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DNN & Foremost Complete First Phase of Option Deal for Uranium Assets

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Denison Mine Corp. (DNN - Free Report) received 1,369,810 common shares in Foremost Clean Energy Ltd. in exchange of an initial 20% interest in its in 10 uranium exploration properties. This marks the completion of the first stage of the option deal between Denison and Foremost, which was announced on Sept. 24, 2024. 

According to the deal, which has an aggregate value of up to $30 million, Foremost can acquire up to 70% of Denison’s interest in 10 uranium exploration properties. This will support Foremost’s transition to uranium exploration. 

Prior to the share issuance, Denison did not own any shares in Foremost. It now has control of 19.95% of the issued and outstanding common shares of the latter.

DNN’s 10 Project Portfolio Subject to the Option Agreement

The option agreement entails Denison’s certain properties in the promising Athabasca Basin, Saskatchewan. These include Murphy Lake South, Hatchet Lake, Turkey Lake, Torwalt Lake, Marten, Wolverine, Epp Lake, Blackwing, GR and CLK. 

These properties cover a total area of 330,000 acres. Denison has the full ownership of the properties except for Hatchet Lake, in which it has a 70.15% stake.

Overview of DNN & Foremost Lithium Deal

Under the terms of the agreement, Foremost may acquire up to 70% of Denison’s  interest in the Exploration Properties. Foremost may earn up to a 51% interest in the Hatchet Lake joint venture.

With the first option being completed, the second option will be to acquire another 31% of DNN’s projects to take the ownership to 51%. The third option will be to add another 19%. The payment due to Denison for Phase 2 or Phase 2 may be made in the form of cash or Foremost shares at the discretion of Foremost.

Foremost’s commitment also includes the funding of exploration expenditure. It is expected to act as the project operator during the term of the option agreement. 

With interests in 10 prospective properties spanning the promising, uranium-rich Athabasca Basin, Foremost is set to be an emerging North American uranium exploration company.

DNN will retain direct interests in the properties and will become Foremost’s largest shareholder. It will have certain strategic rights to participate in future exploration success from the properties.

DNN Stock’s Price Performance

Denison’s shares have gained 21% in the past year compared with the industry’s 7.2% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Denison Mine’s Zacks Rank & Stocks to Consider

DNN currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks from the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , IAMGOLD Corporation (IAG - Free Report) and Eldorado Gold Corporation (EGO - Free Report) . CRS and IAG sport a Zacks Rank #1 (Strong Buy), and EGO carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Carpenter Technology’s fiscal 2025 earnings is pegged at $6.06 per share. The consensus estimate for earnings has moved 17% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 15.9%. CRS’ shares have gained 136% in a year.

The consensus estimate for IAMGOLD’s 2024 earnings is pegged at 39 cents per share. The consensus estimate for earnings has moved 44% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 200%. IAG’s shares have gained 109% in a year.

The consensus estimate for Eldorado Gold’s 2024 earnings is pegged at $1.32 per share. The consensus estimate for earnings has moved 16% north in the past 60 days. It has an average trailing four-quarter earnings surprise of 430%. EGO’s shares have gained 86% in a year.

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