of their net realizable value.

G. Property, plant and equipment

Plant and equipment

Plant and equipment are recorded at acquisition or production cost and carried net of depreciation and

impairments. Cost includes expenditures incurred by the Company that are directly attributable to the acquisition

of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as

appropriate, only when it is probable that future economic benefits associated with the item wil flow to the Company

and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced.

Repairs and maintenance costs are charged to the statement of income and loss during the period in which they

are incurred.

Depreciation is calculated on a straight line or unit of production basis as appropriate. Where a straight line

methodology is used, the assets are depreciated to their estimated residual value over an estimated useful life

which ranges from three to twenty years depending upon the asset type. Where a unit of production methodology

is used, the assets are depreciated to their estimated residual value over the useful life defined by management’s

best estimate of recoverable reserves and resources in the current estimated mine plan. When assets are retired

or sold, the resulting gains or losses are reflected in the statement of income or loss as a component of other

income or expense. The Company allocates the amount initially recognized in respect of an item of plant and

equipment to its significant parts and depreciates separately each such part over its useful life. Residual values,

methods of depreciation and useful lives of the assets are reviewed at least annual y and adjusted if appropriate.

Where straight-line depreciation is utilized, the range of useful lives for various asset classes is generally as follows:

Buildings

15 - 20 years;

Production machinery and equipment

5 - 7 years;

Other

3 – 5 years.

Mineral property acquisition, exploration, evaluation and development costs

Costs relating to mineral and / or exploration rights acquired through a business combination or asset acquisition

are capitalized and reported as part of “Property, plant and equipment”.

Exploration expenditures are expensed as incurred.

Evaluation expenditures are expensed as incurred, until an area of interest is considered by management to be

sufficiently advanced. Once this determination is made, the area of interest is classified as an “Advanced

Evaluation Stage” mineral property, a component of the Company’s mineral properties, and al further non-

exploration expenditures for the current and subsequent periods are capitalized. These expenses can include


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		further evaluation expenditures such as mining method selection and optimization, metallurgical sampling test work
		and costs to further delineate the ore body to a higher confidence level.

		Once commercial viability and technical feasibility has been established for a property, the property is classified
		as a “Development Stage” mineral property, an impairment test is performed on transition, and all further
		development costs are capitalized to the asset. Further development costs include costs related to constructing a
		mine, such as shaft sinking and access, lateral development, drift development, engineering studies and
		environmental permit ing, infrastructure development and the costs of maintaining the site until commercial
		production.

		Such capital costs represent the net expenditures incurred and capitalized as at the balance sheet date and do
		not necessarily reflect present or future values.

		Once a development stage mineral property goes into commercial production, the property is classified as
		“Producing” and the accumulated costs are amortized over the estimated recoverable reserves and resources in
		the current mine plan using a unit of production basis. Commercial production occurs when a property is
		substantially complete and ready for its intended use.

		Proceeds received from the sale of an interest in a property are credited against the carrying value of the property,
		with any difference recorded in the statement of income or loss as a gain or loss on sale within other income and
		expense.

		Lease assets (and lease obligations)

		At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or
		contains, a lease, if the contract conveys the right to control the use of an identified asset for a period of time in
		exchange for consideration. To assess whether a contract conveys the right to control the use of an identified
		asset, the Company assesses whether:
		•	the contract involves the use of an identified asset – this may be specified explicitly or implicitly and should be
			physically distinct or represent substantially all of the capacity of a physically distinct asset. If the supplier has
			a substantive substitution right, then the asset is not identified;
		•	the Company has the right to obtain substantially all of the economic benefits from the use of the asset
			throughout the period of use; and
		•	the Company has the right to direct the use of the asset. The Company has this right when it has the decision-
			making rights that are most relevant to changing how and for what purpose the asset is used. In rare cases
			where the decision about how and for what purpose the asset is used is predetermined, the Company has the
			right to direct the use of the asset if either (a) the Company has the right to operate the asset; or (b) the
			Company designed the asset in a way that predetermines how and for what purpose it wil be used.

		If the contract contains a lease, the Company accounts for the lease and non-lease components separately. For
		the lease component, a right-of-use asset and a corresponding lease liability are set-up at the date at which the
		leased asset is available for use by the Company. The right-of-use asset is depreciated over the shorter of the
		asset’s useful life and the lease term on a straight-line basis.

		The lease payments associated with the lease liability are discounted using either the interest rate implicit in the
		lease, if available, or the Company’s incremental borrowing rate. Each lease payment is al ocated between the
		liability and the finance cost (i.e. accretion) so as to produce a constant rate of interest on the remaining lease
		liability balance.

		H. Impairment of non-financial assets

		Property, plant and equipment assets are assessed at the end of each reporting period to determine if there is any
		indication that the asset may be impaired. If any such indication exists, an estimate of the recoverable amount of
		the asset is made. For the purpose of measuring recoverable amounts, assets are grouped at the lowest level, or
		cash generating unit (“CGU”), for which there are separately identifiable cash inflows. The recoverable amount is
		the higher of an asset’s fair value less costs of disposal and value in use (being the present value of the expected
		future cash flows of the relevant asset or CGU, as determined by management). An impairment loss is recognized
		for the amount by which the CGU’s carrying amount exceeds its recoverable amount.

		Mineral property assets are tested for impairment using the impairment indicators under IFRS 6 “Exploration for
		and Evaluation of Mineral Resources” up until the commercial and technical feasibility for the property is
		established. From that point onwards, mineral property assets are tested for impairment using the impairment
		indicators of IAS 36 “Impairment of Assets”.
	11


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		I. Employee benefits

		Post-employment benefit obligations

		The Company assumed the obligation of a predecessor company to provide life insurance, supplemental health
		care and dental benefits, excluding pensions, to its former Canadian employees who retired from active service
		prior to 1997. The estimated cost of providing these benefits is actuarially determined using the projected benefits
		method and is recorded on the balance sheet at its estimated present value. The interest cost on this unfunded
		liability is being accreted over the remaining lives of this retiree group. Experience gains and losses are being
		deferred as a component of accumulated other comprehensive income or loss and are adjusted, as required, on
		the obligations re-measurement date.

		Stock-based compensation

		The Company uses a fair value-based method of accounting for stock options to employees and to non-employees.
		The fair value is determined using the Black-Scholes option pricing model on the date of the grant. The cost is
		recognized on a graded method basis, adjusted for expected forfeitures, over the applicable vesting period as an
		increase in stock-based compensation expense and the contributed surplus account. When such stock options are
		exercised, the proceeds received by the Company, together with the respective amount from contributed surplus,
		are credited to share capital.

		The Company also has a share unit plan pursuant to which it may grant share units to employees – the share units
		are equity-settled awards. The Company determines the fair value of the awards on the date of grant. The cost is
		recognized on a graded method basis, adjusted for expected forfeitures, over the applicable vesting period, as an
		increase in share-based compensation expense and the contributed surplus account. When such share units are
		settled for common shares, the applicable amounts of contributed surplus are credited to share capital.

		Termination benefits

		The Company recognizes termination benefits when it is demonstrably committed to either terminating the
		employment of current employees according to a detailed formal plan without possibility of withdrawal, or providing
		benefits as a result of an offer made to encourage voluntary termination. Benefits falling due more than twelve
		months after the end of the reporting period are discounted to their present value.

		J. Reclamation provisions

		Reclamation provisions, which are legal and constructive obligations related to the retirement of tangible long-lived
		assets, are recognized when such obligations are incurred and a reasonable estimate of the value can be
		determined. These obligations are measured initially at the present value of expected cash flows using a pre-tax
		discount rate reflecting risks specific to the liability and the resulting costs are capitalized and added to the carrying
		value of the related assets. In subsequent periods, the liability is adjusted for the accretion of the discount and the
		expense is recorded in the statement of income or loss. Changes in the amount or timing of the underlying future
		cash flows or changes in the discount rate are immediately recognized as an increase or decrease in the carrying
		amounts of the related asset, if one exists, and liability. These costs are amortized to the results of operations over
		the life of the asset. Reductions in the amount of the liability are first applied against the amount of the net
		reclamation asset with any excess value being recorded in the statement of income or loss.

		The Company’s activities are subject to numerous governmental laws and regulations. Estimates of future
		reclamation liabilities for asset decommissioning and site restoration are recognized in the period when such
		liabilities are incurred. These estimates are updated on a periodic basis and are subject to changing laws,
		regulatory requirements, changing technology and other factors which wil be recognized when appropriate.
		Liabilities related to site restoration include long-term treatment and monitoring costs and incorporate total
		expected costs net of recoveries. Expenditures incurred to dismantle facilities, restore and monitor closed resource
		properties are charged against the related reclamation liability.

		K. Provisions

		Provisions for restructuring costs and legal claims, where applicable, are recognized in liabilities when the
		Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of
		resources wil be required to settle the obligation, and the amount can be reliably estimated. Provisions are
		measured at management’s best estimate of the expenditure required to settle the obligation at the end of the
		reporting period, and are discounted to present value where the impact of the discount is material. The Company
		performs evaluations to identify onerous contracts and, where applicable, records provisions for such contracts.
	12


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		L. Current and deferred Income tax

		Current income tax payable is based on taxable income for the period. Taxable income differs from income as
		reported in the statement of income or loss because it excludes items of income or expense that are taxable or
		deductible in other periods and it further excludes items that are never taxable or deductible. The Company’s
		liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance
		sheet date.

		Deferred income taxes are accounted for using the balance sheet liability method. Deferred income tax assets and
		liabilities are computed based on temporary differences between the financial statement carrying values of the
		existing assets and liabilities and their respective income tax bases used in the computation of taxable income.
		Computed deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax
		assets are recognized to the extent that it is probable that taxable income wil be available against which deductible
		temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference
		arises from goodwil or from the initial recognition (other than in a business combination) of other assets and
		liabilities in a transaction that affects neither the taxable income nor the accounting income. Deferred tax liabilities
		are recognized for taxable temporary differences arising on investments in subsidiaries and investments, and
		interests in joint ventures, except where the Company is able to control the reversal of the temporary differences
		and it is probable that the temporary dif erences wil not reverse in the foreseeable future. The carrying amount of
		deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable
		that sufficient taxable earnings wil be available to allow all or part of the asset to be recovered.

		Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the
		asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the balance
		sheet date. Deferred tax is charged or credited to the statement of income or loss (or comprehensive income or
		loss in some specific cases), except when it relates to items charged or credited directly to equity, in which case
		the deferred tax is also recorded within equity.

		Income tax assets and liabilities are offset when there is a legally enforceable right to offset the assets and liabilities
		and when they relate to income taxes levied by the same tax authority on either the same taxable entity or different
		taxable entities where there is an intention to settle the balance on a net basis.

		M. Flow-through common shares

		The Company’s Canadian exploration activities have been financed in part through the issuance of flow-through
		common shares, whereby the Canadian income tax deductions relating to these expenditures are claimable by the
		subscribers and not by the Company. The proceeds from issuing flow-through shares are allocated between the
		offering of shares and the sale of tax benefits. The al ocation is based on the difference (“premium”) between the
		quoted price of the Company’s existing shares and the amount the investor pays for the actual flow-through shares.
		A liability is recognized for the premium when the shares are issued, and is extinguished when the tax effect of the
		temporary differences, resulting from the renunciation of the tax deduction to the flow-through shareholders, is
		recorded - with the difference between the liability and the value of the tax assets renounced being recorded as a
		deferred tax expense. The tax effect of the renunciation is recorded at the time the Company makes the
		renunciation to its subscribers – which may differ from the effective date of renunciation. If the flow-through shares
		are not issued at a premium, a liability is not established, and on renunciation the ful value of the tax assets
		renounced is recorded as a deferred tax expense.

