In addition, the Company outlines the highlights of its 2016 financial plan – which includes Canadian exploration and evaluation expenditures of approximately $13m (CAD$16.9m) and revenue from McClean Lake operations and uranium sales of $5.4m (CAD$7.1m).

Denison president and CEO, David Cates said: "With the significant increase in toll milling revenue expected from McClean Lake this year, we are pleased to announce that Denison’s 2016 financial plan is funded, and will allow the Company to focus on increasing its resource base in the Athabasca Basin and advancing the Wheeler River project.

"We are looking forward to the results from the Preliminary Economic Assessment in progress for Wheeler, and the opportunity to continue to explore the property this winter – particularly in the vicinity of the Gryphon deposit and at other priority targets on the property."

The Company’s financial plan for 2016 is based on a USD$ to CAD$ foreign exchange rate of 1 to 1.30. All amounts are stated in US dollars unless otherwise noted.

Wheeler River Property

The Wheeler River property is host to the high-grade Phoenix and Gryphon uranium deposits. The Phoenix deposit is estimated to include indicated resources of 70.2M lbs U3O8 at a grade of 19.1% U3O8, and is the highest grade undeveloped deposit in the world. The Gryphon deposit is hosted in basement rock, approximately 3 kilometres to the northwest of Phoenix, and is estimated to contain inferred resources of 43M lbs U3O8 at a grade of 2.3% U3O8. Wheeler River is a joint venture between Denison (60% and operator), Cameco Corp. ("Cameco") (30%), and JCU (Canada) Exploration Company Limited (10%).

Exploration activities at Wheeler River during 2016 are expected to focus on numerous unconformity and basement targets in the vicinity of the Gryphon deposit. Recent exploration results have continued to return mineralization in the area surrounding the Gryphon deposit and along the K-North trend, which hosts the Gryphon deposit. The results in this area continue to suggest the potential for the discovery of additional zones of significant uranium mineralization.

The K-North trend includes approximately 6 kilometres of prospective strike, primarily to the south of the Gryphon deposit. In addition, 2016 drilling may test other priority target areas on the property, including the Q Central and O Zone target areas. Taken together, 47,000 metres of exploration drilling is planned at Wheeler River between the winter and summer drill programs, along with geophysical surveys at a total cost of CAD$10.0 million (Denison’s share, CAD$6.0 million).

Evaluation activities planned for Wheeler River in 2016 include the completion of a Preliminary Economic Assessment ("PEA"), studying the economic potential of co-developing the Gryphon and Phoenix deposits, which is expected to be completed during the first half of 2016. Subject to a positive outcome from the PEA, the Company has developed a plan to initiate work on a Prefeasibility Study ("PFS"), with an approximate budget for 2016 of CAD$2.6 million (Denison’s share, CAD$1.6 million).

High Priority & Other Properties

Exploration activities in 2016, outside of Wheeler River, will be focused on Denison’s high-priority exploration targets located on the Murphy Lake (68.8% Denison), Crawford Lake (100% Denison) and Waterbury Lake (61.55% Denison) properties, and are planned to include ground geophysical surveying and drilling to follow-up on positive results from 2015.

At Murphy Lake, a winter drill program of approximately 10 holes (3,400 metres) is planned to follow-up on the discovery of a new zone of uranium mineralization highlighted by drill hole MP-15-03, which intersected 0.25% U3O8 over 6.0 metres (at a depth of 270.0 to 276.0 metres) at the sub-Athabasca unconformity.

The Murphy Lake property is located approximately 30 kilometres from Denison’s 22.5% owned McClean Lake mill and is contiguous with the northwest boundary of the Company’s Waterbury Lake property. Drilling programs for Waterbury Lake and Crawford Lake in 2016 are planned to involve 2,500 metres and 4,400 metres respectively. In addition, geochemical surveying, ground geophysical surveying and drilling (approximately 8,000 metres) are expected to be carried out on other Denison-operated properties where exploration is warranted.

Drill programs are also planned in 2016 for Denison’s non-operated joint venture projects, including Mann Lake (30% Denison, 2,000 metres), Wolly (22.5% Denison, 5,000 metres) and McClean Lake (22.5% Denison, 2,500 metres). The Mann Lake project is operated by Cameco, and the Wolly and McClean Lake projects are operated by AREVA Resources Canada Inc. ("ARC")

Taken together, Denison expects to operate and/or participate in a total of 15 exploration programs (including 13 drilling programs totaling approximately 75,000 metres), of which Wheeler River will continue to be the primary focus. The total budget for these programs, inclusive of the evaluation work planned for Wheeler River to follow up on a positive PEA, is estimated to be CAD$24.6 million (Denison’s share, CAD$16.9 million).

