Exhibit
99.1











Denison Mines
Corp.








2019 Annual Information Form


March 13, 2020














































ABOUT THIS ANNUAL INFORMATION FORM





This annual
information form (“AIF”) is dated March 13, 2020.
Unless stated otherwise, all of the information in this AIF is
stated as at December 31, 2019.
This AIF has been
prepared in accordance with Canadian securities laws and contains
information regarding Denison’s history, business, mineral
reserves and resources, the regulatory environment in which Denison
does business, the risks that Denison faces and other important
information for Shareholders.
This AIF
incorporates by reference:

●   Denison’s management
discussion and analysis (“MD&A”) for the year ended
December 31, 2019, which is available under the Company’s
profile on SEDAR (www.sedar.com) and on EDGAR
(www.sec.gov/edgar.shtml)
as an exhibit to the Company’s Form
40-F.

●  Denison’s audited
consolidated financial statements for the year ended December 31,
2019, which are available on SEDAR and EDGAR as an exhibit to the
Company’s Form 40-F.


Financial Information
Unless otherwise
specified, all dollar amounts referred to in this AIF are stated in
Canadian dollars (“CAD”). References to
“US$” mean United States dollars.

Financial
information is derived from consolidated financial statements that
have been prepared in accordance with International Financial
Reporting Standards as issued by the International Accounting
Standards Board.

Table of
Contents
About this AIF
About Denison
Developments over the Last Three
Years
The Uranium
Industry
Mineral Resources and
Reserves
Mineral Properties
Athabasca Exploration: Sampling, Analysis and Data
Verification
Denison Operations
Manager of UPC
Denison Closed Mines Group
Environmental, Health and Safety Matters
Government Regulation
Risk Factors
Denison’s Securities
Denison’s Management
Legal and Regulatory Proceedings
Material Contracts
Names and Interests of Experts
Additional Information
Audit Committee Mandate
Glossary of Terms
1
5
7
15
22
26
88
94
99
99
100
102
107
120
121
127
128
130
131
A
B





Certain
information contained in this AIF and
the documents incorporated by reference concerning the business,
operations and financial performance and condition of Denison
constitutes forward-looking information within the meaning of the
United States Private Securities Litigation
Reform Act of 1995 and similar
Canadian legislation.





Generally, the
use of words and phrases like "plans", "expects", "is expected",
"budget", "scheduled", "estimates", “forecasts", "intends",
"anticipates", or "believes", or the negatives and/or variations of
such words and phrases, or statements that certain actions, events
or results "may", "could", "would", "might" or "will" "be taken",
"occur", "be achieved" or “has the potential to” and
similar expressions are intended to identify forward-looking
information.





Forward-looking
information involves known and unknown risks, uncertainties,
material assumptions and other factors that may cause actual
results or events to differ materially from those expressed or
implied by such forward-looking statements.





2019 Annual Information Form
    1





Denison
believes that the expectations and assumptions reflected in this
forward-looking information are reasonable, but no assurance can be
given that these expectations will prove to be correct.
Forward-looking information should not be unduly relied upon. This
information speaks only as of the date of this AIF, and Denison
will not necessarily update this information, unless required to do
so by securities laws.





Examples of Forward-Looking Information





This
AIF contains forward-looking information in a number of places,
including statements pertaining to Denison’s:





●
 expectations
regarding raising capital
 ●
 exploration, evaluation and development
plans and
objectives
 ●
 plans for capital expenditure
programs, exploration and development expenditures and reclamation
costs and timing
 ●
 results of its Wheeler River PFS and plans with
respect to the EA and FS
process (each as defined below)
 ●
 expectations regarding the process for and receipt
of regulatory approvals, permits and licences under governmental and other applicable
regulatory regimes
 ●
 estimates of
its mineral reserves and mineral resources
 ●
 expectations about 2020 and future market prices, production
costs and global uranium supply and demand
 ●
 expectations
regarding ongoing joint arrangements and Denison's share of
same
 ●
 expectations regarding
additions to its mineral reserves and resources through
acquisitions and exploration
 ●
 expectations regarding the
toll milling of
Cigar Lake
ores, and the relationships with its
contractual partners with respect thereto
 ●
 future
royalty and tax payments and rates
 ●
 expectations regarding possible impacts of
litigation and regulatory
actions





Statements
relating to "mineral resources" are deemed to be forward-looking
information, as they involve the implied assessment, based on
certain estimates and assumptions that the mineral resources
described can be profitably produced in the future.





Material
Risks





Denison's actual results could differ materially
from those anticipated. Management has identified the following
risk factors which could have a material impact on the Company or
the trading price of its common shares (“Shares”):





●
 the capital intensive nature
of mining industry and the uncertainty of funding
 ●
 global
financial conditions, including market reaction to
COVID-19
 ●
 the speculative nature of exploration and
development projects
 ●
 the imprecision of mineral
reserve and resource estimates
 ●
 the risks of,
and market impacts on, developing mineral properties
 ●
 risks
associated with the selection of novel mining methods
 ●
 dependence on obtaining
licenses, and other regulatory and policy risks
 ●
 uncertainty
regarding engagement with Canada’s First Nations and
Métis
 ●
 environment, health and
safety risks
 ●
 global demand
and international trade restrictions
 ●
 the impact of uranium price
volatility on the valuation of Denison’s mineral reserves and
resources and the market price of its
Shares
 ●
 uncertainty
regarding public acceptance of nuclear energy and competition from
other energy sources
 ●
 volatility in
the market price of the Company’s Shares
 ●
 the risk of
dilution from future equity financings
 ●
 dependence on
other operators of the Company’s projects
 ●
 reliance on
contractors, experts and other third parties
 ●
 the risk of failure to realize benefits
from transactions
 ●
 the risk of Denison’s
inability to expand and replace its mineral reserves and
resources
 ●
 competition
for properties
 ●
 risk of
challenges to property title and/or contractual interests in
Denison’s properties
 ●
 the risk of failure by Denison to meet its
obligations to its creditors
 ●
 change of control
restrictions
 ●
 uncertainty as to reclamation
and decommissioning liabilities and timing
 ●
 potential for technical
innovation rendering Denison’s products and services
obsolete
 ●
 liabilities inherent in
mining operations and the adequacy of insurance
coverage
 ●
 the ability
of Denison to ensure compliance with anti-bribery and
anti-corruption laws
 ●
 the
uncertainty regarding risks posed by climate change
 ●
 the reliance
of the Company on its information systems and the risk of
cyber-attacks on those systems
 ●
 dependence on
key personnel
 ●
 potential
conflicts of interest for the Company’s directors who are
engaged in similar businesses
 ●
 limitations
of disclosure and internal controls
 ●     
the potential influence of Denison’s largest Shareholder,
Korea Electric Power Corporation (“KEPCO”)
and its subsidiary, Korea Hydro & Nuclear Power
(“KHNP”).


2019 Annual Information
Form     2





The
risk factors listed above are discussed in more detail later in
this AIF (see “Risk Factors”). The risk factors
discussed in this AIF are not, and should not be construed as
being, exhaustive.





Material assumptions





The
forward looking statements in this AIF and the documents
incorporated by reference are based on material assumptions,
including the following, which may prove to be
incorrect:





●
 our budget,
including expected exploration levels and costs and the assumptions
regarding market conditions and other factors upon which we have
based our expenditure expectations


●
 our ability
to continue as a going concern


●
 our ability to obtain all necessary regulatory
approvals, permits and licences
for our planned activities under governmental and other applicable
regulatory regimes


●
 our expectations regarding the demand for, and supply of, uranium,
the outlook for long-term contracting, changes in regulations,
public perception of nuclear power, and the construction of new and
relicensing of existing nuclear power plants


●
 our
expectations regarding spot prices and realized prices for
uranium


●
 our
expectations regarding tax rates, currency exchange rates and
interest rates


●
 our
decommissioning and reclamation obligations and the status and
ongoing maintenance of agreements with third parties with respect
thereto


●
 our mineral
reserve and resource estimates, and the assumptions upon which they
are based


●
 our, and our
contractors’, ability to comply with current and future
environmental, safety and other regulatory requirements and to
obtain and maintain required regulatory approvals


●
 our
operations are not significantly disrupted as a result of political
instability, nationalization, terrorism, sabotage, social or
political activism, breakdown, natural disasters, governmental or
political actions, litigation or arbitration proceedings, equipment
or infrastructure failure, labour shortages, transportation
disruptions or accidents, or other development or exploration
risks





A Note for US Investors Regarding Estimates of Measured, Indicated
and Inferred Mineral Resources and Probable Mineral
Reserves





This AIF uses the
terms “mineral resource”, “measured mineral
resource”, “indicated mineral resource” and
“inferred mineral resource”, which are Canadian mining
terms as defined in and required to be disclosed in accordance with
National Instrument 43-101 – Standards of Disclosure for
Mineral Projects (“NI
43-101”), which references the guidelines set out in
the Canadian Institute of Mining, Metallurgy and Petroleum (the
“CIM”) –
CIM Definition Standards on Mineral Resources and Mineral Reserves
(“CIM
Standards”), adopted by the CIM Council, as amended.
However, these terms are not defined terms under Industry Guide 7
(“Industry Guide
7”) under the United States Securities Act of 1933, as
amended, and, until recently, have not been permitted to be used in
reports and registration statements filed with the U.S. Securities
and Exchange Commission (the “SEC” or the “Commission”).


2019 Annual Information
Form     3





The terms
“mineral reserve”, “proven mineral reserve”
and “probable mineral reserve” are also Canadian mining
terms for the purposes of NI 43-101 and CIM Standards. These
definitions differ from the definitions in Industry Guide 7. Under
Industry Guide 7, mineralization may not be classified as a
“reserve” unless the determination has been made that
the mineralization could be economically and legally produced or
extracted at the time of the reserve determination. Under Industry
Guide 7 standards, a “final” or “bankable”
feasibility study is required to report reserves, the three-year
historical average price is used in any reserve or cash flow
analysis to designate reserves and the primary environmental
analysis or report must be filed with the appropriate governmental
authority. Denison has not prepared a feasibility study for the
purposes of NI 43-101 or the requirements of the SEC in connection
with its probable mineral reserves disclosure, and therefore such
mineral reserve disclosure is not comparable to information from
U.S. companies subject to the reporting and disclosure requirements
of the SEC. Further, until recently, the SEC has not recognized the
reporting of mineral deposits which do not meet the Industry Guide
7 definition of “reserve”.





The SEC adopted
amendments to its disclosure rules to modernize the mineral
property disclosure requirements for issuers whose securities are
registered with the SEC under the Exchange Act. These amendments
became effective February 25, 2019 (the “SEC Modernization Rules”) with
compliance required for the first fiscal year beginning on or after
January 1, 2021. The SEC Modernization Rules replace the historical
disclosure requirements for mining registrants that were included
in SEC Industry Guide 7, which will be rescinded from and after the
required compliance date of the SEC Modernization Rules. As a
result of the adoption of the SEC Modernization Rules, the SEC now
recognizes estimates of “measured mineral resources”,
“indicated mineral resources” and “inferred
mineral resources”. In addition, the SEC has amended its
definitions of “proven mineral reserves” and
“probable mineral reserves” to be “substantially
similar” to the corresponding definitions under the CIM
Standards, as required under NI 43-101. Accordingly, during the
period leading up to the compliance date of the SEC Modernization
Rules, information regarding mineral resources or mineral reserves
contained or referenced in this Annual Report may not be comparable
to similar information made public by United States
companies.





United States
investors are cautioned that there are differences in the
definitions under the SEC Modernization Rules and the CIM
Standards. Accordingly, there is no assurance any mineral reserves
or mineral resources that the Company may report as “proven
mineral reserves”, “probable mineral reserves”,
“measured mineral resources”, “indicated mineral
resources” and “inferred mineral resources” under
NI 43-101 would be the same had the Company prepared the reserve or
resource estimates under the standards adopted under the SEC
Modernization Rules.





United States
investors are also cautioned that while the SEC will now recognize
“indicated mineral resources” and “inferred
mineral resources”, investors should not assume that any part
or all of the mineralization in these categories will ever be
converted into a higher category of mineral resources or into
mineral reserves. Mineralization described using these terms has a
greater amount of uncertainty as to their existence and feasibility
than mineralization that has been characterized as reserves.
Accordingly, investors are cautioned not to assume that any
“indicated mineral resources” or “inferred
mineral resources” that the Company reports are or will be
economically or legally mineable. Further, “inferred mineral
resources” have a greater amount of uncertainty as to their
existence and as to whether they can be mined legally or
economically. Therefore, United States investors are also cautioned
not to assume that all or any part of the “inferred mineral
resources” exist. In accordance with Canadian securities
laws, estimates of “inferred mineral resources” cannot
form the basis of feasibility or other economic studies, except in
limited circumstances where permitted under NI 43-101.





Accordingly,
information contained in this AIF and the documents incorporated by
reference herein containing descriptions of the Company’s
mineral deposits may not be comparable to similar information made
public by U.S. companies subject to the reporting and disclosure
requirements under the United States federal securities laws and
the rules and regulations thereunder.





2019 Annual Information
Form     4





ABOUT DENISON





Denison Mines
Corp. is primarily engaged in uranium exploration and development.
The registered and head office of Denison is located at 1100
– 40 University Avenue, Toronto, Ontario, M5J 1T1, Canada.
Denison’s website address is www.denisonmines.com.


At the end of 2019, Denison had a total of 65 active employees, all
of whom were employed in Canada. None of the Company’s
employees are unionized.

The Shares are listed on the Toronto Stock
Exchange (“TSX”)
under the symbol “DML” and on the NYSE American under
the symbol “DNN.” Computershare Investor Services Inc.
acts as the registrar and transfer agent for the Shares. The
address for Computershare Investor Services Inc. is 100 University
Avenue, 8th Floor, Toronto, ON, M5J 2Y1, Canada, and the telephone
number is 1-800-564-6253.

In this AIF, Denison or the Company means Denison Mines Corp.,
Shareholders means holders
of Denison’s common shares and Shares means Denison’s common
shares.











Denison’s Structure





Denison conducts
its business through a number of subsidiaries. The following is a
diagram depicting the corporate structure of Denison and its active
subsidiaries as at December 31, 2019, including the name,
jurisdiction of incorporation and proportion of ownership interest
in each.











Denison also owns
a number of inactive subsidiaries which have no liabilities or
assets and do not engage in any business activities.





2019 Annual Information
Form     5





Denison Asset Overview





Uranium Exploration and Development





Denison’s uranium exploration properties
are principally held directly by the Company or indirectly through
Denison Mines Inc. (“DMI”), Denison Waterbury Corp. and
Denison AB Holdings Corp.





Denison’s Key Assets - In the Athabasca Basin in Northern
Saskatchewan:

●A 90% interest in, and
operator of, the Wheeler River Uranium project, which is host to
the high-grade Phoenix and Gryphon uranium deposits –
together representing the largest undeveloped uranium project in
the infrastructure rich eastern Athabasca Basin.

●A 66.57% interest in, and
operator of, the Waterbury Lake project, which includes the J Zone
and Huskie deposits.

●A 22.50% interest in the
McClean Lake uranium processing facility and uranium deposits,
through its interest in the McClean Lake Joint Venture
(“MLJV”)
operated by Orano Canada Inc. (“Orano Canada”).

●A 25.17% interest in the
Midwest uranium project, operated by Orano Canada, which is host to
the Midwest Main and Midwest A deposits.

●An extensive portfolio of
exploration properties located in the Athabasca Basin.





Services





The Company
generates cash flow through the following areas of its
business:





(i)
 Management of Uranium
Participation Corporation (“UPC”)





Pursuant to a
management services agreement, DMI serves as the manager of UPC, a
publicly-traded company listed on the TSX under the symbol
“U”, which invests in uranium oxide in concentrates
(U3O8) and uranium
hexafluoride (UF6).





(ii)
 Denison’s Closed Mines
division (formerly Denison Environmental Services)





Denison provides
mine care & maintenance services to third party
customers.





Toll Milling





Denison is a
party to a toll-milling arrangement through its 22.50% interest in
the MLJV, whereby ore is processed for the Cigar Lake Joint Venture
(“CLJV”) at the
McClean Lake processing facility (the “Cigar Toll Milling”). In February
2017, Denison completed a financing (the “APG Transaction”) with Anglo
Pacific Group PLC ("APG")
and its wholly owned subsidiary Centaurus Royalties Ltd. for gross
proceeds to Denison of $43,500,000. The APG Transaction monetized a
portion of Denison’s future share of the Cigar Toll Milling,
providing Denison with the financial flexibility to advance its
interests in the Athabasca Basin, including the Wheeler River
project.





2019 Annual Information
Form 6





While the APG
Transaction monetized certain future toll milling receipts from the
Cigar Toll Milling, Denison retains a 22.5% strategic ownership
stake in the MLJV and McClean Lake processing facility. See
“Denison’s Operations – Cigar Lake Toll Milling
– APG Transaction”.





The Formation of Denison





Denison was
formed by articles of amalgamation as International Uranium
Corporation (“IUC”) effective May 9, 1997
pursuant to the Business
Corporations Act (Ontario) (the “OBCA”). On December 1, 2006, IUC
combined its business and operations with DMI, by plan of
arrangement under the OBCA (the “IUC Arrangement”). Pursuant to the
IUC Arrangement, all of the issued and outstanding shares of DMI
were acquired in exchange for IUC’s shares. Effective
December 1, 2006, IUC’s articles were amended to change its
name to “Denison Mines Corp.”





Through its 2013 acquisitions of JNR Resources
Inc. (“JNR”), Fission Energy Corp.
(“Fission”) and Rockgate Capital Corp.
(“Rockgate”) and its 2014 acquisition of International
Enexco Limited (“IEC”), Denison increased its project portfolio
in Canada, primarily in the Athabasca Basin.





In 2015 and 2016, Denison worked to further
achieve its objective of focusing on its core activities in the
Athabasca Basin, completing the sale of its interest in the Gurvan
Saihan Joint Venture in Mongolia to Uranium Industry a.s.
(“UI”) in 2015 (the “Mongolia
Transaction”) and
completing a transaction with GoviEx Uranium Inc.
(“GoviEx”) in 2016 to combine their respective
African uranium mineral interests, with GoviEx acquiring
Denison’s uranium mineral interests in Zambia, Mali and
Namibia. See “Legal and Regulatory Proceedings” for
more information on the Mongolia Transaction.





DEVELOPMENTS OVER THE LAST THREE YEARS





2017...





In January,
Denison executed an agreement with the partners of the Wheeler
River Joint Venture ("WRJV")
that was expected to increase Denison's ownership of the Wheeler
River project to up to approximately 66% by the end of 2018. At
that time, the WRJV was a joint venture between Denison as operator
(60.0% interest, which is now a 90.0% interest), Cameco Corporation
("Cameco") (30.0% interest,
which is now a 0.0% interest), and JCU (Canada) Exploration Limited
("JCU") (10.0% interest)
(collectively, the "WRJV
Parties"). Under the terms of the agreement, the WRJV
Parties agreed to allow for a one-time election by Cameco to fund
50% of its ordinary share (30%) of joint venture expenses in 2017
and 2018. The shortfall in Cameco's contribution would be funded by
Denison, in exchange for a transfer to Denison of a portion of
Cameco's interest in the WRJV. Accordingly, Denison's share of
joint venture expenses was to be 75% in 2017 and 2018, and Cameco
and JCU's share of joint venture expenses was to be 15% and 10%,
respectively. See “Mineral Properties – Wheeler
River”.





Also in January,
UI and Denison entered into an extension agreement (the
“Extension
Agreement”), pursuant to which it was agreed that the
payment deadline for the contingent payments due for the Mongolia
Transaction under the Amended and Restated Share Purchase Agreement
between Denison and UI dated November 25, 2015 (the
“GSJV Purchase
Agreement”) would be extended from November 2016 to
July 2017, provided that the outstanding amount would bear interest
at a rate of 5% per annum, payable monthly in arrears. The
contingent payments had become payable after the Mongolian
government (through the Mineral Resource Authority of Mongolia)
formally issued the mining license certificates for the Hairhan,
Haraat, Gurvan Saihan and Ulzit projects in September 2016. The
first payment under the Extension Agreement was due on or before
January 31, 2017. The required payments were not made and UI is in
default of its obligations under the Extension Agreement and GSJV
Purchase Agreement. For further updates, see below in this section
and in “Legal and Regulatory Proceedings”.





2019 Annual Information
Form 7





In February,
Denison completed the APG Transaction for gross proceeds to Denison
of $43,500,000. See “Denison’s Operations – Cigar
Lake Toll Milling – APG Transaction”.





Co-ordinated with
the closing of the APG Transaction, the maturity date under the
credit facility with the Bank of Nova Scotia (the
“Credit
Facility”) was extended to January 31, 2018 and
the terms of the Credit Facility were amended to reflect certain
changes required to facilitate an inter-creditor agreement between
BNS and the parties to the APG Transaction. Amongst those changes,
BNS and DMI agreed to replace a restrictive covenant to maintain
$5,000,000 on deposit with BNS with a pledge of $9,000,000 in
restricted cash or GIC's as collateral. Under the amended Credit
Facility, Denison will pay letter of credit fees of 0.4% on the
first $9,000,000 of credit utilized under the facility (associated
with the restricted cash), and 2.4% on the remaining $15,000,000 of
letters of credit issued thereunder.





Also in February,
Mr. Kwang Hee Jeong was appointed to the Board as KHNP
Canada’s representative.





In March, Denison
closed a private placement share offering, under which the Company
issued, in aggregate, 18,337,000 Shares of Denison for gross
proceeds of $20,000,290. The aggregate share offering was comprised
of the following three elements: (a) a “Common Share”
offering which consisted of 5,790,000 Shares at a price of $0.95
per Share for gross proceeds of $5,500,500; (b) a “Tranche A
Flow-Through” offering which consisted of 8,482,000 Shares
issued on a “flow-through” basis at a price of $1.12
per Share for gross proceeds of $9,499,840; and (c) a
“Tranche B Flow-Through” offering which consisted of
4,065,000 Shares issued on a “flow-through” basis at a
price of $1.23 per Share for gross proceeds of
$4,999,950.





In April, Denison
completed its winter exploration drilling in the Athabasca Basin.
At Wheeler River, the winter 2017 drilling program was focused on
two objectives: (1) continued infill and delineation drilling of
the Gryphon deposit, in order to upgrade the estimated inferred
resources to an indicated level of confidence, and (2) exploration
drilling outside of the current resources estimated for the Gryphon
deposit, with the aim of discovering additional resources. The
winter 2017 drilling program at Wheeler River was completed with a
total of 14,732 metres drilled in 26 holes. Drilling results at
Wheeler River included intersections of high-grade mineralization
within the D Series lenses of mineralization, located within 200
metres north and northwest of the Gryphon deposit. Other notable
winter results included high grade intersections from infill
drilling within the Gryphon deposit’s A, B and C series
lenses, where 17 drill holes, totaling approximately 8,402 metres,
were completed as part of the winter 2017 program. Winter drilling
programs were also completed by the Company at Waterbury Lake (9
holes, 4,803 metres), Murphy Lake (9 holes, 3,433 metres) and
Crawford Lake (1 hole, 519 metres). A further 5,029 metres of
drilling was completed in 17 holes on the Wolly project by Orano
Canada.





In July, Denison
announced that Denison Environmental Services (now Denison’s
Closed Mines Group) had entered into a new two-year services
agreement with Rio Algom Limited (“Rio Algom”), which is a subsidiary
of BHP Billiton Limited (“BHP”). Pursuant to the agreement,
Denison was responsible for the management and operation of nine
decommissioned mine sites in Ontario and two in Quebec from July 1,
2017 to June 30, 2019. See “Developments Over the Last Three
Years – 2019...” for details of the
agreement’s renewal.





2019 Annual Information
Form 8





In September,
Denison reported the completion of the summer exploration drilling
program at the Waterbury Lake project. The summer 2017 drill
program at Waterbury Lake commenced in late July and was highly
successful, returning several high-grade uranium intersections from
a target area located approximately 1.5 kilometres to the northeast
of the property’s J Zone uranium deposit. Following the
discovery of uranium mineralization in the first four drill holes
of the program, the scope of the program was increased in late
August to allow for a total of 9 drill holes. Of the eight drill
holes designed to test for basement-hosted mineralization, seven
holes intersected significant mineralization, including 9.1%
U3O8over 3.7 metres (drill hole
WAT17-446A), 1.7% U3O8over
7.5 metres (drill hole WAT17-449) and 1.5% U3O8over 4.5 metres; (drill hole
WAT17-450A).Taken
together, the summer program included a total of 3,722 metres
drilled and resulted in the wide-spaced definition (approximately
50 x 50 metre drill hole spacing) of a significant zone of entirely
basement-hosted mineralization with geological features consistent
with basement-hosted deposits in the Athabasca Basin. This new zone
of mineralization at the Waterbury Lake project became known as the
“Huskie” zone.





Also in
September, Denison and KHNP Canada entered into an amended and
restated strategic relationship agreement dated September 19, 2017
(the “KHNP
SRA”), on substantially similar terms as the prior
strategic relationship agreement with KEPCO. The KHNP SRA was
entered into in connection with the December 2016 transfer by KEPCO
of substantially all of its indirect ownership of Denison’s
Shares to KHNP Canada. See “Risk Factors – Potential
Influence of KEPCO and KHNP”.





In November, the
Company announced the completion of the summer 2017 drilling
program at the Wheeler River project, including a total of 64 drill
holes (totalling 29,224 metres). The drilling program was focused
within, and in the immediate vicinity of, the Gryphon deposit ahead
of a planned update to the mineral resource estimate for the
property. Highlights from the summer drilling program included: (1)
expansion of high-grade mineralization within the D series lenses;
(2) discovery and expansion of the E series lenses both at the
unconformity and within the upper basement; and (3) expansion of
the A and B series lenses both up-dip and down dip. The Company
also successfully completed the definition drilling program on the
Gryphon deposit’s A, B and C series lenses, with the
objective of increasing the confidence of the previously estimated
mineral resources from an inferred to indicated level. A summer
drilling program was also completed by the Company at Crawford Lake
(4 holes, 2,068 metres) and a further 5,870 metres of drilling was
completed in 20 holes on the McClean project by Orano
Canada.





In December, the
Company filed a Request for Arbitration under the Arbitration Rules
of the London Court of International Arbitration against UI in
connection with the continued failure of UI to pay to the Company
the contingent consideration payable under the GSJV Purchase
Agreement and the Extension Agreement, with respect to the Mongolia
Transaction. See “Legal and Regulatory
Proceedings”.





2018...





In January, the
Company amended and extended its Credit Facility to January 31,
2019.





Also in January,
Denison announced an 88% increase in the indicated mineral
resources estimated for the Wheeler River project with the
completion of an updated mineral resource estimate for the Gryphon
deposit at Wheeler River. The Gryphon deposit is estimated to
contain, above a cut-off grade of 0.2% U3O8, 61.9 million
pounds of U3O8 (1,643,000 tonnes
at 1.71% U3O8) in indicated
mineral resources, plus 1.9 million pounds of U3O8 (73,000 tonnes at
1.18% U3O8) in inferred
mineral resources. By comparison, the maiden mineral resource
estimate, completed in September 2015, was comprised of inferred
mineral resources of 43.0 million pounds of U3O8 above a cut-off
grade of 0.2% U3O8 (834,000 tonnes
at 2.3% U3O8). Together,
Wheeler River is now host to 132.1 million pounds U3O8 (1,809,000 tonnes
at an average grade of 3.3%) in total indicated mineral resources.
Following the mineral resource update, Wheeler River retained and
improved its standing as the largest undeveloped high-grade uranium
project in the infrastructure rich eastern portion of the Athabasca
Basin. In March, Denison filed a technical report containing the
updated mineral resource estimate for the Wheeler River property.
See “Mineral Properties – Wheeler
River”.





2019 Annual Information
Form 9





In March, Denison
also completed a review of an updated mineral resource estimate for
the Midwest project. The review resulted in the estimation of (a)
inferred mineral resources on the property increasing to 18.2
million pounds of U3O8 (100% basis;
above a cut-off grade of 0.1% U3O8), an increase of
13.5 million pounds of U3O8 from the prior
estimate; and (b) indicated mineral resources increasing to 50.78
million pounds U3O8 (100% basis;
above a cut-off grade of 0.1% U3O8), an increase of
2.08 million pounds U3O8 from the prior
estimate. A technical report was filed on March 27, 2018. See
“Mineral Properties – Midwest”.





In April, Denison
further amended the Credit Facility to accommodate the Company's
change in financial statement presentation currency to Canadian
dollars. The covenant in the Credit Facility to maintain a
specified level of tangible net worth was changed to $131,000,000
(from US$150,000,000).





Also in April,
the Company reported the completion of the winter drilling program
at the Wheeler River project, including the discovery of high-grade
uranium mineralization 600 metres and 1 kilometre to the northeast
of the Gryphon uranium deposit. High-grade intercepts were obtained
at the sub-Athabasca unconformity along the K-North trend from
reconnaissance drill fences spaced 200 metres apart. The results
were confirmed by chemical assays announced on June 6, 2018, which
included 1.4% U3O8 over 5.5 metres
(including 7.2% U3O8 over 1.0 metre)
in drill hole WR-704, located 600 metres northeast of Gryphon; and
1.1% U3O8 over 3.0 metres
(including 2.8% U3O8 over 1.0 metre)
in drill hole WR-710D1, located 1 kilometre northeast of Gryphon.
The winter drilling program at Wheeler included 21,153 metres
drilled in 29 diamond drill holes, largely focused on step-out
drilling along strike of the Gryphon deposit and reconnaissance
level regional exploration along the K-North and K-West
trend.





And in April,
Denison reported the expansion of the Huskie zone on the Waterbury
Lake project, with the receipt of U3O8 chemical assay
results from the Company's winter 2018 diamond drilling program.
The results were highlighted by the following intercepts: 4.5%
U3O8 over 6.0 metres
(including 5.8% U3O8 over 4.5 metres),
and 0.57% U3O8 over 6.3 metres
(including 1.9% U3O8 over 1.0 metre)
in drill hole WAT18-452; and 0.62% U3O8 over 1.0 metre in
drill hole WAT18-460A. The winter drilling program involved 9,794
metres of diamond drilling in 19 drill holes, and was focused on 50
metre step-out drilling along strike and down-dip of the Huskie
zone, as well as wider-spaced reconnaissance drilling to the west
along the geological trend.





In May, Denison
announced the results of its Annual General Shareholders Meeting,
which included the ratification and approval of the Company’s
new Share Unit Plan and the previous grants of share units
thereunder.





In August,
changes were made to the composition of the Company’s Board
of Directors, with the appointment to the Board of David Cates, the
Company’s President and Chief Executive Officer, Jack Lundin,
Moo Hwan Seo and Patricia Volker. At that time, the Company
accepted the resignation of Kwang-Hee Jeong and Lukas Lundin. In
addition, Catherine Stefan, previously serving as the
Company’s independent Lead Director, was appointed Chair of
the Board.





2019 Annual Information
Form 10





In September,
Denison entered into an agreement with Cameco, pursuant to which
Denison would increase its ownership interest in the Wheeler River
project to 90% through the acquisition of 100% of Cameco’s
minority interest in the WRJV (subject to certain rights of first
refusal in favour of JCU pursuant to the WRJV joint venture
agreement) in exchange for the issuance to Cameco of 24,615,000
Shares of Denison. JCU waived its rights under the WRJV joint
venture agreement to acquire any of Cameco’s interest, and
Denison’s acquisition of Cameco’s interest was
completed effective October 26, 2018 (the “Cameco Transaction”). See
“Mineral Properties – Wheeler
River”.





Also in
September, Denison announced the appointment of Tim Gabruch as the
Corporation’s Vice President Commercial.





And in September,
Denison reported a new discovery of uranium mineralization on the
Company's Waterbury Lake project. Basement-hosted uranium
mineralization was intersected in two drill holes, approximately
three kilometres northeast of the project's Huskie deposit,
returning mineralized assay intervals of 0.43% U3O8 over 1.0 metre
(including 0.73% U3O8 over 0.5 metres)
in drill hole WAT18-478 and 0.45% U3O8 over 0.5 metre as
well as 0.31% U3O8 over 0.5 metre
and 0.20% U3O8 over 0.5 metre in
drill hole WAT18-479. The zone of mineralization was subsequently
named the GB zone.





In September,
Denison announced the results of the Pre-Feasibility Study
(“PFS”) for the
Wheeler River project. The PFS was completed in accordance with NI
43-101 and is highlighted by the selection of the in-situ recovery
("ISR") mining method for
the development of the high-grade Phoenix deposit
(“Phoenix”),
with an estimated average operating cost of $4.33 (US$3.33) per
pound U3O8. The PFS
considers the potential economic merit of co-developing the Phoenix
and Gryphon deposits. The ISR mining operation planned for Phoenix,
would see associated processing to a finished product occurring at
a plant to be built on site at Wheeler River. The Gryphon deposit
is designed as an underground mining operation, utilizing a
conventional long hole mining approach with processing of mine
production assumed at Denison's 22.5% owned McClean Lake mill.
Taken together, the project is estimated to have mine production of
109.4 million pounds U3O8 over a 14-year
mine life, with a base case pre-tax Net Present Value
("NPV") of $1.31 billion (8%
discount rate), Internal Rate of Return ("IRR") of 38.7%, and initial
pre-production capital expenditures of $322.5 million. The
base-case economic analysis assumes uranium sales are made at UxC
Consulting Company, LLC's ("UxC") annual estimated spot price
(composite mid-point scenario) for mine production from Phoenix
(from ~US$29/lb U3O8 to US$45/lb
U3O8), and a fixed
price for mine production from the Gryphon deposit (US$50/lb
U3O8). The PFS is
prepared on a project (100% ownership) and pre-tax basis, as each
partner to the WRJV is subject to different tax and other
obligations. The technical report in support of the PFS was filed
on October 30, 2018. See “Mineral Properties – Wheeler
River”.





In November,
Denison reported that it had completed a maiden mineral resource
estimate for the Huskie basement-hosted uranium deposit in
accordance with NI 43-101 and CIM Definitions (2014), which was
reviewed and audited by SRK Consulting (Canada) Inc.
(“SRK”). The
result was an inferred mineral resource estimate of 5.7 million
pounds of U3O8 (above a cut-off
grade of 0.1% U3O8) based on 268,000
tonnes of mineralization at an average grade of 0.96% U3O8. The updated
technical report for Waterbury, including the Huskie mineral
resource estimate, was filed on December 21, 2018. See
“Mineral Properties – Waterbury
Lake”.





2019 Annual Information
Form 11





Also in November,
Denison reported the discovery of unconformity uranium and base
metals mineralization on the K West trend at Wheeler River.
Highlights from the Company's summer 2018 diamond drilling program
at Wheeler River included drill hole WR-733D1, which returned 0.30%
U3O8, 4.7% Co, 3.7% Ni
and 0.55% Cu at the unconformity on the K West trend, approximately
500 metres west of the parallel K North trend, which hosts the
Gryphon deposit.





And in November,
Denison announced the completion of a private placement offering
(the "2018 Offering") of
Shares issued on a "flow-through" basis pursuant to the
Income Tax Act (Canada).
The Company issued 4,950,495 Shares, at a price of $1.01 per Share,
for total gross proceeds of approximately $5,000,000. The gross
proceeds of the financing were used to fund expenses related to the
Company's exploration activities in 2019.





In December, the
Company's Board of Directors and the WRJV each approved the
advancement of the Wheeler River project, following a detailed
assessment of the robust economic results demonstrated in the
PFS.





2019...





In January, the
Company amended and extended its Credit Facility to January 31,
2020.





In March, Mr. Moo
Hwan Seo resigned from the Board. Mr. Geun Park joined the Board,
filling the vacancy created by Mr. Seo’s
resignation.





In March, the
Company announced the execution of the new five-year management
services agreement (the “MSA”) to provide management
services to UPC. The MSA took effect on April 1, 2019, at the
conclusion of the three-year term of the then current management
services agreement between UPC and DMI. See “Manager of
UPC”.





In May, the
Company announced the discovery of unconformity-hosted uranium
mineralization along the southern portion of the K West trend at
the Company’s Wheeler River Project, including 0.08%
eU3O8 over 1.3 metres
in drill hole WR-756, accompanied by strong sulphide mineralization
and other geological features commonly associated with
unconformity-related uranium deposits. The Company also announced
the completion of follow-up drilling at the GB Zone at Waterbury
Lake, which intersected basement-hosted mineralization in multiple
drill holes, including 0.15% U3O8 over 6.0 metres
in drill hole WAT19-480, and 0.25% U3O8 over 2.0 metres
and 0.22% U3O8 over 1.5 metres
in drill hole WAT19-486.





In June, the
Canadian Nuclear Safety Commission ("CNSC") and the Saskatchewan Ministry of
Environment accepted the Provincial Technical Proposal and Federal
Project Description (the "Project
Description") submitted by Denison for the ISR uranium mine
and processing plant proposed for the Wheeler River Project. This
acceptance initiated the Environmental Assessment
(“EA”) process
for Wheeler River in accordance with the requirements of both the
Canadian Environmental Assessment
Act, 2012 and the Saskatchewan Environmental Assessment
Act.





Also in June, the
Company announced that it had executed a series of Memoranda of
Understanding (the "MOUs"),
in support of the Wheeler River Project, with certain Indigenous
communities who assert that Wheeler River falls partially or
entirely within their traditional territories and where traditional
land use activities are currently practiced within the local and
regional area surrounding the project. These non-binding MOUs
formalize the signing parties’ intent to work together in the
spirit of mutual respect and cooperation, in order to collectively
identify practical means by which to avoid, mitigate, or otherwise
address potential impacts of the project upon the exercise of
Indigenous rights, Treaty rights, and other interests, as well as
to facilitate sharing in the benefits that are expected to flow
from the project.





2019 Annual Information
Form 12





In June, the
Company announced its plans to undertake an initial ISR field test
program within the Phoenix orebody at Wheeler River, using water to
evaluate hydrologic conditions that can be used to assess the
hydraulic connections and potential mining solution flow between a
series of test wells. Initial test results from Test Area 1 at
Phoenix were announced in August, which confirmed hydraulic
connectivity between multiple test wells, providing significant
preliminary indications of the suitability of Test Area 1 for the
application of ISR mining. In September, the Company reported the
initial results from Test Area 2 of Phoenix, which also confirmed
hydraulic connectivity within a significant portion of the ore zone
tested.





In July,
Denison’s Closed Mines group entered into a new two-year
services agreement with Rio Algom, a subsidiary of BHP. Under the
terms of the agreement, the Closed Mines group is responsible for
carrying out the management and operation of nine of Rio
Algom’s decommissioned mine sites in Ontario and Quebec from
July 1, 2019 to June 30, 2021, which services include the operation
of water treatment plants and tailings management facilities;
environmental monitoring and compliance, data management, and
regulatory reporting; maintenance of roads, dams and electrical
infrastructure; site management, including health and safety,
procurement, logistics, and budgeting activities; and project
management and execution for various projects, including
infrastructure upgrades and replacements, engineering and
environmental programs, as well as water management
initiatives.





In September,
following the positive initial field test results at Phoenix,
Denison advanced to the second stage of ISR field testing –
the installation of a large-diameter commercial scale well
("CSW") in each of Test Area
1 and Test Area 2 of Phoenix, with each well designed to meet the
technical and regulatory standards expected for a commercial ISR
well at Phoenix.





In October, David
Bronkhorst was appointed Vice President Operations with
responsibility for overseeing and advancing the Company’s
project evaluation programs for Wheeler River.





Also
in October, the Company successfully installed two CSWs at Phoenix
– marking the completion of the first CSWs designed for ISR
mining in the Athabasca Basin. The completion of each CSW included
the drilling of a large-diameter vertical borehole (~12 inches in
diameter), to intersect the Phoenix ore body at a depth of
approximately 400 metres below surface, and the installation of
well materials designed to meet expected environmental and
regulatory standards for eventual ISR mining. The Company also
tested down-the-hole permeability enhancement techniques within the
large diameter CSWs.





In December, Denison completed a private placement
offering (the "2019
Offering") of Shares issued on
a "flow-through" basis pursuant to the Income Tax Act
(Canada). Denison issued 6,934,500
flow-through shares, at a price of $0.68 per share, for aggregate
gross proceeds to Denison of approximately $4.7 million, which
includes the exercise, in full, of the over-allotment option of
904,500 shares. The gross proceeds from the financing will be used
to fund the Company’s Canadian exploration expenses through
to the end of 2020.





Also in December,
Denison reported the completion of a highly successful ISR field
test program at Phoenix. The ISR field test program was designed to
validate the permeability of Phoenix, and to collect an extensive
database of hydrogeological data to further evaluate the ISR mining
conditions present at Phoenix. This detailed data is expected to
facilitate detailed mine planning as part of the completion of a
future Feasibility Study (“FS”). The ISR field test program,
as described above, successfully achieved each of its planned
objectives.





2019 Annual Information
Form 13





Denison also
announced the initiation of the next phase of ISR metallurgical
laboratory testing for uranium recovery, which will utilize the
mineralized drill core recovered through the installation of
various test wells during the 2019 ISR field test program. The
metallurgical laboratory test program builds upon the laboratory
tests completed for the recovery of uranium as part of the
project’s PFS and is expected to further increase confidence
and reduce risk associated with the application of ISR. The results
are expected to facilitate detailed mine and process plant planning
as part of a future FS, and will provide key inputs for the EA
process. Significant components of the metallurgical laboratory
test program include core leach tests, column leach tests,
bench-scale tests and metallurgical modelling.





And in December,
Denison received a positive scoping decision, with a Record of
Decision issued by the CNSC on the scope of the factors to be taken
into account for the EA for the Wheeler River project, which
indicate that the EA will follow the CNSC’s generic
guidelines.





Recent Developments...





In January, the
Company amended and extended its Credit Facility to January 31,
2021.





In January, Mr.
Geun Park resigned from the Board. Mr. Jun Gon Kim joined the Board
effective February 17, 2020, filling the vacancy created by Mr.
Park’s resignation.





In February,
Denison reported that initial data from the Phoenix Deposit core
leach tests includes elemental uranium concentrations, after test
startup, in the range of 13.5 grams per litre (‘g/L’)
to 39.8 g/L, and an average of 29.8 g/L over a 20-day period of
testing. This compares favourably to the previous metallurgical
test work completed to assess the use of the ISR mining method at
Phoenix, which supported the use of an assumed uranium
concentration of 10 g/L in the PFS design for the ISR processing
plant.





Also in February
2020, Denison reported that the results from the hydrogeological
test work completed to-date have confirmed the ability to achieve
bulk hydraulic conductivity values (a measure of permeability)
consistent with the PFS. Extensive hydrogeological data sets were
collected during the 2019 ISR field program, and are being
incorporated into a hydrogeological model being developed for
Phoenix. The completed hydrogeological model will allow for
detailed planning for further ISR field testing with the intention
that it will ultimately support the completion of a future
FS.








2019 Annual Information
Form     14





THE URANIUM INDUSTRY





Much of 2019 was
defined and influenced by policy matters in the United States
(“US”), which
have effectively created an overhang of uncertainty throughout the
uranium market. In July 2019, the US Presidential Administration
completed an investigation into a trade petition, launched under
Section 232 of the Trade Expansion Act of 1962 (“Section 232”), and no trade
actions were implemented. The US President indicated that the
Administration’s investigation did not agree with findings of
the US Department of Commerce (“DOC”) that uranium imports
threaten to impair US national security. This announcement was
expected to provide clarity to the uranium market; however, the
Administration followed the decision with an order to review the
nuclear fuel supply chain in the US. Accordingly, a Nuclear Fuel
Working Group (“NFWG”) was commissioned to examine
the current state of domestic nuclear fuel production to
reinvigorate the entire nuclear fuel supply chain, consistent with
United States national security and non-proliferation goals, and to
make recommendations to further enable US domestic nuclear fuel
production, if needed. A report from the NFWG was submitted to the
White House in late 2019. To date, no official recommendations have
been made public; however, the President’s recent Budget
Request for Fiscal Year 2021 included $150 million in Department of
Energy budget funding to establish a uranium reserve. The budget
request also set out a schedule for a similar amount to be approved
in the budget in each of the next ten years.





Another source of
uranium market uncertainty stems from policies relating to Russian
deliveries of nuclear fuel into the US. Since breaking from the
Joint Comprehensive Plan of Action with Iran, commonly known as the
Iran Nuclear Deal, the US Administration has put in place sanctions
against Iran. The US has also issued waivers to certain of
Iran’s trading partners, allowing entities from particular
nations, including Russia, to continue working with Iran on
civilian nuclear programs. On December 15, 2019, one of those
waivers, related to Iran’s Fordow Fuel Enrichment Plant, was
lifted, which raised concern among market participants regarding
the possibility of other waivers being revoked. The waiver causing
uranium market participants particular concern relates to the
Bushehr nuclear power plant, which Russia is involved in building.
If this waiver is removed, there is concern that Russia could face
sanctions in the US, which would halt deliveries of Russian nuclear
fuel to US utilities and represent a significant supply-side
development.





