Published: July 23, 2021 |

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Denison Mines has entered into a binding agreement to acquire 50 percent ownership of JCU (Canada) Exploration Company, from UEX Corporation, 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 to acquire 100 percent ownership of JCU, a wholly owned subsidiary of OURD, for cash consideration of $41 million.

JCU holds a portfolio of twelve uranium project joint venture interests in Canada, including a 10 percent interest in Denison’s 90 percent owned Wheeler River project, a 30.099 percent interest in the Millennium project (Cameco Corporation 69.901 percent), a 33.8123 percent interest in the Kiggavik project (Orano Canada Inc. 66.1877 percent), and a 34.4508 percent interest in the Christie Lake project (UEX 65.5492 percent).

“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,” said David Cates, president and CEO of Denison.

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 to facilitate UEX’s payment of the $41 million purchase price to OURD for the purchase of 100 percent 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 percent 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 percent 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.

• 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 percent 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 favor of Denison if the OURD agreement is not completed by September 30, 2021.

Denison’s previous offer to acquire 100 percent of JCU from OURD in May has been withdrawn.

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 percent 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 percent ownership interest in the McClean Lake joint venture, a 25.17 percent interest in the Midwest Main and Midwest A deposits, and a 66.90 percent interest in the Tthe Heldeth Túé, and Huskie deposits on the Waterbury Lake property.

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.

To stop by Denison’s website, CLICK HERE

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