EX-99.4 5 c89461exv99w4.htm EXHIBIT 4
Exhibit 4
DENISON MINES CORP.
Financial Statements
for the six months ended
June 30, 2009

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DENISON MINES CORP.
Consolidated Balance Sheets
(Unaudited — Expressed in thousands of U.S. dollars)

|  | At June 30 |  |  | At December 31 |
|  | 2009 |  |  | 2008 |
ASSETS |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |
Cash and equivalents |  | $ | 33,440 |  |  | $ | 3,206 |
Trade and other receivables |  |  | 12,591 |  |  |  | 12,894 |
Note receivables |  |  | 369 |  |  |  | 181 |
Inventories, net (Note 3) |  |  | 59,526 |  |  |  | 44,733 |
Prepaid expenses and other |  |  | 514 |  |  |  | 1,275 |
|  |  | 106,440 |  |  |  | 62,289 |
Inventories — ore in stockpiles (Note 3) |  |  | 2,777 |  |  |  | 5,016 |
Investments (Note 4) |  |  | 17,999 |  |  |  | 10,691 |
Property, plant and equipment, net (Note 5) |  |  | 746,394 |  |  |  | 717,433 |
Restricted cash and equivalents (Note 6) |  |  | 21,772 |  |  |  | 21,286 |
Intangibles (Note 7) |  |  | 4,781 |  |  |  | 4,978 |
Goodwill (Note 8) |  |  | 66,229 |  |  |  | 63,240 |
|  | $ | 966,392 |  |  | $ | 884,933 |
LIABILITIES |  |  |  |  |  |  |  |
Current |  |  |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 10,003 |  |  | $ | 23,787 |
Current portion of long-term liabilities: |  |  |  |  |  |  |  |
Post-employment benefits (Note 9) |  |  | 344 |  |  |  | 329 |
Reclamation and remediation obligations (Note 10) |  |  | 917 |  |  |  | 875 |
Debt obligations (Note 11) |  |  | 171 |  |  |  | 464 |
Other long-term liabilities (Note 12) |  |  | 1,133 |  |  |  | 2,179 |
|  |  | 12,568 |  |  |  | 27,634 |
Deferred revenue |  |  | 3,187 |  |  |  | 2,913 |
Provision for post-employment benefits (Note 9) |  |  | 3,152 |  |  |  | 3,028 |
Reclamation and remediation obligations (Note 10) |  |  | 19,205 |  |  |  | 18,471 |
Debt obligations (Note 11) |  |  | 203 |  |  |  | 99,290 |
Other long-term liabilities (Note 12) |  |  | 1,243 |  |  |  | 1,191 |
Future income tax liability (Note 22) |  |  | 124,936 |  |  |  | 124,054 |
|  |  | 164,494 |  |  |  | 276,581 |
SHAREHOLDERS’ EQUITY |  |  |  |  |  |  |  |
Share capital (Note 13) |  |  | 849,369 |  |  |  | 666,278 |
Share purchase warrants (Note 14) |  |  | 11,728 |  |  |  | 11,728 |
Contributed surplus (Note 15) |  |  | 32,242 |  |  |  | 30,537 |
Deficit |  |  | (115,024 | ) |  |  | (95,482 | )
Accumulated other comprehensive income (Note 17) |  |  | 23,583 |  |  |  | (4,709 | )
|  |  | (91,441 | ) |  |  | (100,191 | )
|  |  | 801,898 |  |  |  | 608,352 |
|  | $ | 966,392 |  |  | $ | 884,933 |
Issued and outstanding common shares (Note 13) |  |  | 339,720,415 |  |  |  | 197,295,415 |

Contingent liabilities and commitments (Note 23)
See accompanying notes to the consolidated financial statements

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DENISON MINES CORP.
Consolidated Statements of Operations and Deficit and Comprehensive Income (Loss)
(Unaudited — Expressed in thousands of U.S. dollars except for per share amounts)

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30 |  |  | June 30 |  |  | June 30 |  |  | June 30 |
|  | 2009 |  |  | 2008 |  |  | 2009 |  |  | 2008 |
REVENUES |  | $ | 13,372 |  |  | $ | 31,713 |  |  | $ | 35,370 |  |  | $ | 49,894 |
EXPENSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | 16,765 |  |  |  | 24,892 |  |  |  | 42,134 |  |  |  | 37,685 |
Sales royalties and capital taxes |  |  | 335 |  |  |  | 999 |  |  |  | 688 |  |  |  | 1,808 |
Mineral property exploration |  |  | 2,502 |  |  |  | 3,729 |  |  |  | 4,579 |  |  |  | 10,238 |
General and administrative |  |  | 3,531 |  |  |  | 4,113 |  |  |  | 7,853 |  |  |  | 7,676 |
Stock option expense (Note 16) |  |  | 1,538 |  |  |  | 619 |  |  |  | 1,705 |  |  |  | 1,232 |
|  |  | 24,671 |  |  |  | 34,352 |  |  |  | 56,959 |  |  |  | 58,639 |
Loss from operations |  |  | (11,299 | ) |  |  | (2,639 | ) |  |  | (21,589 | ) |  |  | (8,745 | )
Other income (expense), net (Note 18) |  |  | (7,186 | ) |  |  | (10,742 | ) |  |  | (1,559 | ) |  |  | (8,516 | )
Loss before taxes |  |  | (18,485 | ) |  |  | (13,381 | ) |  |  | (23,148 | ) |  |  | (17,261 | )
Income tax recovery (expense) (Note 22): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current |  |  | 308 |  |  |  | 2,759 |  |  |  | 1,616 |  |  |  | 1,590 |
Future |  |  | (38 | ) |  |  | (3,134 | ) |  |  | 1,990 |  |  |  | (8,547 | )
Net loss for the period |  | $ | (18,215 | ) |  | $ | (13,756 | ) |  | $ | (19,542 | ) |  | $ | (24,218 | )
Deficit, beginning of period |  |  | (96,809 | ) |  |  | (25,296 | ) |  |  | (95,482 | ) |  |  | (14,834 | )
Deficit, end of period |  | $ | (115,024 | ) |  | $ | (39,052 | ) |  | $ | (115,024 | ) |  | $ | (39,052 | )
Net loss for the period |  | $ | (18,215 | ) |  | $ | (13,756 | ) |  | $ | (19,542 | ) |  | $ | (24,218 | )
Change in foreign currency translation (Note 17) |  |  | 32,448 |  |  |  | 3,813 |  |  |  | 18,358 |  |  |  | (16,552 | )
Change in unrealized gain (loss) on investments (Note 17) |  |  | 9,538 |  |  |  | 27,735 |  |  |  | 9,934 |  |  |  | 19,400 |
Comprehensive income (loss) |  | $ | 23,771 |  |  | $ | 17,792 |  |  | $ | 8,750 |  |  | $ | (21,370 | )
Net loss per share: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  | $ | (0.07 | ) |  | $ | (0.07 | ) |  | $ | (0.08 | ) |  | $ | (0.13 | )
Diluted |  | $ | (0.07 | ) |  | $ | (0.07 | ) |  | $ | (0.08 | ) |  | $ | (0.13 | )
Weighted-average number of shares outstanding (in thousands): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Basic |  |  | 244,991 |  |  |  | 189,856 |  |  |  | 233,122 |  |  |  | 189,814 |
Diluted |  |  | 245,052 |  |  |  | 191,244 |  |  |  | 233,143 |  |  |  | 192,236 |

See accompanying notes to the consolidated financial statements

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DENISON MINES CORP.
Consolidated Statements of Cash Flows
(Unaudited — Expressed in thousands of U.S. dollars)

