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-'''Denison Mines Corp.''' (NYSE AMEX: DNN) is a diversified intermediate uranium producer with active mines in the United States and other mines and projects on stand-by in Canada and the U.S. Denison was formed through a merger of the business operations of Denison Mines Inc. and International Uranium Corporation in 2006. Assets include an interest in two of the four licensed and operating conventional uranium mills in North America, with its 100% ownership of the White Mesa mill in Utah and its 22.5% ownership of the McClean Lake mill in Saskatchewan. +'''Denison Mines Corp.''' (NYSE AMEX: DNN) is a diversified intermediate [[uranium]] producer with active mines in the United States and other mines and projects on stand-by in [[Canada]] and the U.S. Denison was formed through a merger of the business operations of Denison Mines Inc. and International Uranium Corporation in 2006. Assets include an interest in two of the four licensed and operating conventional uranium mills in North America, with its 100% ownership of the White Mesa mill in Utah and its 22.5% ownership of the McClean Lake mill in Saskatchewan.
Denison's portfolio includes several world-class exploration projects that include the Wheeler River project, and several others in the Athabasca Basin in Saskatchewan. The portfolio also includes highly regarded exploration and development properties in Mongolia and, indirectly through its investments, in Australia and the U.S. Denison also owns the advanced-stage Mutanga Project in Zambia, Africa. Denison's portfolio includes several world-class exploration projects that include the Wheeler River project, and several others in the Athabasca Basin in Saskatchewan. The portfolio also includes highly regarded exploration and development properties in Mongolia and, indirectly through its investments, in Australia and the U.S. Denison also owns the advanced-stage Mutanga Project in Zambia, Africa.
Line 8: Line 8:
==Business Growth== ==Business Growth==
-Putting the difficult 2009 financial year behind it, Denison ended 2010 in a solid financial position, having benefitted from a C$65 million financing+ 
-during the year, a focus on continuing reduction of operating costs and optimizing of operations and a recovering uranium market.Well financed, with the+Denison ended 2010 in a solid financial position, benefiting from from a C$65 million financing
-ability to ramp up uranium production through its existing operations combined with high potential development and exploration properties, Denison is+during the year, a focus on continuing reduction of operating costs, and a recovering uranium market. <ref name=annual/> Denison has the option of ramping up uranium production, positioning it to take advantage of improving uranium market conditions.
-positioned to take advantage of improving uranium market conditions, expand its resource base and build its production potential for the future.+ 
 +Denison’s 2010 production totaled 1.4 million pounds of uranium oxide (U3O8) and 2.3 million pounds of vanadium blackflake (V2O5).<ref name=annual/> At the end of 2010 the company had 87,000 pounds U3O8 and 679,000 pounds V2O5 and 11,000 pounds FeV in inventory available for sale.<ref name=annual/>
 + 
 +During the first quarter of 2011, Denison's revenue was $26.8 million. Net loss was $7.1 million ($0.02 per share).<ref name=annual/>
==Trends and Forces== ==Trends and Forces==
 +
 +===Japanese Earthquake and Tsunami Led to Sell-off in Uranium Stocks===
 +
 +The 9.0 earthquake in [[Investing in Japan|Japan]] on March 11, 2011, and subsequent tsunami caused four nuclear power plants in Northern Japan to fail, leading to a radiation release and overheating in the reactors. The Japanese government struggled to prevent a nuclear meltdown. The Japanese nuclear crisis has shaken confidence in the future of nuclear energy, with Deniosn's stock losing more than half its value since the earthquake.
 +
 +Japan has closed 11 of its 54 reactors since the earthquake. The affected reactors consume about 340,000 pounds of uranium per month. There could be a short-term impact if the Japanese reactors stay offline since there is a surplus of about 3 million pounds of uranium on the spot market.<ref>[Reuters: Cameco shares tumble on Japanese nuclear crisis http://www.reuters.com/article/2011/03/14/cameco-shares-idUSN1413594320110314]</ref>
 +
 +===Demand for uranium outstrips supply===
 +
 +Every year since 1985, the [[Nuclear Energy|world's consumption of uranium]] has been greater than its production.<ref name=uran/> To help meet this shortfall, reprocessed uranium and plutonium from the dismantling of Russian and U.S. nuclear weapons has been used.<ref name=cnn/> The World Nuclear Association estimates that uranium mining will need to increase by almost 300% in the next two decades.<ref name=cnn>[http://money.cnn.com/2008/03/26/news/international/uranium_kazakhstan.fortune/ CNN: "Nuclear power's white-hot metal"]</ref>
 +
 +There are 440 nuclear reactors operating worldwide and a total of 111 reactors under construction or planned for completion by 2020.<ref name=euro>[http://www.euronuclear.org/info/encyclopedia/n/nuclear-power-plant-world-wide.htm European Nuclear Society: Nuclear power plants, world-wide]</ref> The demand for processed uranium continues to rise as countries throughout the world increase their reliance on nuclear energy for [[Electric Utilities|electricity]].
==Competition== ==Competition==
 +The top uranium ten producers accounted for over 90% of the world’s primary mine supply in 2010.<ref name=annual/> Over 70% of the world’s production came from four countries: Kazakhstan, Canada, Australia and Namibia. Kazakhstan passed Canada in 2009 as the largest producer.<ref name=annual/>
 +
*[[Cameco (CCJ)]] *[[Cameco (CCJ)]]
*[[Crosshair Exploration & Mining (CXZ)]] *[[Crosshair Exploration & Mining (CXZ)]]

