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TABLE OF CONTENTS Mar 10 - 16, 2014 Volume 100 Number 4 - 0 comments

Denison rises on Wheeler River results, Japan nuclear news

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VANCOUVER — Denison Mines (TSX: DML; NYSE-MKT: DNN) plans to complete 60,000 metres of drilling on 13 properties in 2014, and the first set of results suggest the company’s big plans could pay off.

The company will drill the most metres at Wheeler River, its high-grade uranium discovery in the southern Athabasca basin. Denison owns 60% of Wheeler River, Cameco (TSX:CCO; NYSE: CCJ) holds a 30% stake and Japan’s JCU owns the remaining 10%.

The uranium at Wheeler River exists where the unconformity intersects a northeast-trending quartzite ridge. To date work has focused on the Phoenix A zone, which contains 152,000 indicated tonnes grading 15.6% uranium oxide (U3O8), plus 12,000 inferred tonnes grading 29.8% U3O8 for 59.9 million lb. contained U3O8.

Denison has completed 13 of the 28 holes planned in its early 2014 exploration effort. One drill is trying to prove up high-grade material in lower-grade parts of the Phoenix A deposit — in particular to the east, west and north — while a second rig probes a new target to the southwest called the K-zone.

Of the eight holes searching for higher grades at Phoenix A, four succeeded. Hole 550 returned 6.5 metres grading 29.61% U3O8, extending the high-grade envelope on the western side of the deposit. On the northern side of the deposit, hole 539 intersected 3.1 metres of 16.98% U3O8.

On the eastern side, hole 545 cut 4.7 metres grading 18.37% U3O8, while hole 546 returned 3.5 metres of 11.63% U3O8. Also to the east, hole 538 returned four closely spaced intercepts: 1.1 metres of 7.91% U3O8, 5.1 metres of 2.14% U3O8, 3.3 metres of 0.87% U3O8 and 1.4 metres of 1.36% uranium oxide.

The other four holes intersected lower-grade uranium. David Sadowski, an analyst with Raymond James, described the news as “good results that further underline the potential to convert some areas previously thought to be low-grade to higher-grade blocks.”

The company also punched seven holes into the K-zone, which sits a few kilometres southwest. Denison says it is “encouraged with the results even though no significant mineralization has been intersected,” because drills hit into “significant sandstone and basement alteration in three of seven widely spaced holes.”

Denison will move its second rig from the K-zone to one of the four other targets on the list for testing in the winter program at Wheeler River.

Denison also has drills turning at several other Athabasca projects. At Hatchet Lake, in the eastern Athabasca, the company completed a 10-hole program. Drills did not encounter significant uranium mineralization but returned anomalous radioactivity near the unconformity. Denison plans to evaluate new geochemistry data before planning the next stage of exploration at Hatchet Lake.

Similarly, a 10-hole program at Moore Lake did not hit mineralization. Several geophysical surveys are being planned for that property, which is just east of Wheeler River.

And Denison has just begun drilling at two other properties. At Park Creek in the southeastern Athabasca, four of eight holes are done and all four intersected the targeted major fault structures near the unconformity, though none contained uranium mineralization. The first of nine holes at Bell Lake in the eastern Athabasca returned weakly elevated radioactivity at the unconformity, in a faulted pelitic gneiss. 

Denison plans to drill 13 different properties in 2014. The program represents the company’s biggest exploration effort in several years, and will cost $21.2 million. Denison’s share of that expenditure is $15 million, with partners providing the rest. 

Sadowski likes what he sees in Denison’s large, Athabasca-focused portfolio, which he thinks offers “compelling” upside, particularly at Wheeler River.

“Denison features an unrivalled junior-owned asset base in Canada [including 22.5% of McClean Lake mill, a highly strategic, scarce asset], a solid cash position, strong management team, takeout potential and is well-positioned to benefit from what we view is a looming rebound in uranium prices,” Sadowski wrote.

Denison’s share price gained 14¢ on news of the drill results from Wheeler River to close at $1.81, in the second straight 14¢ daily gain. 

The day before investors piled into the stock after Japan formally reintegrated nuclear power into its national power plan. 

Denison has a 52-week share price range of $1.01 to $1.89, and 473 million shares outstanding.

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Denison Mines Corp

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Wheeler River Project

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