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30 |  |  | June 30 |  |  | June 30 |  |  | June 30 |
|  | 2009 |  |  | 2008 |  |  | 2009 |  |  | 2008 |
CASH PROVIDED BY (USED IN): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
OPERATING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loss for the period |  | $ | (18,215 | ) |  | $ | (13,756 | ) |  | $ | (19,542 | ) |  | $ | (24,218 | )
Items not affecting cash: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Depletion, depreciation, amortization and accretion |  |  | 5,628 |  |  |  | 4,385 |  |  |  | 17,250 |  |  |  | 10,484 |
Stock-based compensation |  |  | 1,538 |  |  |  | 619 |  |  |  | 1,705 |  |  |  | 1,232 |
Losses (gains) on asset disposals |  |  | 270 |  |  |  | (181 | ) |  |  | 128 |  |  |  | (181 | )
Fair value change on restricted investments |  |  | 501 |  |  |  | 463 |  |  |  | 696 |  |  |  | (37 | )
Write-downs (recoveries) and other non-cash |  |  | (1,041 | ) |  |  | — |  |  |  | 183 |  |  |  | — |
Change in future income taxes |  |  | 38 |  |  |  | 3,134 |  |  |  | (1,990 | ) |  |  | 8,547 |
Foreign exchange |  |  | 5,760 |  |  |  | 12,766 |  |  |  | (623 | ) |  |  | 12,766 |
Net change in non-cash working capital items |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trade and other receivables |  |  | 11,717 |  |  |  | (5,168 | ) |  |  | 500 |  |  |  | 12,494 |
Inventories |  |  | (7,736 | ) |  |  | (4,632 | ) |  |  | (18,254 | ) |  |  | (15,260 | )
Prepaid expenses and other assets |  |  | 968 |  |  |  | (1,480 | ) |  |  | 779 |  |  |  | (1,317 | )
Accounts payable and accrued liabilities |  |  | (1,862 | ) |  |  | (1,943 | ) |  |  | (13,289 | ) |  |  | (2,642 | )
Post-employment benefits |  |  | (44 | ) |  |  | (85 | ) |  |  | (123 | ) |  |  | (206 | )
Reclamation and remediation obligations |  |  | (204 | ) |  |  | (174 | ) |  |  | (322 | ) |  |  | (366 | )
Deferred revenue |  |  | 59 |  |  |  | 100 |  |  |  | 274 |  |  |  | 374 |
Net cash provided by (used in) operating activities |  |  | (2,623 | ) |  |  | (5,952 | ) |  |  | (32,628 | ) |  |  | 1,670 |
INVESTING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Decrease (increase) in notes receivable |  |  | (244 | ) |  |  | 80 |  |  |  | (187 | ) |  |  | 113 |
Purchase of long-term investments |  |  | — |  |  |  | (13,365 | ) |  |  | — |  |  |  | (13,413 | )
Proceeds from sale of long-term investments |  |  | — |  |  |  | 1,320 |  |  |  | 3,222 |  |  |  | 1,320 |
Expenditures on property, plant and equipment |  |  | (12,818 | ) |  |  | (37,755 | ) |  |  | (23,190 | ) |  |  | (64,964 | )
Proceeds from sale of property, plant and equipment |  |  | 700 |  |  |  | 4 |  |  |  | 706 |  |  |  | 4 |
Decrease (increase) in restricted investments |  |  | (157 | ) |  |  | 92 |  |  |  | (1,049 | ) |  |  | (382 | )
Net cash used in investing activities |  |  | (12,519 | ) |  |  | (49,624 | ) |  |  | (20,498 | ) |  |  | (77,322 | )
FINANCING ACTIVITIES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Increase (decrease) in debt obligations |  |  | (100,748 | ) |  |  | 57,110 |  |  |  | (100,252 | ) |  |  | 66,064 |
Issuance of common shares for: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
New share issues |  |  | 147,988 |  |  |  | — |  |  |  | 184,915 |  |  |  | — |
Exercise of stock options and warrants |  |  | — |  |  |  | 1,070 |  |  |  | — |  |  |  | 1,312 |
Net cash provided by financing activities |  |  | 47,240 |  |  |  | 58,180 |  |  |  | 84,663 |  |  |  | 67,376 |
Increase (decrease) in cash and equivalents |  |  | 32,098 |  |  |  | 2,604 |  |  |  | 31,537 |  |  |  | (8,276 | )
Foreign exchange effect on cash and equivalents |  |  | (1,163 | ) |  |  | (2,340 | ) |  |  | (1,303 | ) |  |  | (4,016 | )
Cash and equivalents, beginning of period |  |  | 2,505 |  |  |  | 7,124 |  |  |  | 3,206 |  |  |  | 19,680 |
Cash and equivalents, end of period |  | $ | 33,440 |  |  | $ | 7,388 |  |  | $ | 33,440 |  |  | $ | 7,388 |

See accompanying notes to the consolidated financial statements

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DENISON MINES CORP.
Notes to the Consolidated Financial Statements
(Unaudited — Expressed in U.S. dollars, unless otherwise noted)

1. |  | NATURE OF OPERATIONS

Denison Mines Corp. (“DMC”) is incorporated under the Business Corporations Act (Ontario) (“OBCA”). Denison Mines Corp. and its subsidiary companies and joint ventures (collectively, the “Company”) are engaged in uranium mining and related activities, including acquisition, exploration and development of uranium bearing properties, extraction, processing, selling and reclamation. The environmental services division of the Company provides mine decommissioning and decommissioned site monitoring services for third parties.
The Company has a 100% interest in the White Mesa mill located in Utah, United States and a 22.5% interest in the McClean Lake mill located in the Athabasca Basin of Saskatchewan, Canada. The Company has interests in a number of nearby mines at both locations, as well as interests in development and exploration projects located in Canada, the United States, Mongolia and Zambia, some of which are operated through joint ventures and joint arrangements. Uranium, the Company’s primary product, is produced in the form of uranium oxide concentrates (“U3O8”) and sold to various customers around the world for further processing. Vanadium, a co-product found in some of the Company’s mines is also produced in the form of vanadium pentoxide (“V2O5”). The Company is also in the business of recycling uranium bearing waste materials, referred to as “alternate feed materials”.
Through its subsidiary Denison Mines Inc. (“DMI”), the Company is the manager of Uranium Participation Corporation (“UPC”), a publicly-listed investment holding company formed to invest substantially all of its assets in U3O8 and uranium hexafluoride (“UF6”). The Company has no ownership interest in UPC but receives various fees for management services and commissions from the purchase and sale of U3O8 and UF6 by UPC.

2. |  | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation
These unaudited consolidated financial statements have been prepared by management in U.S. dollars, unless otherwise stated, in accordance with generally accepted accounting principles in Canada (“Canadian GAAP”) for interim financial statements.
Certain information and note disclosures normally included in the annual consolidated financial statements prepared in accordance with Canadian GAAP have been condensed or excluded. As a result, these unaudited interim consolidated financial statements do not contain all disclosures required for annual financial statements and should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2008.
All material adjustments which, in the opinion of management, are necessary for fair presentation of the results of the interim periods have been reflected in these financial statements. The results of operations for the six months ended June 30, 2009 are not necessarily indicative of the results to be expected for the full year.
These unaudited interim consolidated financial statements are prepared following accounting policies consistent with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2008, except for the changes noted under the “New Accounting Standards Adopted” section below.