Development / Operations

The McClean Lake mill is operated by ARC and is currently licensed for annual production of 13 million pounds U3O8. The expansion of the mill, from 13 million to up to 24 million pounds of annual U3O8 production capacity, will continue during 2016 and remains fully funded by the Cigar Lake Joint Venture. Concurrent with the ongoing mill expansion, ARC plans to submit an application to the Canadian Nuclear Safety Commission ("CNSC") to increase the mill’s licensed annual production limit to 24 million pounds U3O8.

Provided regulatory approvals are secured to increase the annual license limit, the McClean Lake mill is expected to produce 16 million pounds U3O8 during 2016. Production is expected to be 100% from Cigar Lake ore during the year. Denison’s share of revenue from toll milling of the Cigar Lake ore and the sale of approximately 25,000 pounds U3O8, currently held by Denison in inventory, is estimated to be $5.4 million (CAD$7.1 million).

In 2016, Denison’s share of operating and capital expenditures at McClean Lake and Midwest are estimated to be $1.6 million (CAD$2.1 million). Operating expenditures include $797,000 (CAD$1.04 million) in respect of Denison’s share of the planned 2016 budget for the Surface Access Borehole Resource Extraction ("SABRE") program. The SABRE program is operated by ARC, as part of the McClean Lake joint venture, and has a total budget for 2016 of up to CAD$4.6 million. The 2016 SABRE program is expected to study the economic and technical potential associated with further design and process improvements targeted at increasing the rate of mine production.

Reclamation expenditures at Elliot Lake are estimated to be $665,000 (CAD$864,000).


In December 2015, Denison announced the completion of the sale of its interests in Mongolia to Uranium Industry a.s. ("Uranium Industry") of the Czech Republic and the receipt of initial proceeds of $1.25 million. Under the terms of the agreement with Uranium Industry, Denison may be entitled to additional payments of up to $12 million – of which up to $10 million becomes payable within 60 days of the issuance of certain mining licences. The applications for the applicable mining licences were submitted to the Mongolian authorities in December 2015.

In Africa, Denison continues to maintain its interests in Zambia, Mali and Namibia in preparation for a potential spin-out or disposal transaction when market conditions permit. Activities currently planned for 2016 in Africa are designed to keep the Company’s interests in good standing and continue community programs. The 2016 budget for Africa is expected to be between $750,000 and $1.3 million.

Environmental Services & Other

Denison Environmental Services ("DES") provides post-closure mine care and maintenance services to a variety of customers and also manages Denison’s ongoing environmental obligations related to its past producing operations at Elliot Lake. In 2016, revenue from operations at DES is budgeted to be $7.2m (CAD$9.4m) and operating and overhead expenses are forecast to be $6.1m (CAD$7.9m). Capital expenditures at DES are projected to be $230,000 (CAD$300,000).

Denison is the manager of Uranium Participation Corporation ("UPC") and receives management fees and commissions pursuant to a Management Services Agreement ("MSA"). The MSA was entered into on April 1, 2013 for a term of 3 years ending on March 31, 2016. UPC is a public company which invests in uranium on behalf of its shareholders. In 2016, management fees earned from UPC are budgeted at $1.7m (CAD$2.2m). The budget is based on the successful extension or renewal of the MSA on substantially the same terms as the existing MSA.

Corporate administration expenses are forecast to be $3.85 million (CAD$5.0 million) in 2016 and include all head office wages, benefits, office costs, public company expenses, legal, audit and investor relations expenses. Other miscellaneous costs are estimated to be $400,000 (CAD$520,000).

Corporate Update

On January 1, 2016, Denison appointed Mr. Dale Verran to the position of Vice President, Exploration. Prior to this appointment, Mr. Verran served as Denison’s Technical Director, Exploration. Mr. Verran is a geologist with 18 years of international mineral exploration experience. He began his career with Gold Fields and subsequently joined the Mineral Services Group where he served in a variety of mineral exploration roles including Technical Director for Remote Exploration Services. Mr. Verran is based in Denison’s Saskatoon office and holds a Bachelor of Science in Geology from the University of Cape Town, and a Master of Science in Exploration Geology from Rhodes University.