DNN Denison Mines Corp

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

of the Securities Exchange Act of 1934

Date: August 6, 2015

Commission File Number: 001-33414

 

 

Denison Mines Corp.

(Translation of registrant’s name into English)

 

 

Atrium on Bay, 595 Bay Street, Suite 402, Toronto, Ontario M5G 2C2

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F  ¨            Form 40-F  x

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ¨

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ¨

 

 

 

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

						Denison Mines Corp.
						/s/ “Sheila Colman”
Date: August 6, 2015						Sheila Colman
						Vice President, Legal and Corporate Secretary

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EXHIBIT INDEX

 

Exhibit Number		Description
99.1		Press Release dated August 5, 2015
99.2		Financial Statement for the period ended June 30, 2015
99.3		Management’s Discussion and Analysis for the period ended June 30, 2015
99.4		Certification of Interim Filings – CEO
99.5		Certification of Interim Filings – CFO

Exhibit 99.1

 

Denison Mines Corp. Atrium on Bay, 595 Bay Street, Suite 402 Toronto, ON M5G 2C2 Ph. 416-979-1991 • Fx. 416-979-5893 • www.denisonmines.com

PRESS RELEASE

DENISON MINES CORP. REPORTS SECOND QUARTER 2015 RESULTS

Toronto, ON – August 5, 2015. Denison Mines Corp. (“Denison” or the “Company”) (DML: TSX, DNN: NYSE MKT) today reported its results for the six months ended June 30, 2015. All amounts in this release are in U.S. dollars unless otherwise stated.

Highlights

 

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Executed agreement with Fission Uranium Corp. (“Fission”) to create a Canadian focused and diversified uranium company: On July 27, 2015, Denison entered into an agreement to combine its business with Fission by way of a court approved plan of arrangement (the “Arrangement”). The combined company will feature an exploration and development portfolio that will include Fission’s 100% owned Patterson Lake South Project (host to the Triple R deposit) and Denison’s 60% owned Wheeler River Project (which hosts the Phoenix deposit and Gryphon discovery). The combined company will also have a strong exploration foothold in both the historically prolific eastern Athabasca Basin and the emergent western Athabasca Basin, with a combined land package of over 430,000 hectares and a sizeable base of mineral resources.

Under the terms of the Arrangement, Fission common shareholders will receive 1.26 common shares of Denison for each common share of Fission held plus CAD$0.0001 per each Fission share in cash. Upon completion of the transaction, the combined company will be named “Denison Energy Corp.” and will be approximately 50% owned by the existing Denison and Fission shareholders on a fully-diluted in-the-money basis. The Company also plans to complete a 2-for-1 share consolidation upon completion of the transaction. The proposed transaction, name change, share consolidation and shareholders’ approval are expected to be completed in October 2015.

 

•

Agreed to the sale of Mongolian interests: On July 29, 2015, Denison entered into a definitive share purchase agreement with Uranium Industry a.s. (“UI”), of the Czech Republic, whereby UI will acquire all of Denison’s interest in mining assets and operations located in Mongolia in exchange for cash consideration of $20 million (“the GSJV sale”). Pursuant to the terms of the agreement, Denison will receive an initial payment of $250,000 on closing, expected to occur on or about September 8, 2015, and a deferred payment of $19,750,000 by November 30, 2015.

 

•

Completed CAD$15 million flow-through financing to fund Canadian exploration activities in 2016: In May 2015, the Company completed a private placement offering of 12,000,000 common shares issued on a flow-through basis, at a price of CAD$1.25 per share, for aggregate proceeds to Denison of CAD$15 million.

 

•

Stream of toll milling revenue continued to grow in the first half of 2015: The McClean Lake mill, in which Denison holds a 22.5% interest, packaged approximately 3.1 million pounds U3O8 in the first half of 2015 for the Cigar Lake Joint Venture (“CLJV”), generating toll milling revenues for Denison of $0.9 million. Production ramped up significantly in the early part of the second quarter and is on track to meet the target of six to eight million packaged pounds of U3O8 this year. The Company’s share of toll milling revenues for the year is expected to be approximately $2.1 million.

 

•

Continued Exploration Success at the Wheeler River Property: The summer drilling program is currently in progress with 36 drill holes planned, totaling approximately 24,000 metres. The Gryphon zone of uranium mineralization has the potential to add significantly to the estimate of mineral resources at Wheeler River, which already includes the high grade Phoenix uranium deposit.

A total of 14,113 metres of drilling has been completed in 18 drill holes at Wheeler River, to date, as part of the Company’s summer exploration program. Eight of the drill holes were at the Gryphon Zone and were designed to complete the 50 metre x 50 metre spaced drill pattern and determine the extent of the mineralization in the down-dip and down-plunge directions. The best result was in drill hole WR-604, which intersected 3.8% eU₃O₈ over 4.7 metres (779.2 to 783.9 metres), followed by 8.4% eU₃O₈ over 1.1 metres (790.0 to 791.1 metres), which extended mineralization in the down-dip direction. An initial estimate of mineral resources at the Gryphon zone is expected to be prepared before the end of the year.

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Discovered new zone of uranium mineralization at Murphy Lake: The first drill hole of a planned four drill hole program discovered uranium mineralization at Murphy Lake. Drill hole MP-15-03 intersected 0.2% eU3O8 over 6.9 metres (270.0 to 276.9 metres) at the sub-Athabasca unconformity.

Financial Results

 

		Six Months Ended
(in thousands, except for per share amounts)		June 30, 2015				June 30, 2014
Results of Operations:
Total revenues		$	5,257			$	4,532
Net income (loss)		$	(13,928	)		$	(24,231	)
Basic and diluted earnings (loss) per share		$	(0.03	)		$	(0.05	)
(in thousands)		As at June 30, 2015				As at December 31, 2014
Financial Position:
Cash and cash equivalents		$	14,864			$	18,640
Short term investments			8,015				4,381
Long term investments			463				954
Cash, equivalents and investments		$	23,342			$	23,975
Working capital		$	20,649			$	22,542
Property, plant and equipment		$	249,263			$	270,388
Total assets		$	287,444			$	311,330
Total long-term liabilities		$	38,372			$	42,291

Revenue

During the first half of 2015, the McClean Lake mill continued to process ore received from the Cigar Lake mine under a toll milling agreement. The mill packaged approximately 3.1 million pounds U₃O₈ for the CLJV. The Company’s share of toll milling revenue from processing Cigar Lake ore at the McClean Lake mill, during the three and six months ended June 30, 2015, totaled $718,000 and $922,000, respectively. In 2014, toll milling revenue was only recognized in the fourth quarter, as the first drums of CLJV uranium were packaged in October 2014.

Revenue from Denison Environmental Services (“DES”) during the three and six months ended June 30, 2015 was $1,774,000 and $3,414,000, respectively, compared to $1,682,000 and $3,307,000 during the same periods in 2014. In the first half of 2015, DES experienced an increase in Canadian dollar revenues due to an increase in activity at certain care and maintenance sites, which was largely offset by the unfavourable fluctuation in foreign exchange rates applicable on the translation of revenues earned in Canadian dollars.

Revenue from the Company’s management contract with Uranium Participation Corporation (“UPC”) was $437,000 and $921,000 during the three and six months ended June 30, 2015, compared to $676,000 and $1,225,000 for the same periods in 2014. The decrease in revenues during 2015 was due to fewer commissions earned on UPC’s purchases of uranium.

Operating Expenses

In Canada, McClean Lake is comprised of several uranium deposits and a high-grade uranium mill and is located on the eastern edge of the Athabasca Basin in northern Saskatchewan, approximately 750 kilometres north of Saskatoon. The McClean Lake uranium mill is one of the world’s largest uranium processing facilities. Expansion of the mill from 13 million to 24 million pounds annual U₃O₈ production capacity is ongoing while the mill processes ore from Cigar Lake under a toll milling agreement. Commissioning of the mill up to 18 million pounds annual U₃O₈ production capacity has begun and is expected to be completed before the end of 2015. The expansion remains fully funded by the CLJV.

Operating expenses in Canada were $467,000 and $666,000 during the three and six months ended June 30, 2015, compared to $116,000 and $257,000 in the same periods in 2014. Most of the operating expenses are attributable to activity involving the MLJV. Operating costs were higher during 2015 primarily due to depreciation of mill capital assets, as a result of processing the Cigar Lake ore at the McClean Lake mill.

 

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In Africa, operating expenses during the three and six months ended June 30, 2015 totaled $102,000 and $162,000, respectively. During the same periods in 2014, operating expenses totaled $490,000 and $1,185,000. The majority of operating expenses relate to costs incurred on the Falea project in Mali. The higher operating expenses in the first half of 2014 related to engineering studies, metallurgical test work programs and environmental programs that were completed, following the acquisition of the Falea project.

Operating expenses during the three and six months ended June 30, 2015 include costs relating to DES totaling $1,628,000 and $3,204,000, respectively, compared to $1,620,000 and $3,203,000 in the same periods in 2014. During the first half of 2015, DES experienced an increase in Canadian dollar operating expenses due to an increase in activity at certain care and maintenance sites, which was largely offset by the favourable fluctuation in foreign exchange rates applicable on the translation of expenses denominated in Canadian dollars.

Mineral Property Exploration

Denison is engaged in uranium exploration and/or evaluation in Canada, Zambia, Mali, Namibia and Mongolia. While the Company has material interests in uranium projects in Asia and Africa, the Company is focused primarily on the eastern Athabasca Basin, in Saskatchewan, Canada, with numerous projects totaling over 400,000 hectares. Global exploration expenditures were $3,011,000 and $9,146,000 during the three and six months ended June 30, 2015, with over 90% of exploration expenditures being incurred in Canada. Global exploration expenditures totaled $3,588,000 and $10,185,000 during the same periods in 2014. The decrease in global exploration expenditures during the first half of 2015 is mainly due to the favourable fluctuation in foreign exchange rates applicable on the translation of expenses denominated in Canadian dollars.

Denison’s share of exploration spending on its Canadian properties was $2,732,000 and $8,254,000 during the three and six months ended June 30, 2015, as compared to $3,240,000 and $9,494,000 during the same periods in 2014. Exploration spending in Canada is seasonal, with spending higher during the winter drilling programs (January to mid-April) and summer drilling programs (June to mid-October) in the Athabasca Basin.

Denison’s share of exploration costs at Wheeler River amounted to $1,022,000 and $2,775,000, respectively, during the three and six months ended June 30, 2015, compared to $938,000 and $2,786,000 in the same periods in 2014. During the second quarter of 2015, six drill holes were completed at Wheeler River as part of the summer program. Two of the drill holes were completed at the Phoenix North area and did not return significant mineralization. The other four were drilled in the Gryphon area.

A total of 14,113 metres of drilling has been completed in 18 drill holes at Wheeler River, to date, as part of the Company’s summer exploration program. Eight of the drill holes were at the Gryphon Zone and were designed to complete the 50 metre x 50 metre spaced drill pattern and determine the extent of the mineralization in the down-dip and down-plunge directions. The best result was in drill hole WR-604, which intersected 3.8% eU₃O₈ over 4.7 metres (779.2 to 783.9 meters), followed by 8.4% eU₃O₈ over 1.1 metres (790.0 to 791.1 metres), which extended mineralization in the down-dip direction. An initial estimate of mineral resources at the Gryphon zone is expected to be prepared before the end of the year.

During the second quarter of 2015, exploration activity on other projects included a DC-resistivity geophysical survey at Crawford Lake and drilling programs at Jasper Lake, Stevenson River and Bell Lake. At Jasper Lake and Stevenson River, a total of 2,246 metres of drilling was completed in 10 drill holes. No significant mineralization was intersected at these projects.

Subsequent to the first half of 2015, the first drill hole of a planned four drill hole program at Murphy Lake successfully intersected a new zone of uranium mineralization. Drill hole MP-15-03 intersected 0.2% eU₃O₈ over 6.9 metres (270.0 to 276.9 metres) at the sub-Athabasca unconformity. Mineralization is associated with a zone of strong sandstone alteration including desilicification and clay over a hematite cap. Three additional drill holes have been completed to follow up on the mineralization in MP-15-03. While none of the holes intersected mineralization, alteration and structure suggest a highly prospective system which is open to the west and likely to the east. The summer drilling program for 2015 is complete and follow up drilling is being planned for January 2016. Murphy Lake is located approximately 30 kilometres northwest of the McClean Lake mill and is a joint venture with Anthem Resources Inc. (41.06% interest). The 2015 program at Murphy Lake is being fully funded by Denison as a result of Anthem’s choice to dilute its interest.

Exploration activity in Africa for 2015 is designed to maintain the Company’s claims in good standing, while advancing the exploration potential of its assets, as part of a strategy to pursue a spin-out or disposal transaction when market conditions permit.

 

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Exploration expenditures in Mongolia were primarily related to annual license payments, required to maintain the Gurvan Saihan joint venture (“GSJV”) properties in good standing while the Company continued to explore strategic alternatives regarding its ownership interest in the GSJV. On July 29, 2015, the Company entered into a binding agreement with UI, a Czech Republic entity, to dispose of its 85% interest in the GSJV.

General and Administrative

Total general and administrative expenses were $1,741,000 and $3,337,000 during the three and six months ended June 30, 2015, compared with $2,103,000 and $4,506,000 during the same periods in 2014. These costs are mainly comprised of head office salaries and benefits, office costs in multiple regions, audit and regulatory costs, legal fees, investor relations expenses and all other costs related to operating a public company with listings in Canada and the United States. General and administrative expenses decreased in the first half of 2015 mainly as a result of lower office expenses and special projects costs, as well as a favourable fluctuation in foreign exchange rates applicable on the translation of Canadian dollar expenses.

Other Income and Expenses

The Company recognized other income of $420,000 and other expenses of $4,860,000 during the three and six months ended June 30, 2015, respectively, compared to other expenses of $6,009,000 and $9,411,000 during the same periods in 2014. The decrease in other expenses during 2015 is primarily due to a decrease in foreign exchange losses due to favourable fluctuations in foreign exchange rates.

Liquidity and Capital Resources

Cash and cash equivalents were $14,864,000 at June 30, 2015 compared with $18,640,000 at December 31, 2014. The decrease of $3,776,000 was primarily due to net cash used in operations of $9,054,000, net cash used in investing activities of $5,258,000 and a net foreign exchange loss of $1,185,000 on the translation of currency balances at period end, partly offset by net cash provided by financing activities of $11,721,000.

