First quarter results
Denison Mines Ltd DEN
Shares issued 317,871,201 Apr 28 close $0.315
Wed 29 Apr 98 News Release
Mr. E. Peter Farmer reports
Denison had earnings of $1.7-million on revenues of $13.9-million for the
three months ended Mar. 31, 1998, compared with earnings of $7.6-million on
revenues of $20.4-million in the corresponding period of 1997. Earnings per
share were one cent in the first quarter of 1998 compared with two cents in
the first quarter of 1997.
Substantially all of the decrease in revenue is attributable to a 33 per
cent drop in the Prinos oil price and a 30 per cent decrease in production
volume. These decreases were partially offset by lower operating costs.
Pending start-up of the McClean Lake uranium mill or unless there is a
significant improvement in oil prices, the company expects 1998 earnings to
be lower than in the past two years.
Greece
The processing and interpretation of seismic data, obtained in late 1997,
is now complete and has identified six new prospects, three of which have
been preliminarily identified as large reef complexes. Two exploration
wells are expected to be drilled and depending on the availability of a
suitable rig, drilling could commence as early as the end of the second
quarter. The company's 51.5625 per cent share of drilling costs is
estimated at $9.7-million. If commercial quantities of oil are discovered,
it will take about 12-18 months to complete the development of the field
before oil in commercial quantities can be produced. If oil is not
discovered, the current economics dictate that the Prinos field will be
closed.
Saskatchewan Uranium Properties
On Apr. 3, 1998 the governments of Saskatchewan and Canada released their
responses to the report of the panel on uranium mining developments in
Northern Saskatchewan. Both governments support the approach being taken by
Cogema Resources in relation to the Midwest uranium project, which is 19.5
per cent owned by Denison.
Discussions continue between Cogema, Denison and the Atomic Energy Control
Board with respect to licencing of the construction and operation of the
JEB tailings management facility at McClean. Initial consideration of the
construction of the tailings management facility may be made at the AECB
hearing scheduled for June 25. Construction is expected to take 12 weeks.
Denison continues to believe that McClean production will commence in the
fourth quarter.
Elliot Lake
On Apr. 23, 1998 the Atomic Energy Control Board considered the company's
application for a licence to decommission the Stanrock property. Final
approval of this licence application is scheduled for the AECB meeting in
June, 1998. Construction of the final dam is continuing and completion of
all capital works is scheduled for this fall.
Mineral Exploration
Evaluation of the seven holes drilled during last winter's program on the
Wheeler River property is continuing, although no significant discoveries
were made.
A major drilling campaign is scheduled to commence at the Sagar project in
mid-summer.
At the grass roots gold exploration program in Nevada, drill testing of a
number of geochemical anomalies will commence on May 1.
STATEMENT OF EARNINGS
Three months ended Mar. 31
(thousands of dollars)
1998 1997
Revenue $13,927 $20,437
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Operating and
exploration costs 12,185 11,280
General corporate
expenses 1,006 1,036
Amortization of
debt discount - 345
Other income (1,269) (499)
------- -------
11,922 12,162
------- -------
Earnings before
income and mining
taxes 2,005 8,275
Income and mining
taxes 266 693
------- -------
Net earnings $1,739 $7,582
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Net earnings
per share 1 cent 2 cents
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