For Denison Mines Corp (TSE:DML), we are off restriction following the closing of a C$15 million placement. 12 million flow-through shares at rate of C$1.25 were issued, which comapny intends to use towards its 2016 exploration program.
Company’s winter program showed promising results at Wheeler River, Mann Lake, Hatchet Lake, and Crawford Lake. Notably, a new mineralization zone was found at the Wheeler River property which produced a sample of 2.8% U3O8e over 4.0 metres. Company has an aggressive summer drilling program spread across eight properties, funded by the C$15 million share offering finished previous year. Company’s toll milling revenue at the McClean Lake mill was $0.2 million in first quarter, with revenue anticipated to incline considerably in second quarter. We forecast full year toll milling revenue to reach $2.1 million.
We continue to wait for: (1) the potentially monetization of DML’s African assets; (2) a decision on DML’s strategic plan for its Mongolian venture; and (3) an revised forecast of mineral resources at Wheeler River, which we anticipate will follow the summer drill program.
We anticipate company offers one of the best long-dated call options to an eventual recovery in the uranium market, with no operating risk during the recent cycle trough.
Denison Mines Corp. is engaged in uranium exploration and/or development in Canada, Zambia, Mali, Namibia and Mongolia. We reiterate a “Sector Outperform” rating. Uranium outlook, exploration and development progress and CAD/USD currency exchange are key risks to be considered before investing.