Denison Mines - The Uranium Investment Thesis: Fundamentals are Improving, Leading to a Positive New Uranium Cycle - 2020

Uranium (Nuclear Minerals) / Exploration, Mining, Marketing, & Acquisitions

This is a Denison Mines corporate update on their activities in the Athabasca Basin, Northern Saskatchewan. of July, 2020. The uranium investment thesis is that fundamentals are improving, leading to a positive new uranium cycle, on the basis that: 

1.  Long-term contracts from the previous uranium bull cycle have acted as a lifeline to high-cost mines – this is coming to an end, with significant uncovered utility requirements emerging as Denison is expected to enter production,
   
   
2. Demand story is positive and improving –requirements now exceed pre-Fukushima levels,
   
   
3. Significant curtailment decisions have been made by largest uranium producers,
   
   
4. Response to COVID-19 has put additional pressure on supply. Further curtailments have accelerated drawdown of secondary supplies,
   
   
5. Given sustained low prices, project pipeline may be inadequate to deliver new production in time to replace mines that are dropping off,
   
   
6. Long-standing trade issues which have distracted the market have been clarified, in particular the Section 232 investigation and subsequent report by the U.S. Nuclear Fuel Working Group.

Denison Mines controls a diversified Athabasca Basin asset base with superior development leverage:

1. 90% interest in Flagship Wheeler River project,
2. Development stage project,
3. Largest undeveloped uranium project in the infrastructure rich eastern Athabasca Basin,
4. Environmental Assessment (“EA”) initiated,
5. 22.5% interest in McClean Lake Uranium Mill Processing +12% of global uranium production prior to suspension,
6. Excess licensed capacity,
7. Additional leverage to the uranium price from interests in undeveloped uranium resources at McClean Lake, Midwest, and Waterbury Lake,
8. 280,000 hectares of prospective exploration ground in the Athabasca Basin,
9. Internal sources of Cash Flow,
10. Uranium Participation Corp. (TSX-U),
11. Closed mine care & maintenance (formerly Denison Environmental Services).

Read on. Good coverage.