Denison Mines Corp. Reports First Quarter 2014 Results

NEWS RELEASE TRANSMITTED BY Marketwired 
FOR: Denison Mines Corp. 
TSX SYMBOL:  DML
NYSE MKT SYMBOL:  DNN 
MAY 8, 2014 
Denison Mines Corp. Reports First Quarter 2014 Results 
TORONTO, ONTARIO--(Marketwired - May 8, 2014) - Denison Mines Corp.
("Denison" or the "Company") (TSX:DML)(NYSE MKT:DNN) today
reported its results for the three months ended March 31, 2014. All amounts in
this release are in U.S. dollars unless otherwise stated. 
Highlights 
/T/ 
--  Discovered a new zone of high grade mineralization, named the Gryphon 
zone, on the Wheeler River property. During the winter drill program, 
drill hole WR-556 intersected basement hosted uranium mineralization 
averaging 9.7% eU3O8 over 4.6 metres. The first follow-up hole, drill 
hole WR-560, also intersected high grade basement hosted uranium 
mineralization averaging 17.3% e U3O8 over 4.2 metres. The 
mineralization at the Gryphon zone is approximately 200 metres beneath 
the sub-Athabasca unconformity and is open in both strike directions and 
at depth. The Gryphon zone is located 3.0 kilometres northwest of the 
Phoenix deposit.  
--  Reported several high grade intersections at Phoenix Zone A, on the 
Wheeler River property, including drill hole WR-548 which returned an 
assay of 36.83% U3O8 over 6.5 metres. These intersections have expanded 
the zone of higher grade mineralization at Phoenix Zone A.  
--  Received the first truckload of ore from Cigar Lake at the McClean Lake 
mill. Processing of the ore is scheduled to begin in the second half of 
2014.  
--  Signed a definitive arrangement agreement with International Enexco 
Limited ("IEC"), on April 14, 2014, to acquire all of the issued and 
outstanding common shares of IEC by way of a plan of arrangement ("IEC 
Arrangement"). The IEC Arrangement provides that IEC shareholders will 
exchange each IEC share for 0.26 of a Denison common share and a share 
in a company indirectly holding 100% of IEC's Contact Copper Project and 
all other U.S. mineral properties currently owned by IEC. IEC's uranium 
assets consist of a 30% interest in the Mann Lake uranium exploration 
project and a 20% interest in the Bachman Lake Joint Venture. The Mann 
Lake exploration project is operated by Cameco Corp. (52.5% interest). 
It is located 25 kilometres southwest of the McArthur River mine and is 
on trend between Cameco Corp.'s Read Lake project and Denison's 60% 
owned Wheeler River project in the eastern Athabasca Basin. Upon 
completion of the IEC Arrangement, it is anticipated that IEC 
shareholders, other than Denison, will own approximately 2.1% of 
Denison.  
--  Acquired the remaining 10.38% non-controlling interest in Rockgate 
Capital Corp. ("Rockgate"), on January 17, 2014, pursuant to a plan of 
arrangement ("Rockgate Arrangement"). Under the Rockgate Arrangement, 
Denison acquired the outstanding shares of Rockgate that were not 
already owned by Denison in exchange for 0.192 of a Denison common share 
for each Rockgate common share, resulting in the issuance of an 
additional 2.3 million shares of Denison. Denison now owns 100% Rockgate 
and the Falea uranium project in Mali.  
/T/ 
Financial Results 
The Company recorded a net loss of $12,667,000 ($0.03 per share) for the three
months ended March 31, 2014, compared with a net loss of $5,469,000 ($0.01 per
share) for the three months ended March 31, 2013. The net loss for the first
quarter of 2014 includes mineral property exploration expenses of $6,597,000,
foreign exchange losses of $4,115,000, and an impairment charge against the
company's carrying value of mineral property of $1,658,000. 