Net cash used in operating activities of $9,054,000 during the six months ended June 30, 2015 is comprised of a net loss for the period adjusted for non-cash items and changes in working capital items.

Net cash used in investing activities of $5,258,000 consists primarily of cash used to purchase investments of $8,134,000 and property, plant and equipment of $855,000, partly offset by cash provided by the maturity of investments in debt instruments and the sale of investments in equity instruments totaling $4,033,000.

Net cash provided by financing activities of $11,721,000 largely reflects net proceeds received on the issuance of flow-through common shares. On May 26, 2015, the Company closed a CAD$15 million private placement for the issuance of 12,000,000 flow-through common shares at a price of CAD$1.25 per share. The proceeds will be used to fund the Company’s Canadian exploration programs through to the end of 2016. As at June 30, 2015, the company has not incurred any expenditures towards the spending obligation associated with the financing. Other financing activities included proceeds received from the issuance of common shares on the exercise of stock options and warrants for a total of $411,000.

As at June 30, 2015, the Company estimates it has spent CAD$10,671,000 on eligible Canadian exploration expenses towards its obligation under the flow-through share financing completed in August 2014 for gross proceeds of CAD$14,997,000. The remaining balance of CAD$4,326,000 is expected to be incurred before December 31, 2015.

The Company holds a large majority of its cash in CAD denominated bank accounts. As at June 30, 2015, the Company’s cash and cash equivalents amount to CAD$18,566,000.

Revolving Term Credit Facility

On January 30, 2015, the Company entered into an agreement with the Bank of Nova Scotia to amend the terms of a revolving term credit facility entered into in 2014 and to extend the maturity date to January 31, 2016. Under the amended agreement, the Company has access to credit of up to CAD$24,000,000. Use of the facility remains restricted to non-financial letters of credit in support of reclamation obligations.

Outstanding Share Data

At August 5, 2015, there were 518,438,669 common shares issued and outstanding, stock options outstanding for 7,194,085 Denison common shares, and warrants outstanding for 188,066 Denison common shares for a total of 525,820,820 common shares on a fully-diluted basis.

 

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Outlook for 2015

The Company has completed a successful winter exploration program in Canada and resumed drilling during the first week of June 2015, as part of a summer exploration program focused on advancing certain high priority projects. In general, the Company’s exploration, development and operation plans for 2015 remain unchanged at the end of the first half of the year. The outlook for the remainder of the year, however, will change as a result of the Arrangement Agreement executed with Fission. The impact of the Arrangement has not yet been factored into the outlook for 2015.

Given the significant devaluation of the Canadian dollar in the first quarter of 2015, the Company’s Previous Outlook includes revisions to its budgeted USD$ to CAD$ foreign exchange rate to 1.24 from 1.12. The Current Outlook has been revised to reflect additional spending in Mongolia incurred in connection with the GSJV sale.

 

(in thousands)		Previous Outlook 2015 (1)(4)				Current Outlook 2015 (1)				Actual to June 30, 2015 (3)
Canada (2)
Mineral Sales & Toll Milling Revenue		$	3,200			$	3,200			$	914
Mineral Property Exploration			(12,890	)			(12,890	)			(8,514	)
Development & Operations			(1,620	)			(1,620	)			(485	)
			(11,310	)			(11,310	)			(8,085	)
Africa
Zambia & Mali			(2,340	)			(2,340	)			(1,185	)
			(2,340	)			(2,340	)			(1,185	)
Asia
Mongolia			(725	)			(1,200	)			(851	)
			(725	)			(1,200	)			(851	)
Other Activities (2)
UPC Management			1,680				1,680				837
DES Environmental Services			150				150				25
Corporate General & Administration			(4,150	)			(4,150	)			(2,389	)
			(2,320	)			(2,320	)			(1,527	)
Total		$	(16,695	)		$	(17,170	)		$	(11,648	)

 

(1)	Only material operations are shown.

(2)	Outlook figures have been converted using a US$ to CAD$ exchange rate of 1.24.

(3)	The Company budgets on a cash basis. As a result, actual amounts represent a non-GAAP measure and excludes non-cash depreciation and amortization amounts totaling $1,064,000.

(4)	Reflects Outlook 2015 figures as disclosed in the Three Months Ended March 31, 2015 MD&A.

Canada

Mineral Property Exploration

The 2015 budget for the Canadian exploration program is approximately CAD$23.1 million, of which Denison’s share is expected to be CAD$15.8 million. Denison’s exploration expenditures for 2015 are largely being funded by the proceeds from the Company’s flow-through share offering completed in August 2014, which raised CAD$15.0 million.

An aggressive summer exploration campaign began in early June and includes drilling programs on eight properties, all of which are operated by Denison: Wheeler River, Bell Lake, Murphy Lake, Waterbury Lake, Jasper Lake, Stevenson River, South Dufferin and Crawford Lake.

Wheeler River

The 2015 budget for exploration at Wheeler River includes diamond drilling, ground geophysics and line cutting at a total cost of CAD$10.0 million (Denison’s share, CAD$6.0 million).

As the primary focus of the Company’s summer exploration program, 36 drill holes totaling 24,000 metres are planned for the Wheeler River property. Several new high priority targets were identified in the proximity of the Gryphon zone during the winter program, including the discovery of a new area of unconformity mineralization south of Gryphon. The Company plans to aggressively follow up on these targets during the summer exploration season and evaluate other prospective target areas on the property.

The Gryphon zone is an important uranium discovery and has the potential to significantly increase the resource base at Wheeler River, which is currently highlighted by the high grade Phoenix deposit with a total indicated mineral resource estimate of 70.2 million pounds U₃O₈ with an average grade of 19.1% U₃O₈ and a total inferred mineral resource estimate of 1.1 million pounds U₃O₈ an average grade of 5.8% U₃O₈. A portion of the drilling planned at the Gryphon Zone during the summer is intended to support the preparation of an updated estimate of mineral resources for Wheeler River later in the year.

 

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Mineral Sales, Toll Milling Revenue, Development & Operations

The 2015 production plan calls for between six million and eight million pounds U₃O₈ to be packaged at the McClean Lake mill during the year. Production is expected to be primarily from Cigar Lake ore, with supplemental ore from the McClean Lake joint venture stockpiles. Denison’s share of operating and capital expenditures at McClean Lake in 2015 is estimated at CAD$500,000. Denison’s expenditures are expected to be offset by toll milling fees and revenue from the sale of approximately 26,000 pounds U₃O₈, recovered from McClean Lake ores. Denison’s total revenue from operations is projected to be CAD$3.8 million.

Given the current forecasts for the price of uranium, the SABRE program will be kept on care and maintenance and the McClean North and Midwest projects will remain on stand-by in 2015. Total expenditures on SABRE are planned to be CAD$900,000 (Denison’s share, CAD$203,000), and total expenditures on McClean North and Midwest are planned to be CAD$375,000 (Denison’s share, CAD$94,000).

Reclamation expenditures at Elliot Lake are projected to be CAD$819,000.

Africa

The Company has budgeted spending approximately $2.3 million during 2015 to maintain its projects in good standing, while the Company waits for market conditions that will permit a spin-out or disposal of its African portfolio. On its wholly owned Mutanga project in Zambia, activities will focus on generating additional exploration targets through soil and radon sampling, excavator trenching and geological mapping. In Mali, activities will focus on an expansion of previous airborne geophysical surveying and renewing the exploration permit for the Falea project.

Asia

In Mongolia, the Company continued to pursue strategic alternatives for its 85% interest in the GSJV in the quarter. On July 29, 2015, Denison entered into a definitive share purchase agreement providing for the GSJV Sale. UI will be responsible for the operating expenses incurred in Mongolia starting from the closing date of the transaction (on or before September 8, 2015). The current outlook for Mongolia has been increased to $1,200,000 for 2015, to reflect additional spending incurred in relation to the GSJV Sale.

Other Activities

Management fees generated from Denison’s management services agreement with UPC are budgeted to be CAD$2.1 million in 2015.

At DES, revenue from operations is budgeted at CAD$7.4 million and operating and capital expenses are forecasted to be CAD$7.2 million.

Corporate general and administration expenses are forecast to be CAD$4.9 million in 2015 and include all head office wages and benefits, office costs, audit and regulatory costs, legal fees, investor relations expenses and all other costs related to operating a public company with listings in Canada and the United States. The Company has not yet updated its current outlook for project costs associated with the Arrangement with Fission.

Qualified Person

The disclosure of scientific and technical information regarding Denison’s properties in this press release was prepared by or reviewed by Steve Blower, P. Geo., the Company’s Vice President, Exploration, and Terry Wetz, P.E., the Executive Director of the GSJV, who are Qualified Persons in accordance with the requirements of NI 43-101. For a description of the quality assurance program and quality control measures applied by Denison, please see Denison’s Annual Information Form dated March 5, 2015 available at www.sedar.com, and its Form 40-F available at www.sec.gov/edgar.shtml.

Additional Information

Denison’s consolidated financial statements for the six month period ended June 30, 2015 and related management’s discussion and analysis are available on Denison’s website at www.denisonmines.com or under its profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.

 

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About Denison

Denison is a uranium exploration and development company with interests in exploration and development projects in Canada, Zambia, Mali, Namibia and Mongolia. Including its 60% owned Wheeler project, which hosts the high grade Phoenix uranium deposit, Denison’s exploration project portfolio consists of numerous projects covering over 400,000 hectares in the eastern Athabasca Basin region of Saskatchewan. Denison’s interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake joint venture, which is comprised of several uranium deposits and the McClean Lake uranium mill, one of the world’s largest uranium processing facilities and which is currently processing ore from the Cigar Lake mine under a toll milling agreement. Other Saskatchewan assets include a 25.17% interest in the Midwest deposit and a 60% interest in the J Zone deposit on the Waterbury Lake property. Both the Midwest and J Zone deposits are located within 20 kilometres of the McClean Lake mill. Internationally, Denison owns 100% of the conventional heap leach Mutanga project in Zambia, 100% of the uranium/copper/silver Falea project in Mali, a 90% interest in the Dome project in Namibia, and an 85% interest in the in-situ recovery projects held by the Gurvan Saihan joint venture (“GSJV”) in Mongolia.

Denison is engaged in mine decommissioning and environmental services through its DES division and is the manager of UPC, a publicly traded company which invests in uranium oxide and uranium hexafluoride.

For more information, please contact

 

David Cates		(416) 979 – 1991 ext 362
President and Chief Executive Officer
Sophia Shane		(604) 689 - 7842
Investor Relations

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained in this press release constitutes “forward-looking information”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation concerning the business, operations and financial performance and condition of Denison.

Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”, “be achieved” or “has the potential to”.

Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Denison to be materially different from those expressed or implied by such forward-looking statements. Denison believes that the expectations reflected in this forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this press release should not be unduly relied upon. This information speaks only as of the date of this press release. In particular, this press release may contain forward-looking information pertaining to the following: the likelihood of completing and benefits to be derived from corporate transactions; the estimates of Denison’s mineral reserves and mineral resources; expectations regarding the toll milling of Cigar Lake ores; capital expenditure programs, estimated exploration and development expenditures and reclamation costs; expectations of market prices and costs; supply and demand for uranium (“U₃O₈”); possible impacts of litigation and regulatory actions on Denison; exploration, development and expansion plans and objectives; expectations regarding adding to its mineral reserves and resources through acquisitions and exploration; and receipt of regulatory approvals, permits and licences under governmental regulatory regimes.

There can be no assurance that such statements will prove to be accurate, as Denison’s actual results and future events could differ materially from those anticipated in this forward-looking information as a result of the factors discussed in the “Risk Factors” section in Denison’s Management’s Discussion and Analysis for the Six Months Ended June 30, 2015, Annual Information Form dated March 5, 2015 and available at www.sedar.com and its Form 40-F available at www.sec.gov/edgar.shtml.

Accordingly, readers should not place undue reliance on forward-looking statements. These factors are not, and should not be construed as being, exhaustive. Statements relating to “mineral reserves” or “mineral resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future. The forward-looking information contained in this press release is expressly qualified by this cautionary statement. Denison does not undertake any obligation to publicly update or revise any forward-looking information after the date of this press release to conform such information to actual results or to changes in Denison’s expectations except as otherwise required by applicable legislation.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: This press release may use the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.

 

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Exhibit 99.2

DENISON MINES CORP.

Condensed Interim Consolidated Statements of Financial Position

(Unaudited - Expressed in thousands of U.S. dollars except for share amounts)

 

		At June 30 2015				At December 31 2014
ASSETS
Current
Cash and cash equivalents (note 4)		$	14,864			$	18,640
Investments (note 7)			8,015				4,381
Trade and other receivables (note 5)			8,023				9,411
Inventories (note 6)			2,132				2,240
Prepaid expenses and other			331				850
			33,365				35,522
Non-Current
Inventories-ore in stockpiles (note 6)			1,679				1,760
Investments (note 7)			463				954
Restricted cash and investments (note 8)			2,319				2,068
Property, plant and equipment (note 9)			249,263				270,388
Intangibles			355				638
Total assets		$	287,444			$	311,330
LIABILITIES
Current
Accounts payable and accrued liabilities		$	9,754			$	10,050
Current portion of long-term liabilities:
Post-employment benefits (note 10)			240				259
Reclamation obligations (note 11)			656				706
Debt obligations			22				30
Other liabilities (note 13)			2,044				1,935
			12,716				12,980
Non-Current
Post-employment benefits (note 10)			2,436				2,662
Reclamation obligations (note 11)			15,937				16,953
Debt obligations			—				9
Other liabilities (note 13)			765				841
Deferred income tax liability			19,234				21,826
Total liabilities			51,088				55,271
EQUITY
Share capital (note 14)			1,130,785				1,120,758
Share purchase warrants (note 15)			24				376
Contributed surplus			53,684				53,321
Deficit			(906,465	)			(892,537	)
Accumulated other comprehensive income (loss) (note 17)			(41,672	)			(25,859	)
Total equity			236,356				256,059
Total liabilities and equity		$	287,444			$	311,330
Issued and outstanding common shares (note 14)			518,438,669				505,868,894
Subsequent events (note 23)

The accompanying notes are integral to the condensed interim consolidated financial statements

 

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DENISON MINES CORP.

Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Unaudited - Expressed in thousands of U.S. dollars except for share and per share amounts)

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
		2015				2014				2015				2014
REVENUES (note 19)		$	2,929			$	2,358			$	5,257			$	4,532
EXPENSES
Operating expenses (note 18)			(2,380	)			(2,402	)			(4,368	)			(4,989	)
Mineral property exploration (note 19)			(3,011	)			(3,588	)			(9,146	)			(10,185	)
General and administrative (note 19)			(1,741	)			(2,103	)			(3,337	)			(4,506	)
Impairment-mineral properties			—				—				—				(1,658	)
Other income (expense) (note 18)			420				(6,009	)			(4,860	)			(9,411	)
			(6,712	)			(14,102	)			(21,711	)			(30,749	)
Income (loss) before finance charges			(3,783	)			(11,744	)			(16,454	)			(26,217	)
Finance income (expense) (note 18)			(198	)			(130	)			(306	)			(5	)
Income (loss) before taxes			(3,981	)			(11,874	)			(16,760	)			(26,222	)
Income tax recovery (expense) (note 21)
Deferred			(153	)			310				2,832				1,991
Net income (loss) for the period		$	(4,134	)		$	(11,564	)		$	(13,928	)		$	(24,231	)
Items that may be reclassified to income (loss):
Unrealized gain (loss) on investments-net of tax			3				11				—				10
Foreign currency translation change			2,628				13,702				(15,813	)			5,094
Comprehensive income (loss) for the period		$	(1,503	)		$	2,149			$	(29,741	)		$	(19,127	)
Net income (loss) per share:
Basic and diluted		$	(0.01	)		$	(0.02	)		$	(0.03	)		$	(0.05	)
Weighted-average number of shares outstanding (in thousands):
Basic and diluted			510,439				487,017				508,391				485,636

The accompanying notes are integral to the condensed interim consolidated financial statements

 

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DENISON MINES CORP.

Condensed Interim Consolidated Statements of Changes in Equity

(Unaudited - Expressed in thousands of U.S. dollars)

 

		Six Months Ended
		June 30				June 30
		2015				2014
Share capital
Balance-beginning of period		$	1,120,758			$	1,092,144
Shares issued-net of issue costs			11,324				(46	)
Flow-through share premium			(2,028	)			—
Shares issued on acquisition of Rockgate Capital Corp			—				3,034
Shares issued on acquisition of International Enexco Limited			—				11,979
Shares issued to settle payable and accrued liability obligations			—				610
Share options exercised-cash			5				517
Share options exercised-non cash			4				426
Share purchase warrants exercised-cash			406				298
Share purchase warrants exercised-non cash			316				220
Balance-end of period			1,130,785				1,109,182
Share purchase warrants
Balance-beginning of period			376				616
Warrants issued on acquisition of International Enexco Limited			—				61
Warrants exercised			(316	)			(220	)
Warrants expired			(36	)			—
Balance-end of period			24				457
Contributed surplus
Balance-beginning of period			53,321				52,943
Stock-based compensation expense			331				416
Share options issued on acquisition of International Enexco Limited			—				102
Share options exercised-non cash			(4	)			(426	)
Warrants expired			36				—
Balance-end of period			53,684				53,035
Deficit
Balance-beginning of period			(892,537	)			(860,834	)
Net loss			(13,928	)			(24,231	)
Balance-end of period			(906,465	)			(885,065	)
Accumulated other comprehensive income (loss)
Balance-beginning of period			(25,859	)			(7,729	)
Unrealized gain (loss) on investments			—				10
Foreign currency translation realized in net income			(10	)			—
Foreign currency translation			(15,803	)			5,094
Balance-end of period			(41,672	)			(2,625	)
Total Equity
Balance-beginning of period		$	256,059			$	277,140
Balance-end of period		$	236,356			$	274,984

The accompanying notes are integral to the condensed interim consolidated financial statements

 

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DENISON MINES CORP.

Condensed Interim Consolidated Statements of Cash Flow

(Unaudited - Expressed in thousands of U.S. dollars)

 

		Six Months Ended
		June 30				June 30
		2015				2014
CASH PROVIDED BY (USED IN):
OPERATING ACTIVITIES
Net income (loss) for the period		$	(13,928	)		$	(24,231	)
Items not affecting cash:
Depletion, depreciation, amortization and accretion			1,510				1,048
Impairment-mineral properties			—				1,658
Stock-based compensation			331				416
Losses (gains) on asset disposals			(67	)			(449	)
Losses (gains) on investments and restricted investments			480				(119	)
Deferred income tax expense (recovery)			(2,832	)			(1,991	)
Foreign exchange			4,257				10,053
Change in non-cash working capital items (note 18)			1,195				1,782
Net cash provided by (used in) operating activities			(9,054	)			(11,833	)
INVESTING ACTIVITIES
Acquisition of assets, net of cash and cash equivalents acquired:
Rockgate Capital Corp			—				(57	)
International Enexco Limited			—				(141	)
Sale of investments			4,033				9,525
Purchase of investments			(8,134	)			(92	)
Expenditures on property, plant and equipment			(855	)			(644	)
Proceeds on sale of property, plant and equipment			97				265
Decrease (increase) in restricted cash and investments			(399	)			(239	)
Net cash provided by (used in) investing activities			(5,258	)			8,617
FINANCING ACTIVITIES
Increase (decrease) in debt obligations			(14	)			(37	)
Issuance of common shares for:
New share issues-net of issue costs			11,324				(46	)
Share options exercised			5				517
Share purchase warrants exercised			406				298
Net cash provided by (used in) financing activities			11,721				732
Increase (decrease) in cash and cash equivalents			(2,591	)			(2,484	)
Foreign exchange effect on cash and cash equivalents			(1,185	)			(168	)
Cash and cash equivalents, beginning of period			18,640				21,786
Cash and cash equivalents, end of period		$	14,864			$	19,134

The accompanying notes are integral to the condensed interim consolidated financial statements

 

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DENISON MINES CORP.

Notes to the Condensed Interim Consolidated Financial Statements for the six months ended June 30, 2015

(Unaudited - Expressed in U.S. dollars except for shares and per share amounts)

 

1.	NATURE OF OPERATIONS

Denison Mines Corp. and its subsidiary companies and joint arrangements (collectively, the “Company”) are engaged in uranium mining and related activities, including acquisition, exploration and development of uranium bearing properties, extraction, processing and selling of uranium.

The Company has a 22.5% interest in the McClean Lake Joint Venture (“MLJV”) (which includes the McClean Lake mill) and a 25.17% interest in the Midwest Joint Venture (“MWJV”), both of which are located in the Athabasca Basin of Saskatchewan, Canada. The McClean Lake mill provides toll milling services to the Cigar Lake Joint Venture (“CLJV”) under the terms of a toll milling agreement between the parties. In addition, the Company has varying ownership interests in a number of development and exploration projects located in Canada, Mali, Namibia, Zambia and Mongolia.

The Company provides mine decommissioning and decommissioned site monitoring services to third parties through its Denison Environmental Services (“DES”) division and is also the manager of Uranium Participation Corporation (“UPC”), a publicly-listed investment holding company formed to invest substantially all of its assets in uranium oxide concentrates (“U₃O₈”) and uranium hexafluoride (“UF₆”). The Company has no ownership interest in UPC but receives fees for management services and commissions from the purchase and sale of U₃O₈ and UF₆ by UPC.

Denison Mines Corp. (“DMC”) is incorporated under the Business Corporations Act (Ontario) and domiciled in Canada. The address of its registered head office is 595 Bay Street, Suite 402, Toronto, Ontario, Canada, M5G 2C2.

 

2.	BASIS OF PRESENTATION

These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) applicable to the preparation of interim financial statements, including IAS 34, Interim Financial Reporting. The condensed interim consolidated financial statements should be read in conjunction with the audited annual consolidated financial statements for the year ended December 31, 2014.

The Company’s presentation currency is U.S. dollars.

These financial statements were approved by the board of directors for issue on August 5, 2015.

 

3.	SIGNIFICANT ACCOUNTING POLICIES

The significant accounting policies followed in these condensed interim consolidated financial statements are consistent with those applied in the Company’s audited annual consolidated financial statements for the year ended December 31, 2014.

Accounting Standards Issued But Not Yet Applied

The Company has not yet adopted the following new accounting pronouncements which are effective for fiscal periods of the Company beginning on or after January 1, 2016:

International Financial Reporting Standard 9, Financial Instruments (“IFRS 9”)

In July 2014, the IASB published the final version of IFRS 9 Financial Instruments (“IFRS 9”), which brings together the classification, measurement, impairment and hedge accounting phases of the IASB’s project to replace IAS 39 Financial Instruments: Recognition and Measurement. IFRS 9 replaces the multiple classifications for financial assets in IAS 39 with a single principle based approach for determining the classification of financial assets based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. The final version of IFRS 9 is effective for periods beginning on or after January 1, 2018; however, it is available for early adoption.

 

- 5 -

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The Company has not evaluated the impact of adopting this standard.

International Financial Reporting Standard 15, Revenue from Contracts with Customers (“IFRS 15”)

IFRS 15 deals with revenue recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognized when a customer obtains control of a good or service. The standard replaces IAS 18 “Revenue” and IAS 11“Construction Contracts” and related interpretations. The standard is effective for annual periods beginning on or after January 1, 2018 and earlier application is permitted.

The Company has not evaluated the impact of adopting this standard.

 

4.	CASH AND CASH EQUIVALENTS

The cash and cash equivalent balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Cash		$	1,847			$	2,265
Cash in MLJV and MWJV			1,762				885
Cash equivalents			11,255				15,490
		$	14,864			$	18,640

 

5.	TRADE AND OTHER RECEIVABLES

The trade and other receivables balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Trade receivables-other		$	2,708			$	2,138
Receivables in MLJV and MWJV			5,197				7,127
Sales tax receivables			106				131
Sundry receivables			12				15
		$	8,023			$	9,411

 

6.	INVENTORIES

The inventories balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Uranium concentrates and work-in-progress		$	426			$	433
Inventory of ore in stockpiles			1,679				1,834
Mine and mill supplies in MLJV			1,706				1,733
		$	3,811			$	4,000
Inventories-by duration:
Current		$	2,132			$	2,240
Long-term-ore in stockpiles			1,679				1,760
		$	3,811			$	4,000

 

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7.	INVESTMENTS

The investments balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Investments:
Equity instruments-fair value through profit and loss		$	447			$	932
Equity instruments-available for sale			16				22
Debt instruments-fair value through profit and loss			8,015				4,381
		$	8,478			$	5,335
Investments-by duration:
Current		$	8,015			$	4,381
Long-term			463				954
		$	8,478			$	5,335

During the six months ended June 30, 2015, the Company purchased debt instruments at a cost of $8,134,000. In addition, $4,029,000 of debt instruments matured and the proceeds were transferred to cash and equivalents.

 

8.	RESTRICTED CASH AND INVESTMENTS

The Company has certain restricted cash and investments deposited to collateralize a portion of its reclamation obligations. The restricted cash and investments balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Cash		$	133			$	42
Cash equivalents			401				104
Investments			1,785				1,922
		$	2,319			$	2,068
Restricted cash and investments-by item:
Elliot Lake reclamation trust fund		$	2,319			$	2,068
		$	2,319			$	2,068

Elliot Lake Reclamation Trust Fund

During the six months ended June 30, 2015, the Company deposited an additional $696,000 (CAD$864,000) into the Elliot Lake Reclamation Trust Fund and withdrew $298,000 (CAD$368,000).

 

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9.	PROPERTY, PLANT AND EQUIPMENT

The property, plant and equipment balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Plant and equipment:
Cost		$	78,606			$	82,980
Construction-in-progress			5,056				6,960
Accumulated depreciation			(11,894	)			(12,205	)
Net book value		$	71,768			$	77,735
Mineral properties:
Cost		$	177,679			$	192,851
Accumulated amortization			(184	)			(198	)
Net book value		$	177,495			$	192,653
Total net book value		$	249,263			$	270,388

The property, plant and equipment continuity summary is as follows:

 

(in thousands)		Cost				Accumulated Amortization / Depreciation				Net Book Value
Plant and equipment:
Balance-December 31, 2014		$	89,940			$	(12,205	)		$	77,735
Additions			440				—				440
Amortization			—				(42	)			(42	)
Depreciation			—				(789	)			(789	)
Disposals			(226	)			196				(30	)
Foreign exchange			(6,492	)			946				(5,546	)
Balance-June 30, 2015		$	83,662			$	(11,894	)		$	71,768
Mineral properties:
Balance-December 31, 2014		$	192,851			$	(198	)		$	192,653
Additions			454				—				454
Foreign exchange			(15,626	)			14				(15,612	)
Balance-June 30, 2015		$	177,679			$	(184	)		$	177,495

Plant and Equipment - Mining

The Company has a 22.5% interest in the McClean Lake mill located in the Athabasca Basin of Saskatchewan, Canada. A toll milling agreement has been signed with the participants in the CLJV that provides for the processing of the future output of the Cigar Lake mine at the McClean Lake mill, for which the owners of the McClean Lake mill receive a toll milling fee and other benefits. In determining the amortization rate for the McClean Lake mill, the amount to be amortized has been adjusted to include Denison’s expected share of mill feed related to the CLJV toll milling contract.

Plant and Equipment - Services and Other

The environmental services division of the Company provides mine decommissioning and decommissioned site monitoring services for third parties.

Mineral Properties

The Company has various interests in development and exploration projects located in Canada, Mali, Namibia, Zambia and Mongolia which are held directly or through option or various contractual agreements.

 

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Canada Mining Segment

In February 2015, SeqUr Exploration Inc. terminated its option to earn an interest in the Jasper Lake property.

In July 2015, the Company entered into a definitive arrangement agreement to acquire all of the outstanding shares, options and warrants of Fission Uranium Corp (“FCU”). FCU’s principal uranium asset is its 100% owned Patterson Lake South project located in Saskatchewan, Canada (see note 23).

Asia Mining Segment-Mongolia

In July 2015, the Company concluded its strategic review of alternatives for its interest in the Gurvan Saihan Joint Venture (“GSJV”) and entered into a binding agreement with Uranium Industry (“UI”), a Czech Republic entity, to dispose of its 85% interest in the GSJV (see note 23).