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Significant Mining Interests
The following table sets forth the Company’s ownership of its significant mining interests that have projects at the development stage within them as at June 30, 2009:

|  |  |  |  |  | Ownership |
|  | Location |  |  | Interest |
Through majority owned subsidiaries |  |  |  |  |  |  |  |
Arizona Strip |  | USA |  |  | 100.00 | %
Henry Mountains |  | USA |  |  | 100.00 | %
Colorado Plateau |  | USA |  |  | 100.00 | %
Gurvan Saihan Joint Venture |  | Mongolia |  |  | 70.00 | %
Mutanga |  | Zambia |  |  | 100.00 | %
As interests in unincorporated joint ventures, or jointly controlled assets |  |  |  |  |  |  |  |
McClean Lake |  | Canada |  |  | 22.50 | %
Midwest |  | Canada |  |  | 25.17 | %

New Accounting Standards Adopted
The Company adopted the following new accounting standards issued by the Canadian Institute of Chartered Accountants (“CICA”) Handbook effective January 1, 2009:

| a) |  | CICA Handbook Section 3064 “Goodwill and intangible assets” which provides guidance on the recognition, measurement, presentation and disclosure for goodwill and intangible assets, other than the initial recognition of goodwill or intangible assets acquired in a business combination. There was no impact to the Company’s financial statements from adopting this standard.

| b) |  | In January 2009, the CICA issued EIC 173 “Credit Risk and the Fair Value of Financial Assets and Financial Liabilities” which requires the entity to consider its own credit risk as well as the credit risk of its counterparties when determining the fair value of financial assets and liabilities, including derivative instruments. The standard is effective for the Company’s 2009 fiscal year, commencing January 1, 2009 and is required to be applied retrospectively without restatement to prior periods. The adoption of this pronouncement did not have a material impact on the valuation of the Company’s financial assets or financial liabilities.

| c) |  | In March 2009, the CICA issued an EIC Abstract on Impairment Testing of Mineral Exploration Properties, EIC 174. This abstract discusses the analysis recommended to be performed to determine if there has been an impairment of mineral exploration properties. The Company considered the recommendations discussed in the Abstract effective for fiscal periods beginning January 1, 2009 when testing for impairment of mineral properties in the period and no impairment adjustments were required.

Comparative Numbers
Certain classifications of the comparative figures have been changed to conform to those used in the current period.

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3. |  | INVENTORIES

Inventories consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Uranium concentrates and work-in-progress |  | $ | 34,966 |  |  | $ | 12,378 |
Vanadium related concentrates and work-in-progress (1) |  |  | 2,066 |  |  |  | 4,445 |
Inventory of ore in stockpiles |  |  | 20,649 |  |  |  | 26,841 |
Mine and mill supplies |  |  | 4,622 |  |  |  | 6,085 |
Inventories, net |  | $ | 62,303 |  |  | $ | 49,749 |
Inventories, net: |  |  |  |  |  |  |  |
Current |  | $ | 59,526 |  |  | $ | 44,733 |
Long-term — ore in stockpiles |  |  | 2,777 |  |  |  | 5,016 |
|  | $ | 62,303 |  |  | $ | 49,749 |

(1) |  | The Vanadium related concentrates and work-in-progress inventory is presented net of a valuation allowance of $9,683,000 as at June 30, 2009 and $9,500,000 as at December 31, 2008.

Long-term ore in stockpile inventory represents an estimate of the amount of pounds on the stockpile in excess of the next twelve months of planned mill production.
Operating expenses are predominantly cost of sales and include write downs of $183,000 and $Nil relating to the net realizable value of the Company’s vanadium related inventories for the six months ended June 30, 2009 and 2008 respectively.

4. |  | LONG-TERM INVESTMENTS

Long-term investments consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Investments |  |  |  |  |  |  |  |
Available for sale securities at fair value |  | $ | 17,999 |  |  | $ | 10,691 |
Investments |  | $ | 17,999 |  |  | $ | 10,691 |

Sales
During the three months ended March 2009, the Company sold equity interests in one public company for cash consideration of $3,222,000. The resulting gain has been included in “other income, net” in the statement of operations (see Note 18).

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5. |  | PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consists of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Cost, net of write-downs |  |  |  |  |  |  |  |
Plant and equipment |  |  |  |  |  |  |  |
Mill and mining related |  | $ | 166,437 |  |  | $ | 169,971 |
Environmental services and other |  |  | 2,713 |  |  |  | 2,439 |
Mineral properties |  |  | 636,920 |  |  |  | 590,758 |
|  |  | 806,070 |  |  |  | 763,168 |
Accumulated depreciation and amortization |  |  |  |  |  |  |  |
Plant and equipment |  |  |  |  |  |  |  |
Mill and mining related |  |  | 21,095 |  |  |  | 16,938 |
Environmental services and other |  |  | 1,361 |  |  |  | 1,146 |
Mineral properties |  |  | 37,220 |  |  |  | 27,651 |
|  |  | 59,676 |  |  |  | 45,735 |
Property, plant and equipment, net |  | $ | 746,394 |  |  | $ | 717,433 |
Net book value |  |  |  |  |  |  |  |
Plant and equipment |  |  |  |  |  |  |  |
Mill and mining related |  | $ | 145,342 |  |  | $ | 153,033 |
Environmental services and other |  |  | 1,352 |  |  |  | 1,293 |
Mineral properties |  |  | 599,700 |  |  |  | 563,107 |
|  | $ | 746,394 |  |  | $ | 717,433 |

Mineral Properties
The Company has various interests in development and exploration projects located in Canada, the U.S., Mongolia and Zambia which are held directly or through option or joint venture agreements. Amounts spent on development projects are capitalized as mineral property assets. Exploration projects are expensed.
Canada
In October 2004, the Company entered into an option agreement to earn a 22.5% ownership interest in the Wolly project by funding CDN$5,000,000 in exploration expenditures over the next six years. As at June 30, 2009, the Company has incurred a total of CDN$4,861,000 towards this option and has earned a 13.0% ownership interest in the project under the phase-in ownership provisions of the agreement.
In the first quarter of 2006, the Company entered into an option agreement to earn up to a 75% interest in the Park Creek project. The Company is required to incur exploration expenditures of CDN$2,800,000 over three years to earn an initial 49% interest and a further CDN$3,000,000 over two years to earn an additional 26% interest. As at June 30, 2009, the Company has incurred a total of CDN$3,666,000 towards the option and has earned a 49% ownership interest in the project under the phase-in-ownership provisions of the agreement.

6. |  | RESTRICTED CASH AND EQUIVALENTS

The Company has certain restricted cash and equivalents deposited to collateralize its reclamation and certain other obligations. Restricted cash and equivalents consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
U.S. mill and mine reclamation |  | $ | 19,363 |  |  | $ | 19,745 |
Elliot Lake reclamation trust fund |  |  | 2,409 |  |  |  | 1,541 |
|  | $ | 21,772 |  |  | $ | 21,286 |

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U.S. Mill and Mine Reclamation
The Company has cash, cash equivalents and fixed income securities as collateral for various bonds posted in favour of the State of Utah, the applicable state regulatory agencies in Colorado and Arizona and the U.S. Bureau of Land Management for estimated reclamation costs associated with the White Mesa mill and U.S. mining properties. During the six months ended June 30, 2009, the Company has not deposited any additional monies into its collateral account.
Elliot Lake Reclamation Trust Fund
Pursuant to its Reclamation Funding Agreement with the Governments of Canada and Ontario, the Company deposited an additional $915,000 into the Elliot Lake Reclamation Trust Fund and withdrew $180,000 during the six months ended June 30, 2009.

