Denison Reports 2017 Results and 2018 Outlook

Denison Mines Corp. (TSX:DML) today filed its consolidated financial statements and management’s discussion & analysis for the year ended December 31, 2017.

Highlights are as follows:

• Completed a highly successful 2017 exploration and definition drilling program at Wheeler River

During 2017, Denison completed a total of 43,956 metres of drilling in 90 holes at Wheeler River, with work focused at or near the Gryphon deposit, during the summer and the winter drilling programs. To reduce drilling meterage, 77 of the 90 holes were completed as subsurface ‘daughter’ holes, which were drilled as off-cuts from surface ‘parent’ holes, and a directional drilling method was employed to ensure drilling accuracy. Highlights from the 2017 drilling program included:

Expansion of mineralization ahead of the updated Gryphon deposit mineral resource estimate

During 2017, Gryphon mineralization was expanded in numerous areas by infill and step-out drilling on an approximate 25 x 25 meter spacing, including: 1) expansion of high-grade mineralization within the D series lenses; 2) discovery and expansion of the E series lenses both at the unconformity and within the upper basement; and 3) expansion of the A and B series lenses both up-dip and down dip.

Completion of the definition drilling program at the Gryphon Deposit

In the fourth quarter of 2017, the Company successfully completed the definition drilling program on the Gryphon deposit’s A, B and C series mineralized lenses, with the objective of increasing the confidence of the previously estimated mineral resources from an inferred to indicated level. The definition drilling program, which commenced in the summer of 2016, included a total of 42 infill and delineation drill holes to complete an approximate 25 x 25 metre drill spacing.

• Completed an updated mineral resource estimate for Wheeler River’s Gryphon Deposit

On January 31, 2018, Denison announced an updated mineral resource estimate for the Gryphon deposit, which included, above a cut-off grade of 0.2% U₃O₈, 61.9 million pounds of U₃O₈ (1,643,000 tonnes at 1.71% U₃O₈) in Indicated Mineral Resources, plus 1.9 million pounds of U₃O₈ (73,000 tonnes at 1.18% U₃O₈) in Inferred Mineral Resources. With this update to the resources estimated for the Gryphon deposit, the combined Indicated Mineral Resources estimated for the Wheeler River project increased by 88% to 132.1 million pounds U₃O₈, which will be used to support the Pre-Feasibility Study (‘PFS’), initiated for the project in July 2016, and expected to be completed during 2018. Following the update, Wheeler River retained and improved its standing as the largest undeveloped high-grade uranium project in the infrastructure rich eastern portion of the Athabasca Basin.

• Discovered the high-grade, basement-hosted, Huskie Zone on the Waterbury Lake property

During the summer 2017 drilling program at Waterbury Lake, Denison discovered high-grade, basement-hosted mineralization located approximately 1.5 kilometres to the northeast of the property’s J Zone uranium deposit. The summer program included nine drill holes totaling 3,722 metres. Of the eight drill holes designed to test for basement-hosted mineralization, seven holes intersected significant mineralization, including 9.1% U₃O₈ over 3.7 metres (drill hole WAT17-446A), 1.7% U₃O₈ over 7.5 metres (drill hole WAT17-449) and 1.5% U₃O₈ over 4.5 metres (drill hole WAT17-450A). The Huskie zone has been defined over a strike length of 100 metres (the extent of the 2017 drilling) and remains open in all directions.

• Increased Ownership of Wheeler River Project to 63.3%

In January 2017, the Company executed an agreement with the partners of the Wheeler River Joint Venture (‘WRJV’) that will result in an increase in Denison’s ownership of the Wheeler River project by up to approximately 66% by the end of 2018. Under this agreement, Denison is funding 50% of Cameco Corp.’s (‘Cameco’) ordinary share (30%) of joint venture expenses in 2017 and 2018. On January 31, 2018, Denison announced it had increased its interest in the Wheeler River project, based on spending on the project during 2017, from 60% to 63.3% in accordance with this agreement.

• Closed non-dilutive financing for CAD$43.5 million to fund future project development activities

In the first quarter of 2017, Denison announced and closed a financing arrangement for gross proceeds of CAD$43.5 million, which has the effect of monetizing Denison’s future share of the toll milling revenue earned by the McClean Lake mill from the processing of ore from the Cigar Lake mine through the combination of a limited recourse loan and a streaming arrangement. Through this transaction, Denison retains its 22.5% ownership of the McClean Lake Joint Venture (‘MLJV’), but has de-risked its income from certain toll milling revenue, as the Company is not providing any warranty to the future rate of production at the Cigar Lake mine or the McClean Lake mill. The proceeds from the financing are expected to fund the Company’s project development costs for Wheeler River towards the completion of a Feasibility Study and ultimately project financing.

• Obtained financing for the Company’s 2018 Canadian exploration activities

In March 2017, the Company completed a private placement of 18,337,000 common shares for gross proceeds of $14,806,000 (CAD$20,200,290). The financing included (1) a ‘Common Share’ offering of 5,790,000 common shares of Denison at a price of CAD$0.95 per share for gross proceeds of CAD$5,500,500; (2) a ‘Tranche A Flow Through’ offering of 8,482,000 flow through shares at a price of CAD$1.12 per share for gross proceeds of $9,499,840; and (3) A ‘Tranche B Flow Through’ offering of 4,065,000 flow through shares at a price of CAD$1.23 per share for gross proceeds of CAD$4,999,950. The proceeds from the flow through tranches of the financing will be used to fund Canadian exploration activities through to the end of 2018.

• Denison Environmental Services (‘DES’) renewed its cornerstone environmental services contract

In July 2017, DES entered into a new two-year services agreement with Rio Algom Limited, a subsidiary of BHP Billiton Limited for the management and operation of nine decommissioned mine sites in Ontario and Quebec.

David Cates, president and CEO of Denison, commented:

2017 was a volatile year for the uranium market. While the spot price of uranium benefited from upward momentum on multiple occasions during the year, that momentum was not sustained long enough for a meaningful change to the low price environment that saw the market reach 12 and 13 year lows in late 2016. Despite these disappointing market trends, Denison managed to have another productive year as we continue to focus on our strategy of positioning the Company for the future and a return to a much higher uranium price. Much of the work completed by our team in 2017 was in preparation for an updated resource estimate for the Wheeler River project, which we announced in early 2018, and associated advancements ahead of the planned completion of a PFS in 2018. With an 88% increase in our estimated indicated mineral resources at Wheeler River, we feel confident that the project has the ability to become the next producing uranium mine in the Athabasca Basin region. We also strengthened our balance sheet in early 2017, raising CAD$63.5M in gross proceeds, with minimal dilution to our shareholders, providing us with the financial flexibility to advance Wheeler River.

Click here to read the full Denison Mines Corp. (TSX:DML) press release.