Denison Mines (TSX: DML; NYSE: DNN) announced on Tuesday it had reached an agreement with Cantor Fitzgerald Canada for the sale of 37 million Denison shares on a bought deal basis to raise about $75 million (US$55.1 million).
With the share price pegged at $2.03 (US$1.49) apiece, the underwriters have also been granted an over-allotment option of up to a further 5.6 million shares. If the over-allotment is exercised, Denison will reap up to $11.3 million. Denison will pay the underwriters a cash commission equal to 4.75% of the gross proceeds of the offering.
The company intends to use the net proceeds of the offering to advance the Phoenix in-situ recovery (ISR) uranium operation at its Wheeler River project on the southeastern edge of the Athabasca Basin in Saskatchewan. The proceeds would go towards exploration and evaluation expenditures, and for general corporate and administrative expenses. The company said in a release that this agreement, taken together with existing financial resources including those from prior financings, will be sufficient to advance Phoenix to a final production decision.
Wheeler River is a 90-10 joint venture between Denison, which is the operator and JCU (Canada) Exploration. The project is host to the high-grade Phoenix and Gryphon uranium deposits, discovered by Denison in 2008 and 2014, respectively.
In August 2023, Denison filed a feasibility study for ISR at Phoenix and a cost update to the 2018 prefeasibility study for conventional underground mining of the basement-hosted Gryphon uranium deposit. The company believes that based on the respective studies, both deposits have the potential to be competitive with the lowest cost uranium mining operations in the world.
Permitting efforts for the planned Phoenix ISR operation commenced in 2019 and have advanced significantly, with licensing in progress and a draft environmental impact statement submitted for regulatory and public review in October 2022.
Assuming the use of ISR methods, total measured and indicated resources at the Phoenix deposit are 280,200 tonnes averaging 11.4% uranium oxide (U3O8) and containing 70.5 million lb. U3O8. A further 5.6 million tonnes at 2.6% U3O8 are included in the inferred resource.
News of the financing comes just days after Denison announced a $15 million strategic investment for F3 Uranium (TSXV: FUU; US-OTC: FUUF) as it advances its Patterson Lake North (PLN) property on the southwestern edge of the Athabasca Basin.
Denison shares were down almost 10% to $2.00 apiece on Wednesday afternoon in Toronto, valuing the company at $1.6 billion. Its shares traded in a 52-week range of $1.28 and $2.41.
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