		N. Revenue recognition

		Revenue from pre-sold toll milling services

		Revenue from the pre-sale of toll mil ing arrangement cash flows is recognized as the toll milling services are
		provided. At contract inception, the Company estimates the expected transaction price of the toll mil ing services
		being sold based on available information and calculates an average per unit transaction price that applies over
		the life of the contract. This unit price is used to draw-down the deferred revenue balance as the toll mil ing services
		occur. When changes occur to the expected timing, or volume of toll mil ing services, the per unit transaction price
		is adjusted to reflect the change (such review to be done annually, at a minimum), and a cumulative catch up
		adjustment is made to reflect the updated rate. The amount of the upfront payment received from the toll milling
		pre-sale arrangements includes a significant financing component due to the longer term nature of such
		agreements. As such, the Company also recognizes accretion expense on the deferred revenue balance which is
		recorded in the statement of income or loss through “Finance expense, net”.

	13


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Revenue from environmental services (i.e. Closed Mines Group)

		Environmental service contracts represent a series of distinct performance obligations that are substantially the
		same and have the same pattern of transfer of control to the customer. The transaction price is estimated at
		contract inception and is recognized over the life of the contract as control is transferred to the customer. Variable
		consideration, where applicable, is estimated at contract inception using either the expected value method or the
		most likely amount method. If it is highly probable that a subsequent reversal of revenue wil not occur when the
		uncertainty has been resolved, the Company wil recognize as revenue the estimated transaction price, including
		the estimate of the variable portion, upon transfer of control to the customer, otherwise the variable portion of the
		transaction price wil be constrained, and wil not be recognized as revenue until the uncertainty has been resolved.

		Revenue from management services (i.e. UPC)

		The management services arrangement with UPC represents a series of distinct performance obligations that are
		substantially the same and have the same pattern of transfer of control to the customer. The transaction price for
		the contract is estimated at contract inception and is recognized over the life of the contract as control is transferred
		to the customer as the services are provided. The variable consideration related to the net asset value (“NAV”)
		based management fee was estimated at contract inception using the expected value method. It was determined
		that it is highly probable that a subsequent reversal of revenue would occur if the variable consideration was
		included in the transaction price, and as such, the variable portion of the transaction price wil be measured and
		recognized when the uncertainty has been resolved (i.e. when the actual NAV has been calculated).

		Commission revenue earned on acquisition or sale of U3O8 and UF6 on behalf of UPC (or other parties where
		Denison acts as an agent) is recognized when control of the related U3O8 or UF6 passes to the customer, which is
		the date when title of the U3O8 and UF6 passes to the customer.

		Revenue from spot sales of uranium

		In a uranium supply arrangement, the Company is contractually obligated to provide uranium concentrates to the
		customer. Each delivery is considered a separate performance obligation under the contract – revenue is
		measured based on the transaction price specified in the contract and the Company recognizes revenue when
		control to the uranium has been transferred to the customer.

		Uranium can be delivered either to the customer directly (physical deliveries) or notional y under title within a
		uranium storage facility (notional deliveries). For physical deliveries to customers, the terms in the supply
		arrangement specify the location of delivery and revenue is recognized when control transfers to the customer
		which is general y when the uranium has been delivered and accepted by the customer at that location. For notional
		deliveries at a uranium storage facility, revenue is recognized on the date that the Company specifies the storage
		facility to transfer title of a contractually specified quantity of uranium to a customer’s account at the storage facility.

		O. Earnings (loss) per share

		Basic earnings (loss) per share (“EPS”) is calculated by dividing the net income or loss for the period attributable
		to equity owners of DMC by the weighted average number of common shares outstanding during the period.

		Diluted EPS is calculated by adjusting the weighted average number of common shares outstanding for dilutive
		instruments. The number of shares included with respect to options, warrants and similar instruments is computed
		using the treasury stock method.


		3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

		The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical
		accounting estimates and judgements that affect the amounts reported. It also requires management to exercise
		judgement in applying the Company’s accounting policies. These judgements and estimates are based on
		management’s best knowledge of the relevant facts and circumstances taking into account previous experience.
		Although the Company regularly reviews the estimates and judgements made that affect these financial
		statements, actual results may be materially different.

	14


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Significant estimates and judgements made by management relate to:

		A. Determination of a mineral property being sufficiently advanced

		The Company fol ows a policy of capitalizing non-exploration related expenditures on properties it considers to be
		sufficiently advanced. Once a mineral property is determined to be sufficiently advanced, that determination is
		irrevocable and the capitalization policy continues to apply over the life of the property. In determining whether or
		not a mineral property is sufficiently advanced, management considers a number of factors, including, but not
		limited to: current uranium market conditions, the quality of resources identified, access to the resource, the
		suitability of the resource to current mining methods, ease of permitting, confidence in the jurisdiction in which the
		resource is located and mil processing complexity.

		Many of these factors are subject to risks and uncertainties that can support a “sufficiently advanced” determination
		as at one point in time but not support it at another. The final determination requires significant judgment on the
		part of the Company’s management and directly impacts the carrying value of the Company’s mineral properties.

		B. Mineral property impairment reviews and impairment adjustments

		Mineral properties are tested for impairment when events or changes in circumstances indicate that the carrying
		amount may not be recoverable. When an indicator is identified, the Company determines the recoverable amount
		of the property, which is the higher of an asset’s fair value less costs of disposal or value in use. An impairment
		loss is recognized if the carrying value exceeds the recoverable amount. The recoverable amount of a mineral
		property may be determined by reference to estimated future operating results and discounted net cash flows,
		current market valuations of similar properties or a combination of the above. In undertaking this review,
		management of the Company is required to make significant estimates of, amongst other things: reserve and
		resource amounts, future production and sale volumes, forecast commodity prices, future operating, capital and
		reclamation costs to the end of the mine’s life and current market valuations from observable market data which
		may not be directly comparable. These estimates are subject to various risks and uncertainties, which may
		ultimately have an effect on the expected recoverable amount of a specific mineral property asset. Changes in
		these estimates could have a material impact on the carrying value of the mineral property amounts and the
		impairment losses recognized.

		C. Deferred revenue – pre-sold toll milling: classification

		In February 2017, Denison closed an arrangement with Anglo Pacific Group PLC and its subsidiaries (the “APG
		Arrangement” and “APG” respectively – see note 11). Under the APG Arrangement, Denison monetized its right
		to receive future toll milling cash receipts from July 1, 2016 onwards from the MLJV under the current toll mil ing
		agreement with the CLJV for an upfront cash payment. The APG Arrangement consisted of a loan structure and a
		stream arrangement. Significant judgement was required to determine whether the APG Arrangement should be
		accounted for as a financial obligation (i.e. debt) or deferred revenue.

		Key factors that support the deferred revenue conclusion reached by management include, but are not limited to:
		a) Limited recourse loan structure – amounts due to APG are generally repayable only to the extent of Denison’s
		share of the tol mil ing revenues earned by the MLJV from the processing of the first 215 mil ion pounds of U3O8
		from the Cigar Lake mine on or after July 1, 2016, under the terms of the current Cigar Lake toll mil ing agreement;
		and b) No warranty of the future rate of production - no warranty is provided by Denison to APG regarding the
		future rate of production at the Cigar Lake mine and / or the McClean Lake mil , or the amount and / or collectability
		of cash receipts to be received by the MLJV in respect of tol mil ing of Cigar Lake ore.

		D. Deferred revenue – pre-sold toll milling: revenue recognition

		In February 2017, Denison closed the APG Arrangement and effectively monetized its right to receive specified
		future tol mil ing cash receipts from the MLJV related to the current toll mil ing agreement with the CLJV. In
		exchange, Denison received a net up-front payment of $39,980,000 which has been accounted for as a deferred
		revenue liability as at the transaction close date.

		Under IFRS 15, the Company is required to recognize a revenue component and a financing component as it
		draws down the deferred revenue associated with the APG Arrangement over the life of the specified toll mil ing
		production included in the APG Arrangement. In estimating both of these components, the Company is required
		to make assumptions relating to the future tol mil ing production volume associated with Cigar Lake Phase 1 and
		2 ore reserves and resources (to end of mine life) and estimates of the annual timing of that production. Changes
		in these estimates affect the underlying production profile, which in turn affects the average toll mil ing drawdown
		rate used to recognize revenue.
	15

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

When the average toll mil ing drawdown rate is changed, the impact is reflected on a life-to-date production basis

with a retroactive adjustment to revenue recorded in the current period. Going forward, each time the Company

updates its estimates of the underlying production profile for the APG Arrangement (typically in the quarter that

information relating to Cigar Lake uranium resource updates and / or production schedules becomes publicly

available), retroactive adjustments to revenue wil be recorded in the period that the revised estimate is determined

– such adjustments, which are non-cash in nature, could be material.

E. Deferred tax assets and liabilities

Deferred tax assets and liabilities are computed in respect of taxes that are based on taxable profit. Taxable profit

wil often differ from accounting profit and management may need to exercise judgement to determine whether

some taxes are income taxes (and subject to deferred tax accounting) or operating expenses.

Deferred tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply

when the temporary differences between accounting carrying values and tax basis are expected to be recovered

or settled. The determination of the ability of the Company to utilize tax loss carry forwards and other deferred tax

assets to offset deferred tax liabilities requires management to exercise judgment and make certain assumptions

about the future performance of the Company. Management is required to assess whether it is “probable” that the

Company wil benefit from these prior losses and other deferred tax assets. Changes in economic conditions,

commodity prices and other factors could result in revisions to the estimates of the benefits to be realized or the

timing of utilizing the losses.

F. Reclamation obligations

Asset retirement obligations are recorded as a liability when the asset is initially constructed or a constructive or

legal obligation exists. The valuation of the liability typically involves identifying costs to be incurred in the future

and discounting them to the present using an appropriate discount rate for the liability. The determination of future

costs involves a number of estimates relating to timing, type of costs, mine closure plans, and review of potential

methods and technical advancements. Furthermore, due to uncertainties concerning environmental remediation,

the ultimate cost of the Company’s decommissioning liability could differ materially from amounts provided. The

estimate of the Company’s obligation is subject to change due to amendments to applicable laws and regulations

and as new information concerning the Company’s operations becomes available. The Company is not able to

determine the impact on its financial position, if any, of environmental laws and regulations that may be enacted in

the future.

4. CASH AND CASH EQUIVALENTS

The cash and cash equivalent balance consists of:

At December 31 At December 31

(in thousands)

2020

2019

Cash

12,004 $

1,583

Cash in MLJV and MWJV

540

1,397

Cash equivalents

12,448

5,210

24,992 $

8,190

Cash equivalents consist of various investment savings account instruments and money market funds, all of which

are short term in nature, highly liquid and readily convertible into cash.


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		5. TRADE AND OTHER RECEIVABLES

		The trade and other receivables balance consists of:

					At December 31 At December 31
			(in thousands)			2020		2019

			Trade receivables		$	2,644 $		2,608
			Receivables in MLJV and MWJV			394		1,125
			Sales tax receivables			154			92
			Sundry receivables			182		198
					$	3,374 $		4,023


		6. INVENTORIES

		The inventories balance consists of:

					At December 31 At December 31
			(in thousands)			2020		2019

			Uranium concentrates	$						-	$	526
			Inventory of ore in stockpiles			2,098		2,098
			Mine and mil supplies in MLJV			3,015		2,826
				$		5,113	$	5,450

			Inventories-by balance sheet presentation:
			Current	$		3,015	$	3,352
			Long term-ore in stockpiles			2,098		2,098
				$		5,113	$	5,450

		In 2020, the Company sold all of its uranium concentrate inventory.