Also relevant to
Russian nuclear fuel supply into the US is the Agreement Suspending
the Antidumping Investigation on Uranium from the Russian
Federation (also known as the Russian Suspension Agreement, or the
“RSA”), which
established an annual quota limiting the delivery of nuclear fuel
into the US from Russia. This agreement is set to expire at the end
of 2020 and is currently under review. Before the agreement
expires, a decision needs to be made by the US DOC as to whether
there will be an extension and, if so, whether an extension will be
under existing or revised terms. If the RSA expires, Russian-origin
uranium products and services could be sold into the US without any
restrictions – adding further uncertainty to the uranium
market.





These market
dynamics contributed to a soft uranium price throughout the year.
In 2019, the spot uranium price traded within a narrow band,
beginning the year at USD$28.50 per pound U3O8 and ending it
down over 12% at USD$25.00 per pound U3O8. Lower prices
near the end of the year were attributed to limited demand in the
spot market. While spot uranium volumes did not match the historic
high reached in 2018 (almost 89 million pounds U3O8), 2019 spot
buying remained reasonably strong at 65 million pounds
U3O8.
Similar to 2018, however, despite seeing fairly robust spot market
volumes, long-term utility contracting remained low in
2019.





2019 Annual Information
Form 15





Despite the
impact of these policy matters, there are several indications that
uranium supply and demand fundamentals continue to improve
underneath the cloud of uncertainty that has dominated the market
in 2019. This was underscored in the bi-annual Nuclear Fuel Report
released by the World Nuclear Association (“WNA”) at its annual symposium in
September 2019. The report evaluates nuclear fuel demand and supply
scenarios for the period from 2019 to 2040, using reference, low
and high cases. For the first time in several years, the
WNA’s outlook for global uranium demand increased for all
three scenarios, which is positive for the future outlook on demand
and reflects industry consensus that the demand picture has
improved significantly in recent years.





This has been
supported by many positive news stories on the demand side,
including increasing public recognition of the critical role
nuclear energy has to play in combatting climate change. One of the
most significant acknowledgments of this was made by the European
Union (“EU”),
with its leaders recently agreeing that nuclear energy must be
included as part of the solution required to meet the EU’s
goal of becoming carbon neutral by 2050. The EU’s
‘European Green Deal’ officially acknowledged the
importance of nuclear energy in meeting the region’s
comprehensive climate action goals.





●    
  In the US, there were a number of positive announcements
through the course of 2019. In Ohio, a long-awaited energy bill was
passed supporting the continued operation of the Davis-Besse and
Perry nuclear power plants. Previous attempts to secure subsidies
for these plants were unsuccessful, which had led most in the
industry to believe the plants would be shut down by calendar year
2021. Recognizing the long-term viability of existing nuclear power
plants, the Turkey Point nuclear units 3 and 4 received approval
for an additional 20 years of operating life from the US Nuclear
Regulatory Commission (‘NRC’). This additional
extension will take the reactors to a total of 80 years of
operating life, which is the longest license ever issued by the
NRC. Turkey Point 3 and 4 are now licensed to operate to 2052 and
2053, respectively. In the US Midwest, the life of the Monticello
nuclear plant was extended by another decade to 2040.





●      
In Mexico, the country’s national nuclear utility, the
Federal Electricity Commission, is considering building four new
nuclear reactors, to add to its existing two units at Laguna Verde.
The utility shared its plans to present a feasibility study to
management and the government in 2020. The study will examine a
project to build 1,400 megawatts (“MWe”) reactors, with an estimated
cost of US$7 billion each.





●     
In Canada, with the longer-term future of nuclear in mind, the
provincial governments of New Brunswick, Ontario and Saskatchewan
demonstrated support for future nuclear new builds. The leaders of
these provinces announced that they had joined efforts to
collaborate on advancing small modular reactor (“SMR”) technologies. The leaders
see SMR’s as a practical solution to help curb carbon
emissions, move away from coal-fired power generation, and create
an opportunity for new economic growth in the
provinces.





●     
In India, the government continued to demonstrate its commitment to
increase its use of nuclear energy. At a recent nuclear conference,
the Chairman of India’s Atomic Energy Commission and
Secretary of the Department of Atomic Energy reinforced the
country’s aggressive pursuit of new nuclear power plants in
order to improve the reliability of the country’s power
supply. The government’s Union Minister for Atomic Energy
also confirmed that there are currently nine reactors under
construction in India and indicated that the government had given
administrative and financial support to build an additional 12 new
reactors with a capacity of 9,000 MWe.





2019 Annual Information
Form 16





●      
In the United Kingdom, a leaked government analysis stressed the
need to build a fleet of new nuclear or carbon capture power plants
in order to meet climate targets. The UK government believes that
up to 40,000 MWe of low carbon power stations could be needed in
2050 to reduce Britain’s emissions to ‘net zero’
and currently there is just one nuclear power plant under
construction – EDF Energy’s 3,200 MWe Hinkley Point C
in England.





●    
  In South Korea, KHNP announced the successful start-up of
its Shin Kori 4 nuclear power plant. Initial criticality was
reached and the unit was connected to the grid in April 2019. The
Shin Kori 4 unit is a 1,400 MWe APR-1400, which is the same design
as those currently under construction in the United Arab Emirates
at the Barakah nuclear power plant, which is expected to begin
supplying electricity early in 2020.





●     
In Taiwan, sentiment has shifted away from a previous policy to
eliminate nuclear power from the Taiwan energy mix. In May 2019,
the country passed an amendment to eliminate the ‘Nuclear
Free Homeland 2025’ mandate that was imposed by the
anti-nuclear Democratic Progressive Party in early 2017. This
amendment has opened the door for future pro-nuclear decisions to
be made regarding extending the lives of existing nuclear power
plants in the country, as well as the possible completion of the
Lungmen nuclear power plant, where construction was halted in
2014.





●      
In Germany, positive sentiment towards nuclear also appears to be
growing. In 2019 the government received escalating calls from
several of the country’s most prominent businesses to delay
the country’s plans to implement a full-scale nuclear
phase-out by the end of 2022. Some of these businesses emphasized
the importance of nuclear power, highlighting that Germany needs to
run its nuclear power plants longer if climate protection really
matters to the country.





Though much of
the nuclear news out of Asia was positive, news emerged from Japan
early in 2019 that the requirements set out by the country’s
Nuclear Regulation Authority (“NRA”) for utilities to complete
anti-terrorism protection work on each reactor’s emergency
facilities were unlikely to be met on schedule. All three utilities
currently operating units in Japan have said they require between
one and two and a half additional years to complete the required
work. The NRA has indicated, however, that it will not extend the
deadline. Due to this, it was recently announced that reactors 3
and 4 at the Takahama nuclear power plant will stop operating by
the summer of 2020, with work aimed at meeting the NRA commitment
about one year behind schedule





Overall, uranium
demand has grown in recent years, having now exceeded the annual
levels that existed prior to Japan shutting all of its nuclear
units following the 2011 Fukushima Daichii nuclear
incident.





The supply side
of the uranium market has also been progressing in the right
direction. This has resulted in a growing gap between annual
utility requirements and primary production, which continues to be
filled by drawing down on inventories and other secondary sources
of supply. Some of these positive supply indicators
include:





●      
The world’s largest and lowest cost uranium producer,
National Atomic Company Kazatomprom, announced in August 2019 that
it was reaffirming its commitment to reach and maintain a more
commercial balance between supply and demand by extending its 20%
production curtailment through to 2021.





2019 Annual Information
Form 17





●      
Other important supply side changes included Rio Tinto finalizing
the sale of its Rössing operation in Namibia to China’s
China National Uranium Corporation. Taken together with the slow
wind down of Rio Tinto’s Ranger operation in Australia, we
expect to see Rio Tinto, one of the world’s largest mining
companies and a long-term major producer in the uranium industry,
completely exit the market.





●      
In Niger, it was announced that the Cominak mine will cease
operation in March 2021, due to depletion of ore. The operation has
been a source of supply to the industry since 1978.





With a
significant shortfall having developed between annual nuclear
utility requirements and primary production, inventories and other
secondary sources of supply are being drawn down to meet utility
needs. This process of inventory drawdowns suggests that we are
nearing an inflection point - where end-users of uranium begin to
question where long-term uranium supplies will come from and how
secure that supply will be over the long lives of their nuclear
reactors. There is already a growing sense that market participants
are beginning to look beyond near-term market conditions in an
attempt to understand what the supply environment will look like in
the mid-2020s and beyond. With a renewed focus on nuclear energy as
a critical element in battling climate change, it is expected that
global utilities will be looking to source future supply from
operations that are not only low-cost, reliable, and situated in
stable jurisdictions (the typical criteria for a good supplier),
but also those which are flexible and environmentally
responsible.





Uranium Demand





As of February
2020, the WNA reports that there are 442 nuclear reactors operable
in 30 countries. These reactors can generate more than 392
gigawatts of electricity (“GWe”), which equates to
approximately 10% of the world's electrical requirements, with
twelve countries producing 25% or more of their country’s
electricity from nuclear. As well, there are currently 54 nuclear
reactors under construction in 18 countries with the principal
drivers of this expansion being China (12 reactors under
construction), Russia (4), India (7), South Korea (4), UAE (4) and
the United States (4). In addition, there are another 109 reactors
currently planned around the world.





According to
UxC’s Q1 2020 Uranium Market Outlook (“Q1 2020 Outlook”), global nuclear
power capacities are projected to increase to 449 reactors in 32
countries in 2020, generating approximately 399 GWe as new plants
come on line. By 2035, that is expected to be 470 reactors,
generating approximately 459 GWe in 36 countries. In the Q1 2020
Outlook, UxC estimates base case demand will be 182 million pounds
U3O8 in 2020. UxC also
estimates that annual uranium demand could grow to 226 million
pounds U3O8 under their base
case, by 2035 and to almost 304 million pounds U3O8 in their high
case in the same period.








Primary Uranium Supply





UxC’s Q1
2020 Outlook estimates that world uranium production for 2020 is
expected to be approximately 142 million pounds U3O8, a slight
increase over 2019’s production of 140 million pounds
U3O8.





In Canada, Cigar
Lake production is expected to remain constant at 18 million pounds
U3O8 per year through
2028, according to the Q1 2020 Outlook. McArthur River remains
closed indefinitely with no immediate plans for future production,
and a decision to restart is expected to be dependent on market
conditions. Canada remains the second largest producing nation,
with almost 13% of the world’s expected 2020 production,
while Kazakhstan is expected to continue to be the world’s
largest producer of uranium in 2020 by a large margin, representing
almost 42% of production.





2019 Annual Information
Form 18





UxC estimates in
its Q1 2020 Outlook that existing mine production, plus new planned
and potential mine production under its base case, will reach a
peak of 159 million pounds U3O8 by 2028, before
declining back down to 97 million pounds U3O8 by 2035. At its
projected height in 2028, production levels are anticipated to
include the resumption of mining at McArthur River, with UxC
anticipating the mine will ramp up from 4 million pounds
U3O8 in 2027 to 18
million pounds U3O8 by 2028. While
Kazakhstan is seen to maintain relatively consistent supply in
future years, it does start to drop off significantly closer to
2035. In order for other projects to move forward and increase
production forecasts, UxC believes uranium prices will need to
increase appreciably to support higher cost production profiles and
the significant capital expenditures that will be
required.








Secondary Uranium Supply





In the Q1 2020
Outlook, primary mine production in 2020 is estimated to supply
approximately 78% of the year’s estimated base case demand,
with the balance of demand expected to be supplied from secondary
sources. These sources include commercial inventories, reprocessing
of spent fuel, sales by uranium enrichers and inventories held by
governments, such as the U.S. Department of Energy, and the Russian
government. Primary mine production’s share of annual demand
remains lower than pre-2017 levels, in which primary production
made up 85% or more of annual demand.





Secondary
supplies remain a complexity of the uranium market. The Q1 2020
Outlook forecasts that 49 million pounds U3O8 will enter the
market from secondary supplies in 2020, leaving a surplus of 9
million pounds U3O8, if the base case
demand scenario for 2020 is met.





Though excess
commercial inventories, which were one of the major sources of
secondary supplies during the period from the early 1970s to the
early 2000s, were largely consumed in that same period, the planned
shutdown of nuclear programs in countries like Germany, and the
continued struggles of the Japanese nuclear program to restart
following Fukushima have contributed to commercial inventories
again becoming a more significant factor. Government inventories
also continue to contribute substantially to the secondary supply
picture, particularly in the U.S. and Russia. The disposition of
these commercial and government inventories may have a market
impact in the near to medium term, although, UxC expects their role
will diminish over time as these inventories continue to be
depleted and the uranium and enrichment markets rebalance
themselves.





In general, UxC
expects that secondary sources of supply will fall significantly
from estimated 2020 levels of 49 million pounds U3O8 to roughly 17
million pounds U3O8 per year by
2035.





Uranium Prices





Imbalances
between supply and demand of uranium significantly influence
uranium spot prices. According to the Q1 2020 Outlook, it is
projected that primary production and secondary supply will be
sufficient to meet base case demand for U3O8 through the mid
2020’s, with significant supply deficits emerging later in
the decade, contributing to upward price momentum.





2019 Annual Information
Form 19





With respect to
long-term prices, utility uncovered requirements and long-term
demand are significant influencers. Historically, nuclear utilities
have purchased uranium primarily through long-term contracts. These
contracts usually provide for deliveries beginning two to four
years after they are signed with delivery typically extending
anywhere from three or four years to ten years or more. In awarding
medium and long-term contracts, electric utilities consider the
producer’s uranium reserves, record of performance and
production cost profile, in addition to the commercial terms
offered. Prices are established by a number of methods, including
base prices adjusted by inflation indices, reference prices
(generally spot price indicators, but also long-term reference
prices) and annual price negotiations. Contracts may also contain
annual volume flexibility, floor prices, ceiling prices and other
negotiated provisions. Under these contracts, the actual price
mechanisms are usually confidential.





The long-term
uranium demand that actually enters the market is affected in a
large part by utilities’ uncovered requirements. This is the
amount of uranium required by utilities to operate their fleet that
is not yet covered by purchase contracts with suppliers. UxC
estimates, in the Q1 2020 Outlook, that uncovered demand for 2020
was just under 7 million pounds U3O8. Of course, this
uncovered demand increases over time and is projected by UxC to
increase significantly over the next decade. While almost 70
million pounds U3O8 are projected to
remain uncovered in 2025, this number grows to just over 120
million pounds U3O8 in 2030. In 2035,
this number grows to 168 million pounds U3O8 of uncovered
demand, or roughly 74% of total expected base case demand in that
year. In total just over 1.5 billion pounds U3O8 remain uncovered
between 2020 and 2035.





At 168 million
pounds U3O8, uncovered demand
in 2035 is approximately 71 million pounds U3O8 more than total
production expected from existing uranium mines for the same year,
which UxC estimates at 97 million pounds U3O8. Uncovered demand
in 2035 also exceeds the combined supply available from primary
production and secondary sources by approximately 54 million pounds
U3O8. In order to
address the rising portion of demand that is uncovered, utilities
will have to return to the market and enter into long-term
contracts. From 2006 to 2010, on average, 39 million pounds
U3O8 equivalent were
purchased on the spot market per year and roughly 200 million
pounds U3O8 equivalent were
contracted in the long-term market each year. In contrast, in 2019,
64.3 million pounds U3O8 equivalent were
purchased on the spot market, and 95.8 million pounds U3O8 equivalent
contracted in the long-term market. Considering contract volumes
over the past year remain well below annual requirements, and
uncovered requirements are increasing out in time, we expect that
long-term contracting activity will continue to increase in the
near future as utilities look to secure future supply in order to
fuel the world’s growing fleet of nuclear
reactors.





The long-term
price is published on a monthly basis and stayed stagnant the whole
year at US$32.00 per pound U3O8. Nuclear
utilities procure their remaining uranium requirements through spot
and near-term purchases from uranium producers, traders and other
suppliers. Historically, spot prices are more volatile than
long-term prices. The spot price began the year at US$28.90 per
pound U3O8, dipping by the
end of the year to US$25.00 per pound U3O8.





Competition





The uranium
industry is small compared to other commodity industries, and other
energy commodity industries in particular. Uranium demand is
international in scope, but supply is characterized by a relatively
small number of companies operating in only a few countries.
Primary uranium production is concentrated amongst a limited number
of producers and is also geographically concentrated with more than
77% of the world’s production in 2020 projected to be coming
from only four countries: Kazakhstan, Canada, Australia and
Namibia.





2019 Annual Information
Form 20








Competition is
somewhat different amongst exploration & development companies
focused on the discovery or development of a uranium deposit.
Exploration for uranium is being carried out on various continents,
but in recent years development activities by public companies have
been generally concentrated in Canada, Africa and Australia. In
Canada, exploration has focused on the Athabasca Basin region in
northern Saskatchewan. Explorers have been drawn to this area by
the high-grade uranium deposits that have produced some of the most
successful uranium mines operating in the world today. Within the
Athabasca Basin region, exploration is generally divided between
activity that is occurring in the eastern portion of the Basin and
the western portion of the Basin. The eastern Basin is a district
that is defined by rich infrastructure associated with the
existence of operating uranium mines and uranium processing
facilities. Infrastructure includes access to the provincial power
grid and a network of provincial all-weather highways. By
comparison, in the western Basin, there are no operating uranium
mines or processing facilities and access to the provincial power
grid is not currently available. Several uranium discoveries have
been made in the Athabasca Basin region in recent years, and
competition for capital can be intense.





2019 Annual Information
Form     21





MINERAL RESERVES AND MINERAL RESOURCES





Each of Dale
Verran, MSc, P.Geo, Pr.Sci.Nat., Denison's Vice President
Exploration, and David Bronkhorst, P.Eng, Denison's Vice-President
Operations, is a “Qualified Person” in accordance with
the requirements of NI 43-101, and has reviewed and approved all
disclosure of scientific or technical information in this
AIF.





Summary of Mineral Reserves and Mineral Resources





NI 43-101
requires mining companies to disclose mineral reserve and resource
estimates using the subcategories of proven mineral reserves,
probable mineral reserves, measured mineral resources, indicated
mineral resources and inferred mineral resources.





The following
tables show the Company's estimates of mineral reserves and mineral
resources as at December 31, 2019. The estimates are reported in
the applicable technical reports prepared in accordance with NI
43-101, adjusted for mining activity where applicable. The summary
information below on Denison’s proven mineral reserve
estimates was prepared from the year-end stockpile survey reported
by Orano Canada, the operator of the McClean Lake joint
venture.





For full details,
reference should be made to the applicable technical reports for
the properties.





See
“Mineral Properties” for more information.





Proven Mineral Reserve
Estimates (1,10)


100% Basis

Company Share(9)Project/Deposit
Tonnes
Grade
% U3O8
Pounds of U3O8
(,000)

Pounds of U3O8
(,000)McClean
- Ore Stockpile
90,000
0.37
716

161Total Proven Mineral Reserves
90,000

716

161





Probable Mineral Reserve
Estimates (1,2,3,4,10)


100% Basis

Company Share(9)Project/Deposit
Tonnes
Grade
% U3O8
Pounds of U3O8
(,000)

Pounds of U3O8
(,000)Wheeler
River - Phoenix
141,000
19.1
59,700

53,730Wheeler
River - Gryphon
1,257,000
1.8
49,700

44,730Total Probable Mineral Reserves
1,398,000

109,400

98,460








2019 Annual Information
Form 22





Indicated Mineral Resource
Estimates (1,5,10)


100% Basis

Company
Share(9)Project/Deposit
Tonnes
Grade
% U3O8
Pounds of U3O8
(,000)

Pounds of U3O8
(,000)Wheeler River - Phoenix(7)
166,000
19.1
70,200

63,200Wheeler River - Gryphon(7)
1,643,000
1.7
61,900

55,700Wheeler River Subtotal
1,809,000

132,100

118,900McClean
- Caribou
47,800
2.6
2,800

600McClean
- Sue D
122,800
1.1
2,800

600McClean
- McClean North
205,800
2.8
12,400

2,800McClean Subtotal
376,400

18,000

4,000Midwest
- Midwest Main
453,000
4.0
39,900

10,100Midwest
- Midwest A
566,000
0.87
10,800

2,700Midwest Subtotal
1,019,000

50,700

12,800Waterbury
- J Zone
291,000
2.0
12,800

8,500Total Indicated Mineral Resources
3,495,400

213,600

144,200





Inferred Mineral Resource
Estimates (1,6,10)


100% Basis

Company
Share(9)Project/Deposit
Tonnes
Grade
% U3O8
Pounds of U3O8
(,000)

Pounds of U3O8
(,000)Wheeler
River - Phoenix
9,000
5.8
1,100

1,000Wheeler
River - Gryphon
73,000
1.2
1,900

1,700Wheeler River Subtotal
82,000

3,000

2,700McClean
- Sue D
24,200
0.39
200

0McClean - Sue E(8)
483,400
0.69
7,300

1,600McClean
- McClean North
3,300
0.79
100

0McClean Subtotal
510,900

7,600

1,600Midwest
- Midwest Main
793,000
0.66
11,500

2,900Midwest
- Midwest A
53,000
5.8
6,700

1,700Midwest Subtotal
846,000

18,200

4,600Waterbury
- Huskie
268,000
0.96
5,700

3,800Total Inferred Mineral Resources
1,706,900

34,500

12,700





Notes:


(1) CIM
definitions were followed for classification of mineral reserves
and mineral resources. Mineral resources are not mineral
reserves and do not have demonstrated economic
viability.


(2) Mineral reserves for the Phoenix deposit are
reported at the mineral resource cut-off grade of 0.8%
U3O8.
The mineral reserves are based on the block model generated for the
May 28, 2014 mineral resource estimate. A mining recovery factor of
85% has been applied to the mineral resource above the cut-off
grade.


(3) Mineral reserves for the Gryphon deposit are
estimated at a cut-off grade of 0.58% U3O8
using a long-term uranium price of
US$40/lb, and a US$/CAD$ exchange rate of 0.80. The mineral
reserves are based on the block model generated for the January 30,
2018 mineral resource estimate. The cut-off grade is based on an
operating cost of $574/tonne, milling recovery of 97%, and a 7.25%
fee for Saskatchewan royalties (basic royalty plus resource
surcharge).


(4) Mineral reserves are stated at a processing plant
feed reference point and include diluting material and mining
losses.





2019 Annual Information
Form     23





(5) The
indicated mineral resources were estimated at various cut-off
grades. They are:


●Phoenix:  0.80% U3O8
●McClean North: 0.10% U3O8●Gryphon:  0.20% U3O8
●Midwest Main: 0.10% U3O8
(0.085% U)●Caribou:  0.10% U3O8
●Midwest A:  0.10% U3O8
(0.085% U)●Sue D:  0.10% U3O8
●J Zone:  0.10% U3O8


(6) The inferred mineral resources were estimated at
various cut-off grades. They are:


●Phoenix:  0.80% U3O8
●McClean North: 0.10% U3O8●Gryphon:  0.20% U3O8
●Midwest Main: 0.10% U3O8
(0.085% U)●Sue D:  0.10% U3O8
●Midwest A:  0.10% U3O8
(0.085% U)●Sue E:  0.10% U3O8
●Huskie:  0.10% U3O8


(7) Indicated mineral resources for Phoenix and
Gryphon deposits are inclusive of probable mineral
reserves.


(8) The
operator conducted confirmatory drilling on a portion of the Sue E
mineral resources outside the designated pit and late in 2006
submitted a preliminary analysis detailing an inferred mineral
resource of approximately 2 million pounds on a 100% basis in this
area, as compared to the 7.3 million pounds that Scott Wilson
Roscoe Postle Associates Inc. (“Scott Wilson RPA”), now Roscoe
Postle Associates Inc., estimated in its February 2006 technical
report. Roscoe Postle Associates Inc. has not re-estimated the
mineral resource using the new drill information.


(9) As at
December 31, 2019, pursuant to the terms of the agreements with its
applicable joint venture partners, the Company had a 90.00%
interest in the Wheeler River project, a 22.50% interest in the
McClean Lake property; a 25.17% interest in the Midwest project;
and a 66.57% interest in the Waterbury Lake
property.


(10) Numbers may not add due to
rounding.





The tables below
detail the changes to the Company’s mineral reserve and
mineral resource estimates during the fiscal year ended December
31, 2019 from December 31, 2018.





Change to Denison’s Share of Proven Mineral
Reserves


(in thousands of pounds
U3O8)


Project/Deposit
December 31, 2018

Additions
(Deletions)

December 31, 2019McClean - Ore
Stockpile
166

(5) (1)

161





Change to Denison’s Share of Indicated Mineral
Resources


(in thousands of pounds
U3O8)


Project/Deposit
December 31, 2018

Additions
(Deletions)

December 31, 2019Waterbury - J
Zone
8,400

100(2)

8,500


Notes:


(1)
 The decrease
is due to changes in the year-end stockpile report prepared by the
operator, Orano Canada.


(2)
 The Company increased its
interest in the Waterbury Lake project by 0.65% in 2019, in
accordance with the terms of the applicable agreements with
Denison’s partner on the project. The percentage change was
not large enough to be reflected as a change to Denison’s
share of inferred mineral resources at Huskie, due in part to
rounding.








2019 Annual Information
Form 24





Historical Estimates





McClean South Historical Estimate





On the McClean
Lake Joint Venture property, the McClean South trend is located
parallel to and approximately 500 metres south of the McClean North
trend (see “Mineral Properties – McClean Lake”).
There are two presently known mineralized pods which were drilled
by the original owner of the property, Canadian Oxy, during
1979-1980: the Southwest Pod and the Southeast Pod. Canadian Oxy
prepared estimates of tonnages, grades and contained uranium for
these deposits as of 1980, which have
not been verified by Denison. The results of these estimates
are set out below.





The Company is
not treating this historical estimate as current mineral resources
or mineral reserves. This trend will require future evaluation to
upgrade this historical estimate as a current mineral resource
estimate.





McClean South Historical
Estimates (1,2)


100% Basis

Company’s ShareDeposit
Tons
(,000)
Grade
(% U3O8)
Pounds of U3O8
(,000)

Pounds of U3O8
(,000)Southwest
Pod
47.6
2.10
2,000

500Southeast
Pod
126.7
0.73
1,900

400


Notes:


(1) The
historical estimates do not comply with the requirement of NI
43-101. CIM definitions are not used.


(2) The
historical estimates cannot be verified and the estimates are not
necessarily indicative of the mineralization on the
property.











2019 Annual Information
Form 25





MINERAL PROPERTIES





Denison’s Priority Properties:

●Wheeler
River         
             
Page 29

●Waterbury
Lake        
           
Page 61

●McClean
Lake         
            
Page 71

●Midwest         
             
        Page 77

●Other Exploration
Properties    Page 85








Denison’s
mineral property interests are located in the Athabasca Basin
region of northern Saskatchewan, the majority of which are located
in the eastern portion of the Athabasca Basin, which is host to
considerable existing infrastructure including uranium mines and
mills, and provincial powerlines and highways (see location map,
below). As at December 31, 2019, Denison has interests in 34
mineral properties in the Athabasca Basin, comprised of 214 claims
covering 279,883 hectares.





Location Map of Denison’s Athabasca Basin Mineral
Properties








2019 Annual Information
Form 26





Athabasca Basin Overview





The Athabasca
Basin covers an area of approximately 100,000 square kilometres in
northern Saskatchewan and northeastern Alberta. The Athabasca Basin
is one of the principal uranium producing districts in the world
and is host to the world’s highest-grade and some of the
world’s largest uranium mines and deposits, including the
McArthur River mine and Cigar Lake mine located in the eastern
Athabasca Basin.





The uranium
deposits are classified as unconformity-associated (also
unconformity-related and –type) deposits owing to their
spatial association with a major unconformable contact between a
relatively undeformed Proterozoic sedimentary basin (the Athabasca
Basin) and underlying metamorphosed and deformed Archean to
Palaeoproerozoic basement rocks.





A broad variety
of unconformity-associated deposit shapes, sizes, and compositions
have been discovered. Two distinct varieties have been classified;
1) ‘egress-style’ polymetallic lenses at and above the
unconformity, with variable and often highly elevated base metal
and rare earth elements (“REE”) contents, and 2)
‘ingress-style’ vein sets within basement rocks, with
typically lower base metal and REE contents.





Egress-style
deposits can occur in the sandstone, directly above the
unconformity (e.g. Cigar Lake, Sue A and B), straddling the
unconformity (e.g. Phoenix, Collins Bay B Zone, Midwest Main,
Midwest A, McClean North, Key Lake) or perched high above the
unconformity (certain zones at McClean Lake, Midwest, Cigar Lake).
Ingress-style deposits are located in the basement rocks (Gryphon,
Huskie, Eagle Point, Sue C, Sue E, Millennium, Arrow, Triple R),
however the Millennium deposit, and to an extent the Gryphon
deposit, also contain subordinate mineralization at and above the
unconformity. The Shea Creek deposits contain mineralization in the
basement, deep in the basement, at the unconformity, and perched in
the sandstone. In some deposit areas, there is a plunge to the
mineralized pods from sandstone-hosted to basement-hosted within
deposit–scale strike lengths (Rabbit Lake-Collins Bay-Eagle
Point trend, Sue trend deposits, McClean North).





The Athabasca
unconformity-associated deposits are typically related to
graphite-bearing structural zones within the metamorphosed and
deformed Archean to Palaeoproerozoic basement rocks, which are
often termed ‘corridors’ or ‘trends’.
Alteration ‘halos’ or ‘envelopes’ tend to
surround the mineralization, most notably in the overlying
sandstone, and provide an enlarged exploration target through the
detection of diagnostic alteration clays and geochemical pathfinder
elements. Empirical exploration for the deposits typically involves
mapping of structural corridors/trends by geophysical methods,
dominantly electromagnetics, resistivity or magnetics, followed by
drill testing given the buried or blind nature of the deposits
below glacial cover or Athabasca sandstone, respectively. Drill
core is subject to a variety of sampling and analytical methods to
determine possible vectors toward mineralization, and downhole
surveying is commonplace to test for elevated radioactivity or
reconcile geophysical responses. The significant number of
Athabasca uranium discoveries to date has also led to the
development of numerous exploration models which are commonly used
to facilitate interpretations and prioritize target
areas.





Historical
uranium production in the basin was initiated in the 1970s and
1980’s using conventional open pit mining methods at Rabbit
Lake, Cluff Lake and Key Lake. Later in the mine life of each of
Cluff Lake and Rabbit Lake, there was a transition to underground
mining of other deposits on those properties. In the 1990s another
open pit operation at McClean Lake began production.





2019 Annual Information
Form 27





The discovery of
high-grade deposits such as Midwest, McArthur River and Cigar Lake
in the 1980s did not immediately lead to production. The
combination of challenging ground conditions (most notably the
friable and water-saturated Athabasca sandstone conditions above
the mineralization), depth, and the high-grade nature of the
deposits, required extensive research and development to design
safe extraction methods before production was possible. Production
from McArthur was achieved in the early 2000s while Cigar Lake only
initiated production in 2014. Production from these mines was only
made possible by their unique combination of high grades (average
grades > 10% U3O8) and large scale
(>300 million lbs U3O8), as well as the
development of innovative mining techniques including ground
freezing combined with either raise-bore mining or the use of the
jet-boring mining system (JBS). The Midwest deposits are smaller in
size than McArthur River and Cigar Lake, and remain
undeveloped.





In terms of
mineral processing, each historic mining operation included a
dedicated processing plant: Cluff Lake, Key Lake, Rabbit Lake and
McClean Lake operations included on-site processing plants. Due to
the rising cost of construction for such facilities and the
availability of highways and other infrastructure in
Saskatchewan’s North, processing of ores has transitioned to
toll milling at existing facilities. McArthur River ore production
is toll milled at the Key Lake mill, while Cigar Lake production is
toll milled at the McClean Lake mill. With the suspension of
operations at Rabbit Lake in 2016 and McArthur River in 2018, only
the Cigar Lake mine and the McClean Lake mill continue to operate
and produce yellowcake.





2019 Annual Information
Form 28





Wheeler River





The Wheeler River
project is the largest undeveloped uranium project in the
infrastructure rich eastern portion of the Athabasca Basin region,
in northern Saskatchewan. The project is host to the high-grade
Phoenix and Gryphon uranium deposits, discovered by Denison in 2008
and 2014, respectively, and is a joint venture between Denison (90%
and operator) and JCU (Canada) Exploration Company Limited (10%).
Denison is the operator/manager of the project.





The PFS for the
Wheeler River project was completed in 2018, considering the
potential economic merit of developing the Phoenix deposit as an
ISR operation and the Gryphon deposit as a conventional underground
mining operation. Taken together, the project is estimated to have
mine production of 109.4 million pounds U3O8 over a 14-year
mine life, with a base case pre-tax NPV of $1.31 billion (8%
discount rate), IRR of 38.7%, and initial pre-production capital
expenditures of $322.5 million. The Phoenix ISR operation is
estimated to have a stand-alone base case pre-tax NPV of $930.4
million (8% discount rate), IRR of 43.3%, initial pre-production
capital expenditures of $322.5 million, and industry leading
average operating costs of US$3.33/lb U3O8. The results of
the PFS are described in greater detail below.





A technical
report entitled “Prefeasibility Study Report for the Wheeler
River Uranium Project Saskatchewan, Canada” dated October 30,
2018 (the “Wheeler PFS
Report”) has been prepared for the project, a copy of
which is available on the Company’s website. The principal
author of the Wheeler PFS Report was Mr. Mark Liskowich, P.Geo. of
SRK, who is an independent Qualified Person in accordance with the
requirements of NI 43-101.





The Wheeler PFS
Report describes the results of the PFS for the Wheeler River
project with an effective date of September 24, 2018, based in part
upon the mineral resource estimates for the Gryphon deposit
effective January 30, 2018 and the Phoenix deposit effective May
28, 2014.





Except as
otherwise indicated, the following project description is a
summary, supported by the Wheeler PFS Report. We recommend you read
the Wheeler PFS Report in its entirety to fully understand the
technical aspects of the project. The conclusions, projections and
estimates included in this description are subject to the
qualifications, assumptions and exclusions set out in the Wheeler
PFS Report and in the “Risk Factors” set forth below;
in particular, any advancement or development of the Wheeler River
project is subject to attainment of any required approvals,
agreements or resources, including capital funding.





Property Description, Location and Access





The property is
located along the eastern edge of the Athabasca Basin in northern
Saskatchewan, Canada and is located approximately 35 km
north-northeast of the Key Lake mill and 35 km southwest of the
McArthur River uranium mine.





Access to the
property is by road or air from Saskatoon. The property is well
located with respect to all-weather roads and the provincial power
grid. Vehicle access to the property is by the provincial highway
system to the Key Lake mill then by the ore haul road between the
Key Lake and McArthur River operations to the eastern part of the
property. An older access road, the Fox Lake Road, between Key Lake
and McArthur River, provides access to most of the northwestern
side of the property. Gravel and sand roads and drill trails
provide access by either four-wheel-drive or all-terrain-vehicle to
the rest of the property.





2019 Annual Information
Form 29





The property
consists of 19 mineral claims totaling 11,720 hectares, with an
aggregate annual requirement of $293,000 in either work or cash to
maintain title to the mineral claims. Based on previous work
submitted and approved by the province of Saskatchewan, title is
secure until 2035.





The Wheeler River
project is located within the boundaries of Treaty 10 (entered into
between the Government of Canada and the First Nations People of
Saskatchewan and Alberta). It is also located within the
traditional territory of the English River First Nation and in the
homeland of the Métis, each of whom have a strong and
significant relationship to the land.





Location Map, Showing Regional and Proposed
Infrastructure.





Any uranium
produced from the Wheeler River property is subject to uranium
mining royalties in Saskatchewan in accordance with Part III of The
Crown Mineral Royalty Regulations. See “Government Regulation
- Canadian Royalties.” There is also a 10% Net Profits
Interest (“NPI”) associated with the property held by
the WRJV in proportion to the ownership interests of each WRJV
participant. There are no other back-in rights or third-party
royalties applicable to this property.





2019 Annual Information
Form 30





There are no
known environmental liabilities associated with the property.
Before work can be performed on the property, the appropriate
exploration or other permits must be applied for and obtained. If
Denison was unable to satisfy its obligations with respect to the
regulatory and consultation process and obtain the necessary
permits, the Company’s plans for exploration or other work on
the property could be delayed or halted. See “Risk
Factors” for more information on this and other potential
risks that may affect access, title or the right or ability to
perform work on the property. For exploration activities that may
occur in 2020, the Company has obtained all necessary permits for
surface exploration. Additional permits and licenses may be
required in connection with the Company’s project evaluation
activities and will be required (refer to section 20 of the Wheeler
PFS Report) prior to commencement of development and production
activities.





History





The Wheeler River
property was staked on July 6, 1977, due to its proximity to the
Key Lake uranium discoveries, and on December 28, 1978, it was
vended into an agreement between AGIP Canada Ltd., E&B
Explorations Ltd. and Saskatchewan Mining Development Corporation,
with each holding a one-third interest. On July 31, 1984, each
party divested a 13.3% interest and allowed Denison Mines Limited,
a predecessor company to Denison, to earn in to a 40%
interest.





In late 2004,
Denison entered into an agreement to earn a further 20% interest by
expending $7,000,000 within six years. In connection with that,
Denison became the project operator (2005 being the first full year
of operatorship). In 2007, when the earn-in obligations were
completed, the participating and ownership interests were Denison
60%; Cameco 30%, and JCU 10% and they remained that way up to the
end of 2016. In January 2017, Denison, Cameco and JCU executed an
agreement, pursuant to which the WRJV Parties agreed to allow for a
one-time election by Cameco to fund 50% of its ordinary share (30%)
of joint venture expenses in 2017 and 2018. The shortfall in
Cameco's contribution was funded by Denison, in exchange for a
transfer to Denison of a portion of Cameco's interest in the
WRJV.


Accordingly,
Denison's share of joint venture expenses was 75% in 2017 and 2018,
and Cameco and JCU's participating share of joint venture expenses
was 15% and 10%, respectively. As a result of that agreement,
Denison’s interest increased to approximately 66%, with
Cameco holding approximately 24% and JCU holding 10%.





Subsequently,
Denison and Cameco completed the Cameco Transaction, pursuant to
which Denison acquired all of Cameco’s minority interest in
the WRJV effective October 26, 2018, resulting in WRJV
participating and ownership interests being Denison 90% and JCU
10%.


Exploration and
Development History


Period (Year)
Activity1978-Present
The
area was previously explored by AGIP and SMDC (Cameco). Since 1978,
several airborne and ground geophysical surveys have defined 152 km
of conductor strike length in 14 conductive zones.1986-1988
AGIP,
SMDC, and Cameco drilled a total of 192 drill holes encountering
sub-economic uranium mineralization in the M Zone (1986), O Zone
(1986), and K Zone (1988). Rare earth element mineralization was
also discovered in the MAW Zone (1982).2004
Denison
assumed operatorship in late 2004 and initially focused on
exploration drilling on the western side of the quartzite ridge
(west side of the property) intersecting sub-economic uranium
mineralization.








2019 Annual Information
Form 31








Period (Year)
Activity2008
During
a regional exploration campaign, three resistivity targets were
drilled leading to the discovery of the Phoenix
deposit.2008-2014
During
this period, drilling predominantly focused on delineation of the
Phoenix deposit.2014-2017
Exploration
drilling at K North in early 2014 resulted in the discovery of the
Gryphon deposit. Delineation drilling of the Gryphon deposit was
undertaken throughout this period. A Preliminary Economic
Assessment was completed for the Project in early
2016.2018-Present
A
Pre-Feasibility Study was completed for the Project in late 2018.
Exploration drilling undertaken on regional targets.





Geological Setting, Mineralization and Deposit Types





The Wheeler River
property is located near the southeastern margin of the Athabasca
Basin in the southwest part of the Churchill Structural Province of
the Canadian Shield. The Athabasca Basin is a broad, closed, and
elliptically shaped cratonic basin with an area of 425 km
(east-west) by 225 km (north-south). The bedrock geology of the
Athabasca basin area consists of Archean and Paleoproterozoic
gneisses unconformably overlain by up to 1,500 m of flat-lying
unmetamorphosed sandstones and conglomerates of the mid-Proterozoic
Athabasca Group.





The Wheeler River
property is located near the transition zone between two prominent
litho-structural domains within the Precambrian basement, namely
the Mudjatik Domain to the west and the Wollaston Domain to the
east. The Mudjatik Domain is characterized by elliptical domes of
Archean granitoid orthogenesis separated by keels of metavolcanic
and metasedimentary rocks, whereas the Wollaston Domain is
characterized by tight to isoclinal, northeasterly trending, doubly
plunging folds developed in Paleoproterozoic metasedimentary rocks
of the Wollaston Supergroup, which overlie Archean granitoid
orthogenesis identical to those of the Mudjatik Domain. The area is
cut by a major northeast-striking fault system of Hudsonian Age.
The faults occur predominantly in the basement rocks but often
extend up into the Athabasca Group due to several periods of
post-depositional movement.





Local geology is
comprised of relatively undeformed late Paleoproterozoic to
Mesoproterozoic Athabasca Group strata comprised of Manitou Falls
Formation sandstones and conglomerates which unconformably overlie
the crystalline basement and have a considerable thickness from 170
m over the quartzite ridge to at least 560 m on the western side of
the property. Basement rocks beneath the Phoenix and Gryphon
deposits are part of the Wollaston Domain and are comprised of
metasedimentary and granitoid gneisses. The metasedimentary rocks
include graphitic and non-graphitic pelitic and semipelitic
gneisses, meta-quartzite, and rare calc-silicate rocks. Pegmatitic
segregations and intrusions are common in all units with garnet,
cordierite, and sillimanite occurring in the pelitic strata,
indicating an upper amphibolite grade of metamorphism. Graphitic
pelite and quartzite units appear to play important roles in the
genesis of Athabasca Basin unconformity-associated deposits. Thus,
the presence of extensive subcrop of both units (18 km of quartzite
and 152 line-km of conductors, assumed to be graphitic pelite)
greatly enhances the geological potential of the Wheeler River
property. The Wheeler River property is partially covered by lakes
and muskeg, which overlie a complex succession of glacial deposits
up to 130 m in thickness. These include eskers and outwash sand
plains, well-developed drumlins, till plains, and glaciofluvial
plain deposits. The orientation of the drumlins reflects
southwesterly ice flow.





2019 Annual Information
Form 32





The Phoenix
uranium deposit was discovered in 2008 and can be classified as an
unconformity-associated deposit of the sandstone-hosted or
egress-style variety. The deposit occurs dominantly within
sandstone immediately above the sub-Athabasca unconformity
approximately 400 metres below surface and comprises three elongate
pods of mineralization (Zone A, B, and C) which cover a strike
length of 1.1 kilometres. Zone A, the largest of the three pods, is
approximately 380 metres in length, up to 80 metres wide, up to 15
metres thick, and consists of an exceptionally high-grade core
(62,900 tonnes at 43.2 % U3O8 for 59.9 million
pounds U3O8 in estimated
Indicated resources) surrounded by a lower grade shell. The deposit
occurs along a prominent post-Athabasca basement thrust fault (WS
Shear) which occurs footwall to a graphite-rich pelitic gneiss unit
and hangingwall to a garnetiferous pelitic gneiss and quartzite
unit. Mineralization within the Phoenix deposit is dominated by
massive to semi-massive uraninite associated with an alteration
assemblage comprising hematite, dravitic tourmaline, illite, and
chlorite. Secondary uranium minerals (including uranophane) and
sulphides are trace in quantity.