7. |  | INTANGIBLES

Intangibles consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Intangibles, by component: |  |  |  |  |  |  |  |
UPC management contract |  | $ | 4,390 |  |  | $ | 4,557 |
Urizon technology licenses |  |  | 391 |  |  |  | 421 |
|  | $ | 4,781 |  |  | $ | 4,978 |

A continuity summary of intangibles is presented below:

|  | Six Months |
|  | Ended |
(in thousands) |  | June 30, 2009 |
Intangibles, beginning of period |  | $ | 4,978 |
Amortization |  |  | (412 | )
Foreign exchange |  |  | 215 |
Intangibles, end of period |  | $ | 4,781 |

8. |  | GOODWILL

Goodwill consists of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Goodwill, allocation by business unit: |  |  |  |  |  |  |  |
Canada mining segment |  | $ | 66,229 |  |  | $ | 63,240 |

A continuity summary of goodwill is presented below:

|  | Six Months |
|  | Ended |
(in thousands) |  | June 30, 2009 |
Goodwill, beginning of period |  | $ | 63,240 |
Foreign exchange |  |  | 2,989 |
Goodwill, end of period |  | $ | 66,229 |

Goodwill is not amortized and is tested annually for impairment.

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9. |  | POST-EMPLOYMENT BENEFITS

Post-employment benefits consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Post-employment liability, by component: |  |  |  |  |  |  |  |
Accrued benefit obligation |  | $ | 3,296 |  |  | $ | 3,157 |
Unamortized experience gain |  |  | 200 |  |  |  | 200 |
|  | $ | 3,496 |  |  | $ | 3,357 |
Post-employment liability, by duration: |  |  |  |  |  |  |  |
Current |  |  | 344 |  |  |  | 329 |
Non-current |  |  | 3,152 |  |  |  | 3,028 |
|  | $ | 3,496 |  |  | $ | 3,357 |

A continuity summary of post-employment benefits is presented below:

|  | Six Months |
|  | Ended |
(in thousands) |  | June 30, 2009 |
Post-employment liability, beginning of period |  | $ | 3,357 |
Benefits paid |  |  | (123 | )
Interest cost |  |  | 115 |
Amortization of experience gain |  |  | (10 | )
Foreign exchange |  |  | 157 |
Post-employment liability, end of period |  | $ | 3,496 |

10. |  | RECLAMATION AND REMEDIATION OBLIGATIONS

Reclamation and remediation obligations consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Reclamation obligations, by location: |  |  |  |  |  |  |  |
U.S Mill and Mines |  | $ | 11,862 |  |  | $ | 11,436 |
Elliot Lake |  |  | 6,982 |  |  |  | 6,734 |
McClean and Midwest Joint Ventures |  |  | 1,278 |  |  |  | 1,176 |
|  | $ | 20,122 |  |  | $ | 19,346 |
Reclamation obligations, by duration: |  |  |  |  |  |  |  |
Current |  |  | 917 |  |  |  | 875 |
Non-current |  |  | 19,205 |  |  |  | 18,471 |
|  | $ | 20,122 |  |  | $ | 19,346 |

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#####

A continuity summary of reclamation and remediation obligations is presented below:

|  | Six Months |
|  | Ended |
(in thousands) |  | June 30, 2009 |
Reclamation obligations, beginning of period |  | $ | 19,346 |
Accretion |  |  | 723 |
Expenditures incurred |  |  | (322 | )
Foreign exchange |  |  | 375 |
Reclamation obligations, end of period |  | $ | 20,122 |

11. |  | DEBT OBLIGATIONS

Debt obligations consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Revolving line of credit |  | $ | — |  |  | $ | 99,998 |
Deferred debt issue costs |  |  | — |  |  |  | (769 | )
Notes payable and other financing |  |  | 374 |  |  |  | 525 |
|  | $ | 374 |  |  | $ | 99,754 |
Debt obligations, by duration: |  |  |  |  |  |  |  |
Current |  |  | 171 |  |  |  | 464 |
Non-current |  |  | 203 |  |  |  | 99,290 |
|  | $ | 374 |  |  | $ | 99,754 |

Revolving Line of Credit
In July 2008, the Company put in place a $125,000,000 revolving term credit facility with the Bank of Nova Scotia. The facility is repayable in full on June 30, 2011. As at June 30, 2009, the Company has repaid all of the amounts it has drawn under the facility. The amount of the facility available to the Company has been reduced by approximately $6,933,000 as collateral for certain letters of credit.
The borrower under the facility is DMI and DMC has provided an unlimited full recourse guarantee and a pledge of all of the shares of DMI. DMI has provided a first-priority security interest in all present and future personal property and an assignment of its rights and interests under all material agreements relative to the McClean Lake and Midwest projects. In addition, each of DMC’s material U.S subsidiaries has provided an unlimited full recourse guarantee secured by a pledge of all of its shares and a first-priority security interest in all of its present and future personal property.
The Company is required to maintain certain financial covenants on a consolidated basis.
Interest payable under the facility is bankers acceptance or LIBOR rate plus a margin or prime rate plus a margin. The facility is subject to standby fees. The weighted average interest rate paid by the Company during the first six months of 2009 was 2.70%.

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#####

12. |  | OTHER LONG-TERM LIABILITIES

Other long-term liabilities consist of:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Unamortized fair value of sales contracts |  | $ | 1,413 |  |  | $ | 2,429 |
Unamortized fair value of toll milling contracts |  |  | 860 |  |  |  | 821 |
Other |  |  | 103 |  |  |  | 129 |
|  | $ | 2,376 |  |  | $ | 3,370 |
Other long-term liabilities, by duration: |  |  |  |  |  |  |  |
Current |  |  | 1,133 |  |  |  | 2,179 |
Non-current |  |  | 1,243 |  |  |  | 1,191 |
|  | $ | 2,376 |  |  | $ | 3,370 |

Unamortized fair values of sales contracts are amortized to revenue as deliveries under the applicable contracts are made.

13. |  | SHARE CAPITAL

Denison is authorized to issue an unlimited number of common shares without par value. A continuity summary of the issued and outstanding common shares and the associated dollar amounts is presented below:

|  | Number of |  |  |  |
|  | Common |  |  | Dollar |
(in thousands except share amounts) |  | Shares |  |  | Amount |
Balance at December 31, 2008 |  |  | 197,295,415 |  |  | $ | 666,278 |
Issued for cash: |  |  |  |  |  |  |  |
New issue gross proceeds |  |  | 142,425,000 |  |  |  | 193,646 |
New issue gross issue costs |  |  | — |  |  |  | (8,731 | )
Renunciation of flow-through share liability |  |  | — |  |  |  | (1,824 | )
|  |  | 142,425,000 |  |  |  | 183,091 |
Balance at June 30, 2009 |  |  | 339,720,415 |  |  | $ | 849,369 |

New Issues
In June 2009, the Company completed an equity financing of 73,000,000 common shares at a price of CDN$1.30 per share for gross proceeds of $82,522,000 (CDN$94,900,000). Of the 73,000,000 shares issued, 58,000,000 were issued to a subsidiary of Korea Electric Power Corporation (“KEPCO”) and 15,000,000 shares were issued to entities affiliated with Lukas Lundin, a director of the Company.
In June 2009, the Company completed a bought deal financing of 40,000,000 common shares at a price of CDN$2.05 per share for gross proceeds of $71,144,000 (CDN$82,000,000).
In June 2009, the Company completed a private placement of 675,000 flow-through common shares at a price of CDN$2.18 per share for gross proceeds of $1,297,000 (CDN$1,471,500). The income tax benefits of this issue have not yet been renounced to the subscriber. The shares were issued to a director of the Company.
In January 2009, the Company issued 28,750,000 common shares at a price of CDN$1.65 per share for gross proceeds of $38,683,000 (CDN$47,437,500).
Flow-Through Share Issues
The Company finances a portion of its exploration programs through the use of flow-through share issuances. Income tax deductions relating to these expenditures are claimable by the investors and not by the Company.