 

10.	POST-EMPLOYMENT BENEFITS

The post-employment benefits balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Accrued benefit obligation		$	2,676			$	2,921
		$	2,676			$	2,921
Post-employment benefits liability-by duration:
Current		$	240			$	259
Non-current			2,436				2,662
		$	2,676			$	2,921

The post-employment benefits continuity summary is as follows:

 

(in thousands)
Balance-December 31, 2014		$	2,921
Benefits paid			(87	)
Interest cost			49
Foreign exchange			(207	)
Balance-June 30, 2015		$	2,676

 

11.	RECLAMATION OBLIGATIONS

The reclamation obligations balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Reclamation liability-by location:
Elliot Lake		$	10,470			$	11,234
McClean and Midwest Joint Ventures			6,105				6,406
Other			18				19
		$	16,593			$	17,659
Reclamation and remediation liability-by duration:
Current			656				706
Non-current			15,937				16,953
		$	16,593			$	17,659

 

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The reclamation obligations continuity summary is as follows:

 

(in thousands)
Balance-December 31, 2014		$	17,659
Accretion			432
Expenditures incurred			(239	)
Foreign exchange			(1,259	)
Balance-June 30, 2015		$	16,593

Site Restoration: Elliot Lake

Spending on restoration activities at the Elliot Lake site is funded from monies in the Elliot Lake Reclamation Trust fund (see note 8).

Site Restoration: McClean Lake Joint Venture and Midwest Joint Venture

Under the Mineral Industry Environmental Protection Regulations (1996), the Company is required to provide its pro-rata share of financial assurances to the province of Saskatchewan relating to future decommissioning and reclamation plans that have been filed and approved by the applicable regulatory authorities. As at June 30, 2015, the Company has provided irrevocable standby letters of credit, from a chartered bank, in favour of Saskatchewan Environment, totalling CAD$9,698,000 relating to an approved reclamation plan dated October 2009. An updated reclamation plan dated November 2014 has been submitted and is currently under review by the applicable regulatory authorities. Once approved, the Company expects to increase its pro-rata share of financial assurances to the province by CAD$12,748,000 to approximately CAD$22,446,000.

 

12.	DEBT FACILITIES

Line of Credit

The Company’s current credit facility has a maturity date of January 31, 2016 and allows for credit to be extended to the Company for up to CAD$24,000,000. Use of the facility is restricted to non-financial letters of credit in support of reclamation obligations (see note 11).

At June 30, 2015, the Company has no outstanding borrowings under the facility (December 31, 2014 - $nil) and is in compliance with its facility covenants. At June 30, 2015, approximately CAD$9,698,000 (December 31, 2014: CAD$9,698,000) of the facility is being utilized as collateral for certain letters of credit. During the six months ended June 30, 2015, the Company did not incur any interest under the facility but has incurred letter of credit and standby fees of $64,000 and $66,000, respectively.

 

13.	OTHER LIABILITIES

The other liabilities balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Unamortized fair value of toll milling contracts		$	791			$	861
Flow-through share premium obligation (note 14)			2,018				1,915
		$	2,809			$	2,776
Other long-term liabilities-by duration:
Current		$	2,044			$	1,935
Non-current			765				841
		$	2,809			$	2,776

 

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14.	SHARE CAPITAL

Denison is authorized to issue an unlimited number of common shares without par value. A continuity summary of the issued and outstanding common shares and the associated dollar amounts is presented below:

 

(in thousands except share amounts)		Number of Common Shares
Balance at December 31, 2014			505,868,894			$	1,120,758
Issued for cash:
Share issue proceeds			12,000,000				12,069
Share issue costs			—				(745	)
Share options exercised			7,100				5
Share purchase warrants exercised			562,675				406
Share options exercised-fair value adjustment			—				4
Share purchase warrants exercised-fair value adjustment			—				316
Flow-through share premium liability			—				(2,028	)
			12,569,775				10,027
Balance at June 30, 2015			518,438,669			$	1,130,785

New Issues

In May 2015, the Company completed a private placement of 12,000,000 flow-through common shares at a price of CAD$1.25 per share for gross proceeds of $12,069,000 (CAD$15,000,000). The income tax benefits of this issue will be renounced to subscribers no later than December 31, 2015. The related flow-through share premium liability is included as a component of other liabilities on the balance sheet at June 30, 2015.

Flow-Through Share Issues

The Company finances a portion of its exploration programs through the use of flow-through share issuances. Canadian income tax deductions relating to these expenditures are claimable by the investors and not by the Company.

As at June 30, 2015, the Company estimates that it has incurred CAD$10,671,000 of its obligation to spend CAD$14,997,000 on eligible exploration expenditures as a result of the issuance of flow-through shares in August 2014. The Company renounced the income tax benefits of this issue to its subscribers in February 2015. In conjunction with the renunciation, the flow-through share premium liability has been reversed and recognized as part of the deferred tax recovery (see notes 13 and 21).

As at June 30, 2015, the Company has not incurred any expenditures towards its obligation to spend CAD$15,000,000 on eligible exploration expenditures as a result of the issuance of flow-through shares in May 2015.

 

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15.

WARRANTS

A continuity summary of the issued and outstanding share purchase warrants in terms of common shares of the Company and associated dollar amount is presented below:

 

(in thousands except share amounts)		Weighted Average Exercise Price Per Share (CAD$)				Number of Common Shares Issuable				Fair Value Amount
Balance outstanding at December 31, 2014		$	1.17				1,079,802			$	376
Warrants exercised			0.84				(562,675	)			(316	)
Warrants expired			1.54				(329,061	)			(36	)
Balance outstanding at June 30, 2015		$	1.54				188,066				24
Balance of common shares issuable by warrant series:
IEC February 2014 series (1)			1.54				188,066				24
Balance outstanding at June 30, 2015		$	1.54				188,066			$	24

 

(1)	The IEC February 2014 series expires on August 20, 2015.

 

16.	STOCK OPTIONS

A continuity summary of the stock options granted under the Company’s stock-based compensation plan is presented below:

 

		Number of Common Shares				Weighted- Average Exercise Price per Share (CAD$)
Stock options outstanding - beginning of period			6,179,574			$	1.80
Granted			1,645,000				1.09
Exercised (1)			(7,100	)			0.71
Expiries			(338,909	)			1.38
Forfeitures			(147,480	)			1.93
Stock options outstanding - end of period			7,331,085			$	1.66
Stock options exercisable - end of period			5,108,085			$	1.82

 

(1)	The weighted average share price at the date of exercise was CAD$1.07.

A summary of the Company’s stock options outstanding at June 30, 2015 is presented below:

 

Range of Exercise Prices per Share (CAD$)		Weighted Average Remaining Contractual Life (Years)				Number of Common Shares				Weighted- Average Exercise Price per Share (CAD$)
Stock options outstanding
$ 0.38 to $ 2.49			2.99				6,247,424			$	1.32
$ 2.50 to $ 4.99			0.58				838,181				3.23
$ 5.00 to $ 5.67			0.88				245,480				5.02
Stock options outstanding - end of period			2.65				7,331,085			$	1.66

Options outstanding at June 30, 2015 expire between July 2015 and March 2020.

 

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The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model. The following table outlines the range of assumptions used in the model to determine the fair value of options granted:

 

		Six Months Ended June 30, 2015
Risk-free interest rate		0.56% - 0.79%
Expected stock price volatility		46.96% - 47.00%
Expected life		3.6 years
Estimated forfeiture rate		3.40%
Expected dividend yield		—
Fair value per share under options granted		CAD$0.35 - CAD$0.39

The fair values of stock options with vesting provisions are amortized on a graded method basis as stock-based compensation expense over the applicable vesting periods. Included in the statement of income (loss) is stock-based compensation of $132,000 and $331,000 for the three and six months ended June 30, 2015 and $191,000 and $416,000 for the three and six months ended June 30, 2014. At June 30, 2015, an additional $531,000 in stock-based compensation expense remains to be recognized up until March 2017.

 

17.	ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

The accumulated other comprehensive income (loss) balance consists of:

 

		At June 30				At December 31
(in thousands)		2015				2014
Cumulative foreign currency translation		$	(41,830	)		$	(26,017	)
Unamortized experience gain-post employment liability
Gross			206				206
Tax effect			(56	)			(56	)
Unrealized gains (losses) on investments
Gross			8				8
		$	(41,672	)		$	(25,859	)

 

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18.	SUPPLEMENTAL FINANCIAL INFORMATION

The components of operating expenses are as follows:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Cost of goods and services sold:
Operating Overheads:
Mining, other development expense		$	(435	)		$	(800	)		$	(773	)		$	(1,929	)
Milling, conversion expense			(367	)			(12	)			(470	)			(23	)
Mill feed cost:
-Stockpile depletion			(24	)			—				(24	)			—
Less absorption:
-Stockpiles, mineral properties			251				209				454				517
-Concentrates			24				—				24				—
Cost of services			(1,799	)			(1,796	)			(3,528	)			(3,547	)
Cost of goods and services sold			(2,350	)			(2,399	)			(4,317	)			(4,982	)
Reclamation asset amortization			(21	)			(3	)			(42	)			(7	)
Selling expenses			(9	)			—				(9	)			—
Operating expenses		$	(2,380	)		$	(2,402	)		$	(4,368	)		$	(4,989	)

The components of other income (expense) are as follows:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Gains (losses) on:
Foreign exchange		$	548			$	(5,938	)		$	(4,257	)		$	(10,053	)
Disposal of property, plant and equipment			58				431				67				449
Disposal of equity investments			(2	)			—				—				—
Investment fair value through profit (loss)			(109	)			(545	)			(480	)			119
Other			(75	)			43				(190	)			74
Other income (expense)		$	420			$	(6,009	)		$	(4,860	)		$	(9,411	)

The components of finance income (expense) are as follows:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Interest income		$	44			$	82			$	175			$	416
Interest expense			—				—				—				(1	)
Accretion expense-reclamation obligations			(217	)			(182	)			(432	)			(362	)
Accretion expense-post-employment benefits			(25	)			(30	)			(49	)			(58	)
Finance income (expense)		$	(198	)		$	(130	)		$	(306	)		$	(5	)

 

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A summary of depreciation expense recognized in the statement of income (loss) is as follows:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Operating expenses:
Mining, other development expense		$	(53	)		$	(73	)		$	(116	)		$	(160	)
Milling, conversion expense			(367	)			(1	)			(470	)			(2	)
Cost of services			(70	)			(63	)			(127	)			(123	)
Mineral property exploration			(27	)			(36	)			(52	)			(76	)
General and administrative			(11	)			(17	)			(24	)			(34	)
Depreciation expense-gross		$	(528	)		$	(190	)		$	(789	)		$	(395	)

A summary of employee benefits expense recognized in the statement of income (loss) is as follows:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Salaries and short-term employee benefits		$	(1,719	)		$	(2,007	)		$	(3,854	)		$	(4,635	)
Share-based compensation			(132	)			(191	)			(331	)			(416	)
Termination benefits			(62	)			(205	)			(131	)			(216	)
Employee benefits expense		$	(1,913	)		$	(2,403	)		$	(4,316	)		$	(5,267	)

The change in non-cash working capital items in the consolidated statements of cash flows is as follows:

 

		Six Months Ended
		June 30				June 30
(in thousands)		2015				2014
Change in non-cash working capital items:
Trade and other receivables		$	750			$	(1,301	)
Inventories			(97	)			15
Prepaid expenses and other assets			456				332
Accounts payable and accrued liabilities			412				2,315
Post-employment benefits			(87	)			(142	)
Reclamation obligations			(239	)			563
Change in non-cash working capital items		$	1,195			$	1,782

 

19.	SEGMENTED INFORMATION

Business Segments

The Company operates in two primary segments – the Mining segment and the Services and Other segment. The Mining segment, which has been further subdivided by major geographic regions, includes activities related to exploration, evaluation and development, mining, milling and the sale of mineral concentrates. The Services and Other segment includes the results of the Company’s environmental services business, management fees and commission income earned from UPC and general corporate expenses not allocated to the other segments.

 

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For the six months ended June 30, 2015, business segment results were as follows:

 

(in thousands)		Canada Mining				Africa Mining				Asia Mining				Services and Other				Total
Statement of Operations:
Revenues			922				—				—				4,335				5,257
Expenses:
Operating expenses			(666	)			(162	)			(12	)			(3,528	)			(4,368	)
Mineral property exploration			(8,254	)			(524	)			(368	)			—				(9,146	)
General and administrative			(16	)			(340	)			(298	)			(2,683	)			(3,337	)
			(8,936	)			(1,026	)			(678	)			(6,211	)			(16,851	)
Segment income (loss)			(8,014	)			(1,026	)			(678	)			(1,876	)			(11,594	)
Revenues – supplemental:
Environmental services			—				—				—				3,414				3,414
Management fees and commissions			—				—				—				921				921
Toll milling services			922				—				—				—				922
			922				—				—				4,335				5,257
Capital additions:
Property, plant and equipment			105				248				180				361				894
Long-lived assets:
Plant and equipment
Cost			77,736				1,857				276				3,793				83,662
Accumulated depreciation			(8,322	)			(1,483	)			(179	)			(1,910	)			(11,894	)
Mineral properties			134,148				37,052				6,295				—				177,495
Intangibles			—				—				—				355				355
			203,562				37,426				6,392				2,238				249,618
For the three months ended June 30, 2015, business segment results were as follows:
(in thousands)		Canada Mining				Africa Mining				Asia Mining				Services and Other				Total
Statement of Operations:
Revenues			718				—				—				2,211				2,929
Expenses:
Operating expenses			(467	)			(102	)			(12	)			(1,799	)			(2,380	)
Mineral property exploration			(2,732	)			(211	)			(68	)			—				(3,011	)
General and administrative			—				(171	)			(186	)			(1,384	)			(1,741	)
			(3,199	)			(484	)			(266	)			(3,183	)			(7,132	)
Segment income (loss)			(2,481	)			(484	)			(266	)			(972	)			(4,203	)
Revenues – supplemental:
Environmental services			—				—				—				1,774				1,774
Management fees and commissions			—				—				—				437				437
Toll milling services			718				—				—				—				718
			718				—				—				2,211				2,929

 

