Denison closes US$345 million convertible notes offering

TORONTO - Denison Mines Corp. (TSX:DML)(NYSE AMERICAN:DNN), which has demonstrated strong financial health with more cash than debt on its balance sheet according to InvestingPro data, announced Friday it has closed its previously announced offering of convertible senior unsecured notes due 2031, raising US$345 million. The offering includes the initial US$300 million plus a fully exercised US$45 million option granted to initial purchasers.

The notes carry a 4.25% annual coupon rate, payable semi-annually beginning March 15, 2026. According to the company, this financing structure is expected to save over US$100 million in interest payments compared to traditional project debt financing alternatives. The company maintains a healthy liquidity position with a current ratio of 1.78, indicating strong ability to meet short-term obligations.

The initial conversion price is approximately US$2.92 per share, representing a 35% premium to the closing share price at the time of pricing on August 12. Denison also purchased capped call options for approximately US$35.36 million, effectively increasing the conversion price to US$4.32 per share. InvestingPro analysis shows the stock has demonstrated significant volatility, with impressive returns of over 19% in the past six months despite challenging market conditions.

Any conversions prior to the September 15, 2031 maturity date may be settled in cash, Denison common shares, or a combination of both, at the company’s discretion. The notes can only be converted by holders prior to June 15, 2031 under certain circumstances.

Denison reported net proceeds of approximately US$333 million after deducting commissions and expenses. Cantor Fitzgerald & Co. and Scotia Capital (USA) Inc. served as active bookrunners for the transaction.

The company intends to use the proceeds to support the evaluation and development of its uranium projects, including the Wheeler River Uranium Project in northern Saskatchewan, and for general corporate purposes. With revenue growth of 72.75% in the last twelve months, InvestingPro data reveals strong top-line momentum, though the company is yet to achieve profitability. Subscribers can access 11 additional exclusive ProTips and comprehensive financial metrics to better evaluate Denison’s growth trajectory.

The notes and shares issuable upon conversion have not been registered under the U.S. Securities Act and were offered only to qualified institutional buyers, according to the press release statement.

In other recent news, Denison Mines Corp. has announced the pricing of its upsized $300 million convertible notes offering. These senior unsecured notes, due in 2031, will carry a 4.25% semi-annual interest rate and are convertible into Denison shares at a 35% premium to a recent closing price. Meanwhile, Denison Mines and Orano Canada Inc. have started uranium mining operations at the McClean North deposit using the innovative SABRE mining method. The joint venture has successfully extracted approximately 250 tonnes of high-grade ore, with Orano Canada overseeing the operations as the majority owner of the McClean Lake Joint Venture.

Additionally, Denison Mines reported a significant discovery of high-grade uranium mineralization at the Gryphon deposit in northern Saskatchewan. Drill hole WR-837AD2 revealed 2.3 meters at 1.69% eU3O8, including a notable section at 5.48% eU3O8, indicating potential for further expansion. These developments highlight Denison Mines’ ongoing efforts in uranium exploration and extraction.

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