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#####

As at June 30, 2009, the Company estimates that it has spent CDN$3,923,000 of its CDN$8,002,500 December 2008 flow-through share issue obligation. The Company renounced the tax benefit of this issue to subscribers in February 2009.
As at June 30, 2009, the Company estimates that it has spent CDN$105,000 of its CDN$1,471,400 June 2009 flow-through share issue obligation.

14. |  | SHARE PURCHASE WARRANTS

A continuity summary of the issued and outstanding share purchase warrants in terms of common shares of the Company and the associated dollar amounts is presented below:

|  | Number of |  |  | Fair Value |
|  | Common Shares |  |  | Dollar |
(in thousands except share amounts) |  | Issuable |  |  | Amount |
Balance at December 31, 2008 and June 30, 2009 |  |  | 9,564,915 |  |  | $ | 11,728 |
Share purchase warrants, by series: |  |  |  |  |  |  |  |
November 2004 series (1) |  |  | 3,156,915 |  |  | $ | 5,898 |
March 2006 series (2) |  |  | 6,408,000 |  |  |  | 5,830 |
|  |  | 9,564,915 |  |  | $ | 11,728 |

(1) |  | The November 2004 series has an effective exercise price of CDN$5.21 per issuable share (CDN$15.00 per warrant adjusted for the 2.88 exchange ratio associated with the Denison and IUC merger) and expires on November 24, 2009.
(2) |  | The March 2006 series has an effective exercise price of CDN$10.42 per issuable share (CDN$30.00 per warrant adjusted for the 2.88 exchange ratio associated with the Denison and IUC merger) and expires on March 1, 2011.

15. |  | CONTRIBUTED SURPLUS

A continuity summary of contributed surplus is presented below:

|  | Six Months |
|  | Ended |
(in thousands) |  | June 30, 2009 |
Balance, beginning of period |  | $ | 30,537 |
Stock-based compensation expense (note 16) |  |  | 1,705 |
Balance, end of period |  | $ | 32,242 |

16. |  | STOCK OPTIONS

The Company’s stock-based compensation plan (the “Plan”) provides for the granting of stock options up to 10% of the issued and outstanding common shares at the time of grant, subject to a maximum of 20 million common shares. As at June 30, 2009, an aggregate of 15,588,376 options have been granted (less cancellations) since the Plan’s inception in 1997.
Under the Plan, all stock options are granted at the discretion of the Company’s board of directors, including any vesting provisions if applicable. The term of any stock option granted may not exceed ten years and the exercise price may not be lower than the closing price of the Company’s shares on the last trading day immediately preceding the date of grant. In general, the term of stock options granted under the Plan ranges from three to five years and vesting occurs over a three year period.

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#####

A continuity summary of the stock options of the Company granted under the Plan is presented below:

|  |  |  |  |  | Weighted- |
|  |  |  |  |  | Average |
|  |  |  |  |  | Exercise |
|  | Number of |  |  | Price per |
|  | Common |  |  | Share |
|  | Shares |  |  | (CDN $) |
Stock options outstanding, beginning of period |  |  | 5,536,384 |  |  | $ | 7.11 |
Granted |  |  | 5,469,000 |  |  |  | 2.08 |
Exercised |  |  | — |  |  |  | — |
Expired |  |  | (188,034 | ) |  |  | 8.05 |
Stock options outstanding, end of period |  |  | 10,817,350 |  |  | $ | 4.55 |
Stock options exercisable, end of period |  |  | 5,597,265 |  |  | $ | 6.59 |

A summary of the Company’s stock options outstanding at June 30, 2009 is presented below:

|  | Weighted |  |  |  |  |  |  | Weighted- |
|  | Average |  |  |  |  |  |  | Average |
|  | Remaining |  |  |  |  |  |  | Exercise |
Range of Exercise |  | Contractual |  |  | Number of |  |  | Price per |
Prices per Share |  | Life |  |  | Common |  |  | Share |
(CDN $) |  | (Years) |  |  | Shares |  |  | (CDN $) |
Stock options outstanding |  |  |  |  |  |  |  |  |  |  |  |
$1.37 to $4.99 |  |  | 4.88 |  |  |  | 6,641,575 |  |  | $ | 2.07 |
$5.00 to $9.99 |  |  | 5.62 |  |  |  | 1,825,599 |  |  |  | 5.49 |
$10.00 to $15.30 |  |  | 0.54 |  |  |  | 2,350,176 |  |  |  | 10.82 |
Stock options outstanding, end of period |  |  | 4.07 |  |  |  | 10,817,350 |  |  | $ | 4.55 |

Options outstanding at June 30, 2009 expire between August 2009 and October 2016.
The fair value of each option granted is estimated on the date of grant using the Black-Scholes option pricing model. The following table outlines the range of assumptions used in the model for the period:

|  | Six Months
|  | Ended
|  | June 30, 2009
Risk-free interest rate |  | 1.78% - 2.40%
Expected stock price volatility |  | 83.4% - 89.6%
Expected life |  | 3.5 years
Expected forfeitures |  | —
Expected dividend yield |  | —
Fair value per share under options granted |  | CDN$0.89 - CDN$1.36

Stock-based compensation would be allocated as follows in the statement of operations:

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30 |  |  | June 30 |  |  | June 30 |  |  | June 30 |
(in thousands) |  | 2009 |  |  | 2008 |  |  | 2009 |  |  | 2008 |
Operating expenses |  | $ | 157 |  |  | $ | 71 |  |  | $ | 269 |  |  | $ | 188 |
Mineral property exploration |  |  | 39 |  |  |  | 58 |  |  |  | 43 |  |  |  | 114 |
General and administrative |  |  | 1,342 |  |  |  | 490 |  |  |  | 1,393 |  |  |  | 930 |
|  | $ | 1,538 |  |  | $ | 619 |  |  | $ | 1,705 |  |  | $ | 1,232 |

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#####

The fair values of stock options with vesting provisions are amortized on a straight-line basis as stock-based compensation expense over the applicable vesting periods. At June 30, 2009, the Company had an additional $5,821,000 in stock-based compensation expense to be recognized periodically to December 2011.

