Denison Mines Corp. is pleased to announce that it has executed a definitive agreement with ALX Uranium Corp. to acquire an immediate 80% ownership of the entire Hook-Carter property (the "Property") in exchange for the issuance of 7.5 million common shares of Denison (the "Agreement"). Under the terms of the Agreement, ALX will retain a 20% interest in the Property and Denison agrees to fund ALX's share of the first CAD$12M in expenditures.
The Property consists of 28 claims, totaling 16,805 hectares, and is located near the southwestern margin of the Athabasca Basin, in northern Saskatchewan. The Property is highlighted by 15 kilometres of strike potential along the prolific Patterson Lake Corridor - host to the recently discovered Triple R deposit (Fission Uranium Corp.), Arrow deposit (NexGen Energy Ltd.), and Spitfire discovery (Purepoint Uranium Group Inc., Cameco Corp., and AREVA Resources Canada Inc.) which occur within 8 to 20 kilometres of the Property. The Property is located within the Athabasca Basin and features between 250 and 700 metres of Athabasca Group sandstone cover overlying the basement rocks that define the prospective geological trends or corridors. As a result, the Property offers both basement- and unconformity-hosted uranium deposit potential. The sandstone thicknesses are similar to those at Denison's 60% owned Wheeler River property in the eastern Athabasca Basin where Denison has developed proven exploration methodologies which have resulted in the discovery of the high-grade unconformity-hosted Phoenix deposit in 2008 and the high-grade basement-hosted Gryphon deposit in 2014. The Property is significantly underexplored compared with other properties along this trend with only eight historic drill holes, including only five holes over the 15 kilometres of Patterson Lake Corridor strike length. Results from historic holes (including sandstone alteration, geochemistry and basement geology and structure) suggest favorable environments for the presence of unconformity-related uranium deposits. The Property also covers significant portions of the Derkson and Carter Corridors which provide additional priority target areas.
Dale Verran, VP Exploration of Denison commented, "This is Elephant country - a large property that has seen very little drilling on a geological trend with a precedent for large and high-grade uranium deposits. The Hook-Carter property is uniquely situated on the Patterson Lake Corridor, offering potential for both basement-hosted deposits, similar to Triple R and Arrow, and unconformity-hosted deposits which remain the largest and highest grade in Athabasca Basin, namely McArthur River and Cigar Lake which are both operating mines. With Athabasca sandstone thicknesses similar to the Wheeler River project, the Property plays to our team's strengths and we are very excited to get started with exploration in 2017."
Denison's President and CEO, David Cates commented, "While this transaction expands Denison's project portfolio into the western side of the Athabasca Basin, Denison remains focused on advancing our flagship Wheeler River property in the infrastructure rich eastern portion of the Athabasca Basin. Wheeler River continues to deliver significant exploration results, as we continue towards the completion of a pre-feasibility study and positioning the project to become one of the next new uranium mines to be developed in Canada. The acquisition of the Hook-Carter property is about building our project pipeline and generating our own success in the very exciting western portion of the Athabasca Basin. We believe the western Basin has the potential to emerge as a mining camp in the long-term, and could eventually represent an important part of the uranium mining industry in Canada. This property is a unique grassroots exploration opportunity, situated on a prolific trend, with the potential to deliver meaningful exploration results and enhance our portfolio of uranium assets."
- Denison acquires an immediate 80% ownership in the entire Property in exchange for the issuance of 7.5M Denison common shares to ALX;
- ALX retains a 20% interest in the Property, and Denison agrees to fund ALX's share of the first CAD$12M in expenditures on the Property;
- Denison will be the operator of the project and will retain full discretion as to the nature, extent, timing and scope of all work projects on the Property;
- Denison agrees to a modest work commitment, whereby Denison is required to spend CAD$3.0M on the Property over the first 3 years. If Denison does not meet the $3.0M work commitment, ALX's interest will increase from 20% to 25% and Denison's interest in the project will decrease from 80% to 75%.
- Thirty-six months after the effective date of the Agreement, the parties agree to form a joint venture, in which all material decisions shall be carried by a vote representing a 51% ownership interest;
- The Denison common shares issued to ALX will be subject to an escrow arrangement, whereby 1/6th of the shares will be available to ALX on closing, and a further 1/6th of the shares will be released from escrow in 6 month increments following the closing;
- The transaction remains subject to and conditional on certain approvals from the Toronto Stock Exchange, NYSE MKT, and TSX Venture Exchange, as applicable.
The Property is located approximately 25 kilometres east of Highway 955 in the southwestern portion of the Athabasca Basin region in northern Saskatchewan. The Property is accessible year round by utilizing a combination of vehicular and helicopter and/or fixed wing aircraft. The Property comprises a total of 28 mineral dispositions covering approximately 16,805 hectares, including three blocks of contiguous claims, namely the Carter West Claims, Carter East Claims and Orphan East Claim. Previous exploration work has been dominated by geophysical surveys dating back to 1997. Airborne surveying has included property-wide electromagnetics (including a VTEM™ survey on the Patterson Lake Corridor), a property-wide medium-resolution magnetic survey and limited Falcon® Airborne Gravity Gradiometry and HeliSAM TEM surveying. These data sets provide an excellent repository for the interpretation of basement geology and area selection for further targeting. Ground geophysical surveying has included property-wide electromagnetic surveys on a reconnaissance spacing. The airborne and ground electromagnetic survey results indicate the prospective corridors on the Property are comprised of multiple conductors suggesting numerous graphitic target horizons are present. Surficial surveys completed include lake sediment sampling, radiometric sampling, and boulder sampling. Anomalies produced by boulder and lake geochemistry along the Patterson Lake corridor provide further encouragement for mineralization.
Very limited drilling has been carried out on the Property, with only eight holes drilled on the Property to date, including only five holes on the Patterson Lake Corridor and three holes on the Derkson Corridor. No drilling has been carried out on the Carter Corridor. The majority of historic drill holes show significant sandstone alteration, encouraging sandstone geochemistry and favorable basement geology in terms of lithology and structure. All the holes drilled to date were designed to test the unconformity (seldom penetrating more than 100 metres into the basement) and therefore the basement is considered unexplored. The five holes on the Patterson Lake Corridor are between 1.5 and 4.3 kilometres apart and considering the corridor is comprised of multiple conductors, significant space and potential exists for sizeable deposits. The Derkson Corridor, followed by the Carter Corridor, offer additional priority target areas based on geophysical and drilling results to date. Approximately 3 kilometres southwest along trend of the Property boundary, drilling on the Derkson Corridor has previously returned mineralized results approximately 5 metres below the unconformity (0.24% U3O8 over 2.5 metres reported in drill hole DER-04 by SMDC-Imperial Oil, 1978, Assessment File Number 74F11-0008, Saskatchewan Mineral Assessment Database).
Figure 1 provides a map of Denison's Athabasca Basin properties including the newly acquired Hook-Carter property. Figure 2 shows the location of the Hook-Carter property in relation to the prospective geological trends and uranium deposits and prospects.
The disclosure of a scientific or technical nature contained in this news release was prepared by Dale Verran, MSc, Pr.Sci.Nat., Denison's Vice President, Exploration, who is a Qualified Person in accordance with the requirements of NI 43-101.