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For the six months ended June 30, 2014, business segment results were as follows:
(in thousands)		Canada Mining				Africa Mining				Asia Mining				Services and Other				Total
Statement of Operations:
Revenues			—				—				—				4,532				4,532
Expenses:
Operating expenses			(257	)			(1,185	)			—				(3,547	)			(4,989	)
Mineral property exploration			(9,494	)			(401	)			(290	)			—				(10,185	)
General and administrative			(10	)			(607	)			(631	)			(3,258	)			(4,506	)
Impairment–mineral properties (note 9)			(1,658	)			—				—				—				(1,658	)
			(11,419	)			(2,193	)			(921	)			(6,805	)			(21,338	)
Segment income (loss)			(11,419	)			(2,193	)			(921	)			(2,273	)			(16,806	)
Revenues – supplemental:
Environmental services			—				—				—				3,307				3,307
Management fees and commissions			—				—				—				1,225				1,225
			—				—				—				4,532				4,532
Capital additions:
Property, plant and equipment			138				405				76				81				700
Long-lived assets:
Plant and equipment
Cost			87,154				2,483				349				4,002				93,988
Accumulated depreciation			(8,901	)			(1,763	)			(230	)			(1,937	)			(12,831	)
Mineral properties			156,974				44,626				6,455				—				208,055
Intangibles			—				—				—				971				971
			235,227				45,346				6,574				3,036				290,183
For the three months ended June 30, 2014, business segment results were as follows:
(in thousands)		Canada Mining				Africa Mining				Asia Mining				Services and Other				Total
Statement of Operations:
Revenues			—				—				—				2,358				2,358
Expenses:
Operating expenses			(116	)			(490	)			—				(1,796	)			(2,402	)
Mineral property exploration			(3,240	)			(305	)			(43	)			—				(3,588	)
General and administrative			(2	)			(302	)			(345	)			(1,454	)			(2,103	)
			(3,358	)			(1,097	)			(388	)			(3,250	)			(8,093	)
Segment income (loss)			(3,358	)			(1,097	)			(388	)			(892	)			(5,735	)
Revenues – supplemental:
Environmental services			—				—				—				1,682				1,682
Management fees and commissions			—				—				—				676				676
			—				—				—				2,358				2,358

Revenue Concentration

The Company’s business is such that, at any given time, it sells its environmental and other services to a relatively small number of customers. During the six months ended June 30, 2015, two customers from the services and other segment and one customer from the mining segment accounted for approximately 82% of total revenues consisting of 46%, 18% and 18% individually. During the six months ended June 30, 2014, four customers from the services and other segment accounted for approximately 96% of total revenues consisting of 48%, 27%, 11% and 10% individually.

 

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20.	RELATED PARTY TRANSACTIONS

Uranium Participation Corporation

The following transactions were incurred with UPC for the periods noted:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Revenue:
Management fees		$	437			$	362			$	899			$	780
Commission fees			—				314				22				445
		$	437			$	676			$	921			$	1,225

At June 30, 2015, accounts receivable includes $171,000 (December 31, 2014: $123,000) due from UPC with respect to the fees and transactions indicated above.

Korea Electric Power Corporation (“KEPCO”)

As at June 30, 2015, KEPCO holds 58,284,000 shares of Denison representing a share interest of approximately 11.2%.

In January 2014, Denison agreed to allow its partner in the Waterbury Lake project, Korea Waterbury Uranium Limited Partnership (“KWULP”), to defer its funding obligations to Waterbury Lake Uranium Corporation (“WLUC”) and Waterbury Lake Uranium Limited Partnership (“WLULP”) until September 30, 2015 in exchange for allowing Denison to carry out spending programs without obtaining the approval of 75% of the voting interest. As at June 30, 2015, KWULP has a funding obligation to WLUC and WLULP of CAD$1,421,000. Denison has recorded its proportionate share of this amount of $682,000 (CAD$852,000) as a component of trade and other receivables.

Other

During the six months ended June 30, 2015, the Company incurred investor relations, administrative service fees and other expenses of $62,000 (June 30, 2014: $28,000) with Namdo Management Services Ltd, which shares a common officer with Denison. These services were incurred in the normal course of operating a public company. At June 30, 2015, an amount of $nil (December 31, 2014: $nil) was due to this company.

During the six months ended June 30, 2015, the Company incurred legal fees of $58,000 (June 30, 2014: $234,000) with Cassels Brock & Blackwell, LLP, a law firm of which a member of Denison’s Board of Directors is a partner. In the current year, the services and associated costs are mainly related to the transaction with Fission Uranium Corp (see note 23). In the six months of the prior year, the services and associated costs were mainly related to the acquisition of International Enexco Ltd. and internal re-organization activities done by the Company. At June 30, 2015, an amount of $58,000 (December 31, 2014: $1,000) is due to this legal firm.

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers, vice-presidents and members of its Board of Directors.

The following compensation was awarded to key management personnel:

 

		Three Months Ended								Six Months Ended
		June 30				June 30				June 30				June 30
(in thousands)		2015				2014				2015				2014
Salaries and short-term employee benefits		$	(331	)		$	(339	)		$	(816	)		$	(979	)
Share-based compensation			(90	)			(126	)			(207	)			(267	)
Termination benefits			—				(158	)			—				(158	)
Key management personnel compensation		$	(421	)		$	(623	)		$	(1,023	)		$	(1,404	)

 

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21.	INCOME TAXES

For the six months ended June 30, 2015, Denison has recognized deferred tax recoveries of $2,832,000. The deferred tax recovery includes the recognition of previously unrecognized Canadian tax assets of $3,200,000 relating to the February 2015 renunciation of the tax benefits associated with the Company’s CAD$14,997,000 flow-through share issue in August 2014.

 

22.	FAIR VALUE OF FINANCIAL INSTRUMENTS

IFRS requires disclosures about the inputs to fair value measurements, including their classification within a hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are:

 

•

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

 

•

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

 

•

Level 3 – Inputs that are not based on observable market data.

The fair value of financial instruments which trade in active markets (such as equity instruments) is based on quoted market prices at the balance sheet date. The quoted market price used to value financial assets held by the Company is the current closing price.

Except as otherwise disclosed, the fair values of cash and cash equivalents, trade and other receivables, accounts payable and accrued liabilities, restricted cash and cash equivalents and debt obligations approximate their carrying values as a result of the short-term nature of the instruments, or the variable interest rate associated with the instruments, or the fixed interest rate of the instruments being similar to market rates.

The following table illustrates the classification of the Company’s financial assets within the fair value hierarchy as at June 30, 2015 and December 31, 2014:

 

(in thousands)		Financial Instrument Category(1)				Fair Value Hierarchy				June 30 2015 Fair Value				December 31, 2014 Fair Value
Financial Assets:
Cash and equivalents			Category D							$	14,864			$	18,640
Trade and other receivables			Category D								8,023				9,411
Investments
Equity instruments			Category A				Level 1				432				916
Equity instruments			Category A				Level 2				15				16
Equity instruments			Category B				Level 1				16				22
Debt instruments			Category A				Level 1				8,015				4,381
Restricted cash and equivalents
Elliot Lake reclamation trust fund			Category C								2,319				2,068
										$	33,684			$	35,454
Financial Liabilities:
Account payable and accrued liabilities			Category E								9,754				10,050
Debt obligations			Category E								22				39
										$	9,776			$	10,089

 

(1)

Financial instrument designations are as follows: Category A=Financial assets and liabilities at fair value through profit and loss; Category B=Available for sale investments; Category C=Held to maturity investments; Category D=Loans and receivables; and Category E=Financial liabilities at amortized cost.

 

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23.	SUBSEQUENT EVENTS

Transaction with Fission Uranium Corp and Denison Share Consolidation

On July 27, 2015, Denison entered into a definitive arrangement agreement to acquire all of the issued and outstanding shares, options and warrants of FCU by way of a court approved plan of arrangement (the “Fission Arrangement”). FCU’s principal uranium asset is its 100% owned Patterson Lake South project located in Saskatchewan, Canada. Completion of the Fission Arrangement is subject to Denison and FCU shareholder approval, applicable regulatory approvals and the satisfaction of other customary conditions. Denison expects to complete the Fission Arrangement in October 2015.

Under the terms of the Fission Arrangement, Denison will acquire all of the issued and outstanding FCU shares on the basis of 1.26 of a Denison share plus cash of CAD$0.0001 for each FCU share. Any outstanding warrants and options of FCU as of the completion of the Fission Arrangement will be exchanged for options and warrants of Denison adjusted by the exchange ratio of 1.26.

The value of the Denison shares to be issued under the Fission Arrangement is estimated to be $364,995,000. The estimate is based on approximately 386,238,000 outstanding shares of FCU being exchanged at the above noted ratio, and a fair market value of a Denison common share of $0.75 as per Denison’s closing share price on June 30, 2015. Each $0.01 increase (decrease) in Denison’s share price increases (decreases) the value of the Denison shares to be issued by approximately $4,867,000.

At June 30, 2015, Denison has incurred $58,000 of transaction costs related to the Fission Arrangement.

Immediately following the closing of the Fission Arrangement, Denison shareholders will also be asked to approve a 2-for-1 share consolidation and a corporate name change to “Denison Energy Corp”.

Denison agrees to sale of Mongolian interests

On July 29, 2015, Denison entered into a definitive share purchase agreement with UI, whereby UI will acquire all of Denison’s interest in mining assets and operations located in Mongolia in exchange for cash consideration of $20 million (the “GSJV Sale”). Under the agreement, Denison will receive an initial payment of $250,000 on closing (expected to be on or before September 8, 2015) and a deferred payment of $19,750,000 by November 30, 2015. The deferred payment is guaranteed in the event that the mining licences for the Hairhan, Haraat, Gurvan Saihan, and Ulziit projects (the “Mining Licences”) are granted to the GSJV on or before November 30, 2015. In the event that the Mining Licenses are not granted, and UI does not make the deferred payment of $19,750,000, the shares subject to the agreement will be transferred back to Denison. UI will be responsible for the operating expenses incurred in Mongolia from closing (expected to be on or before September 8, 2015).

 

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Exhibit 99.3

DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

INTRODUCTION

This Management’s Discussion and Analysis (“MD&A”) of Denison Mines Corp. and its subsidiary companies and joint arrangements (collectively, “Denison” or the “Company”) provides a detailed analysis of the Company’s business and compares its financial results with those of the previous year. This MD&A is dated as of August 5, 2015 and should be read in conjunction with the Company’s unaudited condensed interim consolidated financial statements and related notes for the six months ended June 30, 2015. The unaudited interim consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). Readers are also encouraged to consult the audited consolidated financial statements and MD&A for the year ended December 31, 2014. All dollar amounts are expressed in U.S. dollars, unless otherwise noted.

Other continuous disclosure documents, including the Company’s press releases, quarterly and annual reports, Annual Information Form and Form 40-F are available through its filings with the securities regulatory authorities in Canada at www.sedar.com and the United States at www.sec.gov/edgar.shtml.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain information contained in this MD&A constitutes “forward-looking information”, within the meaning of the United States Private Securities Litigation Reform Act of 1995 and similar Canadian legislation concerning the business, operations and financial performance and condition of Denison.

Generally, these forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates”, or “believes”, or the negatives and/or variations of such words and phrases, or state that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur”, “be achieved” or “has the potential to”.

Forward looking statements are based on the opinions and estimates of management as of the date such statements are made, and they are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Denison to be materially different from those expressed or implied by such forward-looking statements. Denison believes that the expectations reflected in this forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information included in this MD&A should not be unduly relied upon. This information speaks only as of the date of this MD&A. In particular, this MD&A may contain forward-looking information pertaining to the following: the likelihood of completing and benefits to be derived from corporate transactions; the estimates of Denison’s mineral reserves and mineral resources; expectations regarding the toll milling of Cigar Lake ores; capital expenditure programs, estimated exploration and development expenditures and reclamation costs; expectations of market prices and costs; supply and demand for uranium (“U₃O₈”); possible impacts of litigation and regulatory actions on Denison; exploration, development and expansion plans and objectives; expectations regarding adding to its mineral reserves and resources through acquisitions and exploration; and receipt of regulatory approvals, permits and licences under governmental regulatory regimes.

There can be no assurance that such statements will prove to be accurate, as Denison’s actual results and future events could differ materially from those anticipated in this forward-looking information as a result of the factors discussed herein and under the heading “Risk Factors” in Denison’s Annual Information Form dated March 5, 2015 available at www.sedar.com, and in its Form 40-F available at www.sec.gov/edgar.shtml.

Accordingly, readers should not place undue reliance on forward-looking statements. These factors are not, and should not be construed as being exhaustive. Statements relating to “mineral reserves” or “mineral resources” are deemed to be forward-looking information, as they involve the implied assessment, based on certain estimates and assumptions that the mineral reserves and mineral resources described can be profitably produced in the future. The forward-looking information contained in this MD&A is expressly qualified by this cautionary statement. Denison does not undertake any obligation to publicly update or revise any forward-looking information after the date of this MD&A to conform such information to actual results or to changes in Denison’s expectations except as otherwise required by applicable legislation.

Cautionary Note to United States Investors Concerning Estimates of Measured, Indicated and Inferred Mineral Resources: This MD&A may use the terms “measured”, “indicated” and “inferred” mineral resources. United States investors are advised that while such terms are recognized and required by Canadian regulations, the United States Securities and Exchange Commission does not recognize them. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of feasibility or other economic studies. United States investors are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be converted into mineral reserves. United States investors are also cautioned not to assume that all or any part of an inferred mineral resource exists, or is economically or legally mineable.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

2015 HIGHLIGHTS

 

•

Denison executes agreement with Fission Uranium Corp. (“Fission”) to create a Canadian focused and diversified uranium company: On July 27, 2015, Denison entered into an agreement to combine its business with Fission by way of a court approved plan of arrangement (the “Arrangement”). The combined company will feature an exploration and development portfolio that will include Fission’s 100% owned Patterson Lake South Project (host to the Triple R deposit) and Denison’s 60% owned Wheeler River Project (which hosts the Phoenix deposit and Gryphon discovery). The combined company will also have a strong exploration foothold in both the historically prolific eastern Athabasca Basin and the emergent western Athabasca Basin, with a combined land package of over 430,000 hectares and a sizeable base of mineral resources.

Under the terms of the Arrangement, Fission common shareholders will receive 1.26 common shares of Denison for each common share of Fission held plus CAD$0.0001 per each Fission share in cash. Upon completion of the transaction, the combined company will be named “Denison Energy Corp.” and will be approximately 50% owned by the existing Denison and Fission shareholders on a fully-diluted in-the-money basis. The Company also plans to complete a 2-for-1 share consolidation upon completion of the transaction. The proposed transaction, name change, share consolidation and shareholders’ approval are expected to be completed in October 2015.

