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Denison Mine (DNN) to Report Q4 Earnings: What's in Store?
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Denison Mine Corp (DNN - Free Report) is expected to register a loss of 1 cent per share when it reports fourth-quarter 2023 results next month.
The estimate has remained unchanged over the past 30 days. The company had reported break-even earnings per share in the fourth quarter of 2022.
Q3 Results
In the last reported quarter, Denison Mine reported an earnings per share of 5 cents against the loss of 1 cent per share in the year-ago quarter. Revenues declined 9% year over year.
Denison Mine’s earnings have outpaced the consensus estimate in each of the trailing four quarters, the average surprise being 225%.
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. It has a 95% interest in its flagship Wheeler River Uranium Project, which is the largest undeveloped uranium project in the infrastructure-rich eastern portion of the Athabasca Basin region of northern Saskatchewan.
Denison holds a 22.5% ownership interest in the MLJV (a joint venture with Orano Canada) and the McClean Lake uranium mill, one of the world’s largest uranium processing facilities, which is contracted to process ore from the Cigar Lake mine under a toll milling agreement.
Notably, the company’s toll milling revenues fluctuate due to the timing of uranium processing at the McClean Lake mill, as well as changes to the estimated mineral resources of the Cigar Lake mine.
In the third quarter of 2023, the McClean Lake mill processed 2.7 million pounds of uranium, down compared with 3.6 million in the third quarter of 2022. Denison recorded toll milling revenues of $0.8 million in the third quarter of 2023 compared with $0.99 million in the year-ago quarter. The decrease in toll milling in the quarter was due to the mill processing fewer pounds of uranium for the Cigar Lake Joint Venture. In the first nine months of 2023, the mill processed 10.3 million pounds of uranium, down 13% year over year.
The Cigar Lake mine operators had initially forecasted a full-year mine production of 18 million pounds of uranium for 2023. It is anticipated that the remaining production of 7.7 million pounds to meet this target is likely to have occurred in the fourth quarter. The McClean Lake mill had processed 5.3 million pounds of uranium in the fourth quarter of 2022. This increase in production is expected to have reflected in Denison’s fourth-quarter revenues.
However, this gain is likely to have been offset by the absence of revenues from Closed Mine Services in the fourth quarter. Denison’s Closed Mines group has provided long-term care and maintenance for closed mine sites since 1997. The group managed Denison’s Elliot Lake reclamation projects and also provided related services for certain third-party projects until September 2023. However, DNN’s third-party closed mines services contract expired in August 2023 and the company has ceased to provide care and maintenance services to third parties and will no longer earn revenues from these services. This is likely to have impacted the year-over-year comparisons in the company’s fourth-quarter 2023 revenues.
The company has been witnessing higher general and administrative expenses, which comprise head office salaries and benefits, office costs in multiple regions, audit and regulatory costs, legal fees, investor relations expenses and project costs. Increases in compliance costs (stock exchange fees, audit fees, etc.), as well as increased travel costs associated with site visits to the Wheeler River FFT site, are also expected to have driven these costs higher. The company’s results in the fourth quarter are also likely to have been impacted by exploration and evaluation costs.
Recent Major Development
Denison Mines and Orano Canada recently announced that the MLJV has approved a restart of uranium mining operations at McClean Lake Mining using the joint venture's patented Surface Access Borehole Resource Extraction mining method.
Mining is set to commence at the McClean North deposit in 2025, with 2024 activities expected to focus on preparations necessary to ready the existing SABRE mining site and equipment for continuous commercial operations, as well as for the installation of eight pilot holes for the first mining cavities planned for excavation. The approved budget for this work in 2024 is $7 million.
What our Zacks Model Indicates
Our proven model does not conclusively predict an earnings beat for Denison Mine this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Denison Mine is 0.00%.
Zacks Rank: DNN currently carries a Zacks Rank of 3.
Price Performance
Denison Mine’s shares have gained 43.2% in the past year against the industry’s 1.6% decline.
Image Source: Zacks Investment Research
Stocks to Consider
Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.
The consensus estimate for LAAC’s earnings for the fourth quarter is currently pegged at a penny per share. The company has an average surprise of positive 120.8% in each of the trailing four quarters.
SilverCrest Metals (SILV - Free Report) , scheduled to release fourth-quarter earnings on Mar 6, has an Earnings ESP of +2.22%. SILV currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for SILV’s earnings for the fourth quarter is currently pegged at 15 cents per share, which projects a 275% increase from the fourth quarter of 2022. It has an average surprise of positive 4.4% in the trailing four quarters.
Wheaton Precious Metals Corp. (WPM - Free Report) , slated to release earnings on Mar 14, has an Earnings ESP of +5.05% and a Zacks Rank of 3, at present.
The consensus mark for WPM’s fourth-quarter earnings is currently pegged at 30 cents per share. Wheaton Precious has an average surprise of positive 4.7% in each of the trailing four quarters.
Image: Bigstock
Denison Mine (DNN) to Report Q4 Earnings: What's in Store?
Denison Mine Corp (DNN - Free Report) is expected to register a loss of 1 cent per share when it reports fourth-quarter 2023 results next month.
