TORONTO, Nov. 27,
2024 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX:
DML) (NYSE American: DNN) is pleased to announce that is has
executed an agreement (the "Agreement") with Cosa Resources
Corp. ("Cosa") (TSX-V: COSA) to form three uranium
exploration joint ventures in the eastern portion of the
Athabasca Basin region in northern
Saskatchewan. Pursuant to the
Agreement, Cosa will acquire a 70% interest in Denison's
100%-owned Murphy Lake North, Darby, and Packrat properties (the
"Properties") in exchange for approximately 14.2
million Cosa common shares, $2.25M in
deferred equity consideration, and a commitment to spend
$6.5 million in exploration
expenditures at Murphy Lake North and Darby (the
"Transaction"). View PDF Version
David Cates, President & CEO
of Denison, commented, "Denison is pleased to collaborate
with Cosa in a way that is mutually beneficial and enhances our
exposure to the potential discovery of a meaningful uranium deposit
on the Properties and through Cosa's existing uranium exploration
portfolio. With Denison focused on executing on our core
mining and development-stage projects, we believe Cosa is an
excellent partner to advance exploration of the
Properties. The entire Cosa senior management team has worked
with Denison previously, and have strong technical capabilities,
plus a unique familiarity with the Properties and nearby
discoveries."
Transaction Highlights:
- The transaction is structured to incentivize exploration
activity, with Cosa required to invest a minimum of $6.5 million in exploration expenditures to
retain its operatorship and ownership level of the Murphy Lake
North and Darby properties.
- Denison to receive meaningful consideration in the form of an
upfront payment of 14,195,506 Cosa common shares (representing
~19.95% ownership interest in Cosa post transaction), deferred
equity consideration of $2.25 million
of additional Cosa common shares, and a royalty on each of the
Properties.
- Denison retains a minimum 30% direct interest in the Properties
and will become Cosa's largest shareholder, while also securing
strategic pre-emptive rights and a buydown right to increase
Denison's interest in the Darby property.
- Denison will have the right to nominate one director to Cosa's
board of directors for so long as Denison holds at least 5% of the
issued and outstanding common shares and an additional director to
Cosa's board of directors for so long as Denison holds at least 10%
of the issued and outstanding common shares.
Terms of the Transaction
Under the terms of the Acquisition Agreement, Cosa will acquire
a 70% interest in each of the Properties from Denison.
See Figure 1 for the location of the
Properties. Upon closing of the Transaction, the parties will
form a joint venture for each of the
Properties (each, a "Joint Venture") and Cosa will
become the project operator. Denison will retain a 30% interest in
each of the Properties.
As consideration for the Transaction, Cosa will issue 14,195,506
common shares to Denison, equivalent to 19.95% of the
outstanding common shares of Cosa following completion of
the Transaction. Denison will retain a 2% Net Smelter Royalty
("NSR") on Darby and Packrat, and a 0.5% NSR on Murphy Lake
North.
Cosa has been granted the right to reduce the NSR royalty rate
on each of Darby and Packrat to 1% for a cash payment of
C$2,000,000 per project.
Additionally, Cosa will be required to:
- issue Denison a further C$2,250,000 in deferred consideration shares
within a five-year period beginning at the closing date (the
"Closing Date") of the Transaction;
- fund 100% of the next C$1,500,000
in exploration expenditures on Murphy Lake North by December 31, 2027, otherwise Denison's ownership
interest in the property will increase to 51% and Denison will
become the operator; and
- fund 100% of the next C$5,000,000
in exploration expenditures on Darby by June
30, 2029, otherwise Denison's ownership interest in the
property will increase to 51% and Denison will become the
operator.
Darby is subject to a buydown right (the
"Buydown"), which permits Denison to reclaim up
to a 60% interest in Darby until such time as
Denison's interest in the project falls below 10%, or
commercial production of 500,000 lbs. of
U3O8 is achieved from the applicable Darby
claim.
Cosa is to appoint a technical advisor nominated by Denison for
a period of five years from the Closing Date or until all of Cosa's
obligations under the Acquisition Agreement have been
fulfilled.
Completion of the Transaction is subject to a number of
conditions precedent, including, but not limited to: (i) acceptance
by the TSX.V and receipt of other applicable regulatory approvals
to be obtained by Cosa, and (ii) certain other closing conditions
customary for a transaction of this nature.
On closing, Denison and Cosa will enter into an Investor
Rights Agreement, which will provide for, among other
things, a pre-emptive right and top-up rights entitling
Denison to maintain and/or acquire up to a 19.95%
interest in Cosa, on the condition that Denison holds at least 5%
of the issued and outstanding common shares. Additionally, Denison
will have the right to nominate one director to Cosa's board of
directors for so long as Denison holds at least 5% of the issued
and outstanding common shares and an additional director to Cosa's
board of directors for so long as Denison holds at least 10% of the
issued and outstanding common shares.
About Denison
Denison is a uranium mining, exploration and development
company with interests focused in the Athabasca Basin region of northern
Saskatchewan, Canada. The Company
has an effective 95% interest in its flagship 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.
