Denison Mines Corp. · TSX:DML
Denison Mines — Shareholder Meeting (May 2014)
53 slides from Denison Mines's shareholder meeting presentation, May 8, 2014
Slide 1: Annual Meeting of Shareholders
Annual Meeting of Shareholders May 8, 2014
Slide 2: John H. Craig, Lead Director
seca? MINES John H. Craig Lead Director
Slide 3: Board of Directors – Nominees
Board of Directors – Nominees John H. Craig W. Robert Dengler 3
Slide 4: Board of Directors – Nominees
Board of Directors – Nominees Brian D. Edgar Ron F. Hochstein 4
Slide 5: Board of Directors – Nominees
Board of Directors – Nominees Tae Hwan Kim Lukas H. Lundin 5
Slide 6: Board of Directors – Nominees
Board of Directors – Nominees William A. Rand Catherine J. G. Stefan 6
Slide 7: John H. Craig, Director
seca? MINES John H. Craig Director
Slide 8: Ron Hochstein, President & CEO
Ron Hochstein President & Chief Executive Officer 8
Slide 9: Agenda
Agenda • Denison’s Strategic Direction • Q1 2014 Highlights • Remainder of 2014 • Positioning for Long Term Uranium Market • Question Period 9
Slide 10: Cautionary Statements
Cautionary Statements This presentation includes forward-looking information or forward-looking statements under Canadian and U.S. securities laws that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by such forward-
Slide 11: Strategy Set in October 2011
Strategy Set in October 2011 “To create an Athabasca Basin focused uranium exploration and development company.” 11
Slide 12: Why?
Why? • Why transform the company from a producer to an exploration/development company? • To realize value • To lessen the impact of the current low uranium price environment • To better position the company for future uranium price appreciation 12
Slide 13: Athabasca Basin Strategy
Athabasca Basin Strategy • Identified three companies of interest • JNR Resources • Minority interests in Bell Lake & Moore Lake • Fission Energy • 60% interest in Waterbury Lake • International Enexco • 30% interest in Mann Lake 13
Slide 14: Athabasca Basin Portfolio
Athabasca Basin Portfolio (as of December 31, 2012) 14 14
Slide 15: Athabasca Basin Portfolio
Athabasca Basin Portfolio (as of April 30, 2014) 15 15
Slide 16: International Enexco
International Enexco • Denison to acquire International Enexco • 0.26 of a Denison share for each IEC share • IEC shareholders will hold 2.1% of Denison • Copper assets to be spun out by IEC into new vehicle • Denison transaction anticipated to close in early June 16
Slide 17: Mann Lake
• Mann Lake – 52.5% Cameco, 17.5% AREVA, 30% IEC MN-060 • 2014 Program - 18 holes, 13,000 m – 2.31% eU3O8 / 5.1 m, Gryphon including 0.4 metres at 10.92% eU3O8 in MN-060 – 3.67% eU3O8 / 1.2 m, including 11.02% eU3O8 / 0.3 m in MN-065 – Trend Open Along 3.1 km Length – Basement hosted mineralization
Slide 18: 2014 Q1 Highlights
2014 Q1 Highlights 18
Slide 19: Q1 2014 - Highlights: Exploration Expenses
Q1 2014 - Highlights $7,000 Q1 2012 $6,000 Q1 2013 Q1 2014 $5,000 (US$000s) $4,000 $6.3M spent $3,000 in Canada $2,000 $1,000 $0 Exploration Expenses 19
Slide 20: Q1 2014 - Highlights: Winter Programs
Q1 2014 - Highlights 40,000 35,000 30,000 (Metres Drilled) 25,000 20,000 Q1 2012 Q1 2013 15,000 Q1 2014 10,000 5,000 0 Athabasca Basin Winter Programs 20
Slide 21: Wheeler River Project
Wheeler River Project Wheeler River Project • Denison 60% • Cameco 30% • JCU 10% • Denison is the operator 21 21