17. |  | ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

A continuity summary of accumulated other comprehensive income (loss) (“AOCI”) is as follows:

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30 |  |  | June 30 |  |  | June 30 |  |  | June 30 |
(in thousands) |  | 2009 |  |  | 2008 |  |  | 2009 |  |  | 2008 |
AOCI-Balance, beginning of period |  | $ | (18,403 | ) |  | $ | 82,256 |  |  | $ | (4,709 | ) |  | $ | 110,956 |
Cumulative foreign currency translation gain (loss) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period |  | $ | (19,015 | ) |  | $ | 72,491 |  |  | $ | (4,925 | ) |  | $ | 92,856 |
Change in foreign currency |  |  | 32,448 |  |  |  | 3,813 |  |  |  | 18,358 |  |  |  | (16,552 | )
Balance, end of period |  |  | 13,433 |  |  |  | 76,304 |  |  |  | 13,433 |  |  |  | 76,304 |
Unrealized gains (losses) on investments |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period |  |  | 612 |  |  |  | 9,765 |  |  |  | 216 |  |  |  | 18,100 |
Net unrealized gains (losses), net of tax (1) |  |  | 9,538 |  |  |  | 27,735 |  |  |  | 9,934 |  |  |  | 19,400 |
Balance, end of period |  |  | 10,150 |  |  |  | 37,500 |  |  |  | 10,150 |  |  |  | 37,500 |
AOCI-Balance, end of period |  | $ | 23,583 |  |  | $ | 113,804 |  |  | $ | 23,583 |  |  | $ | 113,804 |

(1) |  | Unrealized gains (losses) on investments deemed available-for-sale are included in other comprehensive income (loss) until realized. When the investment is disposed of or incurs a decline in value that is other than temporary, the gain (loss) is realized and reclassified to the income statement. During the three months and six months ending June 2009, approximately $nil and $136,000 of gains from investment disposals were recognized and reclassified to the income statement, respectively. During the three months and six months ending June 2008, approximately $195,000 and $195,000 of gains from investment disposals were recognized and reclassified to the income statement, respectively. During the six months ending June 2009 and 2008, no other than temporary losses were recognized.

18. |  | OTHER INCOME, NET

The elements of other income, net in the statement of operations is as follows:

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30 |  |  | June 30 |  |  | June 30 |  |  | June 30 |
(in thousands) |  | 2009 |  |  | 2008 |  |  | 2009 |  |  | 2008 |
Interest income, net of fees |  | $ | 185 |  |  | $ | 236 |  |  | $ | 369 |  |  | $ | 609 |
Interest expense |  |  | (740 | ) |  |  | (516 | ) |  |  | (1,434 | ) |  |  | (520 | )
Gains (losses) on: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Foreign exchange |  |  | (5,760 | ) |  |  | (10,197 | ) |  |  | 623 |  |  |  | (8,965 | )
Land, plant and equipment |  |  | (270 | ) |  |  | — |  |  |  | (264 | ) |  |  | 125 |
Investment disposals |  |  | — |  |  |  | 195 |  |  |  | 136 |  |  |  | 195 |
Fair value change on restricted cash and equivalents |  |  | (501 | ) |  |  | (463 | ) |  |  | (696 | ) |  |  | 37 |
Other |  |  | (100 | ) |  |  | 3 |  |  |  | (293 | ) |  |  | 3 |
Other income, net |  | $ | (7,186 | ) |  | $ | (10,742 | ) |  | $ | (1,559 | ) |  | $ | (8,516 | )

19. |  | SEGMENTED INFORMATION

Business Segments
The Company operates in two primary segments — the mining segment and the services and other segment. The mining segment, which has been further subdivided by major geographic regions, includes activities related to exploration, evaluation and development, mining, milling and the sale of mineral concentrates. The services and other segment includes the results of the Company’s environmental services business, management fees and commission income earned from UPC and general corporate expenses not allocated to the other segments.

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For the six months ended June 30, 2009, business segment results were as follows:

|  | Canada |  |  | U.S.A |  |  | Africa |  |  | Asia |  |  | Services |  |  |  |
(in thousands) |  | Mining |  |  | Mining |  |  | Mining |  |  | Mining |  |  | and Other |  |  | Total |
Statement of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 10,886 |  |  |  | 18,755 |  |  |  | — |  |  |  | — |  |  |  | 5,729 |  |  |  | 35,370 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | 12,238 |  |  |  | 25,622 |  |  |  | — |  |  |  | — |  |  |  | 4,274 |  |  |  | 42,134 |
Sales royalties and capital taxes |  |  | 693 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (5 | ) |  |  | 688 |
Mineral property exploration |  |  | 3,432 |  |  |  | 9 |  |  |  | 8 |  |  |  | 1,130 |  |  |  | — |  |  |  | 4,579 |
General and administrative |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,853 |  |  |  | 7,853 |
Stock option expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,705 |  |  |  | 1,705 |
|  |  | 16,363 |  |  |  | 25,622 |  |  |  | 8 |  |  |  | 1,130 |  |  |  | 13,827 |  |  |  | 56,959 |
Loss from operations |  |  | (5,477 | ) |  |  | (6,876 | ) |  |  | (8 | ) |  |  | (1,130 | ) |  |  | (8,098 | ) |  |  | (21,589 | )
Revenues — supplemental: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uranium concentrates |  |  | 10,886 |  |  |  | 16,710 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 27,596 |
Vanadium related concentrates |  |  | — |  |  |  | 2,018 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,018 |
Environmental services |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,187 |  |  |  | 4,187 |
Management fees and commissions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,542 |  |  |  | 1,542 |
Alternate feed processing and other |  |  | — |  |  |  | 27 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 27 |
|  |  | 10,886 |  |  |  | 18,755 |  |  |  | — |  |  |  | — |  |  |  | 5,729 |  |  |  | 35,370 |
Long-lived assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plant and equipment |  |  | 83,608 |  |  |  | 60,828 |  |  |  | 618 |  |  |  | 288 |  |  |  | 1,352 |  |  |  | 146,694 |
Mineral properties |  |  | 297,377 |  |  |  | 69,710 |  |  |  | 225,283 |  |  |  | 7,330 |  |  |  | — |  |  |  | 599,700 |
Intangibles |  |  | — |  |  |  | 391 |  |  |  | — |  |  |  | — |  |  |  | 4,390 |  |  |  | 4,781 |
Goodwill |  |  | 66,229 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 66,229 |
|  |  | 447,214 |  |  |  | 130,929 |  |  |  | 225,901 |  |  |  | 7,618 |  |  |  | 5,742 |  |  |  | 817,404 |

For the three months ended June 30, 2009, business segment results were as follows:

|  | Canada |  |  | U.S.A |  |  | Africa |  |  | Asia |  |  | Services |  |  |  |
(in thousands) |  | Mining |  |  | Mining |  |  | Mining |  |  | Mining |  |  | and Other |  |  | Total |
Statement of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 5,405 |  |  |  | 3,877 |  |  |  | — |  |  |  | — |  |  |  | 4,090 |  |  |  | 13,372 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | 6,151 |  |  |  | 7,873 |  |  |  | — |  |  |  | — |  |  |  | 2,741 |  |  |  | 16,765 |
Sales royalties and capital taxes |  |  | 346 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (11 | ) |  |  | 335 |
Mineral property exploration |  |  | 1,576 |  |  |  | 5 |  |  |  | 8 |  |  |  | 913 |  |  |  | — |  |  |  | 2,502 |
General and administrative |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,531 |  |  |  | 3,531 |
Stock option expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,538 |  |  |  | 1,538 |
|  |  | 8,073 |  |  |  | 7,878 |  |  |  | 8 |  |  |  | 913 |  |  |  | 7,799 |  |  |  | 24,671 |
Loss from operations |  |  | (2,668 | ) |  |  | (4,001 | ) |  |  | (8 | ) |  |  | (913 | ) |  |  | (3,709 | ) |  |  | (11,299 | )
Revenues — supplemental: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uranium concentrates |  |  | 5,405 |  |  |  | 1,853 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,258 |
Vanadium related concentrates |  |  | — |  |  |  | 2,018 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,018 |
Environmental services |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,843 |  |  |  | 2,843 |
Management fees and commissions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,247 |  |  |  | 1,247 |
Alternate feed processing and other |  |  | — |  |  |  | 6 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 6 |
|  |  | 5,405 |  |  |  | 3,877 |  |  |  | — |  |  |  | — |  |  |  | 4,090 |  |  |  | 13,372 |