The Gryphon
uranium deposit was discovered in 2014 and can be classified as an
unconformity-associated deposit of the basement-hosted or
ingress-style variety. The deposit occurs within southeasterly
dipping crystalline basement rocks below the regional sub-Athabasca
Basin unconformity. The deposit is located from 520 to 850 metres
below surface, has an overall strike length of 610 metres and dip
length of 390 metres, and varies in thickness between two and 70
metres, depending on the number of mineralized lenses present. The
mineralized lenses are controlled by reverse fault structures,
which are largely conformable to the basement stratigraphy and
dominant foliation. The A, B, and C series of lenses are comprised
of stacked, parallel lenses which plunge to the northeast along a
fault zone (G-Fault) which occurs between hangingwall graphite-rich
pelitic gneisses and a more competent pegmatite-dominated footwall.
A ubiquitous zone of silicification (Quartz-Pegmatite Assemblage)
straddles the G-Fault and the A, B, and C series of lenses occur in
the hangingwall of, within, and in the footwall of the
Quartz-Pegmatite Assemblage respectively. The D series lenses occur
within the pegmatite-dominated footwall along a secondary fault
zone (Basal Fault) or within extensional relay faults which link to
the G-Fault. The E series lenses occur along the G-Fault, up-dip
and along strike to the northeast of the A and B series lenses,
within the upper basement or at the sub-Athabasca unconformity.
Mineralization within the Gryphon deposit lenses is dominated by
massive, semi-massive, or fracture-hosted uraninite associated with
an alteration assemblage comprising hematite, dravitic tourmaline,
illite, chlorite, and kaolinite. Secondary uranium minerals
(including uranophane and carnotite) and sulphides are trace in
quantity.





Exploration and Drilling





As operator,
Denison has conducted numerous geophysical surveys across the
property, generating many drill targets over several years.
Airborne surveys have included two electromagnetic surveys
(totaling 2,005 line kilometres) and one gravity survey (totaling
1,711 line kilometres). Ground surveys have included four
electromagenetic surveys (488 line kilometres), 10 resistivity
surveys (979 line kilometres), two gravity surveys (2,920 stations)
and 45 downhole geophysical surveys. Results to date indicate the
property comprises multiple prospective trends that warrant drill
testing. These trends are interpreted primarily from magnetic and
electromagnetic and/or resistivity data to infer the location of
faulted graphitic basement horizons that may have associated
uranium mineralization.


Denison has
completed 380,668 metres of exploration diamond drilling in 735
holes on the Wheeler River property during the period from 2005 to
the end of 2019. The majority of this drilling has been focused on
the discovery and delineation of the Phoenix (251 holes totaling
115,948 metres) and Gryphon (214 holes totaling 120,351 metres)
deposits.





2019 Annual Information
Form 33





Discovery and Delineation of the Phoenix Deposit





In the summer of
2008, as a direct result of the 2007 DC resistivity survey along
the hanging wall of the quartzite ridge, two drill holes were
located 600 metres apart along the same low resistivity trend. This
drilling intersected a zone of characteristic sandstone alteration
and uranium mineralization linked to unconformity-associated
uranium deposits. All drill holes during the summer of 2008
intersected either uranium mineralization or very strong alteration
close to mineralization.





Subsequent
drilling programs conducted during 2009 and 2010 extended the
mineralized zone for a strike length of greater than 900 metres. An
initial mineral resource estimate was completed at the end of 2010.
Aggressive drilling programs in 2011 and 2012 successfully added
additional mineral resources. In 2013, drilling was completed at
the Phoenix deposit, but a large portion of the 2013 Wheeler River
drilling program was also allocated to exploration of several other
target areas on the property. Some additional infill drilling was
completed at the Phoenix deposit in early 2014, and this work was
successful in extending some high grade mineralization into areas
previously modeled as low grade. These results, combined with
results from 2013, were the catalyst for the updated mineral
resource estimate for the Phoenix deposit effective May
2014.





Discovery and Delineation of the Gryphon Deposit





In March 2014,
drill hole WR-556 resulted in discovery of the Gryphon deposit,
intersecting uranium mineralization averaging 15.33% U3O8 over 4.0 metres
in basement graphitic gneiss, 200 metres below the sub-Athabasca
unconformity. The Gryphon deposit occurs on the K-North trend,
which exhibits numerous favourable exploration criteria including
basement quartzite and graphitic gneisses, basement structures,
reverse offsets of the unconformity, weak basement hosted
mineralization near the unconformity, and anomalous sandstone
geochemistry and alteration.





Historical holes
ZK-04 and ZK-06 drilled in the late 1980s, along the K-North trend,
targeted unconformity-related mineralization and intersected
favourable sandstone structure and alteration as well as alteration
and weak mineralization in the basement approximately 35 metres
below the unconformity. Follow-up drilling campaigns attempted to
locate unconformity mineralization up dip of the weak basement
mineralization. Gryphon deposit discovery drill hole WR-556 was the
first to evaluate the down dip projection of these intersections
into the basement.





Since the
discovery hole at Gryphon, subsequent drilling campaigns in 2014
and 2015 were completed and an initial resource estimate was
released in November 2015. Additional mineralization was discovered
immediately northeast of Gryphon in 2016, which was subsequently
named the “D Series Lenses”.Continued drilling during 2016 and
2017 was focused on expanding the mineral resources at Gryphon and
increasing the level of confidence from an inferred to indicated
category and an updated mineral resource estimate for the Gryphon
deposit was released in January 2018. Drilling was completed during
2018 to test for extensions to the Gryphon deposit (15,621 metres
in 23 drill holes). The deposit was successfully extended to the
northeast by approximately 200 metres, however these results have
yet to be included in a mineral resource estimate. The Gryphon
deposit remains open in numerous areas and the 2018 results confirm
potential to continue to expand the Gryphon mineral resource
outside of the current extents of the deposit.





2019 Annual Information
Form 34





Post-PFS Exploration Drilling Activities





Denison conducted
winter and summer diamond drilling programs at Wheeler River during
2019 – totaling 10,573 metres in 20 holes. The programs were
focused on initial testing of regional target areas (K West, Q
South East, K South, O Zone) with the potential to result in the
discovery of additional high-grade deposits that could form
satellite ISR operations.





The winter 2019
drilling program commenced in early January 2019 and was concluded
by the end of March 2019. A single diamond drill rig was utilized,
which completed 7,434 metres in 14 drill holes across regional
target areas including O Zone (2091 metres; 4 holes), Q South East
(714 metres; 2 holes), K South (1017 metres; 2 holes), K West (1899
metres; 3 holes), M Zone (1116 metres; 2 holes) and Gryphon South
(597 metres; 1 holes). The location of the regional target areas
are provided in the figure below. Highlight drilling results
included:





●
 K West:





Unconformity-hosted
mineralization was intersected in drill hole WR-756, highlighted by
0.03% U3O8 over 1.5 metres,
1.3% Cu over 4.0 metres, 0.13% Ni over 4.0 metres and 0.18% Co over
6.0 metres, immediately above the sub-Athabasca unconformity which
was intersected at 543.8 metres below surface.





The
mineralization was accompanied by other geological features
commonly associated with unconformity-related deposits, including
highly structured and hydrothermally altered sandstone and faulted
graphitic basement rocks. Significant fault zones both within the
lower sandstone and upper basement indicate additional unconformity
targets exist to the southeast and northwest along section,
respectively. While the other two holes completed at K West, on 600
metre centers along strike, did not intersect the optimal target
area on their respective sections, they both intersected
significant structure and alteration in the sandstone –
confirming the presence of a mineralizing system along the southern
portion of the K West trend.





●
 Q South East:





Two drill holes,
completed as a fence, were designed to test an unconformity target
on the eastern edge of the Quartzite Ridge - a geological setting
analogous to the Phoenix deposit. The drill holes intersected
structured and hydrothermally altered sandstone, an unconformity
offset of 16 metres and basement stratigraphy identical to the
Phoenix deposit. Targets exist along strike, particularly to the
northeast along the eastern edge of the Quartzite Ridge, which is
largely untested for 8.8 kilometres.





●
 K South:





Drill hole WR-749
intersected anomalous uranium in both the upper sandstone (average
1.29 parts per million (“ppm”) uranium from 15 to 130
metres) and the lower sandstone (average 1.03 ppm uranium from 360
to 435 metres). The lower sandstone was also marked by significant
hydrothermal alteration including anomalous clay signatures up to
80 metres above the unconformity. The granite intersected at the
unconformity, at 465 metres, indicates the drill hole overshot the
optimal target. The highly anomalous sandstone signatures indicate
compelling future targets remain to the southeast, and along
strike, where graphitic basement rocks and associated structure are
interpreted to occur (subcrop) at the unconformity.





2019 Annual Information
Form 35








●
 O Zone:





The testing of
DCIP resistivity targets confirmed the presence of a major
post-Athabasca thrust fault with an unconformity offset of over 60
vertical metres and associated significant sandstone structure and
hydrothermal alteration. Additional targets exist over the 3
kilometres of interpreted strike length along the O Zone thrust
fault.





During the summer
2019 exploration program, which commenced in late July and was
concluded by early September, a total of 3,139 metres of diamond
drilling was undertaken in six completed holes utilizing one drill
rig. The summer drill holes were undertaken as a follow-up to the
winter 2019 program along the southern portion of the K-West trend
and designed to follow-up certain targets on existing drill
sections, and to test along strike of previous drill
holes.





In summary, the
six drill holes completed during the summer 2019 exploration
program all intersected favorable hydrothermal alteration within
the basal sandstone associated with the K-West graphitic fault,
including bleaching, desilification, and grey alteration. Three
drill holes (WR-756D1, WR-756D2 and WR753D1) were completed as a
wedge (or daughter) hole from existing drill holes, to follow-up on
results from the winter 2019 exploration program. These drill holes
intersected strong alteration associated with highly anomalous
geochemistry, highlighted by WR-756D1 which averaged 3 parts per
million uranium (partial digest) over the basal 230 metres of
sandstone, indicative of a potentially fertile uranium mineralizing
system along the K-West trend. Somewhat weaker geochemical results
were returned from the other three holes completed (WR759, WR-760,
WR761A) along strike of the winter 2019 drill holes on an
approximate 300 metre spacing. The drill holes completed along
strike are, however, interpreted to have undershot the optimal
target by 45 to 65 metres. Accordingly, additional exploration
along the K-West trend is warranted, particularly along the
northern portion (west and northwest of the Gryphon deposit), where
the strongest geochemical anomalism along the K-West trend occurs
and unconformity targets are largely untested.

















2019 Annual Information
Form 36








2019 Drill Testing Target Areas, shown on Basement Geology
Map.








During 2020,
exploration drilling is expected to be focused on the Phoenix
deposit with the objective of delineating additional Indicated
Mineral Resources within the planned ISR freeze dome that may be
incorporated into a future FS. Priority target areas include the
“A/B Gap” (between Zones A and B), Zone B, and Zone C.
Within the A/B Gap, previous drilling has been interpreted to have
missed the optimal target. Within Zone B and C, multiple drill
sections exist where mineralization is not closed-off and/or the
optimal target related to the WS Shear has not been adequately
tested, particularly along the northwestern margin of the deposit.
The mineralization at Zone C is not currently included in the
mineral resources estimated for the Project.





Additional
high-priority regional target areas exist on the property that may
be tested during 2020 or future years. These target areas include
K-West (northern portion), Gryphon South, N Zone and M Zone. The
figure below shows the location of the target areas.








2019 Annual Information
Form 37





High Priority Regional Targets for 2020 Drill Testing, shown on
Basement Geology Map.








Evaluation Activities - 2019 ISR Field Test Program





Subsequent to the completion of
the PFS in 2018, project development and evaluation activities have
pivoted towards initiating and supporting EA and FS processes for
Phoenix. Work during 2019 focused on (a) those activities necessary
to support and move forward the environmental assessment process
(see “Government Regulation – Environmental
Assessments” below), which is currently expected to take
36-48 months to complete from initiation in February 2019, and (b)
those engineering and other studies required to de-risk the Phoenix
deposit as an ISR mining operation.





Engineering
and other studies completed in 2019 included (i) an ISR field test
program, including the installation of CSWs at Phoenix, as the
first CSWs designed for ISR mining in the Athabasca Basin, and (ii)
further ISR metallurgical laboratory testing for uranium recovery
(see “Mineral Processing and Metallurgical Testing,
below).





2019 Annual Information
Form 38





The
ISR field test program was designed to assess the permeability of
Phoenix, and to collect an extensive database of hydrogeological
data to further evaluate the ISR mining conditions present at
Phoenix (see Figure 1 below). This data is of critical importance
to the advancement of Phoenix as an ISR mining operation – as
it is expected to support a detailed assessment of the ISR
requirements related to permeability, and be further incorporated
into a detailed ISR mine plan as part of the completion of a future
FS.





The
Company successfully completed the planned ISR field test work and
safely concluded operations on site at Wheeler River during the
fourth quarter of 2019. The field activities associated with the
2019 ISR field test program were completed over a period of
approximately 23 weeks (starting in June and completed in late
November), and required the support of approximately 40 Denison
employees and contractor staff.





The
objectives of the program were extensive, and the scope of the work
completed on site during the program was considerable. The
following represent the key components of field work completed as
part of the 2019 ISR field test program:





●
 Installation
of 4 small-diameter pump/injection (‘P/I’) wells with a
2.5-inch diameter PVC pipe and slotted well-screen set within the
ore zone of Test Area 1 and Test Area 2.





●
 Installation
of 5 small-diameter observation wells with a 1.5-inch diameter PVC
pipe and slotted well-screen set at various depths within the ore
zone of Test Area 1 and Test Area 2.





●
 Installation
of 6 small-diameter observation wells with a 1.5 inch diameter PVC
pipe and slotted well-screen set at various depths outside of the
ore zone of Test Area 1 and Test Area 2, including wells situated
in the basement formation below Phoenix and in the sandstone above
and adjacent to Phoenix.





●
 Installation
of 2 test wells containing Vibrating Wire Piezometers
(‘VWPs’) in each of Test Area 1 and Test Area 2,
equipped with pressure transducers at five different depth
locations – including the overburden (1 transducer),
overlying sandstone (2 transducers), ore zone (1 transducer), and
underlying basement (1 transducer).





●
 Installation
of 12 small-diameter regional observation wells with a 1.5 inch
diameter PVC pipe and slotted well-screen set at various depths and
located approximately between 100 metres and 700 metres outside of
the boundaries of the ore zone at Phoenix, for the purposes of
environmental monitoring and baseline data collection.





●
 Installation
of 1 re-charge well with a 2.5-inch diameter PVC pipe and slotted
well-screen set within the ore zone horizon for the purposes of
recharging formation test waters.





●
 Completion of
a series of short-duration preliminary hydrogeological tests, using
the P/I wells to pump water from or inject water into the ore zone
to collect hydrogeological data and identify hydraulic connectivity
between test wells – validating the ability to move water,
and the existence of significant permeability, within the Phoenix
ore zone.


●
 Installation
of 2 large-diameter CSWs within the ore zone – one located in
each of Test Area 1 and Test Area 2 and both designed to meet
expected regulatory and environmental requirements such that they
can ultimately form part of the production ISR well field at
Phoenix.





●
 Completion of
a series of short-duration preliminary hydrogeological tests, using
the CSWs to pump water from or inject water into the ore zone to
collect further hydrogeological data and assess the extent of
permeability prior to testing the MaxPERF Drilling
Tool.








2019 Annual Information
Form 39








●
 Deployment of
the MaxPERF Drilling Tool in each of CSW1 and CSW2 to complete an
array of lateral drill holes (penetration tunnels) designed to
enhance access from each CSW to the existing permeability within
the ore zone.





●
 Completion of
a further series of short-duration preliminary hydrogeological
tests, using each of CSW1 and CSW2 to pump water from or inject
water into the ore zone following the deployment of the MaxPERF
Drilling Tool – indicating potential increased flow rates
following the application of the MaxPERF drilling.





●
 Completion of
long-duration hydrogeological tests, using each of CSW1 and CSW2 to
pump water from or inject water into the ore zone for an extended
period of time, to collect further detailed hydrogeological data
designed to simulate fluid flow under conditions similar to an
envisioned commercial production environment.





●
 Completion of
approximately 23 individual hydraulic conductivity tests (downhole
packer testing) in 15 boreholes at various depths within and
adjacent to the ore zone of Test Area 1 and Test Area 2 –
including hydraulic conductivity tests within the underlying
basement formation below Phoenix and in the sandstone above and
adjacent to Phoenix.





●
 Completion of
downhole geophysics including nuclear magnetic resonance, dual
neutron, and cement-bond log in CSW2 and dual neutron in GWR-001,
GWR-010, GWR-019 and GWR-022.





●
 Recovery of
approximately 100 metres of mineralized drill core in 14 individual
drill holes from the installation of P/I and observation wells, as
well as CSWs, within Test Area 1 and Test Area 2 – subject to
detailed on-site geological and geotechnical logging as well as
permeability (permeameter) testing, prior to portions of the core
being preserved for laboratory-based metallurgical test
work.





●
 Completion of
extensive permeameter testing in the field, utilizing a portable
nitrogen gas probe permeameter adapted for testing whole drill core
pieces. Permeameter measurements were taken on core at approximate
10 centimetre intervals, resulting in a total of over 1,200
measurements collected from the 2019 ISR field test
program.





The
ISR field test achieved each of the program’s planned
objectives, and was highlighted by several key de-risking
accomplishments, including the following:





●
 Confirmation
of significant hydraulic connectivity within the Phoenix ore
zone:





85% of test
wells located within Test Area 1 and Test Area 2 of the Phoenix
deposit showed hydraulic connectivity with another test well (see
Figure 2 and Figure 3). Hydraulic connectivity was observed over
77% of the total strike length tested in Test Area 1 and Test Area
2 combined, and over 100% of the total across-strike length tested.
Taken together, the extent of hydraulic connectivity observed
during the ISR field test program is supportive of the permeability
of the ore zone and the potential suitability for ISR
mining.





●
 Installation
of the Athabasca Basin’s first CSWs for ISR:





ISR mining of
the Phoenix deposit is expected to require the installation of
approximately 300 large-diameter/commercial-scale vertical wells
into and surrounding the Phoenix deposit at approximately 400
metres below surface. The installation of CSW1 (GWR-031) and CSW2
(GWR-032) represent a historic milestone for the advancement of ISR
mining within the Athabasca Basin – as the first wells to
have been installed in the Athabasca Basin for the purpose of ISR
mining (see Figure 2 and Figure 3).


Completion of
these wells represents a notable de-risking accomplishment for the
project, as it confirms the ability to drill these large-diameter
holes and install the materials necessary for ISR mining in a
complex and highly altered geological setting that has not
previously been tested for the suitability of the installation of
ISR wells.





2019 Annual Information
Form 40





●
 Confirmation
of limited hydraulic connectivity within the underlying basement
units:





During
preliminary tests in Test Area 1 and Test Area 2, negligible
hydraulic responses were observed in the observation wells situated
in the basement rock units underlying the Phoenix deposit. This
result is indicative of the basement units having relatively low
permeability and is supportive of the PFS design for the Phoenix
ISR operation, which relies on the basement units providing
containment of the ISR mining solution in conjunction with the
planned freeze dome.





●
 Demonstration
of the effectiveness of MaxPERF to increase CSW access to existing
permeability:





The MaxPERF
Drilling Tool was successfully deployed in CSW1 and CSW2 to create
a series of lateral drill holes (penetration tunnels) roughly 0.7
inches (1.78 centimetres) in diameter, which extend up to 72 inches
(1.83 metres) from the CSW. Initial short-duration hydrogeological
tests confirmed increased flow rates in Test Area 1 following the
completion of the MaxPERF drilling. In Test Area 2, initial
short-duration hydrogeological tests confirmed similar flow rates
both before and after the completion of the MaxPERF
drilling.





These results
confirm that the MaxPERF Drilling Tool can be deployed successfully
within a CSW to mechanically engineer increased access to the
existing permeability of the ore formation. This tool could be of
significant utility in areas of the Phoenix deposit where natural
access to permeability is challenged.





●
 Confirmation
of ability to achieve hydraulic conductivity values consistent with
PFS





In February
2020, the Company reported further results of the pump and
injection tests performed on the two CSWs. These tests were
designed to allow for the simulation of fluid flow under conditions
similar to an envisioned commercial ISR production environment
– ultimately facilitating a quantitative assessment of the
bulk hydraulic conductivity of the Phoenix orebody and surrounding
rock formations.





For ISR
mining operations, the term “hydraulic conductivity” is
used to describe the ease with which a fluid can move through the
pore spaces or fractures within a host rock. Hydraulic conductivity
is commonly represented by the symbol ‘K’, is often
stated as a rate of flow (under a unit hydraulic gradient through a
unit cross-sectional area of aquifer) and is typically reported in
units of metres/sec (‘m/s’) or metres/day
(‘m/d’).








2019 Annual Information
Form     41





The
extensive hydrogeological data sets collected during the 2019 field
program will be incorporated into the hydrogeological model being
developed for Phoenix, which is expected to facilitate detailed
mine planning. Denison expects the hydrogeological model and final
report to be completed in Q1 2020.





Figure 1: Test Areas and Well Installations Completed during
2019

















2019 Annual Information
Form 42





Figure 2: Pump/Injection wells, Observation wells and CSW1 in Test
Area 1














2019 Annual Information
Form 43





Figure 3: Pump/Injection wells, Observation wells and CSW2 in Test
Area 2





2019 Annual Information
Form 44





Mineral Processing and Metallurgical Testing





A number of
metallurgical testing programs have been undertaken at the project,
to evaluate the mineral processing potential for both the Gryphon
and the Phoenix deposits.





2014-2018





In 2014,
preliminary metallurgical test work was initiated to assess the
basic metallurgical properties of the deposit ores. In 2017 and
2018, advanced metallurgical testing was completed, to test mill
performance at extremes of potential ore feed grades and impurity
levels, as well as optimize processing parameters. Results of this
testing are incorporated in the Wheeler PFS Report.





In summary, for
both the Phoenix and Gryphon deposits, results of the testing
indicate that ores are readily amenable to acid base leaching with
high uranium extraction rates. Performance in terms of retention
time, reagent usage and consumption are all consistent with current
industry operating parameters. Test work results were positive,
with results generally in line with capacities at existing plants
and with yellowcake produced meeting all specifications from ASTM
C967-13 “Standard Specifications for Uranium Ore
Concentrate”.





In order to
support the evaluation of a contemplated ISR operation for Phoenix,
during the PFS process, Denison completed Leach Amenability Studies
(Bottle Roll Tests) and column leach tests from 2016 to 2018.
Testing included subjecting appropriate ore samples to various pH,
ORP and other solution characteristics and monitoring progress of
leaching over time. Results of these initial tests demonstrated
Phoenix ore responded strongly to acid leach conditions with low
impurities removal, extremely low reagent consumption levels and
high uranium recovery.





2019-2020





In December 2019,
Denison initiated the next phase of ISR metallurgical laboratory
testing for uranium recovery at Phoenix, which will utilize the
mineralized drill core recovered through the installation of
various test wells during the 2019 ISR field test program. The
metallurgical laboratory test program builds upon the laboratory
tests completed for the recovery of uranium as part of the
project’s PFS and is expected to further increase confidence
and reduce risk associated with the application of the ISR mining
method. The results are expected to facilitate detailed mine and
process plant planning as part of a future FS, and will provide key
inputs for the EA process. Significant components of the
metallurgical laboratory test program include core leach tests,
column leach tests, bench-scale tests and metallurgical
modelling.





Metallurgical
test work commenced in the fourth quarter of 2019, and is expected
to include the following:





●
 Core Leach
Tests:





These specialized
tests involve the testing of intact mineralized core samples
(between 0.75 metres and 1.5 metres in length). Core samples were
collected to represent the various ore types and grade ranges (~1%
to 60% U3O8) at Phoenix. A
triple-tube method of core recovery was employed to ensure the core
could be recovered with minimal breakage and would be
representative of the in-situ conditions at Phoenix, to evaluate
uranium recovery specifically for the ISR mining
method.





2019 Annual Information
Form 45





Denison has
acquired access to a unique and specialized laboratory apparatus at
the Saskatchewan Research Council laboratories, which will be
utilized to completely seal the outer diameter of the intact
mineralized core, thus ensuring that the leach solution travels
through the intact core sample (25 centimetres to 50 centimetres in
length). The tests are expected to utilize mining solution (or
lixiviant) with acid and oxidant concentrations, and injection
pressures, similar to those envisaged during commercial ISR
operations. Denison considers this type of specialized test of
intact competent core samples to be the most representative
available laboratory test of the natural leach conditions of the
host rock. Accordingly, these tests are expected to provide
important detailed metallurgical recovery data that is expected to
inform the Company’s understanding of the potential scope of
the start-up, steady state, and closure of ISR wells.





In February 2020,
the Company reported on the results from the initial core leach
tests. At that time, over 50 days of testing had been completed on
a mineralized core sample recovered from drill hole GWR-016. The
core sample was recovered from between 405 and 407 metres below
surface within the extent of the high-grade core of Phoenix Zone A.
Various parameters for lixiviant composition (including both acid
and oxidant concentration) have been tested to date. In all cases,
the lixiviant is injected into the core continuously and only
interrupted periodically if a change in the lixiviant composition
is required. After the initial test startup, uranium bearing
solution recovered from the core sample returned uranium content in
the range of 13.5 g/L to 39.8 g/L. The average uranium
concentration returned over the last 20 days of testing was 29.8
g/L – which represents a uranium content that is
approximately 200% higher than (or three times) the minimum level
used for the ISR process plant design in the PFS of 10
g/L.





●
 Column Leach Tests:





Additional core
samples in the same grade ranges (~1% to 60% U3O8) were obtained
from the 2019 ISR field test program and preserved for
metallurgical tests. These samples will be crushed and packed into
test columns at the test facility, in order to complete traditional
column leach tests utilizing the same mining solutions as the Core
Leach Tests. The testing is expected to provide additional data on
the recovery of uranium, and any other metals, from the various ore
types and grade ranges associated with the Phoenix deposit under
the envisaged ISR mining conditions. The purpose of the Column
Leach Tests is to correlate data from the specialized Core Leach
Tests to the traditional ISR laboratory testing methods used during
the PFS. Additionally, the Column Leach Tests are able to generate
uranium bearing solutions in larger quantities for further
laboratory testing of the process plant flowsheet.





●
 Bench Scale
Tests:





Upon completion
of the Core Leach Tests and Column Leach Tests, Bench-Scale Tests
of each unit operation in the proposed flowsheet is planned. These
tests are expected to use the uranium-bearing solution produced
from both of the Leach Tests. The data from the Bench-Scale Tests
is expected to provide key details for plant design for impurity
removal, uranium precipitation, solid liquid separation, reagent
usage and water treatment.





2019 Annual Information
Form 46





●
 Metallurgical
Modelling:





Concurrent with
these tests, Denison is building a metallurgical simulation model
with the basic parameters for mass, energy and water balances. The
data from all laboratory tests will be incorporated into a model
update once testing is completed.





The timing and
completion of the above noted elements of the metallurgical test
program will be contingent on the Company raising sufficient
capital.





Sampling, Analysis and Data Verification





See
“Athabasca Exploration: Sampling, Analysis and Data
Verification” for details.





Mineral Reserve and Mineral Resource Estimates





RPA, an
independent technical consulting firm with relevant experience, was
retained by Denison on behalf of the WRJV to prepare and audit the
mineral resource estimates for the Gryphon and Phoenix deposits in
accordance with CIM Definition Standards (2014) and NI 43-101. The
Wheeler PFS Report contains a combined mineral resource estimate
for the Wheeler River project, with effective dates for the mineral
resource estimates for the Gryphon and Phoenix deposits of January
30, 2018 and May 28, 2014, respectively. See “Mineral
Reserves and Mineral Resources”, above, for a summary of the
combined mineral resource estimate for the Wheeler River
project.





As further
discussed in the Wheeler PFS Report, a mineral reserve estimate for
the Gryphon deposit was prepared based on the January 30, 2018
mineral resources estimate and a mineral reserve estimate for the
Phoenix deposit was prepared based on the March 24, 2014 mineral
resources estimate.





Phoenix Deposit Mineral Resource Estimation
Methodology





Geology,
structure, and the size and shape of the mineralized zones have
been interpreted using data from 243 diamond drill holes which
resulted in three-dimensional wireframe models that represent 0.05%
U3O8 grade envelopes.
The mineralization model generally consists of a higher-grade zone
within an envelope of lower grade material, resulting in two main
estimation domains - higher grade and lower grade. Additionally, a
small zone of structurally controlled basement mineralization was
modelled at the north end of the deposit.





Based on 196 dry
bulk density determinations, Denison developed a formula relating
bulk density to uranium grade which was used to assign a density
value to each assay. Bulk density values were used to weight grades
during the resource estimation process and to convert volume to
tonnage.





Uranium grade
times density (“GxD”) values and density
(“D”) values
were interpolated into blocks in each domain using an inverse
distance squared (“ID2”) algorithm. Hard domain
boundaries were employed such that drill hole grades from any given
domain could not influence block grades in any other domain. Very
high-grade composites were not capped but grades greater than a
designated threshold level for each domain were subject to
restricted search ellipse dimensions in order to reduce their
influence. Block grade was derived from the interpolated GxD value
divided by the interpolated D value for each block. Block tonnage
was based on volume times the interpolated D value.





2019 Annual Information
Form 47





The mineral
resources estimated for the Phoenix deposit were classified as
indicated or inferred based on drill hole spacing and apparent
continuity of mineralization. The block models were validated by
comparison of domain wireframe volumes with block volumes, visual
comparison of composite grades with block grades, comparison of
block grades with composite grades used to interpolate grades, and
comparison with estimation by a different method.





Gryphon Deposit Mineral Resource Estimation
Methodology





The
three-dimensional mineralized wireframes were created by Denison
utilizing Gemcom software following detailed interpretation of the
deposit geology and structure. The wireframes were defined using a
threshold of 0.05% U3O8 and minimum
thickness of two metres. One higher grade domain was defined within
the A1 lenses and three higher grade domains were defined in the D1
lenses based on a threshold of 4.0% U3O8. The wireframes
and drilling database were sent to RPA for grade modelling
following QAQC which included ensuring the wireframes were
‘snapped’ to the drill hole mineralized
intervals.





Based on 279 dry
bulk density determinations, a polynomial formula was determined
relating bulk density to uranium grade which was used to assign a
density value to each assay. Bulk density values were used to
weight grades during the resource estimation process and to convert
volume to tonnage. Uranium GxD values and D values were
interpolated into blocks measuring 5 metres by 1 metre by 2 metres
using an ID2 algorithm since variograms were not considered good
enough to derive kriging parameters. Hard domain boundaries were
employed at the wireframe edges, so that blocks within a given
wireframe were only informed by grade data from that wireframe. For
the A1 high-grade domain, assays were capped at 30% U3O8 with a search
restriction applied to composite grades over 20% and for the D1
high-grade domains, assays were capped at 20% U3O8 with no search
restriction. For the A1-A4, B3-B7, C4-C5 and D2-D4 low-grade
domains, assays were capped at 10% U3O8. For the C1
low-grade domain, assays were capped at 20% U3O8 with a search
restriction applied to composite grades over 10%. For the B1, B2,
E1 and E2 low-grade domains, assays were capped at 15%
U3O8
with search restrictions applied to composite grades over 10%
U3O8 for the B1 domain
and 5.0% U3O8 for the E2
domain. For the D1 low-grade domain, assays were capped at 5%
U3O8. Block grade was
derived from the interpolated GxD value divided by the interpolated
D value for each block. Block tonnage was based on volume times the
interpolated D value.





The mineral
resources estimated for the Gryphon deposit were classified
according to the drill hole spacing and the apparent continuity of
mineralization, as either indicated mineral resources (generally,
drill hole spacing of 25 x 25 metres) or inferred mineral resources
(generally, drill hole spacing of 50 x 50 metres). The block models
were validated by comparison of domain wireframe volumes with block
volumes, visual comparison of composite grades with block grades,
comparison of block grades with composite grades used to
interpolate grades, and comparison with estimation by a different
method.





Phoenix and Gryphon Deposit Reserve Calculations





The mineral
reserve for the Phoenix and Gryphon deposits are summarized in the
following table. For Phoenix, the ISR process has been designed to
a level appropriate for a PFS and mineral reserve estimation, with
application of appropriate modifying factors including geological,
mining, hydrogeological, metallurgical and cut-off grades. The
Gryphon mine design has been completed to a level appropriate for a
PFS and the mineral reserve estimation, with application of
appropriate modifying factors including geological, mining recovery
and dilution and cut-off grades. The estimated mineral reserves are
based on previously estimated indicated mineral resources, which
are converted to probable reserves.





2019 Annual Information
Form 48





Mineral Reserve Estimate – Wheeler River Project –
September 1, 2018


Deposit
Category
Tonnes
Grade(% U3O8)
Million lbs U3O8(100%
Basis)Phoenix
Probable
141,000
19.1
59.7Gryphon
Probable
1,257,000
1.8
49.7Total
1,398,000
3.5
109.4


Notes:


1. CIM
definitions (2014) were followed for classification of mineral
reserves.


2. Mineral
reserves for the Phoenix deposit are reported at the mineral
resource cut-off grade of 0.8% U3O8 and are based on
the block model generated for the May 28, 2014 mineral resource
estimate. Mining recovery factor of 85% has been applied to the
mineral resource above the cut-off grade.


3. Mineral
reserves for the Gryphon deposit are estimated at a cut-off grade
of 0.58% U3O8 using a long-term
uranium price of US$40/lb, and a US$/CAD$ exchange rate of 0.80.
The mineral reserves are based on the block model generated for the
January 30, 2018 mineral resource estimate. The cut-off grade is
based on an operating cost of $574/tonne, milling recovery of 97%,
and a 7.25% fee for Saskatchewan royalties (basic royalty plus
resource surcharge).


4. Mineral
reserves are stated at a processing plant feed reference point and
include diluting material and mining losses.


5. Numbers
may not add due to rounding.








Mining Evaluation and Development Operations





Phoenix





ISR mining has
become the industry’s leading low-cost uranium production
method globally – following on from initial use in the 1960s
to extensive use at present in Kazakhstan (the world's largest and
lowest cost producer of uranium), the United States, China, Russia,
and Australia, amongst others. ISR mining is amenable to uranium
deposits in certain sedimentary formations and is well known in the
industry for comparatively minimal surface impact, high production
flexibility, and low operating and capital costs. In 1998, ISR
mining represented roughly 13% of global uranium production,
increasing rapidly to the point where today it is estimated to
account for over 50% of global uranium production. There has been
continuous development and improvement of ISR mining techniques in
past years, particularly in the two decades since the International
Atomic Energy Agency (“IAEA”) published the Manual of
Acid In-Situ Leach Uranium Mining Technology
(IAEA-TECDOC-1239).





ISR mining
involves recovery of uranium by pumping a mining solution (also
referred to as a “lixiviant”) through an appropriately
permeable orebody. The method eliminates the need to physically
remove ore and waste from the subsurface – thus eliminating
the related surface disturbance and tailings normally related to
underground or open pit operations. The mining solution dissolves
the uranium as it travels through the ore zone – effectively
reversing the natural process that originally deposited the
uranium. The mining solution is injected into the ore zone through
a series of cased drill holes called injection wells and pumped
back to surface via a similar series of recovery wells. The
collective of the various injection and recovery wells is referred
to as a wellfield. Once on surface, the uranium bearing solution is
sent to a surface processing plant for the chemical separation of
the uranium. Following the uranium removal, the mining solution is
reconditioned (often referred to as the barren mining solution) and
returned back to the wellfield for further production.





2019 Annual Information
Form 49





ISR wellfields
are designed to effectively target delineated mineralization and
achieve the operation’s desired production level. At present,
the Company expects the drilling of individual wells will be
carried out utilizing either air rotary or mud rotary methods. The
wellfield at Phoenix has been designed using a standard hexagonal
pattern with 10m spacing between wells.





Containment of
the solution is a requirement in ISR operations to ensure recovery
of the uranium and to minimize regional groundwater infiltration
into the ore zone and associated dilution of the mining solution.
In typical ISR operations, this is normally achieved through
natural clay or other impermeable geological layers.





At Phoenix, the
basement rock below the orebody achieves this purpose but the
sandstone formation which hosts and surrounds the ore zone is not
impermeable. As a result, in order to maintain containment, it is
proposed that the entire orebody will be isolated by use of an
artificial freeze wall that will cover all sides and above the
orebody to create an impermeable dome to surround the deposit. This
dome will be keyed into the impermeable basement rocks on all
sides. The freeze wall would be established using directional
drilling methods to drill and case a series of holes from surface
that will run across the orebody. Circulation of a low temperature
brine solution in the holes will remove heat from the ground,
freezing the natural groundwater, and establishing an impermeable
frozen wall encapsulating the deposit.





The following
figures show the ISR operation planned for Phoenix (including the
planned freeze dome and ISR wellfield) in a cross sectional view
and an isometric view.








Proposed ISR Operation – Cross-Sectional View





2019 Annual Information
Form 50











Proposed ISR Operation – Isometric View








Benefits of ISR
operations generally include:





●
 Established safety practices
and procedures to ensure health and safety of workers.





●
 Minimal environmental
impacts, including low noise, dust, and air emissions, low water
consumption levels, minimal surface disturbance, and full
rehabilitation of the area.





●
 Ability to scale production
up or down to meet market demands.





●
 Insensitivity to ore grades
(i.e. lixiviants will dissolve the uranium at any
grades).





●
 Low initial capital costs and
short timeframe to production.





●
 Low operating
costs.





The Company's
evaluation of the ISR mining method at Phoenix, as detailed in the
PFS, has identified several significant environmental and
permitting advantages, particularly when compared to the impacts
associated with conventional uranium mining in Canada. The
PFS’s plan for the proposed ISR mining operation is expected
to produce no tailings, generate very small volumes of waste rock,
and has the potential for low volumes or possibly no treated water
discharge to surface water bodies, as well as the potential to use
the existing power grid to operate on a near zero carbon emissions
basis.





The planned use
of the freeze wall, to encapsulate the ore zone and contain the
mining solution used in the ISR operation, has the potential to
streamline the mining process, minimize interaction with the
environment, and facilitate controlled reclamation of the site at
decommissioning.





2019 Annual Information
Form 51





Taken together,
ISR mining at Phoenix has the potential to be one of the most
environmentally friendly uranium mining and processing operations
in the world.





Gryphon





The extraction
strategy for Gryphon, as described in the PFS, has not changed from
the approach described in the Company’s preliminary economic
assessment released in March 2016. The planned mining method for
Gryphon is conventional longhole stoping with backfill. Longhole
stoping is a widely used conventional mining method applied in both
the Canadian uranium industry as well as in the broader mining
industry for the extraction of base metals, gold, and other
commodities.





According to the
planned approach, access to the Gryphon deposit will be established
through two shafts. The primary shaft will provide for movement of
personnel and supplies, ore/waste hoisting, and fresh air to the
underground operations. The second shaft will be solely for exhaust
air and secondary egress. Both shafts will be excavated through
blind boring methods. Blind bored shafts have been selected for
vertical access in favour of typical full-face shaft sinking with
cover grouting or freeze curtain protection. Blind bored shafts
offer more competitive costs and construction schedules, and a
reduced risk profile while sinking through saturated ground
conditions. A composite steel/concrete liner will be installed over
the full length of the shaft and grouted into basement
rock.





In the
underground operation, initial underground development will focus
on establishment of permanent infrastructure and flow through
ventilation between the main shaft and the exhaust shaft. Most of
the permanent infrastructure will be located on the 500 m level,
the level of the main shaft station. Following this, development
priorities will be to establish access to the E series lense (E
Zone), which provides early opportunity for ore production and
waste rock storage (in mined out stopes). As mining is initiated in
the E Zone, ramp development will continue to provide access to the
remainder of the ore zones.





The PFS also
assumes that the ore will be hoisted to surface and transported to
the McClean Lake mill for processing. A two-year ramp-up to full
production is planned, with the full production rate set at 9
million pounds U3O8 per year.
Processing at the McClean Lake mill will require the negotiation
and execution of a toll milling agreement, which is not currently
established, and will also require regulatory approvals, which have
not been obtained.





After careful
consideration of the risks and opportunities associated with
concurrent permitting and advancement of project engineering
activities, the Company decided to submit a Project Description and
initiate the Environmental Assessment process in early 2019 to
support the advancement of the Phoenix ISR operation, and to bring
the Gryphon operation forward at a later date (still in line with
the PFS plan of Gryphon first production by 2030).





Processing and Recovery





Phoenix





The uranium
bearing solution from the Phoenix wellfield will be directed to a
self-contained processing facility located adjacent to the
wellfield. The processing plant is expected to house most of the
process equipment in a 46,500 square foot pre-fabricated metal
building.





2019 Annual Information
Form 52





The proposed
processing plant for the Phoenix ISR process will have four major
circuits: impurities removal, yellowcake precipitation,
dewatering/drying, and packaging. The processing plant will also
have filtration systems, bulk chemical storage, process solution
storage tanks, and a control room.





As described
above, Denison is currently conducting additional leaching tests at
the Saskatchewan Research Council laboratories in Saskatoon. The
future results from these tests are expected to form the basis for
the Processing Plant designs planned to be incorporated into a
future FS. Testing is expected to include all unit operations
currently included in the flow-sheet from the PFS, as summarized in
the figure below.





Phoenix ISR Processing Plant Design





Broadly, the ISR
processing plant design at Phoenix involves the beneficiation of
the uranium bearing solution recovered from the wellfields and
pumped to the processing plant, as described below:





●
 Impurities removal –
Uranium liberated from underground in the Phoenix deposit will be
routed to an iron/radium removal circuit, where the pH of the
solution will be adjusted to allow the precipitation of iron
hydroxide and other metals. Once the iron hydroxide has
precipitated out of the solution, the solution will be routed to
the primary yellowcake precipitation circuit.





●
 Yellowcake precipitation
– The solution will be pH adjusted to optimal levels for
uranium precipitation with sodium hydroxide, then yellowcake
product will be precipitated with hydrogen peroxide, using sodium
hydroxide (or other suitable high pH solution) to maintain optimal
pH. Following uranium precipitation into yellowcake slurry, the
barren mining solution will be reconstituted to the proper acid
level prior to being pumped back to the wellfield for
reinjection.





2019 Annual Information
Form 53





●
 Yellowcake dewatering/drying
– The precipitated yellowcake slurry will be transferred to a
filter press, where excess liquid will be removed. Following a
fresh water wash step that will further clean the yellowcake
product, the resulting yellowcake will be transferred to the dryer,
which will further reduce the moisture content, yielding the final
dried, free-flowing product.





●
 Packaging – Refined
yellowcake will be packaged in 55-gallon drums.





Taken together,
the processing plant is expected to achieve 98.5% recovery of
uranium from the uranium bearing solution. The simplified
processing plant design, together with the use of the freeze cap,
creates a closed loop system with the prospect of achieving zero
discharge of effluent to the environment. The different types of
chemical reagents will be stored, used, and managed to ensure
worker and environmental safety, in accordance with standards
developed by regulatory agencies and vendors.





Gryphon





The PFS plan
assumes that Gryphon ore will be transported to the McClean Lake
mill for processing.





The results of
the metallurgical test work program completed for the PFS indicate
that the Gryphon deposit is amenable to recovery utilizing the
existing McClean Lake mill flowsheet. Moreover, the deposit is
amenable to processing under similar conditions to those currently
used in the McClean Lake mill. The mill is currently processing
material from the Cigar Lake mine; however, it has additional
licenced processing capacity to a total annual production of up to
24 million pounds U3O8. Overall process
recovery based on metallurgical test work conducted to date has
been estimated at 98.4% for Gryphon ore.





Should Denison
proceed with processing the Gryphon deposit at the McClean Lake
mill, such processing will require certain modifications to the
McClean Lake mill. These modifications include expansion of the
leaching circuit, the addition of a filtration system to complement
the Counter Current Decantation (CCD) circuit capacity, the
installation of an additional tailings thickener, and expansion of
the acid plant. Various other upgrades will also be required
throughout the mill to permit production at the full 24 million
pounds per year U3O8 licenced
capacity, as described in greater detail in the PFS.





Infrastructure, Permitting and Compliance Activities





As a remote
northern greenfield site, the Wheeler River project would require
substantial infrastructure to support operations. The site is
located approximately 5 kilometres from a provincial highway and
powerline. Tie-ins from that infrastructure into site would be
required.


Additional
surface infrastructure required to be located at the sites would
include:





●
 5 km access road from
provincial highway 914 to site;


●
 5 km power distribution line
from provincial power grid into site; and


●
 1,600 m
airstrip.





2019 Annual Information
Form 54





In accordance
with the plan, production from the Gryphon site will be trucked to
the existing McClean Lake mill to the northeast, via existing
Provincial Highway 914, including 51 km of new road required
between the McArthur River mine and the Cigar Lake mine. The large
scale infrastructure described above and the existing regional
infrastructure in the proximity to the Wheeler River project is
illustrated in the figure below.





