Denison Mines Corp. ("Denison") (TSX:DML)(NYSE MKT:DNN) (Currency:
CAD$) today announced that it intends to make a takeover bid to
acquire all of the outstanding shares of Rockgate Capital Corp.
("Rockgate") in exchange for shares of Denison. Under the terms of
the offer, each Rockgate common share will be exchanged for 0.192
of a common share of Denison (the "Offer") with an implied value of
$0.23 per Rockgate share and a total purchase price for all
outstanding Rockgate shares of approximately $26.7 million.
The Offer represents a 47% premium over the closing price of
Rockgate shares on the Toronto Stock Exchange (the "TSX") on
September 16, 2013, the last trading day prior to Denison's
announcement of its intention to make the Offer and a 38% premium
to both companies' trailing 20-day volume-weighted average prices
("VWAP").
Denison has entered into lock-up agreements covering 20,381,900
Rockgate shares, representing 17.4% of Rockgate's total shares
outstanding. Under the lock-up agreements, the shareholders have
agreed, among other things, to tender their Rockgate shares to the
Offer.
Separately, Denison has been advised by shareholders holding
31.5% of the shares of Rockgate, including the shareholders who
have signed lock-up agreements, that they currently intend to vote
against the proposed transaction between Rockgate and Mega Uranium
Ltd. ("Mega") that was announced on June 6, 2013 (the "Mega
Transaction"). Sprott U.S. Holdings, Inc., incorporating all US
Sprott affiliates ("Sprott"), has also advised Denison that it
currently intends to recommend to its clients (who hold
approximately 11.2% of the shares of Rockgate) that they vote
against the Mega Transaction.
Denison President and Chief Executive Officer, Ron Hochstein,
commented, "We believe that the Offer represents a superior
alternative for Rockgate shareholders. Following the announcement
of the Mega Transaction, Denison was contacted by several of
Rockgate's largest shareholders who were unhappy with the Mega
Transaction. For its part, Denison had previously viewed Rockgate's
Falea asset as a compelling potential addition to its own African
uranium portfolio. We therefore welcomed the opportunity given by
key Rockgate shareholders to assist in undertaking this Offer. This
acquisition does not signal a reduced focus on the Athabasca Basin
for Denison, but instead is intended to result in a stronger
Denison African asset base, in pursuit of an eventual spin-out of
that portfolio. With this transaction, Rockgate shareholders will
enjoy exposure to not only a broadened African asset portfolio, but
also to Denison's extensive Athabasca Basin portfolio."
Upon the completion of the Offer, Denison intends to undertake
an evaluation of the merits of a spin-out into a new company of
Denison's African assets including its Mutanga development project
in Zambia, its exploration joint ventures with Rio Tinto in
Namibia, as well as Rockgate's Falea project in Mali. Any such
transaction would allow Denison to focus on its Athabasca Basin
uranium exploration and development assets, while continuing to
provide diversification to Denison and Rockgate shareholders alike.
The timing and structure of any such subsequent transaction will be
decided in the context of prevailing market conditions and optimal
financial considerations.