In mid-2023, a feasibility study was completed for the
Phoenix deposit as an in-situ
recovery ("ISR") mining operation, and an update to the previously
prepared 2018 Pre-Feasibility Study was completed for Wheeler
River's Gryphon deposit as a conventional underground mining
operation. Based on the respective studies, both deposits have the
potential to be competitive with the lowest cost uranium mining
operations in the world. Permitting efforts for the planned Phoenix
ISR operation commenced in 2019 and a several notable milestones
were achieved in 2024 with the submission of federal licensing
documents and the proposed final versions of the Environmental
Impact Statement ("EIS") to the Canadian Nuclear Safety Commission
and the Province of Saskatchewan.
Denison's interests in Saskatchewan also include a 22.5% ownership
interest in the McClean Lake Joint Venture ("MLJV"), which includes
unmined uranium deposits (planned for extraction via the MLJV's
SABRE mining method starting in 2025) and the McClean Lake uranium
mill (currently utilizing a portion of its licensed capacity to
process the ore from the Cigar Lake mine under a toll milling
agreement), plus a 25.17% interest in the MWJV's Midwest Main and
Midwest A deposits, and a 69.44% interest in the Tthe Heldeth Túé
("THT") and Huskie deposits on the Waterbury Lake Property. The
Midwest Main, Midwest A, THT and Huskie deposits are located within
20 kilometres of the McClean Lake mill. Taken together, Denison has
direct ownership interests in properties covering ~384,000 hectares
in the Athabasca Basin
region.
Additionally, through its 50% ownership of JCU (Canada) Exploration Company, Limited ("JCU"),
Denison holds additional interests in various uranium project joint
ventures in Canada, including the
Millennium project (JCU, 30.099%), the Kiggavik project (JCU,
33.8118%), and Christie Lake (JCU,
34.4508%).
In 2024, Denison is celebrating its 70th year in uranium
mining, exploration, and development, which began in 1954 with
Denison's first acquisition of mining claims in the Elliot Lake region of northern
Ontario.
About Cosa Resources Corp.
Cosa Resources is a Canadian uranium exploration company
operating in northern Saskatchewan. The portfolio comprises roughly
237,000 ha across multiple 100% owned and Cosa operated joint
venture projects in the Athabasca
Basin region, all of which are underexplored, and the majority
reside within or adjacent to established uranium
corridors.
Cosa's award-winning management team has a long track record
of success in Saskatchewan. In
2022, members of the Cosa team were awarded the AME Colin Spence
Award for their previous involvement in discovering IsoEnergy's
Hurricane deposit. Prior to Hurricane, Cosa personnel led teams or
had integral roles in the discovery of Denison's Gryphon deposit
and 92 Energy's Gemini Zone and held key roles in the founding of
both NexGen and IsoEnergy.
Cosa's primary focus through 2024 was initial drilling at the
100% owned Ursa Project, which captures over 60-kilometres of
strike length of the Cable Bay Shear Zone, a regional structural
corridor with known mineralization and limited historical drilling.
It potentially represents the last remaining eastern Athabasca corridor to not yet yield a major
discovery, which the Company believes is primarily due to a lack of
modern exploration. Modern geophysics completed by Cosa in 2023
identified multiple high-priority target areas characterized by
conductive basement stratigraphy beneath or adjacent to broad zones
of inferred sandstone alteration – a setting that is typical of
most eastern Athabasca uranium
deposits. Guided by a recently completed Ambient Noise Tomography
(ANT) survey, Cosa's second and most recent drilling campaign at
Ursa intersected a significant zone of unconformity-style sandstone
hosted structure and alteration underlain by several intervals of
anomalous radioactivity in the basement rocks. Follow-up is
currently in planning for 2025.
Cautionary Statement Regarding Forward-Looking
Statements
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 'potential', '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' or 'be
achieved'.
In particular, this news release contains forward-looking
information pertaining to Denison's current intentions and
objectives with respect to, and commitments set forth in, the
Acquisition Agreement and ancillary agreements and
the expected
benefits thereof; the
assumption that the transactions set forth in the
Acquisition Agreement will be completed as described; the
Company's exploration, development and expansion
plans and objectives for the Exploration Properties and
other Company projects; and expectations regarding
its joint venture ownership interests and the continuity of its
agreements with its partners and third
parties.
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 parties to the
Acquisition Agreement may not complete obligations as
described therein and/or the exploration
objective for the Exploration Properties may not be
achieved.
In addition, Denison may decide or otherwise be required to
discontinue testing, evaluation and
other work on the Company's other
properties if it is unable to maintain or otherwise secure
the necessary resources (such as testing facilities, capital
funding, joint venture approvals,
regulatory approvals, etc.). Denison believes that the
expectations reflected in this forward-looking information are
reasonable but 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 Denison's Annual Information Form dated March 28,
2024 under the heading 'Risk
Factors' or in subsequent quarterly
financial reports. 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.
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SOURCE Denison Mines Corp.