Denison Mines Corp. (DML.T) has signed an agreement with Pathfinder Mines Corp., a subsidiary of AREVA (427583.FR), to acquire five uranium deposits in the Arizona Strip district in northeastern Arizona for $5.5 million in cash plus a 1% royalty.
Denison said the historical resource estimates at the Pathfinder deposits total 1.3 million tons at an average grade of 0.28% U3O8, containing an estimated 7.1 million pounds of U3O8.
The deposits are within hauling distance of Denison's White Mesa Mill and near its Arizona Strip mines, "providing a synergistic opportunity to significantly increase production in the near term from this mining district," it said.
In conjunction with the closing of property acquisition, Denison will commit to sell to AREVA up to 6.5 million pounds of production from the company's White Mesa Mill. The sales agreement will provide for a price equal to 95% of the month end long-term prices for U3O8 published the month prior to delivery with a floor price of $45 a pound. Both parties will have the option to suspend deliveries under certain conditions.
Denison, Toronto, is an intermediate uranium producer.
-Carolyn King; 416-306-2100; AskNewswires@dowjones.com
Copyright (c) 2007 Dow Jones & Company, Inc.
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