EX-99.1
2
a2021-06denisonagreestopu.htm
PRESS RELEASE DATED JUNE 15, 2021
a2021-06denisonagreestopu
Exhibit 99.1
Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
PRESS
RELEASE
DENISON ANNOUNCES AGREEMENT TO ACQUIRE 50% OF
JCU (CANADA) EXPLORATION COMPANY, LIMITED
FROM UEX CORPORATION FOR $20.5 MILLION
Toronto, ON – June 15,
2021. Denison Mines Corp. (“Denison” or the
“Company”) (TSX: DML, NYSE American: DNN) is pleased to
announce that it has entered into a binding agreement (the
“Agreement”) to acquire 50% ownership of JCU (Canada)
Exploration Company, Limited (“JCU”) from UEX
Corporation (“UEX”), for cash consideration of $20.5
million, following UEX’s expected acquisition of JCU from
Overseas Uranium Resources Development Co., Ltd.
(“OURD”).
UEX
has entered into an amended purchase agreement with OURD
(“OURD Agreement”) to acquire 100% ownership of JCU, a
wholly owned subsidiary of OURD, for cash consideration of $41
million (see UEX press release dated June 15, 2021).
JCU
holds a portfolio of twelve uranium project joint venture interests
in Canada, including a 10% interest in Denison’s 90% owned
Wheeler River project, a 30.099% interest in the Millennium project
(Cameco Corporation 69.901%), a 33.8123% interest in the Kiggavik
project (Orano Canada Inc. 66.1877%), and a 34.4508% interest in
the Christie Lake project (UEX 65.5492%).
David Cates, President and CEO, stated:
“Denison
welcomes this new partnership with UEX. We are pleased with the
acquisition terms for this unique and valuable portfolio of
strategic Canadian uranium interests, which have been meticulously
accumulated by JCU over prior decades. Following this acquisition,
Denison will not only increase its indirect ownership of the
Company’s flagship Wheeler River project, but will also
expand its asset base to include additional important Canadian
uranium development projects such as Millennium and
Kiggavik.”
The
key terms of the Agreement are outlined below:
●
Denison
agrees to provide UEX with an interest-free three-month term loan
of up to $41 million (the “Term Loan”) to facilitate
UEX’s payment of the $41 million purchase price to OURD for
the purchase of 100% of the shares of JCU pursuant to the OURD
Agreement.
●
$20.5 million
of the amount drawn under the Term Loan will be deemed repaid to
Denison by UEX on the transfer of 50% of the JCU shares to Denison
immediately following the closing of the OURD Agreement and the
acquisition of the JCU shares by UEX.
●
UEX may
extend the Term Loan by an additional three months, in which case
interest will be charged at a rate of 4% from the date of the
initial advance under the Term Loan until maturity.
●
All of the
shares of JCU owned by UEX will be held by Denison as security
against the Term Loan pursuant to a pledge agreement until the Term
Loan is repaid in full.
●
The Term Loan
is subject to certain customary terms and conditions and contains
standard events of default that protect Denison.
●
Denison and
UEX agree to enter into a shareholders’ agreement governing
the relationship of Denison and UEX with respect to the future
management of JCU (“Shareholders’
Agreement”).
●
The
Shareholders’ Agreement shall include various provisions
regarding future funding and dilution, as well as resolution of
deadlock situations and protections of minority interests in
relation to specific business matters that will require 66.67% or
unanimous support from then JCU shareholders.
●
The Agreement
is subject to certain conditions precedent, including the
completion of the acquisition of the JCU shares by UEX, pursuant to
the OURD Agreement.
●
Should the
OURD Agreement be terminated, each of Denison and UEX have agreed
to provide the other party with the opportunity to participate on a
50/50 basis in subsequent offers made in relation to an alternative
acquisition of JCU.
●
UEX and
Denison have certain termination rights, including those in favour
of Denison if the OURD Agreement is not completed by September 30,
2021.
The OURD Agreement, and the completion of the JCU
acquisition by UEX pursuant thereto, remains subject to approval at
a meeting of the shareholders of OURD, which is expected to occur
in Tokyo on June 18, 2021. If the shareholders of OURD approve the
OURD Agreement, the transaction is expected to
close on or before August 3, 2021.
Denison’s
previously announced offer to acquire 100% of JCU from OURD (see
press release dated May 4, 2021) has been withdrawn.
Haywood
Securities Inc and RCI Capital Group are acting as financial
advisor, and Blake, Cassels & Graydon LLP is acting as legal
counsel to Denison.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca Basin region of northern
Saskatchewan, Canada. The Company's flagship project is the 90%
owned Wheeler River Uranium Project, which is the largest
undeveloped uranium project in the infrastructure rich eastern
portion of the Athabasca Basin region of northern Saskatchewan.
Denison's interests in Saskatchewan also include a 22.5% ownership
interest in the McClean Lake joint venture ("MLJV"), which includes
several uranium deposits and the McClean Lake uranium mill that is
contracted to process the ore from the Cigar Lake mine under a toll
milling agreement, plus a 25.17% interest in the Midwest Main and
Midwest A deposits, and a 66.90% interest in the Tthe Heldeth
Túé ("THT," formerly J Zone) and Huskie deposits on the
Waterbury Lake property. Each of Midwest Main, Midwest A, THT and
Huskie are located within 20 kilometres of the McClean Lake
mill.
Denison is also engaged in mine decommissioning and environmental
services through its Closed Mines group (formerly Denison
Environmental Services), which manages Denison's Elliot Lake
reclamation projects and provides post-closure mine care and
maintenance services to a variety of industry and government
clients.
Certain information contained in this news release constitutes
‘forward-looking information’, within the meaning of
the applicable United States and Canadian legislation concerning
the business, operations and financial performance and condition of
Denison.
Generally, these forward-looking statements can be identified by
the use of forward-looking terminology such as ‘plans’,
‘expects’, ‘budget’,
‘scheduled’, ‘estimates’,
‘forecasts’, ‘intends’,
‘anticipates’, or ‘believes’, or the
negatives and/or variations of such words and phrases, or state
that certain actions, events or results ‘may’,
‘could’, ‘would’, ‘might’ or
‘will be taken’, ‘occur’, ‘be
achieved’ or ‘has the potential to’.
In particular, this news release contains forward-looking
information pertaining to the following: the terms of the Agreement
and the OURD Agreement, including the conditions and other rights
and obligations of the parties and the expectation that UEX, OURD
and Denison will be able to complete the transactions described
herein and therein; and expectations regarding its joint venture
ownership interests and the continuity of its agreements with its
partners.
Forward looking statements are based on the opinions and estimates
of management as of the date such statements are made, and they are
subject to known and unknown risks, uncertainties and other factors
that may cause the actual results, level of activity, performance
or achievements of Denison to be materially different from those
expressed or implied by such forward-looking statements. For
example, the conditions to the transactions, including the approval
of OURD shareholders, may not be satisfied or the parties may
negotiate terms materially different than disclosed herein. Denison
believes that the expectations reflected in this forward-looking
information are reasonable and no assurance can be given that these
expectations will prove to be accurate and results may differ
materially from those anticipated in this forward-looking
information. For a discussion in respect of risks and other factors
that could influence forward-looking events, please refer to the
factors discussed in the Annual Information Form dated March 26,
2021 under the heading “Risk Factors”. These factors
are not, and should not be construed as being
exhaustive.
Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking information
contained in this news release is expressly qualified by this
cautionary statement. Any forward-looking information and the
assumptions made with respect thereto speaks only as of the date of
this news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news release to conform such information to actual
results or to changes in Denison's expectations except as otherwise
required by applicable legislation.