Denison Mines Corp. (the “Company”) (DML: TSX, DNN: NYSE American) is pleased to announce that, effective April 1, 2019, its wholly owned subsidiary, Denison Mines Inc. (“Denison” or the “Manager”), has entered into a new five year agreement (the “MSA”) to provide management services to Uranium Participation Corporation (“UPC” or the “Corporation”).
David Cates, President & CEO of Denison and UPC commented “Denison is pleased to have reached an agreement with UPC to continue as the Corporation’s manager for a further five years. UPC is a well-respected and important contributor to the global uranium market, and we are proud of the relationship that Denison has nurtured with UPC since its inception.”
Under the terms of the MSA, UPC appoints Denison to act as the manager of the Corporation and grants the Manager the authority and responsibility to manage and administer the business and affairs of UPC, subject to the oversight and applicable approvals from the Board of Directors of UPC. The Manager is responsible for providing the Corporation with certain executive officers, and any other staff necessary to carry out its responsibilities for the administration and oversight of UPC’s uranium inventories, as well as UPC’s financial reporting, investor relations and marketing activities.
The fees payable to Denison for providing these services to UPC under the MSA are unchanged from the previous management services agreement between Denison and UPC, and are summarized as follows:
- a base fee of $400,000 per annum, payable in equal quarterly installments;
- a variable fee equal to (a) 0.3% per annum of UPC’s total assets in excess of $100 million and up to and including $500 million; and (b) 0.2% per annum of UPC’s total assets in excess of $500 million;
- a fee, at the discretion of the Board, for on-going monitoring or work associated with a transaction or arrangement (other than a financing, or the acquisition of or sale of U3O8 or UF6); and
- a commission of 1.0% of the gross value of any purchases or sales of U3O8 or UF6, or gross interest fees payable to UPC in connection with any uranium loan arrangements.
All of the amounts in this release are stated in Canadian dollars.
The MSA has a five-year term ending March 31, 2024 (the “Term”), at which point it may be renewed on terms mutually acceptable to each party. The MSA may be terminated during the Term by the Manager upon the provision of 180 days’ written notice and by UPC (i) in the event of a material breach, (ii) within 90 days of certain events surrounding a change of both of the individuals serving as Chief Executive Officer and Chief Financial Officer of UPC, and/or a change of control of the Manager, or (iii) upon the provision of 30 days written notice and, subject to certain exceptions, a cash payment to the Manager of an amount equal to the base and variable management fees that would otherwise be payable to the Manager (calculated based on UPC’s current uranium holdings at the time of termination) for the lesser period of a) three years, or b) the remaining term of the MSA.
About Denison
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northernSaskatchewan, Canada. In addition to its 90% owned Wheeler River project, which ranks as the largest undeveloped high-grade uranium project in the infrastructure rich eastern portion of the Athabasca Basin region, Denison’s Athabasca Basin exploration portfolio consists of numerous projects covering approximately 320,000 hectares. Denison’s interests in the Athabasca Basin also include a 22.5% ownership interest in the McClean Lake joint venture (“MLJV”), which includes several uranium deposits and the McClean Lake uranium mill, which is currently processing ore from the Cigar Lake mine under a toll milling agreement, plus a 25.17% interest in the Midwest and Midwest A deposits, and a 65.92% interest in the J Zone and Huskie deposits on the Waterbury Lake property. Each of Midwest, Midwest A, J Zone and Huskie are located within 20 kilometres of the McClean Lake mill.
Denison is also engaged in mine decommissioning and environmental services through its Denison Environmental Services division and is the manager of Uranium Participation Corp., a publicly traded company which invests in uranium oxide and uranium hexafluoride.
Source: Denison Mines Corp.