		Long-term ore in stockpile inventory represents an estimate of the amount of ore on the stockpile in excess of the
		next twelve months of planned mil production.


		7. INVESTMENTS

		The investments balance consists of:

					At December 31 At December 31
			(in thousands)			2020		2019

			Investments:
			Equity instruments	$		16,950	$	12,104
				$		16,950	$	12,104

			Investments-by balance sheet presentation:
			Current	$		16,657	$	-
			Long-term			293		12,104
				$		16,950	$	12,104

	17


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		The investments continuity summary is as fol ows:

			(in thousands)			2020		2019

			Balance-January 1		$	12,104	$	2,255
			Proceeds from property disposals (note 10)			270			-
			Purchase of investments							7	511
			Sale of investments			(477)			-
			Transfer from investment in associates at fair value (note 8)		-		10,423
			Fair value gain (loss) to profit and loss (note 20)			5,046		(1,085)
			Balance-December 31		$	16,950	$	12,104

		At December 31, 2020, the Company holds equity instruments consisting of shares and warrants in publicly-traded
		companies and no debt instruments.


		8. INVESTMENT IN ASSOCIATE

		In June 2016, Denison acquired a significant shareholding in GoviEx Uranium Inc (“GoviEx”). GoviEx is a mineral
		resource company focused on the exploration and development of its uranium properties located in Africa. GoviEx
		maintains a head office located in Canada and is a public company listed on the TSX Venture Exchange. Denison’s
		ownership interest in GoviEx at December 31, 2020 is approximately 13.72%, based on publicly available
		information, and it continues to have one director appointed to the GoviEx board of directors

		Through the voting power of its share ownership interest, its large warrant holdings and its seat on the board of
		directors, Denison had the ability to demonstrate significant influence over GoviEx and used the equity method to
		account for this investment up to September 30, 2019. On October 1, 2019 (the deconsolidation date), Denison
		discontinued use of the equity method based on a determination that Denison’s influence over GoviEx was no
		longer demonstrable as significant - due to the expiry of its warrant holdings and an increased ownership interest
		in GoviEx’s main subsidiary by the Government of Niger during GoviEx’s third quarter of 2019.

		A continuity summary of the investment in GoviEx, using the equity method, is as fol ows:

			(in thousands except share amounts)			Number of
				Common Shares

			Balance-January 1, 2019			65,144,021			5,582
			Equity share of net loss				-	(678)
			Dilution gain				-	252
			Deconsolidation of investment in GoviEx				-	(5,156)
			Balance-December 31, 2019			65,144,021 $	-

		On the deconsolidation date, Denison classified its equity investment in GoviEx as FVTPL. As a result, Denison
		recognized a gain of $5,267,000 which represents the excess of the fair value of the investment on that date
		($10,423,000) as compared to the investment’s carrying value under the equity method ($5,156,000).

		In 2020, Denison’s investment in GoviEx has been classified as FVTPL and is included as a component of
		Investments on the balance sheet (see note 7).














	18


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		9. RESTRICTED CASH AND INVESTMENTS

		The Company has certain restricted cash and investments deposited to collateralize a portion of its reclamation
		obligations. The restricted cash and investments balance consists of:

				At December 31 At December 31
			(in thousands)		2020		2019

			Cash and cash equivalents	$	2,883	$	2,859
			Investments		9,135		9,135
				$	12,018	$	11,994

			Restricted cash and investments-by item:
			El iot Lake reclamation trust fund	$	2,883	$	2,859
			Letters of credit facility pledged assets		9,000		9,000
			Letters of credit additional collateral		135		135
				$	12,018	$	11,994

		At December 31, 2020 and December 21, 2019, investments consist of guaranteed investment certificates with
		maturities of more than 90 days.

		Elliot Lake reclamation trust fund

		The Company has the obligation to maintain its decommissioned El iot Lake uranium mine pursuant to a
		Reclamation Funding Agreement effective December 21, 1995 (“Agreement”) with the Governments of Canada
		and Ontario. The Agreement, as further amended in February 1999, requires the Company to maintain funds in
		the reclamation trust fund equal to estimated reclamation spending for the succeeding six calendar years, less
		interest expected to accrue on the funds during the period. Withdrawals from this reclamation trust fund can only
		be made with the approval of the Governments of Canada and Ontario to fund El iot Lake monitoring and site
		restoration costs.

		In 2020, the Company deposited an additional $803,000 into the Elliot Lake reclamation trust fund and withdrew
		$811,000. In 2019, the Company deposited an additional $477,000 into the Elliot Lake reclamation trust fund and
		withdrew $797,000.

		Letters of credit facility pledged assets

		At December 31, 2020, the Company had on deposit $9,000,000 with the Bank of Nova Scotia (“BNS”) as pledged
		restricted cash and investments pursuant to its obligations under an amended and extended letters of credit facility
		(see notes 11, 13 and 14). The funds were initial y deposited in 2017.

		Letters of credit additional col ateral

		At December 31, 2020, the Company had on deposit an additional $135,000 of cash collateral with BNS in respect
		of the portion of its issued reclamation letters of credit in excess of the collateral available under its letters of credit
		facility (see notes 13 and 14).
















	19


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		10. PROPERTY, PLANT AND EQUIPMENT

		The property, plant and equipment (“PP&E”) continuity summary is as follows:

					Plant and Equipment			Mineral	Total
			(in thousands)				Owned	Right-of-Use				Properties	PP&E

			Cost:
			Balance – January 1, 2019	$ 103,430 $		- $ 178,947 $ 282,377
			Adoption of IFRS 16		-							944	-	944
			Additions								376	38	534	948
			Disposals		(104)						(76)	-	(180)
			Reclamation adjustment (note 13)								885	-			-	885
			Balance – December 31, 2019	$ 104,587 $						906 $ 179,481 $ 284,974

			Additions								16	26	262	304
			Disposals								(60)	(41)	-	(101)
			Reclamation adjustment (note 13)		1,544		-			-	1,544
			Balance – December 31, 2020	$ 106,087 $						891 $ 179,743 $ 286,721

			Accumulated amortization, depreciation:
			Balance – January 1, 2019	$	(24,086) $		- $			- $	(24,086)
			Amortization		(212)		-			-	(212)
			Depreciation		(3,527)						(237)	-	(3,764)
			Disposals								95	40	-	135
			Reclamation adjustment (note 13)								212	-			-	212
			Balance – December 31, 2019	$	(27,518) $						(197) $	- $	(27,715)

			Amortization		(243)		-			-	(243)
			Depreciation		(2,037)						(198)	-	(2,235)
			Disposals								60	39	-	99
			Reclamation adjustment (note 13)								243	-			-	243
			Balance – December 31, 2020	$	(29,495) $						(356) $	- $	(29,851)

			Carrying value:
			Balance – December 31, 2019	$	77,069 $						709 $ 179,481 $ 257,259
			Balance – December 31, 2020	$	76,592 $						535 $ 179,743 $ 256,870

		Plant and Equipment - Owned

		The Company has a 22.5% interest in the McClean Lake mil through its ownership interest in the MLJV. The
		carrying value of the mil , comprised of various infrastructure, building and machinery assets, represents
		$68,909,000, or 90.0%, of the December 2020 total carrying value amount of owned PP&E assets.

		A toll mil ing agreement amongst the participants of the MLJV and the CLJV provides for the processing of certain
		future output of the Cigar Lake mine at the McClean Lake mil , for which the owners of the McClean Lake mil
		receive a toll mil ing fee and other benefits (Denison further has an agreement with APG reqarding the receipt of
		certain toll milling fees it receives from this tol milling agreement – see note 11). In determining the units of
		production amortization rate for the McClean Lake mil , the amount of production attributable to the mil assets
		includes Denison’s expected share of mil feed related to MLJV ores, MWJV ores and the CLJV toll mil ing contract.
		Milling activities in 2019 and 2020 at the McClean Lake mil have been dedicated to processing and packaging ore
		from the Cigar Lake mine. Mil production in 2020 has been impacted by the COVID-19 pandemic.

		Plant and Equipment – Right-of-Use

		In conjunction with the adoption of IFRS 16 Leases (“IFRS 16”), effective January 1, 2019, the Company has
		included the cost of various right-of-use (“ROU”) assets within PP&E. ROU assets consist of building, vehicle and
		office equipment leases. The majority of the value is attributable to the building lease assets for the Company’s
		offices and warehousing space located in Toronto and Saskatoon.
	20


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Mineral Properties

		The Company has various interests in development, evaluation and exploration projects located in Canada which
		are held directly or through option or various contractual agreements. The fol owing projects, all located in
		Saskatchewan, represent $162,641,000, or 90.5%, of the carrying value amount of mineral property assets as at
		December 31, 2020:

		a) Wheeler River - the Company has a 90.0% interest in the project (includes the Phoenix and Gryphon deposits);
		b) Waterbury Lake - the Company has a 66.90% interest in the project (includes the THT and Huskie deposits)
			and also has a 2.0% net smelter return royalty on the portion of the project it does not own;
		c) Midwest - the Company has a 25.17% interest in the project (includes the Midwest Main and Midwest A
			deposits);
		d) Mann Lake - the Company has a 30.0% interest in the project;
		e) Wolly - the Company has a 21.89% interest in the project;
		f) Johnston Lake - the Company has a 100% interest in the project; and
		g) McClean Lake - the Company has a 22.5% interest in the project (includes the Sue D, Sue E, Caribou,
			McClean North and McClean South deposits).

		Waterbury Lake

		In 2019, the Company increased its interest in the Waterbury Lake property from 65.92% to 66.57% and further
		increased it again in 2020 to 66.90% under the terms of the dilution provisions in the agreements governing the
		project (see note 22).

		Hook Carter

		In November 2016, Denison completed the purchase of an 80% interest in the Hook-Carter property, located in
		the southwestern portion of the Athabasca Basin region in northern Saskatchewan, from ALX Uranium Corp
		(“ALX”), with ALX retaining a 20% interest.

		Under terms in the agreement, Denison agreed to fund ALX’s share of the first $12,000,000 in expenditures on the
		property. As at December 31, 2020, the Company has spent $6,719,000 towards ALX’s carried interest on the
		project since its acquisition in November 2016 (December 31, 2019: $6,712,000).

		Moon Lake South

		In January 2016, the Company entered into an option agreement with CanAlaska Uranium Ltd (“CanAlaska”) to
		earn an interest in CanAlaska’s Moon Lake South project located in the Athabasca Basin in Saskatchewan. Under
		the terms of the option, Denison would earn an initial 51% interest in the project by spending $200,000 by
		December 31, 2017 and would increase its interest to 75% by spending an additional $500,000 by December 31,
		2020.

		As at December 31, 2020, the Company has spent the required $700,000 under the option and has earned a 75%
		interest in the project.

		Murphy Lake

		In November 2019, Denison completed an agreement with Eros Resources Corp (“Eros”) to acquire Eros’s minority
		interest in the Murphy Lake project. Denison acquired Eros’s 17.42% minority interest in Murphy Lake in exchange
		for the issuance of 32,262 common shares of DMC and the granting of a 1.5% net smelter return royalty on the
		project. Denison’s interest in Murphy Lake is now 100%.

