Denison earnings tumble

Uranium and oil producer Denison Mines (DEN-T) saw its second-quarter earnings dramatically reduced as a result of lower oil output and prices.

For the three months ended June 30, Denison earned $2.4 million (nil per share) on revenue of $12.2 million, compared with $12.8 million (4 cents per share) on $16.4 million in the corresponding period of 1997. The 1997 period includes a gain of $8.5 million from the purchase of long-term debt.

Earnings in the first half of 1998 were $4.1 million (1 cents per share), a drop of $16.3 million from the year-ago period. Revenues between the periods were $26.2 million and $36.9 million.

Denison attributes the poorer performance to lower oil prices and reduced production from its Prinos oil field in Greece. It notes, however, that these decreases were slightly offset by improved operating costs.

On the exploration front, seismic surveying has discovered several prospects near the company’s producing oil fields. One of these, situated 10 km south of the Prinos field, covers 410 ha and has a potential thickness of between 55 and 200 metres.

Drilling will start shortly.

Meanwhile, the company and French-owned partner Cogema Resources are awaiting a development and operating permit for a tailings facility at the McClean Lake uranium project in northern Saskatchewan. Construction is expected to last 12 weeks.

Denison holds a 22.5% interest in McClean Lake, with operator Cogema holding the remainder. The two companies also share ownership of the nearby Midwest uranium project, tailings from which are to be deposited at McClean Lake.