Slide 22: Athabasca Basin Deposits
Athabasca Basin Deposits Contained M lbs U3O8 as of January 2014 PHOENIX RESOURCE ESTIMATE* Tonnes Grade Million Lbs. U3O8 Category (100% Basis) (% U3O8) (100% Basis) Indicated 152,400 15.6% 52.3 Resources Inferred 11,600 29.8% 7.6 Resources All data from Public Sources. All Resource Categories have
Slide 23: Athabasca Basin Deposits
Athabasca Basin Deposits Grade % U3O8 as of January 2014 All data from Public Sources. All Resource Categories have been combined 23
Slide 24: Wheeler River Property – Phoenix A Uranium Deposit
Za) f = DENISON MINES CORP. | PHOENIX A URANIUM DEPOSIT S WHEELER RIVER PROPERTY WR-559" 7 or Denison 60% Cameco 30% JCU 10% : 5.26) %eU,0,/2.3m PW S ~ WR-539 ; iS - Only the highest arate | \ 13.12%U,0,/5.0m intersections are shown where q drill holes have more than one . x mineralized interval. *
Slide 25: Wheeler River – Phoenix High Grade Shell
Wheeler River – Phoenix High Grade Shell 25 25
Slide 26: High Value Intersections
High Value Intersections Source: Tempest Capital 26
Slide 27: Wheeler Targets in 2014
venison DA A Wheeler Ta rgets in 2014 MINES PHOENIX DEPOSI ta pelite ‘graphitic pelite -garetiferous pelite re main road seminewe -7~7- access road gran A camp - Target Areas Drill Hole Collar 2014 Completed Collars power line 27
Slide 28: Gryphon Intersections
Gryphon Intersections WR-556 3.7% eU3O8/12.6 m Incl. 9.7% eU3O8/4.6m WR-560 17.3% eU3O8/4.2 m 28
Slide 29: Athabasca Basin Portfolio
Athabasca Basin Portfolio (as of April 30, 2014) 29 29
Slide 30: 2014 Summer Activities
2014 Summer Activities Wheeler River – 14,000 – 15,000 m Crawford Lake – 3,600 m Bachman Lake – 3,100 m Packrat – 800 m Updated resource estimate for Phoenix expected in June 30
Slide 31: McClean Lake Mill
McCLEAN LAKE MILL (Saskatchewan) • Denison owns 22.5%, AREVA 70%, OURD 7.5% 31
Slide 32: First Cigar Lake Ore Arrives
First Cigar Lake Ore Arrives • 5 m3 vessels x 4 per load • ~ 10,000 lbs U3O8 per load • Transported 85 km by road from Cigar to McClean mill • For 2014 McClean uranium production projected at 1.9 – 3.4 million lbs. • For Denison uranium sales and toll milling to generate $1.8 – $2.3 million Source:
Slide 33: McClean Lake Mill Expansion
McClean Lake Mill Expansion • Mill expansion well underway • Capacity increase from 13 M to 24 M lbs/yr • Completed 2016 • $281 M from $150 M • $43 M for additional leach circuit mods • Processing to begin late July/early August 2014 33
Slide 34: African Portfolio
same MINES African Portfolio 34
Slide 35: Diversified African Portfolio
Diversified African Portfolio Mutanga 35
Slide 36: Resources
Resources Tonnes U3O8 Lbs U3O8 Project Category (000’s) (%) (000’s) Mutanga* Measured & Indicated 10,280 0.03 7,809 Inferred 65,270 0.03 41,400 Falea** Measured & Indicated 15,670 0.09 29,581 Inferred 15,350 0.05 15,688 Total Measured & Indicated 25,950 0.06 37,390 Inferred 80,620 0.03 57,088 Falea
Slide 37: Mutanga/Falea Comparison
Mutanga/Falea Comparison Mutanga Falea Exploration Potential √√ √ Resources (M lbs. U3O8) √ √√* Infrastructure + - Political Risk + - Metallurgy + - Value per Tonne** $23.00 $185.00 Mining Open pit U/G * Falea also includes copper and silver ** At current metal prices. 37
Slide 38: Positioning for the Long Term Uranium Market
Positioning for the Long Term Uranium Market 38