Revision as of 11:55, July 1, 2011

Denison Mines Corp. (NYSE AMEX: DNN) is a diversified intermediate uranium producer with active mines in the United States and other mines and projects on stand-by in Canada and the U.S. Denison was formed through a merger of the business operations of Denison Mines Inc. and International Uranium Corporation in 2006. Assets include an interest in two of the four licensed and operating conventional uranium mills in North America, with its 100% ownership of the White Mesa mill in Utah and its 22.5% ownership of the McClean Lake mill in Saskatchewan.

Denison's portfolio includes several world-class exploration projects that include the Wheeler River project, and several others in the Athabasca Basin in Saskatchewan. The portfolio also includes highly regarded exploration and development properties in Mongolia and, indirectly through its investments, in Australia and the U.S. Denison also owns the advanced-stage Mutanga Project in Zambia, Africa.

Uranium, Denison's primary product, is produced in the form of uranium oxide concentrates (U3O8) and sold to customers worldwide for further processing. The company also produces vanadium in the form of vanadium pentoxide (V2O5). The company is also in the business of processing uranium bearing waste materials.[1]

In 2010, Denison produced 1.4 million pounds of uranium and 2.3 million pounds of vanadium and sold 1.8 million pounds of uranium and 2.4 million pounds of vanadium at average prices of $47.67 per pound uranium and $6.33 per pound vanadium.[2]

Business Growth

Denison ended 2010 in a solid financial position, benefiting from from a C$65 million financing during the year, a focus on continuing reduction of operating costs, and a recovering uranium market. [2] Denison has the option of ramping up uranium production, positioning it to take advantage of improving uranium market conditions.

Denison’s 2010 production totaled 1.4 million pounds of uranium oxide (U3O8) and 2.3 million pounds of vanadium blackflake (V2O5).[2] At the end of 2010 the company had 87,000 pounds U3O8 and 679,000 pounds V2O5 and 11,000 pounds FeV in inventory available for sale.[2]

During the first quarter of 2011, Denison's revenue was $26.8 million. Net loss was $7.1 million ($0.02 per share).[2]

Trends and Forces

Japanese Earthquake and Tsunami Led to Sell-off in Uranium Stocks

The 9.0 earthquake in Japan on March 11, 2011, and subsequent tsunami caused four nuclear power plants in Northern Japan to fail, leading to a radiation release and overheating in the reactors. The Japanese government struggled to prevent a nuclear meltdown. The Japanese nuclear crisis has shaken confidence in the future of nuclear energy, with Deniosn's stock losing more than half its value since the earthquake.

Japan has closed 11 of its 54 reactors since the earthquake. The affected reactors consume about 340,000 pounds of uranium per month. There could be a short-term impact if the Japanese reactors stay offline since there is a surplus of about 3 million pounds of uranium on the spot market.[3]

Demand for uranium outstrips supply

Every year since 1985, the world's consumption of uranium has been greater than its production.[4] To help meet this shortfall, reprocessed uranium and plutonium from the dismantling of Russian and U.S. nuclear weapons has been used.[5] The World Nuclear Association estimates that uranium mining will need to increase by almost 300% in the next two decades.[5]

There are 440 nuclear reactors operating worldwide and a total of 111 reactors under construction or planned for completion by 2020.[6] The demand for processed uranium continues to rise as countries throughout the world increase their reliance on nuclear energy for electricity.

Competition

The top uranium ten producers accounted for over 90% of the world’s primary mine supply in 2010.[2] Over 70% of the world’s production came from four countries: Kazakhstan, Canada, Australia and Namibia. Kazakhstan passed Canada in 2009 as the largest producer.[2]

References

  1. Google Finance: DNN
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Denison Mines Annual Report 2010
  3. [Reuters: Cameco shares tumble on Japanese nuclear crisis http://www.reuters.com/article/2011/03/14/cameco-shares-idUSN1413594320110314]
  4. 5.0 5.1 CNN: "Nuclear power's white-hot metal"
  5. European Nuclear Society: Nuclear power plants, world-wide



References

  1. Google Finance: DNN
  2. 2.0 2.1 2.2 2.3 2.4 2.5 2.6 Denison Mines Annual Report 2010
  3. [Reuters: Cameco shares tumble on Japanese nuclear crisis http://www.reuters.com/article/2011/03/14/cameco-shares-idUSN1413594320110314]
  4. 5.0 5.1 CNN: "Nuclear power's white-hot metal"
  5. European Nuclear Society: Nuclear power plants, world-wide
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