Denison Mines Corp. (DML)

[NYBob]

Denison Mines Corp. Reports Second Quarter Earnings -
Wednesday August 13, 7:30 am ET

TORONTO, ONTARIO--(MARKET WIRE)--Aug 13, 2008 -- Denison Mines Corp. ("Denison" or the "Company") (Toronto:DML.TO - News)(DNN - News) today reported its financial results for the three months and six months ended June 30, 2008. All amounts in this release are in U.S. dollars unless otherwise indicated. For a more detailed discussion of the financial results, see management's discussion and analysis ("MD&A") following this release.

Consolidated Results

Consolidated net loss was $13,756,000 or $0.07 per share for the three months ended June 30, 2008 compared with consolidated net income of $40,489,000 or $0.21 per share for the same period in 2007. For the six months ended June 30, 2008, consolidated net loss was $24,218,000 ($0.13 per share) compared with consolidated net income of $35,423,000 ($0.19 per share) for the same period in 2007.

Revenue was $31,713,000 for the three months ended June 30, 2008 compared with $18,809,000 for the three months ended June 30, 2007. Revenue was $49,894,000 for the six months ended June 30, 2008 compared to $30,528,000 for the six months ended June 30, 2007.

Net cash from (used in) operations was ($5,952,000) for the three months ended June 30, 2008, compared with net cash from operations of $537,000 for the three months ended June 30, 2007. For the six months ended June 30, 2008 net cash from (used in) operations was $1,670,000 compared with ($4,905,000) for the same period in 2007.

Losses on foreign currency translation totaled $11,237,000 for the three months and $12,766,000 for the six months ended June 30, 2008 arising from the translation of the Zambian kwacha into U.S currency at June 30, 2008. Substantially all of this loss resulted from translating future income taxes payable relating to the Mutanga project.

In March 2008, the Zambian government enacted previously announced legislation which increased the income tax rate for mining companies from 25% to 30%. As a result in the first quarter the Company increased its future income taxes related to its Zambian assets thereby reducing net income by $10,740,000.

The Company expenses exploration expenditures on mineral properties not sufficiently advanced to identify their development potential. Exploration expenditures expensed totalled $3,787,000 for the three months ended and $10,352,000 for the six months ended June 30, 2008 compared to $3,480,000 for the three months and $8,529,000 for the six months ended June 30, 2007.

Significant events in the second quarter include:

- Denison sold 100,000 pounds U3O8 during the quarter from U.S. production at an average price of $83.13 per pound and 271,950 pounds U3O8 from its Canadian production under the existing long-term contracts at an average price of $50.96 per pound.

- Spot prices for U3O8 decreased from $71.00 per pound at March 31, 2008 to $59.00 per pound at June 30, 2008 as quoted by Ux Consulting. The long-term price for U3O8 dropped from $95.00 per pound at March 31, 2008 to $80.00 per pound at June 30, 2008 as quoted by Ux Consulting.

- Denison purchased 5,465,000 common equity units in Uranerz Energy Corp., each unit consisting of one common share and one-half warrant for $2.40 per unit or $13,116,000.

- Denison commenced processing of conventional ore at its White Mesa mill in Utah on April 28, 2008.

- Denison entered into a credit agreement with the Bank of Nova Scotia for a US$125,000,000 revolving three year term credit facility.

Revenue

Uranium sales revenue for the second quarter was $28,998,000. Sales from U.S. production were 100,000 pounds U3O8 at an average price of $83.13 per pound. Sales of Canadian production were 271,950 pounds U3O8 at an average price of $50.96 per pound. Revenue also includes the amortization of the fair value increment on sales contracts from the acquisition of Denison Mines Inc. in the amount of $6,737,000 in the quarter. Uranium sales revenue in the 2007 period totaled $15,243,000 from the net sale of 70,000 pounds U3O8 from Canadian production at an average sales price of $80.51 per pound and the sale of 75,000 pounds U3O8 from U.S. production at an average price of $130.00 per pound.