/T/ 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Three Months    Three Months  
Ended           Ended  
March 31,       March 31, 
(in thousands, except per share amounts)               2014            2013 
---------------------------------------------------------------------------- 
Results of Operations:                                                      
 Total revenues                                  $    2,174      $    2,291 
 Net income (loss) for the period                   (12,667)         (5,469)
 Basic and diluted earnings (loss) per share          (0.03)          (0.01) 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
As at           As at  
March 31,    December 31, 
(in thousands)                                         2014            2013 
---------------------------------------------------------------------------- 
Financial Position:                                                         
 Cash and cash equivalents                       $   20,151      $   21,786 
 Short term investments                               5,536          10,040 
 Long term investments                                1,869           5,901  
--------------- ---------------
 Cash, equivalents and investments                   27,556          37,727  
Working capital                                     24,581          29,391 
 Property, plant and equipment                      266,755         281,010 
 Total assets                                       312,552         330,969 
 Total long-term liabilities                     $   39,232      $   41,283 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
/T/ 
Revenue 
Revenue from Denison Environmental Services ("DES") for the three
months ended March 31, 2014 was $1,625,000 compared to $1,907,000 in the same
period in 2013. Revenue decreased in 2014, due to a reduction in activity at
certain care and maintenance sites, and the change in foreign exchange rates
applicable on the translation of Canadian dollar denominated revenues. 
Revenue from the Company's management contract with Uranium Participation
Corporation ("UPC"), for the three months ended March 31, 2014, was
$549,000, compared to $384,000 in the same period in 2013. The revenue increase
in 2014 is due to additional fees earned from UPC in connection with UPC's
purchase of additional uranium holdings. 
Operating Expenses 
In Canada, commissioning of the McClean Lake mill continued during the first
quarter of 2014 with the Cigar Lake joint venture ("CLJV") continuing
to pay nearly all of the expenses under the terms of a toll milling agreement.
The first shipment of ore to the McClean Lake mill from Cigar Lake was received
during the first quarter, and together with further ore shipments, will be
stockpiled until the mill restarts operations during the second half of 2014. 
Denison's share of operating costs in Canada, for the three months ended
March 31, 2014, totaled $141,000 compared to $283,000 for the three months
ended March 31, 2013. Operating costs decreased in 2014 primarily due to
reductions in expenditures on the Surface Access Borehole Resource Extraction
("SABRE") program, which is not part of the stand-by costs paid by
the CLJV.  
In Africa, the Company completed a site visit and detailed review of the
recently acquired Falea project in Mali. During the quarter, engineering
studies, a metallurgical test work program and environmental programs
originally initiated by Rockgate were also completed. Operating expenses in
Africa for the three months ended March 31, 2014 totaled $695,000, and were
primarily attributable to the Falea project. Operating expenses in Africa for
the three months ended March 31, 2013, by comparison, totaled $45,000.  
Operating expenses also include costs relating to DES of $1,583,000 for the
three months ended March 31, 2014, as compared to $1,937,000 for the same
period in 2013. DES costs decreased in 2014, due to a reduction in activity at
certain care and maintenance sites, and the change in foreign exchange rates
applicable on the translation of Canadian dollar expenses. 
Mineral Property Exploration 
Denison is engaged in uranium exploration and/or development in Canada, Zambia,
Mali, Namibia, Niger and Mongolia. While the Company has material interests in
uranium projects in Asia and Africa, the Company is focused primarily on the
eastern Athabasca Basin in Saskatchewan, Canada, with 43 projects covering
582,000 hectares.  
Global exploration expenditures for the three months ended March 31, 2014 were
$6,597,000 compared to $4,709,000 for the three months ended March 31, 2013
with nearly 95% of exploration expenditures being incurred in Canada during the
first three months of 2014 as compared to roughly 89% of expenditures during
the same period in 2013. The increase in global exploration expenditures in
2014 is due to an increase in exploration activity in Canada, offset somewhat
by a reduction in exploration expenditures in other jurisdictions. 
In Canada, Denison's share of exploration spending on its Canadian
properties totaled $6,254,000 for the three months ended March 31, 2014 as
compared to $4,173,000 for the three months ended March 31, 2013. The winter
exploration program commenced in January 2014 and was completed in April 2014.  