Reasons to Accept the Offer
Denison believes that Rockgate shareholders will enjoy the
following significant benefits from the Offer:
-- Significant Premium - The Offer represents a premium of approximately
47% over the closing price of $0.155 per Rockgate share on the TSX, and
a premium of 38% based on the trailing 20 day VWAP of both companies on
the TSX as of September 16, 2013;
-- Premium to Implied Mega Offer - The Offer represents a 38% premium over
the Mega Transaction exchange ratio based on the closing prices on the
TSX as of September 16, 2013;
-- Superior Asset Value Recognition - Based on its closing share prices
during the trailing three months as of September 16, 2013, Rockgate has
not attained a market capitalization in excess of its June 30, 2013 net
cash value per share;
-- Major Shareholder Rejection of the Mega Transaction - Denison has been
advised by holders of 31.5% of the Rockgate shares outstanding that they
will vote against the Mega Transaction. Sprott has also advised Denison
that it currently intends to recommend to its clients (who hold
approximately 11.2% of the shares of Rockgate) that they vote against
the Mega Transaction;
-- Premier Uranium Exploration Company - The opportunity for Rockgate
shareholders to participate in the assets of Denison, which include a
best-in-class pipeline of advanced exploration, development and capital
assets in the Athabasca Basin, including the Wheeler River Project, as
well as the Mutanga Project in Zambia;
-- Superior Capital Markets Presence - Rockgate shareholders to benefit
from larger scale (Denison's market capitalization is $549 million as of
September 16, 2013), superior trading liquidity (Denison's three month
average daily trading value in Canada and the United States is $3.5
million per day), and increased research analyst coverage (11 research
analysts actively cover Denison);
-- Superior African Synergies - Denison's African and global exploration
team is more complementary to Falea's development than what is offered
by the Mega Transaction;
-- Business Activity Alignment - Denison's active business is the
exploration and development of uranium projects, which better
complements Rockgate's asset base as compared to Mega's primary business
activity of holding small-cap uranium equity investments. Denison offers
Rockgate shareholders the added potential benefit from any future
increases in value associated with the continued exploration and
development of Denison's current portfolio of assets; and
-- Reduced Exposure to Third-Party Equity Risk - Mega's underlying asset
valuation is heavily influenced by the potential success and liquidity
of externally operated portfolio holdings, in particular that of Toro
Energy Ltd. of Australia as a result of a transaction announced by Mega
on August 12, 2013.
About the Offer
A summary of the terms of the Offer will be published in
newspaper advertisements in the national edition of the Globe and
Mail and in La Presse on September 19, 2013. Full details of the
Offer will be included in the formal offer and takeover bid
circular, which is expected to be filed on September 19, 2013 with
securities regulatory authorities (together with all related
documents) and will be available under Rockgate's profile on SEDAR.
The Offer will remain open until 4:00 p.m. Toronto time on October
25, 2013, unless otherwise withdrawn or extended by Denison.
Denison will be making a formal request for the list of Rockgate
shareholders from Rockgate and expects to mail the offer circular
to Rockgate's shareholders as soon as reasonably practicable
following receipt of such shareholder list.
The Offer will be subject to certain customary conditions,
including confirmation to the satisfaction of Denison that the
Rockgate shareholder rights plan will not adversely affect the
Offer. Denison intends to apply to the British Columbia Securities
Commission immediately after the Offer is commenced for an order
that Rockgate's shareholder rights plan be rendered inapplicable to
the Offer. Other conditions will include acceptance of the Offer by
Rockgate shareholders owning not less than 90 percent of Rockgate's
outstanding shares on a fully-diluted basis, receipt of all
necessary regulatory approvals, no material adverse change in
Rockgate and other conditions customary for transactions of this
nature. The Offer will not be subject to any financing condition or
Denison shareholder approval.
This press release does not constitute an offer to buy or an
invitation to sell, or the solicitation of an offer to buy or
invitation to sell, any securities of Denison or Rockgate. Such an
offer may only be made pursuant to the offer and takeover bid
circular to be filed with the Canadian securities regulators and
pursuant to registration or qualification under the securities laws
of any other such jurisdiction.
Denison intends to file with the U.S. Securities and Exchange
Commission (the "SEC") a Registration Statement on Form F-8 which
will include the offer and takeover bid circular. Investors and
security holders are urged to read the offer and takeover bid
circular regarding the proposed transaction referred to in these
documents when they become available, because they will contain
important information. Investors and security holders may obtain a
free copy of the offer and takeover bid circular, when they become
available and certain other offer documents filed by Denison with
the Canadian provincial securities regulators on SEDAR at
www.sedar.com, and with the SEC at the SEC's website at
www.sec.gov. Copies of any such documents may be obtained free of
charge upon request made to Sheila Colman, the corporate secretary
of Denison at 595 Bay Street, Suite 402, Toronto, ON, Canada, M5G
2C2.
Advisors and Information Agent
Denison has engaged Haywood Securities Inc. as its financial
advisor and Cassels Brock & Blackwell LLP and Paul, Weiss,
Rifkind, Wharton & Garrison LLP as its legal advisors in
respect of the Offer.
Questions and requests for assistance may be directed to
Computershare Investor Services Inc., the Depositary for the Offer,
or Laurel Hill Advisory Group, the Information Agent for the Offer,
at the addresses and telephone numbers set out below.