 

•

The Company agrees to sale of Mongolian interests: On July 29, 2015, Denison entered into a definitive share purchase agreement with Uranium Industry a.s. (“UI”), of the Czech Republic, whereby UI will acquire all of Denison’s interest in mining assets and operations located in Mongolia in exchange for cash consideration of $20 million. Pursuant to the terms of the agreement, Denison will receive an initial payment of $250,000 on closing, excepted to occur on or about September 8, 2015, and a deferred payment of $19,750,000 by November 30, 2015.

 

•

CAD$15 million flow-through financing completed to fund Canadian exploration activities in 2016: In May 2015, the Company completed a private placement offering of 12,000,000 common shares issued on a flow-through basis, at a price of CAD$1.25 per share, for aggregate proceeds to Denison of CAD$15 million.

 

•

Stream of toll milling revenue continues to grow in the first half of 2015: The McClean Lake mill, in which Denison holds a 22.5% interest, packaged approximately 3.1 million pounds U3O8 in the first half of 2015 for the Cigar Lake Joint Venture (“CLJV”), generating toll milling revenues for Denison of $0.9 million. Production ramped up significantly in the early part of the second quarter and is on track to meet the target of six to eight million packaged pounds of U3O8 this year. The Company’s share of toll milling revenues for the year is expected to be approximately $2.1 million.

 

•

Continued Exploration Success at the Wheeler River Property: The summer drilling program is currently in progress with 36 drill holes planned, totaling approximately 24,000 metres. The Gryphon zone of uranium mineralization has the potential to add significantly to the estimate of mineral resources at Wheeler River, which already includes the high grade Phoenix uranium deposit.

A total of 14,113 metres of drilling has been completed in 18 drill holes at Wheeler River, to date, as part of the Company’s summer exploration program. Eight of the drill holes were at the Gryphon Zone and were designed to complete the 50 metre x 50 metre spaced drill pattern and determine the extent of the mineralization in the down-dip and down-plunge directions. The best result was in drill hole WR-604, which intersected 3.8% eU₃O₈ over 4.7 metres (779.2 to 783.9 metres), followed by 8.4% eU₃O₈ over 1.1 metres (790.0 to 791.1 metres), which extended mineralization in the down-dip direction. An initial estimate of mineral resources at the Gryphon zone is expected to be prepared before the end of the year.

 

•

New zone of uranium mineralization discovered at Murphy Lake: The first drill hole of a planned four drill hole program discovered uranium mineralization at Murphy Lake. Drill hole MP-15-03 intersected 0.2% eU3O8 over 6.9 metres (270.0 to 276.9 metres) at the sub-Athabasca unconformity.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

ABOUT DENISON

Denison was formed under the laws of Ontario and is a reporting issuer in all Canadian provinces. Denison’s common shares are listed on the Toronto Stock Exchange (the “TSX”) under the symbol “DML” and on the NYSE MKT exchange under the symbol “DNN”.

Denison is a uranium exploration and development company with interests in exploration and development projects in Canada, Zambia, Mali, Namibia and Mongolia. Including its 60% owned Wheeler project, which hosts the high grade Phoenix uranium deposit, Denison’s exploration project portfolio consists of numerous projects covering over 400,000 hectares in the eastern Athabasca Basin region of Saskatchewan. Denison’s interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake joint venture, which includes several uranium deposits and the McClean Lake uranium mill, one of the world’s largest uranium processing facilities that is currently processing ore from the Cigar Lake mine under a toll milling agreement, plus a 25.17% interest in the Midwest deposit and a 60% interest in the J Zone deposit on the Waterbury Lake property. Both the Midwest and J Zone deposits are located within 20 kilometres of the McClean Lake mill. Internationally, Denison owns 100% of the conventional heap leach Mutanga project in Zambia, 100% of the uranium/copper/silver Falea project in Mali, a 90% interest in the Dome project in Namibia, and an 85% interest in the in-situ recovery projects held by the Gurvan Saihan joint venture (“GSJV”) in Mongolia.

Denison is engaged in mine decommissioning and environmental services through its Denison Environmental Services (“DES”) division, which manages Denison’s Elliot Lake reclamation projects and provides post-closure mine and maintenance services to a variety of customers.

Denison is also the manager of Uranium Participation Corporation (“UPC”), a publicly traded company listed on the TSX under the symbol “U”, which invests in uranium oxide and uranium hexafluoride.

SELECTED QUARTERLY FINANCIAL INFORMATION

 

(in thousands)		As at June 30, 2015				As at December 31, 2014
Financial Position:
Cash and cash equivalents		$	14,864			$	18,640
Short term investments			8,015				4,381
Long term investments			463				954
Cash, equivalents and investments		$	23,342			$	23,975
Working capital		$	20,649			$	22,542
Property, plant and equipment		$	249,263			$	270,388
Total assets		$	287,444			$	311,330
Total long-term liabilities		$	38,372			$	42,291
		Six Months Ended
(in thousands, except for per share amounts)		June 30, 2015				June 30, 2014
Results of Operations:
Total revenues		$	5,257			$	4,532
Net income (loss)		$	(13,928	)		$	(24,231	)
Basic and diluted earnings (loss) per share		$	(0.03	)		$	(0.05	)

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

		2015				2015				2014				2014
(in thousands, except for per share amounts)		Q2				Q1				Q4				Q3
Results of Operations:
Total revenues		$	2,929			$	2,328			$	2,736			$	2,351
Net income (loss)		$	(4,134	)		$	(9,794	)		$	(4,652	)		$	(2,820	)
Basic and diluted earnings (loss) per share		$	(0.01	)		$	(0.02	)		$	(0.01	)		$	(0.01	)
		2014				2014				2013				2013
(in thousands, except for per share amounts)		Q2				Q1				Q4				Q3
Results of Operations:
Total revenues		$	2,358			$	2,174			$	2,413			$	2,801
Net income (loss)		$	(11,564	)		$	(12,667	)		$	(30,459	)		$	(45,477	)
Basic and diluted earnings (loss) per share		$	(0.02	)		$	(0.03	)		$	(0.06	)		$	(0.10	)

RESULTS OF OPERATIONS

Revenues

Canada - Mining

During the first half of 2015, the McClean Lake mill continued to process ore received from the Cigar Lake mine under a toll milling agreement. The mill packaged approximately 3.1 million pounds U₃O₈ for the CLJV. The Company’s share of toll milling revenue from processing Cigar Lake ore at the McClean Lake mill, during the three and six months ended June 30, 2015, totaled $718,000 and $922,000, respectively. In 2014, toll milling revenue was only recognized in the fourth quarter, as the first drums of CLJV uranium were packaged in October 2014.

Services and Other

Revenue from DES during the three and six months ended June 30, 2015 was $1,774,000 and $3,414,000, respectively, compared to $1,682,000 and $3,307,000 during the same periods in 2014. In the first half of 2015, DES experienced an increase in Canadian dollar revenues due to an increase in activity at certain care and maintenance sites, which was largely offset by the unfavourable fluctuation in foreign exchange rates applicable on the translation of revenues earned in Canadian dollars.

Revenue from the Company’s management contract with UPC was $437,000 and $921,000 during the three and six months ended June 30, 2015, compared to $676,000 and $1,225,000 for the same periods in 2014. The decrease in revenues during 2015 was due to fewer commissions earned on UPC’s purchases of uranium. Refer to RELATED PARTY TRANSACTIONS below for further details.

Operating Expenses

Canada

McClean Lake is comprised of several uranium deposits and a high-grade uranium mill and is located on the eastern edge of the Athabasca Basin in northern Saskatchewan, approximately 750 kilometres north of Saskatoon. The McClean Lake uranium mill is one of the world’s largest uranium processing facilities. Expansion of the mill from 13 million to 24 million pounds annual U₃O₈ production capacity is ongoing while the mill processes ore from Cigar Lake under a toll milling agreement. Commissioning of the mill at 18 million pounds annual U₃O₈ production capacity has begun and is expected to be completed in the third or fourth quarter of 2015. The expansion remains fully funded by the CLJV.

Operating expenses in Canada were $467,000 and $666,000 during the three and six months ended June 30, 2015, compared to $116,000 and $257,000 in the same periods in 2014. Most of the operating expenses are attributable to activity involving the MLJV. Operating costs were higher during 2015 primarily due to depreciation of mill capital assets, as a result of processing the Cigar Lake ore at the McClean Lake mill.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Africa

Operating expenses in Africa during the three and six months ended June 30, 2015 totaled $102,000 and $162,000, respectively. During the same periods in 2014, operating expenses totaled $490,000 and $1,185,000. The majority of operating expenses relate to costs incurred on the Falea project in Mali. The higher operating expenses in the first half of 2014 related to engineering studies, metallurgical test work programs and environmental programs that were completed during the first half of 2014, following the acquisition of the Falea project.

Services and Other

Operating expenses during the three and six months ended June 30, 2015 include costs relating to DES totaling $1,628,000 and $3,204,000, respectively, compared to $1,620,000 and $3,203,000 in the same periods in 2014. During the first half of 2015, DES experienced an increase in Canadian dollar operating expenses due to an increase in activity at certain care and maintenance sites, which was largely offset by the favourable fluctuation in foreign exchange rates applicable on the translation of expenses denominated in Canadian dollars.

Mineral Property Exploration

Denison is engaged in uranium exploration and/or evaluation in Canada, Zambia, Mali, Namibia and Mongolia. While the Company has material interests in uranium projects in Asia and Africa, the Company is focused primarily on the eastern Athabasca Basin, in Saskatchewan, Canada, with numerous projects totaling over 400,000 hectares. Global exploration expenditures were $3,011,000 and $9,146,000 during the three and six months ended June 30, 2015, with over 90% of exploration expenditures being incurred in Canada. Global exploration expenditures totaled $3,588,000 and $10,185,000 during the same periods in 2014. The decrease in global exploration expenditures during the first half of 2015 is mainly due to the favourable fluctuation in foreign exchange rates applicable on the translation of expenses denominated in Canadian dollars.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Canada

The Company’s land position in the eastern Athabasca Basin, as of June 30, 2015, is illustrated below:

 

Denison’s share of exploration spending on its Canadian properties was $2,732,000 and $8,254,000 during the three and six months ended June 30, 2015, as compared to $3,240,000 and $9,494,000 during the same periods in 2014. Exploration spending in Canada is seasonal with spending higher during the winter drilling programs (January to mid-April) and summer drilling programs (June to mid-October) in the Athabasca Basin. The following table summarizes the exploration activities that were completed as of June 30, 2015.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Canadian Exploration Activities

 

Property		Denison’s ownership				Drilling in metres (m)		Other ongoing activities
Wheeler River			60	%		23,148 (32 holes)		Geophysical surveys
Bell Lake			100	%		180 (in progress)		Geophysical surveys
Crawford Lake			100	%		4,135 (8 holes)		Geophysical surveys
Hatchet Lake			58.06	%(1)		2,547 (9 holes)		Geophysical surveys
Jasper Lake			100	%		1,469 (7 holes)		—
Lynx Lake			58.42	%(1)		1,338 (2 holes)		—
Mann Lake			30	%		7,775 (14 holes)		—
Murphy Lake			58.94	%(1)		—		Geophysical surveys
Moore Lake			100	%		2,667 (7 holes)		—
Turkey Lake			100	%		702 (5 holes)		—
Stevenson River			100	%		777 (3 holes)		—
Waterbury Lake			60	%		1,224 (4 holes)		Geophysical surveys
Waterfound North			58.42	%(1)		—		Geophysical surveys
Wolly			22.5	%		5,169 (21 holes)		Geophysical surveys
Total						51,131 (112 holes)

 

(1)	The Company’s ownership in these projects is as at December 31, 2014. Various partners in these projects have elected not to fund the 2015 programs and dilute their respective ownership interest. As a result, Denison’s interest will increase.

Wheeler River

The Wheeler River property lies in close proximity to existing mining and milling infrastructure between the McArthur River Mine and the Key Lake mill complex in the Athabasca Basin in northern Saskatchewan. Denison is the operator and holds a 60% interest in the project, while Cameco holds a 30% interest and JCU (Canada) Exploration Company, Limited (“JCU”) holds a 10% interest. Denison’s share of exploration costs at Wheeler River amounted to $1,022,000 and $2,775,000, respectively, during the three and six months ended June 30, 2015, compared to $938,000 and $2,786,000 in the same periods in 2014. During the second quarter of 2015, six drill holes were completed at Wheeler River as part of the summer program. Two of the drill holes were completed at the Phoenix North area and did not return significant mineralization. The other four were drilled in the Gryphon area.

Gryphon Zone

The Gryphon zone, located approximately three kilometres northwest of the high grade Phoenix uranium deposit, was discovered in 2014. The highest grade intersection to date at Gryphon was returned from drill hole WR-573D1, which intersected 22.2% U₃O₈ over 2.5 metres.

A total of 14,113 metres of drilling has been completed in 18 drill holes at Wheeler River, to date, as part of the Company’s summer exploration program. Eight of the drill holes were at the Gryphon Zone and were designed to complete the 50 metre x 50 metre spaced drill pattern and determine the extent of the mineralization in the down-dip and down-plunge directions. The best result was in drill hole WR-604, which intersected 3.8% eU₃O₈ over 4.7 metres (779.2 to 783.9 meters), followed by 8.4% eU₃O₈ over 1.1 metres (790.0 to 791.1 metres), which extended mineralization in the down-dip direction. An initial estimate of mineral resources at the Gryphon zone is expected to be prepared before the end of the year.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

In April 2015, a 17,700 metre, 26 hole winter drilling program at Wheeler River was completed. Seven of the 12 drill holes targeting extensions of the Gryphon zone intersected significant uranium mineralization. The zone was extended up-plunge, down-plunge, and up-dip on two sections. Consistent with the down-hole probe data, the best assay result was in drill hole WR-584B, which intersected 7.9% U₃O₈ over 4.5 metres in the up-plunge direction at Gryphon.