Wheeler River Regional Infrastructure








The figure below
reflects the conceptual plan for the Phoenix operation’s
surface facilities, showing the relative scale and nominal
footprint of site infrastructure, including (all estimated sizes
are approximate):





●
 Area allocation over the
defined deposit for an ISR wellfield (90 m x 800 m);


●
 ISR processing plant (90 m x
48 m);


●
 Operations centre (61 m x 41
m), including men’s and women’s dry facilities, 3-bay
maintenance shop, welding bay, warehouse, emergency response
vehicle storage, mine rescue and emergency response office,
laboratory, nurse’s station, training room, offices
(administration, maintenance, and supply chain), meeting rooms,
lunch room, and radiation monitoring room;


●
 150-person camp with kitchen
and laundry facilities;


●
 Personal-vehicle
parking;


2019 Annual Information
Form 55


●
 Main electrical substation
(50 m x 50 m);


●
 North and south
gatehouses;


●
 Outdoor and covered storage
(15 m x 30 m);


●
 Wash bay and scanning
facility;


●
 30 m long, 80 tonne weigh
scale;


●
 Potable water treatment
facility;


●
 Fuel storage and dispensing
facility (gas and diesel);


●
 Fire water tank and
pumphouse;


●
 Two bullet propane tank
farm;


●
 Sewage treatment
facility;


●
 Incinerator;


●
 Backfill plant with storage
facility;


●
 Outdoor fenced hazardous
storage area (30 m x 30 m);


●
 Fenced landfill area (90 m x
90 m);


●
 Water discharge
station;


●
 Special waste storage (46 m x
46 m, 3,200 cubic meter capacity); and


●
 Clean waste rock storage (60
m x 60 m, 7,100 cubic meter capacity).





Phoenix Site Conceptual Layout








Taken together,
the Phoenix operation has the potential to be one of the most
environmentally friendly uranium mining projects in the world. Per
the plan in the PFS:


●
 The planned ISR approach
produces no tailings.





2019 Annual Information
Form 56


●
 The closed loop system of the
processing plant has the potential to eliminate any major sources
of treated water to be discharged to the environment. Due to
evaporation and moisture content of the yellowcake product, the
processing plant may require small volumes of make-up
water.


●
 Minimal volumes of surface
run-off will be captured, treated, and used as make-up water in the
processing plant, re-injected underground or processed in the water
treatment plant.


●
 Low to near zero carbon
emissions due to the lack of heavy equipment and provision of power
from the provincial power grid.


●
 Small volumes of waste
products from the iron precipitation circuits will be temporarily
stored on surface and disposed of in the underground stopes at
Gryphon or other suitable long term storage facility.





At Gryphon, the
most significant environmental concern associated with the project
will be the management of treated mine effluent. Investigations
into environmentally acceptable discharge locations has identified
suitable sites nearby that will minimize any impacts from treated
effluent discharge. Other waste products, such as potentially acid
generating waste rock or low-grade waste products, will be used
underground as backfill on a priority basis where possible.
Otherwise, such materials will be stored in approved facilities
designed for safe closure and decommissioning. Future studies will
evaluate the potential for 100% underground storage to eliminate
the need for surface facilities.





Denison believes
all potential environmental impacts associated with the planned
Phoenix or Gryphon operations can be successfully mitigated through
the implementation of industry best practices.





The project will
require completion of Federal and Provincial environmental impact
assessments. In June 2019, the CNSC and the Saskatchewan Ministry
of Environment accepted the Project Description submitted by
Denison for the ISR uranium mine and processing plant proposed for
Phoenix at the Wheeler River Project. This acceptance initiated the
EA process of assessments for construction, operation and closure
of the Phoenix deposit at Wheeler River for Phoenix in accordance
with the requirements of both the Canadian Environmental Assessment Act,
2012 and the Saskatchewan
Environmental Assessment Act. It is estimated the
assessments will require approximately 36 to 48 months to complete
following these submissions. In late December 2019, Denison
received a Record of Decision from the CNSC, on the scope of the
factors to be taken into account for the Wheeler River EA, which
indicates that the EA will follow the CNSC’s generic
guidelines.





See
“Government Regulation – Environmental
Assessments” for more information.





Denison
recognizes the importance of early engagement and has been
developing relationships with key interested parties since 2016.
Amongst Denison’s guiding principles is the outmost respect
for Indigenous communities, Indigenous Rights, and traditional
knowledge. Denison wishes to share the land and to work in
partnership to return meaningful benefits from the Wheeler River to
potentially impacted Rights holders, communities, and/or groups.
Denison understands the importance of protecting the area in which
it is working – including the land, the water, the animals,
the air, and the history. Denison welcomes input from all
interested parties through the regulatory engagement and
consultation process and interested parties are invited to contact
Denison directly to express any comments (positive or negative) or
recommendations regarding its activities – so that the input
can be incorporated into its project plans, designs, and
decisions.





2019 Annual Information
Form 57





To support its
engagement and consultation activities, Denison has developed
practices to (1) ensure that employment opportunities are
established for residents from the communities of interest; (2)
procure goods and services from suppliers from the communities of
interest and/or Indigenous-owned suppliers, to support continued
exploration and evaluation activities; (3) support important
community-led activities related to wellness and/or the
preservation of traditional knowledge; and (4) solicit input
through engagement and consultation activities into aspects of
project designs (for example, selection of mining methods, access
road routing, and selection of preferred treated water discharge
locations).





Capital and Operating Costs





Capital and
operating cost estimates were developed to support the PFS of the
Gryphon and Phoenix deposits. The estimates address the initial
capital, sustaining capital and operating costs required to
engineer, procure, construct, commission, start-up and operate the
mines, ISR precipitation plant and related infrastructure at the
Wheeler River site and upgrades at the McClean Lake mill. Estimates
were completed to ‘Association for the Advancement of Cost
Engineering’ class four level with an accuracy of -15% to
-30% on the low side and +20% to +50% on the high
side.





The Wheeler River
project total capital cost is estimated at approximately $1.13
billion, comprised of $322.5 million of initial pre-production
capital for the Phoenix operation and $623.1 million of initial
pre-production capital for the Gryphon operation as outlined in the
following table.


Capital Cost Summary





Wheeler River Capital Cost (1,000's)Area
Initial
Sustaining
TotalPhoenix
$
322,539
$
103,411
$
425,950Gryphon
$
623,120
$
82,743
$
705,863Sub Total
$ 945,659
$ 186,154
$
1,131,813





The capital costs
for the ISR mining of the Phoenix deposit are categorized as
follows:


Phoenix Capital Cost Summary


Phoenix Capital Cost Details (1,000's)Direct Capital Costs
Initial
Sustaining
TotalWellfield
$
63,674
$
35,402
$
99,076ISR
Precipitation Plant
$
50,935
$
4,606
$
55,541Water
Treatment Plant
$
1,268
$
18,676
$
19,944Surface
Facilities
$
22,325
$
49
$
22,374Utilities
$
6,538
$
803
$
7,341Electrical
$
18,834
$
-
$
18,834Civil &
Earthworks
$
44,309
$
1,331
$
45,640Offsite
Infrastructure
$
7,950
$
-
$
7,950Decommissioning
$
-
$
27,454
$
27,454Total Direct Costs
$ 215,834
$ 88,321
$ 304,155Indirect
Costs
$
28,288
$
5,669
$
33,957Other
(Owner's) Costs
$
14,227
$
-
$
14,227Contingency
Costs
$
64,190
$
9,421
$
73,611Total Costs
$ 322,539
$ 103,411
$ 425,950





2019 Annual Information
Form 58





The capital costs
for the underground mining of the Gryphon deposit are shown in the
following table.


Gryphon Capital Cost Summary





Gryphon Capital Cost Details (1,000's)Direct Capital Costs
Initial
Sustaining
TotalShafts
$
131,522
$
-
$
131,522Surface
Facilities
$
46,932
$
6,074
$
53,006Underground
$
49,518
$
68,842
$
118,360Utilities
$
3,946
$
263
$
4,209Electrical
$
3,613
$
-
$
3,613Civil &
Earthworks
$
11,791
$
483
$
12,274McClean Mill
Upgrades
$
49,920
$
-
$
49,920Offsite
Infrastructure
$
32,392
$
-
$
32,392Decommissioning
$
-
$
1,575
$
1,575Total Direct Costs
$ 329,634
$ 77,237
$ 406,871Indirect
Costs
$
142,015
$
5,112
$
147,127Other
(Owner's) Costs
$
28,143
$
-
$
28,143Contingency
Costs
$
123,328
$
394
$
123,722Total Costs
$ 623,120
$ 82,743
$ 705,863





Operating costs
are estimated for the 14-year mine production period from July 1,
2024 through to March 31, 2037. Phoenix mine production is
scheduled from July 1, 2024 to June 30, 2034 and Gryphon mine
production is scheduled from September 1, 2030 to March 31, 2037.
The table below presents a summary of the Wheeler River
prefeasibility level operating cost estimates.





Wheeler River Operating Cost Summary





Cost Area
Phoenix
Gryphon
Total Cost$000's
$/lb U3O8
$000's
$/lb U3O8
$000'sMining
$
44,020
$
0.75
$
266,202
$
5.46
$
310,222Milling
$
115,577
$
1.97
$
412,621
$
8.45
$
528,198Transport
to Convertor
$
12,341
$
0.21
$
10,252
$
0.21
$
22,593Site
Support / Administration
$
82,264
$
1.40
$
53,346
$
1.09
$
135,610Total
$ 254,202
$ 4.33
$ 742,421
$ 15.21
$ 996,623Total US$

$ 3.33

$ 11.70U308
Sales - lbs in
000's
58,767
48,817





The project
economics have been analyzed on a pre-tax basis (100% basis) and a
Denison specific post-tax basis (90% basis, based on
Denison’s current ownership interest and reflected as a
pro-forma analysist in the PFS). Inputs into both pre-tax and
post-tax models include:


●
 Discount rate of
8%.


●
 Estimated metallurgical
process uranium recoveries of 98.5% and 98.2% for Phoenix and
Gryphon mill feeds, respectively.


●
 Project capital and operating
cost assumptions, as further described in the PFS.


●
 Project schedule assumptions
from 2019 to 2043, as further described in the PFS.


●
 Mine production assumptions,
as further described in the PFS.





2019 Annual Information
Form 59


●
 Uranium pricing scenarios, as
follows:


o
 Base case: (a) Phoenix
– based on UxC’s Q3-2018 Uranium Market Report
Composite Midpoint spot price projection, in constant (uninflated)
2018 dollars, ranging from US$29.48 to US$45.14 per pound
U3O8 during the
Phoenix mine production period; and (b) Gryphon – based on a
fixed price of US$50.00 per pound U3O8 during the
Gryphon mine production period. US$ amounts translated to CAD using
an exchange rate of 1.30 CAD/US$.


o
 High case: a fixed price of
US$65.00 per pound U3O8 for both the
Phoenix and Gryphon production.


●
 Saskatchewan revenue-based
royalties and surcharges applicable to uranium revenue, as follows:
a) a basic royalty of 5.0% of uranium revenue; b) a resource credit
of 0.75% of uranium revenue (which partially offsets the basic
royalty); and c) a resource surcharge of 3.0% of the value of
uranium revenue. For the purposes of these calculations, revenue
has been computed as gross uranium revenue less transportation
costs to the convertor.


●
 No inflation or escalation of
revenue or costs have been incorporated.





The Wheeler River
project pre-tax indicative economic results are illustrated
below.


Pre-tax Economic Results (100% basis)


Pre-Tax Results
NPV 8%
IRR
PaybackBase
Case
$1,308
million
38.7%
~ 24
MonthsHigh
Case
$2,587
million
67.4%
~ 11
Months


(1)
 NPV and IRR are calculated to the start of pre-production
activities for the Phoenix operation in 2021.


(2)
 Payback period is stated as number of months to pay back from start
of uranium production.





A post-tax
Denison-specific economic assessment includes similar inputs as the
pre-tax assessment with the following modifications:


●
 Denison’s share of
project development costs is included in the project’s
capital costs along with their impact on Denison’s estimated
tax pools.


●
 The impact of the
Saskatchewan Profit Royalty as estimated for Denison is
included.


●
 Denison’s expected
provincial and federal income taxes payable are
included.


●
 Denison’s recovery of
toll milling fees paid to the MLJV (22.5% owned by Denison) by the
WRJV for the toll milling of Gryphon ores are
incorporated.





The Wheeler River
project post-tax Denison-specific (90% basis) indicative economic
results are further detailed in the PFS, and summarized as
follows:





Post-tax Economic Results to Denison (90% basis)


Post-Tax Results
NPV 8%
IRR
PaybackBase
Case
$755.9
million
32.7%
~26
monthsHigh
Case
$1,483.8
million
55.7%
~12
months


(2)
 Payback period is stated as number of months to pay back from start
of uranium production











2019 Annual Information
Form 60





Waterbury Lake





The Waterbury
Lake property is owned by Denison (66.57%) and Korea Waterbury
Uranium Limited Partnership (“KWULP”) (33.41%), as limited
partners, and Waterbury Lake Uranium Corporation
(“WLUC”)
(0.02%), as general partner, in the Waterbury Lake Uranium Limited
Partnership (“WLULP”), pursuant to the Waterbury
Lake Uranium Limited Partnership Agreement. Denison holds a 60%
interest in WLUC and is the operator of the project.





This project
description is based on the project’s technical report
entitled “Technical Report with an Updated Mineral Resource
Estimate for the Waterbury Lake Property, Northern
Saskatchewan” dated December 21, 2018 (the
“Waterbury
Report”) by Serdar Donmez, P.Geo., E.I.T., Dale
Verran, Pr.Sci.Nat., P.Geo., and Paul Burry, P.Geo. of Denison, Oy
Leuangthong, P.Eng, and Cliff Revering, P.Eng, of SRK, Allan
Armitage, P.Geo, SGS Geostat and Alan Sexton, P.Geo, GeoVector
Management Inc. (“GeoVector”), a copy of which is
available on the Company’s website.





The conclusions,
projections and estimates included in this description are subject
to the qualifications, assumptions and exclusions set out in the
technical report. We recommend you read the technical report in its
entirety to fully understand the project.





Property Description, Location and Access





The Waterbury
Lake property is located within the eastern part of the Athabasca
Basin in northern Saskatchewan. The project is located
approximately 750 kilometres by air north of Saskatoon and about
420 kilometres by road north of the town of La Ronge. The property
can be accessed year round by provincial highway to Points North
Landing, which is a privately owned service centre with an airstrip
and accommodations available. Points North Landing is located near
the eastern edge of the property, approximately 12 kilometres away
from current operations. The property’s core camp is
accessible year round via 4x4 trail or ice road during winter
across McMahon Lake. The nearest community is Wollaston Lake, 57
kilometres directly south east of Points North
Landing.





The property is
comprised of 12 contiguous claims and one separate claim covering
40,256 hectares with an annual assessment requirement of $1,006,675
to maintain title to the mineral claims. Based on previous work
submitted and approved by the province of Saskatchewan, there is
sufficient assessment credits available to keep title on the
property secure until at least 2039, with the separate claim secure
until 2032.





The J Zone and
Huskie Zone deposits are located within the property near its
eastern edge. Several uranium deposits are located nearby including
the Roughrider, McClean Lake, Midwest, and Midwest A
deposits.





Any uranium
produced from the Waterbury Lake property is subject to uranium
mining royalties in Saskatchewan in accordance with Part III of The
Crown Mineral Royalty Regulations. See “Government Regulation
- Canadian Royalties.” There are no other back-in rights or
royalties with non-owners applicable to this property. Denison has
a 2% net smelter return royalty on the portion of the project that
it does not own.





There are no
known environmental liabilities associated with the Waterbury Lake
property, and there are no other significant factors and risks that
may affect access, title, or the right or ability to perform work
on the property. All the necessary permits for surface exploration
on the property are in place and current.





2019
Annual Information
Form 61





Location of the J Zone and Huskie Zone on the Waterbury Lake
project








2019 Annual Information
Form 62





History





Uranium
exploration activities have been conducted over various portions of
the Waterbury Lake mineral claims over the past 40 years. The
current Waterbury Lake mineral claims were originally staked by
Strathmore Minerals Corp. in 2004. Strathmore subsequently spun out
all of its Canadian assets to Fission in 2007. On January 30, 2008,
KWULP and Fission entered into an earn-in agreement for the
Waterbury Lake property, pursuant to which Fission granted KWULP
the exclusive rights to earn up to a 50% interest in the Waterbury
Lake property by funding $14,000,000 of expenditures on or before
January 30, 2011. Additionally, Fission retained an overriding
royalty interest in the property of 2% of net smelter returns. On
April 29, 2010, KWULP had fully funded its $14 million of
expenditures and consequently earned a 50% interest in the
property. Fission and KWULP subsequently formed the WLULP in
December 2010 with each party owning an equal interest. In April
2011, Fission exercised a back-in option right and increased its
interest in the WLULP to 60%.





Effective April
26, 2013, Denison acquired Fission and all of Fission’s
rights and entitlements to the Waterbury Lake property, including
the 2% net smelter returns royalty. Denison became manager of WLULP
and operator of Waterbury Lake. KWULP has not funded spending
programs of the WLULP since January 2014 and, as a result, Denison
has increased its interest in the WLULP (now 66.57%) while KWULP
has diluted.





The Waterbury
Lake uranium project currently consists of two deposits: the J Zone
deposit and the Huskie deposit.





The J Zone
uranium deposit was discovered during the winter 2010 drill
program. The second drill hole of the campaign, WAT10-063A, was an
angled hole drilled from a peninsula extending into McMahon Lake.
It intersected 10.5 metres of uranium mineralization grading 1.91%
U3O8, including 1.0
metre grading 13.87% U3O8 as well as an
additional four meters grading at 0.16% U3O8. Subsequent
drilling led Fission to focus in on a significant mineralized trend
immediately adjacent to the southeastern boundary of disposition
S-107370. The maiden mineral resource estimate for the J-Zone was
issued by Fission in 2011.





Denison first
discovered mineralization at the Huskie zone in summer 2017 with
the intersection 9.10% U3O8 over 3.7 metres,
including 16.78% U3O8 over 2 metres,
from 306.5 to 310.2 metres depth in drill hole WAT17-466A. Further
drilling in 2017 and 2018 resulted in a maiden mineral resource
estimate in December 2018.





Geological Setting, Mineralization and Deposit Types





The Waterbury
Lake property is located near the southeastern margin of the
Athabasca Basin in the southwest part of the Churchill Structural
Province of the Canadian Shield. The Athabasca Basin is a broad,
closed, and elliptically shaped, cratonic basin with an area of 425
km east-west by 225 km north-south. The bedrock geology of the area
consists of Archean and Paleoproterozoic gneisses unconformably
overlain by flat-lying, unmetamorphosed sandstones and
conglomerates of the mid-Proterozoic Athabasca Group.





The Waterbury
Lake property is located near the transition zone between two
prominent litho-structural domains within the Precambrian basement,
the Mudjatik Domain to the west and the Wollaston Domain to the
east. The Mudjatik Domain is characterized by elliptical domes of
Archean granitoid orthogenesis separated by keels of metavolcanic
and metasedimentary rocks, whereas the Wollaston Domain is
characterized by tight to isoclinal, northeasterly trending, doubly
plunging folds developed in Paleoproterozoic metasedimentary rocks
of the Wollaston Supergroup, which overlie Archean granitoid
orthogenesis identical to those of the Mudjatik Domain. The area is
cut by a major northeast-striking fault system of Hudsonian Age.
The faults occur predominantly in the basement rocks but often
extend up into the Athabasca Group due to several periods of
post-depositional movement.





2019
Annual Information
Form 63





The basement
beneath the Waterbury Lake project is comprised of approximately
northeast-trending corridors of metasediments wrapping around
orthogneissic domes and locally in the Discovery Bay trend an
east-west trending corridor of metasediments bounded to the north
and south by thick zones of orthogneiss that, based on
interpretation of aeromagnetic images, may represent two large dome
structures. As discussed in the Waterbury Report, the metasediments
and the orthogneiss domes are interpreted to be Paleoproterozoic
and Archean in age, respectively.





The J Zone is
hosted within an east-west trending faulted package of variably
graphitic and pyritic metasediments bounded by orthogneiss to both
the north and south. The pelitic metasedimentary assemblage, which
ranges in thickness from 90 to 120 metres and is moderately steep
dipping to the north includes, from north to south, a roughly 50
metre thick pelitic gneiss underlain by 20 metre thick graphitic
pelitic gneiss, underlain by a 10 to 15 metre thick quartz-feldspar
wedge underlain by 20 metre thick graphitic pelitic gneiss,
underlain by a 15 to 25 metre thick pelitic gneiss, then back into
a footwall orthogneiss. There are discontinuous offsets at the
unconformity that range from a few metres to as much as ten
metres.





The J Zone
deposit can be classified as an unconformity-related deposit of the
unconformity-hosted or egress-style variety. It is currently
defined by 268 drill holes intersecting uranium mineralization over
a combined east-west strike length of up to 700 metres and a
maximum north-south lateral width of 70 metres. The deposit trends
roughly east-west (080°) in line with the metasedimentary
corridor and cataclastic graphitic fault zone. A 45 metre east-west
intermittently mineralized zone occurs in the target area formerly
known as Highland roughly separating the J Zone into two segments
referred to as the eastern and western lenses which are defined
over east-west strike lengths of 260 and 318 metres, respectively.
A thin zone of unconformity uranium mineralization occurs to the
north of intermittently mineralized zone which is interpreted to
represent a mineralized block that has been displaced northwards by
faulting and is referred to as the mid lens.





Mineralization
thickness varies widely throughout the J Zone and can range from
tens of centimetres to over 19.5 metres in vertical thickness. In
cross section, J Zone mineralization is roughly trough shaped with
a relatively thick central zone that corresponds with the
interpreted location of the cataclasite and rapidly tapers out to
the north and south. Locally, a particularly high-grade (upwards of
40% U3O8) but often thin
lens of mineralization is present along the southern boundary of
the metasedimentary corridor, as seen in holes WAT10-066,
WAT10-071, WAT10-091, and WAT10-103. Ten meter step out drill holes
to the south from these high-grade holes have failed to intersect
any mineralization, demonstrating the extremely discreet nature of
mineralization.





Uranium
mineralization is generally found within several metres of the
unconformity at depth ranges of 195 to 230m below surface at the J
Zone. Mineralization occurs in three distinct settings: (1)
entirely hosted within the Athabasca sediments, (2) entirely within
the metasedimentary gneisses or (3) straddling the boundary between
them. A semi-continuous, thin zone of uranium mineralization has
been intersected in occasional southern J Zone drill holes well
below the main mineralized zone, separated by several meters of
barren metasedimentary gneiss. This mineralized zone is informally
termed the South-Side Lens and can host grades up to 3.70%
U3O8, as seen in drill
hole WAT11-142.





2019
Annual Information
Form 64





The Huskie
deposit is entirely hosted within competent basement rocks below
the sub-Athabasca unconformity primarily within a faulted,
graphite-bearing pelitic gneiss (“graphitic gneiss”) which forms
part of an east-west striking, northerly dipping package of
metasedimentary rocks flanked to the north and south by granitic
gneisses. The Athabasca Group sandstones that unconformably overlie
the basement rocks are approximately 200 metres thick. The deposit
can be classified as an unconformity-related deposit of the
basement-hosted or ingress-style variety and it is located
approximately 1.5 kilometres to the north-east of the J-Zone
deposit.





The deposit
comprises three stacked, parallel lenses (Huskie 1, Huskie 2 and
Huskie 3), which are conformable to the dominant foliation and
fault planes within the east-west striking graphitic gneiss unit.
The drilling to date suggests the grade, thickness, and number of
lenses present is controlled by the presence of northeast striking
faults which cross-cut the graphitic gneiss unit. The northeast
striking faults identified at the Huskie deposit are interpreted to
be part of the regional Midwest structure. The deposit occurs over
a strike length of approximately 210 metres, dip length of
approximately 215 metres and has an overall true thickness of
approximately 30 metres (individual lenses vary in true thickness
of between 1 metre and 7 metres). The deposit occurs at vertical
depths ranging between 240 and 445 metres below surface and 40 to
245 metres below the sub-Athabasca unconformity. The high-grade
mineralization within the lenses is comprised of massive to
semi-massive uraninite (pitchblende) and subordinate bright yellow
secondary uranium minerals occurring along fault or fracture
planes, or as replacement along foliation planes. Disseminations of
lower grade mineralization occur within highly altered rocks
proximal to fault planes. The mineralization is intimately
associated with hematite, which both occur central to a broad and
pervasive alteration envelope of white clays, chlorite and
silicification.





Exploration





With the
exception of drilling, and related work, exploration on the
Waterbury Lake property has mostly been in the form of geophysical
surveys. Airborne magnetic surveys have been flown property wide
and have been used to identify significant basement structures and
to help map basement rock types. Airborne and ground based EM
surveys have also been carried out across the property in order to
define conductive, likely graphitic basement structures that may be
associated with uranium mineralization. Additionally, ground based
induced polarization (DC-IP) and gravity surveys have aimed to
identify zones of low resistivity and negative gravity anomalies
resulting from quartz dissolution and clay alteration. Since
Denison acquired the property in April 2013 and up to the end of
2017, four resistivity surveys (298 line kilometres) have been
completed, comprised of surveys over the Discovery Bay (J Zone),
Oban and Hamilton Lake areas. These surveys augment existing
magnetic, electromagnetic, resistivity and gravity surveys for the
property. The resistivity surveying conducted by Denison have led
to the definition of numerous drill targets, a large portion of
which have been subsequently tested.





A 2D DCIP
resistivity survey comprising 28.8 kilometres (16 lines) was
completed during October 2018. The survey was designed to map the
possible extension of the Midwest structure on to the Waterbury
Lake property and to define possible drill targets for future
testing. This area is referred to as the Midwest Extension
area.





No significant
geological mapping has been conducted on the Waterbury Lake
property to date as the property is predominantly covered by a
thick layer of Quaternary sediments resulting in poor outcrop
exposure; however, several reconnaissance scale surface geochemical
surveys have been undertaken on the Waterbury Lake
property.





2019
Annual Information
Form 65





Drilling results
from the 2019 exploration drilling program (described below) have
indicated that follow-up exploration work is warranted on the GB
Northeast target area. Reconnaissance drill hole (WAT19-493), which
tested an airborne electromagnetic target, intersected highly
favorable geology and geochemistry. A ground electromagnetic survey
is planned for the GB Northeast target area in 2020, designed to
map favourable conductive lithologies (graphite-bearing basement
rocks) and identify targets for future drill testing.





Drilling





Target areas
drill tested by Denison since April 2013, when Denison acquired the
property, until the end of 2019, have included the Discovery Bay
Extension (12 holes, 3,963 metres), Oban (23 holes, 8,113 metres),
Hamilton Lake (12 holes, 5,880 metres), Arran (3 holes, 888
metres), Huskie (33 holes, 15,143 metres) and GB (11 holes, 4,286
metres). Highlights have included the discovery of the Huskie
deposit and weak mineralization at Oban, Hamilton Lake and GB.
These target areas have untested drill targets that warrant future
follow-up.





The 2019 drilling
program commenced in January and was concluded in March. Activities
focused on drill testing priority target areas associated with the
regional Midwest Structure, which is interpreted to be located
along the eastern portion of the Waterbury Lake property. Target
areas tested included the GB Zone (3,385 metres; 9 drill holes),
Oban South (1,127 metres; 3 drill holes), GB Northeast (323 metres;
1 drill hole) and the Midwest Extension (900 metres; 2 drill
holes), with highlight results described below:





GB Zone – Nine drill holes were
completed to follow-up on basement-hosted mineralization discovered
during the summer 2018 drilling program (see Denison’s press
release dated September 17, 2018). The winter 2019 drill holes were
oriented steeply to the northeast on an approximate 100 x 100 metre
spacing to test the faulted graphitic basement sequence which dips
steeply to the southwest. Basement-hosted mineralization was
intersected in drill hole WAT19-480, highlighted by 0.15%
U3O8 over 6.0 metres,
including 0.26% U3O8 over 3.0 metres.
Additional basement-hosted mineralized intercepts were obtained
approximately 100 metres to the southeast of WAT19-480 in drill
hole WAT19-486 highlighted by 0.25% U3O8 over 2.0 metres
and 0.22% U3O8 over 1.5 metres.
The remainder of the holes encountered variable amounts of basement
structure and alteration, often associated with anomalous
geochemistry. The up-dip projection of the mineralized faults was
tested at the unconformity, where two drill holes encountered
significant hydrothermal alteration but no significant
mineralization.





Oban South – The target area at
Oban South comprises the interpreted intersection of the east-west
trending Oban South graphitic conductor and the north-northeast
trending regional Midwest structure. Three drill holes were
completed as an initial test of the geological concept. The
drilling successfully identified a faulted graphitic unit within
the basement, which was hydrothermally altered, and a broad zone of
desilicification within the lower sandstone, which included 10 ppm
uranium and over 100 ppm boron within the basal 12.5 metres of
sandstone immediately overlying the unconformity.





GB Northeast – A single
reconnaissance drill hole was completed to test a coincident
airborne electromagnetic conductor and magnetic low approximately
2.5 kilometres to the northeast of the GB Zone. The drill hole
intersected moderately to locally strong sandstone alteration and
an altered and faulted graphitic pelite unit immediately below the
unconformity. The drill hole was highlighted by a discrete spike in
basement radioactivity of 1,520 counts per second
(“cps”),
measured with an RS-125 gamma hand-held spectrometer, within the
faulted graphitic pelite unit accompanied by elevated uranium (up
to 200 ppm over 0.5 metres) and pathfinder
geochemistry.





2019
Annual Information
Form 66





Sampling, Analysis and Data Verification





The following is
a summary of the sampling, analysis and data verification
procedures followed by non-Denison operators to establish the J
Zone mineral resource estimate. For the exploration and drilling
work being completed by Denison since April 2013, including the
drilling completed to define the Huskie deposit, Denison has
followed the sampling, analysis and data verification procedures as
outlined in the section “Athabasca Exploration: Sampling,
Analysis And Data Verification”.





Prior to April
2013, drill core was split once geological logging, sample mark up
and photographing were completed. All drill core samples were
marked out and split at the splitting shack by Fission employees,
put into 5-gallon sample pails and sealed and transported to Points
North, Saskatchewan only prior to shipment. The samples were then
transported directly to the Saskatchewan Research Council
Geoanalytical laboratories (the “SRC Lab”) in Saskatoon,
Saskatchewan by Marsh Expediting. All assay and bulk density
samples were split using a manual core splitter over the intervals
noted in the sample booklet. Half of the core was placed in a
plastic sample bag with the sample tag and taped closed with fibre
tape. The other half of the core was returned to the core box in
its original orientation for future reference. All drill core
samples were evenly and symmetrically split in half in order to try
and obtain the most representative sample possible. Mineralized
core samples which occur in drill runs with less than 80% core
recovery are flagged for review prior to the resource estimation
process. Recovery through the mineralized zone is generally good
however and assay samples are assumed to adequately represent in
situ uranium content. The SRC Lab offers an ISO/IEC 17025:2005
accredited method for the determination of U3O8 weight % in
geological samples. Rock samples are crushed to 60 % at -2 mm and a
100-200g sub sample is split out using a riffler. The sub sample is
further crushed to 90% at -106 microns using a standard puck and
ring grinding mill. An aliquot of pulp is digested in a
concentrated mixture of HNO3:HCl in a hot
water bath for an hour before being diluted by deionised water.
Samples are then analysed by a Perkin Elmer ICP-OES instrument
(models DV4300 or DV5300).





Drill core
samples collected for bulk density measurements were first weighed
as they are received and then submerged in deionised water and
re-weighed. The samples are then dried until a constant weight is
obtained. The sample is then coated with an impermeable layer of
wax and weighed again while submersed in deionized water. Weights
are entered into a database and the bulk density of the core waxed
and un-waxed (immersion method) is calculated and recorded. Not all
density samples had both density measurements recorded. Water
temperature at the time of weighing is also recorded and used in
the bulk density calculation. The detection limit for bulk density
measurements by this method is 0.01 g/cm3.





Prior to the
summer 2010 drill program, the only QAQC procedures implemented on
drill core samples from the project were those performed internally
by SRC Lab. The in-house SRC Lab QAQC procedures involve inserting
one to two quality control samples of known value with each new
batch of 40 geochemical samples. All of the reference materials
used by the SRC Lab on the Waterbury project are certified and
provided by CANMET Mining and Mineral Services. The SRC Lab
internal QAQC program continued through the 2013 drill program.
Starting in the summer of 2010 and continuing into the 2013 drill
program (discontinued after DDH WAT13-350), an internal QAQC
program was designed by Fission to independently provide confidence
in the core sample geochemical results provided by the SRC Lab. The
internal QAQC sampling program determines analytical precision
through the insertion of sample duplicates, accuracy through the
insertion of materials of “known” composition
(reference material) and checks for contamination by insertion of
blanks.





2019
Annual Information
Form 67





Blanks, reference
standards and duplicates were inserted into the sample sequence
including field duplicates (quarter core every 1 in 20 samples),
prep and pulp duplicates (inserted by the SRC Lab every 1 in 20
samples) and blank samples (1 sample for every mineralized drill
hole). Beginning in 2012 certified, internal reference standards
were used in all holes drilled at Waterbury Lake, replacing the
re-analysed low, medium and high grade reference samples. The
results of the QAQC programs indicate there are no issues with the
drill core assay data. The data verification programs undertaken on
the data collected from the Project support the geological
interpretations, and the analytical and database quality, and
therefore the data can support mineral resource
estimation.





Mineral Processing and Metallurgical Testing





A preliminary
assessment of the mineralogical and leaching characteristics of a
representative selection of drill core samples from the J Zone was
undertaken between July and December 2011 by Mineral Services
Canada.





The study was
based on a suite of 48 samples of mineralized material collected
from thirty-two drill holes (2010 and 2011 programs). These were
chosen to provide good spatial representation of the J Zone
mineralization as well as representing a wide range of uranium
content. The samples were derived from the half split core
remaining after the initial geochemical / assay sampling process.
All samples were submitted to the SRC Lab for comprehensive
mineralogical analysis and preparation of thin sections for
petrographic analysis. The results of mineralogical work were used,
in conjunction with spatial considerations, to define suitable
composite samples for preliminary leaching test work undertaken by
the Saskatchewan Research Council (“SRC”) Mining and Minerals
Division.





Mineralogical
analysis, utilizing XRD, quantitative mineralogical analysis
(Q-Min), petrography and SEM-EDS analysis, determined that the most
abundant uranium-bearing minerals in the J Zone are uraninite
and/or pitchblende, and coffinite. The gangue mineralogy is
essentially comprised of various amounts of quartz, phyllosilicates
(illite-sericite, chlorite, biotite, kaolinite) and (Fe, Ti)-oxides
(hematite, goethite and anatase). Feldspars also occur in most
samples and carbonates as well as a variety of sulphides are
locally present. Ni-arsenides are recognized throughout the samples
as well. The results of the mineralogical analyses identified five
groupings of samples with ore mineralogies typically dominated by
either uranium oxide or uranium silicate phases.





Preliminary acid
leaching tests were undertaken by SRC Mining and Minerals Division
on composite samples prepared from the sample set. Only the
leaching time and rate of acid addition were considered in the
tests while the other parameters (e.g. solid percentage in the
slurry, temperature, pressure and agitation conditions) remained
fixed. A total of five composite samples were defined based on
spatial location, lithology, uranium grades and mineralogy. Acid
leaching (H2SO4) was performed on
each of the composite samples for 12 hours under atmospheric
pressure and at a temperature of 55-65°C. Agitation was used
to create adequate turbulence. Sodium Chlorate was used as the
oxidant. The tests were undertaken on the assay lab rejects from
XRD analyses that were ground to 90% passing 106 microns. The
percentage of solids in the slurry was set at 50%. The only
variables were the acid addition and leaching residence time. Two
different H2SO4 dosages were used
to create an initial leaching environment with 25 mSc/cm and 55
mSc/cm, respectively. Each composite sample was split into two
subsamples labelled A and B. The A sample was used to test high
acid addition with high initial conductivity and the B sample was
used to test low acid addition with low initial conductivity. The
preliminary acid leaching tests showed that maximum extraction
rates of 97.6 % to 98.5 % U3O8 can be obtained
(depending on the acid addition) within 4 to 8 hours of leaching
time, and that the leaching efficiency was variably affected by
acid addition and leaching time.





2019
Annual Information
Form 68





A more
comprehensive phase of metallurgical test work has been recommended
to optimize the leaching efficiency as well as to evaluate other
parameters of the leaching process (grinding size of the ore, solid
percentage in the slurry, temperature, pressure, and residence time
and agitation conditions).





No metallurgical
or mineral processing test work has been completed for the Huskie
deposit.





Mineral Resource Estimates





J Zone





The Company
retained GeoVector to independently review and audit mineral
resource estimates for the Waterbury Lake property, in accordance
with the requirements of NI 43-101, and in 2013 GeoVector prepared
the J Zone Technical Report. See “Mineral Reserves and
Mineral Resources”, above, for a summary of the mineral
resource estimate for the Waterbury Lake project.





For the 2013
mineral resource estimate, a 3D wireframe model was constructed
based generally on a cut-off grade of 0.03 to 0.05 % U3O8 which involved
visually interpreting mineralized zones from cross sections using
histograms of U3O8. 3D rings of
mineralized intersections were created on each cross section and
these were tied together to create a continuous wireframe solid
model in Gemcom GEMS 6.5 software. The modeling exercise provided
broad controls on the size and shape of the mineralized
volume.





Based on a
statistical analysis of the composite database, no capping was
applied on the composite populations to limit high values for
uranium. A histogram of the data indicates a log normal
distribution of the metals with very few outliers within the
database. Analysis of the spatial location of outlier samples and
the sample values proximal to them led GeoVector to believe that
the high values were legitimate parts of the population and that
the impact of including these high composite values uncut would be
negligible to the overall resource estimate.





Using waxed core
and dry bulk density determinations a formula was derived relating
bulk density to grade and was used to assign a density value to
each assay. Bulk density values were used to weight grades during
the resource estimation process and to convert volume to
tonnage.





GxD values and
density (D) values were interpolated into the block model using an
ID2 algorithm. Block grade was derived from the interpolated GxD
value divided by the interpolated D value for each block. Block
tonnage was based on volume times the interpolated D
value.





Two passes were
used to interpolate all of the blocks in the wireframe, but 99% of
the blocks were filled by the first pass. The size of the search
ellipse, in the X, Y, and Z direction, used to interpolate grade
into the resource blocks is based on 3D semi-variography analysis
(completed in GEMS) of mineralized points within the resource
model. For the first pass, the search ellipse was set at 25 x 15 x
15 metres in the X, Y, Z direction respectively. For the second
pass, the search ellipse was set at 50 x 30 x 30 metres in the X,
Y, Z direction respectively. The Principal azimuth is oriented at
075o, the Principal dip is oriented at 0° and the
Intermediate azimuth is oriented at 0°.





2019
Annual Information
Form 69





The mineral
resources for the J Zone were classified as indicated based on
drill hole spacing and continuity of mineralization. The block
model was validated by visual and statistical comparisons of
composite grades and block grades.





Huskie Deposit





During the fourth
quarter of 2018, Denison completed a maiden mineral resource
estimate for the Huskie basement-hosted uranium deposit, which was
reviewed and audited by SRK in accordance with NI 43-101 and CIM
Definitions (2014). See “Mineral Reserves and Mineral
Resources”, above, for a summary of the mineral resource
estimate for the Waterbury Lake project.





For the 2018
mineral resource estimate, GEOVIA GEMSTM software (version
6.8) was used to build three-dimensional mineralized wireframes for
the Huskie 1, Huskie 2 and Huskie 3 lenses based on lithological
and structural data from core logs and geochemical assay (or
radiometric probe) data collected from 28 holes totaling 12,273
metres completed by Denison since 2017. A lower cut-off of 0.05%
U3O8 and a minimum
thickness of 1 metre was selected for the mineralized wireframe
model, consistent with similar basement-hosted uranium deposits in
the Athabasca Basin. Of the 13 mineralized drill holes within the
28 hole data population, a total of 10 drill holes met the
parameters for defining the mineralized wireframes.





The mineral
resource model was constrained by the mineralization wireframes.
The assay database (% U3O8 or %
eU3O8) used for
resource modelling consists of 201 assays from the 10 mineralized
boreholes, contained within the three mineralized lenses. The 0.5
metre interval assays were composited to 1.0 metre lengths. Capping
was considered, with only assay data from Huskie 2 being capped for
% U3O8. Density values
were assigned to the database based on a regression between
U3O8 and density data
pairs using the relationship determined for Denison’s Gryphon
deposit, which is also hosted within comparable basement rocks. The
validity of the Gryphon grade:density regression for the Huskie
deposit was confirmed by plotting 12 bulk dry density samples
collected by SRK from the Huskie deposit. Variograms were modelled
to determine appropriate search radii for grade
estimation.





An
accumulation-like approach was used, wherein “U3O8*density”
and “density” were estimated into a three-dimensional
block model, constrained by wireframes in two passes using ID2. A
%U3O8 grade was then
calculated into each block by dividing the estimated U3O8*density by the
estimated density. A block size of 10 by 5 by 5 metres was
selected. Search radii were based primarily on visual observations
and variogram analyses. The estimation of U3O8*density and
density were based on two estimation passes. The block model was
validated using nearest neighbour estimation and by visual
inspection of the block grades relative to composites and swath
plots comparing the ID2 and nearest neighbour model. All blocks
were classified as Inferred.





2019 Annual Information
Form 70





McClean Lake





The McClean Lake
projects are owned by Denison (22.5%) and its joint venture
partners, Orano Canada (70.0%) and OURD (7.5%). Orano Canada is the
operator/manager of the projects.





Except as
otherwise noted below, the project descriptions are based on the
Company’s technical reports: (A) the “Technical Report
on the Denison Mines Inc. Uranium Properties, Saskatchewan,
Canada” dated November 21, 2005, as revised February 16, 2006
(the “McClean Technical
Report”), (B) the “Technical Report on the Sue D
Uranium Deposit Mineral Resource Estimate, Saskatchewan,
Canada” dated March 31, 2006 (the “Sue D Report”), and (C) the
"Technical Report on the Mineral Resource Estimate for the McClean
North Uranium Deposits, Saskatchewan" dated January 31, 2007 (the
“McClean North Technical
Report”), copies of which are available on the
Company’s
profile on the SEDAR website at www.sedar.com. Scott Wilson RPA
(now Roscoe Postle Associates Inc.) was engaged to prepare and
deliver the McClean Technical Report (authored by Richard E.
Routledge, M.Sc., P. Geo.), the Sue D Report and the McClean North
Technical Report (each authored by Richard E. Routledge, M.Sc., P.
Geo. and James W. Hendry, P. Eng.). Each author was an independent
Qualified Persons for the purposes of NI 43-101. By letter dated
October 20, 2009, Orano Canada received from Scott Wilson RPA
subsequent corrections to the resource estimate in the McClean
North Technical Report, which revisions have been incorporated
herein as applicable.





The conclusions,
projections and estimates included in this description are subject
to the qualifications, assumptions and exclusions set out in the
technical reports. We recommend you read the technical reports in
their entirety to fully understand the project.





Property Description, Location and Access





The McClean Lake
property is located within the eastern part of the Athabasca Basin
in northern Saskatchewan, approximately 26 kilometres west of the
Rabbit Lake mine and approximately 750 kilometres north of
Saskatoon. Access to the McClean Lake site is by both road and air.
Goods are transported to the site by truck over an
all–weather road connecting with the provincial highway
system. Air transportation is provided through the Points North
airstrip about 25 kilometres from the project site.





The mineral
property consists of four (4) mineral leases covering an area of
1,147 hectares and 13 mineral claims covering an area of 3,111
hectares. The right to mine the McClean Lake deposits was acquired
under these mineral leases, as renewed from time to time. Mineral
leases are for terms of 10 years with the right to renew for
successive 10-year periods provided that the leaseholders are not
in default of the terms of the lease. A mineral claim grants the
holder the right to explore for minerals within the claim lands and
the right to apply for a mineral lease. The current mineral leases
have terms that expire between November 2025 and August 2026 and
title to the mineral claims is secure until at least 2041. It is
expected that the leases will be renewed in the normal course, as
required, to enable all the McClean Lake deposits to be fully
exploited.





The right to use
and occupy the lands at McClean Lake has been granted in a surface
lease agreement with the province of Saskatchewan. The McClean
surface lease was entered into in 2002, has a term until 2035 (33
years) and covers a land area of approximately 3,677
hectares.





The uranium
produced from the McClean Lake deposits is subject to uranium
mining royalties in Saskatchewan in accordance with Part III of The
Crown Mineral Royalty Regulations. See “Government Regulation
- Canadian Royalties.” In addition, a royalty of 2% of the
spot market price on all U3O8 produced from the
Sue E deposit is payable to the previous owner of a portion of the
deposit.