In Zambia, exploration expenditures of $47,000 were incurred during the three
months ended March 31, 2014, as the Company prepares for geological mapping,
geochemical and trenching programs expected to be carried out later in the year
on the Company's Mutanga project. During the same three months in 2013,
exploration expenditures totaled $195,000.  
In Mali, exploration activities were minimal during the first quarter of 2014.
As a result, exploration expenditures of only $29,000 have been incurred on the
Falea project during the first three months of 2014. Geological field programs
and geophysics are planned for the second quarter in Mali. 
In Namibia, Rio Tinto Mining and Exploration Limited ("Rio")
terminated its option to earn an interest in the Dome project under the
provisions of an earn-in agreement between the parties. Rio discontinued
activities at the site at the end of February 2014. The Company is evaluating
options for moving forward with the Dome project. 
In Mongolia, exploration expenditures on the Company's Gurvan Saihan joint
venture ("GSJV") properties totaled $247,000 for the three months
ended March 31, 2014, compared to $341,000 for the three months ended March 31,
2013. Expenditures in Mongolia during the first quarter of 2014 and 2013 relate
primarily to annual license payments required to maintain the GSJV properties
in good standing while the Company continues to explore strategic alternatives
regarding its ownership interest in the GSJV. The Company currently has an 85%
interest in the GSJV, with Mon-Atom LLC holding the remaining 15% interest. 
General and Administrative 
General and administrative expenses totaled $2,403,000 for the three months
ended March 31, 2014 compared with $1,903,000 for the three months ended March
31, 2013. These expenses consist primarily of payroll and related expenses for
personnel, contract and professional services, stock option expense and other
public company expenditures. General and administrative expenditures were
higher in 2014 primarily due to special project costs, as well as an increase
over 2013 in the performance bonuses paid in the first quarter. 
Other Income and Expenses  
Other income (expense) totaled ($3,402,000) for the three months ended March
31, 2014 compared with ($929,000) for the three months ended March 31, 2013.
The Company realized foreign exchange losses of ($4,115,000) during the three
months ended March 31, 2014, as compared to foreign exchange losses of only
($80,000) during the three months ended March 31, 2013. The Company also
recognized $664,000 in gains on investments carried at fair market value during
the three months ended March 31, 2014, as compared to a loss of ($697,000) on
investments during the three months ended March 31, 2013.  
Liquidity & Capital Resources 
Cash and cash equivalents were $20,151,000 at March 31, 2014 compared with
$21,786,000 at December 31, 2013. The decrease of $1,635,000 was primarily due
to cash used in operations of $9,195,000 and an unfavourable movement in
foreign exchange rates, offset by cash provided by investing activities of
$7,913,000. 
Net cash used in operating activities of $9,195,000 in the three months ended
March 31, 2014 is comprised of net loss for the period adjusted for non-cash
items and changes in working capital items. Significant changes in working
capital items during the period include an increase of $4,887,000 in trade and
other receivables and an increase of $1,452,000 in prepaid expenses and other
assets, offset by an increase of $4,936,000 in accounts payable and accrued
liabilities. The increase in trade and other receivables and accounts payable
is due to the increase in activity at the McClean Lake mill. 
Net cash provided by investing activities of $7,913,000 consists primarily of
cash provided by the sale or maturity of debt instruments accounting for
$8,608,000, offset by $336,000 in cash spent on property, plant and equipment,
and $320,000 used to fund the Elliot Lake reclamation trust fund.  
On January 31, 2014, the Company entered into a revolving term credit facility
(the "Credit Facility") for CAD$15,000,000. The use of the Credit
Facility is restricted to the issuance of non-financial letters of credit and
contains a covenant to maintain a certain level of tangible net worth, which
must be greater than or equal to $150,000,000. The Credit Facility terminates
on January 31, 2015. At March 31, 2014, the Company is in compliance with the
covenants of the Credit Facility, and CAD$9,698,000 of the Credit Facility was
being used as collateral for certain letters of credit. As part of the Credit
Facility, the Company has provided an unlimited full recourse guarantee and a
pledge of all of the shares of Denison Mines Inc.  