The remaining 14 drill holes were completed to explore for other areas of mineralization along strike to the south of the Gryphon zone. This resulted in the discovery of a new zone of uranium mineralization, occurring at the unconformity, 800 metres to the south of Gryphon. Mineralization in this zone straddles the unconformity, replacing the matrix of the basal sandstone or filling fractures in the underlying pelitic strata. The area is characterized by graphitic faults and a prospective alteration zone that extends from the south end of Gryphon. Assay results from this area are encouraging, as drill hole WR-597 returned 4.5% U₃O₈ over 4.5 metres along with several other mineralized intervals. As WR-597 is the furthest hole completed to the south, the zone is open in that direction and will be followed up later in the summer drilling program.

2015 Year to Date Probe and Assay Comparison Highlights at the Gryphon Zone ⁽¹⁾

 

						Down-Hole Total Gamma Probe																Assay
Hole Number		Location		Mineralization		From (m)				To (m)				Length (m)				eU3O8 (%)(2)				From (m)				To (m)				Length (m)				U3O8 (%)
WR-571D2(3,5)		Up-Dip		Basement			512.6				517.9				5.3				3.2				512.0				517.5				5.5				3.9
and		Up-Dip		Basement			544.8				546.0				1.2				1.8				544.0				545.5				1.5				5.0
WR-574D1(3,5)		Up-Dip		Basement			510.4				511.4				1.0				7.5				510.0				511.0				1.0				8.1
WR-582(4)		Down-plunge		Basement			764.2				766.6				2.4				2.9				763.5				766.5				3.0				3.8
WR-583(4)		Down-plunge		Basement			786.3				788.7				2.4				2.8				786.1				788.1				2.0				3.7
WR-583D2(3,5)		Down-plunge		Basement			508.2				509.8				1.6				2.4				509.0				510.0				1.0				3.6
WR-584B(3)		Up-plunge		Basement			641.6				646.2				4.6				9.0				641.6				646.1				4.5				7.9
WR-595(4)		South of Gryphon		Unconformity			525.0				526.2				1.2				1.0				526.2				527.7				1.5				0.5
WR-597(3)		South of Gryphon		Unconformity			496.5				500.5				4.0				2.8				495.5				500.0				4.5				4.5
WR-604(3)(6)		Down-Dip		Basement			779.2				783.9				4.7				3.8				—				—				—				—
and		Down-Dip		Basement			790.0				791.1				1.1				8.4				—				—				—				—

 

(1)

As the drill holes are angled steeply to the northwest and the basement mineralization is interpreted to dip moderately to the southeast, the true thickness of the basement mineralization (all holes except WR-595 and WR-597) is expected to be approximately 75% of the intersection lengths. As the unconformity mineralization (holes WR-595 and WR-597) is horizontal, the true thickness is expected to be approximately 90% of the intersection lengths.

(2)	eU3O8 is radiometric equivalent uranium from a total gamma down-hole probe.

(3)	Composited above a cut-off grade of 1.0% eU3O8.

(4)	Composited above a cut-off grade of 0.05% eU3O8.

(5)	Distances are measured from a wedge, not from surface.

(6)	Assays results not available yet.

The Gryphon zone consists of multiple stacked lenses with variable thicknesses that plunge to the northeast. Mineralization is hosted in basement gneisses and occurs from 100 to 250 metres below the sub-Athabasca unconformity (600 to 750 metres below surface). The zone is approximately 450 metres long (along the plunge) by 60 metres wide (across the plunge).

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Gryphon Zone – High Grade Uranium Discovery at Wheeler River

 

 

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Other Properties

During the second quarter of 2015, exploration activity on other projects included a DC-resistivity geophysical survey at Crawford Lake and drilling programs at Jasper Lake, Stevenson River and Bell Lake. At Jasper Lake and Stevenson River, a total of 2,246 metres of drilling was completed in 10 drill holes. No significant mineralization was intersected at these projects. At Bell Lake, the first drill hole of a planned four hole, 2,650 metre drilling program is underway.

Subsequent to the first half of 2015, the first drill hole of a planned four drill hole program at Murphy Lake successfully intersected a new zone of uranium mineralization. Drill hole MP-15-03 intersected 0.2% eU₃O₈ over 6.9 metres (270.0 to 276.9 metres) at the sub-Athabasca unconformity. Mineralization is associated with a zone of strong sandstone alteration including desilicification and clay over a hematite cap. Basement rocks immediately below the mineralization consist of graphitic pelitic gneisses with occasional faults. The target was an east-west oriented resistivity low anomaly that has been tested by only one other drill hole previously. That drill hole is located 400 metres to the east and was flagged for follow-up due to significant sandstone alteration above graphitic basement rocks. Three additional drill holes have been completed to follow up on the mineralization in MP-15-03. While none of the holes intersected mineralization, alteration and structure suggest a highly prospective system which is open to the west and likely to the east. The summer drilling program for 2015 is complete and follow up drilling is being planned for January 2016. Murphy Lake is located approximately 30 kilometres northwest of the McClean Lake mill and is a joint venture with Anthem Resources Inc. (41.06% interest). The 2015 program at Murphy Lake is being fully funded by Denison as a result of Anthem’s choice to dilute its interest.

Africa

Exploration expenses in Africa during the three and six months ended June 30, 2015 were $211,000 and $524,000, respectively. During the same periods in 2014, exploration expenses were $305,000 and $401,000. Exploration activity planned for 2015 has been designed to maintain the Company’s claims in good standing while advancing the exploration potential of its assets as part of a strategy to pursue a spin-out or disposal transaction when market conditions permit.

Zambia

Exploration expenditures at the Mutanga project during the three and six months ended June 30, 2015 were $159,000 and $217,000, respectively. An excavator trenching program was completed during the second quarter of 2015, and a program of surficial geochemistry is scheduled to follow during the second half of the year. During the same periods in 2014, exploration expenses were $161,000 and $208,000, when work included geological mapping, geochemical sampling and excavator trenching programs at the Company’s Mutanga project.

Mali

Exploration expenditures of $50,000 and $302,000 were incurred during the three and six months ended June 30, 2015, primarily relating to an airborne geophysical survey completed in the first quarter, which was designed to extend the coverage of a previously flown survey. In February 2015, an application was made to renew the Falea exploration permit. The convention for a new permit was signed by the Minister of Mines in July 2015 and the final granting of the Falea permit is expected later this year. During the three and six months ended June 30, 2014, exploration expenditures amounted to $123,000 and $152,000, respectively, while a field program consisting of geological mapping and surficial geochemistry surveys was completed during the second quarter.

Namibia

No significant exploration work was completed on the Dome project during the first half of 2015. Similarly, no significant exploration work was carried out during the first half of 2014.

Mongolia

Exploration expenditures on the GSJV properties totaled $68,000 and $368,000 during the three and six months ended June 30, 2015, compared to $43,000 and $290,000 during the same periods in 2014. Expenditures in both periods were primarily related to annual license payments, required to maintain the GSJV properties in good standing while the Company explored strategic alternatives regarding its ownership interest in the GSJV. On July 29, 2015, the Company entered into a binding agreement with UI, a Czech Republic entity, to dispose of its 85% interest in the GSJV. Refer to SUBSQUENT EVENTS for further details.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

General and Administrative

Total general and administrative expenses were $1,741,000 and $3,337,000 during the three and six months ended June 30, 2015, compared with $2,103,000 and $4,506,000 during the same periods in 2014. These costs are mainly comprised of head office salaries and benefits, office costs in multiple regions, audit and regulatory costs, legal fees, investor relations expenses and all other costs related to operating a public company with listings in Canada and the United States. General and administrative expenses decreased in the first half of 2015 mainly as a result of lower office expenses and special projects costs, as well as a favourable fluctuation in foreign exchange rates applicable on the translation of Canadian dollar expenses.

Impairment – Mineral Properties

There was no impairment recognized during the first half of 2015. During the first quarter of 2014, the Company recognized a mineral property impairment charge of $1,658,000 associated with the Company’s release of its Black Lake land holdings in Canada. There was no impairment recognized during the second quarter of 2014.

Other Income and Expenses

The Company recognized other income of $420,000 and other expenses of $4,860,000 during the three and six months ended June 30, 2015, respectively, compared to other expenses of $6,009,000 and $9,411,000 during the same periods in 2014. The decrease in other expenses during 2015 is primarily due to a decrease in foreign exchange losses due to favourable fluctuations in foreign exchange rates.

LIQUIDITY AND CAPITAL RESOURCES

Cash and cash equivalents were $14,864,000 at June 30, 2015 compared with $18,640,000 at December 31, 2014. The decrease of $3,776,000 was primarily due to net cash used in operations of $9,054,000, net cash used in investing activities of $5,258,000 and a net foreign exchange loss of $1,185,000 on the translation of currency balances at period end, partly offset by net cash provided by financing activities of $11,721,000.

Net cash used in operating activities of $9,054,000 during the six months ended June 30, 2015 is comprised of a net loss for the period adjusted for non-cash items and changes in working capital items.

Net cash used in investing activities of $5,258,000 consists primarily of cash used to purchase investments of $8,134,000 and property, plant and equipment of $855,000, partly offset by cash provided by the maturity of investments in debt instruments and the sale of investments in equity instruments totaling $4,033,000.

Net cash provided by financing activities of $11,721,000 largely reflects net proceeds received on the issuance of flow-through common shares. On May 26, 2015, the Company closed a CAD$15 million private placement for the issuance of 12,000,000 flow-through common shares at a price of CAD$1.25 per share. The proceeds will be used to fund the Company’s Canadian exploration programs through to the end of 2016. As at June 30, 2015, the company has not incurred any expenditures towards the spending obligation associated with the financing. Other financing activities included proceeds received from the issuance of common shares on the exercise of stock options and warrants for a total of $411,000.

As at June 30, 2015, the Company estimates it has spent CAD$10,671,000 on eligible Canadian exploration expenses towards its obligation under the flow-through share financing completed in August 2014 for gross proceeds of $14,997,000. The remaining balance of CAD$4,326,000 is expected to be incurred before December 31, 2015.

The Company holds a large majority of its cash in CAD denominated bank accounts. As at June 30, 2015, the Company’s cash and cash equivalents amount to CAD$18,566,000.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Revolving Term Credit Facility

On January 30, 2015, the Company entered into an agreement with the Bank of Nova Scotia to amend the terms of a revolving term credit facility entered into in 2014 and to extend the maturity date to January 31, 2016. Under the amended agreement, the Company has access to credit of up to CAD$24,000,000. Use of the facility remains restricted to non-financial letters of credit in support of reclamation obligations.

The amended agreement contains a covenant to maintain a level of tangible net worth greater than or equal to the sum of $150,000,000 and a covenant to maintain a minimum balance of cash and equivalents of CAD$5,000,000 on deposit with the Bank of Nova Scotia. As security for the amended facility, Denison has provided an unlimited full recourse guarantee and a pledge of all of the shares of Denison Mines Inc. (“DMI”). DMI has provided a first-priority security interest in all present and future personal property and an assignment of its rights and interests under all material agreements relative to the McClean Lake and Midwest projects. The amended facility is also subject to letter of credit and standby fees of 2.40% and 0.75%, respectively.

Reclamation Sites

Elliot Lake – Spending on restoration activities at the Elliot Lake sites is funded from monies in the Elliot Lake Reclamation Trust Fund. At June 30, 2015, the amount of restricted cash and investments relating to the Elliot Lake Reclamation Trust fund was $2,319,000.

McClean Lake and Midwest –Under the Mineral Industry Environmental Protection Regulations, 1996, the Company is required to provide its pro-rata share of financial assurances to the Province. The Company has in place irrevocable standby letters of credit from a chartered bank in favour of Saskatchewan’s Ministry of Environment, totaling CAD$9,698,000 which relate to a previously filed reclamation plan. Under the preliminary plan submitted in November 2014, the Company expects to increase its pro-rata share of financial assurances to the Province to approximately CAD$22,446,000.

TRANSACTIONS WITH RELATED PARTIES

Uranium Participation Corporation

The Company is a party to a management services agreement with UPC. Under the terms of the agreement, the Company receives the following fees from UPC: a) a commission of 1.5% of the gross value of any purchases or sales of uranium completed at the request of the Board of Directors of UPC; b) a minimum annual management fee of CAD$400,000 (plus reasonable out-of-pocket expenses) plus an additional fee of 0.3% per annum based upon UPC’s net asset value in excess of CAD$100,000,000; and c) a fee, at the discretion of the Board of Directors of UPC, for on-going monitoring or work associated with a transaction or arrangement (other than a financing, or the purchase or sale of uranium).

The management services agreement was entered into on April 1, 2013 and has a three-year term. The agreement may be terminated by either party upon the provision of 120 days written notice.

The following management fees were received from UPC for the periods noted:

 

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
(in thousands)		2015				2014				2015				2014
Revenue
Management fees		$	437			$	362			$	899			$	780
Commission fees			—				314				22				445
		$	437			$	676			$	921			$	1,225

At June 30, 2015, accounts receivable includes $171,000 (December 31, 2014: $123,000) due from UPC with respect to the fees and transactions discussed above.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Korea Electric Power Corporation (“KEPCO”)

In 2009, Denison entered into a strategic relationship agreement with its largest shareholder, KEPCO. Pursuant to the strategic relationship agreement, KEPCO is entitled to subscribe for additional common shares in Denison’s future share offerings. The strategic relationship agreement also provides KEPCO with a right of first opportunity if Denison intends to sell any of its substantial assets, a right to participate in certain purchases of substantial assets which Denison proposes to acquire and a right to nominate one director to Denison’s Board, so long as its share interest in Denison is above 5.0%. In January 2015, Mr. Tae Hwan Kim, KEPCO’s representative on Denison’s Board resigned and was replaced by Mr. Joo Soo Park.

As at June 30, 2015, KEPCO holds 58,284,000 shares of Denison representing a share interest of 11.2%.

As at June 30, 2015, Denison also holds a 60% interest in Waterbury Lake Uranium Corporation (“WLUC”) and Waterbury Lake Uranium Limited Partnership (“WLULP”) entities whose key asset is the Waterbury Lake property. The other remaining 40% interest in these entities is held by a consortium of investors (“KWULP”) of which KEPCO is the primary holder. When a spending program is approved by the participants, each participant is required to fund these entities based upon its respective ownership interest. Spending program approval requires 75% of the voting interest.

In January 2014, Denison agreed to allow KWULP to defer its funding obligations to WLUC and WLULP until September 30, 2015 in exchange for allowing Denison to carry out spending programs without obtaining the approval of 75% of the voting interest. As at June 30, 2015, KWULP has a funding obligation to WLUC and WLULP of CAD$1,421,000. Denison has recorded its proportionate share of this amount of $682,000 (CAD$852,000) as a component of trade and other receivables.