2019
Annual Information
Form 71





History





Several operators
and related joint ventures have managed the McClean Lake project
from 1968 to present. Their involvement has resulted in the
discovery of several uranium deposits including McClean North,
McClean South, JEB, Sue trend (A,B,C,D,E) and Caribou. Exploration
activities over the project have involved extensive geophysical
surveys, both airborne and ground, in addition to
exploration/delineation diamond drilling.





Uranium
production from the McClean Lake deposits at the onsite McClean
mill facility to date (current to 2019) is approximately 50 million
pounds U3O8. The ore feed for
production is almost entirely sourced from mining activities of the
Sue (A, B, C, and E) and JEB deposits.





1968 – 1974 (Gulf Minerals Canada Ltd.)





From 1968 to
1974, the entire area was held under permit (Permit #8) by Gulf
Minerals Canada Ltd. During this period, Gulf flew an airborne
radiometric survey over the area and conducted reconnaissance and
ground level surveys.





1974 – 1985 (Canadian Occidental Petroleum Ltd)





In 1974 Gulf
reduced their land holding and allowed Permit #8 to lapse. Canadian
Occidental Petroleum Ltd. (“CanOxy”) acquired the ground and
flew a reconnaissance survey over the area in July of that same
year and preceded to stake a 260 square kilometre area called then
the Wolly property (now divided into the McClean Lake and Wolly
properties). CanOxy operated the project from 1974 to 1985 at first
without partners, then in 1977, in partnership with Inco
Ltd.





Initial
exploration consisted of geochemical and ground radiometric
prospecting with follow up drilling. Several geophysical methods
were also used, but correlation with geochemical and radiometric
anomalies was generally poor. In 1977, airborne magnetic and EM
surveys were flown over the property. The results indicated
conductive trends and helped to better define the regional basement
structure and lithology. The first significant discovery came in
1978, when the Tent Lake zone was found along a major conductive
trend. Following this discovery, the emphasis was on geophysical
rather than geochemical or radiometric targets. From 1979 to 1985,
several major discoveries were made based mainly on geophysics and
improved geological interpretations. This included the McClean
North deposit in 1979, the McClean South deposit in 1980, the Candy
Lake zone in 1981 and the JEB deposit in 1982. During this period,
CanOxy completed 781 drill holes for 118,540 metres of drilling;
most of them concentrated in the area now known as the McClean Lake
property.





1985 – 1993 (Minatco / Denison Mines / OURD)





In January 1985,
Minatco entered into a joint venture agreement with CanOxy and Inco
to become the operator of the project. Geophysical and drilling
programs were conducted throughout the project area to follow up
existing mineralized areas, and explore new zones. In 1987, an
additional zone (Pod 5) was found in McClean North. Several very
significant discoveries were also made the following year, in 1988:
two new mineralized zones, Sue A and B were found in the Sue area,
which would lead to the discovery of the highly productive Sue
trend; mineralization was indicated on the McClean South conductor,
west of the McClean Southwest pod; and additional mineralization
was found in McClean North. Additional work in the Sue area over
the next few years, led to the Sue C deposit in 1989, the Sue D
deposit in 1990 and the Sue E deposit in 1991. From 1985 to 1993,
Minatco completed 1,160 drill holes for a total of 171,090 metres
of drilling on the Wolly and McClean Lake projects, most of them
concentrated again in the area now known as the McClean Lake
property. In 1990, the CanOxy-Inco JV sold out to
Minatco.





2019
Annual Information
Form 72





In 1993, Denison
Mines Ltd. exchanged with Minatco a 70% interest in the Midwest
Lake project for a 22.5% interest in the McClean Lake project. OURD
Canada Ltd., a Denison partner, also obtained a 7.5% interest in
McClean. Also in 1993, Orano Canada (formerly Cogema Resources
Inc.) acquired the uranium assets of TOTAL (Minatco in Canada) and
became the operator of the McClean Lake Project.





In 1993, the
joint venture planned to proceed with mine development. The McClean
Lake property was created, and defined as a portion of the Wolly
property outlined by a surface lease (containing the JEB, Sue and
McClean deposits).





Geological Setting, Mineralization and Deposit Types





The McClean Lake
uranium deposits lie near the eastern margin of the Athabasca Basin
in the Churchill Structural Province of the Canadian Shield. The
bedrock geology of the area consists of Precambrian gneisses
unconformably overlain by flat lying, unmetamorphosed sandstones
and conglomerates of the Athabasca Group. The Precambrian basement
complex is composed of an overlying Aphebian aged supracrustal
metasedimentary unit infolded into the older Archean gneisses. The
younger Helikian aged, Athabasca sandstone was deposited onto this
basement complex. The basement surface is marked by a
paleoweathered zone with lateritic characteristics referred to as
regolith.





The McClean Lake
uranium deposits which include the Sue deposits (A to E), McClean
deposits (North and South), Caribou deposit and JEB deposit are
unconformity-related deposits of the unconformity-hosted
variety.





Exploration and Drilling





Exploration
activities including ground geophysics and diamond drilling were
conducted by Orano Canada from 1994 to present. The majority of
exploration has been focused on areas of known mineralization at
McClean North/South, Sue Trend, JEB and the Tent Seal Trend. Other
target areas on the property which have also been subject to ground
geophysics and drilling include Candy Lake, Bena, Vulture and
Moffat Lake. In 2002 the discovery of Caribou, the high- grade
unconformity related uranium deposit was made approximately 2
kilometres northwest of the Sue C open pit. No other significant
discoveries have been made since 2002. During the period 1994 to
2019 Orano Canada completed 98,498 metres of drilling in 505
holes.





There is no
significant exploration planned for 2020 for McClean Lake at this
time.





Sampling, Analysis and Data Verification





The following
description applies to all exploration on the McClean Lake
property.





Following the
completion of a drill hole, the hole is radiometrically logged
using a downhole slim-line gamma probe. The gamma-log results
provide an immediate equivalent uranium value (eU%) for the hole,
which, except in high grade zones, is reasonably accurate. The
gamma-log results, however, have not been used for the purposes of
estimating mineral reserves or resources unless core loss is
significant.





2019 Annual Information
Form     73





Sample intervals
are generally 50 centimetres long, except where higher or lower
grade mineralization boundaries fall within the interval. In that
case, two 25 centimetre samples are collected. Flank samples of 1.0
metre are always collected where mineralization is located. A
background geochemistry sample is collected every 10 metres down
the hole.





All sampled core
is split in half, one half retained and the other sent to an
independent laboratory. Lost core is not an issue at the McClean
project as core recovery has been good. Control samples are
routinely assayed with each batch of core samples
analyzed.





The
mineralization in the various McClean deposits is highly variable
in both mineralogy and uranium content. The principal minerals
identified in the deposits are pitchblende, uraninite and
niccolite. As a result of the highly variable uranium content, a
variable density formula was developed for the McClean deposits.
This formula was modified over the years to account for the fact
that it originally tended to underestimate U3O8 content where the
U3O8 values were
associated with high values of nickel and arsenic.





No opinion can be
given regarding security of samples in the mid to late 1970s and
the late 1980s other than to indicate that subsequent geological
work and all metallurgical and geotechnical work have confirmed the
results. All procedures reviewed follow generally accepted industry
practice. A good demonstration of the reliability is that JEB and
the Sue deposits (B and C) have been mined out and more uranium has
been recovered into stockpiles than had been estimated from surface
drilling.





Mineral Reserve and Mineral Resource Estimates





Estimation
procedures have evolved over the years. At the time of the
feasibility study in 1990, polygonal methods were used for the JEB,
the Sue A, the Sue B, the Sue C deposits and for the McClean zones.
Prior to the start of mining at the JEB deposit, the mineral
reserves were re-evaluated using computerized methods whereby block
models were constructed and geostatistical methods were
implemented. Much more recently, these mineral resource estimates
have been further refined using Whittle pit optimization software.
Appropriate tests and audits of the databases on all the McClean
deposits have been carried out by past qualified Denison personnel.
In the case of JEB, Sue C and Sue B, the amount of U3O8 recovered into
stockpiles was higher than that estimated from surface
drilling.





The Company
received the McClean Technical Report from Scott Wilson RPA (now
Roscoe Postle Associates Inc.) on its mineral reserves and mineral
resources at certain of the deposits (Sue A, B, E and McClean North
and Caribou) at McClean Lake. See “Mineral Reserves and
Mineral Resources”, above, for a summary of the mineral
resource and mineral reserve estimates remaining, after adjusting
for mining activity, as applicable.





In preparing the
McClean Technical Report, Scott Wilson RPA reviewed previous
estimates of mineral reserves and mineral resources at the
applicable properties, and examined and analyzed data supporting
the previous estimates, as well as other available data regarding
the properties, including extensive information from Orano
Canada.





For the Sue E
deposit, Scott Wilson RPA constructed a block model using indicator
kriging to both map out and geologically constrain mineralized
areas. A block that had at least one nearby composite within 10
metres of its centre, and that had composites from at least two
different drill holes in its search neighbourhood was classified as
part of the indicated mineral resource. The indicated mineral
resource was evaluated by Scott Wilson RPA in 2005 using Whittle
economic evaluation software showing that the Sue E pit economics
were robust and mineral reserves were estimated. Mining was
completed at the Sue E pit during 2008 recovering about 91% of the
probable mineral reserves estimated. Scott Wilson RPA classified
approximately 7.3 million of the pounds outside the current pit as
inferred mineral resources. Confirmatory drilling in 2006 by the
operator has indicated that this may be reduced to 2.0 million
pounds, but mineral resources have not been
re-estimated.





2019
Annual Information
Form 74





The mineral
resource estimate for the Caribou deposit is based on a block model
for which grade was interpolated using ordinary kriging. Since
there were no plans for the mining of this deposit at the date of
the McClean Technical Report, the economic potential was not
evaluated and mineral reserves were not estimated.





With respect to
the Sue D deposit, the Company received the Sue D Report in 2006,
authored by Scott Wilson RPA. Scott Wilson RPA carried out an
independent mineral resource estimate for Sue D by conventional 3-D
computer block modeling. A minimum vertical mining width of two
metres was employed with a 0.1% U3O8
cut-off.





Due to the
significant increase in the price of uranium from 2004 to 2006,
Denison engaged Scott Wilson RPA to re-evaluate the uranium
resources in the McClean North trend that are amenable to other
methods of mining. The original McClean Technical Report had only
evaluated mineral resources and mineral reserves of the high grade
portions under the assumption that they would be mined using a
blind shaft mining method. The Company received the McClean North
Technical Report on the mineral reserves and resources at the
McClean North uranium project in 2007.





The re-evaluation
of McClean North was carried out by conventional 3-D computer block
modeling. Wire frames were constructed for each of pods 1, 2 and 5.
The estimate included internal dilution, but not external dilution,
and was carried out at a 0.1% U3O8 cut-off. This
mineral resource estimate is based entirely on diamond drill
information. Block cell dimensions were selected at 8 metre model
grid east west x 5 metre model grid north south and a 2 metre bench
height or approximately 180 tonnes/block. Scott Wilson RPA
constructed a mineral resource wireframe based on kriging, and
constructed a special waste wireframe, that generally surrounds the
mineral resource wireframe, using similar kriging parameters but
with larger search distances. Subsequent to this report, the
Company and Scott Wilson RPA reviewed the block model and
estimation procedures in October 2009 and made a slight revision to
the mineral resource estimate for the McClean North
deposit.





Mining Operations





McClean Lake
consists of nine known ore deposits: JEB; Sue A, B, C, D and E;
McClean North; McClean South; and Caribou. In 1995, the development
of the McClean Lake project began. Mill construction commenced in
1995 and ore processing activities reached commercial production in
November 1999. Mining operations also commenced, and the following
deposits have been mined out to date: JEB (1996 to 1997), Sue C
(1997 to 2002), Sue A (2005 to 2006), Sue E (2005 to 2008) and Sue
B (2007 to 2008). Various test mining programs from 2006 to date
have also been conducted at McClean North.





At December
2019, the remaining ore reserves consist of a limited quantity of
stockpiled ore from historical Sue B open pit mining operations and
test mining activities at McClean North. Approximately 87,454
tonnes of Sue B ore at a grade of 0.35% U3O8 and 2,226 tonnes
of McClean Lake North ore (mined via SABRE, as defined below), at
an average grade of 0.68% U3O8, are stockpiled
on surface as at the end of 2019.





2019 Annual Information
Form     75





Other than
continued test mining activities for SABRE, no additional mining
operations are planned at this time.





Low-grade special
waste from the mining of the JEB, Sue C, Sue A, Sue E and Sue B
deposits has been disposed of in the mined-out Sue C pit. In the
future, Cigar Lake special waste is also expected to be disposed of
in the Sue C Pit. By agreement between the CLJV and the MLJV, costs
to update the Sue Water Treatment Plan and costs to dewater the Sue
C pit for Cigar Lake special waste will be shared 50/50 between the
CLJV and MLJV.





SABRE





The MLJV is
currently assessing the Surface Access Borehole Resource Extraction
(“SABRE”) mining
method technology for extraction of the McClean North deposits. The
SABRE technology is experimental and a feasibility study has not
yet been completed. Previous field tests of the SABRE technology
have produced a small amount of ore, some of which has been
processed into U3O8 and some of which
remain in the ore stockpile at December 2019. See
“Denison’s Operations – SABRE Mining
Program” below for more information on SABRE.





Processing and Recovery Operations





Processing of the
McClean Lake ore stockpiles is anticipated to occur prior to the
end of life of the McClean Lake mill. Historical processing of the
McClean Lake orebodies through 2000 to 2010 has demonstrated strong
performance, with recoveries above 97%. The MLJV anticipates
processing of the remaining stockpiles to have similar performance
results.





Development and Production





In 2012, Orano
Canada (then AREVA) initiated an internal study evaluating the
feasibility of mining the McClean North, Caribou and Sue D deposits
via conventional underground methods. The internal study was
completed in April 2014; however, no formal technical report has
been prepared by Denison in accordance with NI 43-101 and a
production decision has been deferred indefinitely due to the low
uranium price environment.





As part of the
continuing development of the SABRE mining tool in 2020, a small
test mining program at McClean North is expected to occur with the
potential to generate some ore for future processing. See
“Denison Operations-SABRE Mining Program” for more
information on the SABRE development program and potential
processing activity for 2020.





Infrastructure, Permitting and Compliance Activities





The McClean Lake
uranium mill, one of the world’s largest uranium processing
facilities, is currently processing ore from the Cigar Lake mine
under the Cigar Lake toll milling arrangement between the MLJV and
the CLJV. The site has been in operation since the late
1990’s and consists of the mill, a tailings management
facility, administration offices and building, camp facilities,
back-up power supply, water treatment plants and a host of other
minor facilities. The site is connected to the provincial power
grid and provincial highways. Points North Landing Airport provides
transportation to and from site for personnel on a daily
basis.





As a uranium
site, the CNSC permits the operations. On July 1, 2017 the McClean
site received a 10 year license for operations until June 30, 2027.
See “Denison’s Operations – McClean Lake Mill
License” for more details.





2019 Annual Information
Form     76





Midwest





The Midwest
project is owned by Denison (25.17%) and its joint venture
partners, Orano Canada (69.16%) and OURD (5.67%) pursuant to the
Midwest Joint Venture Agreement. Orano Canada is the operator of
the project.





Except as
otherwise noted below, this project description is based on the
project’s technical report entitled “Technical Report
with an Updated Mineral Resource Estimate for the Midwest Property,
Northern Saskatchewan, Canada” dated March 26, 2018 (the
“Midwest Technical
Report”), a copy of which is available on the
Company’s
profile on the SEDAR website at www.sedar.com. The Midwest
Technical Report was authored by Dale Verran, MSc, P.Geo,
Pr.Sci.Nat. and Chad Sorba, P.Geo, of the Company, G. David Keller,
PGeo, formerly of SRK, and Oy Leuangthong, PEng, of SRK. G. David
Keller and Oy Leuangthong are independent qualified persons for the
purposes of NI 43-101.





The conclusions,
projections and estimates included in this description are subject
to the qualifications, assumptions and exclusions set out in the
technical report. We recommend you read the technical report in its
entirety to fully understand the project.





Property Description, Location and Access





The Midwest
property is located within the eastern part of the Athabasca Basin
in northern Saskatchewan. The northern portion of the property is
located on South McMahon Lake, about one kilometre from the Points
North Landing airstrip and about 25 kilometres west by existing
roads from the McClean Lake mill on the McClean Lake property. The
site is approximately 750 km by air north of Saskatoon and about
420 km by road north of the town of La Ronge.





Access to the
Midwest property is by both road and air. Goods are transported to
the site by truck over an all-weather road connecting with the
provincial highway system. Air transportation is provided through
the Points North airstrip.





The property
consists of three (3) contiguous mineral leases, covering 1,426
hectares and contains both the Midwest Main and Midwest A deposits.
The mineral lease containing the Midwest Main deposit (ML 5115) is
556 hectares in size. Each of the mineral leases is at an annual
assessment rate of $75.00 per hectare and has sufficient approved
assessment credits to maintain the ground in good standing until
2031. There is no current production from these mineral leases.
Leases must be renewed every 10 years as part of an administrative
process.





Since the
completion of the underground test mine at the Midwest Main deposit
in 1988 and 1989, the site has been under an environmental
monitoring and site security surveillance program. At present,
there is an inactive water treatment plant, two water storage ponds
and a core storage area on the site, as well as a dam in the Mink
Arm of South McMahon Lake. All of the facilities used in the test
mine program and all of the existing surface facilities are located
on lands owned by the province of Saskatchewan. The right to use
and occupy the lands was granted in a surface lease agreement with
the province of Saskatchewan. The original surface lease agreement
of 1988 was replaced by a new agreement in 2002. This new surface
lease is valid for a period of 33 years. Obligations under the
surface lease agreement primarily relate to annual reporting
regarding the status of the environment, the land development and
progress made on northern employment and business development. The
Midwest surface lease covers an area of approximately 646
hectares.





2019 Annual Information
Form 77





Location of the Midwest Main and Midwest A deposits on the Midwest
project








2019 Annual Information
Form 78





Any uranium
produced from the Midwest deposits is subject to uranium mining
royalties in Saskatchewan in accordance with Part III of The Crown
Mineral Royalty Regulations. See “Government Regulation -
Canadian Royalties.” A portion of Denison's interest in the
Midwest project (i.e. 5.5% of the project reducing to 3.44% after
payout) is subject to a sliding–scale, gross overriding
royalty ranging from 2% to 4% payable to two previous owners of a
portion of the Midwest project.





There are no
known significant factors or risks that may affect access, title,
the right, or ability of Orano to perform work at/on the Midwest
property.





History





Initial
exploration work in the vicinity of the two Midwest deposits began
in 1966. Canada Wide Mines Ltd., a subsidiary of Esso Resources
Canada Ltd., was operator of the project from 1968 to 1982. From
1968 to 1975, exploration was carried out on an exploration permit
which included the area covered by the current mineral leases. Most
of the work was concentrated on the area near South McMahon Lake
where uranium mineralized boulders were found. In 1974, the
exploration permit was changed to mineral leases.





During the winter
season of 1977, one of the holes drilled through the unconformity
encountered mineralization. In January 1978, the Midwest Main
deposit was intersected by the first drill holes. During 1978
through 1980, a further 439 holes were drilled (for a total of
about 650) to delineate the deposit and to explore the surrounding
area of the mineral leases.





In 1987, Denison
acquired a 45% interest in the Midwest project and became the
operator. An underground test mine program was completed in 1989
which confirmed the results of the surface drilling program and
identified a high grade historical mineral reserve containing 35.7
million pounds of U3O8 at an average
diluted grade of 4.5% U3O8, considered to be
mineable by underground methods. This is a historical estimate, not
being treated as current mineral reserves. During this time,
Denison also performed an EM-37survey and geotechnical drilling
on the Midwest Main deposit. Exploration drilling was conducted to
the east (1988) and along the conductive trend to the north of
Midwest Main deposit (1989).





In 1993, the
respective owners of McClean Lake and Midwest combined their
interests to make two complementary projects with one mill at
McClean Lake. In order to accomplish this, a portion of Denison's
interest in Midwest was exchanged for an interest in McClean Lake.
This transaction, together with several related ownership changes,
resulted in Denison's ownership interest in Midwest being reduced
to 19.5% and Minatco, Orano Canada’s predecessor in title,
becoming the operator.





In 1999, Denison
increased its interest in Midwest by 5.50% through the exercise of
first refusal rights. With the uncertainty of the timing and costs
of the Midwest development and the desire to eliminate the
obligation to pay advance and future royalties on production from
Midwest, Denison decreased its interest in Midwest from 25% to
19.96% effective March 31, 2001. Orano Canada, the operator/manager
of Midwest, also reduced its interest from 70.5% to 54.84% for the
same reason.





At the end of
2004, in order to take advantage of rapidly increasing uranium
prices, Denison again increased its interest at Midwest, along with
its joint venture partners, by buying the 20.70% interest in
Midwest then held by Redstone Resources Inc. This purchase
permitted Denison to acquire a further 5.21% interest in Midwest,
bringing its interest to 25.17%. Orano Canada’s interest
increased to 69.16% and OURD’s interest increased to
5.67%.





2019 Annual Information
Form 79





Geological Setting, Mineralization and Deposit Types





The Midwest
deposits are classified as ‘unconformity-type’ uranium
deposits and occur approximately 200 metres below surface
straddling the unconformable contact between overlying Athabasca
Group sandstones and the underlying Paleoproterozoic and Archean
basement rocks belonging to the Wollaston-Mudjatik Transition Zone.
The north-northeast Midwest structural trend that controls the
Midwest Main and Midwest A uranium deposits follows a
steeply-dipping, graphitic pelitic gneiss, basement unit that is
bounded by granitic gneisses or granite to both the east and west.
The sub-Athabasca unconformity surface is relatively flat on a
regional scale, however there is a slight uplift along the
north-northeast Midwest trend and a generally higher elevation to
the east. Fault zones in the basement are often characterized by
brecciation and strong hydrothermal alteration with clay mineral
development. These fault zones generally extend into the overlying
Athabasca Group sandstone.





The Midwest Main
deposit is lens to cigar shaped, 600 metres long, 10 to over 100
metres wide, with thicknesses ranging from 5 metres to 10 metres.
The deposit consists of a near-massive, high-grade mineralized core
that straddles the unconformity approximately 210 metres below
surface. The high-grade core is surrounded by lower-grade, more
dispersed, fracture-controlled mineralization in both sandstone
and, in minor amounts, in basement rocks. The high-grade
mineralization forms a roughly flat-lying lensoid concentration,
with a root extending down into the basement rocks along a
steeply-dipping fault.





The Midwest A
deposit is approximately 450 metres long, 10 to 60 metres wide,
ranges up to 70 metres in thickness and occurs between 150 and 235
metres below surface. Mineralization straddles the unconformity
contact with minor amounts hosted within basement structures
immediately below the unconformity. Thicker zones of mineralization
above the unconformity are concentrated in conglomerate units at
the base of the Athabasca sandstone. Similar to Midwest Main, a
high-grade core of mineralization is surrounded by a lower-grade,
more dispersed, fracture-controlled envelope.





Exploration and Drilling





Under Orano
Canada’s operatorship, exploration activities resumed in
2004. Exploration drilling was initiated some three kilometres to
the northeast of the Midwest deposit to test ground around a
historic hole MW-338 that had returned an isolated intercept of 3.8
metres at 6.9% U3O8. Between 2005 and
2009, a further 50,831 metres of drilling was completed in 191
drill holes on the property, which discovered and delineated the
Midwest A deposit and identified and evaluated several other
mineralized areas, including the Josie Zone, lying between the
Midwest and the Midwest A deposits. 76 of these holes (20,794.9
metres) have intersected the mineralization associated with the
Midwest A deposit. Additional geophysical programs were also
conducted.





The Midwest Main
deposit was intensively drilled in the late 1970’s and 1980s.
Drill holes defining the Midwest deposit include 615 drill holes,
of which 362 are mineralized. By type, these include exploration,
shallow reconnaissance (<100 metres), and geotechnical drill
holes. Between 2004 and 2017, only 11 drill holes have been
completed on the Midwest Main deposit area under Orano
Canada’s operatorship. Four inclined geotechnical holes were
drilled in 2004 and four shallow geotechnical drill holes were
completed in 2006. Three additional exploration drill holes were
carried out within the deposit outlines in 2006 (MW-677, MW-678,
and MW-685).





No exploration
work was conducted at Midwest during the period 2010 to 2017 or in
2019. The winter 2018 drill program comprised 4,709 metres in 12
completed diamond drill holes. Drilling was conducted on the Points
North conductor (6 drill holes, 2,269 metres) to test exploration
targets, and at Midwest Main (6 drill holes, 2,440 metres) to
collect additional information from the unconformity-hosted
mineralized zone and to test underlying basement
targets.





2019
Annual Information
Form 80





The drilling
validated mineralization at the Midwest Main deposit (based on
preliminary radiometric equivalent uranium results), but did not
intersect any high-grade mineralization on the Points North
conductor, or below the Midwest Main deposit within the basement.
No further exploration is currently planned for 2020.





Sampling, Analysis and Data Verification





During 2017,
Orano Canada undertook a comprehensive review of the databases for
both the Midwest Main and Midwest A deposits ahead of an updated
mineral resource estimate. Concerns were identified at both
deposits that needed to be addressed to increase both the
confidence and the accuracy of the final estimate.





Given the
historic nature of the data at Midwest Main a limited amount of
data was readily available digitally: downhole gamma probe
(“probe”) data
existed only as paper logs making it previously unavailable to be
used, no comprehensive 3D geological model was available, perched
mineralization was not fully modeled, and further data QAQC was
needed. Midwest A has a much more modern data set; however, no dry
bulk density measurements were available, the latest drilling from
September 2007 to December 2009 was not taken into account in the
previous estimate, and the High Grade Zone was assigned an average
uranium grade rather than performing grade modelling. Additionally,
both deposits required new probe to chemical uranium assay grade
(“grade”)
correlations for the calculation of equivalent uranium (eU),
combination of probe and grade data based on core recovery and
probing/drilling parameters to be available for estimation, updated
lithology and structural models (geological models), and an updated
block model.





Work began with
verifying the grade data against assay certificates and a
historical nine track database from ESSO. Some discrepancies were
noted in the sample locations as well as some of the grades due to
typographical errors. When compared to the original drill logs and
the probe logs, these were able to be rectified.





The Midwest
deposits often have core loss associated with the mineralization,
due to the high amount of clay alteration and quartz dissolution
which makes core recovery while drilling difficult. This results in
gaps in the grade dataset that are typically addressed by using
probe radiometric equivalent uranium (eU) data. Digital probe data
was available for Midwest A, however for Midwest Main most of probe
data was never digitized and remained only available on paper logs.
The paper logs for 218 holes were digitized and added to the
Midwest data set. This was followed up by ensuring the probe data
was depth corrected (depth matched with grade data), as well as the
creation of new probe to grade correlations for both
deposits.





Midwest Main had
a robust density to grade correlation; however, Midwest A did not
have any dry bulk density measurements taken. The only density data
at Midwest A was in the form of specific gravity measurements which
do not take into account porosity and therefore tend to
overestimate the density. Due to the high density of uranium,
density is a vital reference for the expected tonnage of high-grade
uranium deposits, which has a direct effect on the amount of
uranium estimated. Given this uncertainty at Midwest A, previous
resource estimations were forced to use a very conservative grade
to density regression formula to avoid overestimation of resources.
During a 2017 site visit, 25 dry bulk density measurements were
taken from the remaining Midwest A drill core and sent for dry bulk
density and geochemical analyses. A new grade to density regression
formula was established showing an increase to the correlation by
approximately 10%.





2019 Annual Information
Form 81





Various chemical
assay methods have been employed at the Midwest Project prior to
Orano Canada assuming operatorship in 2004. The methods described
herein pertain to the program from 2004 onwards. Drill core with
anomalous total gamma radioactivity (>200 counts per second
utilizing a SPP2 or SPPc scintillometer) was sampled over 0.5 metre
intervals. Sampling is undertaken on site by splitting the core in
half, with one half submitted for analysis and the other half
retained in the core box for future reference. Uranium chemical
assays are performed by the SRC Lab located in Saskatoon. Sample
preparation involves crushing and pulverizing core samples to 90%
passing -106 microns. Splits of the resultant pulps are initially
submitted for multi-element ICP-MS analysis following partial
(HNO3:HCl) and total
(HF:HNO3:HClO4) digestions.
Samples with ≥ 1,000 ppm U (partial digest) are re-assayed
for U3O8 using an ISO/IEC
17025:2005 accredited method for the determination of U3O8 weight %. Pulp
splits are digested using aqua-regia and the solution analyzed for
U3O8 weight % using
ICP-OES.





For composite
exploration samples, collected over 20 metre (upper sandstone) or
10 metre intervals (lower sandstone and basement), major and trace
elements are determined using ICP-MS or ICP-OES after partial and
total digestions. Boron values are obtained through NaO2/NaCO3 fusion followed
by ICP-OES. In addition to internal checks by the SRC Lab, Orano
has rigorous QAQC procedures including the insertion of standard
reference materials, blanks and field duplicates.





For mineral
resource estimation purposes, wherever core recovery was less than
75%, the eU values derived from a calibrated downhole gamma probe
are substituted for chemical assays where possible. Core recovery
at Midwest Main is typically good with poorer recovery observed at
Midwest A. For the Midwest A and Midwest Main updated mineral
resource estimates reported herein, 64% and 16% of the assay
intervals relied on eU grades, respectively.





Orano Canada has
performed detailed QAQC and data verification, where possible, of
all datasets, which in Denison’s opinion are in accordance
with industry best practice. Denison has performed additional QAQC
and data verification of the drilling database including review of
the QAQC methods and results, verification of assay certificates
against the database assay table, review of downhole probe and eU
calculation procedures, standard database validation checks and two
site visits to the Midwest project in early 2018. Denison has
reviewed Orano Canada’s procedures and protocols and
considers them to be reasonable and acceptable for mineral resource
estimation.





Mineral Processing and Metallurgical Testing





Several programs
of metallurgical testing have been carried out on Midwest Main
mineralization. The two main studies were by Melis Engineering in
1990 and by SEPA (Service d’Études, de
Procédés et Analyses, engineering department of the Orano
Group in France) in 1998. Both studies show that good metallurgical
recovery of uranium can be achieved. The current McClean mill
milling process differs from what was planned by Melis as a
separate facility was planned in the study. The leaching tests done
by SEPA on the Midwest Main mineralization samples showed that
99.5% of uranium could be extracted using these
conditions:


● Leach
time 24 hours


● Acid
addition 120 kg/tonne


● Free acid
at end of test 25 g/l


●
Oxidation, 02 at 2 bar pressure


● Redox
470 m.v.





2019
Annual Information
Form 82





The current
process for Cigar Lake ore being processed at the McClean mill
requires an eight hour leaching time which is substantially less
than what is proposed as optimal for Midwest Main ore (24 hours).
As the mill has recently undergone upgrades, it is expected these
leaching times will be reviewed.





The test work has
demonstrated that a metallurgical recovery for uranium of 98% from
Midwest Main mineralization can be obtained.





The Midwest Main
deposit has a relatively high amount of arsenic (5-10% overall),
which could affect the water quality discharge from the mill if not
properly precipitated into the tailings. The SEPA study proposed
using ferric sulphate to precipitate the arsenic in the tailings.
Currently the mill is addressing moderate arsenic levels in the
Cigar Lake ore feeds using barium chloride and ferric sulphate to
precipitate it from solution.





Test work was
conducted by Denison in 1992 at Lakefield Research to determine if
the recovery of nickel and cobalt was feasible along with the
extraction of uranium (Lakefield Research, 1992). Test work
indicated that a precipitate with good grades of nickel and cobalt
could be produced from a raffinate solution after the arsenic and
radium are precipitated. It is estimated that an overall process
recovery of 54% for both nickel and cobalt could be
achieved.





The McClean mill
has seen many upgrades and changes since the 1992 and 1998 studies
were conducted. Review of the studies and additional metallurgical
testing will likely need to be conducted prior to assessing the
feasibility of mining of Midwest Main.


There has been no
mineral processing or metallurgical test work completed on the
Midwest A deposit.





Mineral Resource Estimates





The Company
retained SRK to independently review and audit an updated mineral
resource estimate for the Midwest project completed by Orano Canada
in November 2017. The review and audit was done in accordance with
CIM Definition Standards (2014) and NI 43-101. The Company received
a memorandum from SRK dated March 9, 2018, which was incorporated
into the Midwest Technical Report. See “Mineral Reserves and
Mineral Resources”, above, for a summary of the mineral
resource estimate for the Midwest project.





In November 2017,
Orano Canada provided Denison with a comprehensive project database
consisting of drill hole data, mineralized wireframes and block
models for both the Midwest Main and Midwest A deposits. The
Midwest database was sent to SRK to conduct review and audit of the
updated mineral resource estimate completed by Orano Canada. For
the audited mineral resource estimate, SRK used data collected from
several drilling campaigns completed between 1977 and 2009,
including a total of 156 drill holes for Midwest A and 305 drill
holes for Midwest Main. The audited mineral resource estimate
includes expanded Low Grade and High Grade zones for Midwest A and
three primary mineralized zones at Midwest Main, namely
Unconformity, Perched and Basement zones. A summary of the audited
estimation methodology and for Midwest A and Midwest Main are
described below.





The Midwest A
block model consists of two main mineralized domains, Low Grade and
High Grade zones constructed using a 0.05% U cut-off with minimum
thickness of two metres and 10.0% U cut-off with minimum thickness
of one metre, respectively. A perched zone was identified, but was
not considered for resource estimation. The Midwest A deposit
consists of data from 113 boreholes of which 69 boreholes intersect
the mineralization itself.





2019
Annual Information
Form 83





Grades are
comprised of 64% eU data, derived from a calibrated downhole gamma
probe, and 36% chemical assay data. Sample data were composited to
one metre length. An accumulation-like approach was used, wherein
GxD (where grade is in percent uranium) and density were estimated
into a three-dimensional block model, constrained by wireframes in
two passes using ordinary kriging. The grade was then calculated
into each block by dividing the estimated GxD by the estimated
density. A block size of 5 by 5 by 2 metres was selected. Search
radii were based on variogram analyses with a relatively flat
ellipsoid used aligned roughly to the unconformity
surface.





Grade capping was
not performed, however, the treatment of high grades was considered
during estimation by limiting the influence of GxD composites
greater than 20 and density composites greater than 3, to a
neighbourhood of 7.5 cubic metres within the low-grade zone.
Classification is based on drillhole spacing, with blocks
classified as Indicated only found in the sandstone and upper
basement portion of the Low Grade zone with drillhole space of 30
metres or less. The lower basement and all other sandstone blocks
are classified as inferred mineral resources.





The Midwest Main
block model considered three main mineralized domains: one
Unconformity, 19 Perched and a one Basement zone constructed using
a 0.05% U cut-off with minimum thickness of two metres. The Midwest
Main deposit consists of data from 305 boreholes that intersected
the mineralization, with new downhole gamma probe eU data for
unsampled locations or in areas of poor core recovery (less than
75% core recovery). Grades are comprised of 16% eU data, derived
from a calibrated downhole gamma probe, and 84% chemical assay
data.Sample data were
composited to one metre length.





Similar to
Midwest A, two attributes, density and GxD, were calculated into
each block using ordinary kriging, and the uranium grade was then
calculated by dividing the estimated GxD by the estimated density.
A block size of 5 by 5 by 2 metres was selected. Search radii were
based on variogram analyses with a relatively flat ellipsoid used
aligned roughly to the unconformity surface. Capping was not
performed, however, higher grade composites were limited to a
5-cubic-metre neighbourhood of influence. This was applied to all
zones, with high grade thresholds varying by zone. Classification
is based on estimation passes, with blocks classified as Indicated
only in the Unconformity zone and in regions of tight borehole
spacing up to a nominal spacing of 17.5 metres. All other blocks
are classified as inferred mineral resources.





Development and Production





In early 2007,
Orano Canada completed an internal study evaluating the feasibility
of mining the Midwest Main deposit via open pit mining methods and
processing the resulting ore at the McClean Lake mill. In November
2007, the Midwest Joint Venture partners made a formal production
decision to proceed with the development of the Midwest Main
deposit. Subsequently, in November 2008, the Midwest Joint Venture
partners announced that the development of the Midwest Main project
would be delayed for an indefinite period due to delays and
uncertainties associated with the regulatory approval process,
increasing capital and operating cost estimates and the depressed
state of the uranium market at the time. At this time, no
development or production work is planned.





Despite this
decision, the Midwest Joint Venture partners advanced the
environmental assessment process and, after several years of work,
the final version of the Midwest Project Environmental Impact
Statement (“EIS”) was submitted to provincial
and federal governments in September 2011. A Comprehensive Study
Report was drafted by the CNSC and circulated for federal,
provincial and aboriginal review, and in September 2012, the
Midwest EIS was approved.





2019 Annual Information
Form     84





Other Properties, Athabasca Basin, Saskatchewan





Results from the
2019 programs at Denison’s highest priority non-material
properties are discussed below. For Sampling, Analysis and Data
Verification Procedures with respect thereto, see “Athabasca
Exploration: Sampling, Analysis and Data
Verification”.





Hook-Carter





The Hook-Carter
property is owned 80% by Denison and 20% by ALX Resources Corp.
(“ALX”). Denison
has agreed to fund ALX's share of the first $12 million in
expenditures. The Hook-Carter property consists of 6 claims
covering 24,262 hectares and is located in the western portion of
the Athabasca Basin. The project is highlighted by 15 kilometres of
strike potential along the prolific Patterson Lake Corridor
(“PLC”) –
host to the Arrow deposit (NexGen Energy Ltd.), Triple R deposit
(Fission Uranium Corp.), and Spitfire discovery (Purepoint Uranium
Group Inc., Cameco, and Orano Canada), which occur within 8 to 20
kilometres of the property. The property is significantly
underexplored compared to other properties along this trend, with
only five of eight historic drill holes located along the 15
kilometres of PLC strike length. The property also covers
significant portions of the Derkson and Carter Corridors, which
provide additional priority target areas. During 2018, an
additional 3,707 hectares (35 claims) were acquired which extended
the prospective strike length of the Derksen Corridor up to 17
kilometres.





During 2018,
Denison completed a winter and summer diamond drilling program
totalling 6,960 metres in nine holes. The 2018 inaugural drilling
programs were designed to test an initial set of geophysical
targets on a regional scale along 7.5 kilometres of the 15
kilometres of PLC strike length at Hook-Carter. The nine holes
completed successfully identified multiple prospective trends with
geological features commonly associated with Athabasca Basin
uranium deposits, including hydrothermal alteration in both the
sandstone and the basement lithologies associated with graphitic
basement structures.





During 2019, a
diamond drilling program was completed in the first quarter
consisting of 4,797 metres in six completed holes (see drill hole
locations in the figure below). The program was aimed at testing
additional high-priority geophysical targets identified from the
2017 electromagnetic (moving loop TEM) and resistivity (DCIP)
surveys within the interpreted extension of the Patterson Lake
Corridor.





Favorable
structure and alteration was encountered in the majority of the
drill holes completed in the 2019 drilling program, and the initial
batches of geochemical results show significant concentrations of
uranium pathfinder elements, which confirm the presence of a
mineralizing system on the Hook Carter Property. Completion of the
2018 and 2019 drilling programs has provided reconnaissance level
drill hole coverage along the Patterson Lake Corridor at an
approximate 1,200 metre spacing within the 2017 geophysical survey
area. These reconnaissance drill holes form an important initial
repository of drilling data, which is expected to be used to
prioritize target horizons and plan future exploration programs.
There is not currently a planned exploration program for
2020.





2019
Annual Information
Form 85





Hook Carter Drill Hole Locations








Drill hole
highlights from the 2019 drilling program include:





HC19-010A - Targeted a DC resistivity
anomaly located along the eastern edge of the 2017 geophysical
grid. The hole intersected weak to moderate hydrothermal alteration
in the sandstone. Geochemistry results returned anomalous boron
values up to 762 ppm throughout the sandstone column. An additional
DC resistivity target is located to the southeast on this
section.





HC19-011 – Tested a roughly
coincident electromagnetic-resistivity anomaly 900 metres along
strike to the southwest of HC19-010A. Drill hole HC19-011
intersected moderate to locally strong hydrothermal alteration in
the sandstone and weakly elevated radioactivity in hematized clay
near the unconformity (up to 225 cps with a handheld RS-125
spectrometer). Elevated levels of boron, up to 3,320 ppm, were
reported in the sandstone and immediately below the unconformity.
It has been interpreted that HC19-011 likely overshot the optimal
target and additional targets may exist to the southeast on
section.





HC19-013A and HC19-014A – These
drill holes tested electromagnetic targets, 1.5 kilometres and 2.7
kilometres along strike to the northeast of HC19-010A,
respectively. HC19-013A encountered multiple zones of strongly
brecciated, faulted and hydrothermally altered sandstone,
particularly near the unconformity. Strongly silicified pelitic
gneisses and a graphite-rich pelitic gneiss were intersected within
the basement that exhibited extensive shearing, faulting and
brecciation. Elevated radioactivity, with handheld RS-125
spectrometer values of up to 170 cps, was recorded in some of the
fault zones in the basement.





2019
Annual Information
Form 86





The sandstone
column returned highly anomalous boron values ranging from 45 to
1,110 ppm in the basal 300 metres. One 10-metre composite sandstone
sample, from 100 – 110 metres, averaged 5.79 ppm uranium
(partial digest). Collared approximately 1.2 kilometres northeast
of HC19-013A, drill hole HC19-014A encountered similar sandstone
structure and alteration restricted to the basal portion of the
sandstone column. A massive white clay zone about three metres in
thickness was encountered at the unconformity. HC19-014A
encountered strongly sheared, faulted and brecciated graphitic
pelitic gneiss in the basement. Strong clay alteration and
hematization followed the graphitic unit extending about 10 metres
into the underlying quartz-flooded granitic gneiss.
Lithogeochemical samples from HC19-014A did not yield anomalous
uranium values, however one sample from the basal 3 metres of the
sandstone column returned 1,380 ppm boron.





HC19-012 – Targeted a strong
electromagnetic anomaly in the central portion of the 2017
geophysical survey area. The hole was designed to test the basement
below historic drill hole HK-002. Sandstone structure included
several narrow zones of blocky and locally brecciated core.
Significant hydrothermal alteration was noted in the sandstone.
Lithogeochemical samples analyzed from this hole returned strongly
anomalous boron values up to 1,000 ppm for the entire sandstone
column. Structurally-controlled clay alteration was observed in
multi-metre sections. A weakly to moderately bleached, locally
sheared, weakly graphitic unit was intersected in the basement
below HK-002.





HC19-015 – Completed
approximately 3 kilometres southwest of HC19-011, to test a
resistivity target that is coincident with a historical
electromagnetic anomaly. Weak dravite and pyrite alteration was
noted mostly in the upper portions of the sandstone column. The
basal 30 metres were desilicified with several unconsolidated
sections. Basement lithologies encountered included a graphitic
breccia and a weakly graphitic pelite unit. Pervasive strong quartz
flooding was observed throughout the basement and elevated
radioactivity of up to 350 cps was measured with a hand-held RS-125
scintillometer in a hematized zone below the
unconformity.

















2019 Annual Information
Form 86





Other Denison Athabasca Projects





Denison’s
other Athabasca projects range in exploration maturity and present
numerous exploration opportunities. Denison continuously reviews
its significant land package with a view to generating new
exploration targets or creating spin-out opportunities. The table
below provides a list of Denison’s Athabasca projects as at
December 31, 2019.





Projects
Denison
Ownership
JV Partner
# Claims
HectaresBachman
Lake
100%

5
11,419Bell
Lake
100%

6
16,479Brown
Lake
100%

4
1,853Candle
Lake
44.66%
Uranium
One/JCU
1
2,595Crawford
Lake
100%

5
11,800Darby
59.55%
Uranium
One
9
15,392Epp
Lake
100%

2
865Ford
Lake
100%

8
10,924Hatchet
Lake
70.15%
Eros
Resources
9
10,212Jasper
Lake
100%

1
900Johnston
Lake
100%

6
17,265Lynx
Lake
59.55%
Uranium
One
1
1,274Mann
Lake
30%
Cameco/Orano
2
3,407Marten
100%

2
5,008Moon
Lake
59.55%
Uranium
One
2
4,309Moon
Lake North
100%

5
788Moon Lake South(1)
51%
CanAlaska
1
2,716Murphy
Lake
100%

8
8,686Packrat
100%

2
2,102Park
Creek
49%
Cameco
8
7,798Russell
Lake
37.82%
Cameco/Boyko
1
355South
Dufferin
100%

8
9,569Torwalt
Lake
100%

1
812Turkey
Lake
100%

1
3,789Waterbury
South
100%

7
1,145Waterfound
12.32%
Orano/JCU
25
11,670Waterfound
North
59.55%
Uranium
One
4
4,124Wolly
21.89%
Orano/JCU
17
23,700Wolverine
100%

5
7,006





Notes:


(1)
 Subject of an option
agreement between Denison and CanAlaska Uranium Ltd., pursuant to
which Denison can earn up to a 75% interest in the
property.