		Eros’s minority interest acquired by Denison has been accounted for as an asset acquisition with share based
		consideration. Denison recorded a total acquisition value of $40,000 in 2019, which included transaction costs of
		$21,000 and $19,000 of share based consideration which were fair valued using Denison’s closing share price on
		November 28, 2019 of $0.58 per share. In 2020, the total acquisition value was reduced to $35,000 due to the
		reversal of $5,000 of estimated transaction related costs.

		Talbot Lake

		In June 2020, the Company closed an agreement to sell its 100% interest in the Talbot Lake property to Argo Gold
		Inc (“Argo Gold”). At closing, Denison received cash consideration of $135,000 and 1,350,000 common shares of
		Argo Gold that were fair valued at $270,000. The shares were subject to a four month hold. The Company has
		recognized a gain on sale of $405,000 in conjunction with the sale.
	21


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Under the terms of the agreement, Denison has also received a 2% net smelter royalty on the property and it is
		entitled to receive an additional milestone payment, in cash or shares, if the property produces a resource estimate
		that meets certain specified amounts in the agreement.


		11. DEFERRED REVENUE

		The deferred revenue balance consists of:

				At December 31 At December 31
			(in thousands)		2020	2019

			Deferred revenue – pre-sold toll milling:
			CLJV Toll Milling - APG	$	36,617 $	36,321
				$	36,617 $	36,321

			Deferred revenue-by balance sheet presentation:
			Current	$	3,478 $	4,580
			Non-current		33,139	31,741
				$	36,617 $	36,321

		The deferred revenue liability continuity summary is as fol ows:

			(in thousands)		2020	2019

			Balance-January 1	$	36,321 $	37,727
			Revenue earned during the period (note 21)		(2,762)	(4,609)
			Accretion		3,058	3,203
			Balance-December 31	$	36,617 $	36,321

		Arrangement with Anglo Pacific Group PLC

		In February 2017, Denison closed an arrangement with APG under which Denison received an upfront payment
		of $43,500,000 in exchange for its right to receive future tol mil ing cash receipts from the MLJV under the current
		toll mil ing agreement with the CLJV from July 1, 2016 onwards. The up-front payment was based upon an estimate
		of the gross toll mil ing cash receipts to be received by Denison discounted at a rate of 8.50%.

		The APG Arrangement represents a contractual obligation of Denison to pay onward to APG any cash proceeds
		of future toll mil ing revenue earned by the Company related to the processing of the specified Cigar Lake ore
		through the McClean Lake mil . At closing, the Company made payments to APG of $3,520,000, representing the
		Cigar Lake toll milling cash receipts received by Denison in respect of toll milling activity for the period from July 1,
		2016 through January 31, 2017, and reflected those amounts as a reduction of the initial upfront amount received,
		thereby reducing the initial deferred revenue balance to $39,980,000 at the transaction date.

		In connection with the closing of the APG Arrangement, Denison reimbursed APG for USD$100,000 in due
		diligence costs and granted 1,673,077 share purchase warrants, exercisable for 3 years from the closing date at
		an exercise price of $1.27 per share, to APG in satisfaction of a $435,000 arrangement fee payable (see note 17).
		In addition, the terms of the BNS Letters of Credit Facility between BNS and Denison were amended to reflect
		certain changes required to facilitate an Intercreditor Agreement between APG, BNS and Denison (see note 14).

		In 2019, the Company recognized $4,609,000 of toll mil ing revenue from the draw-down of deferred revenue,
		based on Cigar Lake toll mil ing production of 18,012,000 pounds U3O8 (100% basis). The drawdown in 2019
		includes a cumulative increase in revenue for prior periods of $26,000 resulting from changes in estimates to the
		toll mil ing drawdown rate in the first quarter of 2019.

		In 2020, the Company recognized $2,762,000 of toll mil ing revenue from the draw-down of deferred revenue,
		based on Cigar Lake toll mil ing production of 10,069,000 pounds U3O8 (100% basis). The drawdown in 2020
		includes a cumulative increase in revenue for prior periods of $168,000 resulting from changes in estimates to the
		toll mil ing drawdown rate during 2020.



	22


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		12. POST-EMPLOYMENT BENEFITS

		The Company provides post-employment benefits for former Canadian employees who retired on immediate
		pension prior to 1997. The post-employment benefits provided include life insurance and medical and dental
		benefits as set out in the applicable group policies. No post-employment benefits are provided to employees
		outside the employee group referenced above. The post-employment benefit plan is not funded.

		The effective date of the most recent actuarial valuation of the accrued benefit obligation is October 1, 2020. The
		amount accrued is based on estimates provided by the plan administrator which are based on past experience,
		limits on coverage as set out in the applicable group policies and assumptions about future cost trends. The
		significant assumptions used in the most recent valuation are listed below:

		•	Discount rate of 1.75%;
		•	Medical cost increase trend rate of 4.09% in 2020, grading up to 5.30% per year by 2026, staying flat at 5.30%
			per year from 2026 to 2030 and then grading down to 4.05% per year from 2031 through to 2041; and
		•	Dental cost increase trend rate of 4.50% in 2020, grading up to 5.30% per year by 2026, staying flat at 5.30%
			per year from 2026 to 2030 and then grading down to 4.05% per year from 2031 through to 2041.

		The post-employment benefits balance consists of:

				At December 31 At December 31
			(in thousands)		2020		2019

			Accrued benefit obligation	$	1,361 $		2,258
				$	1,361 $		2,258

			Post-employment benefits-by balance sheet presentation:
			Current	$	120 $		150
			Non-current		1,241		2,108
				$	1,361 $		2,258

		The post-employment benefits continuity summary is as follows:

			(in thousands)		2020		2019

			Balance-January 1	$	2,258	$	2,295
			Accretion		57		70
			Benefits paid		(90)		(107)
			Experience gain adjustment		(864)				-
			Balance-December 31	$	1,361	$	2,258


		13. RECLAMATION OBLIGATIONS

			The reclamation obligations balance consists of:

				At December 31 At December 31
			(in thousands)		2020		2019

			Reclamation obligations-by item:
			Elliot Lake	$	21,523 $		17,987
			McClean and Midwest Joint Ventures		16,875		14,503
			Other					22	22
				$	38,420 $		32,512

			Reclamation obligations-by balance sheet presentation:
			Current	$	802 $		914
			Non-current		37,618		31,598
				$	38,420 $		32,512

	23

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

The reclamation obligations continuity summary is as follows:

(in thousands)

2020

2019

Balance-January 1

32,512 $

30,064

Accretion

1,352

1,361

Expenditures incurred

(826)

(855)

Liability adjustments-income statement (note 20)

3,595

845

Liability adjustments-balance sheet (note 10)

1,787

1,097

Balance-December 31

38,420 $

32,512

Site Restoration: Elliot Lake

The Elliot Lake uranium mine was closed in 1992 and capital works to decommission this site were completed in

1997. The remaining provision is for the estimated cost of monitoring the Tailings Management Areas at the

Denison and Stanrock sites and for treatment of water discharged from these areas. The Company conducts its

activities at both sites pursuant to licenses issued by the Canadian Nuclear Safety Commission (“CNSC”). The

above accrual represents the Company’s best estimate of the present value of the total future reclamation cost,

based on assumptions as to what levels of treatment wil be required in the future, discounted at 3.50% (2019:

4.16%). As at December 31, 2020, the undiscounted amount of estimated future reclamation costs, in current year

dollars, is $32,335,000 (December 31, 2019: $31,604,000). Revisions to the reclamation liability for El iot Lake are

recognized in the income statement as the site is closed and there is no asset recognized for this site.

Spending on restoration activities at the El iot Lake site is funded by the El iot Lake Reclamation Trust fund (see

note 9).

Site Restoration: McClean Lake Joint Venture and Midwest Joint Venture

The McClean Lake and Midwest operations are subject to environmental regulations as set out by the

Saskatchewan government and the CNSC. Cost estimates of the estimated future decommissioning and

reclamation activities are prepared periodically and filed with the applicable regulatory authorities for approval. The

above accrual represents the Company’s best estimate of the present value of the future reclamation cost

contemplated in these cost estimates discounted at 3.50% (2019: 4.16%). As at December 31, 2020, the

undiscounted amount of estimated future reclamation costs, in current year dollars, is $24,135,000 (December 31,

2019: $23,685,000). The majority of the reclamation costs are expected to be incurred between 2038 and 2056.

Revisions to the reclamation liabilities for McClean Lake and Midwest are recognized on the balance sheet as

adjustments to the net reclamation assets associated with the sites.

Under the Mineral Industry Environmental Protection Regulations (1996), the Company is required to provide its

pro-rata share of financial assurances to the province of Saskatchewan based on periodic filings of estimated

reclamation plans and the associated undiscounted future reclamation costs included therein. Accordingly, as at

December 31, 2020, the Company has in place irrevocable standby letters of credit, from a chartered bank, in

favour of the Saskatchewan Ministry of the Environment, totalling $24,135,000 which relate to the most recently

filed reclamation plan dated March 2016. An updated reclamation plan is required to be filed in 2021.


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		14. OTHER LIABILITIES

		The other liabilities balance consists of:

						At December 31	At December 31
			(in thousands)					2020		2019

			Debt obligations:
			Lease obligations			$		582 $		739
			Loan obligations						33	263
			Flow-through share premium obligation (note 16)					22	902
						$		637 $		1,904

			Other liabilities-by balance sheet presentation:
			Current			$		262 $		1,372
			Non-current					375		532
						$		637 $		1,904

		Debt Obligations

		At December 31, 2020, the Company’s debt obligations are comprised of lease liabilities associated with the
		accounting required under IFRS 16 and loan liabilities. The debt obligations continuity summary is as follows:

										Lease	Loan		Total Debt
			(in thousands)									Liabilitites		Liabilities	Obligations

			Balance – January 1, 2019	$		- $	- $	-
			Adoption of IFRS 16			944	-			944
			Accretion			76	-			76
			Additions			38			632	670
			Repayments			(293)			(369)	(662)
			Liability adjustment gain (note 20)			(26)	-			(26)
			Balance – December 31, 2019	$		739 $			263 $	1,002

			Accretion			56	-			56
			Additions			26	-			26
			Repayments			(237)			(230)	(467)
			Liability adjustment gain (note 20)			(2)	-	(2)
			Balance – December 31, 2020	$		582 $			33 $	615

		Debt Obligations – Scheduled Maturities

		The fol owing table outlines the Company’s scheduled maturities of its debt obligations at December 31, 2020:

										Lease	Loan		Total Debt
			(in thousands)									Liabilitites		Liabilities	Obligations

			Maturity analysis – contractual undiscounted cash flows:
			Next 12 months	$		231 $	9 $			240
			One to five years			457			26	483
			More than five years			-	-	-
			Total obligation – end of period - undiscounted		688			35	723
			Present value discount adjustment			(106)			(2)	(108)
			Total obligation – end of period - discounted	$		582 $			33 $	615

		Letters of Credit Facility

		In 2020, the Company had a facility in place with BNS for credit of up to $24,000,000 with a one year term and a
		maturity date of January 31, 2021 (the “2020 Facility”). Use of the 2020 Facility is restricted to non-financial letters
		of credit in support of reclamation obligations.
	25


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		The 2020 Facility contains a covenant to maintain a level of tangible net worth greater than or equal to the sum of
		$131,000,000 and a pledge of $9,000,000 in restricted cash and investments as collateral for the facility (see note
		9). As additional security for the 2020 Facility, DMC has provided an unlimited full recourse guarantee and a pledge
		of al of the shares of DMI. DMI has provided a first-priority security interest in al present and future personal
		property and an assignment of its rights and interests under all material agreements relative to the McClean Lake
		and Midwest projects. The 2020 Facility is subject to letter of credit fees of 2.40% (0.40% on the $9,000,000
		covered by pledged cash collateral) and standby fees of 0.75%.