Subsequent Events 
On April 14, 2014, Denison announced the signing of an agreement to acquire all
of the issued and outstanding shares, options and warrants of IEC by way of the
IEC Arrangement. IEC's uranium assets consist of a 30% interest in the
Mann Lake exploration project and a 20% interest in the Bachman Lake Joint
Venture, both located in Saskatchewan, Canada. IEC also owns a subsidiary
indirectly holding 100% of IEC's Contact Copper project and its other US
properties ("Spinco"). Denison currently owns 3,600,000 shares and
1,800,000 share purchase warrants of IEC and expects to complete the IEC
Arrangement before June 30, 2014. 
Under the terms of the IEC Arrangement, Denison will acquire all of the issued
and outstanding IEC shares on the basis of 0.26 of a Denison share for each IEC
share. Any outstanding warrants and options of IEC as of the completion of the
IEC Arrangement will be exchanged for options and warrants of Denison adjusted
with reference to the exchange ratio of 0.26. The Denison options received as a
result of this exchange will expire 90 days after the completion of the IEC
Arrangement while the new Denison warrants will expire in accordance with the
expiry dates of the existing IEC warrants. Upon completion of the IEC
Arrangement, it is anticipated that IEC shareholders, other than Denison, will
own approximately 2.1% of Denison. 
As part of the Arrangement, IEC's shareholders will also receive a pro
rata distribution of Spinco shares on a one-for-one basis and one-half of a
warrant to acquire an additional Spinco share, exercisable for 6 months, at a
price of CAD$5.00 for each whole share to be acquired. Each holder of IEC
options and warrants will also receive replacement options and warrants, as the
case may be, from Spinco with the same terms and conditions as the IEC options
and warrants being replaced. 
Outlook for 2014  
The Company's exploration, development and operation plans for 2014 remain
largely unchanged at the end of the first three months of the year. The Company
has completed a significant winter exploration program in Canada and plans to
follow up with a summer exploration program on certain high priority projects.  
/T/ 
----------------------------------------------------------------------------
---------------------------------------------------------------------------- 
Actual to  
Current       March 31, 
(in thousands)                                   Budget (1)        2014 (3) 
----------------------------------------------------------------------------
Canada (2)                                                                  
 Mineral sales                                   $    1,155               - 
 Toll milling fees                                      850               - 
 Exploration                                        (14,276)         (6,222)
 Development/operations                              (1,564)           (141)
---------------------------------------------------------------------------- 
(13,835)         (6,363)
Africa                                                                      
 Mali                                                (2,000)           (858)
 Zambia                                              (1,830)           (365)
---------------------------------------------------------------------------- 
(3,830)         (1,223)
Asia                                                                        
 Mongolia                                              (962)           (467) 
Services and Other (2)                                                      
 Management fees and commissions                      1,996             549 
 Environmental services                                 604               5 
 Corporate general and administration                (4,433)         (1,269)
---------------------------------------------------------------------------- 
(1,833)           (715) 
----------------------------------------------------------------------------
Total                                            $  (20,460)     $   (8,768)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
(1) Only Denison's material operations are shown in the above table.        
(2) Budget figures have been converted using a US$ to CAD$ exchange rate of  
0.95.                                                                   
(3) The Company budgets on a cash basis. As a result, the actual figure      
represents a non-GAAP measure and excludes non-cash depreciation and     
amortization amounts of $205,000.                                        
/T/ 
Canada 
Mineral Property Exploration 
The Company is planning to spend approximately CAD$15,000,000 on exploration
activities in Canada during 2014. At this time, the winter portion of the 2014
exploration program has been completed. Denison is planning to carry out
additional geophysical surveying on several properties and is also planning to
carry out further drilling on five projects, of which Wheeler River will
continue to be the primary focus. Drilling at Wheeler River will continue to be
focused on the K trend, including follow-up at the Gryphon zone discovery.
Approximately 15,000 metres of drilling is planned at Wheeler River during the
summer program.  