2019 Annual Information
Form 88





ATHABASCA EXPLORATION: SAMPLING, ANALYSIS AND DATA
VERIFICATION





Unless otherwise specifically disclosed herein,
the following describes the procedures and protocols for all
Athabasca exploration programs operated by Denison in reference to
drill hole surveying, downhole radiometric surveying, core logging,
core sampling, sample preparation methods, analytical procedures,
Quality Assurance and Quality Control (“QAQC”) and data verification. For Sampling,
Analysis and Data Verification procedures employed by other
operators, past or present, on projects in which Denison holds an
ownership interest, refer to those project sections within the AIF,
specifically for McClean Lake, Midwest and Waterbury
Lake.





Drill Hole Surveying





Drill
collars are typically sited and surveyed in the field using a
Differential Global Positioning System (“DGPS”) to
determined accurate coordinates and elevation. The drill rig
azimuth and dip is aligned using a field compass (set to the
appropriate magnetic declination) or a rig alignment tool. The
trajectory of all drill holes is determined with a Reflex survey
instrument in single point mode, which measures the dip and azimuth
at 50 metre intervals down the hole.





Downhole Radiometric Probe Surveying





When possible,
all drill holes are surveyed immediately after drilling with a
downhole radiometric probe to measure natural gamma radiation. Each
survey consists of either a HPL2375 single sodium iodide (NaI)
scintillation crystal tool or a 2GHF-1000 triple gamma (one sodium
iodide crystal and two ZP1320 high flux Geiger-Mueller (GM) tubes)
tool attached to a MX-Series winch with a MGX data recorder
connected to a portable computer. All logging instruments are
manufactured by Mt. Sopris Instruments Inc., Denver CO and powered
by a portable Honda generator.





Downhole logging
measurements are completed within the drill rods for both down and
up survey runs using MSLog software provided by Mt Sopris. Logging
speeds are maintained at approximately 10 metres/minute. Individual
data recordings are stored separately for each run on a portable
laptop computer.





Total count
measurements from each survey are converted to radiometric
equivalent grade U3O8 %
(“eU3O8”)
values using conversion coefficients derived from calibration
facilities at the SRC pits located in Saskatoon, Saskatchewan. The
calibration facilities allow for regular checks on both probes and
probing equipment and to monitor or determine maintenance issues
before field operations begin. This site consists of four
mineralized holes, with isolated uranium concentrations of 1.4,
1.6, 1.6 and 0.21 metres wide with U grades varying from 0.063,
0.29, 1.25 and 4.07%, respectively. Individual probes are
calibrated using the NaI crystal measurements a minimum of two
times per year, normally before and after the winter and summer
field seasons. Survey results are also corrected for attenuation of
signal in water and for the thickness of steel pipe in the hole. GM
tubes are checked for drift at the site, however calibration
factors for these probes was derived separately using direct
comparisons of total count values with assay core results as high
as 80% U3O8. The
“in-situ” nature of this calibration procedure allows
for a wider spectrum of predicted results than using the SRC
calibration facilities.





The Company
typically reports eU3O8, derived from a
calibrated downhole total gamma probe, as preliminary during its
exploration programs and subsequently reports definitive assay
grades following sampling and chemical analysis of the mineralized
drill core.





2019
Annual Information
Form 89





Core Logging





Denison employs
suitably qualified persons to log all drill core in detail at
dedicated, custom-built core logging facilities proximal to
drilling operations. Routine logs completed for each drill hole
include lithology, sandstone texture, paleoweathering,
mineralization, alteration, structure (interval and point),
geotechnical and gamma (handheld scintillometer). Where required
for geophysical survey reconciliation, additional logs may include
magnetic susceptibility and other physical property measurements.
For advanced projects where mining studies may be applicable
geotechnical logs are expanded and may also include point load
testing. All logging data, together with collar and survey
information and a drill hole summary, are uploaded to a DH Logger
database with central storage on Denison’s server at the
Saskatoon office. In addition, drill core is photographed, both wet
and dry, before it is stored at project sites either in racks or as
cross-stacks. Drill core handling and sampling protocols are in
accordance with industry best practices.





Core Sampling, Sample Preparation and Assaying





Assay Samples





Denison submits
drill core samples for chemical U3O8 assay for all
mineralized intervals, where core recovery permits. Mineralized
intervals are identified by handheld scintillometre and confirmed
by downhole gamma probe logs. All mineralized core is broken into
approximate 10 centimetre pieces and measured with a handheld
scintillometer (RS-120 or RS-125) by removing each piece of drill
core from the ambient background, noting the most pertinent
reproducible result in counts per second (“cps”), and carefully returning it
to its correct place in the core box. Any core registering over 500
cps is marked for sampling, typically over 50 centimetre intervals.
A threshold of 300 cps has been used at Wheeler River’s
Gryphon deposit since the beginning of 2017. Additional
non-mineralized ‘shoulder’ samples are marked over 50
centimetre intervals to flank both ends of the mineralized
intervals. In areas of strong mineralization more than one sample
on either end is sometimes required. All core samples are split in
half with a hand splitter according to the sample intervals marked
on the core. One-half of the core is returned to the core box for
future reference and the other half is tagged and sealed in a
plastic bag. Bags of mineralized samples are sealed for shipping in
metal or plastic pails depending on the radioactivity
level.





Because the
mineralized drill cores are classified as hazardous materials and
are regulated under requirements governing the transport of
dangerous goods, Denison staff have been trained in the proper
handling and transport of the cores and deliver them from the core
facility directly to the laboratory without outside
contact.





All drill core
U3O8 assays are
conducted by the SRC Lab.The assay sample preparation and
analytical procedures are as follows:





●
 Drill core samples are
received by the analytical laboratory from Denison in sealed
five-gallon plastic or metal pails. Each sample is contained in a
sealed plastic bag with a sample tag. A packing slip is enclosed
that contains instructions and a sample number list. Samples are
verified against the packing slip. Any extra samples or missing
samples are noted and Denison is informed.


●
 Samples are sorted and
processed according to location (sandstone or basement origin) and
level of radioactivity.


●
 Sample preparation includes
drying, jaw crushing to 60% passing -2 millimetres and pulverizing
to 90% passing -106 microns.





2019
Annual Information
Form 90


●
 The resultant pulp is split
and digested using a two-acid partial digest (HNO3:HCl) and a
three-acid ‘total’ digest (HF: HNO3:HClO4) and the
respective solutions analyzed for multi-elements, including
uranium, using ICP-OES (SRC Lab analytical method ICP1). Boron
values are obtained through NaO2/NaCO3 fusion followed
by ICP-OES.


●
 When uranium partial values,
as obtained above, are ≥1,000 ppm, sample pulps are
re-assayed for U3O8 using SRC
Lab’s ISO/IEC 17025:2005 accredited method for the
determination of U3O8 wt%. A split of
the sample pulp is digested using aqua-regia (HCl:HNO3 in the ratio 3:1)
and the solution analyzed for U3O8 wt% using
ICP-OES.F





Bulk Dry Density Sampling





In addition,
samples are routinely collected from mineralized intersections for
bulk dry density determination as required for mineral resource
estimation. Density samples are typically collected at a frequency
of one density sample per 10 assay samples (i.e. 1 sample for every
5 metre interval), also ensuring the density samples are
representative of the uranium grade range and the different domains
of the deposit. The density samples comprise half-split core over
10 centimetre intervals, and for each sample, the depth, rock type
and gamma scinitllometre reading is recorded. The samples are sent
to the SRC Lab for analysis along with the mineralized core samples
for assay. At the SRC Lab, the density samples are first weighed as
received and then submerged in de-ionized water and re-weighed. The
samples are then dried until a constant weight is obtained. The
sample is then coated with an impermeable layer of wax and weighed
again while submersed in de-ionized water. Weights are entered into
a database and the bulk density of each sample is calculated. Water
temperature at the time of weighing was also recorded and used in
the bulk density calculation. Following bulk density determination,
the samples are sent for uranium assay using SRC Lab’s
ISO/IEC 17025:2005 accredited method for the determination of
U3O8 wt% in order to
ensure a direct correlation can be made between density and assay
values.





Exploration Samples





Three other types
of drill core samples are collected during routine exploration, the
results of which are used to prioritize drill holes for follow-up
exploration or determine geochemical and/or alteration vectors
toward mineralization, as follows:





1.
 Composite geochemical samples
are collected over approximately 10 metre intervals in the upper
Athabasca sandstone and in fresh lithologies beneath the
unconformity (basement) and over 5 metre intervals in the basal
sandstone and altered basement units. The samples consist of 1
centimetre to 2 centimetres disks of core collected at the top or
bottom of each row of core in the box over the specified interval.
Care is taken not to cross lithological contacts or stratigraphic
boundaries. These samples are submitted to the SRC Lab for sample
preparation and multi-element analysis. The same sample preparation
procedures are used as described above for U3O8 assay samples.
The pulps are analyzed using the ICPMS Exploration Package which
includes a total digest (HF:HNO3:HCIO4) and partial
digest (HNO3:HCl) followed by
ICP-MS analysis. Boron values are obtained through NaO2/NaCO3 fusion followed
by ICP-OES.





2.
 Representative/systematic
core disks (one to five centimetres in width) are collected at
regular 5 metre to 10 metre intervals throughout the entire length
of core until basement lithologies become unaltered. These samples
are analyzed for clay minerals using reflectance spectroscopy.
Samples for reflectance clay analyses are analyzed by Denison using
an ArcSpectro FT-NIR ROCKET spectrometer and sent to AusSpec
International Ltd. (AusSpec) for interpretation.





2019
Annual Information
Form 91





3.
 Select spot samples are
collected from significant geological features (i.e. radiometric
anomalies, structure, alteration etc.). Core disks 1 to 2
centimetres thick are collected for reflectance spectroscopy and
split core samples are collected for geochemical analysis. The same
reflectance spectrometry or geochemical procedures as described
above are used.





These sampling
types and approaches are typical of uranium exploration and
definition drilling programs in the Athabasca Basin.





Data Handling





After the
analyses are completed, analytical data are securely sent using
electronic transmission of the results, by the SRC Lab to Denison.
The electronic results are secured using WINZIP encryption and
password protection. These results are provided as a series of
Adobe PDF files containing the official analytical results
(“assay certificates”) and a Microsoft Excel
spreadsheet file containing only the analytical results. Analytical
data received from the lab is imported directly into
Denison’s DH Logger database. The data is subject to
validation using triggers built into the database to identify blank
or standard assays that fall outside the accepted limits that
require re-analysis. Field duplicates are validated using control
charts. The laboratory is notified immediately of any problematic
samples or batches and these are re-analyzed. Assay values that
fall below the method detection limit (MDL) are reported by the lab
as ‘less than’ values (<MDL). These values are
automatically replaced by half MDL by the database during import.
The database is backed up on- and off-site every day.





QAQC





The SRC Lab has
an internal QAQC program dedicated to active evaluation and
continual improvement in the internal quality management system.
The laboratory is accredited by the Standards Council of Canada as
an ISO/IEC 17025 Laboratory for Mineral Analysis Testing and is
also accredited ISO/IEC 17025:2005 for the analysis of
U3O8.
The laboratory is licensed by the Canadian Nuclear Safety
Commission (CNSC) for possession, transfer, import, export, use,
and storage of designated nuclear substances by CNSC Licence Number
01784-1-09.3. As such, the laboratory is closely monitored and
inspected by the CNSC for compliance. All analyses are conducted by
the SRC Lab, which has specialized in the field of uranium research
and analysis for over 30 years. The SRC Lab is an independent
laboratory, and no associate, employee, officer, or director of
Denison is, or ever has been, involved in any aspect of sample
preparation or analysis on samples. The SRC Lab uses a Laboratory
Management System (LMS) for Quality Assurance. The LMS operates in
accordance with ISO/IEC 17025:2005 (CAN-P-4E) “General
Requirements for the Competence of Mineral Testing and Calibration
Laboratories” and is also compliant to CAN-P-1579
“Guidelines for Mineral Analysis Testing Laboratories”.
The laboratory continues to participate in proficiency testing
programs organized by CANMET (CCRMP/PTP-MAL).





The SRC Lab
routinely inserts standard reference materials and blanks into
batches of the Company’s samples as an internal check on
accuracy and contamination. Quality control samples (reference
materials, blanks, and duplicates) are included with each
analytical run, based on the rack sizes associated with the method.
Before the results leave the laboratory, the standards, blanks, and
split replicates are checked for accuracy, and issued provided the
senior scientist is fully satisfied. If for any reason there is a
failure in an analysis, the sub-group affected will be re-analyzed,
and checked again. A Corrective Action Report will be issued and
the problem is investigated fully to ensure that any measures to
prevent the re-occurrence can and will be taken. All human and
analytical errors are, where possible, eliminated. If the
laboratory suspects any bias, the samples are re-analyzed and
corrective measures are taken.





2019
Annual Information
Form 92





Denison
has developed several QAQC procedures and protocols for all
exploration projects to independently monitor laboratory
performance which include the analysis of uranium standards,
blanks, field duplicates and exploration standards, as
follows:





Uranium
Standards - Due to the
radioactive nature of the standard material, insertion of the
standard materials is preferable at the SRC Lab instead of in the
field. During sample processing, the appropriate standard grade is
determined, and an aliquot of the appropriate standard is inserted
into the analytical stream for each batch of materials assayed.
Uranium standards are typically inserted at a minimum rate of 1 in
every 40 samples. For the Wheeler River project up until the end of
2018, Denison used standards provided by Joint Venture partner
Cameco for uranium assays. Six Cameco uranium assay standards were
prepared for use in monitoring the accuracy of uranium assays
received from the laboratory. For Wheeler River from 2019 and
onward, and for other Denison projects, a suitable matrix-matched
Certified Reference Material (“CRM”) is used as a
standard.





Blanks
- Denison employs a lithological blank
composed of quartzite to monitor the potential for contamination
during sampling, processing, and analysis. The selected blank
consists of a material that contains lower contents of
U3O8
than the sample material but is still
above the detection limit of the analytical process. Due to the
sorting of the samples submitted for assay by the SRC Lab based on
radioactivity, the blanks employed must be inserted by the SRC Lab
after this sorting takes place, in order to ensure that these
materials are ubiquitous throughout the range of analytical grades.
In effect, if the individual geologists were to submit these
samples anonymously, they would invariably be relegated to the
minimum radioactive grade level, preventing their inclusion in the
higher radioactive grade analyses performed by the SRC Lab. Blanks
are typically inserted at a minimum rate of 1 in every 40 samples.
For the Wheeler River project up until the end of 2018, Denison
used blanks provided by Joint Venture partner Cameco. For Wheeler
River from 2019 and onward, and for other Denison projects, other
suitable blank material is used, as provided by the SRC
Lab.





Field
Duplicates - The Company
inserts duplicate samples in the sample stream as a check on the
precision of the SRC Lab. Core duplicates are prepared by
collecting a second sample of the same interval, through splitting
the original sample, or other similar technique, and are submitted
as an independent sample. Duplicates are typically submitted at a
minimum rate of one per 25 samples. The collection may be further
tailored to reflect field variation in specific rock types or
horizons.





Exploration
Standards – Denison has
prepared three in-house ‘exploration standards’ to
independently monitor laboratory performance during the processing
of routine drill core exploration samples. These standards aim to
test laboratory accuracy and precision for a variety of trace
metals at low levels, as required for Athabasca uranium
exploration.





Assay Checks
– In addition to the QAQC
described above, up until the end of 2018, Denison sent one in
every 25 U3O8
assay samples to the SRC Lab’s
Delayed Neutron Counting (DNC) laboratory, a separate umpire
facility located at the SRC Lab in Saskatoon, to compare the
uranium values using two different methods, by two separate
laboratories. All radioactive samples are monitored and recorded as
per CNSC licence 01784-1-09.0. Decommissioning of the SRC
Lab’s DNC facility is planned for early
2019.





2019
Annual Information
Form 93





The SRC Labe is planning to have an X-ray
fluorescence (“XRF”) lab running in the spring of 2019
for umpire analyses, which will operate on a similar independent
basis as the DNC facility. Furthermore, down hole radiometric probe
results provide equivalent uranium data (eU3O8)
that is used internally by the Company for comparisons with the SRC
Lab U3O8
results.





Data Verification





Denison
engages with independent consultants for estimation of mineral
resources on its mineral properties, in accordance with CIM
Standards and NI 43-101, as well as other studies, including the
PFS and ISR field testing and engineering studies. In this regard,
the independent consultants undertake rigorous data verification
including, but not limited to, Denison’s field procedures,
databases and assay results.





Prior to public disclosure of drilling results,
including preliminary radiometric equivalent grades
(“eU3O8”)
and chemical assay grades (“U3O8”),
the results are subject to data verification by Qualified Persons
employed by Denison. This includes checks of 10 to 20% of the
results (typically as composited intervals) against non-composited
eU3O8 determinations and laboratory assay
certificates.




















2019 Annual Information
Form 94





DENISON’S OPERATIONS





McClean Lake Mill





The MLJV owns a
state of the art uranium processing facility located on the eastern
edge of the Athabasca Basin in northern Saskatchewan, approximately
750 kilometres north of Saskatoon. Orano Canada is the
operator/manager of the facility.





The McClean Lake
mill is specially designed and constructed to process high grade
uranium ores in a safe and environmentally responsible manner. The
mill uses sulphuric acid and hydrogen peroxide leaching and a
solvent extraction recovery process to extract and recover the
uranium product from the ore. In addition to the mill facility,
other infrastructure on the site includes a sulphuric acid plant, a
ferric sulphate plant, an oxygen plant, an electricity transmission
line tied into the provincial power grid, a 14 megawatt back-up
diesel power plant, warehouses, shops, offices and living
accommodations for site personnel.





In 2016, an
expansion of the mill was completed and an increase to the licensed
capacity of the mill was approved – resulting in an increase
to the licensed production capacity of the mill to 24 million
pounds U3O8 per year. This
increased licensed capacity allowed for the processing of 100% of
ore production from the Cigar Lake mine, expected to be 18 million
pounds U3O8 per year, and
provides the flexibility for the mill to process ore from other
sources in the future.





Operations





The McClean Lake
mill began production of uranium concentrates in 1999, with the
first ore fed to the mill on June 22, 1999 and commercial
production achieved on November 1, 1999. The mill operated until
the end of June 2010, producing approximately 50 million pounds
U3O8, when it was
placed on stand-by due to a lack of ore. In 2014, the McClean Lake
mill re-commenced operations with the delivery of ore shipments
from the Cigar Lake Mine, owned by the CLJV and operated by Cameco.
In 2014, the mill processed over 456,800 pounds of U3O8 with a 97.5%
recovery rate. Mill feed consisted of a blend of Cigar Lake ores
and stockpiled Sue B and McClean Lake North ores (mined via SABRE).
In 2015, production ramped up and the mill produced approximately
11.3 million pounds of U3O8 with a 98.9%
recovery rate.





In 2016, the mill
produced 17.3 million pounds of U3O8 with a 99%
recovery, and mill feed was all Cigar Lake ore. From 2017 to 2019,
the mill has produced just over 18.0 million pounds of
U3O8
per year, processing 100% mill feed from Cigar Lake with recoveries
at approximately 99%. The table below shows the operating
statistics for McClean Lake over the last five years.





McClean Lake Operations
2019
2018
2017
2016
2015Ore Milled
(thousand tonnes)
45,456
42,624
36,374
36,682
24,912Average Grade (%
U3O8)
17.89
19.19
22.78
21.39
20.61MLJV Production
(thousand pounds U3O8)
-
-
-
-
10.7Denison’s
share MLJV Production (thousand pounds U3O8)
-
-
-
-
2.4Toll Mill
Production (thousand pounds U3O8)
18,012
18,018
18,015
17,333
11,294





During the fourth
quarter of 2019, the McClean Lake Union Unifor Local 48-S ratified
a new collective bargaining agreement. The new three-year agreement
includes a new two-weeks-in two-weeks-out rotation, which will be
implemented early in 2020.


For information
pertaining to taxes and royalties, see “Government Regulation
– Saskatchewan Royalties” and “Government
Regulation – Canadian Income and Other
Taxes.”





2019
Annual Information
Form 95





Mill Licence





The McClean Lake
site is operated under various permits, licences, leases and claims
granted and renewed from time to time, all of which are currently
in good standing. Several key regulatory achievements were
completed in 2017 for McClean Lake: (a) the issuance by the CNSC of
a 10 year license for operation of both McClean and Midwest
projects; (b) the receipt of renewal of provincial approvals to
operate for a 6 year term, expiring on October 31, 2023; and (c)
CNSC approval to expand the existing tailings facility up to an
elevation of 448 meters above sea level (“m ASL”). Historically CNSC issued
Mine Operating Licences were granted for a 5 year term, but in 2009
the McClean Lake operations received an 8 year term and in 2017 was
granted a further 10 year term: UMOL-MINEMILL-McLEAN.00/2017 (the
“Mine Operating
License”) which is valid for the period July 1,
2017 to June 30, 2027. In addition to renewal of all previously
licensed activities, the current licence authorizes mining of the
McClean North deposits using hydraulic borehole mining methods
(SABRE) and includes the care and maintenance activities at the
Midwest site.





Tailings Disposal





The disposal of
mill tailings in an environmentally acceptable manner has led to
advances in the design and construction of new tailings management
facilities. In the McClean tailings management facility
(“TMF”),
tailings are deposited sub-aqueously from a barge. This procedure
minimizes tailings segregation, reduces concerns of freezing and
dust generation, and controls radiation and radon emissions from
the pond. This facility has been designed to receive tailings from
processing high grade Midwest and Cigar Lake ores in addition to
tailings from the McClean Lake deposits.





Under the
regulatory approved “TMF
Optimization” project, the tailings capacity of the
TMF was increased in two stages during the period 2013 to 2018. The
TMF Optimization project involved the sloping of the TMF walls and
the placement of a bentonite liner to increase the TMF capacity up
to an elevation of 443 m ASL.





A second project,
called “TMF
Expansion”, entails adding additional tailings
capacity over and above that created through the TMF Optimization
project. The first phase of the project entails increasing the
consolidated tailings elevation of the TMF up to 448 m ASL. On
April 19, 2017, the MLJV received regulatory approvals for the TMF
Expansion project. Following such receipt, construction activities
were initiated in 2018 with re-sloping of the pit walls,
installation of a new tailings pipe bench, decommissioning of 12
dewatering wells and the relocation of the contaminated landfill
from the TMF to the Sue C site.





In 2019, phase
one construction activities continued and work on placing
additional bentonite liner commenced. By the end of September 2019,
the first phase of the TMF Expansion was completed with the
bentonite liner reaching a level of ~447.4 m ASL. The regulatory
costs associated with the TMF Expansion Phase 1 work was funded by
the MLJV while the CLJV funded predominantly all of the
construction costs.





Plans for 2020
include regulatory work necessary to advance the permitting
associated with the TMF Expansion Project Phase 2, which envisions
raising the TMF capacity to 468 m ASL.





2019
Annual Information
Form 96





Cigar Lake Toll Milling





In 2002, Denison
and its partners entered into an agreement with the CLJV to process
Cigar Lake ore at the McClean Lake mill. Pursuant to that
agreement, all Cigar Lake ore was to be leached at the McClean Lake
mill with the pregnant aqueous solution being divided between the
McClean Lake and Rabbit Lake facilities for processing into uranium
concentrates. In order to process this Cigar Lake ore, an expansion
of the McClean Lake mill was required. The expansion and
modifications of the McClean Lake mill to raise its capacity to
13.0 million pounds U3O8 were completed in
2008 and all costs were paid for by the CLJV.





As a result of
delays in the startup of the Cigar Lake mine and the exhaustion of
permitted ore deposits at McClean Lake, the McClean Lake mill was
placed on stand-by at the end of June of 2010. Under the Cigar Lake
toll milling agreement, the CLJV funded a considerable portion of
the McClean Lake stand-by costs, with the relative proportion of
the stand-by costs paid by each party calculated on the basis of
the percentage of mineral reserves between the McClean Lake and
Cigar Lake joint ventures.





In 2011, the CLJV
and the MLJV agreed to amend the toll milling agreement. Under the
new milling arrangement, the McClean Lake operation is to process
and package 100% of the uranium produced from the Cigar Lake mine.
To accommodate the annual production of 18.0 million pounds
U3O8 from the CLJV,
the mill has been further expanded to an annual licensed capacity
of 24.0 million pounds U3O8. All costs for
the expansion of the McClean Lake mill and a portion of the TMF
Optimization and TMF Expansion were paid or will be paid for by the
CLJV (see “Denison’s Operations - McClean Lake -
Tailings Disposal”).





Cigar Lake Toll Milling – APG Transaction





Pursuant to the
APG Transaction in February 2017, certain of Denison’s
interests in the Cigar Lake toll milling proceeds have been sold to
APG and its subsidiary Centaurus Royalties Ltd.
(“Centaurus”)
for aggregate gross proceeds to Denison of $43,500,000. The APG
Transaction is comprised of the following elements: (1) a 13 year
limited recourse lending arrangement involving a loan from APG to
9373721 Canada Inc. (“SPV”) (the “APG Loan”) and a further loan from
SPV to DMI (the “SPV
Loan”) each for $40,800,000 (collectively, the
“Lending
Arrangement”); and (2) $2,700,000 in proceeds from the
sale, to Centaurus, of a stream equal to Denison’s 22.5%
share of proceeds from the toll milling of Cigar Lake ore by the
McClean Lake mill for specified Cigar Lake toll milling throughput
in excess of 215 million pounds U3O8 after July 1,
2016 (the “Stream
Arrangement”).





Additional
details of the APG Transaction are as follows:





●
 No Warranty of the Future
Rate of Production - No warranty is provided by Denison (including
DMI and SPV) to APG (including Centaurus), under the terms of the
Lending Arrangement or the Stream Arrangement, regarding: the
future rate of production at the Cigar Lake mine and / or the
McClean Lake mill; or the amount or collectability of proceeds to
be received by the MLJV in respect of toll milling of Cigar Lake
ore.


●
 APG Loan Details - The APG
Loan will accrue interest at a rate of 10% per annum and does not
have a predetermined principal repayment schedule. The APG Loan is
secured by a first priority interest in the assets of SPV which
will essentially consist of the SPV Loan to DMI.


●
 SPV Loan Details - The SPV
Loan will accrue interest at a rate of approximately 10% per annum
and does not have a predetermined principal repayment schedule. The
SPV Loan is limited in its recourse against DMI such that it is
generally repayable only to the extent of Denison’s share of
the toll milling revenues earned by the MLJV from the processing of
the first 215 million pounds of U3O8 from Cigar Lake
ore on or after July 1, 2016. Denison will guarantee the limited
recourse loan repayments and will grant a second ranking pledge of
its share of DMI to secure performance by DMI of its obligations to
pay the SPV Loan. The share pledge is second ranking to
Denison’s existing pledge of its shares of DMI to the Bank of
Nova Scotia (“BNS”) under the terms of its
Letters of Credit Facility.





2019
Annual Information
Form 97





Surface Access Borehole Resource Extraction (SABRE) Mining
Program





The SABRE program
is focused on developing a viable alternate mining method combining
surface drilling and borehole mining technology. Benefits of the
method may include a reduced time to production, reduced or
deferred capital costs, as well as minimized safety and
environmental risks.





Hydraulic
borehole mining is a technique used to extract materials through a
small access borehole, typically less than one-half of a metre in
diameter, resulting in a very small disturbance to the surface. A
mining tool containing a high-pressure water jet nozzle is lowered
through the access borehole in the overburden and sandstone to the
mineralized horizon. The high-pressure water jet is used to cut or
erode the mineral-bearing ore and to create a cavity up to four
metres in diameter. The cuttings are transported to surface in a
slurry form and sent through a series of screens and settling ponds
to separate the ore from the jetting water. Jetting water is
filtered further and re-used in the process. Each mined out cavity
is backfilled after completion with a cemented mixture in the
mineralized horizon.





Between 2007 and
2012, approximately 2,100 tonnes of ore was recovered through
various SABRE test mining programs, a portion of which has been fed
to the mill between 2007 and 2014. After the completion of several
significant milestones in 2012 and 2013, a decision was made in
late 2013 to suspend the SABRE program in 2014 in response to the
low uranium price environment. In 2015, SABRE activities were
limited to patent applications and upgrading down-hole sonar
capabilities with the objective of improving surveying of cavity
dimensions and mining performance. In 2016, an expanded program was
evaluated for SABRE including the re-tooling of the program to
allow for larger volumes and jetting pressures designed to increase
the SABRE production rate. In addition, the purchase, installation
and testing of a new solid / liquid separation system was completed
to assess the improvement in recovery of small uranium particles
from the production slurry created during the SABRE mining
process.





In 2017 and 2018,
development of the re-tooled SABRE program continued with
engineering of larger diameter mining pipes, procurement of
high-pressure pumps and a tendering process to contract drilling
equipment and labour for a further mining test. In addition, in
2018 four access holes were drilled and cased from surface to just
above the McClean North orebody elevation. It is expected that
these access holes will be used in 2020 as part of planned mining
tests using the re-tooled equipment. In 2019, engineering and
procurement activities for the re-tooled mining equipment continued
and various equipment acceptance testing activities were
completed.





It is currently
anticipated that, in 2020, the work to be performed for the SABRE
program will include installation and testing of the re-tooled
mining equipment on-site. A four-hole test mining program is
planned at McClean North, using the four-access holes drilled in
2018. There is the potential that a small uranium processing
campaign, using any ore recovered from the test mining program,
could be carried out at the McClean mill in December of 2020.
Processing ore from the SABRE test mining program will require
sufficient ore to be recovered from the test, and for the McClean
mill’s production schedule to allow for it. Modifications to
the grinding circuit at the McClean Lake mill are planned, in order
to facilitate the possible processing of ore recovered from the
test mining program.





2019
Annual Information
Form 98





MANAGER OF UPC





DMI is the
manager of UPC. UPC is a public company with the primary investment
objective of achieving an appreciation in the value of its uranium
holdings. The Company does not, directly or indirectly, have an
ownership interest in UPC. As manager, DMI provides UPC’s
officers and manages UPC's activities, including purchasing uranium
for and on behalf of UPC as directed by the UPC board, arranging
for its storage and attending to regulatory reporting for
UPC.





The MSA is the
current management services agreement between DMI and UPC,
effective April 1, 2019 for a five year term. Under the MSA, DMI
receives the following management fees from UPC: a) a base fee of
$400,000 per annum, payable in equal quarterly installments; b) a
variable fee equal to (i) 0.3% per annum of UPC’s total
assets in excess of $100 million and up to and including $500
million, and (i) 0.2% per annum of UPC’s total assets in
excess of $500 million; c) a fee, at the discretion of the UPC
board, for on-going monitoring or work associated with a
transaction or arrangement (other than a financing, or the
acquisition of or sale of U3O8 or UF6); and d) a
commission of 1.0% of the gross value of any purchases or sales of
U3O8 or UF6, or gross
interest fees payable to UPC in connection with any uranium loan
arrangements. During 2019, DMI earned an aggregate of $1,966,000 in
management fees from UPC.





The MSA may be
terminated by Denison upon the provision of 180 days written
notice. The MSA may be terminated by UPC (i) in the event of a
material breach, (ii) within 90 days of certain events surrounding
a change of both of the individuals serving as Chief Executive
Officer and Chief Financial Officer of UPC, and / or a change of
control of Denison, or (iii) upon the provision of 30 days written
notice and, subject to certain exceptions, a cash payment to
Denison of an amount equal to the base and variable management fees
that would otherwise be payable to Denison (calculated based on
UPC’s current uranium holdings at the time of termination)
for the lesser period of a) three years, or b) the remaining term
of the MSA.





DENISON CLOSED MINES GROUP





Denison formed
its Denison Environmental Services division (“DES”) in 1997 to provide mine
decommissioning and mine care and maintenance services to industry
and government, as well as to manage Denison’s post mine
closure environmental obligations on its Elliot Lake landholdings.
In late 2019, driven by a new strategic vision for Denison as a
mining company with expertise across the full mining life cycle,
Denison discontinued the use of the DES name. The team of closed
mine care & maintenance specialists and environmental
professionals previously working under DES are now part of
Denison’s integrated “Closed Mines” group, which
is positioned within the organization alongside each of
Denison’s exploration and project development
teams.





The Closed Mines
group (“CMG”)
remains focused on post-closure mine care and maintenance services,
and its technical team is principally located in Elliot Lake,
Ontario.





The primary
activities of the Closed Mines Group include: the ongoing
monitoring of Denison’s two closed Elliot Lake mine sites,
plus environmental monitoring, effluent treatment and maintenance
services for other non-Denison clients, including in
2019:





●
 Certain of Rio Algom
Ltd.’s closed mine sites in Ontario and Quebec, including
Elliot Lake;


●
 Yukon Government’s
closed Mt. Nansen Mine in the Yukon; and


●
 Ontario Government’s
closed Lockerby Mine in northern Ontario.





2019
Annual Information
Form 99





ENVIRONMENTAL, HEALTH AND SAFETY MATTERS





The Company has
an Environmental, Health and Safety Policy (the “EHS Policy”) that affirms
Denison’s commitment to environmentally responsible
management and compliance with occupational health and safety laws.
Under the EHS Policy, the Company has committed to run its
operations in compliance with applicable legislation, in a manner
that minimizes the impact on our ecosystem. The EHS Policy mandates
the use of regular monitoring programs to identify risks to the
environment, to the public and to Denison’s employees and to
ensure compliance with regulatory requirements. The EHS Policy also
sets out Denison’s requirement to train its employees
regarding environmental and health and safety compliance and best
practices and to provide adequate resources in this
regard.


The EHS Policy
requires regular reporting to the Board regarding the
Company’s compliance and the results of the Company’s
monitoring. To assist the Board with its responsibilities in
overseeing environmental, health and safety matters, the Board has
established the Environment, Health and Safety Committee (the
“EHS Committee”)
which works with management to discuss matters affecting the
environment, health and safety and its stakeholders and reporting
and making recommendations to the Board.





Exploration and Development


In 2019,
Denison’s exploration team did not have any lost time
incidents, but there were three modified work injuries. The project
development team did not have any lost time incidents or modified
work injuries. Combined, the teams (and the contractors for whom
they are responsible) had one medical incident.





There was one
reportable environmental incident in 2019, when a drill
malfunctioned resulting in a spill of mineralized cuttings in the
immediate vicinity of the drill hole. The potential impacts have
been mitigated, and remediation will be completed as required to
minimize any potential environmental impacts.





Closed Mines





In 2018, the CMG
team were celebrated for having achieved over 500,000 cumulative
work hours without a lost time injury, representing almost 10 years
of continuous service without a lost time injury. In 2019, the CMG
continued its excellent safety performance and, as at December 31,
2019, the team had worked a total of 618,577 hours without a lost
time injury. Over 890 cumulative hours of health and safety
training was completed by CMG staff during the year.





Denison also
holds the internationally recognized ISO 9001:2015 certification,
which is a certification for Quality Management
Systems.





Elliot Lake


Denison's uranium
mine at Elliot Lake, Ontario, which started operations in 1957, was
permanently closed upon completion of deliveries of U3O8 to Ontario Hydro
in May 1992. During its 35 years of continuous operation, the
facility produced 147 million pounds of U3O8 in concentrates
from the milling of 70 million tons of ore. By 1998, all
significant capital reclamation activities at Denison's two closed
Elliot Lake mines had been completed and, for the most part,
decommissioning has progressed to the long-term monitoring phase
(see “Government Regulation – Canadian Uranium
Industry”).





2019
Annual Information
Form 100





During 2019, the
water treatment plants operated as planned and all environmental
targets were met. Monitoring and other remediation related expenses
were $842,000 for the year. Reclamation expenses for 2020 are
budgeted to be $891,000. All expenditures are funded from the
Reclamation Trust described below. It is estimated that sufficient
funds are in the Reclamation Trust to meet all monitoring costs
through 2025.





All activities
and monitoring results are reviewed regularly by the CNSC and the
Elliot Lake Joint Regulatory Group, which consists of federal and
provincial regulators. Pursuant to a Reclamation Funding Agreement,
effective June 30, 1994, with the Governments of Canada and
Ontario, Denison has established a Reclamation Trust from which all
spending on its Elliot Lake reclamation activities is funded. When
the Reclamation Trust was first established in 1994, Denison was
required to deposit 90% of its cash receipts after deducting
permitted expenses, as defined in such agreement, into the
Reclamation Trust. In 1997, the Governments of Canada and Ontario
agreed to suspend the 90% funding requirement provided Denison
maintained four years of cash requirements in the Reclamation
Trust. Early in 1999, the Governments of Canada and Ontario agreed
to further amend the Reclamation Funding Agreement, effective when
Denison received an amended site decommissioning licence, which was
obtained on April 22, 1999. Pursuant to that amendment, Denison is
required to maintain sufficient funds in the Reclamation Trust to
meet six years of cash requirements.





McClean Lake





At McClean Lake,
which is operated by Orano Canada, toll milling activities for
Cigar Lake ores continued at a stable rate throughout the year.
During 2019, a total of 511,807 hours were worked. During this
time, there were 3 medical incidents, 3 modified work injuries and
3 lost time incidents. Environmentally there were 3 reportable
environmental incidents. The facility has maintained its
internationally recognized ISO 14001:2004 and OHSAS 18001
certification.





The McClean Lake
and Midwest projects are combined under a single Operating License
issued by the CNSC. The combined Preliminary Closure Plan was
prepared by Orano Canada and approved by the authorities in 2016,
estimating the total decommissioning and reclamation costs for both
projects to be $107,241,000. Financial assurances are in place for
this entire amount, with Denison’s share being
$24,135,000.


























2019 Annual Information
Form 101





GOVERNMENT REGULATION





Saskatchewan Exploration and Land Tenure





In Canada,
natural resource exploration and land tenure activity fall under
provincial legislative jurisdiction. In Saskatchewan, the
management of mineral resources and the granting of exploration and
mining rights for mineral substances and their use are regulated by
the Crown Minerals Act
(Saskatchewan) and The Mineral
Tenure Registry Regulations, 2012, that are administered by
the Saskatchewan Ministry of Energy and Resources.





The right to
explore for minerals in Saskatchewan is acquired under a mineral
claim from the province. The initial term of a mineral claim is two
years, renewable for successive one–year periods, provided
the mineral claim is in good standing. To maintain a mineral claim
in good standing, generally, the holder of a mineral claim must
expend a prescribed amount on exploration. Excess expenditures
(also known as assessment credits) can be applied to satisfy
expenditure requirements for future claim years. Except for
exploration purposes, a mineral claim does not grant the holder the
right to mine minerals. A holder of a mineral claim in good
standing has the right to convert a mineral claim into a mineral
lease. Surface exploration work on a mineral claim requires
additional governmental approvals.


The right to mine
minerals in Saskatchewan is acquired under a mineral lease from the
province. A mineral lease is for a term of 10 years, with a right
to renew for successive 10-year terms in the absence of default by
the lessee. The lessee is required to spend certain amounts for
work during each year of a mineral lease. A mineral lease cannot be
terminated except in the event of default and for certain
environmental concerns, as prescribed in The Crown Minerals Act (Saskatchewan).
However, mineral leases may be amended unilaterally by the lessor
by amendment to The Crown Minerals
Act (Saskatchewan) or The
Crown Mineral Royalty Regulations, 2013
(Saskatchewan).





Mineral rights,
held through mineral claims and mineral leases, are distinct from
surface rights. The surface facilities and mine workings are
located on lands owned by the province of Saskatchewan. The right
to use and occupy lands is acquired under a surface lease from the
province of Saskatchewan. A surface lease is for a period of time,
up to a maximum of 33 years, as is necessary to allow the lessee to
operate its mine and plant and thereafter carry out the reclamation
of the lands involved. Surface leases are also used by the province
of Saskatchewan as a mechanism to achieve certain environmental and
radiation protection and socio-economic objectives, and contain
certain undertakings in this regard.





Environmental Assessments





The assessment of
a proposed uranium project in Saskatchewan involves both a
provincial and federal environmental assessment
(“EA”). In
Saskatchewan, the assessment of a project with joint federal and
provincial jurisdiction is coordinated through established
protocols in order to align with the “one project-one
assessment” model for the proponent and the public without
compromising any statutory requirements of the legislation of
either jurisdiction.





In the province
of Saskatchewan, the Environmental
Assessment Act is administered by the Ministry of
Environment. The level of assessment for mining projects is
dependent on the specific characteristics of each individual
project. A proponent of a project that is considered to be a
“development” pursuant to the Saskatchewan Environmental Assessment Act, is
required to conduct an environmental assessment
(“EA”) of the
proposed project and prepare and submit an environmental impact
statement (“EIS”) to the Minister of
Environment.





2019
Annual Information
Form 102





Federally, the
Canadian Environmental Assessment
Act (CEAA) was amended in the spring of 2012 and the
Regulations Designating Physical
Activities (2012) were established to clarify when a federal
EA is required and define what federal agency is required to be the
“responsible authority” for the conduct of the EA. For
uranium projects, the CNSC is designated as the “responsible
authority” under the CEAA and carries full authority to
complete the screening of the proposed project and any subsequent
environmental assessments.


The Government of
Canada implemented a new Impact
Assessment Act (the “IAA”), to replace the CEAA on
August 28, 2019. The transitional provision (section 182 of the
IAA) provide that a CNSC designated project EA, which commenced
under the CEAA 2012, is to be continued under the CEAA 2012. This
means that the Wheeler River EA will continue the assessment
process under CEAA 2012.





An EA is a
planning and decision-making tool, which involves predicting
potential environmental effects throughout the project lifecycle
(construction, operation, decommissioning and post-decommissioning)
at the site, and within the local and regional assessment areas.
Under the CEAA, an EA’s scope focuses on potential adverse
environmental effects that are within federal jurisdiction
including: (a) fish and fish habitat and other aquatic species; (b)
migratory birds; (c) federal lands; (d) effects that cross
provincial or international boundaries; (e) effects that impact on
aboriginal peoples, such as their use of lands and resources for
traditional purposes, and (f) changes to the environment that are
directly linked to or necessarily incidental to any federal
decisions about a project.





Wheeler River





Project Description and Environmental Assessment





In 2019, Denison
executed on its decision to advance the Wheeler River Project
through the EA regulatory process following the release of the PFS.
Activities completed in 2019 included the submission of two key
documents to provincial and federal regulators, with respect to the
proposed ISR mining operation: 1) the Saskatchewan Provincial
Technical Proposal and the Federal Project Description and 2) the
Terms of Reference. Acceptance of these documents was announced by
both the Province of Saskatchewan and the CNSC on June 1, 2019.
Final confirmation of the scope and guidelines for the EA for the
Project was received from the CNSC on December 20, 2019. The
Company identified the EA process as a key element of the Project's
critical path. Accordingly, Denison has initiated various studies
and assessments as part of the EA process, which is intended to
culminate in the preparation of a Project EIS.





Environmental Baseline Data Collection





Baseline work
completed during 2019 included ongoing monitoring of ambient radon
and dust in the air, groundwater quality, and waste rock barrel
leachate chemistry. In addition, ambient gamma, sulphur dioxide and
nitrogen dioxide monitoring programs were initiated during the
year, and aquatic, terrestrial and heritage baseline surveys were
conducted to build upon the work completed to date. These ongoing
tests are designed to improve Denison’s understanding of the
existing environment in and around the Wheeler River Project area
and support the completion of the EA.





In 2019, 12
regional observation wells were also installed for the purpose of
regional hydrogeological testing outside of the Phoenix deposit.
The wells will be used to establish baseline conditions within the
local and regional groundwater system and the data collected
(including groundwater levels and flow) will form key inputs to
groundwater models for the EA.





2019
Annual Information
Form 103





Denison
expectsthat the
federal and provincial EA process for the proposed Phoenix
operation will take approximately 36-48 months to complete from initiation in
February 2019.





Corporate Social Responsibility





Denison has been
focused on strengthening many long-term relationships, and building
new relationships, with Indigenous and non-Indigenous communities
who have a strong connection to the land on which the Wheeler River
Project is located.





The Company has
conducted site tours for the Indigenous and municipal leaders for
communities of interest, including two site tours in 2019. These
tours have focused on introducing the community members to the
site, providing an overview of the Company’s project-related
activities and offering an opportunity for collaboration regarding
the advancement of the Project. Denison also supports various
community initiatives and activities, as part of its focus on
community investment.