		At December 31, 2020, the Company was in compliance with its 2020 Facility covenants and $24,000,000 of the
		2020 Facility was being utilized as collateral for certain letters of credit (December 31, 2019 - $24,000,000). During
		2020, the Company incurred letter of credit and standby fees of $398,000 (2019 - $397,000).

		In January 2021, the Company has entered into an agreement with BNS to amend the terms of the 2020 Facility
		to extend the maturity date to January 31, 2022 (see note 26).


		15. INCOME TAXES

		The income tax recovery balance from continuing operations consists of:

			(in thousands)	2020		2019

			Deferred income tax:
			Origination of temporary dif erences		$	710 $		4,940
			Tax benefit-previously unrecognized tax assets		1,255		1,326
			Prior year over (under) provision			(1,105)		(890)
						860		5,376
			Income tax recovery		$	860 $		5,376

		The Company operates in multiple industries and jurisdictions, and the related income is subject to varying rates
		of taxation. The combined Canadian tax rate reflects the federal and provincial tax rates in effect in Ontario, Canada
		for each applicable year. A reconciliation of the combined Canadian tax rate to the Company’s effective rate of
		income tax is as follows:

			(in thousands)	2020		2019

			Loss before taxes		$	(17,143) $		(23,517)
			Combined Canadian tax rate			26.50%		26.50%
			Income tax recovery at combined rate			4,543		6,232

			Difference in tax rates			1,746		2,048
			Non-deductible amounts			(2,579)		(2,675)
			Non-taxable amounts			2,535		2,362
			Previously unrecognized deferred tax assets (1)			1,255		1,326
			Renunciation of tax attributes-flow through shares		(417)		(403)
			Change in deferred tax assets not recognized			(5,960)		(2,476)
			Change in tax rates, legislation			(55)		(81)
			Prior year over (under) provision			(1,105)		(890)
			Other			897		(67)
			Income tax recovery		$	860 $		5,376

		(1) The Company has recognized certain previously unrecognized Canadian tax assets in 2020 and 2019 as a result of the renunciation of certain
			tax benefits to subscribers pursuant to its December 2019 $4,715,460 and November 2018 $5,000,000 flow-through share offerings.

		The deferred income tax assets (liabilities) balance reported on the balance sheet is comprised of the temporary
		differences as presented below:

	26


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

						At December 31 At December 31
			(in thousands)				2020		2019

			Deferred income tax assets:
			Property, plant and equipment, net			$	387 $		387
			Post-employment benefits				355		590
			Reclamation obligations				11,709		9,561
			Tax loss carry forwards				16,943		15,827
			Other				7,747		8,537
			Deferred income tax assets-gross				37,141		34,902
			Set-off against deferred income tax liabilities				(37,141)		(34,902)
			Deferred income tax assets-per balance sheet			$		- $	-

			Deferred income tax liabilities:
			Inventory			$	(757) $		(742)
			Property, plant and equipment, net				(44,436)		(41,949)
			Other				(1,140)		(1,135)
			Deferred income tax liabilities-gross				(46,333)		(43,826)
			Set-off of deferred income tax assets				37,141		34,902
			Deferred income tax liabilities-per balance sheet		$	(9,192) $		(8,924)

		The deferred income tax liability continuity summary is as follows:

			(in thousands)				2020		2019

			Balance-January 1			$	(8,924) $		(12,963)
			Recognized in income (loss)				860		5,376
			Recognized in other liabilities (flow-through shares)			(902)		(1,337)
			Recognized in other comprehensive income				(226)	-
			Balance-December 31			$	(9,192) $		(8,924)

		Management believes that it is not probable that sufficient taxable profit wil be available in future years to al ow
		the benefit of the following deferred tax assets to be utilized:

						At December 31 At December 31
			(in thousands)				2020		2019

			Deferred income tax assets not recognized
			Property, plant and equipment			$	4,744	$	7,344
			Tax losses – capital				66,873		66,783
			Tax losses – operating				42,635		35,904
			Tax credits				1,126		1,126
			Other deductible temporary dif erences				1,441		1,571
			Deferred income tax assets not recognized			$	116,819	$	112,728

			The expiry dates of the Company’s Canadian tax losses and credits is as fol ows:

				Expiry		At December 31 At December 31
			(in thousands)	Date			2020		2019

			Tax losses - gross	2025-2040	$	220,039	$	192,197

			Tax benefit at tax rate of 26% - 27%				59,578		51,731
			Set-off against deferred tax liabilities				(16,943)		(15,827)
			Total tax loss assets not recognized			$	42,635	$	35,904

			Tax credits	2025-2035		1,126		1,126
			Total tax credit assets not recognized			$	1,126	$	1,126

	27


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		16. SHARE CAPITAL

		Denison is authorized to issue an unlimited number of common shares without par value. A continuity summary of
		the issued and outstanding common shares and the associated dol ar amounts is presented below:

				Number of
				Common
		(in thousands except share amounts)		Shares

			Balance-January 1, 2019	589,175,086 $			1,331,214
			Issued for cash:
			Share issue proceeds	6,934,500		4,715
			Share issue costs		-	(423)
			Share option exercises	663,150		405
			Share option exercises-fair value adjustment		-	140
			Share unit exercises-fair value adjustment	433,333		299
			Acquisition-Murphy Lake additional interest (note 10)	32,262		19
			Flow-through share premium liability (note 14)		-	(902)
			Share cancellations	(46,178)	-
				8,017,067		4,253
			Balance-December 31, 2019	597,192,153 $			1,335,467

			Issued for cash:
			Share issue proceeds	81,179,280		33,933
			Share issue costs		-	(3,108)
			Share option exercises	251,500		148
			Share option exercises-fair value adjustment		-	50
			Share unit exercises-fair value adjustment	358,949		242
			Flow-through share premium liability (note 14)		-	(22)
				81,789,729		31,243
			Balance-December 31, 2020	678,981,882 $			1,366,710

		Share Issues

		In December 2019, Denison completed a private placement of 6,934,500 flow-through common shares at a price
		of $0.68 per share for gross proceeds of $4,715,460. The income tax benefits of this issue were renounced to
		subscribers with an effective date of December 31, 2019. The related flow-through share premium liabilities are
		included as a component of other liabilities on the balance sheet at December 31, 2019 and were extinguished
		during 2020 when the tax benefit was renounced to the shareholders (see note 14).

		In April 2020, the Company completed a public offering of 28,750,000 common shares at a price of USD$0.20 per
		share for gross proceeds of $8,041,000 (USD$5,750,000). The offering included the full exercise of an over-
		allotment option of 3,750,000 common shares granted to the underwriters.

		In October 2020, the Company completed a public offering of 51,347,321 common shares at a price of USD$0.37
		per share for gross proceeds of approximately $24,962,000 (USD$18,999,000), which included the partial exercise
		by the underwriters of their over-allotment option.

		In December 2020, Denison completed a private placement of 1,081,959 flow-through common shares at a price
		of $0.86 per share for gross proceeds of $930,485. The income tax benefits of this issue were renounced to
		subscribers with an effective date of December 31, 2020. The related flow-through share premium liabilities are
		included as a component of other liabilities on the balance sheet at December 31, 2020 and wil be extinguished
		during 2021 when the tax benefit is renounced to the shareholders (see note 14).

		Share Cancellations

		In February 2019, 46,178 shares were cancelled in connection with the January 2013 acquisition of JNR Resources
		Inc (“JNR”). JNR shareholders were entitled to exchange their JNR shares for shares of Denison in accordance
		with the share exchange ratio established for the acquisition. In January 2019, this right expired and the un-
		exchanged shares for which shareholders had not elected to exercise their exchange rights were subsequently
		cancelled.
	28

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

Flow-Through Share Issues

The Company finances a portion of its exploration programs through the use of flow-through share issuances.

Canadian income tax deductions relating to these expenditures are claimable by the investors and not by the

Company.

As at December 31, 2020, the Company has satisfied its obligation to spend $4,715,460 on eligible exploration

expenditures by the end of fiscal 2020 as a result of the issuance of flow-through shares in December 2019. The

Company renounced the income tax benefits of this issue in February 2020, with an effective date of renunciation

to its subscribers of December 31, 2019. In conjunction with the renunciation, the flow-through share premium

liability at December 31, 2019 was extinguished and recognized as part of the deferred tax recovery in 2020 (see

note 15).

As at December 31, 2020, the Company estimates that it incurred $Nil of expenditures towards its obligation to

spend $930,485 on eligible exploration expenditures by the end of fiscal 2021 as a result of the issuance of flow-

through shares in December 2020.

17. SHARE PURCHASE WARRANTS

A continuity of the issued and outstanding share purchase warrants in terms of common shares of the Company

and the associated dollar amounts is presented below:

Weighted

Average

Number of

Exercise

Common

Fair

Price Per

Value

(in thousands except share amounts)

Share (CAD)

Issuable

Amount

Balance-December 31, 2019

1.27

1,673,077 $

435

Expiries

1.27

(1,673,077)

(435)

Balance-December 31, 2020

- $

The warrants noted above, issued in February 2017 in conjunction with the APG Arrangement (see note 11),

expired on February 14, 2020. On expiry, the balance was reclassified to Contributed Surplus.

18. SHARE-BASED COMPENSATION

The Company’s share based compensation arrangements include share options, restricted share units (“RSUs”)

and performance share units (“PSUs”).

A summary of share based compensation expense recognized in the statement of income (loss) is as fol ows:

(in thousands)

2020

2019

Share based compensation expense for:

Share options

(559) $

(776)

RSUs

(1,034)

(1,043)

PSUs

(234)

(403)

Share based compensation expense

(1,827) $

(2,222)

An additional $1,290,000 in share-based compensation expense remains to be recognized, up until November

2023, on outstanding options and share units at December 31, 2020.

Share Options

The Company’s stock-based compensation plan (the “Plan”) provides for the granting of share options up to 10%

of the issued and outstanding common shares at the time of grant, subject to a maximum of 39,670,000 common

shares. As at December 31, 2020, an aggregate of 23,401,593 options (December 31, 2019: 21,900,093) have

been granted (less cancellations) since the Plan’s inception in 1997.

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

Under the Plan, all share options are granted at the discretion of the Company’s board of directors, including any

vesting provisions if applicable. The term of any share option granted may not exceed ten years and the exercise

price may not be lower than the closing price of the Company’s shares on the last trading day immediately

preceding the date of grant. In general, share options granted under the Plan have five year terms and vesting

periods up to 24 months.

A continuity summary of the share options of the Company granted under the Plan for 2020 and 2019 is presented

below:

2020

2019

Weighted

Average

Exercise

Number of

Price per

Number of

Price per

Common

(CAD)

Share options outstanding – January 1

13,827,243 $

0.75 13,865,193 $

0.83

Grants

3,671,000

0.46

3,005,000

0.67

Exercises (1)

(251,500)

0.59

(663,150)

0.61

Expiries

(1,424,000)

0.97

(866,000)

1.81

Forfeitures

(745,500)

0.67

(1,513,800)

0.79

Share options outstanding – December 31

15,077,243 $

0.67 13,827,243 $

0.75

Share options exercisable – December 31

10,289,743 $

0.74

9,747,721 $

0.80

(1) The weighted average share price at the date of exercise was CAD$0.72 (2019: CAD$0.70).

