Denison Mines Corp. (TSX:DML)(NYSE MKT:DNN) (NYSE Amex:DNN)
("Denison") is pleased to announce the signing of a Binding Letter
of Intent (the "Binding LOI") pursuant to which Denison will
acquire a portfolio of uranium exploration projects from Fission
Energy Corp. ("Fission") including Fission's 60% interest in the
Waterbury Lake uranium project, as well as Fission's exploration
interests in all other properties in the eastern part of the
Athabasca Basin, its interests in two joint ventures in Namibia
plus its assets in Quebec and Nunavut (together, the "Assets").
Under the terms of the Binding LOI, Denison has agreed to offer
shareholders of Fission 0.355 shares of Denison for each share of
Fission held, conditional upon, among other things, certain assets
of Fission being spun out to a new company ("NewCo") to be held pro
rata by current Fission shareholders (collectively, the
"Transaction"). NewCo assets will include, among others, a 50%
interest in the Patterson Lake South ("PLS") property located in
the western Athabasca Basin. The Transaction values the Assets at
approximately $70 million based on the closing price of Denison as
of January 15, 2013. Upon completion of the Transaction,
shareholders of Fission will own approximately 11% of Denison.
The board of directors of Fission, following consultation with
its financial and legal advisors, has approved the Transaction and
recommends that Fission shareholders vote in favour of the
Transaction. Fission's board of directors has received a verbal
opinion from Dundee Capital Markets that the consideration pursuant
to the Transaction is fair, from a financial point of view, to
Fission shareholders.
"This transaction further satisfies our corporate objective to
become the leading explorer in the Athabasca Basin through
continued growth and consolidation of strategically located
assets," commented Ron Hochstein, President, CEO and Director of
Denison. "The acquisition of Waterbury will allow Denison to expand
its exploration efforts in the area of our Midwest uranium deposits
with a significantly enhanced land package."
"We are very pleased to have reached an agreement with Denison
in which Fission will now be able to focus its attention on the
highly prospective Patterson Lake South discovery, while allowing
shareholders continued exposure to future exploration success at
Waterbury, as well as Denison's other assets, such as Wheeler
River" said Dev Randhawa, Chairman of Fission.
Transaction Benefits
Both Fission and Denison believe that the Transaction will
provide a number of substantial benefits to the shareholders of
both companies, including the following:
-- Substantial value offered to FIS shareholders for the Assets
-- The opportunity for FIS shareholders to participate in the assets of
Denison, which include several advanced exploration properties plus an
interest in the McClean Lake mill, as well as the highly prospective
Western Athabasca exploration portfolio of NewCo
-- NewCo will hold approximately $18 million in cash, fully funded to
continue future programs at PLS and elsewhere
-- NewCo will continue forward under the leadership of the same successful
management team that developed Fission
-- Further solidifies Denison as the consolidator of strategic assets in
the Athabasca Basin, to the benefit of both sets of shareholders
Transaction
Denison and Fission expect the Transaction will take place by
way of a plan of arrangement whereby Denison and/or a wholly owned
subsidiary will enter into an arrangement agreement with Fission in
accordance with the terms of the Binding LOI. Pursuant to the terms
of the Binding LOI, the completion of the Transaction is
conditional upon a number of items, including, without limitation,
approval of the shareholders of Fission, receipt of all necessary
regulatory approvals, formalization of the legal structure of the
Transaction, no material adverse change occurring with respect to
either company, compliance by both parties with their respective
obligations under the Binding LOI and satisfaction of other
customary deal conditions.
The Binding LOI contains customary deal support provisions,
including a reciprocal break fee of $3.5 million, payable if the
proposed Transaction is not completed in certain circumstances. In
addition, the Binding LOI includes customary non-solicitation
covenants by Fission together with customary exemptions to permit
Fission's board of directors to exercise its fiduciary duties and a
right in favour of Denison to match any superior proposal that may
arise.
Full details of the Transaction will be included in the formal
definitive agreement and management information circular to be
filed with the regulatory authorities and mailed to Fission
shareholders in accordance with applicable securities laws. All
Fission shareholders are urged to read the information circular
once it becomes available as it will contain additional important
information about the Transaction.
Fission's outstanding options and warrants will be adjusted in
accordance with their terms such that the number of Denison shares
and NewCo shares received upon exercise and their respective
exercise prices will reflect the exchange ratio and Transaction
described above.
The proposed transaction is expected to be completed in April
2013 or such later date as the parties may agree. A special meeting
of the shareholders of Fission will be held at a time yet to be
determined to approve the Transaction.
Denison has engaged Haywood Securities Inc. as its financial
advisor and Cassels Brock & Blackwell LLP and Troutman Sanders
LLP as its legal advisors in respect of the Transaction. Fission
has engaged Dundee Capital Markets and Primary Capital Inc. as its
financial advisors and Blake, Cassels & Graydon LLP as its
legal advisor in respect of the Transaction.
This news release and the information contained herein do not
constitute an offer of securities for sale in the United Sates. The
securities have not been and will not be registered under the
United States Securities Act of 1933, as amended, and may not be
offered or sold in the United States absent registration or an
applicable exemption from such registration requirements.
About Denison Mines Corp.
Denison Mines Corp. is a uranium exploration and development
company with interests in exploration and development projects in
Saskatchewan, Zambia and Mongolia. Including the world class
Phoenix deposits, located on its 60% owned Wheeler River project,
Denison's exploration project portfolio includes 26 projects and
totals over 330,000 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, and
a 25.17% interest in the Midwest deposit, which is located 15
kilometres from the McClean Lake mill. Internationally, Denison
owns 100% of the conventional heap leach Mutanga project, in
Zambia, and an 85% interest in the in-situ recovery projects held
by the Gurvan Saihan Joint Venture, in Mongolia.
Denison is engaged in mine decommissioning and environmental
services through its Denison Environmental Services (DES) division
and is the manager of Uranium Participation Corporation (TSX:U), a
publicly traded company which invests in uranium oxide in
concentrates and uranium hexafluoride.
Additional information about Denison is 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.
Cautionary Statement:
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 contained in this press release may
include statements regarding our ability to complete the
Transaction and benefits of the Transaction, which involve known
and unknown risks and uncertainties which may not prove to be
accurate. Actual results and outcomes may differ materially from
what is expressed or forecasted in these forward-looking
statements. Such statements are qualified in their entirety by the
inherent risks and uncertainties surrounding future expectations.
Among those factors which could cause actual results to differ
materially are the following: uncertainties as to the timing of the
Transaction and satisfaction of the conditions thereto, market
conditions and other risk factors listed from time to time in our
reports filed with Canadian and U.S. securities regulators on SEDAR
at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.
Contacts: Denison Mines Corp. Ron Hochstein President, CEO &
Director (416) 979-1991, ext. 232 Denison Mines Corp. Sophia Shane
Investor Relations (604) 689-7842 www.denisonmines.com
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