The Company was
pleased to announce in June 2019 that it had executed a series of
MOUs, in support of the advancement of Wheeler River, with certain
Indigenous communities who assert that the project falls within
their traditional territories and where traditional land use
activities are currently practiced within the local and regional
area surrounding the project. These non-binding MOUs formalize the
signing parties’ intent to work together in the spirit of
mutual respect and cooperation, in order to collectively identify
practical means by which to avoid, mitigate, or otherwise address
potential impacts of the project upon the exercise of Indigenous
rights, Treaty rights, and other interests, as well as to
facilitate sharing in the benefits that will flow from the
project.





Later in 2019,
the Company saw two significant leadership and relationship
changes. By elections held on October 25, 2019, a new Chief and
Council were formed for the English River First nation
(“ERFN”).
Denison has engaged with the newly elected Chief and Council, to
develop meaningful lines of communication and enhance their
understanding of the Wheeler River Project.





Denison was also
formally notified that the Métis Nation – Saskatchewan
(“MNS”) was
appointed to represent a number of Métis communities that
Denison had established and developed direct relationships with
since 2016. Denison is now engaged with the MNS, pursuant to a new
process set out by the MNS, for consultation on Denison’s
exploration and project development activities.





McClean and Midwest





Environmental
matters related to the McClean Lake uranium facility and the
Midwest project are regulated by the CNSC and the Saskatchewan
Ministry of Environment. A number of other ministries and
departments of the federal and Saskatchewan governments also
regulate certain aspects of the operation. Prior to proceeding with
development of the McClean Lake uranium facility and Midwest
project, the proponents were required to submit Environmental
Impact Statements for review. After completion of that review and
receipt of recommendations, the federal and Saskatchewan
governments issued the appropriate initial authorizations, subject
to the normal licensing renewal process, for the McClean Lake
uranium facility in 1995 and for Midwest in 2012.





2019
Annual Information
Form 104





Licensing and Permitting





The federal
government recognizes that the uranium industry has special
importance in relation to the national interest and therefore
regulates the mining, extraction, use and export of uranium under
the Nuclear Safety and Control
Act (“NSCA”). The NSCA is administered
by the CNSC which issues licences pursuant to the regulations under
the NSCA.





In the event EA
approvals by both the provincial and federal governments are
granted, a project will be allowed to proceed to the second tier of
approvals for licenses. The federal (CNSC) licensing process
requires the submission of detailed engineering design packages as
well as detailed management plans for all facets of the operation
as part of their licensing process. The federal licenses are
typically the license (i) to prepare a site and construct, (ii)
operate, (iii) decommission, and (iv) abandon. Under provincial
jurisdiction, a number of permits and approvals are required prior
to construction. Key requirements include the execution of a
Surface Lease Agreement with the Province of Saskatchewan and an
Approval to Construct and Operate a Pollutant Control Facility as
regulated under the Saskatchewan Environmental Management and Protection
Act (2010).





Activities at
McClean Lake and Midwest are currently carried out under a single
operating license issued by the CNSC and are subject to all
applicable federal statutes and regulations and to all laws of
general application in Saskatchewan, except to the extent that such
laws conflict with the terms and conditions of the licences or
applicable federal laws.





Decommissioning
activities at Elliot Lake are currently carried out under two
decommissioning licences issued by the CNSC: for the Stanrock
tailings area and the Denison mine site and tailings areas.
Decommissioning of the facilities pursuant to the terms of the
decommissioning licences has been completed. The CNSC has initiated
the actions to combine the Stanrock and Denison sites under one
Waste Facility Operating Licence. There are no significant
differences between the different forms of licences. After a
lengthy period of care, maintenance and monitoring, Denison may
apply to the CNSC for permission to abandon the sites.





Saskatchewan Royalties





The province of
Saskatchewan imposes royalties on the sale of uranium extracted
from ore bodies in the province in accordance with Part III of The
Crown Mineral Royalty Regulations (the “Regulations”) pursuant to The
Crown Minerals Act (the “Act”). Significant revisions to
the uranium royalty regime in Saskatchewan became effective on
January 1, 2013, with the resulting regime consisting of the
following three components:





(i)
 Basic Royalty: Computed as 5%
of gross revenues derived from uranium extracted from ore bodies in
the province;


(ii)
 Saskatchewan Resource Credit:
Reduction in the basic royalty equal to 0.75% of gross revenues
derived from uranium extracted from ore bodies in the province;
and


(iii)
 Profit Royalty: Two-tier rate
structure, computed as 10% or 15% of net profits derived from the
mining and processing of uranium extracted from ore bodies in the
province.





Gross revenue,
for the Basic Royalty, is determined in accordance with the
Regulations and allows for reductions based on specified
allowances. Net profit, for the Profit Royalty, is calculated based
on the recognition of the full dollar value of a royalty
payer’s exploration, capital, production, decommissioning and
reclamation costs, in most cases, incurred after January 1, 2013.
Net profits will be taxed under the profit royalty at a rate of 10%
for net profits up to and including $22.00 per kilogram ($10 per
pound) of uranium sold, and at 15% for net profits in excess of
$22.00 per kilogram. The $22.00 per kilogram threshold is
applicable for 2013 (the base year) and is indexed in subsequent
years for inflation.





2019
Annual Information
Form 105





Under this
system, each owner or joint venture participant in a uranium mine
is a royalty payer. Individual interests are consolidated on a
corporate basis for the computation and reporting of royalties due
to the province.


Royalty payments
are due to the province on or before the last day of the month
following the month in which the royalty payer sold, or consumed,
the uranium for the purposes of the basic royalty, and quarterly
installments are required based on estimates of net profits in
respect of the profit royalty.





Canadian Income and Other Taxes





Denison and its
Canadian subsidiaries are subject to federal and provincial income
taxes. In 2019, taxable income was subject to federal taxes at a
rate of 15%, and provincial taxes in Saskatchewan, Ontario, Quebec,
British Columbia and the Yukon Territory at rates varying between
11.5% and 12.0%. Taxable income for each entity is allocated
between provinces and territories based on a two point average of
the proportion of salaries and revenues attributable to each
province or territory. Denison expects that it will not be liable
for Canadian income taxes on a current tax basis for the financial
year ended 2019. As a resource corporation in Saskatchewan, Denison
is also subject to a resource surcharge equal to 3% of the value of
resource sales from production in Saskatchewan, if any, during the
year.





In recent years,
including 2019, Denison has issued shares eligible for treatment as
“flow through shares”, as defined in subsection 66(15)
of the Income Tax Act
(Canada). As a result, a significant portion of Denison's Canadian
Exploration Expenditures have been renounced to shareholders and
are not available to Denison as a tax deduction in the current year
or future years.





Audit / Review by Taxing Authorities





From time to
time, Denison is subject to audit / review by taxing authorities.
In certain jurisdictions, periodic reviews are carried out by
taxing authorities in the ordinary course of business. Denison
cooperates with all requests received from taxing authorities, and
is not currently engaged in a material dispute with any of the
applicable taxing authorities.


























2019 Annual Information Form
106





RISK FACTORS





Denison’s
business, the value of the Shares and management’s
expectations regarding the same 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 than anticipated. The following are
those risks, uncertainties and other factors pertaining to the
outlook and conditions currently known to Denison that have been
identified by the Company as having the potential to negatively
affect Denison’s business and the value of the Shares.
Current and prospective security holders of Denison should
carefully consider these risk factors. However, these factors are
not, and should not be construed as being exhaustive, and other
circumstances that are currently not foreseen by management of
Denison could arise to negatively affect Denison’s business
and its Shareholders.





Capital Intensive Industry and Uncertainty of Funding





The exploration
and development of mineral properties and any operation of mines
and facilities requires a substantial amount of capital and the
ability of the Company to proceed with any of its plans with
respect thereto depends on its ability to obtain financing through
joint ventures, equity financing, debt financing or other means.
General market conditions, volatile uranium markets, a claim
against the Company, a significant disruption to the
Company’s business or operations or other factors may make it
difficult to secure financing necessary to fund the substantial
capital that is typically required in order to continue to advance
a mineral project, such as the Wheeler River project, through the
testing, permitting and feasibility processes to a production
decision or to place a property, such as the Wheeler River project,
into commercial production. Similarly, there is uncertainty
regarding the Company’s ability to fund additional
exploration of the Company’s projects or the acquisition of
new projects.





There is no
assurance that the Company will be successful in obtaining required
financing as and when needed on acceptable terms, and failure to
obtain such additional financing could result in the delay or
indefinite postponement of any or all of the Company’s
exploration, development or other growth initiatives.





Global Financial Conditions





Global financial
conditions continue to be subject to volatility arising from
international geopolitical developments and global economic
phenomenon, as well as general financial market turbulence,
including a significant recent market reaction to the novel
coronavirus (COVID-19), resulting in a significant reduction in in
many major market indices and in Denison’s share price.
Access to public financing and credit can be negatively impacted by
the effect of these events on Canadian and global credit markets.
The health of the global financing and credit markets may impact
the ability of Denison to obtain equity or debt financing in the
future and the terms at which financing or credit is available to
Denison. These instances of volatility and market turmoil could
adversely impact Denison's operations and the trading price of the
Shares.





Speculative Nature of Exploration and Development





Exploration for
minerals and the development of mineral properties is speculative,
and involves significant uncertainties and financial risks that
even a combination of careful evaluation, experience and technical
knowledge may not eliminate. While the discovery of an ore body may
result in substantial rewards, few properties which are explored
prove to return the discovery of a commercially mineable deposit
and/or are ultimately developed into producing mines.





2019
Annual Information
Form 107





As at the date
hereof, many of Denison’s projects are preliminary in nature
and mineral resource estimates include inferred mineral resources,
which are considered too speculative geologically to have the
economic considerations applied that would enable them to be
categorized as mineral reserves. Mineral resources that are not
mineral reserves do not have demonstrated economic viability. Major
expenses may be required to properly evaluate the prospectivity of
an exploration property, to develop new ore bodies and to estimate
mineral resources and establish mineral reserves. There is no
assurance that the Company’s uranium deposits are
commercially mineable.





Imprecision of Mineral Reserve and Resource Estimates





Mineral reserve
and resourcefigures
are estimates, and no assurances can be given that the estimated
quantities of uranium are in the ground and could be produced, or
that Denison will receive the prices assumed in determining its
mineral reserves. Such estimates are expressions of judgment based
on knowledge, mining experience, analysis of drilling results and
industry best practices. Valid estimates made at a given time may
significantly change when new information becomes available. While
Denison believes that the Company’s estimates of mineral
reserves and mineral resources are well established and reflect
management’s best estimates, by their nature, mineral reserve
and resource estimates are imprecise and depend, to a certain
extent, upon statistical inferences and geological interpretations,
which may ultimately prove inaccurate. Furthermore, market price
fluctuations, as well as increased capital or production costs or
reduced recovery rates, may render mineral reserves and resources
uneconomic and may ultimately result in a restatement of mineral
reserves and resources. The evaluation of mineral reserves or
resourcesis always
influenced by economic and technological factors, which may change
over time.





Risks of, and Market Impacts on, Developing Mineral
Properties





Denison’s
current and future uranium production is dependent in part on the
successful development of its known ore bodies, discovery of new
ore bodies and/or revival of previously existing mining operations.
It is impossible to ensure that Denison’s current exploration
and development programs will result in profitable commercial
mining operations. Where the Company has been able to estimate the
existence of mineral resources and mineral reserves, such as for
the Wheeler River project, substantial expenditures are still
required to establish economic feasibility for commercial
development and to obtain the required environmental approvals,
permitting and assets to commence commercial
operations.





Development
projects are subject to the completion of successful feasibility
studies, engineering studies and environmental assessments, the
issuance of necessary governmental permits and the availability of
adequate financing. The economic feasibility of development
projects is based upon many factors, including, among others: the
accuracy of mineral reserve and resource estimates; metallurgical
recoveries; capital and operating costs of such projects;
government regulations relating to prices, taxes, royalties,
infrastructure, land tenure, land use, importing and exporting, and
environmental protection; political and economic climate; and
uranium prices, which are historically cyclical.





Denison is
currently undertaking various studies and test work in connection
with a feasibility study for its Wheeler River project, subject to
the availability of capital. If completed, such a feasibility
study, and any estimates of mineral reserves and mineral resources,
development costs, operating costs and estimates of future cash
flow contained therein, will be based on Denison’s
interpretation of the information available to-date. Development
projects have no operating history upon which to base developmental
and operational estimates. Particularly for development projects,
economic analyses and feasibility studies contain estimates based
upon many factors, including estimates of mineral reserves, the
interpretation of geologic and engineering data, anticipated
tonnage and grades of ore to be mined and processed, the
configuration of the ore body, expected recovery rates of uranium
from the ore, estimated operating costs, anticipated climatic
conditions and other factors. As a result, it is possible that
actual capital and operating costs and economic returns will differ
significantly from those estimated for a project prior to
production.





2019
Annual Information
Form 108





The decision as
to whether a property, such as the Wheeler River project, contains
a commercial mineral deposit and should be brought into production
will depend upon the results of exploration programs and/or
feasibility studies, and the recommendations of duly qualified
engineers and/or geologists, all of which involves significant
expense and risk.





It is not unusual
in the mining industry for new mining operations to take longer
than originally anticipated to bring into a producing phase, and to
require more capital than anticipated. Any of the following events,
among others, could affect the profitability or economic
feasibility of a project or delay or stop its advancement:
unavailability of necessary capital, unexpected problems during the
start-up phase delaying production, unanticipated changes in grade
and tonnes of ore to be mined and processed, unanticipated adverse
geological conditions, unanticipated metallurgical recovery
problems, incorrect data on which engineering assumptions are made,
unavailability of labour, increased costs of processing and
refining facilities, unavailability of economic sources of power
and water, unanticipated transportation costs, changes in
government regulations (including regulations with respect to the
environment, prices, royalties, duties, taxes, permitting,
restrictions on production, quotas on exportation of minerals,
environmental, etc.), fluctuations in uranium prices, and
accidents, labour actions and force majeure events.





The ability to
sell and profit from the sale of any eventual mineral production
from a property will be subject to the prevailing conditions in the
applicable marketplace at the time of sale. The demand for uranium
and other minerals is subject to global economic activity and
changing attitudes of consumers and other end-users’
demand.





Many of these
factors are beyond the control of a mining company and therefore
represent a market risk which could impact the long term viability
of Denison and its operations.





Risks Associated with the Selection of Novel Mining
Methods





As disclosed in
the Wheeler PFS Report, Denison has selected the ISR mining method
for production at the Phoenix deposit. While test work completed to
date indicates that ground conditions and the mineral reserves
estimated to be contained within the deposit are amenable to
extraction by way of ISR, actual conditions could be materially
different from those estimated based on the Company’s
technical studies completed to-date. While industry best practices
have been utilized in the development of its estimates, actual
results may differ significantly. Denison will need to complete
substantial additional work to further advance and/or confirm its
current estimates and projections for development to the level of a
feasibility study. As a result, it is possible that actual costs
and economic returns of any mining operations may differ materially
from Denison’s best estimates.





Dependence on Obtaining Licenses and other Regulatory and Policy
Risks





Uranium mining
and milling operations and exploration activities, as well as the
transportation and handling of the products produced, are subject
to extensive regulation by federal, provincial and state
governments. Such regulations relate to production, development,
exploration, exports, imports, taxes and royalties, labour
standards, occupational health, waste disposal, protection and
remediation of the environment, mine decommissioning and
reclamation, mine safety, toxic substances, transportation safety
and emergency response, and other matters.





2019
Annual Information
Form 109





Compliance with
such laws and regulations is currently, and has historically,
increased the costs of exploring, drilling, developing,
constructing, operating and closing Denison’s mines and
processing facilities. It is possible that the costs, delays and
other effects associated with such laws and regulations may impact
Denison’s decision with respect to exploration and
development properties, including whether to proceed with
exploration or development, or that such laws and regulations may
result in Denison incurring significant costs to remediate or
decommission properties that do not comply with applicable
environmental standards at such time.





The development
of mines and related facilities is contingent upon governmental
approvals that are complex and time consuming to obtain and which
involve multiple governmental agencies. Environmental and
regulatory review has become a long, complex and uncertain process
that can cause potentially significant delays. In addition, future
changes in governments, regulations and policies, such as those
affecting Denison’s mining operations and uranium transport,
could materially and adversely affect Denison’s results of
operations and financial condition in a particular period or its
long-term business prospects.





The ability of
the Company to obtain and maintain permits and approvals and to
successfully explore and evaluate properties and/or develop and
operate mines may be adversely affected by real or perceived
impacts associated with its activities that affect the environment
and human health and safety at its projects and in the surrounding
communities. The real or perceived impacts of the activities of
other mining companies, locally or globally, may also adversely
affect our ability to obtain and maintain permits and approvals.
The Company is uncertain as to whether all necessary permits will
be obtained or renewed on acceptable terms or in a timely manner.
Any significant delays in obtaining or renewing such permits or
licences in the future could have a material adverse effect on
Denison.





Denison expends
significant financial and managerial resources to comply with such
laws and regulations. Denison anticipates it will have to continue
to do so as the historic trend toward stricter government
regulation may continue. Because legal requirements are frequently
changing and subject to interpretation, Denison is unable to
predict the ultimate cost of compliance with these requirements or
their effect on operations. While the Company has taken great care
to ensure full compliance with its legal obligations, there can be
no assurance that the Company has been or will be in full
compliance with all of these laws and regulations, or with all
permits and approvals that it is required to have.





Failure to comply
with applicable laws, regulations and permitting requirements, even
inadvertently, may result in enforcement actions. These actions may
result in orders issued by regulatory or judicial authorities
causing operations to cease or be curtailed, and may include
corrective measures requiring capital expenditures, installation of
additional equipment or remedial actions. Companies engaged in
uranium exploration operations may be required to compensate others
who suffer loss or damage by reason of such activities and may have
civil or criminal fines or penalties imposed for violations of
applicable laws or regulations.





Engagement with Canada’s First Nations and
Métis





First Nations and
Métis rights, entitlements and title claims may impact
Denison’s ability and that of its joint venture partners to
pursue exploration, development and mining at its Saskatchewan
properties. Pursuant to historical treaties, First Nations in
northern Saskatchewan ceded title to most traditional lands but
continue to assert title to the minerals within the lands.
Métis people have not signed treaties; they assert aboriginal
rights throughout Saskatchewan, including aboriginal title over
most if not all of the Company’s project lands.





2019
Annual Information
Form 110





Managing
relations with the local First Nations and Métis communities
is a matter of paramount importance to Denison. Engagement with,
and consideration of other rights of, potentially affected
Indigenous peoples may require accommodations, including
undertakings regarding funding, contracting, environmental
practices, employment and other matters. This may affect the
timetable and costs of exploration, evaluation and development of
the Company’s projects.





The
Company’s relationships with communities of interest are
critical to ensure the future success of its existing operations
and the construction and development of its projects. There is an
increasing level of public concern relating to the perceived effect
of mining activities on the environment and on communities impacted
by such activities. Adverse publicity relating to the mining
industry generated by non-governmental organizations and others
could have an adverse effect on the Company’s reputation or
financial condition and may impact its relationship with the
communities in which it operates. While the Company is committed to
operating in a socially responsible manner, there is no guarantee
that the Company’s efforts in this regard will mitigate this
potential risk.





The inability of
the Company to maintain positive relationships with communities of
interest, including local First Nations and Métis, may result
in additional obstacles to permitting, increased legal challenges,
or other disruptions to the Company’s exploration,
development and production plans, and could have a significant
adverse impact on the Company’s share price and financial
condition.





Environmental, Health and Safety Risks





Denison has
expended significant financial and managerial resources to comply
with environmental protection laws, regulations and permitting
requirements in each jurisdiction where it operates, and
anticipates that it will be required to continue to do so in the
future as the historical trend toward stricter environmental
regulation may continue. The uranium industry is subject to, not
only the worker health, safety and environmental risks associated
with all mining businesses, including potential liabilities to
third parties for environmental damage, but also to additional
risks uniquely associated with uranium mining and processing. The
possibility of more stringent regulations exists in the areas of
worker health and safety, the disposition of wastes, the
decommissioning and reclamation of mining and processing sites, and
other environmental matters each of which could have a material
adverse effect on the costs or the viability of a particular
project.





Denison’s
facilities operate under various operating and environmental
permits, licences and approvals that contain conditions that must
be met, and Denison’s right to pursue its development plans
is dependent upon receipt of, and compliance with, additional
permits, licences and approvals. Failure to obtain such permits,
licenses and approvals and/or meet any conditions set forth therein
could have a material adverse effect on Denison’s financial
condition or results of operations.





Although the
Company believes its operations are in compliance, in all material
respects, with all relevant permits, licences and regulations
involving worker health and safety as well as the environment,
there can be no assurance regarding continued compliance or ability
of the Company to meet stricter environmental regulation, which may
also require the expenditure of significant additional financial
and managerial resources.





Mining companies
are often targets of actions by non-governmental organizations and
environmental groups in the jurisdictions in which they operate.
Such organizations and groups may take actions in the future to
disrupt Denison's operations. They may also apply pressure to
local, regional and national government officials to take actions
which are adverse to Denison's operations. Such actions could have
an adverse effect on Denison's ability to advance its projects and,
as a result, on its financial position and results.





2019
Annual Information
Form 111





Global Demand and International Trade Restrictions





The international
uranium industry, including the supply of uranium concentrates, is
relatively small compared to other minerals, and is generally
highly competitive and heavily regulated. Worldwide demand for
uranium is directly tied to the demand for electricity produced by
the nuclear power industry, which is also subject to extensive
government regulation and policies. In addition, the international
marketing of uranium is subject to governmental policies and
certain trade restrictions. For example, the supply and marketing
of uranium from Russia and from certain republics of the former
Soviet Union is, to some extent, impeded by a number of
international trade agreements and policies.





In the United
States, certain uranium producers filed a petition with the U.S.
DOC to investigate the import of uranium into the U.S. under
Section 232 of the 1962 Trade Expansion Act. The DOC completed its
investigation and, in July 2019, presented its findings to the
President of the United States whom is empowered to use tariffs or
other means to adjust the imports of goods or materials from other
countries if it deems the quantity or circumstances surrounding
those imports to threaten national security. The U.S. President
ultimately concluded that uranium imports do not threaten national
security and no trade actions were implemented under Section 232.
The U.S. Administration, however, ordered a further review of the
nuclear supply chain in the U.S. and commissioned the NFWG. The
results of the NFWG review, and any recommendations therefrom, have
not yet been made public.





The uncertainty
surrounding this Section 232 trade action and the subsequent NFWG
review is believed to have impacted the uranium purchasing
activities of nuclear utilities, especially in the U.S., and
consequently negatively impacted the market price of uranium and
the uranium industry as a whole. Depending on the outcome of the
NWFG’s review, there is the potential for this to have
further negative impacts on the uranium market
globally.





Restrictive trade
agreements, governmental policies and/or trade restrictions are
beyond the control of Denison and may affect the supply of uranium
available for use in markets like the United States and Europe,
which are currently the largest markets for uranium in the world.
Similarly, trade restrictions could impact the ability to supply
uranium to developing markets, such as China and India. If
substantial changes are made to the regulations affecting global
marketing and supply of uranium, the Company’s business,
financial condition and results of operations may be materially
adversely affected.





Volatility and Sensitivity to Market Prices





The value of the
Company’s mineral resources, mineral reserves and estimates
of the viability of future production for its projects is heavily
influenced by long and short term market prices of U3O8. Historically,
these prices have seen significant fluctuations, and have been and
will continue to be affected by numerous factors beyond
Denison’s control. Such factors include, among others: demand
for nuclear power, political and economic conditions in uranium
producing and consuming countries, public and political response to
nuclear incidents, reprocessing of used reactor fuel and the
re-enrichment of depleted uranium tails, sales of excess civilian
and military inventories (including from the dismantling of nuclear
weapons) by governments and industry participants, uranium supplies
from other secondary sources, and production levels and costs of
production from primary uranium suppliers.





2019
Annual Information
Form 112





Uranium prices
failing to reach or sustain projected levels can impact operations
by requiring a reassessment of the economic viability of the
Company’s projects, and such reassessment alone may cause
substantial delays and/or interruptions in project development,
which could have a material adverse effect on the results of
operations and financial condition of Denison.





Public Acceptance of Nuclear Energy and Competition from Other
Energy Sources





Growth of the
uranium and nuclear power industry will depend upon continued and
increased acceptance of nuclear technology as a clean means of
generating electricity. Because of unique political, technological
and environmental factors that affect the nuclear industry,
including the risk of a nuclear incident, the industry is subject
to public opinion risks that could have an adverse impact on the
demand for nuclear power and increase the regulation of the nuclear
power industry. Nuclear energy competes with other sources of
energy, including oil, natural gas, coal and hydro-electricity.
These other energy sources are, to some extent, interchangeable
with nuclear energy, particularly over the longer term. Technical
advancements in, and government subsidies for, renewable and other
alternate forms of energy, such as wind and solar power, could make
these forms of energy more commercially viable and put additional
pressure on the demand for uranium concentrates. Sustained lower
prices of alternate forms of energy may result in lower demand for
uranium concentrates.





Current estimates
project increases in the world’s nuclear power generating
capacities, primarily as a result of a significant number of
nuclear reactors that are under construction, planned, or proposed
in China, India and various other countries around the world.
Market projections for future demand for uranium are based on
various assumptions regarding the rate of construction and approval
of new nuclear power plants, as well as continued public acceptance
of nuclear energy around the world. The rationale for adopting
nuclear energy can be varied, but often includes the clean and
environmentally friendly operation of nuclear power plants, as well
as the affordability and round-the-clock reliability of nuclear
power. A change in public sentiment regarding nuclear energy could
have a material impact on the number of nuclear power plants under
construction, planned or proposed, which could have a material
impact on the market’s and the Company’s expectations
for the future demand for uranium and the future price of
uranium.





Market Price of Shares





Securities of
mining companies have experienced substantial volatility in the
past, often based on factors unrelated to the financial performance
or prospects of the companies involved. These factors include
macroeconomic conditions in North America and globally, and market
perceptions of the attractiveness of particular industries.
As noted above,
global financial conditions continue to be subject to volatility
arising from international geopolitical developments and global
economic phenomenon, as well as general financial market
turbulence, including a significant recent market reaction to the
novel coronavirus (COVID-19), resulting in a significant reduction
in in many major market indices and in Denison’s share
price.





The price of
Denison's securities is also likely to be significantly affected by
short-term changes in commodity prices, other mineral prices,
currency exchange fluctuation, or changes in its financial
condition or results of operations as reflected in its periodic
earnings reports and/or news releases. Other factors unrelated to
the performance of Denison that may have an effect on the price of
the securities of Denison include the following: the extent of
analytical coverage available to investors concerning the business
of Denison; lessening in trading volume and general market interest
in Denison's securities; the size of Denison's public float and its
inclusion in market indices may limit the ability of some
institutions to invest in Denison's securities; and a substantial
decline in the price of the securities of Denison that persists for
a significant period of time could cause Denison's securities to be
delisted from an exchange.





2019
Annual Information
Form 113





If an active
market for the securities of Denison does not continue, the
liquidity of an investor's investment may be limited and the price
of the securities of the Company may decline such that investors
may lose their entire investment in the Company. As a result of any
of these factors, the market price of the securities of Denison at
any given point in time may not accurately reflect the long-term
value of Denison. Securities class-action litigation often has been
brought against companies following periods of volatility in the
market price of their securities. Denison may in the future be the
target of similar litigation. Securities litigation could result in
substantial costs and damages and divert management's attention and
resources.





Dilution from Further Issuances





While active in
exploring for new uranium discoveries in the Athabasca Basin
region, Denison’s present focus is on advancing the Wheeler
River project to a development decision, with the potential to
become the next large scale uranium producer in Canada. Denison
will require additional funds to further such
activities.





Denison may sell
additional equity securities (including through the sale of
securities convertible into Shares) and may issue additional debt
or equity securities to finance its exploration, development and
other operations, acquisitions or other projects. Denison is
authorized to issue an unlimited number of Shares. Denison cannot
predict the size of future sales and issuances of debt or equity
securities or the effect, if any, that future sales and issuances
of debt or equity securities will have on the market price of the
Shares. Sales or issuances of a substantial number of equity
securities, or the perception that such sales could occur, may
adversely affect prevailing market prices for the Shares. With any
additional sale or issuance of equity securities, investors may
suffer dilution of their voting power and it could reduce the value
of their investment.





Reliance on Other Operators





At some of its
properties, Denison is not the operator and therefore is not in
control of all of the activities and operations at the site. As a
result, Denison is and will be, to a certain extent, dependent on
the operators for the nature and timing of activities related to
these properties and may be unable to direct or control such
activities.





As an example,
Orano Canada is the operator and majority owner of the McClean Lake
and Midwest joint ventures in Saskatchewan, Canada. The McClean
Lake mill employs unionized workers who work under collective
agreements. Orano Canada, as the operator, is responsible for most
operational and production decisions and all dealings with
unionized employees. Orano Canada may not be successful in its
attempts to renegotiate the collective agreements, which may impact
mill and mining operations. Similarly, Orano Canada is responsible
for all licensing and dealings with various regulatory authorities.
Orano Canada maintains the regulatory licences in order to operate
the McClean Lake mill, all of which are subject to renewal from
time to time and are required in order for the mill to operate in
compliance with applicable laws and regulations. Any lengthy work
stoppages, or disruption to the operation of the mill or mining
operations as a result of a licensing matter or regulatory
compliance, may have a material adverse impact on the
Company’s future cash flows, earnings, results of operations
and financial condition.





Reliance on Contractors and Experts





In various
aspects of its operations, Denison relies on the services,
expertise and recommendations of its service providers and their
employees and contractors, whom often are engaged at significant
expense to the Company. For example, the decision as to whether a
property contains a commercial mineral deposit and should be
brought into production will depend in large part upon the results
of exploration programs and/or feasibility studies, and the
recommendations of duly qualified third party engineers and/or
geologists.





2019
Annual Information
Form 114





In addition, while Denison
emphasizes the importance of conducting operations in a safe and
sustainable manner, it cannot exert absolute control over the
actions of these third parties when providing services to Denison
or otherwise operating on Denison’s properties. Any material
error, omission, act of negligence or act resulting in
environmental pollution, accidents or spills, industrial and
transportation accidents, work stoppages or other actions could
adversely affect the Company’s operations and financial
condition.





Benefits Not Realized From Transactions





Denison has
completed a number of transactions over the last several years,
including without limitation the acquisition of International
Enexco Ltd., the acquisition of Fission, the acquisition of JNR,
the sale of its mining assets and operations located in the United
States to Energy Fuels Inc., the Mongolia Transaction, the
optioning of the Moore Lake property to Skyharbour Resources Ltd.,
the acquisition of an 80% interest in the Hook-Carter property from
ALX, the acquisition of an interest in the Moon Lake property from
CanAlaska, entering into the APG Transaction and Cameco
Transaction. Despite Denison’s belief that these
transactions, and others which may be completed in the future, will
be in Denison’s best interest and benefit the Company and
Denison’s shareholders, Denison may not realize the
anticipated benefits of such transactions or realize the full value
of the consideration paid or received to complete the transactions.
This could result in significant
accounting impairments or write-downs of the carrying values of
mineral properties or other assets and could adversely
impact the Company and the price of its Shares.





Inability to Expand and Replace Mineral Reserves and
Resources





Denison’s
mineral reserves and resources at its Wheeler River, Waterbury
Lake, McClean Lake and Midwest projects are Denison’s
material future sources of possible uranium production. Unless
other mineral reserves or resources are discovered or acquired,
Denison’s sources of future production for uranium
concentrates will decrease over time if its current mineral
reserves and resources are depleted. There can be no assurance that
Denison’s future exploration, development and acquisition
efforts will be successful in replenishing its mineral reserves and
resources. In addition, while Denison believes that many of its
properties demonstrate development potential, there can be no
assurance that they can or will be successfully developed and put
into production in future years.





Competition for Properties





Significant
competition exists for the limited supply of mineral lands
available for acquisition. Participants in the mining business
include large established companies with long operating histories.
In certain circumstances, the Company may be at a disadvantage in
acquiring new properties as competitors may have greater financial
resources and more technical staff. Accordingly, there can be no
assurance that the Company will be able to compete successfully to
acquire new properties or that any such acquired assets would yield
resources or reserves or result in commercial mining
operations.





Property Title Risk





The Company has
investigated its rights to explore and exploit all of its material
properties and, to the best of its knowledge, those rights are in
good standing. However, no assurance can be given that such rights
will not be revoked, or significantly altered, to its detriment.
There can also be no assurance that the Company’s rights will
not be challenged or impugned by third parties, including the
Canadian federal, provincial and local governments, as well as by
First Nations and Métis.





2019
Annual Information
Form 115





There is also a
risk that Denison's title to, or interest in, its properties may be
subject to defects or challenges. If such defects or challenges
cover a material portion of Denison's property, they could have a
material adverse effect on Denison's results of operations,
financial condition, reported mineral reserves and resources and/or
long-term business prospects.





Ability to Maintain Obligations under Credit Facility and Other
Debt





The 2020 Credit
Facility has a term of one year, and will need to be renewed on or
before January 31, 2021. There is no certainty what terms of any
renewal may be, or any assurance that such renewal will be made
available to Denison.





Denison is
required to satisfy certain financial covenants in order to
maintain its good standing under the Credit Facility. Denison is
also subject to a number of restrictive covenants under the Credit
Facility and the APG Transaction, such as restrictions on
Denison’s ability to incur additional indebtedness and sell,
transfer of otherwise dispose of material assets. Denison may from
time to time enter into other arrangements to borrow money in order
to fund its operations and expansion plans, and such arrangements
may include covenants that have similar obligations or that
restrict its business in some way.





Events may occur
in the future, including events out of Denison's control, which
could cause Denison to fail to satisfy its obligations under the
Credit Facility, APG Transaction or other debt instruments. In such
circumstances, the amounts drawn under Denison's debt agreements
may become due and payable before the agreed maturity date, and
Denison may not have the financial resources to repay such amounts
when due. The Credit Facility and APG Transaction are secured by
DMI's main properties by a pledge of the shares of DMI. If Denison
were to default on its obligations under the Credit Facility, APG
Transaction or other secured debt instruments in the future, the
lender(s) under such debt instruments could enforce their security
and seize significant portions of Denison's assets.





Change of Control Restrictions





The APG
Transaction and certain other of Denison’s agreements contain
provisions that could adversely impact Denison in the case of a
transaction that would result in a change of control of Denison or
certain of its subsidiaries. In the event that consent is required
from our counterparty and our counterparty chooses to withhold its
consent to a merger or acquisition, then such party could seek to
terminate certain agreements with Denison, including certain
agreements forming part of the APG Transaction, or require Denison
to buy the counterparty’s rights back from them, which could
adversely affect Denison’s financial resources and prospects.
If applicable, these restrictive contractual provisions could delay
or discourage a change in control of our company that could
otherwise be beneficial to Denison or its
shareholders.





Decommissioning and Reclamation





As owner of the
Elliot Lake decommissioned sites and part owner of the McClean Lake
mill, McClean Lake mines, the Midwest uranium project and certain
exploration properties, and for so long as the Company remains an
owner thereof, the Company is obligated to eventually reclaim or
participate in the reclamation of such properties. Most, but not
all, of the Company’s reclamation obligations are secured,
and cash and other assets of the Company have been reserved to
secure this obligation. Although the Company’s financial
statements record a liability for the asset retirement obligation,
and the security requirements are periodically reviewed by
applicable regulatory authorities, there can be no assurance or
guarantee that the ultimate cost of such reclamation obligations
will not exceed the estimated liability contained on the
Company’s financial statements.





2019
Annual Information
Form 116





As
Denison’s properties approach or go into decommissioning,
regulatory review of the Company’s decommissioning plans may
result in additional decommissioning requirements, associated costs
and the requirement to provide additional financial assurances. It
is not possible to predict what level of decommissioning and
reclamation (and financial assurances relating thereto) may be
required from Denison in the future by regulatory
authorities.





Technical Innovation and Obsolescence





Requirements for
Denison’s products and services may be affected by
technological changes in nuclear reactors, enrichment and used
uranium fuel reprocessing. These technological changes could reduce
the demand for uranium or reduce the value of Denison’s
environmental services to potential customers. In addition,
Denison’s competitors may adopt technological advancements
that give them an advantage over Denison.





Mining and Insurance





Denison’s
business is capital intensive and subject to a number of risks and
hazards, including environmental pollution, accidents or spills,
industrial and transportation accidents, labour disputes, changes
in the regulatory environment, natural phenomena (such as inclement
weather conditions, earthquakes, pit wall failures and cave-ins)
and encountering unusual or unexpected geological conditions. Many
of the foregoing risks and hazards could result in damage to, or
destruction of, Denison’s mineral properties or processing
facilities in which it has an interest; personal injury or death;
environmental damage, delays in or interruption of or cessation of
exploration, development, production or processing activities; or
costs, monetary losses and potential legal liability and adverse
governmental action. In addition, due to the radioactive nature of
the materials handled in uranium exploration, mining and
processing, as applicable, additional costs and risks are incurred
by Denison and its joint venture partners on a regular and ongoing
basis.





Although Denison
maintains insurance to cover some of these risks and hazards in
amounts it believes to be reasonable, such insurance may not
provide adequate coverage in the event of certain circumstances. No
assurance can be given that such insurance will continue to be
available, that it will be available at economically feasible
premiums, or that it will provide sufficient coverage for losses
related to these or other risks and hazards.





Denison may be
subject to liability or sustain loss for certain risks and hazards
against which it cannot insure or which it may reasonably elect not
to insure because of the cost. This lack of insurance coverage
could result in material economic harm to Denison.





Anti-Bribery and Anti-Corruption Laws





The Company is
subject to anti-bribery and anti-corruption laws, including the
Corruption of Foreign Public
Officials Act (Canada). Failure to comply with these laws
could subject the Company to, among other things, reputational
damage, civil or criminal penalties, other remedial measures and
legal expenses which could adversely affect the Company’s
business, results from operations, and financial condition. It may
not be possible for the Company to ensure compliance with
anti-bribery and anti-corruption laws in every jurisdiction in
which its employees, agents, sub-contractors or joint venture
partners are located or may be located in the future.





2019
Annual Information
Form 117





Climate Change





Due to changes in
local and global climatic conditions, many analysts and scientists
predict an increase in the frequency of extreme weather events such
as floods, droughts, forest and brush fires and extreme storms.
Such events could materially disrupt the Company’s
operations, particularly if they affect the Company’s sites,
impact local infrastructure or threaten the health and safety of
the Company’s employees and contractors. In addition,
reported warming trends could result in later freeze-ups and warmer
lake temperatures, affecting the Company’s winter exploration
programs at certain of its material projects. Any such event could
result in material economic harm to Denison.





The Company is
focused on operating in a manner designed to minimize the
environmental impacts of its activities; however, environmental
impacts from mineral exploration and mining activities are
inevitable. Increased environmental regulation and/or the use of
fiscal policy by regulators in response to concerns over climate
change and other environmental impacts, such as additional taxes
levied on activities deemed harmful to the environment, could have
a material adverse effect on Denison’s financial condition or
results of operations.





Information Systems and Cyber Security





The Company's
operations depend upon the availability, capacity, reliability and
security of its information technology (IT) infrastructure, and its
ability to expand and update this infrastructure as required, to
conduct daily operations. Denison relies on various IT systems in
all areas of its operations, including financial reporting,
contract management, exploration and development data analysis,
human resource management, regulatory compliance and communications
with employees and third parties.





These IT systems
could be subject to network disruptions caused by a variety of
sources, including computer viruses, security breaches and
cyber-attacks, as well as network and/or hardware disruptions
resulting from incidents such as unexpected interruptions or
failures, natural disasters, fire, power loss, vandalism and theft.
The Company's operations also depend on the timely maintenance,
upgrade and replacement of networks, equipment, IT systems and
software, as well as pre-emptive expenses to mitigate the risks of
failures.





The ability of
the IT function to support the Company’s business in the
event of any such occurrence and the ability to recover key systems
from unexpected interruptions cannot be fully tested. There is a
risk that, if such an event actually occurs, the Company’s
continuity plan may not be adequate to immediately address all
repercussions of the disaster. In the event of a disaster affecting
a data centre or key office location, key systems may be
unavailable for a number of days, leading to inability to perform
some business processes in a timely manner. As a result, the
failure of Denison’s IT systems or a component thereof could,
depending on the nature of any such failure, adversely impact the
Company's reputation and results of operations.





Although to date
the Company has not experienced any material losses relating to
cyber-attacks or other information security breaches, there can be
no assurance that the Company will not incur such losses in the
future. Unauthorized access to Denison’s IT systems by
employees or third parties could lead to corruption or exposure of
confidential, fiduciary or proprietary information, interruption to
communications or operations or disruption to the Company’s
business activities or its competitive position. Further,
disruption of critical IT services, or breaches of information
security, could have a negative effect on the Company’s
operational performance and its reputation. The Company's risk and
exposure to these matters cannot be fully mitigated because of,
among other things, the evolving nature of these threats. As a
result, cyber security and the continued development and
enhancement of controls, processes and practices designed to
protect systems, computers, software, data and networks from
attack, damage or unauthorized access remain a
priority.





2019
Annual Information
Form 118





The Company
applies technical and process controls in line with
industry-accepted standards to protect information, assets and
systems; however these controls may not adequately prevent
cyber-security breaches. There is no assurance that the Company
will not suffer losses associated with cyber-security breaches in
the future, and may be required to expend significant additional
resources to investigate, mitigate and remediate any potential
vulnerabilities. As cyber threats continue to evolve, the Company
may be required to expend additional resources to continue to
modify or enhance protective measures or to investigate and
remediate any security vulnerabilities.





Dependence on Key Personnel and Qualified and Experienced
Employees





Denison’s
success depends on the efforts and abilities of certain senior
officers and key employees. Certain of Denison’s employees
have significant experience in the uranium industry, and the number
of individuals with significant experience in this industry is
small. While Denison does not foresee any reason why such officers
and key employees will not remain with Denison, if for any reason
they do not, Denison could be adversely affected. Denison has not
purchased key man life insurance for any of these individuals.
Denison’s success also depends on the availability of
qualified and experienced employees to work in Denison’s
operations and Denison’s ability to attract and retain such
employees.





Conflicts of Interest





Some of the
directors and officers of Denison are also directors of other
companies that are similarly engaged in the business of acquiring,
exploring and developing natural resource properties. Such
associations may give rise to conflicts of interest from time to
time. In particular, one of the consequences would be that
corporate opportunities presented to a director or officer of
Denison may be offered to another company or companies with which
the director or officer is associated, and may not be presented or
made available to Denison. The directors and officers of Denison
are required by law to act honestly and in good faith with a view
to the best interests of Denison, to disclose any interest which
they may have in any project or opportunity of Denison, and, where
applicable for directors, to abstain from voting on such matter.
Conflicts of interest that arise will be subject to and governed by
the procedures prescribed in the Company’s Code of Ethics and
by the OBCA.





Disclosure and Internal Controls





Internal controls
over financial reporting are procedures designed to provide
reasonable assurance that transactions are properly authorized,
assets are safeguarded against unauthorized or improper use, and
transactions are properly recorded and reported. Disclosure
controls and procedures are designed to ensure that information
required to be disclosed by a company in reports filed with
securities regulatory agencies is recorded, processed, summarized
and reported on a timely basis and is accumulated and communicated
to the company’s management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow
timely decisions regarding required disclosure. A control system,
no matter how well designed and operated, can provide only
reasonable, not absolute, assurance with respect to the reliability
of reporting, including financial reporting and financial statement
preparation.





2019
Annual Information
Form 119





Potential Influence of KEPCO and KHNP





Effective
December 2016, KEPCO indirectly transferred the majority of its
interest in Denison to KHNP Canada. Denison and KHNP Canada
subsequently entered into the KHNP SRA (on substantially similar
terms as the original strategic relationship agreement between
Denison and KEPCO), pursuant to which KHNP Canada is contractually
entitled to Board representation. Provided KHNP Canada holds over
5% of the Shares, it is entitled to nominate one director for
election to the Board at any shareholder meeting.





KHNP
Canada’s shareholding level gives it a large vote on
decisions to be made by shareholders of Denison, and its right to
nominate a director may give KHNP Canada influence on decisions
made by Denison's Board. Although KHNP Canada’s director
nominee will be subject to duties under the OBCA to act in the best
interests of Denison as a whole, such director nominee is likely to
be an employee of KHNP and he or she may give special attention to
KHNP’s or KEPCO’s interests as indirect Shareholders.
The interests of KHNP and KEPCO, as indirect Shareholders, may not
always be consistent with the interests of other
Shareholders.