About Denison
Denison is a uranium exploration and development company with
interests in exploration and development projects in Canada,
Zambia, Namibia, and Mongolia. Including the high grade Phoenix
deposits, located on its 60% owned Wheeler project, Denison's
exploration project portfolio includes 49 projects and totals
approximately 603,000 hectares in the Eastern Athabasca Basin
region of Saskatchewan. Denison's interests in Saskatchewan also
include a 22.5% ownership interest in the McClean Lake joint
venture, which includes several uranium deposits and the McClean
Lake uranium mill, one of the world's largest uranium processing
facilities, plus a 25.17% interest in the Midwest deposit and a 60%
interest in the J-Zone deposit on the Waterbury property. Both the
Midwest and J-Zone deposits are located within 20 kilometres of the
McClean Lake mill. Internationally, Denison owns 100% of the
conventional heap leach Mutanga project in Zambia, an approximate
71% interest in the newly acquired Dome project in Namibia, and an
85% interest in the in-situ recovery projects held by the Gurvan
Saihan joint venture in Mongolia.
Denison is engaged in mine decommissioning and environmental
services through its DES division and is the manager of UPC, a
publicly traded company which invests in uranium oxide and uranium
hexafluoride.
Additional information about Denison is available on Denison's
website at www.denisonmines.com or under its profile on SEDAR at
www.sedar.com and on EDGAR at www.sec.gov.
Cautionary Statement Regarding Forward-Looking Statements
Certain information contained in this press release constitutes
"forward-looking statements", within the meaning of the United
States Private Securities Litigation Reform Act of 1995 and
"forward looking information" within the meaning of similar
Canadian legislation concerning the business, operations and
financial performance and condition of Denison.
Generally, these forward-looking statements and information can
be identified by the use of forward-looking terminology such as
"plans", "expects" or "does not expect", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates" or
"does not anticipate", or "believes", or variations of such words
and phrases or state that certain actions, events or results "may",
"could", "would", "might" or "will be taken", "occur", "be
achieved" or "has the potential to".
Forward looking statements are based on the opinions and
estimates of management as of the date such statements are made,
and they are subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of Denison to be materially different
from those expressed or implied by such forward-looking statements.
Denison believes that the expectations reflected in forward-looking
statements and information are reasonable but no assurance can be
given that these expectations will prove to be correct and such
forward-looking statements and information included in this press
release should not be unduly relied upon. This information speaks
only as of the date of this press release. In particular, this
press release may contain forward-looking statements and
information about the Offer and Denison's ability to complete the
Offer, the likelihood of the conditions on the Offer being
satisfied, the anticipated benefits or timing of the Offer, and the
timing and structure of a subsequent spin-out of a new company
following the Offer.
There can be no assurance that such statements or information
will prove to be accurate, as Denison's actual results and future
events could differ materially from those anticipated in any
forward-looking statements or information as a result of the
factors discussed in or referred to under the heading "Risk
Factors" in Denison's Annual Information Form dated March 13, 2013
available at http://www.sedar.com, and in its Form 40-F available
at http://www.sec.gov/edgar.shtml.
Accordingly, readers should not place undue reliance on
forward-looking statements or information. These factors are not,
and should not be construed as being, exhaustive. The
forward-looking statements and information contained in this press
release are expressly qualified by this cautionary statement.
Denison does not undertake any obligation to publicly update or
revise any forward-looking statements or information after the date
of this press release to conform such information to actual results
or to changes in Denison's expectations except as otherwise
required by applicable legislation.
Contacts: Investors and analysts Ron Hochstein President, Chief
Executive Officer Sophia Shane Investor Relations (416)
979-1991info@denisonmines.com The Depositary: Computershare
Investor Services Inc. Toll-Free Phone: 1-800-564-6253 Toll-Free
Facsimile: 1-888-453-0330corporateactions@computershare.com The
Information Agent: Laurel Hill Advisory Group Toll-Free Phone:
1-877-452-7184 Outside of North America Phone: 1-416-304-0211
Facsimile: 1-416-646-2415assistance@laurelhill.com
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