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For the six months ended June 30, 2008, business segment results were as follows:

|  | Canada |  |  | U.S.A |  |  | Africa |  |  | Asia |  |  | Services |  |  |  |
(in thousands) |  | Mining |  |  | Mining |  |  | Mining |  |  | Mining |  |  | and Other |  |  | Total |
Statement of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 32,351 |  |  |  | 12,862 |  |  |  | — |  |  |  | — |  |  |  | 4,681 |  |  |  | 49,894 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | 24,237 |  |  |  | 10,487 |  |  |  | — |  |  |  | — |  |  |  | 2,961 |  |  |  | 37,685 |
Sales royalties and capital taxes |  |  | 1,722 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 86 |  |  |  | 1,808 |
Mineral property exploration |  |  | 8,474 |  |  |  | 56 |  |  |  | — |  |  |  | 1,708 |  |  |  | — |  |  |  | 10,238 |
General and administrative |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7,676 |  |  |  | 7,676 |
Stock option expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,232 |  |  |  | 1,232 |
|  |  | 34,433 |  |  |  | 10,543 |  |  |  | — |  |  |  | 1,708 |  |  |  | 11,955 |  |  |  | 58,639 |
Income (loss) from operations |  |  | (2,082 | ) |  |  | 2,319 |  |  |  | — |  |  |  | (1,708 | ) |  |  | (7,274 | ) |  |  | (8,745 | )
Revenues — supplemental: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uranium concentrates |  |  | 32,351 |  |  |  | 12,825 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45,176 |
Environmental services |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,495 |  |  |  | 2,495 |
Management fees and commissions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,186 |  |  |  | 2,186 |
Alternate feed processing and other |  |  | — |  |  |  | 37 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 37 |
|  |  | 32,351 |  |  |  | 12,862 |  |  |  | — |  |  |  | — |  |  |  | 4,681 |  |  |  | 49,894 |
Long-lived assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Property, plant and equipment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Plant and equipment |  |  | 89,017 |  |  |  | 74,894 |  |  |  | 550 |  |  |  | 342 |  |  |  | 1,641 |  |  |  | 166,444 |
Mineral properties |  |  | 351,628 |  |  |  | 28,935 |  |  |  | 216,886 |  |  |  | 3,304 |  |  |  | — |  |  |  | 600,753 |
Intangibles |  |  | — |  |  |  | 453 |  |  |  | — |  |  |  | — |  |  |  | 5,878 |  |  |  | 6,331 |
Goodwill |  |  | 118,923 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 119,923 |
|  |  | 559,568 |  |  |  | 104,282 |  |  |  | 217,436 |  |  |  | 3,646 |  |  |  | 7,519 |  |  |  | 892,451 |

For the three months ended June 30, 2008, business segment results were as follows:

|  | Canada |  |  | U.S.A |  |  | Africa |  |  | Asia |  |  | Services |  |  |  |
(in thousands) |  | Mining |  |  | Mining |  |  | Mining |  |  | Mining |  |  | and Other |  |  | Total |
Statement of Operations: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Revenues |  |  | 20,686 |  |  |  | 8,326 |  |  |  | — |  |  |  | — |  |  |  | 2,701 |  |  |  | 31,713 |
Expenses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Operating expenses |  |  | 13,987 |  |  |  | 9,172 |  |  |  | — |  |  |  | — |  |  |  | 1,733 |  |  |  | 24,892 |
Sales royalties and capital taxes |  |  | 982 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 17 |  |  |  | 999 |
Mineral property exploration |  |  | 2,546 |  |  |  | 56 |  |  |  | — |  |  |  | 1,127 |  |  |  | — |  |  |  | 3,729 |
General and administrative |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,113 |  |  |  | 4,113 |
Stock option expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 619 |  |  |  | 619 |
|  |  | 17,515 |  |  |  | 9,228 |  |  |  | — |  |  |  | 1,127 |  |  |  | 6,482 |  |  |  | 34,352 |
Income (loss) from operations |  |  | 3,171 |  |  |  | (902 | ) |  |  | — |  |  |  | (1,127 | ) |  |  | (3,781 | ) |  |  | (2,639 | )
Revenues — supplemental: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Uranium concentrates |  |  | 20,686 |  |  |  | 8,312 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 28,998 |
Environmental services |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,354 |  |  |  | 1,354 |
Management fees and commissions |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,347 |  |  |  | 1,347 |
Alternate feed processing and other |  |  | — |  |  |  | 14 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 14 |
|  |  | 20,686 |  |  |  | 8,326 |  |  |  | — |  |  |  | — |  |  |  | 2,701 |  |  |  | 31,713 |

Major Customers
The Company’s business is such that, at any given time, it sells its uranium and vanadium concentrates to and enters into process milling arrangements and other services with a relatively small number of customers. In the six months ended June 30, 2009, 2 customers accounted for approximately 78% of total revenues. For the comparative six month period ending June 30, 2008, 2 customers accounted for approximately 66% of total revenues.

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20. |  | RELATED PARTY TRANSACTIONS

Uranium Participation Corporation
The Company is a party to a management services agreement with UPC. Under the terms of the agreement, the Company will receive the following fees from UPC: a) a commission of 1.5% of the gross value of any purchases or sales of uranium completed at the request of the Board of Directors of UPC; b) a minimum annual management fee of CDN$400,000 (plus reasonable out-of-pocket expenses) plus an additional fee of 0.3% per annum based upon UPC’s net asset value between CDN$100,000,000 and CDN$200,000,000 and 0.2% per annum based upon UPC’s net asset value in excess of CDN$200,000,000; c) a fee of CDN$200,000 upon the completion of each equity financing where proceeds to UPC exceed CDN$20,000,000; d) a fee of CDN$200,000 for each transaction or arrangement (other than the purchase or sale of uranium) of business where the gross value of such transaction exceeds CDN$20,000,000 (“an initiative”); e) an annual fee up to a maximum of CDN$200,000, at the discretion of the Board of Directors of UPC, for on-going maintenance or work associated with an initiative; and f) a fee equal to 1.5% of the gross value of any uranium held by UPC prior to the completion of any acquisition of at least 90% of the common shares of UPC.
In accordance with the management services agreement, all uranium investments owned by UPC are held in accounts with conversion facilities in the name of DMI as manager for and on behalf of UPC.
From time to time, the Company has also provided temporary revolving credit facilities to UPC which generate interest and standby fee income. No such facilities were in place for the three and six month periods ending June 30, 2009 or 2008.
The following transactions were incurred with UPC for the periods noted:

|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30 |  |  | June 30 |  |  | June 30 |  |  | June 30 |
(in thousands) |  | 2009 |  |  | 2008 |  |  | 2009 |  |  | 2008 |
Revenue: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Management fees, including out-of-pocket expenses |  | $ | 505 |  |  | $ | 385 |  |  | $ | 800 |  |  | $ | 1,001 |
Commission fees on purchase and sale of uranium |  |  | 742 |  |  |  | 962 |  |  |  | 742 |  |  |  | 1,185 |
|  | $ | 1,247 |  |  | $ | 1,347 |  |  | $ | 1,542 |  |  | $ | 2,186 |

At June 30, 2009, accounts receivable includes $890,000 due from UPC with respect to the fees indicated above.
Korea Electric Power Corporation (“KEPCO”)
In June 2009, Denison completed definitive agreements with KEPCO. The agreements included a long-term offtake agreement which provides for the delivery to KEPCO of 20% of Denison’s annual U3O8 production (±10%) but not less than 350,000 pounds (±10%) per year from 2010 to 2015 inclusive. KEPCO also purchased 58,000,000 common shares of Denison (see note 13) representing approximately 17% of the issued and outstanding capital at June 2009. One representative from KEPCO has been appointed to Denison’s board of directors.