Denison currently markets its uranium from the McClean Lake joint venture jointly with AREVA Resources Canada Inc. ("ARC"). Denison's share of current contracted sales volumes jointly marketed with ARC is set out in the table below:



Contracted Canadian Sales Volumes
---------------------------------
(pounds U3O8 x 1000)

(in thousands) 2008 2009 2010 Pricing
---- ---- ---- -------

Market Related 588 392 49 80% to 85% of Spot
Legacy Base Escalated 95 0 0 $20.00 to $26.00
Legacy Market Related 60 0 0 96% of Spot

Agreements with AREVA call for production to be allocated first to the market related contracts with any surplus to be apportioned evenly over the legacy contracts. The legacy base-escalated contracts have pricing formulas that result in sales prices well below current market prices.

The joint marketing of Canadian uranium production will cease at the end of 2008 except for the market related category above. Future long-term sales agreements for the Company's uranium inventory and production are expected to be primarily under market-related contracts.

Revenue from the environmental services division was $1,354,000 for the three months ended June 30, 2008 compared to $1,174,000 in the same period in 2007. Revenue from the management contract with Uranium Participation Corporation was $1,347,000 for the three months ended June 30, 2008 compared to $2,129,000 for the second quarter of 2007.

Uranium Production

Total uranium production for the Company from its Canadian and U.S. operations was 322,000 pounds for the three months ended June 30, 2008 and 507,000 pounds for the six months ended June 30, 2008. The McClean Lake joint venture produced 1,157,000 pounds U3O8 for the three months ended June 30, 2008 and 1,748,000 pounds U3O8 for the six months ended June 30, 2008 compared to production of 329,000 pounds and 784,000 pounds during the same periods in 2007. Denison's 22.5% share of the 2008 production totaled 260,000 pounds during the three months and 393,000 pounds during the six months ended June 30, 2008.

Production at the White Mesa mill was 62,000 pounds U3O8 for the three months ended June 30, 2008 and 114,000 pounds U3O8 for the six months ended June 30, 2008 compared to 56,000 pounds and 137,000 pounds U3O8 for the same periods in 2007. Processing of conventional ore commenced on April 28, 2008 and to June 30, 2008 production from conventional ore was 20,000 pounds U3O8. Production at the White Mesa mill has been increasing since the commencement of conventional ore processing with approximately 89,500 pounds U3O8 produced in July 2008.

Mineral Property Exploration

Denison is engaged in uranium exploration, as both operator and non-operator of joint ventures and as operator of its own properties in Canada, the U.S., Mongolia and Zambia. For the three months ended June 30, 2008 exploration expenditures totaled $3,787,000 compared to $3,480,000 for the three months ended June 30, 2007. For the six months ended June 30, 2008, exploration expenditures totaled $10,352,000 compared with $8,529,000 for the six months ended June 30, 2007.

A majority of the exploration expenditures during the period were spent in the Athabasca Basin region of northern Saskatchewan. Denison is engaged in uranium exploration on advanced projects in this region of Canada as part of the ARC operated McClean and Midwest joint ventures and is participating in a total of 34 other exploration projects concentrated in the prospective eastern margin of the Athabasca Basin. Denison's share of exploration spending on its Canadian properties totaled $2,758,000 of which $2,546,000 was expensed in the statement of operations for the three months ended June 30, 2008. Exploration spending totaled $3,279,000 of which $3,059,000 was expensed in the statement of operations for the three months ended June 30, 2007. For the six months ended June 30, 2008, Denison's share of exploration spending on its Canadian properties totaled $9,168,000 of which $8,474,000 was expensed compared with spending of $8,433,000 of which $7,894,000 was expensed in the six months ended June 30, 2007.

Exploration expenditures of $1,090,000 for the three months ended June 30, 2008 ($319,000 for the three months ended June 30, 2007) and of $1,421,000 for the six months ended June 30, 2008 ($461,000 for the six month period in 2007) were spent in Mongolia on the Company's joint venture and 100% owned properties. The Company has a 70% interest in the Gurvan Saihan Joint Venture ("GSJV") in Mongolia. The other parties to the joint venture are the Mongolian government as to 15% and Geologorazvedka, a Russian government entity, as to 15%. Additional expenditures for development of the GSJV's Hairhan uranium deposits have also been incurred. Development work includes extensive resource delineation drilling, hydrological drilling, plant design and environmental studies.

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