Other

During the three and six months ended June 30, 2015, all services and transactions with the following related parties were made on terms equivalent to those that prevail with arm’s length transactions:

 

•

Investor relations, administrative service fees and other expenses of $48,000 and $62,000 were incurred during the three and six months ended June 30, 2015 (June 30, 2014: $13,000 and $28,000) with Namdo Management Services Ltd, which shares a common officer with Denison. These services were incurred in the normal course of operating a public company. At June 30, 2015, an amount of $nil (December 31, 2014: $nil) was due to this company.

 

•

Legal fees of $58,000 and $58,000 were incurred during the three and six months ended June 30, 2015 (June 30, 2014: $127,000 and $234,000) with Cassels Brock & Blackwell, LLP, a law firm of which a member of Denison’s Board of Directors is a partner. In the current year, the services and associated costs are mainly related to the Arrangement with Fission. In the prior year, the services and associated costs were mainly related to the acquisition of International Enexco Ltd. and the Company’s internal reorganization of its interests to consolidate its African holdings. At June 30, 2015, an amount of $58,000 (December 31, 2014: $1,000) was due to the law firm.

 

•

Executive services of $28,000 and $28,000 were provided by the Company during the three and six months ended June 30, 2014 to Lundin Gold Inc. (formerly Fortress Minerals Corp.). No similar services were provided during 2015. At June 30, 2015, an amount of $nil (December 31, 2014: $44,000) was due to Denison.

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel include the Company’s executive officers, vice-presidents and members of its Board of Directors.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

The following compensation was awarded to key management personnel:

 

		Three Months Ended								Six Months Ended
		June 30,				June 30,				June 30,				June 30,
(in thousands)		2015				2014				2015				2014
Salaries and short-term employee benefits		$	331			$	339			$	816			$	979
Share-based compensation			90				126				207				267
Termination benefits			—				158				—				158
		$	421			$	623			$	1,023			$	1,404

SUBSEQUENT EVENTS

Denison executes arrangement with Fission Uranium Corp.

On July 27, 2015, Denison executed the Arrangement agreement to combine its business with Fission. Fission’s principal uranium asset is its 100% owned Patterson Lake South project located in Saskatchewan, Canada. Completion of the Arrangement is subject to Denison and Fission shareholder approval, applicable regulatory approvals and the satisfaction of other customary conditions. Denison expects to complete the Arrangement in October 2015.

Under the terms of the Arrangement, Denison will acquire all of the issued and outstanding Fission shares on the basis of 1.26 of a Denison share plus cash of CAD$0.0001 for each Fission share. Any outstanding warrants and options of Fission as of the completion of the Arrangement will be exchanged for options and warrants of Denison adjusted by the exchange ratio of 1.26.

The value of the Denison shares to be issued under the Arrangement is estimated to be $364,995,000. The estimate is based on approximately 386,238,000 outstanding shares of Fission being exchanged at the above noted ratio, and a fair market value of a Denison common share of $0.75 as per Denison’s closing share price on June 30, 2015. Each $0.01 increase (decrease) in Denison’s share price increases (decreases) the value of the Denison shares to be issued by approximately $4,867,000.

At June 30, 2015, Denison has incurred $58,000 of transaction costs related to the Arrangement, which were expensed in the period.

Immediately following the closing of the Arrangement, Denison shareholders will also be asked to approve a 2-for-1 share consolidation and a corporate name change to “Denison Energy Corp”.

Denison agrees to sale of Mongolian interests

On July 29, 2015, Denison entered into a definitive share purchase agreement with UI, whereby UI will acquire all of Denison’s interest in mining assets and operations located in Mongolia in exchange for cash consideration of $20 million (the “GSJV Sale”). Under the agreement, Denison will receive an initial payment of $250,000 on closing (expected to be on or before September 8, 2015) and a deferred payment of $19,750,000 by November 30, 2015. The deferred payment is guaranteed in the event that the mining licences for the Hairhan, Haraat, Gurvan Saihan, and Ulziit projects (the “Mining Licences”) are granted to the GSJV on or before November 30, 2015. In the event that the Mining Licenses are not granted, and UI does not make the deferred payment of $19,750,000, the shares subject to the agreement will be transferred back to Denison. UI will be responsible for the operating expenses incurred in Mongolia from closing (expected to be on or before September 8, 2015).

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

OUTSTANDING SHARE DATA

At August 5, 2015, there were 518,438,669 common shares issued and outstanding, stock options outstanding for 7,194,085 Denison common shares, and warrants outstanding for 188,066 Denison common shares for a total of 525,820,820 common shares on a fully-diluted basis.

OUTLOOK FOR 2015

The Company has completed a successful winter exploration program in Canada and resumed drilling during the first week of June as part of a summer exploration program focused on advancing certain high priority projects. In general, the Company’s exploration, development and operation plans for 2015 remain unchanged at the end of the first half of the year. The outlook for the remainder of the year, however, is expected to change as a result of the Arrangement Agreement executed with Fission. The impact of the Arrangement has not yet been factored into the outlook for 2015.

Given the significant devaluation of the Canadian dollar in the first quarter of 2015, the Company’s Previous Outlook includes revisions to its budgeted USD$ to CAD$ foreign exchange rate to 1.24 from 1.12. The Current Outlook has been revised to reflect additional spending in Mongolia incurred in connection with the GSJV Sale.

 

(in thousands)		Previous Outlook 2015 (1)(4)				Current Outlook 2015 (1)				Actual to June 30, 2015 (3)
Canada (2)
Mineral Sales & Toll Milling Revenue		$	3,200			$	3,200			$	914
Mineral Property Exploration			(12,890	)			(12,890	)			(8,514	)
Development & Operations			(1,620	)			(1,620	)			(485	)
			(11,310	)			(11,310	)			(8,085	)
Africa
Zambia, Mali and Namibia			(2,340	)			(2,340	)			(1,185	)
			(2,340	)			(2,340	)			(1,185	)
Asia
Mongolia			(725	)			(1,200	)			(851	)
			(725	)			(1,200	)			(851	)
Other Activities (2)
UPC Management			1,680				1,680				837
DES Environmental Services			150				150				25
Corporate General & Administration			(4,150	)			(4,150	)			(2,389	)
			(2,320	)			(2,320	)			(1,527	)
Total		$	(16,695	)		$	(17,170	)		$	(11,648	)

 

(1)	Only material operations are shown.

(2)	Outlook figures have been converted using a US$ to CAD$ exchange rate of 1.24.

(3)	The Company budgets on a cash basis. As a result, actual amounts represent a non-GAAP measure and excludes non-cash depreciation and amortization amounts totaling $1,064,000.

(4)	Reflects Outlook 2015 figures as disclosed in the Three Months Ended March 31, 2015 MD&A.

Canada

Mineral Property Exploration

The 2015 budget for the Canadian exploration program is approximately CAD$23.1 million, of which Denison’s share is expected to be CAD$15.8 million. Denison’s exploration expenditures for 2015 are largely being funded by the proceeds from the Company’s flow-through share offering completed in August 2014, which raised CAD$15.0 million.

An aggressive summer exploration campaign began in early June and includes drilling programs on eight properties, all of which are operated by Denison: Wheeler River, Bell Lake, Murphy Lake, Waterbury Lake, Jasper Lake, Stevenson River, South Dufferin and Crawford Lake.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

Wheeler River

The 2015 budget for exploration at Wheeler River includes diamond drilling, ground geophysics and line cutting at a total cost of CAD$10.0 million (Denison’s share, CAD$6.0 million).

As the primary focus of the Company’s summer exploration program, 36 drill holes totaling 24,000 metres are planned for the Wheeler River property. Several new high priority targets were identified in the proximity of the Gryphon zone during the winter program, including the discovery of a new area of unconformity mineralization south of Gryphon. The Company plans to aggressively follow up on these targets during the summer exploration season and evaluate other prospective target areas on the property.

The Gryphon zone is an important uranium discovery and has the potential to significantly increase the resource base at Wheeler River, which is currently highlighted by the high grade Phoenix deposit with a total indicated mineral resource estimate of 70.2 million pounds U₃O₈ with an average grade of 19.1% U₃O₈ and a total inferred mineral resource estimate of 1.1 million pounds U₃O₈ an average grade of 5.8% U₃O₈. A portion of the drilling planned at the Gryphon Zone during the summer is intended to support the preparation of an updated estimate of mineral resources for Wheeler River later in the year.

Mineral Sales, Toll Milling Revenue, Development & Operations

The 2015 production plan calls for between six million and eight million pounds U₃O₈ to be packaged at the McClean Lake mill during the year. Production is expected to be primarily from Cigar Lake ore, with supplemental ore from the McClean Lake joint venture stockpiles. Denison’s share of operating and capital expenditures at McClean Lake in 2015 is estimated at CAD$500,000. Denison’s expenditures are expected to be offset by toll milling fees and revenue from the sale of approximately 26,000 pounds U₃O₈, recovered from McClean Lake ores. Denison’s total revenue from operations is projected to be CAD$3.8 million.

Given the current forecasts for the price of uranium, the SABRE program will be kept on care and maintenance and the McClean North and Midwest projects will remain on stand-by in 2015. Total expenditures on SABRE are planned to be CAD$900,000 (Denison’s share, CAD$203,000), and total expenditures on McClean North and Midwest are planned to be CAD$375,000 (Denison’s share, CAD$94,000).

Reclamation expenditures at Elliot Lake are projected to be CAD$819,000.

Africa

The Company has budgeted spending approximately $2.3 million during 2015 to maintain its projects in good standing, while the Company waits for market conditions that will permit a spin-out or disposal of its African portfolio. On its wholly owned Mutanga project in Zambia, activities will focus on generating additional exploration targets through soil and radon sampling, excavator trenching and geological mapping. In Mali, activities will focus on an expansion of previous airborne geophysical surveying and renewing the exploration permit for the Falea project.

Asia

In Mongolia, the Company continued to pursue strategic alternatives for its 85% interest in the GSJV in the quarter. On July 29, 2015, Denison entered into a definitive share purchase agreement providing for the GSJV Sale. UI will be responsible for the operating expenses incurred in Mongolia from the closing date of the transaction (on or before September 8, 2015). The current outlook for Mongolia has been increased to $1,200,000 for 2015, to reflect additional spending incurred in relation to the GSJV Sale.

Other Activities

Management fees generated from Denison’s management services agreement with UPC are budgeted to be CAD$2.1 million in 2015.

At DES, revenue from operations is budgeted at CAD$7.4 million and operating and capital expenses are forecasted to be CAD$7.2 million.

Corporate general and administration expenses are forecast to be CAD$4.9 million in 2015 and include all head office wages and benefits, office costs, audit and regulatory costs, legal fees, investor relations expenses and all other costs related to operating a public company with listings in Canada and the United States. The Company has not yet updated its current outlook for project costs associated with the announced transaction with Fission.

 

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DENISON MINES CORP.

Management’s Discussion and Analysis

For the Six Months Ended June 30, 2015

(Expressed in U.S. Dollars, unless otherwise noted)

 

CONTROLS AND PROCEDURES

The Company’s management is responsible for establishing and maintaining an adequate system of internal control over financial reporting. Any system of internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

There has not been any change in the Company’s internal control over financial reporting that occurred during the six months ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

RISK FACTORS

In addition to the risks set out below, there are a number of factors that could negatively affect Denison’s business and the value of Denison’s common shares, including the factors listed in the Company’s Annual Information Form dated March 5, 2015 available at www.sedar.com, and in the Company’s Form 40-F available at www.sec.gov/edgar.shtml.

Denison has completed a number of transactions over the last several years, including without limitation the transactions involving Rockgate Capital Corp., International Enexco Limited, Fission Energy Corp, JNR Resources Inc. and Energy Fuels Inc. and has recently entered into the Arrangement Agreement with Fission and the GSJV Sale (collectively, the “Transactions”). Despite Denison’s belief that these Transactions, and others which may be completed in the future, will be in Denison’s best interest and benefit the Company and Denison’s shareholders, Denison may not realize the anticipated benefits of such transactions or realize the full value of the consideration paid to complete the Transactions. This could result in significant accounting impairments or write-downs of the carrying values of mineral properties and could adversely impact the Company, its financial performance and the trading price of its common shares on a short term or long term basis.

QUALIFIED PERSON

The disclosure of scientific and technical information regarding Denison’s properties in the MD&A was prepared by or reviewed by Steve Blower, P. Geo., the Company’s Vice President, Exploration, and Terry Wetz, P.E., the Executive Director of the GSJV, who are Qualified Persons in accordance with the requirements of NI 43-101. For a description of the quality assurance program and quality control measures applied by Denison, please see Denison’s Annual Information Form dated March 5, 2015 available at www.sedar.com, and its Form 40-F available at www.sec.gov/edgar.shtml.

 

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Exhibit 99.4

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

I, David D. Cates, President and Chief Executive Officer of Denison Mines Corp., certify the following:

 

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Denison Mines Corp. (the “issuer”) for the interim period ended June 30, 2015.

 

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

 

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

 

4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

 

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

 

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

 

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

 

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

 

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

 

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

5.2	ICFR: Not applicable.

 

5.3	Limitation on scope of design: Not applicable.

 

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2015 and ended on June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 5, 2015

 

/s/ “David D. Cates”

Name: David D. Cates

Title: President and Chief Executive Officer

Exhibit 99.5

FORM 52-109F2

CERTIFICATION OF INTERIM FILINGS

I, Gabriel (Mac) McDonald, Vice President Finance and Chief Financial Officer of Denison Mines Corp., certify the following:

 

1.	Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of Denison Mines Corp. (the “issuer”) for the interim period ended June 30, 2015.

 

2.

No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

 

3.

Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

 

4.

Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

 

5.	Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings

 

(a)

designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that

 

(i)

material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

 

(ii)

information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

 

(b)

designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

 

5.1	Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control – Integrated Framework (COSO Framework) published by The Committee of Sponsoring Organizations of the Treadway Commission (COSO).

 

5.2	ICFR: Not applicable.

 

5.3	Limitation on scope of design: Not applicable.

 

6.	Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2015 and ended on June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date: August 5, 2015

 

/s/ “Gabriel (Mac) McDonald”

Name: Gabriel (Mac) McDonald

Title: Vice President Finance and Chief Financial Officer