Denison Mines excutes agreement with Cosa Resurces

TipRanks

Thu, Nov 28, 2024, 5:11 AM 2 min read

Denison Mines (DNN) announced that is has executed an agreement with Cosa Resources to form three uranium exploration joint ventures in the eastern portion of the Athabasca Basin region in northern Saskatchewan. Pursuant to the Agreement, Cosa will acquire a 70% interest in Denison’s 100%-owned Murphy Lake North, Darby, and Packrat properties in exchange for approximately 14.2M Cosa common shares, $2.25M in deferred equity consideration, and a commitment to spend $6.5 million in exploration expenditures at Murphy Lake North and Darby. The transaction is structured to incentivize exploration activity, with Cosa required to invest a minimum of $6.5 million in exploration expenditures to retain its operatorship and ownership level of the Murphy Lake North and Darby properties. Denison to receive meaningful consideration in the form of an upfront payment of 14,195,506 Cosa common shares, deferred equity consideration of $2.25M of additional Cosa common shares, and a royalty on each of the Properties. Denison retains a minimum 30% direct interest in the Properties and will become Cosa’s largest shareholder, while also securing strategic pre-emptive rights and a buydown right to increase Denison’s interest in the Darby property. Denison will have the right to nominate one director to Cosa’s board of directors for so long as Denison holds at least 5% of the issued and outstanding common shares and an additional director to Cosa’s board of directors for so long as Denison holds at least 10% of the issued and outstanding common shares. Under the terms of the Acquisition Agreement, Cosa will acquire a 70% interest in each of the Properties from Denison. Upon closing of the Transaction, the parties will form a joint venture for each of the Properties and Cosa will become the project operator. Denison will retain a 30% interest in each of the Properties. Cosa has been granted the right to reduce the NSR royalty rate on each of Darby and Packrat to 1% for a cash payment of CA$2,000,000 per project. Completion of the Transaction is subject to a number of conditions.