In addition to the Wheeler River program, summer drill programs are also
planned at Crawford Lake, Bachman Lake, Packrat and McClean Lake. At Crawford
Lake, 3,550 metres of drilling is planned for six drill holes to evaluate
geophysical targets and follow up on drilling results in 2013. Drilling at
Bachman Lake will consist of 3,050 metres in five drill holes to evaluate
geophysical targets there. At Packrat, a four hole, 800 metre drilling program
is planned to follow-up on weak uranium mineralization intersected in 2013.
McClean Lake is also planning a five hole, 1,500 metre, drilling program. 
Development/Operations 
At McClean Lake, the expansion of the mill from 13 to 24 million pounds annual
U3O8 capacity is being fully funded by the CLJV and is well underway. First ore
from the Cigar Lake mine was received during the first quarter and processing
of ores from the McClean Lake SABRE program and from Sue B, blended with Cigar
Lake ore, is scheduled to begin during the second half of 2014. Denison's
share of operating and capital expenditures at the mill in 2014 is estimated at
CAD$1.1 million. Denison's expenditures are expected to be offset by
revenue from the sale of approximately 30,000 pounds U3O8, recovered from
McClean Lake ores processed at the mill, and from toll milling fees. Total
revenue from operations is projected at CAD$1.9 to 2.4 million. 
Due to low uranium prices, the Midwest and McClean underground projects will
continue to remain on stand-by in 2014. Total expenditures on these projects is
budgeted at CAD$0.9 million (Denison's share, CAD$212,000). While
significant milestones were achieved by the McClean joint venture in the
development of the SABRE mining technology in 2012 and 2013, a decision was
made by the joint venture to put this program on stand-by. As a result, SABRE
expenditures are expected to be reduced in 2014 to CAD$650,000 (Denison's
share, CAD$146,000).  
International 
On its wholly owned Mutanga project in Zambia, the Company plans to carry out
further geological mapping, geochemical and trenching programs to follow up on
the results of the work completed in 2013. The Zambian program is estimated to
total $1.8 million. 
On its wholly owned Falea project in Mali, the Company is planning to carry out
geological field programs and metallurgical test work. The Mali program is
estimated to total $2.0 million.  
In Mongolia, the 2014 expenditures are estimated to total $1.0 million. 
Other Activities 
Revenue from operations at DES is budgeted at CAD$7.0 million and operating
expenses are forecast to be CAD$6.3 million for 2014. Capital expenditures and
reclamation funding are projected to be CAD$0.7 million. 
Management fees from Denison's contract with UPC are budgeted at CAD$2.1
million in 2014. 
Corporate administration expenses are forecast to be CAD$4.6 million in 2014
and include all head office wages, benefits, office costs, public company
expenses, legal, audit and investor relations expenses. 
Qualified Person 
The disclosure of scientific and technical information regarding Denison's
properties in this press release was prepared by or reviewed by Steve Blower,
P. Geo., the Company's Vice President, Exploration, and Terry Wetz, P.E.,
the Executive Director of the GSJV, who are Qualified Persons in accordance
with the requirements of NI 43-101. For a description of the quality assurance
program and quality control measures applied by Denison, please see
Denison's Annual Information Form dated March 14, 2014 available at
http://www.sedar.com, and its Form 40-F available at
http://www.sec.gov/edgar.shtml. 
Additional Information 
Denison's consolidated financial statements for the three month period
ended March 31, 2014 and related management's discussion and analysis are
available on Denison's website at www.denisonmines.com or under its
profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml. 
