Denison picks up interest surrounding McClean Lake

An earn-in agreement between Cogema Resources and Denison Mines (DEN-T) will see Denison finance exploration on a Cogema property surrounding the McClean Lake uranium deposit in northern Saskatchewan.

Denison can earn a 22.5% interest, identical to its portion of the McClean Lake property, by funding $5 million over a six-year period. By the end of 2006 it must have spent $1.5 million of that commitment, and would vest a 6% interest.

The agreement needs the minority partner, OURD Canada, which owns 15%, to waive a first right of refusal on the sale. OURD, owned by a consortium of Japanese electrical utilities, also has a 7.5% interest in the McClean Lake mine.

The property, dubbed Wolly for its proximity to Wollaston Lake, covers 23.7 sq. km on the edge of the Athabasca sandstone. The sandstone thins in the area, and is no more than 200 metres deep on most of the property, making open-pit and borehole mining possible on deposits that lie at the base of the sandstone. Cogema has identified 13 drill targets for winter work.