Denison, IUC deal done

The new Denison Mines (DML-T) is open for business, following court approval of a merger between Denison Mines and International Uranium.

The Ontario Superior Court has approved the plan of arrangement under which Denison shareholders get 2.88 shares in the new company for each Denison share, while International Uranium shareholders get one for one.

The court approval followed shareholder meetings of both Denison and IUC that approved the merger plan. In the Denison vote, the plan got 99.9% support; International Uranium shareholders voted virtually unanimously for the deal and 98.4% in favour of the name change.

Denison had two series of warrants, which will convert to warrants in the new company at the same ratio as the share trade, and continue to be listed on the TSX. The company will keep its management contract with uranium trader Uranium Participation Corp. (U-T).

The principal assets Denison brings to the new company are a 22.5% interest in the McClean Lake uranium mine in Saskatchewan and a 25.2% interest in the Midwest uranium project, scheduled to be in production in 2010. It also has significant exploration interests in ground in the Athabasca basin of Saskatchewan in joint venture with Cameco (CCO-T, CCJ-N) and Cogema, a unit of French nuclear fuel company Areva (ARVCF-O).

In the first nine months of 2006, Denison posted a loss of $169,000 on revenue of $28.6 million. It had earned $207,000 on revenue of $24 million in the first nine months of 2005. At Sept. 30 it had $78.6 million in cash and $25.3 million in other current assets. Its environmental consulting business, an outgrowth of rehabilitation efforts at its former Elliot Lake mines in Ontario, brings in about $5 million in revenue annually.

International Uranium brings in about $39.2 million (US$35.1 million) in current assets, and lost $2.3 million (US$2 million) on revenue of $1.6 million (US$1.4 million) in the fiscal year ended Sept. 30.

The company’s principal assets are the White Mesa uranium mill in southern Utah, plus uranium exploration projects in Saskatchewan and the southwestern United States.

White Mesa has mainly been processing contaminated soil wastes from old nuclear-industry sites. The mill can do 1,800 tonnes of ore per day when in full production.

It most recently put out a resource estimate on its Henry Mountains project on the Colorado Plateau in southeastern Utah, where two deposits, Bullfrog and Tony M, had been drilled by previous operators. Bullfrog has an indicated 1 million tonnes grading 0.32% U3O8 and 800,000 tonnes of inferred material grading 0.35% U3O8. Tony M has 1.2 million tonnes grading 0.21% U3O8, all in the inferred category.