The KHNP SRA also
includes provisions granting KHNP Canada a right of first offer for
certain asset sales and the right to be approached to participate
in certain potential acquisitions. The right of first offer and
participation right of KHNP Canada may negatively affect Denison's
ability or willingness to entertain certain business opportunities,
or the attractiveness of Denison as a potential party for certain
business transactions. KEPCO’s large indirect shareholding
block may also make Denison less attractive to third parties
considering an acquisition of Denison if those third parties are
not able to negotiate terms with KEPCO or KHNP Canada to support
such an acquisition.





DENISON’S SECURITIES





The Shares





The Company is
entitled to issue an unlimited number of Shares. As of December 31,
2019 and the date hereof, Denison had an aggregate of 597,192,153
Shares issued and outstanding.





Shareholders are
entitled to receive notice of, and to one vote per share at, every
meeting of Shareholders and to share equally in the assets of
Denison remaining upon the liquidation, dissolution or winding up
of Denison after the creditors of Denison have been
satisfied.





Price Range and Trading Volume of Shares





The Shares trade
on the TSX under the symbol “DML” and on the NYSE
American under the symbol “DNN”. The following table
sets forth, for the periods indicated, the reported intra-day high
and low sales prices and aggregate volume of trading of the Shares
on the TSX and NYSE American during the year ended December 31,
2019.











2019 Annual Information
Form 120





Month
High
(CAD$)
TSX
Low
(CAD$)
TSX
Volume
TSX
High
(US$)
NYSE American
Low
(US$)
NYSE American
Volume
NYSE AmericanJanuary
0.71
0.63
8.30
M
0.55
0.46
9.84
MFebruary
0.74
0.65
8.07
M
0.55
0.50
8.24
MMarch
0.75
0.66
7.75
M
0.56
0.49
10.29
MApril
0.78
0.68
8.92
M
0.59
0.51
12.27
MMay
0.73
0.66
4.56
M
0.55
0.49
8.19
MJune
0.72
0.67
3.93
M
0.58
0.46
5.07
MJuly
0.72
0.57
10.80
M
0.55
0.43
12.80
MAugust
0.64
0.52
6.60
M
0.49
0.38
10.58
MSeptember
0.68
0.58
4.65
M
0.51
0.44
8.71
MOctober
0.65
0.59
3.74
M
0.49
0.45
4.65
MNovember
0.64
0.55
3.82
M
0.48
0.42
4.86
MDecember
0.57
0.51
7.33
M
0.43
0.38
10.90
M


Source: TMX
Money





Dividends





Shareholders are
entitled to receive dividends if, as and when declared by the Board
of Directors. The Company is restricted from paying dividends under
its Credit Facility, and the directors are focused on dedicating
cash flow to reinvestment in the business of the Company.
Accordingly, no dividends have been declared to date.





Prior Sales





During the year
ended December 31, 2019, the Company issued the following
securities pursuant to the Company’s Option Plan and Share
Unit Plan, as applicable:





Stock Options:





Date of Issuance
Options Issued
(#)
Exercise Prices
($)March
11, 2019
2,691,000
$0.68August
12, 2019
27,000
$0.58November
11, 2019
287,000
$0.61TOTAL
3,005,000








Share Units:





Date of Issuance
Restricted
Share Units Issued
(#)
Performance
Share Units Issued
(#)March
18, 2019
1,914,000
-April
2, 2019
-
240,000August
12, 2019
13,000
-TOTAL
1,927,000
240,000








2019 Annual Information
Form 121





DENISON’S MANAGEMENT





Denison’s Directors





The following
table sets out the names and the provinces and countries of
residence of each of the directors of Denison as of the date
hereof, their respective positions and offices held with Denison
and their principal occupations during the five preceding years.
The following table also identifies the members of each committee
of the Board of Directors.





Name and
Province and
Country of
Residence
Principal
Occupation and Employment for
Past Five
Years
Director Since(1)David D. Cates
Ontario,
Canada
President and
Chief Executive Officer of the Company since 2015; prior: serving
in various roles with the Company since 2008, including Vice
President Finance, Tax & Chief Financial Officer as well as
Director, Taxation.
2018W. Robert Dengler(5,8,
11)
Ontario,
Canada
Corporate
Director since 2006; prior: Vice-Chairman and Director of Dynatec
Corporation; President and Chief
Executive Officer of Dynatec Corporation.
2006Brian D. Edgar(3,4)
British Columbia,
Canada
Chairman
of Silver Bull Resources, Inc., a mineral exploration company
listed on both OTCMKTS and the TSX, since 2012, and President and
Chief Executive Officer of Dome Ventures Corporation, a subsidiary
of Silver Bull Resources Inc., since 2005.
2005Ron F.
Hochstein(7)(9)(10)
British Columbia, Canada
President
and Chief Executive Officer of Lundin Gold Inc. since 2014; prior:
President and Chief Executive Officer of the Company from
2009 to 2015.
2000Jun Gon
Kim
Gyeongsangbuk-do,
Korea
General Manager
of the Nuclear Fuel Supply division of KHNP; prior: has held
various positions at KHNP.
2020Jack O.A. Lundin(9)(11)
British
Columbia, Canada
Chief
Executive Officer of Bluestone Resources Inc.; prior: Senior Mine
Project Engineer of Lundin Gold Inc. since 2017 and analyst in the
commercial department of Lundin Norway AS.
2018William A. Rand(7)
British Columbia,
Canada
President
and director of Rand Investments Ltd., a private investment company
based in British Columbia.
1997Catherine J. G. Stefan(2,5)
Ontario,
Canada
Chair of the
Board of the Company; prior: President, Stefan & Associates, a
consulting firm based in Ontario, from 2009-2016; prior: Managing Partner, Tivona Capital
Corporation, a private investment firm, from
1999-2008.
2006Patricia M. Volker(3,6)
Ontario,
Canada
Corporate
Director since 2016; prior: over 17 years of service in various
roles at the Chartered Professional Accountants of Ontario
including Director of Standards Enforcement and Director, Public
Accounting.
2018


Notes:


(1)
 The term of office of each of
the directors of Denison will expire at the Annual Meeting of the
Shareholders currently scheduled to be held on May 7,
2020.





2019 Annual Information
Form 122


(3)
 Chair, Audit
Committee


(4)
 Member, Audit
Committee


(5)
 Chair, Corporate Governance
and Nominating Committee


(6)
 Member, Corporate Governance
and Nominating Committee


(7)
 Chair, Compensation
Committee


(8)
 Member, Compensation
Committee


(9)
 Chair, Environment Health and
Safety Committee


(10)
 Member, Environment, Health
and Safety Committee


(11)
 Chair, Technical
Committee


(12)
 Member, Technical
Committee








Denison’s Executive Officers





The following
table sets out the names and the provinces or states and countries
of residence of each of the executive officers of Denison as of the
date hereof, their respective positions and offices held with
Denison and their principal occupations during the five preceding
years.





Name and Province and
Country of Residence
Position with Denison and Employment for Past Five
YearsDavid Cates
Ontario,
Canada
President and
Chief Executive Officer since 2015; prior: Vice President Finance,
Tax and Chief Financial Officer since 2013.Gabriel McDonald
Ontario,
Canada
Executive Vice
President and Chief Financial Officer, with Denison since 2015;
prior: Director of Financial Reporting at IAMGOLD Corporation from
2015, Senior Manager at PricewaterhouseCoopers LLP from
2008.David Bronkhorst
Saskatchewan,
Canada
Vice President
Operations since 2019; prior: Vice President, Mining, Projects and
Technology at Cameco Corporation until retirement in
2016.Tim Gabruch
Saskatchewan,
Canada
Vice President
Commercial since 2018; prior: various marketing and corporate
development roles for Cameco Corporation.Michael Schoonderwoerd
Ontario,
Canada
Vice President,
Controller since 2013.Dale Verran
Saskatchewan,
Canada
Vice President,
Exploration since January 2016; prior: Technical Director,
Exploration since 2013.Amanda Willett
British Columbia,
Canada
Corporate Counsel
and Corporate Secretary since June 2016; prior: Senior Associate at
Blakes in Vancouver since 2011.





The directors and
executive officers of Denison, as a group, beneficially own, or
control or direct, directly or indirectly, 3,177,115 Shares, or
less than one percent of the Shares as of the date of this AIF. No
single director or officer beneficially owns or controls or
directs, directly or indirectly, one percent or more of the Shares
as of the date of this AIF. The information as to Shares
beneficially owned or directed by the directors and officers, not
being within the knowledge of the Company, has been furnished by
each such individual.





Cease Trade Orders, Bankruptcies, Penalties or
Sanctions





Other than as
referred to below, no director or officer of the
Company:





(a) is, as
at the date of this AIF, or has, within the previous ten year
period, been a director or executive officer of a company
(including Denison) that:





2019
Annual Information
Form
123





(i) was
subject to a cease trade or similar order or an order that denied
the relevant company access to any exemption under securities
legislation that was in effect for a period of more than 30
consecutive days that was issued (A) while that person was acting
in such capacity or (B) after that person ceased to act in such
capacity but which resulted from an event that accrued while that
person was acting in that capacity; or





(ii) became
bankrupt, made a proposal under any legislation relating to
bankruptcy or insolvency or was subject to or instituted any
proceedings, arrangement or compromise with creditors or had a
receiver, receiver manager or trustee appointed to hold its assets
(A) while that person was acting in such capacity or (B) within a
year of that person ceasing to act in such capacity,
or





(b) has,
within the previous ten year period, become bankrupt, made a
proposal under any legislation relating to bankruptcy or
insolvency, or become subject to or instituted any proceedings,
arrangement or compromise with creditors, or had a receiver,
receiver manager or trustee appointed to hold such person’s
assets; or





(c) is, or
has been, subject to any penalties or sanctions (i) imposed by a
court relating to securities legislation or by a securities
regulatory authority or has entered into a settlement agreement
with a securities regulatory authority, or (ii) imposed by a court
or regulatory body that would likely be considered important to a
reasonable security holder in making an investment
decision.





Ron Hochstein was
a director of Sirocco Mining Inc. (“Sirocco”). Pursuant to a plan of
arrangement completed on January 31, 2014, Canadian Lithium Corp.
amalgamated with Sirocco to form RB Energy Inc.
(“RBI”). In
October 2014, RBI commenced proceedings under the Companies'
Creditors Arrangement Act (the “CCAA”). CCAA proceedings continued
in 2015 and a receiver was appointed in May 2015. The TSX de-listed
RBI’s common shares in November 24, 2014 for failure to meet
the continued listing requirements of the TSX. Ron Hochstein was a
director of RBI until October 3, 2014.





Conflicts of Interest





Some of
Denison’s directors and officers are also directors and/or
officers of other natural resource companies and, consequently,
there exists the possibility for such directors and officers to be
in a position of conflict relating to any future transactions or
relationships between the Company and such other companies or
common third parties. However, the Company is unaware of any such
pending or existing conflicts between these parties. Any decision
made by any of such directors and officers involving the Company
are made in accordance with their duties and obligations to deal
fairly and in good faith with the Company and such other companies
and their obligations to act in the best interests of
Denison’s shareholders. In addition, each of the directors of
the Company discloses and refrains from voting on any matter in
which such director may have a conflict of interest.





None of the
present directors or senior officers of the Company, and no
associate or affiliate of any of them, has any material interest in
any transaction of the Company or in any proposed transaction which
has materially affected or will materially affect the
Company.


However, investor
relations, administrative service fees and other pass-through
expenses of $217,000 were incurred during the financial year ended
December 31, 2019 with Namdo Management Services Ltd., a company
which shares a common director with Denison. These services were
incurred in the normal course of operating a public
company.





2019
Annual Information
Form
124





In addition, one
of Denison’s directors, Mr. Kim, is employed by KHNP, a
subsidiary of KEPCO and the parent corporation of KHNP Canada.
Through its corporate holdings, KEPCO is a significant shareholder
of the Company, with approximately 9.76% of the outstanding Shares
as of the date hereof (the majority of which are held directly by
KHNP Canada). The Company and KHNP Canada are parties to the KHNP
SRA, which may present a conflict of interest for Mr. Kim. The KHNP
SRA provides KHNP Canada with a right of first offer for certain
asset sales and the right to be approached to participate in
certain potential acquisitions being considered by Denison. While
the Company is not aware of a pending or existing conflict of
interest with Mr. Kim as of the date hereof, the interests of
KEPCO, KHNP and KHNP Canada as shareholders of Denison and their
business relationships with Denison may place Mr. Kim in a position
of conflict as a director of the Company in the
future.





Interest of Management and Others in Material
Transactions





Other than as
disclosed in this AIF, no director or executive officer of Denison,
no person or company that beneficially owns, controls or directs,
indirectly or directly, more than 10% of the Shares, and no
associate or affiliate of any of them, has or has had, within the
three most recently completed financial years or during the current
financial year, any material interest, direct or indirect, in any
transaction which materially affects or is reasonably expected to
materially affect Denison.





Standing Committees of the Board





The Audit Committee





The audit
committee of the Company’s Board of Directors is principally
responsible for:





● recommending to
the Company’s Board of Directors the external auditor to be
nominated for election by the Company’s shareholders at each
annual general meeting and negotiating the compensation of such
external auditor;


● overseeing the
work of the external auditor;


● reviewing the
Company’s annual and interim financial statements, its
MD&A in respect thereof and press releases regarding earnings
before they are reviewed and approved by the Board of Directors and
publicly disseminated by the Company; and


● reviewing the
Company’s financial reporting procedures for the
Company’s public disclosure of financial information
extracted or derived from its financial statements.





The
Company’s Board of Directors has adopted an audit committee
mandate/terms of reference (the “Mandate”) which sets out the Audit
Committee’s mandate, organization, powers and
responsibilities. The complete Mandate is attached as Schedule A to
this AIF.





Below are the
details of each Audit Committee member, including his or her name,
whether she or he is independent and financially literate as such
terms are defined under National Instrument 52-110 - Audit Committees of the Canadian
Securities Administrators(“NI 52-110”) and his or her
education and experience as it relates to the performance of his or
her duties as an Audit Committee member. All three audit committee
members have “financial expertise” within the meaning
of the U.S. Sarbanes-Oxley
Act of 2002, as amended, and are financially literate under
NI 52-110. The qualifications and independence of each member is
discussed.





2019
Annual Information
Form 125








Director
Independent(1)
Financially Literate(2)
Education & Experience Relevant toPerformance of Audit
Committee DutiesCatherine J.G.
Stefan

Chair of the
Audit Committee
Yes
Yes
●Chartered Professional
Accountant, Chartered Accountant
●     B. Comm
●Held position of Chief
Operating Officer, O&Y Properties Inc., President of Stefan
& Associates and Executive Vice-President of Bramalea Group,
Chair, Tax Committee of the Canadian Institute of Public Real
Estate Companies (CIPREC).Brian D.
Edgar
Yes
Yes
●Law degree, with extensive
corporate finance experience
●Held positions of Chairman
(since 2011) and President and Chief Executive Officer (2005 to
2011) of a public company.
●Has served on audit
committees of a number of public companiesPatricia M.
Volker
Yes
Yes
●Chartered Professional
Accountant, Chartered Accountant,
Certified
Management Accountant
●B.Sc.
●Served for over 17 years in
various positions at the Chartered Professional Accountants of
Ontario during her 30+ year career in the accounting
profession.
●Serves on private and public
company audit and/or finance committees


Notes:


(1)
 Independent within the
meaning of NI 52-110.


(2)
 To be considered financially
literate, a member of the Committee must have the ability to read
and understand a set of financial statements that present a breadth
and level of complexity of accounting issues that are generally
comparable to the breadth and complexity of the issues that can
reasonably be expected to be raised by the Company’s
financial statements.





Since the
commencement of the Company’s most recently completed
financial year, there has not been a recommendation of the Audit
Committee to nominate or compensate an internal auditor which was
not adopted by the Company’s Board of Directors.





The Audit
Committee has adopted specific policies and procedures for the
engagement of non-audit services as described in Section D of the
Mandate.





The following
table discloses the fees billed to the Company by its external
auditor, PricewaterhouseCoopers LLP (“PwC”), during the last two fiscal
years.





Financial
Year

Audit-RelatedEnding
Audit Fees(1)
Fees (2)
Tax Fees (3)
All Other Fees(4)December 31,
2019
$180,775
$115,254
Nil
NilDecember 31,
2018
$171,434
$123,994
Nil
Nil





2019 Annual Information
Form 126





Notes:


(1)
 The aggregate fees billed for
audit services of the Company’s consolidated financial
statements.


(2)
 The aggregate fees billed for
assurance and related services that are reasonably related to the
performance of the audit or review of the Company’s financial
statements and are not disclosed in the Audit Fees column. Fees
relate to reviews of interim consolidated financial statements and
specified audit procedures not included as part of the audit of the
consolidated financial statements.


(3)
 The aggregate fees billed for
tax compliance, tax advice, and tax planning services, such as
transfer pricing and tax return preparation.


(4)
 The aggregate fees billed for
professional services other than those listed in the other
columns.





Other Board Committees





The Board currently has three other standing
committees in addition to the Audit Committee, namely the Corporate
Governance and Nominating Committee, the Compensation Committee and
the Environment, Health and Safety Committee. Each standing committee of the Board operates
according to its mandate, which is approved by the Board and sets
out the committee’s duties and responsibilities. The Board
also has an ad hoc Technical Committee. A discussion of each
committee and its composition can be found in the most recent
management information circular prepared in connection with the
Company’s Shareholder meeting, and copies of the standing
committee mandates are available at www.denisonmines.com.





Corporate
Governance





As a Canadian reporting issuer with its Shares
listed on the TSX, Denison has in place a system of corporate
governance practices which is responsive to applicable Canadian
requirements, including National Policy 58-201 -
Corporate
Governance Guidelines of the
Canadian Securities Administrators (the “Guidelines”). Denison's corporate governance practices
meet or exceed the Guidelines and all other applicable Canadian
requirements. Reference is made to the Corporate Governance
Practices section of the Circular, which contains a description of
the Company’s system of corporate governance practices with
reference to the Guidelines.





Denison
is classified as a foreign private issuer under U.S. securities law
and its Shares are listed on NYSE American. Pursuant to the rules
of the NYSE American, a foreign private issuer is permitted to
follow home country practice except with respect to certain rules,
with which Denison complies.





LEGAL AND REGULATORY PROCEEDINGS





Except as
described below, the Company was not a party to, and none of the
Company’s property was the subject of, any material legal
proceedings in 2019, and the Company knows of no such material
legal proceedings that are contemplated. However, from time to
time, the Company may become party to litigation incidental to its
business or other litigation matters deemed by the Company to not
be material and/or not involve a claim for damages in excess of ten
per cent of the current assets of the Company.





Uranium
Industry a.s. Arbitration





Pursuant to the
terms of the Amended and Restated Share Purchase Agreement between
Denison and UI dated November 25, 2015 (the “GSJV Purchase Agreement”) with
respect to the Mongolia Transaction, the Company had sold its
interest in the Gurvan Saihan Joint Venture (the
“GSJV”)
effective December 1, 2015 (the “Mongolia Transaction”). In
connection with the closing the Company received US$1,250,000 and
retained rights to receive additional proceeds from contingent
payments of up to US$12,000,000, for total consideration of up to
US$13,250,000. The contingent payments are payable as follows: (1)
US$5,000,000 within 60 days of the issuance of a mining licence for
an area covered by any of the four principal exploration licences
held by the GSJV, being the Hairhan, Haraat, Gurvan Saihan and
Ulzit projects (the "First
Project"); (2) US$5,000,000 within 60 days of the issuance
of a mining licence for an area covered by any of the other
exploration licences held by the GSJV (the "Second Project"); (3) US$1,000,000
within 365 days following the production of an aggregate of 1,000
pounds U3O8 from the
operation of the First Project; and (4) US$1,000,000 within 365
days following the production of an aggregate of 1,000 pounds
U3O8 from the
operation of the Second Project.





2019 Annual Information
Form 127





The issuance by
the Mongolian government of mining licence certificates for the
Hairhan, Haraat, Gurvan Saihan and Ulzit projects in 2016 triggered
an obligation for UI to make an aggregate of US$10,000,000 of
contingent payments to Denison by November 16, 2016.





Pursuant to the
Extension Agreement subsequently entered into between UI and the
Company, the payment due date for the contingent payments was
extended from November 16, 2016 to July 16, 2017. As consideration
for the extension, UI agreed to pay interest on the contingent
payments at a rate of 5% per year, payable monthly up to July 16,
2017 and agreed to pay a US$100,000 instalment amount towards the
balance of contingent payments. The first payment under the
Extension Agreement was due on or before January 31, 2017. The
required payments were not made and UI is in breach of the GSJV
Purchase Agreement and the Extension Agreement.





On February 24,
2017, the Company served notice to UI that UI was in default of its
obligations under the GSJV Agreement and the Extension Agreement
and that the contingent payments and all interest payable thereon
are immediately due and payable. On December 12, 2017, the Company
filed a Request for Arbitration under the Arbitration Rules of the
London Court of International Arbitration in conjunction with the
default of UI’s obligations under the GSJV and Extension
agreements. Hearings in front of the three-person arbitration panel
were held in December 2019, and all anticipated formal submissions
to the panel have been made by each party. The arbitration
panel’s findings are expected to be issued in
2020.








Other
Arbitration


Denison
commenced arbitration with Orano Canada and OURD in October 2019,
with Denison’s initial written submission made on March 9,
2020. The arbitration relates to certain payments made under the
joint venture agreement for the MLJV. Denison claims that these
payments were required in breach of OURD and Orano’s
contractual and other obligations. Denison seeks approximately $6.5
million with respect to these payments, an unquantified amount for
further damages and related contractual relief. The arbitral
tribunal has set hearing dates for July 2020.





MATERIAL CONTRACTS





Reference is made
to the material contracts which have been filed by Denison with the
Canadian securities regulatory authorities on the SEDAR website at
www.sedar.com.





Below are the
particulars of each contract, other than those entered into in the
ordinary course of business, that is material to Denison and that
was entered into between January 1, 2019 and the date hereof or was
entered into before that date but is still in effect:





1.
 The following agreements
executed in connection with the APG Transaction:





a.
 The loan agreement between
DMI and SPV dated January 31, 2017 with respect to the DMI
Loan;





b.
 The loan agreement between
SPV and APG dated January 31, 2017 with respect to the SPV
Loan;





c.
 The performance guarantee by
Denison as guarantor in favour of the SPV as beneficiary and APG as
permitted assignee, pursuant to which Denison has agreed to
guarantee the performance of DMI’s obligations to SPV under
the SPV Loan, which guarantee has been assigned by SPV in favour of
APG;





2019 Annual
Information Form 128





d.
 The streaming agreement
between the DMI and Centaurus dated January 31, 2017 with respect
to the Stream Arrangement; and





e.
 The performance guarantee by
Denison as guarantor in favour of Centaurus as beneficiary,
pursuant to which Denison has agreed to guarantee the performance
of DMI’s obligations to Centaurus under the Stream
Arrangement.




2.
 The Reclamation Funding
Agreement made as of the 21st day of December
1995 among Denison Mines Limited (“DML”), Her Majesty the Queen in
Right of Canada (the “Government of Canada”) and Her
Majesty the Queen in Right of the Province of Ontario (the
“Government of
Ontario”) as amended by the Amending Agreement made as
of the 11th day of April 1997
among DML (now DMI), the Government of Canada and the Government of
Ontario and as further amended by the Amending Agreement made as of
the 25th
day of February 1999 among DML, the Government of Canada and the
Government of Ontario and further amended by an Assignment and
Novation Agreement made as of the 29th day of December,
2003 among Denison Energy, DMI, the Government of Canada and the
Government of Ontario.





According to the
Reclamation Funding Agreement, the Company is required to maintain
funds in an Environmental Trust sufficient for the succeeding six
years of the estimated reclamation and on-going care and monitoring
expenditures for the Company’s closed Elliot Lake mining
facility.





3.
 The KHNP SRA dated September
19, 2017 between the Company and KHNP Canada.





The KHNP SRA
provides for a long-term collaborative business relationship
between the parties, replacing the strategic relationship agreement
made as of June 15, 2009 among the Company, KEPCO and KEPCO Canada
Uranium Investment Limited Partnership. Under the KHNP SRA, KHNP
Canada is entitled to the nomination of one Board representative,
provided that KHNP Canada’s shareholding percentage stays
above 5%.





The KHNP SRA also
provides that if Denison intends to sell an interest in certain of
its substantial assets, it will first notify KHNP Canada of each
such proposed sale and provide KHNP Canada with a 30-day right of
first offer to allow KHNP Canada to purchase the interest in the
asset that Denison proposes to sell. The KHNP SRA provides that
Denison will allow KHNP Canada to participate in potential
purchases of certain assets, including a mill facility, a producing
mine or a mineral resource for which a production feasibility study
has been completed, which Denison plans to pursue with a
co-investor. KHNP Canada’s ability to purchase will not be
available where Denison and KHNP Canada cannot agree on terms
within a reasonable time or where their involvement would adversely
affect Denison's ability to pursue an investment
opportunity.





2019 Annual
Information Form 129





The right of
first offer and co-investment rights are subject to pre-existing
contractual commitments and do not apply to certain pre-existing
transactions. KHNP Canada is also entitled to subscribe for
additional Shares in order to maintain or increase its shareholding
percentage in Denison to thresholds which are relevant to its
rights under the KHNP SRA, in circumstances where Denison completes
a public offering or broadly distributed private placement to raise
proceeds of greater than $10 million.





Denison is
entitled to terminate the KHNP SRA if KHNP Canada’s
shareholding percentage in Denison drops below 5% and stays below
5% for 60 days following delivery of a notice to that effect by
Denison to KHNP Canada or if Denison completes an Extraordinary
Transaction, as defined in the KHNP SRA.





4.
 The Credit Facility dated
January 30, 2015, and all subsequent amendments including the Sixth
Amending Agreement to the Fourth Amended and Restated Credit
Facility dated January 28, 2020.





NAMES AND INTERESTS OF EXPERTS





The
Company’s Independent Registered Public Accounting Firm is
PricewaterhouseCoopers LLP, Chartered Professional Accountants,
Licensed Public Accountants, who have issued an independent
auditor’s report dated March 5, 2020 in respect of
Denison’s consolidated financial statements as at
December 31, 2019 and 2018 for the years ended 2019 and 2018
and the effectiveness of the Company’s internal control over
financial reporting as at December 31, 2019. PwC has advised that
it is independent with respect to the Company within the meaning of
the Rules of Professional Conduct of the Chartered Professional Accountants of
Ontario and Public Company Accounting Oversight Board Rule
3520 Auditor Independence.





Dale Verran, MSc,
Pr.Sci.Nat., Denison’s Vice President Exploration, who is a
"Qualified Person" within the meaning of this term in NI 43-101,
has prepared sections of this AIF that are of a scientific or
technical nature pertaining to the Company’s mineral projects
and has verified the data disclosed therein. To the knowledge of
Denison, Dale Verran is the registered or beneficial owner,
directly or indirectly, of less than one percent of the outstanding
Shares.





David Bronkhorst,
P.Eng., Denison’s Vice President Operations, who is a
"Qualified Person" within the meaning of this term in NI 43-101,
has prepared sections of this AIF that are of a scientific or
technical nature pertaining to the Company’s mineral projects
and has verified the data disclosed therein. To the knowledge of
Denison, David Bronkhorst is the registered or beneficial owner,
directly or indirectly, of less than one percent of the outstanding
Shares.





The principal
author of the Wheeler PFS Report dated October 30, 2018 was Mark
Liskowich, P.Geo. of SRK, who is independent in accordance with the
requirements of NI 43-101.





The Waterbury
Report dated December 21, 2018 was authored by Serdar Donmez,
P.Geo.,E.I.T., Dale Verran, Pr.Sci.Nat., P.Geo., and Paul Burry,
P.Geo. of Denison, Oy Leuangthong, P.Eng, and Cliff Revering,
P.Eng, of SRK, Allan Armitage, P.Geo, SGS Geostat and Alan Sexton,
P.Geo, GeoVector Management. Each of Messrs. Leuangthong, Revering,
Armitaage and Sexton, and their respective firms, are independent
in accordance with the requirements of NI 43-101.





RPA, which was
retained to independently review and audit the mineral reserves and
mineral resources in accordance with the requirements of NI 43-101,
prepared the following technical reports: (a) McClean Technical
Report dated November 21, 2005 as amended on February 16, 2006 by
Richard E. Routledge, M.Sc., P.Geo. and James W. Hendry, P.Eng.;
(b) McClean North Technical Report dated January 31, 2007 by
Richard E. Routledge, M.Sc., P.Geo.; and (c) Sue D Report dated
March 31, 2006 by Richard E Routledge, M.Sc., P.Geo. and James W.
Hendry, P.Eng.





2019 Annual
Information Form 130





The Midwest
Technical Report dated March 26, 2018 was authored by Dale Verran,
MSc, Pr.Sci.Nat. and Chad Sorba, P.Geo, of the Company and G. David
Keller, PGeo, formerly of SRK, and Oy Leuangthong, PEng, of SRK.
Each of Messrs. Keller and Leuangthong and SRK are independent in
accordance with the requirements of NI 43-101.





To the knowledge
of Denison as of the date hereof, each of RPA, GeoVector, SGS
Geostat, and SRK and each of their respective partners, employees
and consultants who participated in the preparation of the
aforementioned reports, or who were in a position to influence the
outcome of such reports, are the registered or beneficial owner,
directly or indirectly, of less than one percent of the outstanding
Shares.





ADDITIONAL INFORMATION





Additional
information regarding the Company is available on the SEDAR website
at www.sedar.com.
Further information concerning the Company, including directors'
and officers' remuneration and indebtedness, principal holders of
the Company's securities, options to purchase securities and
interests of insiders in material transactions, where applicable,
is contained in the management information circular for the
Company’s most recent meeting of shareholders. Additional
financial information is provided in the Company's audited
consolidated financial statements and MD&A for the financial
year ended December 31, 2019.





A copy of this
AIF, as well as the Circular and such other information and
documentation that the Company makes available via SEDAR, can be
found at www.sedar.com. In addition,
certain of this information is distributed to shareholders in
connection with Denison’s Annual General Meeting of
Shareholders. The Company will provide any of the foregoing
documents subject to its rights to require people who are not
security holders of the Company to pay a reasonable charge. Copies
of these documents may be obtained by writing to:





Denison Mines
Corp.


1100 – 40
University Avenue


Toronto, Ontario, M5J
1T1





Telephone: (416)
979-1991


Facsimile: (416)
979-5893


Email:
info@denisonmines.com



































2019 Annual Information
Form 131


Schedule A











Audit Committee Mandate and Charter





A.
 Composition
of the Committee





(1) The
Board shall appoint annually from among its members at the first
meeting of the Board following the annual meeting of the
shareholders a committee to be known as the Audit Committee (the
“Committee”) to be composed of three (3) directors or
such other number not less than three (3) as the Board may from
time to time determine.


(2) Any
member of the Committee may be removed or replaced at any time by
the Board. Any member of the Committee ceasing to be a director or
ceasing to qualify under A(3) below shall cease to be a member of
the Committee. Subject to the foregoing, each member of the
Committee shall hold office as such until the next annual
appointment of members to the Committee after his or her election.
Any vacancy occurring in the Committee shall be filled at the next
meeting of the Board.


(3) Each
member of the Committee shall:


(a) be a
member of the Board;


(b) not be
an officer or employee of the Company or any of its
affiliates;


(c) be an
unrelated director as defined in the Toronto Stock Exchange (the
“TSX”) Corporate Governance Guidelines (“TSX
Guidelines”) as the same may be amended from time to
time;


(d) satisfy
the independence requirements applicable to members of audit
committees under each of Multilateral Instrument 52-110 –
Audit Committees of the Canadian Securities Administrators
(“M1 52-110”), Rule 10A-3(b)(1)(ii) of the United
States Securities and Exchange Commission, and any other applicable
laws and regulations, as the same may be amended from time to time
(with the TSX Guidelines, “Applicable Laws”);
and


(e) satisfy
the financial literacy requirements prescribed by Applicable
Laws.


(4) A
majority of the Committee shall constitute a quorum.


(5) The
Committee shall elect annually a chairperson from among its
members.





B. Purpose


(1) The
Committee’s purpose is to assist the Board in its supervision
of the management of the business and affairs of the Company
through oversight of:


(a) the
integrity of the Company’s financial statements,
Management’s Discussion and Analysis (“MD&A”)
and other financial reporting;


(b) the
integrity of the Company’s internal control and management
information systems;


(c) the
Company’s compliance with all applicable laws, rules,
regulations, policies and other requirements of governments,
regulatory agencies and stock exchanges relating to accounting
matters and financial disclosure;


(d) the
auditor’s qualifications and activities;


(e) communication among
the auditor, management and the Board; and


(f) such
other matters as are determined by the Board from time to
time.





_____________________________________________________________________________________________
 2019
Annual Information
Form A-1





C. Committee Resources


(1) The
Committee shall have direct channels of communication with the
Company’s auditor to discuss and review specific issues as
appropriate.


(2) The
Committee, or any member of the Committee with the approval of the
Committee, may retain at the expense of the Company such
independent legal, accounting (other than the auditor) or other
advisors on such terms as the Committee may consider appropriate
and shall not be required to obtain the approval of the Board in
order to retain or compensate any such advisors.


(3) The
Committee shall have unrestricted access to Company personnel and
documents and shall be provided with all necessary funding and
other resources to carry out its responsibilities.





D. Committee Responsibilities


(1) The
responsibilities of the Committee shall be to:


(a) with
respect to financial accounting matters:


(i)
 review with management and
the external auditors the annual consolidated financial statements,
MD&A and press release announcing annual financial results of
operations before making recommendations to the Board relating to
approval of such documents;





(ii)
 review with management and
the external auditors interim financial statements, MD&A and
press release announcing interim financial results of operations
before making recommendations to the Board relating to approval of
such documents;





(iii)
 review and discuss with
management and the external auditors all public disclosure
documents containing audited or unaudited financial information
including: any Prospectus; the Annual Report; interim unaudited
reports; and any material change report pertaining to the
Company’s financial matters. The Committee will review the
consistency of the foregoing documents with facts, estimates or
judgments contained in the audited or unaudited financial
statements;





(iv)
 satisfy itself that adequate
procedures are in place for the review of the Company’s
disclosure of financial information extracted or derived from the
Company’s financial statements, other than the
Company’s financial statements, MD&A and earnings press
releases, and shall periodically assess the adequacy of those
procedures;





(v)
 prior to the completion of
the annual audit, and at any other time deemed advisable by the
Committee, review and discuss with management and the auditor the
quality of the Company’s accounting policies and financial
statement presentation, including, without limitation, the
following:





1. all
critical accounting policies and practices to be used, including,
without limitation, the reasons why certain estimates or policies
are or are not considered critical and how current and anticipated
future events may impact those determinations as well as an
assessment of any proposed modifications by the auditors that were
not made;


2. all
alternative accounting treatments for policies and practices that
have been discussed by management and the auditors;
and


3. other
material written communications between the auditor and management,
including, without limitation, any management letter, schedule of
unadjusted differences, the management representation letter,
report on internal controls, as well as the engagement letter and
the independence letter;





_____________________________________________________________________________________________
 2019
Annual Information
Form A-2





(vi) review
annually the accounting principles and practices followed by the
Company and any changes in the same as they occur;


(vii) review
new accounting principles of the Chartered Professional Accountants
of Canada and the International Accounting Standards Board which
would have a significant impact on the Company’s financial
reporting as reported to the Committee by management;


(viii) review the
status of material contingent liabilities as reported to the
Committee by management;


(ix) review
potentially significant tax problems as reported to the Committee
by management; and


(x) review
any errors or omissions in the current or prior year’s
financial statements which appear material as reported to the
Committee by management;


(b) with
respect to the external auditors:


(i) be
directly responsible for recommending the appointment of the
auditor, the auditor’s compensation, retention and
termination and for oversight of the work of the auditor
(including, without limitation, resolution of disagreements between
management and the auditor regarding financial reporting) for the
purpose of preparing or issuing an audit report or performing other
audit, review or services for the Company;


(ii) approve, prior to
the auditor’s audit, the auditor’s audit plan
(including, without limitation, staffing), the scope of the
auditor’s review and all related fees;


(iii) satisfy itself as
to the independence of the auditor. The Committee shall pre-approve
any non-audit services (including, without limitation, fees
therefor) provided to the Company or its subsidiaries by the
auditor or any auditor of any such subsidiary and shall consider
whether these services are compatible with the auditor’s
independence, including, without limitation, the nature and scope
of the specific non-audit services to be performed and whether the
audit process would require the auditor to review any advice
rendered by the auditor in connection with the provision of
non-audit services. The Committee shall not allow the auditor to
render any non-audit services to the Company or its subsidiaries
that are prohibited by Applicable Law;


(iv) review
and approve the Company’s policies concerning the hiring of
employees and former employees of the Company’s auditor or
former auditor.


(c) with
respect to internal controls:


(i) oversee
management’s design, testing and implementation of the
Company’s internal controls and management information
systems and review the adequacy and effectiveness
thereof.


(d) with
respect to concerns and complaints:


(i) establish procedures
for:


1. the
receipt, retention and treatment of complaints received by the
Company regarding accounting, internal accounting controls or
auditing matters; and


2. the
confidential, anonymous submission by employees of the Company of
concern regarding questionable accounting or auditing
matters.


(e) with
respect to ethics:


(i) The
Committee shall be responsible for oversight and enforcement of the
Code of Ethics for the Chief Executive Officer, Senior Financial
Officers and Other Officers of the Company, subject to the
supervision of the Board.





_____________________________________________________________________________________________
 2019
Annual Information
Form A-3





(f) with
respect to general audit matters:


(i) inquire
of management and the external auditors as to any activities that
may or may not appear to be illegal or unethical;


(ii) review
with management, the operations analyst and the external auditors
any frauds reported to the Audit Committee;


(iii) review
with the external auditors the adequacy of staffing for accounting
and financial responsibilities; and


(iv) report
and make recommendations to the Board as the Committee considers
appropriate.


(2) In
addition, the Board may refer to the Committee such matters and
questions relating to the Company as the Board may from time to
time see fit;


(3) Any
member of the Committee may require the auditors to attend any or
every meeting of the Committee.





E. Meetings





(1) The
times of and the places where meetings of the Audit Committee shall
be held and the calling of and procedure at such meetings shall be
determined from time to time by the Committee, provided however
that the Committee shall meet at least quarterly, and the Committee
shall maintain minutes or other records of its meetings and
activities. Notice of every such meeting to be given in writing not
less than five (5) days prior to the date fixed for the meeting,
and shall be given to the auditors of the Company, that the
auditors shall be entitled to attend and be heard thereat. Meetings
shall be convened whenever requested by the auditors, the
operations analyst or any member of the Audit Committee in
accordance with the Ontario Business Corporations Act.


(2) As part
of each meeting of the Committee at which it recommends that the
Board approve the financial statements of the Company, and at such
other times as the Committee deems appropriate, the Committee shall
meet separately with the auditor to discuss and review specific
issues as appropriate.





F. Evaluation of Charter and Mandate





(1) On at
least an annual basis, the Committee shall review and assess the
adequacy of this Charter and Mandate and recommend any proposed
changes to the Board of Directors.


(2) All
prior resolutions of the Board relating to the constitution and
responsibilities of the Audit Committee are hereby
repealed.





_____________________________________________________________________________________________
 2019
Annual Information
Form A-4


Schedule B





Glossary of Technical Terms





Note: The terms
related to Mineral resources and mineral reserves presented herein
are as defined in “CIM DEFINITION STANDARDS on Mineral
Resources and Mineral Reserves” prepared by the CIM Standing
Committee on Reserve Definitions, adapted by CIM Council, May 10,
2014.





eU3O8
or eU


This term refers to equivalent
U3O8
grade derived from the downhole
logging of drill holes using a calibrated total gamma
probe.





Feasibility Study


A Feasibility
Study is a comprehensive technical and economic study of the
selected development option for a mineral project that includes
appropriately detailed assessments of applicable Modifying Factors
together with any other relevant operational factors and detailed
financial analysis that are necessary to demonstrate, at the time
of reporting, that extraction is reasonably justified (economically
mineable). The results of the study may reasonably serve as the
basis for a final decision by a proponent or financial institution
to proceed with, or finance, the development of the project. The
confidence level of the study will be higher than that of a
Pre-Feasibility Study.





Historical Estimate


A historical
estimate means an estimate of the quantity, grade or metal or
mineral content of a deposit that an issuer has not verified as a
current mineral resource or mineral reserve, and which was prepared
before the issuer acquiring, or entering into an agreement to
acquire, an interest in the property that contains the
deposit.





Indicated Mineral Resource


An indicated
mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape and physical
characteristics, can be estimated with a level of confidence
sufficient to allow the appropriate application of technical and
economic parameters, to support mine planning and evaluation of the
economic viability of the deposit. The estimate is based on
detailed and reliable exploration and testing information gathered
through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes that are spaced closely
enough for geological and grade continuity to be reasonably
assumed.





Inferred Mineral Resource


An inferred
mineral resource is that part of a mineral resource for which
quantity and grade or quality can be estimated on the basis of
geological evidence and limited sampling and reasonably assumed,
but not verified, geological and grade continuity. The estimate is
based on limited information and sampling gathered through
appropriate techniques from locations such as outcrops, trenches,
pits, workings and drill holes





Measured Mineral Resource


A measured
mineral resource is that part of a mineral resource for which
quantity, grade or quality, densities, shape, and physical
characteristics are so well established that they can be estimated
with confidence sufficient to allow the appropriate application of
technical and economic parameters, to support production planning
and evaluation of the economic viability of the deposit. The
estimate is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques
from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough to confirm both geological and
grade continuity.








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 2019
Annual Information
Form  B-1





Mineral Reserve


A mineral reserve
is the economically mineable part of a measured or indicated
mineral resource demonstrated by at least a Preliminary Feasibility
Study. This Study must include adequate information on mining,
processing, metallurgical, economic and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified. A mineral reserve includes diluting materials and
allowances for losses that may occur when the material is
mined.





Mineral Resource


A mineral
resource is a concentration or occurrence of diamonds, natural
solid inorganic material, or natural solid fossilized organic
material including base and precious metals, coal, and industrial
materials in or on the Earth’s crust in such form and
quantity and of such a grade or quality that it has reasonable
prospects for economic extraction. The location, quantity, grade,
geological characteristics and continuity of a mineral resource are
known, estimated or interpreted from specific geological evidence
and knowledge.





Modifying Factors


Modifying Factors
are considerations used to convert Mineral Resources to Mineral
Reserves. These include, but are not restricted to, mining,
processing, metallurgical, infrastructure, economic, marketing,
legal, environmental, social and governmental factors.





Preliminary Feasibility Study or Pre-Feasibility Study


A Pre-Feasibility
Study is a comprehensive study of a range of options for the
technical and economic viability of a mineral project that has
advanced to a stage where a preferred mining method, in the case of
underground mining, or the pit configuration, in the case of an
open pit, is established and an effective method of mineral
processing is determined. It includes a financial analysis based on
reasonable assumptions on the Modifying Factors and the evaluation
of any other relevant factors which are sufficient for a Qualified
Person, acting reasonably, to determine if all or part of the
Mineral Resource may be converted to a Mineral Reserve at the time
of reporting. A Pre-Feasibility Study is at a lower confidence
level than a Feasibility Study.





Probable Mineral Reserve


A ‘probable
mineral reserve’ is the economically mineable part of an
indicated, and in some circumstances, a measured mineral resource
demonstrated by at least a Preliminary Feasibility Study. This
Study must include adequate information on mining, processing,
metallurgical, economic, and other relevant factors that
demonstrate, at the time of reporting, that economic extraction can
be justified.





Proven Mineral Reserve


A ‘proven
mineral reserve’ is the economically mineable part of a
measured mineral resource demonstrated by at least a Preliminary
Feasibility Study. This Study must include adequate information on
mining, processing, metallurgical, economic, and other relevant
factors that demonstrate, at the time of reporting, that economic
extraction is justified.





Qualified Person


A
‘Qualified Person’ means an individual who is an
engineer or geoscientist with at least five years of experience in
mineral exploration, mine development or operation or mineral
project assessment, or any combination of these; has experience
relevant to the subject matter of the mineral project and the
technical report and is a member or licensee in good standing of a
professional association of geoscientists and/or engineers meeting
the criteria set out in NI 43-101.





_____________________________________________________________________________________________
 2019
Annual Information
Form  B-2