Slide 39: U3O8 Daily and Long-term Prices
U3O8 Daily and Long-term Prices $80.00 $70.00 (US$/lb U3O8) Daily Price $60.00 Long-term Price $50.00 $40.00 $30.00 $20.00 January 2011 - May 2014 Published by UxCo 39
Slide 40: Long Term Contracting Volume ('90 – '14)
Long Term Contracting Volume (‘90 – ’14) © UxC 40 Source: Uranium Market Outlook, Q1 2014
Slide 41: Spot Market Volume ('90 – '14)
Spot Market Volume (‘90 – ’14) © UxC Source: Uranium Market Outlook, Q1 2014 41
Slide 42: Primary Uranium Supply
Primary Uranium Supply • Uranium production continues to increase even at low uranium prices • 2013 production up by 2.5% • Production response delayed due to majority of uranium sold under mid- or long- term contracts • Increasing Geopolitical risk • Threat to existing and planned production in Nig
Slide 43: Secondary Supplies
Secondary Supplies • Russian HEU Deal ended in 2013 • Russia could still use HEU internally, but no chance of HEU-II deal • U.S. Department of Energy excess uranium inventories are lower, but still substantial • 111 million pounds U3O8 equivalent in 2012 • Russian government still holds large quanti
Slide 44: World Nuclear Power Reactors
World Nuclear Power Reactors 600 500 400 300 200 100 0 2007 2008 2009 2010 2011 2012 2013 2014 Proposed Planned Under Construction Source: Ux Consulting, World Nuclear Association 44
Slide 45: Demand Growth Fueled by New Builds
45 Demand Growth Fueled by New Builds • Top 3 represent over 59% of the 554 reactors under construction, planned or proposed China India Russia USA Japan UAE South Korea 0 50 100 150 200 250 Under Construction Planned Proposed Source: World Nuclear Association, April 2014 45
Slide 46: Fundamentals Still Strong
Fundamentals Still Strong • Currently 72 reactors under construction • China is still the growth engine for nuclear • Currently 20 operating units ~17 Gwe • Under construction: 29 units / ~33 GWe should all be online by mid to late 2018 • Some economic pressures in U.S. but reactor fleet to remain
Slide 47: Near Term Uncovered Demand
Near Term Uncovered Demand 177 M lbs. Source: Uranium Market Outlook, Q1 2014 47
Slide 48: In Closing
seca? MINES In Closing 48
Slide 49: Financial Snapshot
Financial Snapshot • At end of Q1 Company has US$25.7 million in cash and equivalents • Majority of Canadian exploration spend already incurred • Will consider flow through financing later in the year to finance 2015 Canadian exploration • In 2014 long term cash stream from toll milling begins 49
Slide 50: Consolidated Cash Flow
Consolidated Cash Flow 2014 Consolidated Cash Flow by Segment (USD, Millions) $2.0 $0.5 $- $(0.1) $(2.0) $(1.0) $(1.8) $(2.0) $(4.0) $(2.9) $(2.7) $(6.0) $(8.0) $(10.0) $(12.0) $(14.0) $(13.9) $(16.0) Canadian Canadian DES Zambia Mali Mongolia Corp. & Other Exploration Dev't & Ops Denver Admin 50
Slide 51: 2014 Management Objectives
2014 Management Objectives • To continue to build the strongest portfolio of strategic uranium deposits in the Athabasca Basin through resource development and strategic acquisitions • To ensure all environmental, health and safety laws and requirements are met • To dispose/spin-out international as
Slide 52: Question Period
seca? MINES Question Period 52
Slide 53: Thank You for Attending the Annual Meeting of Shareholders
Thank You for Attending the Annual Meeting of Shareholders 53