A summary of the Company’s share options outstanding at December 31, 2020 is presented below:

Weighted

Weighted-

Average

Remaining

Exercise

Range of Exercise

Contractual

Number of

Price per

Prices per Share

Life

Common

(CAD)

(Years)

(CAD)

Stock options outstanding

$ 0.25 to $ 0.49

4.21

3,502,000 $

0.45

$ 0.50 to $ 0.74

2.26

6,443,643

0.64

$ 0.75 to $ 0.99

1.19

5,131,600

0.85

Stock options outstanding - December 31, 2020

2.35

15,077,243 $

0.67

Options outstanding at December 31, 2020 expire between March 2021 and November 2025.

The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing

model. The following table outlines the range of assumptions used in the model to determine the fair value of

options granted:

2020

2019

Risk-free interest rate

0.27% - 0.67%

1.31% - 1.65%

Expected stock price volatility

44.16% - 54.16%

43.86% - 49.46%

Expected life

3.4 years

3.4 to 3.5 years

Estimated forfeiture rate

2.84% - 3.08%

2.82% - 3.12%

Expected dividend yield

–

Fair value per option granted

CAD$0.15 - CAD$0.25

CAD$0.19 - CAD$0.26

The fair values of share options with vesting provisions are amortized on a graded method basis as share-based

compensation expense over the applicable vesting periods.


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Share Units

		The Company has a share unit plan which provides for the granting of share unit awards to directors, officers and
		employees of the Company. The maximum number of share units that are issuable under the share unit plan is
		15,000,000. Each share unit represents the right to receive one common share from treasury, subject to the
		satisfaction of various time and / or performance conditions.

		Under the plan, all share unit grants, vesting periods and performance conditions therein are approved by the
		Company’s board of directors. Share unit grants are either in the form of RSUs or PSUs. RSUs granted under the
		plan, to date, vest ratably over a period of three years. PSUs granted under the plan, to date, vest ratably based
		upon the achievement of certain non-market performance vesting conditions. PSUs granted in 2018 vest ratably
		over a period of five years, PSUs granted in 2019 vest ratably over a period of four years and PSUs granted in
		2020 vest ratably over a period of three years.

		A continuity summary of the RSUs of the Company granted under the share unit plan for 2020 and 2019 is
		presented below:

				2020		2019
						Weighted						Weighted
						Average						Average
				Number of	Fair Value	Number of		Fair Value
				Common	Per RSU	Common		Per RSU
				Shares					(CAD)		Shares		(CAD)

			RSUs outstanding – January 1	2,754,099 $			0.70	1,200,432 $		0.65
			Grants	3,345,750			0.38	1,927,000		0.73
			Exercises (1)	(238,949)			0.69	(373,333)	0.70
			Forfeitures	(169,001)			0.59	-	-
			RSUs outstanding – December 31	5,691,899 $			0.52	2,754,099 $		0.70
			RSUs vested – December 31	970,670 $			0.69	303,810 $	0.65

			(1) The weighted average share price at the date of exercise was CAD$0.56 (2019: CAD$0.67).


		A continuity summary of the PSUs of the Company granted under the share unit plan for 2020 and 2019 is
		presented below:

				2020		2019
						Weighted						Weighted
						Average						Average
				Number of	Fair Value	Number of		Fair Value
				Common	Per PSU	Common		Per PSU
				Shares					(CAD)		Shares		(CAD)

			PSUs outstanding – January 1	2,140,000 $			0.65	2,200,000 $		0.65
			Grants	180,000			0.38	240,000	0.69
			Exercises (1)	(120,000)			0.65	(60,000)	0.65
			Forfeitures	(180,000)			0.65	(240,000)	0.65
			PSUs outstanding – December 31	2,020,000 $			0.63	2,140,000 $		0.65
			PSUs vested – December 31	700,000 $			0.65	380,000 $	0.65

			(1) The weighted average share price at the date of exercise was CAD$0.67 (2019: CAD$0.67).

		The fair value of each RSU and PSU granted is estimated on the date of grant using the Company’s closing share
		price on the day before the grant date.
	31


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		19. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

		The accumulated other comprehensive income balance consists of:

				At December 31	At December 31
			(in thousands)			2020		2019

			Cumulative foreign currency translation	$		413 $		410
			Unamortized experience gain – post employment liability
			Gross			1,847		983
			Tax effect			(485)		(259)
				$		1,775 $		1,134


		20. SUPPLEMENTAL FINANCIAL INFORMATION

		The components of operating expenses are as fol ows:

			(in thousands)											2020	2019

			Cost of goods and services sold:
			Cost of goods sold – mineral concentrates	$			(526) $	-
			Operating Overheads:
						Mining, other development expense						(1,165) $	(2,709)
						Mil ing, conversion expense						(1,769)	(3,230)
						Less absorption:
				- Mineral properties						39	61
			Cost of services				(6,852)	(8,346)
			Cost of goods and services sold				(10,273)	(14,224)
			Reclamation asset amortization				(243)	(212)
			Selling expenses				(14)	-
			Sales royalties and non-income taxes				(64)	-
			Operating expenses	$			(10,594) $	(14,436)

		The components of other income (expense) are as follows:

			(in thousands)											2020	2019

			Gains (losses) on:
			Foreign exchange	$			(529) $	2
			Disposal of property, plant and equipment				405	(37)
			Investment fair value through profit (loss) (note 7)			5,046			(1,085)
			Deconsolidation of investment in associate (note 8)			-			5,267
			Reclamation obligation adjustments (note 13)			(3,595)	(845)
			Debt obligation adjustments (note 14)			2			26
			Legal settlement (note 24)				(850)	-
			Other				(574)	(358)
			Other income (expense)	$			(95) $	2,970
	32


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		The components of finance income (expense) are as follows:

			(in thousands)						2020	2019

			Interest income	$		291 $		594
			Interest expense			(4)	(9)
			Accretion expense:
			Deferred revenue (note 11)			(3,058)		(3,203)
			Post-employment benefits (note 12)			(57)		(70)
			Reclamation obligations (note 13)		(1,352)		(1,361)
			Debt obligations (note 14)		(56)		(76)
			Finance expense, net	$		(4,236) $		(4,125)

		A summary of depreciation expense recognized in the statement of income (loss) is as follows:

			(in thousands)						2020	2019

			Operating expenses:
			Mining, other development expense	$		(3) $	(3)
			Mil ing, conversion expense			(1,730)		(3,165)
			Cost of services			(192)		(248)
			Exploration and evaluation			(184)		(221)
			General and administrative			(126)		(127)
			Depreciation expense-gross (note 10)	$		(2,235) $		(3,764)

		A summary of employee benefits expense recognized in the statement of income (loss) is as follows:

			(in thousands)						2020	2019

			Salaries and short-term employee benefits	$		(7,405) $		(8,407)
			Share-based compensation (note 20)			(1,827)		(2,222)
			Termination benefits			(35)		(633)
			Employee benefits expense-gross	$		(9,267) $		(11,262)

		A summary of lease related amounts recognized in the statement of income (loss) is as follows:

			(in thousands)						2020	2019

			Accretion expense on lease liabilities	$		(56) $		(76)
			Expenses relating to short-term leases			(2,287)		(5,146)
			Expenses relating to non-short term low-value leases		(13)		(19)
			Lease related expense-gross	$		(2,356) $		(5,241)

		The change in non-cash working capital items in the consolidated statements of cash flows is as fol ows:

			(in thousands)						2020	2019

			Change in non-cash working capital items:
			Trade and other receivables		$	649 $		(201)
			Inventories			220		232
			Prepaid expenses and other assets			(422)		(160)
			Accounts payable and accrued liabilities			(754)		2,385
			Change in non-cash working capital items		$	(307) $		2,256

	33


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		The supplemental cash flow disclosure required for the consolidated statements of cash flows is as follows:

			(in thousands)												2020		2019

			Supplemental cash flow disclosure:
			Interest paid						$	(4) $	(9)
			Income taxes paid								-	-



		21. SEGMENTED INFORMATION

		Business Segments

			The Company operates in three primary segments – the Mining segment, the Closed Mine Services segment and
		the Corporate and Other segment. The Mining segment includes activities related to exploration, evaluation and
		development, mining, mil ing (including tol mil ing) and the sale of mineral concentrates. The Closed Mine Services
		segment includes the results of the Company’s environmental services business which provides mine
		decommissioning and other services to third parties. The Corporate and Other segment includes management fee
		income earned from UPC and general corporate expenses not allocated to the other segments. Management fee
		income has been included in the same segment as general corporate expenses due to the shared infrastructure
		between the two activities.

		For the year ended December 31, 2020, reportable segment results were as fol ows:

																Closed
															Mines		Corporate
			(in thousands)	Mining				Services		and Other		Total

			Statement of Operations:
			Revenues			3,614							8,205		2,604	14,423

			Expenses:
			Operating expenses			(3,742)							(6,849)		(3)	(10,594)
			Exploration and evaluation			(9,032)							-		-	(9,032)
			General and administrative			(19)							-	(7,590)		(7,609)
										(12,793)							(6,849)	(7,593)	(27,235)
			Segment income (loss)			(9,179)							1,356	(4,989)		(12,812)

			Revenues – supplemental:
			Uranium concentrate sales			852							-		-	852
			Environmental services			-	8,205		-	8,205
			Management fees			-	-		2,604	2,604
			Toll milling services–deferred revenue (note 11)		2,762					-		-	2,762
						3,614							8,205		2,604	14,423

			Capital additions:
			Property, plant and equipment (note 10)			289							15		-	304

			Long-lived assets:
			Plant and equipment
			Cost			101,540							4.546		892	106,978
			Accumulated depreciation			(26,241)							(3,194)		(416)	(29,851)
			Mineral properties			179,743							-		-	179,743
						255,042							1,352		476	256,870

	34


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		For the year ended December 31, 2019, reportable segment results were as fol ows:

												Closed
											Mines	Corporate
			(in thousands)	Mining						Services	and Other	Total

			Statement of Operations:
			Revenues					4,609							8,974	1,966	15,549

			Expenses:
			Operating expenses					(6,090)							(8,346)	-	(14,436)
			Exploration and evaluation					(15,238)											-	-	(15,238)
			General and administrative					(17)											-	(7,794)	(7,811)
						(21,345)						(8,346)	(7,794)	(37,485)
			Segment income (loss)					(16,736)											628	(5,828)	(21,936)

			Revenues – supplemental:
			Environmental services					-	8,974	-	8,974
			Management fees					-				-	1,966	1,966
			Toll milling services–deferred revenue (note 11)			4,609										-	-	4,609
								4,609							8,974	1,966	15,549

			Capital additions:
			Property, plant and equipment (note 10)					637											273	38	948

			Long-lived assets:
			Plant and equipment
			Cost					99,994							4,591	908	105,493
			Accumulated depreciation					(24,349)							(3,062)	(304)	(27,715)
			Mineral properties					179,481											-	-	179,481
								255,126							1,529	604	257,259

		Revenue Concentration

		The Company’s business is such that, at any given time, it sells its environmental and other services to a relatively
		smal number of customers. During 2020, one customer from the corporate and other segment, three customers
		from the Closed Mines Group segment and one customer from the mining segment accounted for approximately
		94% of total revenues consisting of 18%, 57% and 19% respectively. During 2019, one customer from the
		Corporate and Other segment, three customers from the Closed Mine Services segment and one customer from
		the Mining segment accounted for approximately 99% of total revenues consisting of 13%, 56% and 30%
		respectively.

