U.S. EXPLORATION PROPERTIES

The uranium mineralization found in the Colorado Plateau was deposited in alluvial fans by braided streams. The shape and size of the mineralized lenses are extremely variable. As a result, exploration and mining have historically involved conducting exploration to find the lens and then following its erratic path, with little additional surface exploration drilling other than development drilling in the course of following the lens. This is unlike other types of mining where mineralization is almost completely delineated by surface drilling prior to mining.

The unusual nature of these deposits has traditionally resulted in a limited amount of resources being dedicated to delineate reserves prior to mining. Traditionally, there will be some reserves that have been delineated at the beginning of each year, uranium will be mined during the year and approximately the same amount of reserves will remain delineated at the end of the year. This pattern has persisted since the 1940s.

Following an extensive review, it was determined that an exploration drilling program was warranted to better direct the mining activities and to locate similar deposits with potential for development. A 90,000 feet (28,000 metres) drill program was planned for 2007. Unfortunately, unforeseen delays with permitting effectively cancelled the work in 2007.

Denison conducted drilling at three sites in 2008. Two of these sites are proximal to existing, active Denison mines, and the third site, Monogram Mesa, is a block of claims in an area of extensive historical production by past operators. Total drilling was 11,830 metres in 63 holes.

Near the Pandora Mine in the La Sal trend in Utah, 30 holes were completed totalling 4,675 metres. This drilling targeted two areas of limited past drilling within 60 to 325 metres of currently active mine workings. Based on preliminary probing of the drill holes, minable grade mineralization was encountered in both target areas at the same levels as the current mine workings. These intersections potentially expand the resources available for near term mining at the Pandora mine. Further drilling is planned to test extensions of both trends, as mineralization remains open in both areas.

Twelve exploration holes, totalling 2,680 metres were drilled near the Rim Mine in 2008. The Rim drilling tested a projected extension branching off the main mineralized channel system. Drill results were negative. Further drilling is planned to move back to the main mineralized channel and extend known, open-ended mineralized zones.

Initial exploration drilling was conducted in 2008 on the Monogram Mesa claims in Colorado, which is near Denison’s Van 4 mine. Monogram Mesa is one of the more prolific historical production areas in this region, and widespread past drilling has indicated additional mineralized trends that have not been adequately tested. Drilling on the claims totalled 4,470 metres in 21 holes. A number of weakly mineralized zones were encountered. Based on the initial drilling results, follow up drilling is planned.

The 2009 drill program has been placed on hold as part of Denison's capital conservation program.