U.S. MINING

Colorado Plateau

Straddling the southern border between Colorado and Utah, the Colorado Plateau district encompasses the Uravan mineral belt, which has a lengthy uranium mining history going back to the late 1890s. Denison owns a number of mine properties on the Plateau, all of which are within 65 to 100 miles of the White Mesa mill.

The Colorado Plateau mines are a rich source of vanadium. For every pound of U₃O₈ produced, White Mesa’s vanadium co-product recovery circuit produces approximately four pounds of vanadium in the form of vanadium pentoxide (V₂O₅).

In 2007, Denison operated four mines in the area: Topaz, Pandora, West Sunday and Sunday/St. Jude. The Sunday/St. Jude, West Sunday and Pandora mines are mature operating mines with extensive underground workings, while the Topaz mine is relatively new. Working with independent mining contractors, Denison undertook the successful rehabilitation of these mines, reopening three of them in late 2006 and the fourth, Sunday/St. Jude, in early 2007.

All totaled, Denison’s Colorado Plateau mines produced approximately 75,000 tons of uranium/vanadium ore in 2007. Two existing mines are scheduled for reopening on the Colorado Plateau in 2008: Rim and Beaver. Each of these mines requires rehabilitation work to the existing mine shafts and in some cases dewatering and new ventilation shafts. A third mine, Van 4, will be in production in early 2009. Combined, Rim and Beaver are expected to contribute approximately 19,000 tons of ore in 2008 containing more than 69,000 pounds of U₃O₈ plus approximately 500,000 pounds of vanadium. Production at the Colorado Plateau mines is currently running at about 350 tons per day.

Henry Mountains Complex, Utah

Denison’s Henry Mountains Complex in Utah is one of the largest undeveloped conventional uranium resources in the U.S. The Henry Mountains Complex is one contiguous property totaling approximately 4,300 acres, which includes the Tony M deposit and mine and the adjacent Bullfrog deposit.

The Tony M mine, which is approximately 117 miles west of Denison’s White Mesa mill, was originally developed from 1977 to 1984 at which time nearly 17 miles of underground workings had been excavated. In 2006, Denison was granted an exploration permit that allowed it to inspect the Tony M workings and begin rehabilitation of the mine. In addition to a ramp-up of underground activities, the company also began construction of a number of surface facilities including a power generation station and ancillary equipment, maintenance building and offices. An evaporation pond, which was originally constructed when the Tony M mine was in operation in the 1980s, was reconstructed so that dewatering of the mine could begin.

Denison received operational permits in September 2007 and mining commenced. Several working faces are available in the upper part of the mine, and it is expected that Tony M will produce 300 tons of uranium ore per day by mid 2008 and 450 tons per day by year end. The Tony M deposit has an historical indicated mineral resource of 1.28 million tons with an average grading of 0.21% eU3O8 totaling 5.3 million pounds of U3O8 ⁽¹⁾.

The full mine infrastructure of the Tony M mine will facilitate access to the nearby undeveloped Bullfrog resources. Following the dewatering operations and a 3,500-foot extension of the main Tony M drift, a 600-foot shaft will be raised to the surface. The new shaft will be used to remove ore from the Bullfrog deposit. The first ore from the Bullfrog deposit is expected to be shipped to the White Mesa mill in late 2009. The Bullfrog deposit has an estimated indicated mineral resource of 1.06 million tons grading 0.32% eU₃O₈ totaling 6.87 million pounds of U₃O₈⁽²⁾.

The Arizona Strip

The Arizona Strip is an area largely bounded by the Arizona/Utah state line in the north and the Colorado River in

Arizona 1 Headframe

At the start of 2007, Denison owned four developed and partially developed mines in the Arizona Strip: Arizona 1, Canyon, Pinenut and Kanab North, all of which had been shut down when uranium prices were low. Both the Canyon and Pinenut mines require upgrading of their permits, a process which commenced in 2007. Arizona 1 is permitted with shaft rehabilitation and the driving of a ramp to access the deeper parts of the ore body underway. Production is anticipated to start at Arizona 1 by mid-2008. Inferred mineral resource estimates for Arizona 1 are 70,300 tons at an average grade eU₃O₈ of 0.68% containing 956,000 pounds U₃O₈ ⁽³⁾.

In February 2007, Denison acquired five additional uranium deposits on the Arizona Strip: EZ1, EZ2, DB, WHAT and Moonshine Springs. The proximity of these properties to Denison’s other mines in the area provides a synergistic opportunity to significantly increase production in the area. Four of the deposits are breccia pipes and will require underground mining while the fifth, Moonshine Springs, is a sandstone hosted uranium deposit that can be developed as an open pit. Denison has started permitting on EZ1 and EZ2 and anticipates that one of these mines will be in production by 2009.

^{(1) (2)} The Company has filed the "Technical Report on the Henry Mountains Complex Uranium Project, Utah, USA," dated September 9, 2006 on the Company’s profile on the SEDAR website at www.sedar.com. Cutoff grade for the Tony M resources are at 0.15% U₃O₈ and for Bullfrog are at 0.20% U₃O₈.

⁽³⁾ The Company has filed the "Technical Report on the Arizona Strip Uranium Project, Arizona, USA," dated February 26, 2007 on the Company’s profile on the SEDAR website at www.sedar.com. The cutoff grade used was 0.20% U₃O₈.

Last updated April 2008