The estimate has remained unchanged over the past 30 days. The company had reported break-even earnings per share in the fourth quarter of 2022.
Q3 Results
In the last reported quarter, Denison Mine reported an earnings per share of 5 cents against the loss of 1 cent per share in the year-ago quarter. Revenues declined 9% year over year.
Denison Mine’s earnings have outpaced the consensus estimate in each of the trailing four quarters, the average surprise being 225%.
Denison Mine Corp Price and EPS Surprise
Denison Mine Corp price-eps-surprise | Denison Mine Corp Quote
Factors to Note
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. It has a 95% interest in its flagship Wheeler River Uranium Project, which is the largest undeveloped uranium project in the infrastructure-rich eastern portion of the Athabasca Basin region of northern Saskatchewan.
Denison holds a 22.5% ownership interest in the MLJV (a joint venture with Orano Canada) and the McClean Lake uranium mill, one of the world’s largest uranium processing facilities, which is contracted to process ore from the Cigar Lake mine under a toll milling agreement.
Notably, the company’s toll milling revenues fluctuate due to the timing of uranium processing at the McClean Lake mill, as well as changes to the estimated mineral resources of the Cigar Lake mine.
In the third quarter of 2023, the McClean Lake mill processed 2.7 million pounds of uranium, down compared with 3.6 million in the third quarter of 2022. Denison recorded toll milling revenues of $0.8 million in the third quarter of 2023 compared with $0.99 million in the year-ago quarter. The decrease in toll milling in the quarter was due to the mill processing fewer pounds of uranium for the Cigar Lake Joint Venture. In the first nine months of 2023, the mill processed 10.3 million pounds of uranium, down 13% year over year.
The Cigar Lake mine operators had initially forecasted a full-year mine production of 18 million pounds of uranium for 2023. It is anticipated that the remaining production of 7.7 million pounds to meet this target is likely to have occurred in the fourth quarter. The McClean Lake mill had processed 5.3 million pounds of uranium in the fourth quarter of 2022. This increase in production is expected to have reflected in Denison’s fourth-quarter revenues.
However, this gain is likely to have been offset by the absence of revenues from Closed Mine Services in the fourth quarter. Denison’s Closed Mines group has provided long-term care and maintenance for closed mine sites since 1997. The group managed Denison’s Elliot Lake reclamation projects and also provided related services for certain third-party projects until September 2023. However, DNN’s third-party closed mines services contract expired in August 2023 and the company has ceased to provide care and maintenance services to third parties and will no longer earn revenues from these services. This is likely to have impacted the year-over-year comparisons in the company’s fourth-quarter 2023 revenues.
The company has been witnessing higher general and administrative expenses, which comprise head office salaries and benefits, office costs in multiple regions, audit and regulatory costs, legal fees, investor relations expenses and project costs. Increases in compliance costs (stock exchange fees, audit fees, etc.), as well as increased travel costs associated with site visits to the Wheeler River FFT site, are also expected to have driven these costs higher. The company’s results in the fourth quarter are also likely to have been impacted by exploration and evaluation costs.
Recent Major Development
Denison Mines and Orano Canada recently announced that the MLJV has approved a restart of uranium mining operations at McClean Lake Mining using the joint venture's patented Surface Access Borehole Resource Extraction mining method.
Mining is set to commence at the McClean North deposit in 2025, with 2024 activities expected to focus on preparations necessary to ready the existing SABRE mining site and equipment for continuous commercial operations, as well as for the installation of eight pilot holes for the first mining cavities planned for excavation. The approved budget for this work in 2024 is $7 million.
What our Zacks Model Indicates
Our proven model does not conclusively predict an earnings beat for Denison Mine this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat.
You can uncover the best stocks before they’re reported with our Earnings ESP Filter.
Earnings ESP: The Earnings ESP for Denison Mine is 0.00%.
Zacks Rank: DNN currently carries a Zacks Rank of 3.
Price Performance
Denison Mine’s shares have gained 43.2% in the past year against the industry’s 1.6% decline.
Image Source: Zacks Investment Research
Stocks to Consider
Here are some stocks with the right combination of elements to post an earnings beat in their upcoming releases.
Lithium Americas (Argentina) Corp. (LAAC - Free Report) , scheduled to release earnings on Mar 21, has an Earnings ESP of +47.56% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for LAAC’s earnings for the fourth quarter is currently pegged at a penny per share. The company has an average surprise of positive 120.8% in each of the trailing four quarters.
SilverCrest Metals (SILV - Free Report) , scheduled to release fourth-quarter earnings on Mar 6, has an Earnings ESP of +2.22%. SILV currently carries a Zacks Rank of 3.
The Zacks Consensus Estimate for SILV’s earnings for the fourth quarter is currently pegged at 15 cents per share, which projects a 275% increase from the fourth quarter of 2022. It has an average surprise of positive 4.4% in the trailing four quarters.
Wheaton Precious Metals Corp. (WPM - Free Report) , slated to release earnings on Mar 14, has an Earnings ESP of +5.05% and a Zacks Rank of 3, at present.
The consensus mark for WPM’s fourth-quarter earnings is currently pegged at 30 cents per share. Wheaton Precious has an average surprise of positive 4.7% in each of the trailing four quarters.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.