About Denison 
Denison is a uranium exploration and development company with interests in
exploration and development projects in Canada, Zambia, Mali, Namibia, Niger
and Mongolia. Including the high grade Phoenix deposit, located on its 60%
owned Wheeler project, Denison's exploration project portfolio consists of
43 projects and totals approximately 582,000 hectares in the Eastern Athabasca
Basin region of Saskatchewan. Denison's interests in Saskatchewan also
include a 22.5% ownership interest in the McClean Lake joint venture, which
includes several uranium deposits and the McClean Lake uranium mill, one of the
world's largest uranium processing facilities, plus a 25.17% interest in
the Midwest deposit and a 60% interest in the J Zone deposit on the Waterbury
property. Both the Midwest and J Zone deposits are located within 20 kilometres
of the McClean Lake mill. Internationally, Denison owns 100% of the
conventional heap leach Mutanga project in Zambia, 100% of the
uranium/copper/silver Falea project in Mali, a 90% interest in the Dome project
in Namibia, and an 85% interest in the in-situ recovery projects held by the
GSJV in Mongolia. 
Denison is engaged in mine decommissioning and environmental services through
its DES division and is the manager of UPC, a publicly traded company which
invests in uranium oxide and uranium hexafluoride. 
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS  
Certain information contained in this press release constitutes
"forward-looking information", within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and similar 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" or
"does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts",
"intends", "anticipates" or "does not
anticipate", or "believes", 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". 
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. 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 correct and such forward-looking
information included in this press release should not be unduly relied upon.
This information speaks only as of the date of this press release. In
particular, this press release may contain forward-looking information
pertaining to the following: the likelihood of completing and benefits to be
derived from corporate transactions; the estimates of Denison's mineral
reserves and mineral resources; expectations regarding the toll milling of
Cigar Lake ores; capital expenditure programs, estimated exploration and
development expenditures and reclamation costs; expectations of market prices
and costs; supply and demand for uranium ("U3O8"); possible impacts
of litigation and regulatory actions on Denison; exploration, development and
expansion plans and objectives; expectations regarding adding to its mineral
reserves and resources through acquisitions and exploration; and receipt of
regulatory approvals, permits and licences under governmental regulatory
regimes. 
There can be no assurance that such statements will prove to be accurate, as
Denison's actual results and future events could differ materially from
those anticipated in this forward-looking information as a result of the
factors discussed under the heading "Risk Factors" in Denison's
Annual Information Form dated March 14, 2014 available at http://www.sedar.com,
and in its Form 40-F available at http://www.sec.gov/edgar.shtml. 
Accordingly, readers should not place undue reliance on forward-looking
statements. These factors are not, and should not be construed as being,
exhaustive. Statements relating to "mineral reserves" or
"mineral resources" are deemed to be forward-looking information, as
they involve the implied assessment, based on certain estimates and assumptions
that the mineral reserves and mineral resources described can be profitably
produced in the future. The forward-looking information contained in this press
release is expressly qualified by this cautionary statement. Denison does not
undertake any obligation to publicly update or revise any forward-looking
information after the date of this press release to conform such information to
actual results or to changes in Denison's expectations except as otherwise
required by applicable legislation. 
Cautionary Note to United States Investors Concerning Estimates of Measured,
Indicated and Inferred Mineral Resources: This press release may use the terms
"measured", "indicated" and "inferred" mineral
resources. United States investors are advised that while such terms are
recognized and required by Canadian regulations, the United States Securities
and Exchange Commission does not recognize them. "Inferred mineral
resources" have a great amount of uncertainty as to their existence, and
as to their economic and legal feasibility. It cannot be assumed that all or
any part of an inferred mineral resource will ever be upgraded to a higher
category. Under Canadian rules, estimates of inferred mineral resources may not
form the basis of feasibility or other economic studies. United States
investors are cautioned not to assume that all or any part of measured or
indicated mineral resources will ever be converted into mineral reserves.
United States investors are also cautioned not to assume that all or any part
of an inferred mineral resource exists, or is economically or legally mineable. 
-30-
FOR FURTHER INFORMATION PLEASE CONTACT: 
Denison Mines Corp.
Ron Hochstein
President and Chief Executive Officer
(416) 979-1991 ext 232
or
Denison Mines Corp.
Sophia Shane
Investor Relations
(604) 689-7842
www.denisonmines.com 
INDUSTRY:  Manufacturing and Production - Mining and Metals 
SUBJECT:  ERN 
-0-
-0- May/08/2014 20:30 GMT
 
 
Press spacebar to pause and continue. Press esc to stop.