Denison Mines Corp. is pleased to announce the signing of a definitive share purchase agreement with Uranium Industry a.s., of the Czech Republic, whereby Denison will sell its interest in the Gurvan Saihan joint venture to Uranium Industry for US$20,000,000.
Pursuant to the terms of the Agreement, Denison will receive an initial payment of US$250,000 on closing and a deferred payment of US$19,750,000 by November 30, 2015.
David Cates, President and CEO of Denison, commented, "With Denison's continued focus on its Canadian exploration and development projects, we are pleased to have reached an agreement with Uranium Industry for the sale of our Mongolian interests. Throughout our negotiations, Uranium Industry has shown its strong commitment to developing the uranium mining industry in Mongolia together with its government partner Mon-Atom LLC. We are proud of the progress that Denison has made throughout the years in Mongolia, and we believe that Uranium Industry is very well positioned to take these assets into development and production."
Uranium Industry is based in the Czech Republic and has unique experience in the geology, mining and processing of uranium, and is the successor to a 75 year tradition of uranium mining and environmental remediation of uranium mines in the Czech Republic. Uranium Industry is currently focused on geologic prospecting, mining, and processing of uranium ore in foreign countries that have traditionally had ongoing relations with the Czech Republic. Uranium Industry is already active in Mongolia and established the Mon Czech Uranium joint venture with Mon-Atom LLC on June 17, 2015.
The Transaction is scheduled to close on or before September 8, 2015 (the "Closing Date") and involves the transfer of all of the shares of Denison's wholly owned subsidiary, Denison Mines (Mongolia) Ltd., to Uranium Industry a.s. Denison Mines (Mongolia) Ltd. holds an 85% interest in the GSJV, as well as a 100% interest in Denison Mines Mongolia LLC, which is the operator of the GSJV (collectively the "Acquired Entities").
The Agreement requires the shares of Denison Mines (Mongolia) Ltd. to be deposited with an escrow agent on the Closing Date and held as security for Denison until certain conditions have occurred to permit the release of the shares to Uranium Industry or the return of the shares to Denison. Among closing conditions, Uranium Industry is required to deliver a guarantee of its obligation to pay the Deferred Payment from an agreed commercial bank. The Deferred Payment is guaranteed in the event that the mining licences for the Hairhan, Haraat, Gurvan Saihan, and Ulziit projects (the "Mining Licences") are granted to the GSJV on or before November 30, 2015. In the event that the Mining Licences are not issued, and Uranium Industry does not otherwise elect to make the Deferred Payment by November 30, 2015, the shares of Denison Mines (Mongolia) Ltd. will be transferred back to Denison. As of closing, all operating costs of the Acquired Entities, including the costs associated with the Mining Licences, will be the responsibility of Uranium Industry.
Denison has carried out considerable work towards the submission of the mining licence applications and understands that all required materials for the license applications have been prepared and that the GSJV is eligible to receive the Mining Licences. Once the mining licence applications are submitted, approval could occur within as few as 20 days.