		Revenue Commitments

		Denison’s revenue portfolio consists of short and long-term sales commitments. The following table summarizes
		the expected future revenue, by segment, based on the customer contract commitments and information that exists
		as at December 31, 2020:

																	There-
			(in thousands)		2021	2022						2023				2024	after	Total

			Revenues – by Segment:
			Closed Mines Group
			Environmental services				4,751	-				-	-		-	4,751
			Corporate and Other
			Management fees				2,186	2,186 2,186								547		-	7,105
			Total Revenue Commitments				6,937	2,186 2,186								547		- 11,856

		The amounts in the table above represent the estimated consideration that Denison wil be entitled to receive when
		it satisfies the remaining performance obligations in its customer contracts. Various assumptions, consistent with
	35

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

past experience, have been made where the quantity of the performance obligation may vary.

In addition to the amounts disclosed above, the Company is also contracted to pay onward to APG all toll mil ing

cash proceeds received from the MLJV related to the processing of specified Cigar Lake ore through the McClean

Lake mil (see note 11). The timing and amount of such future toll mil ing cash proceeds are outside the control of

the Company.

22. RELATED PARTY TRANSACTIONS

Uranium Participation Corporation

The previous management services agreement with UPC expired on March 31, 2019. Ef ective April 1, 2019, a

new management services agreement (“MSA”) was entered into for a term of five years (the “Term”). Under the

MSA, Denison continues to receive the following management fees from UPC, unchanged from the previous

agreement: a) a base fee of $400,000 per annum, payable in equal quarterly installments; b) a variable fee equal

to (i) 0.3% per annum of UPC’s total assets in excess of $100 mil ion and up to and including $500 mil ion, and (i )

0.2% per annum of UPC’s total assets in excess of $500 mil ion; c) a fee, at the discretion of the Board, for on-

going monitoring or work associated with a transaction or arrangement (other than a financing, or the acquisition

of or sale of U3O8 or UF6); and d) a commission of 1.0% of the gross value of any purchases or sales of U3O8 or

UF6 or gross interest fees payable to UPC in connection with any uranium loan arrangements.

The MSA may be terminated during the Term by Denison upon the provision of 180 days written notice. The MSA

may be terminated during the Term by UPC (i) in the event of a material breach, (i ) within 90 days of certain events

surrounding a change of both of the individuals serving as Chief Executive Officer and Chief Financial Officer of

UPC, and / or a change of control of Denison, or (i i) upon the provision of 30 days writ en notice and, subject to

certain exceptions, a cash payment to Denison of an amount equal to the base and variable management fees

that would otherwise be payable to Denison (calculated based on UPC’s current uranium holdings at the time of

termination) for the lesser period of a) three years, or b) the remaining term of the MSA.

The fol owing transactions were incurred with UPC for the periods noted:

(in thousands)

2020

2019

Management fees:

Base and variable fees

2,011 $

1,822

Discretionary fees

300

Commission fees

293

144

2,604 $

1,966

At December 31, 2020, accounts receivable includes $265,000 (December 31, 2019: $236,000) due from UPC

with respect to the fees and transactions indicated above.

Korea Electric Power Corporation (“KEPCO”) and Korea Hydro & Nuclear Power (“KHNP”)

In connection with KEPCO’s investment in Denison in June 2009, KEPCO and Denison were parties to a strategic

relationship agreement. In December 2016, Denison was notified that KEPCO’s indirect ownership of Denison’s

shares had been transferred from an affiliate of KEPCO to an affiliate of KEPCO’s wholly-owned subsidiary, KHNP.

In September 2017, Denison and KHNP’s affiliate entered into an amended and restated strategic relationship

agreement, in large part providing KHNP’s affiliate with the same rights as those previously given to KEPCO under

the prior agreement, including entitling KHNP’s affiliate to: (a) subscribe for additional common shares in Denison’s

future public equity offerings; (b) a right of first opportunity if Denison intends to sel any of its substantial assets;

right to nominate one director to Denison’s board so long as its share interest in Denison is above 5.0%.

As at December 31, 2020, KEPCO, through its subsidiaries, holds 58,284,000 shares of Denison representing a

share interest of approximately 8.58%. KHNP Canada Energy Ltd (“KHNP Canada”), a subsidiary of KHNP, is the

holder of the majority of Denison’s shares.

KHNP Canada is also the majority member of the Korea Waterbury Uranium Limited Partnership (“KWULP”).

KWULP is a consortium of investors that holds the non-Denison owned interests in Waterbury Lake Uranium

Corporation (“WLUC”) and the WLULP, entities whose key asset is the Waterbury Lake property. At December 31,

2020, WLUC is owned by Denison Waterbury Corp (60%) and KWULP (40%) while the WLULP is owned by

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

Denison Waterbuy Corp (66.89% - limited partner), KWULP (33.09% - limited partner) and WLUC (0.02% - general

partner). When a spending program is approved, each participant is required to fund these entities based upon its

respective ownership interest or be diluted accordingly. Spending program approval requires 75% of the limited

partners’ voting interest.

In January 2014, Denison agreed to allow KWULP to defer a decision regarding its funding obligation to WLUC

and WLULP until September 30, 2015 and to not be immediately diluted as per the dilution provisions in the relevant

agreements (“Dilution Agreement”). Instead, under the Dilution Agreement, dilution would be delayed until

September 30, 2015 and then applied in each subsequent period, if applicable, in accordance with the original

agreements. In exchange, Denison received authorization to approve spending programs on the property, up to

an aggregate $10,000,000, until September 30, 2016 without obtaining approval from 75% of the voting interest.

Under subsequent amendments, Denison and KWULP have agreed to extend Denison’s authorization under the

Dilution Agreement to approve program spending up to an aggregate $15,000,000 until December 31, 2021.

In 2019, Denison funded 100% of the approved fiscal 2019 program for Waterbury Lake and KWULP continued to

dilute its interest in the WLULP. As a result, Denison increased its interest in the WLULP from 65.92% to 66.57%,

in two steps, which has been accounted for using effective dates of May 31, 2019 and November 30, 2019. The

increased ownership interest resulted in Denison recording its increased pro-rata share of the assets and liabilities

of Waterbury Lake, the majority of which relates to an addition to mineral property assets of $448,000.

In 2020, Denison funded 100% of the approved fiscal 2020 program for Waterbury Lake and KWULP continued to

dilute its interest in the WLULP. As a result, Denison increased its interest in the WLULP from 66.57% to 66.90%,

in two steps, which has been accounted for using effective dates of June 30, 2020 and November 30, 2020. The

increased ownership interest resulted in Denison recording its increased pro-rata share of the assets and liabilities

of Waterbury Lake, the majority of which relates to an addition to mineral property assets of $223,000.

Other

In December 2018, the Company lent $250,000 to GoviEx pursuant to a credit agreement between the parties.

The loan was unsecured and bore interest at 7.5% per annum. In April 2019, the loan was repaid in ful , together

with interest thereon.

During 2020, the Company incurred investor relations, administrative service fees and certain pass-through

expenses of $206,000 (2019: $217,000) with Namdo Management Services Ltd, which shares a common director

with Denison. These services were incurred in the normal course of operating a public company. At December 31,

2020, an amount of $nil (December 31, 2019: $nil) was due to this company.

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and

controlling the activities of the Company, directly or indirectly. Key management personnel includes the Company’s

executive officers, vice-presidents and members of its Board of Directors.

The fol owing compensation was awarded to key management personnel:

(in thousands)

2020

2019

Salaries and short-term employee benefits

(1,899) $

(2,024)

Share-based compensation

(1,507)

(1,881)

Termination benefits

(481)

Key management personnel compensation

(3,406) $

(4,386)

23. CAPITAL MANAGEMENT AND FINANCIAL RISK

Capital Management

The Company’s capital includes cash, cash equivalents, investments in debt instruments, investments in equity

instruments and the current portion of debt obligations. The Company’s primary objective with respect to its capital

management is to ensure that it has sufficient capital to maintain its ongoing operations, to provide returns for

shareholders and benefits for other stakeholders and to pursue growth opportunities.

Planning, annual budgeting and controls over major investment decisions are the primary tools used to manage

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

the Company’s capital. The Company’s cash is managed centrally and disbursed to the various business units

based on a system of internal controls that require review and approval of significant expenditures by the

Company’s key decision makers. For example, under the Company’s delegation of authority guidelines, significant

debt obligations require the approval of both the CEO and the CFO before they are entered into.

The Company currently manages its capital by ongoing monitoring and review of its net cash and investment

position, as wel as its operating plans for the current and future periods. The Company’s net cash and investment

position is summarized below:

At December 31 At December 31

(in thousands)

2020

2019

Net cash and investments:

Cash and cash equivalents

24,992 $

8,190

Investments

16,950

12,104

Debt obligations-current (note 14)

(240)

(470)

Net cash and investments

41,702 $

19,824

Financial Risk

The Company examines the various financial risks to which it is exposed and assesses the impact and likelihood

of those risks. These risks may include credit risk, liquidity risk, currency risk, interest rate risk and price risk.

(a) Credit Risk

Credit risk is the risk of loss due to a counterparty’s inability to meet its obligations under a financial instrument

that wil result in a financial loss to the Company. The Company believes that the carrying amount of its cash and

cash equivalents, trade and other receivables and restricted cash and investments represents its maximum credit

exposure.

The maximum exposure to credit risk at the reporting dates is as follows:

At December 31 At December 31

(in thousands)

2020

2019

Cash and cash equivalents

24,992 $

8,190

Trade and other receivables

3,374

4,023

Restricted cash and investments

12,018

11,994

40,384 $

24,207

The Company limits cash and cash equivalents and restricted cash and investment risk by dealing with credit

worthy financial institutions. The majority of the Company’s normal course trade and other receivables balance

relates to a smal number of customers whom have established credit worthiness with the Company through past

dealings.

(b) Liquidity Risk

Liquidity risk is the risk that the Company wil encounter difficulties in meeting obligations associated with its

financial liabilities as they become due. The Company has in place a planning and budgeting process to help

determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The

Company ensures that there is sufficient committed capital to meet its short-term business requirements, taking

into account its anticipated cash flows from operations, its holdings of cash and cash equivalents and equity

investments, its financial covenants and its access to credit and capital markets, if required.

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

The maturities of the Company’s financial liabilities at December 31, 2020 are as follows:

Within 1

1 to 5

(in thousands)

Year

Years

Accounts payable and accrued liabilities

7,178

Debt obligations (note 14)

240

375

7,418

375

Foreign exchange risk is the risk that the fair value of future cash flows of a financial instrument wil fluctuate

because of changes in foreign exchange rates. The Company predominantly operates in Canada and incurs the

majority of its operating and capital costs in Canadian dollars. At December 31, 2020, the Company is exposed

to some foreign exchange risk on its net U.S dollar financial asset position, predominantly as a result of U.S dollar

financing activity completed in the fourth quarter of 2020.

At December 31, 2020, the Company’s net U.S dollar financial assets were $10,191,000. The impact of the U.S

dollar strengthening or weakening (by 10%) on the value of the Company’s net U.S dollar financial assets is as

follows:

Dec.31’2020

Sensitivity

Foreign

Change in

Exhange

Exchange

net income

(in thousands except foreign exchange rates)

Rate

(loss)

Currency risk

Canadian dollar (“CAD”) weakens

1.2732

1.4005

1,019

Canadian dollar (“CAD”) strengthens

1.2732

1.1459

(1,019)

Currently, the Company does not have any programs or instruments in place to hedge this possible currency risk.

