Denison Mines Corp. · TSX:DML
Denison Mines — Merger or Acquisition (October 2006)
28 slides from Denison Mines's merger presentation, October 2006
Slide 1: A New Diversified Uranium Producer - Denison Mines Ltd.
A NEW DIVERSIFIED URANIUM PRODUCER DENISON MINES LTD.
Slide 2: Disclaimers: Forward Looking Statements
Disclaimers Caution Statement Regarding Forward Looking Statements Statements contained herein which are not historical facts are forward-looking statements that involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied by suc
Slide 3: Disclaimers: Inferred and Historical Resources
Disclaimers Caution Regarding Inferred and Historical Resources This presentation uses the terms "Measured", "Indicated“, "Inferred" and “Historical” Resources. U.S. investors are advised that while such terms are recognized and required by Canadian regulations, the Securities and Exchange Commissio
Slide 4: A New Company - Denison Mines Ltd
A New Company - Denison Mines Ltd International Uranium and Denison are pleased to announce their intention to merge the two companies to create a new diversified and growth-oriented uranium producer The new Denison Mines Ltd will be the only intermediate uranium producer in North America, with asse
Slide 5: Strategic Benefits
Strategic Benefits Commanding uranium mill licensed capacity in North America ¾ 10.7 million lbs per year in 2007 ¾ Designed to be expandable to 13.4 million lbs per year ¾ In proximity to existing resources Diversified and immediate uranium production base ¾ Athabasca Basin high-grade production ¾
Slide 6: Strategic Benefits
Strategic Benefits Expanded and complementary management team Operating partnerships with AREVA, the world’s largest nuclear company Marketing expertise Corporate compliance cost savings Environmental reclamation experience Increased market liquidity Stronger equity currency for strategic acquisitio
Slide 7: North American Asset Base
North American Asset Base 1 McClean Lake Mine and Mill 7 2 2 Midwest Mine 8 1 3 White Mesa Mill 4 Colorado Plateau Mines 5 3 4 5 Henry Mountains Mines 6 6 Arizona Strip Mines 7 Mae Exploration Project 8 Moore Lake Exploration Project 7
Slide 8: Peer Production and Valuation
Peer Production and Valuation Peer Market Capitalization 1 $2,400 $2,000 C$ (thousands) $1,600 $1,200 $800 $400 $0 DEN IUC SXR New Denison UUU PDN 2010E U3O8 Peer Production 2 7 6 Lbs U3O8 (millions) 5 4 3 2 1 1 Based on 09/16/06 close. SXR excludes share payments due for US 0 acquisitions DEN IUC S
Slide 9: Substantial Resource Base
Substantial Resource Base Denison Share U3O8 Tonnes U308% Lbs (M) Resources M&I Henry Mountains 1,060,000 0.32% 6.9 Total 6.9 Resources (Inferred) Henry Mountains 880,000 0.35% 6.1 Denison Share U3O8 Total 6.1 Tonnes U308% Lbs (M) Historical Resources 1 Reserves Probable Henry Mountains 1,300,000 0.
Slide 10: Diversified Production
Diversified Production Multiple mines decrease operational risk Production growth from < 1 million lbs U3O8 in 2006 to an anticipated 5.5 million + lbs U3O8 in 2010 White Mesa Colorado Plateau Mill Henry Mountains Arizona Strip McClean McClean McClean Mill Midwest 2006 2007 2008 2009 2010 2011 2012
Slide 11: McClean Lake Mill
McClean Lake Mill State of the art facility Strategic location Labour contract until 2010 Meets all regulatory requirements Location Saskatchewan Ownership 22.5% Operator Areva (70% Interest) Licensed Mill Capacity (2006) 8 million lbs First Expansion (2007) 12 million lbs Second Expansion (2010) 16
Slide 12: White Mesa Mill
White Mesa Mill The only uranium mill currently operating in the US Situated in the centre of the Southwest US uranium district Ample processing and tailings capacity High potential for toll milling Location Utah Ownership 100.0% Operator Denison Mines Ltd Licensed Mill Capacity 8 million lbs Initia
Slide 13: McClean Lake Mines
McClean Lake Mines Sue E open-pit mining Q3/06 McClean North borehole McClean Mill mining Q3/06 Location Saskatchewan Ownership 22.5% Operator Areva U308 DEN Share Tonnes U308% Lbs (M) Lbs (M) Reserves Probable 801,303 1.09% 19.3 4.3 Resources (Inferred) 816,542 0.68% 12.3 2.8 Start Date Operating 2
Slide 14: Midwest Mine
