Denison First Quarter Report
TORONTO,ONTARIO--Denison Mines Limited reported a loss of $347,000
($0.00 per share) on revenue of $345,000 for the three months
ended March 31, 1999, compared with earnings of $1,739,000 ($0.01
per share) on revenue of $13,927,000 in the corresponding period
of 1998. Results in 1999 do not include any revenue from the
Prinos oil field, where production ceased in November 1998, or
from deliveries of uranium, which will resume once the McClean
Lake project goes into production. In addition, the field
activities of Denison Environmental Services were substantially
reduced during the winter months and have now recommenced.
McClean Lake
The AECB gave final approval for construction of the JEB tailings
management facility at its March meeting. Construction of this
facility is well advanced and will be complete prior to the middle
of June. On April 22, 1999, the AECB gave initial consideration to
the operating license for the McClean Lake mining and milling
facilities. Final approval is scheduled for June 17, 1999.
Production is expected to commence shortly after the operating
license is obtained.
Greece
Production at the Prinos field ceased in November 1998. However,
abandonment of wells by the Consortium and the Greek government
has been delayed at the request of the government. All costs in
the first quarter of 1999 have been charged against the accounting
provision for Greek oil field decommissioning. Any costs
associated with the delay requested by the Greek government in
commencing well abandonment beyond April 1, 1999 are for the
account of the government.
Elliot Lake Reclamation
On April 22, 1999, the Company received the amended
decommissioning license from the AECB for its Denison tailings
management area at Elliot Lake. All capital works have now been
completed at Elliot Lake. The Company is carrying out a
monitoring and water treatment program.
As a result of this license approval, the Company has transferred
approximately $0.7 million from Restricted Cash to the Reclamation
Fund and a further $1.0 million has been released from Restricted
Cash. With the payment of this additional contribution to the
Reclamation Trust Account, the debenture security for the Elliot
Lake Reclamation will be discharged.
/T/
Consolidated Statement of Earnings (Loss) (Unaudited)
(In thousands except per share data)
--------------------------------------------------------------
Three Months Ended
March 31
---------------------------
1999 1998
---------- -------------
Revenue $ 345 $ 13,927
---------- ------------
Operating and exploration costs 177 12,185
General corporate expenses 813 1,006
Investment income (320) (1,269)
---------- ------------
670 11,922
---------- ------------
Earnings (loss) before income and
mining taxes (325) 2,005
Income and mining taxes 22 266
---------- ------------
Net earnings (loss) for the period $ (347) $ 1,739
---------- ------------
---------- ------------
Net earnings (loss) per common share $ 0.00 $ 0.01
---------- ------------
-------------------------------------------------------------
-------------------------------------------------------------
Segmented Information (Unaudited)
(In thousands)
-------------------------------------------------------------
Three Months Ended
March 31
--------------------------
1999 1998
---------- ------------
Revenue
Mining $ 345 $ 6,817
Oil and gas - 7,110
---------- ------------
$ 345 $ 13,927
---------- ------------
---------- ------------
Net earnings (loss)
Mining $ (122) $ 1,811
Oil and gas 290 (358)
Corporate and other (515) 286
---------- ------------
$ (347) $ 1,739
---------- ------------
---------- ------------
---------------------------------------------------------------
---------------------------------------------------------------
Consolidated Statement of Cash Flow (Unaudited)
(In thousands)
---------------------------------------------------------------
---------------------------------------------------------------
Three Months Ended
March 31
-------------------------
1999 1998
----------- ------------
Operating Activities
Net earnings (loss) for the period $ (347) $ 1,739
Adjustments for:
Depreciation 9 -
Gain on sale of assets (20) (20)
Increase in taxes payable after one year
and deferred income and mining taxes (60) 66
--------- ----------
(418) 1,785
Increase in operating working capital (1,620) (10,020)
Spending on Greek oil field
decommissioning costs (4,632) -
--------- ----------
Net cash used in operating activities (6,670) (8,235)
--------- ----------
Financing Activities
Borrowings on loan facility 2,441 3,947
-------- ---------
Investing Activities
Proceeds on sale of assets 20 20
Additions to property, plant and
Equipment (3,901) (5,541)
Sale of marketable securities - 774
Decrease in restricted cash 251 810
----------- --------
(3,630) (3,937)
------------ ---------
Decrease in Cash and Cash Equivalents (7,859) (8,225)
Cash and Short-term Deposits
- Beginning of Period 23,815 36,327
----------- ----------
Cash and Short-term Deposits
- End of Period $ 15,956 28,102
---------- ---------
---------- ---------
---------------------------------------------------------------
---------------------------------------------------------------
Consolidated Balance Sheet (Unaudited)
(In thousands)
---------------------------------------------------------------
---------------------------------------------------------------
March 31 December 31
1999 1998
--------- ------------
ASSETS
Cash and short-term deposits 15,956 $ 23,815
Restricted cash 2,794 3,045
Accounts receivable 24,486 38,375
Product inventory 19 4,964
Raw materials, supplies and
prepaid expense 1,625 1,652
Net property, plant and
Equipment 139,853 135,961
-------- -----------
$ 184,733 $ 207,812
---------- -------------
---------- -------------
LIABILITIES
Accounts payable and accrued
Liabilities $ 25,998 $ 46,343
Income taxes due within
one year 41 120
Income and mining taxes due
after one year 4,698 4,758
Long-term debt 58,796 56,354
Provision for post-employment
benefits 12,312 12,475
Provision for Elliot Lake mine
decommissioning and reclamation
costs 9,252 9,137
Provision for Greek oil field
decommissioning costs 19,992 24,624
Deferred income and mining
taxes 563 563
------- -------
131,652 154,374
SHAREHOLDERS' EQUITY 53,081 53,438
--------- ------------
$ 184,733 $ 207,812
---------- -------------
---------- ------------- |