(d) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument wil fluctuate because of

changes in market interest rates. The Company is exposed to interest rate risk on its liabilities through its

outstanding borrowings and on its assets through its investments in debt instruments. The Company monitors its

exposure to interest rates and has not entered into any derivative contracts to manage this risk.

(e) Price Risk

The Company is exposed to equity price risk on its investments in equity instruments of other exploration and

mining companies. The sensitivity analysis below il ustrates the impact of equity price risk on the equity investments

held by the Company at December 31, 2020:

Change in

net income

(in thousands)

(loss)

Equity price risk

10% increase in equity prices

1,709

10% decrease in equity prices

(1,709)

Fair Value of Financial Instruments

IFRS requires disclosures about the inputs to fair value measurements, including their classification within a

hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are:

•

Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities;

•

Level 2 - Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly;

and

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

•

Level 3 - Inputs that are not based on observable market data.

The fair value of financial instruments which trade in active markets, such as share and warrant equity instruments,

is based on quoted market prices at the balance sheet date. The quoted market price used to value financial assets

held by the Company is the current closing price. Warrants that do not trade in active markets have been valued

using the Black-Scholes pricing model. Debt instruments have been valued using the effective interest rate for the

period that the Company expects to hold the instrument and not the rate to maturity.

Except as otherwise disclosed, the fair values of cash and cash equivalents, trade and other receivables, accounts

payable and accrued liabilities, restricted cash and cash equivalents and debt obligations approximate their

carrying values as a result of the short-term nature of the instruments, the variable interest rate associated with

the instruments or the fixed interest rate of the instruments being similar to market rates.

During 2020 and 2019, there were no transfers between levels 1, 2 and 3 and there were no changes in valuation

techniques, however, the Company did change its method of accounting for its GoviEx investment from the equity

method to FVTPL in the fourth quarter of 2019.

The fol owing table il ustrates the classification of the Company’s financial assets within the fair value hierarchy as

at December 31, 2020 and December 31, 2019:

Financial

Fair

December 31, December 31,

Instrument

Value

2020

2019

(in thousands)

Category(1)

Hierarchy

Fair Value

Financial Assets:

Cash and equivalents

Category B

24,992 $

8,190

Trade and other receivables

Category B

3,374

4,023

Investments

Equity instruments-shares

Category A

Level 1

16,657

11,971

Equity instruments-warrants

Category A

Level 2

293

133

Restricted cash and equivalents

El iot Lake reclamation trust fund

Category B

2,883

2,859

Credit facility pledged assets

Category B

9,000

Reclamation letter of credit collateral

Category B

135

57,334 $

36,311

Financial Liabilities:

Account payable and accrued liabilities

Category C

7,178

7,930

Debt obligations

Category C

615

1,002

7,793 $

8,932

(1) Financial instrument designations are as follows: Category A=Financial assets and liabilities at fair value through profit and loss; Category

B=Financial assets at amortized cost; and Category C=Financial liabilities at amortized cost.

24. COMMITMENTS AND CONTINGENCIES

General Legal Matters

The Company is involved, from time to time, in various legal actions and claims in the ordinary course of business.

In the opinion of management, the aggregate amount of any potential liability is not expected to have a material

adverse effect on the Company’s financial position or results.

Specific Legal Matters

Mongolia Mining Division Sale – Arbitration Proceedings with Uranium Industry a.s

In November 2015, the Company sold all of its mining assets and operations located in Mongolia to Uranium

Industry a.s (“UI”) pursuant to an amended and restated share purchase agreement (the “GSJV Agreement”). The

primary assets at that time were the exploration licenses for the Hairhan, Haraat, Gurvan Saihan and Ulzit projects.

As consideration for the sale per the GSJV Agreement, the Company received cash consideration of

USD$1,250,000 prior to closing and the rights to receive additional contingent consideration of up to

USD$12,000,000.


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		On September 20, 2016, the Mineral Resources Authority of Mongolia (“MRAM”) formal y issued mining license
		certificates for all four projects, triggering Denison’s right to receive contingent consideration of USD$10,000,000
		(collectively, the “Mining License Receivable”). The original due date for payment of the Mining License Receivable
		by UI was November 16, 2016.

		Under an extension agreement between UI and the Company, the payment due date of the Mining License
		Receivable was extended from November 16, 2016 to July 16, 2017 (the “Extension Agreement”). As consideration
		for the extension, UI agreed to pay interest on the Mining License Receivable amount at a rate of 5% per year,
		payable monthly up to July 16, 2017 and they also agreed to pay a USD$100,000 instalment amount towards the
		balance of the Mining License Receivable amount. The required payments were not made.

		On February 24, 2017, the Company served notice to UI that it was in default of its obligations under the GSJV
		Agreement and the Extension Agreement and on December 12, 2017, the Company filed a Request for Arbitration
		between the Company and UI under the Arbitration Rules of the London Court of International Arbitration. Hearings
		in front of the arbitration panel were held in December 2019. The final award was rendered by an arbitration panel
		on July 27, 2020, with the panel finding in favour of Denison and ordering UI to pay the Company USD$10,000,000
		plus interest at a rate of 5% per annum from November 16, 2016, plus certain legal and arbitration costs. Denison
		and UI have exchanged correspondence, and award recovery options are being considered.

		Arbitration Proceedings with Orano Canada Inc. (“Orano Canada”) and OURD (Canada) Co., Ltd. (“OURD”)

		Denison commenced arbitration with Orano Canada and OURD in October 2019, with Denison’s initial written
		submission made on March 9, 2020. Denison claimed that certain payments it was required to make related to
		matters outside the scope of the joint venture agreement for the MLJV. Proceedings in front of the arbitration panel
		were held in October 2020 and the panel released its decision in December 2020, finding in favour of Orano
		Canada and OURD on the facts. A settlement was agreed amongst the parties whereby Denison would pay
		$850,000 in respect of legal fees and expenses incurred by Orano Canada and OURD. This amount has been
		accrued as a payable at year end and is included in Other income (expense) in 2020. Denison paid the settlement
		amount in January 2021.

		Performance Bonds and Letters of Credit

		In conjunction with various contracts, reclamation and other performance obligations, the Company may be
		required to issue performance bonds and letters of credit as security to creditors to guarantee the Company’s
		performance. Any potential payments which might become due under these items would be related to the
		Company’s non-performance under the applicable contract. As at December 31, 2020, the Company had
		outstanding letters of credit of $24,135,000 for reclamation obligations of which $24,000,000 is collateralized by
		the Company’s 2020 credit facility (see note 14) and the remainder is col ateralized by cash (see note 9).


		25. INTEREST IN OTHER ENTITIES

		The significant subsidiaries, associates and joint operations of the Company at December 31, 2020 are listed
		below. The table also includes information related to key contractual arrangements associated with the Company’s
		mineral property interests that comprise 90.5% of the December 31, 2020 carrying value of its Mineral Property
		assets (see note 10). The company does not have any accounting joint ventures as defined by IFRS 11.

	41

ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

December December

Fiscal

Place

31, 2020

31, 2019

2020

Ownership Ownership Participating

Accounting

Business

Interest (1)

Interest (2)

Method

Subsidiaries

Denison Mines Inc.

Canada

100.00%

N/A

Consolidation

Denison AB Holdings Corp.

Canada

100.00%

N/A

Consolidation

Denison Waterbury Corp

Canada

100.00%

N/A

Consolidation

9373721 Canada Inc.

Canada

100.00%

N/A

Consolidation

Denison Mines (Bermuda) I Ltd

Bermuda

100.00%

N/A

Consolidation

Joint Operations

Waterbury Lake Uranium Corp

Canada

60.00%

100%

Voting Share (3)

Waterbury Lake Uranium LP

Canada

66.90%

66.57%

100%

Voting Share (3)

Key Contractual Arrangements

Wheeler River Joint Venture

Canada

90.00%

Denison Share (3)

Midwest Joint Venture

Canada

25.17%

Denison Share (3)

Mann Lake Joint Venture

Canada

30.00%

N/A (4)

Denison Share (3)

Wolly Joint Venture

Canada

21.89%

N/A (4)

Denison Share (3)

McClean Lake Joint Venture

Canada

22.50%

Denison Share (3)

(1) Ownership Interest represents Denison’s percentage equity / voting interest in the entity or contractual arrangement;

(2) Participating interest represents Denison’s percentage funding contribution to the particular joint operation or contractual arrangement. This

percentage can differ from ownership interest in instances where other parties to the arrangement have carried interests, they are earning-in

to the arrangement, or they are diluting their interest in the arrangement (provided the arrangement has dilution provisions therein);

(3) Denison Share is where Denison accounts for its share of assets, liabilities, revenues and expenses in accordance with the specific terms

within the contractual arrangement. – this can be by using either its ownership interest (i.e. Voting Share) or its participating interest (i.e.

Funding Share), depending on the arrangement terms. The Voting Share and Funding Share approaches produce the same accounting result

when the Company’s ownership interest and participating interests are equal;

(4) The participating interest for 2020 for these arrangements is shown as Not Applicable as there were no approved spending programs carried

out during fiscal 2020.

WLUC and WLULP were acquired by Denison as part of the Fission Energy Corp acquisition in April 2013. Denison

uses its equity interest to account for its share of assets, liabilities, revenues and expenses for these joint

operations. In 2020, Denison funded 100% of the activities in these joint operations pursuant to the terms of an

agreement that allows it to approve spending for the WLULP without having the required 75% of the voting interest

(see note 22).

26. SUBSEQUENT EVENTS

Bank of Nova Scotia Credit Facility Renewal

On January 14, 2021, the Company entered into an amending agreement with BNS to extend the maturity date of

the 2020 Facility (see note 14). Under the facility amendment, the maturity date has been extended to January 31,

2022 (the “2021 Facility”). Al other terms of the 2021 Facility (tangible net worth covenant, pledged cash,

investments amounts and security for the facility) remain unchanged from those of the 2020 Facility, and the

Company continues to have access to credit up to $24,000,000 the use of which is restricted to non-financial letters

of credit in support of reclamation obligations.

The 2021 Facility remains subject to letter of credit and standby fees of 2.40% (0.40% on the $9,000,000 covered

by pledged cash collateral) and 0.75% respectively.

At-the-Market (“ATM”) Share Issue Program Activity

Subsequent to year-end, Denison, through its agents, issued 4,230,186 common shares under its ATM program

at an average price of $0.93 per share for aggregate gross proceeds of $3,914,000. The Company paid total

commissions of $78,000 resulting in net proceeds after commissions of $3,836,000. The Company has also

incurred other costs associated with the set-up of the ATM program which have been deferred on the balance

sheet at December 31, 2020 and which wil be recognized as share issue expenses in 2021.


ANNUAL CONSOLIDATED FINANCIAL STATEMENTS

		Public Unit Offering Issue

		On February 19, 2021, the Company completed a public offering by way of a prospectus supplement to the 2020
		Shelf Prospectus of 31,593,950 units of the Company at USD$0.91 per unit for gross proceeds of $36,266,000
		(USD$28,750,000), including the ful exercise of the underwriters’ over-allotment option, accounting for 4,120,950
		units. Each unit consists of one common share and one-half of one transferable common share purchase warrant
		of the Company. Each ful warrant is exercisable to acquire one common share of the Company at an exercise
		price of USD$2.00 for 24 months after issuance.

		Private Placement of Flow Through Shares

		On March 3, 2021, the Company completed a private placement of 5,926,000 flow-through common shares at a
		price of $1.35 per share for gross proceeds of approximately $8,000,000. The income tax benefits of this issue

		wil be renounced to subscribers with an effective date of December 31, 2021.

	43