Midwest Mine 20 Km from McClean Mill by existing road Expansion potential in adjacent MAE Zone Significant Nickel and Cobalt by- products Location Saskatchewan Ownership 25.2% Operator Areva U308 DEN Share Tonnes U308% Lbs (M) Lbs (M) Reserves Probable 345,500 5.47% 41.7 10.5 Resources (Inferred) 25
Slide 15: Colorado Plateau Mines
Colorado Plateau Mines Series of proximal mining projects ¾ West Sunday / St. Jude, Carnation / Sunday / GMG, Topaz, Pandora, Rim, Van 4 Mining contracts in place Significant vanadium by-product Exploration potential near existing operations Location Utah/Colorado Ownership 100.0% Operator Denison M
Slide 16: Henry Mountains Mines
Henry Mountains Mines Composed of the Bullfrog and Tony M Mines Mine infrastructure in place One of the largest undeveloped uranium resources in the US Location Utah Ownership 100.0% Operator Denison Mines Ltd U308 Tons U308% Lbs (M) Resources M&I 1,060,000 0.32% 6.9 Resources (Inferred) 880,000 0.3
Slide 17: Arizona Strip Mines
Arizona Strip Mines Series of proximal mining projects ¾ Arizona 1 (fully permitted), Pinenut, Canyon Among the highest grade deposits in the US Potential to increase resources Location Arizona Ownership 100.0% Operator Denison Mines Ltd U308 Tons U308% Lbs (M) 12 Historical Resources 339,436 0.60%
Slide 18: Global Reach
Global Reach Sask Mining and Exploration Assets Mongolia Exploration and Development Labrador Exploration Strategic shareholding in Energy Metals SW US Mining Assets Excellent potential for increased resources near existing licensed mill interests 12 full time exploration professionals Broad range o
Slide 19: Athabasca Basin Prominence
Athabasca Basin Prominence Large land position with over 660,000 hectares under option or 100% owned 19
Slide 20: World-Class Exploration Projects
World-Class Exploration Projects MAE Zone Mae Zone (25.2%) ¾ Immediately proximal to Midwest Deposit ¾ Operator AREVA Mae Zone Drill Highlights Midwest Hole Length (m) Grade (U3O8) MW-660 7.1 11.67% MW-691 12.5 15.30% MW-692 6.1 12.40% MW-682 7.2 9.50% MW-706 31.3 3.21% Wheeler River (40%) ¾ Operato
Slide 21: World-Class Exploration Projects
World-Class Exploration Projects Moore Lake (75%) ¾ Operator Denison Mines Moore Lake Drill Highlights Year Length (m) Grade (U3O8) ML-61 10.0 4.03% ML-55 6.2 5.14% ML-83 11.1 1.81% ML-97 7.8 2.31% ML-101 6.6 1.53% 21
Slide 22: Mongolia Synergy
Mongolia Synergy Development Projects Hairhan and Haraat Deposits ¾ 70% JV interest ¾ Existing resources of ~12 million lbs ¾ Deposits have shown amenability to ISL mining Exploration Projects 3.7+ million ha ¾ Including a 25% interest in 0.8 million ha through AREVA JV Unique Political Position 22
Slide 23: Other Assets
Other Assets Equity Investments ¾ Fortress Minerals Corp. ¾ Energy Metals Corp. ¾ Energy Metals Ltd. of Australia ¾ JNR Resources Inc. ¾ Santoy Resources Ltd. ¾ Erdene Gold Inc. Manager of Uranium Participation Corporation Owner of Denison Environmental Services ¾ Reclamation experience in a uranium
Slide 24: Management Team
Management Team E. Peter Farmer, CEO Ron Hochstein, President and COO James Anderson, CFO Proposed Board of Directors: Lukas Lundin, Chairman E. Peter Farmer Ron Hochstein Paul Little John Craig Roy Romanow William Rand Robert Dengler Brian Edgar Catherine Stefan 24
Slide 25: Balance Sheet and Share Capital
Balance Sheet and Share Capital Weighted Avg Proceeds Outstanding Basic Exercise Price (C$ 000's) (000's) Shares 174,240 Options $3.39 $19,606 5,780 Warrants $8.69 $83,237 9,574 Fully Diluted $102,843 189,594 Balance Sheet Item (C$ 000's) Cash & Short Term Investments $122,904 Working Capital $139,7
Slide 26: Merger Summary
Merger Summary Consideration: ► 2.88 IUC shares for each DEN share Structure: ► Court Approved Plan of Arrangement ► Recommended by both Boards Ownership: ► IUC Shareholders 50%; DEN Shareholders 50% ► Warrants and Options will roll-over Listing: ► TSX Company Name: ► Denison Mines Ltd. ► Corporate
Slide 27: Summary Points
Summary Points The merger of IUC and Denison will create a growth- oriented and diversified uranium producer Estimated combined annualized production rate of 5.5 million lbs U3O8 by 2010 100% ownership of White Mesa mill 22.5% ownership of McClean Lake mill Five active uranium mining projects in Nor
Slide 28: The New Diversified Uranium Producer - Denison Mines Ltd.
THE NEW DIVERSIFIED URANIUM PRODUCER DENISON MINES LTD.