Denison to reject Hydro price offer

The future of Denison Mines’ (TSE) Elliot Lake, Ont., uranium mine continues to hang in the balance now that the company and Ontario Hydro have failed to agree on a new pricing formula for a long-term supply contract. Denison President Bill James said the company has no alternative but to reject the new Ontario Hydro price offer which the uranium miner received March 19. “We can’t deliver at the price they have given us,” James told The Northern Miner.

However, he indicated that his company will continue to negotiate with the utility (Denison’s only remaining customer) until June 28, when Ontario Hydro can legally serve Denison with a notice to end the contract.

If no deal is reached, Denison would continue to fulfil its obligations to the utility on a cost plus basis until the contact expires Jan. 1, 1993. At that point, Denison would likely have to layoff the remaining 660 mine staff and shut the operation down.


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