TORONTO — Denison Mines and Korea Electric Power Corp. (Kepco) have formalized their undertaking that gives Kepco a 17.0% interest in the Canadian uranium miner and plumps up Denison's treasury.
Kepco will purchase 58 million common shares of Denison for total proceeds of $75.4 million. In return, the two companies have struck a long-term uranium off take deal that will 20% of Denison's annual production (±10%) but not less than 350,000 lb U3O8 per year from 2011 to 2015. Two Kepco appointees will sit on the Denison board.
The terms of the agreement also stipulate that entities nominated by or affiliated with Denison's chairman, Lukas Lundin, will acquire an additional 15.0 million common shares worth another $19.5 million. That brings to $94.9 million the total value of the equity deal.
Denison (www.DenisonMines.com) expects the deal to close in late June 2009, and that has led to speculation that Sinosteel of Hong Kong will attempt to outbid Kepco for a 20% share of Denison. Sinosteel denies the reports.
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