21. |  | CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS

Capital Management
The Company’s capital includes debt and shareholders’ equity. The Company’s primary objective with respect to its capital management is to ensure that it has sufficient capital to maintain its ongoing operations, to provide returns for shareholders and benefits for other stakeholders and to pursue growth opportunities. As at June 30, 2009, the Company is not subject to externally imposed capital requirements (other than the financial covenants relating to the revolving credit facility) and there has been no change with respect to the overall capital risk management strategy.

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The total capital is calculated as follows:

|  | At June 30 |  |  | At December 31 |
(in thousands) |  | 2009 |  |  | 2008 |
Debt obligations — current and long-term |  | $ | 374 |  |  | $ | 99,754 |
Less: Cash and equivalents |  |  | (33,440 | ) |  |  | (3,206 | )
Adjusted net debt |  |  | (33,066 | ) |  |  | 96,548 |
Shareholders’ Equity |  |  | 800,595 |  |  |  | 608,352 |
Adjusted net debt to Shareholders’ Equity ratio |  |  | (4.1 | )% |  |  | 15.9 | %

Funds raised from equity financing during the period were used to reduce the Company’s debt obligations.
Fair Values of Financial Instruments
The Company examines the various financial instrument risks to which it is exposed and assesses the impact and likelihood of those risks. These risks may include credit risk, liquidity risk, currency risk, interest rate risk and price risk.
(a) Credit Risk
Credit risk is the risk of loss due to a counterparty’s inability to meet it obligations. The Company’s credit risk is related to trade receivables in the ordinary course of business, cash and cash equivalents and investments. The Company sells uranium exclusively to large organizations with strong credit ratings and the balance of trade receivables owed to the Company in the ordinary course of business is not significant. Cash and cash equivalents are in place with major financial institutions and the Canadian and US government. Therefore, the Company is not exposed to significant credit risk and overall the Company’s credit risk has not changed significantly from the prior period.
(b) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations associated with its financial liabilities and other contractual obligations. The Company has in place a planning and budgeting process to help determine the funds required to support the Company’s normal operating requirements on an ongoing basis. The Company endeavors to have sufficient committed capital to meet its short-term business requirements, taking into account its anticipated cash flows from operations and its holdings of cash and cash equivalents. The Company has in place a three year term revolving credit facility in the amount of US$125,000,000 to meet its cash flow needs (see note 11).
The maturities of the Company’s financial liabilities are as follows:

|  | Within 1 |  |  | 1 to 5 |
(in thousands) |  | Year |  |  | Years |
Accounts payable and accrued liabilities |  | $ | 10,003 |  |  | $ | — |
Debt obligations (Note 12) |  |  | 171 |  |  |  | 203 |
|  | $ | 10,174 |  |  | $ | 203 |

(c) Currency Risk
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates. The Company’s risk management objective is to reduce cash flow risk related to foreign denominated cash flows. Financial instruments that impact the Company’s operations or other comprehensive income due to currency fluctuations include: non United States dollar denominated cash and cash equivalents, accounts receivable, accounts payable, long-term investments and bank debt.

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The sensitivity of the Company’s operations and other comprehensive income due to changes in the exchange rate between the Canadian dollar and its Zambian kwacha functional currencies and its United States dollar reporting currency as at June 30, 2009 is summarized below:

|  |  |  |  |  | Change in |
|  | Change in |  |  | Comprehensive |
(in thousands) |  | Net Income (1) |  |  | Net Income (1) |
Canadian dollar |  |  |  |  |  |  |  |
10% increase in value |  | $ | (1,004 | ) |  | $ | 56,540 |
10% decrease in value |  | $ | 1,004 |  |  | $ | (56,540 | )
Zambian kwacha |  |  |  |  |  |  |  |
10% increase in value |  | $ | (5,378 | ) |  | $ | (5,378 | )
10% decrease in value |  | $ | 5,378 |  |  | $ | 5,378 |

(1) |  | In the above table, positive (negative) values represent increases (decreases) in net income and comprehensive net income respectively.

(d) Interest Rate Risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company is exposed to interest rate risk on its outstanding borrowings and short-term investments. Presently, all of the Company’s outstanding borrowings are at floating interest rates. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk. The weighted average interest rate paid by the Company during the six months ended June 2009 on its outstanding borrowings was 2.70%.
An increase in interest rates of 100 basis points (1 percent) would have increased the amount of interest expense recorded in the six month period ended June 2009 by approximately $456,000.
(e) Price Risk
The Company is exposed to price risk on the commodities which it produces and sells. The Company is exposed to equity price risk as a result of holding long-term investments in other exploration and mining companies. The Company does not actively trade these investments.
The sensitivity analyses below have been determined based on the exposure to commodity price risk and equity price risk at June 30, 2009:

|  |  |  |  |  | Change in |
|  | Change in |  |  | Comprehensive |
(in thousands) |  | Net Income (1) |  |  | Net Income (1) |
Commodity price risk |  |  |  |  |  |  |  |
10% increase in uranium prices (2) |  | $ | 1,769 |  |  | $ | 1,769 |
10% decrease in uranium prices (2) |  | $ | (1,769 | ) |  | $ | (1,769 | )
10% increase in vanadium-related prices |  | $ | 157 |  |  | $ | 157 |
10% decrease in vanadium-related prices |  | $ | (157 | ) |  | $ | (157 | )
Equity price risk |  |  |  |  |  |  |  |
10% increase in equity prices |  | $ | — |  |  | $ | 1,800 |
10% decrease in equity prices |  | $ | — |  |  | $ | (1,800 | )

(1) |  | In the above table, positive (negative) values represent increases (decreases) in net income and comprehensive net income of the six month period ending June 2009 respectively.
(2) |  | The Company is exposed to fluctuations in both the spot price and long-term price of uranium as a result of the various pricing formulas in the uranium contracts. The above sensitivity analysis is prepared using the 6 month average year-to-date June 2009 actual realized price and adjusting the uranium and vanadium related pricing formulas for a 10% increase or decrease in spot and long-term prices as applicable.

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(f) Fair Value Estimation
The fair value of financial instruments which trade in active markets (such as available-for-sale securities) is based on quoted market prices at the balance sheet date. The quoted market price used to value financial assets held by the Company is the current bid price.
The fair values of cash and cash equivalents, trade and other receivables and accounts payable and accrued liabilities approximate their carrying values because of the short-term nature of these instruments.
The fair values of the Company’s restricted cash and equivalents in cash and cash equivalents, U.S. government bonds, commercial paper and corporate bonds approximate carrying values.
The fair value of the Company’s debt obligations at June 30, 2009 is approximately $374,000.

22. |  | INCOME TAXES

For the six months ended June 30, 2009, the Company has provided for current tax recoveries of $1,616,000 and for future tax recoveries of $1,990,000. The current tax recovery relates primarily to the anticipated carry-back of tax losses generated during 2009 to prior tax years of $1,599,000. The future tax recovery relates primarily to the recognition of previously unrecognized Canadian tax assets of $1,865,000.

23. |  | COMMITMENTS AND CONTINGENCIES

General Legal Matters
The Company is involved, from time to time, in various other legal actions and claims in the ordinary course of business. In the opinion of management, the aggregate amount of any potential liability is not expected to have a material adverse effect on the Company’s financial position or results.
Third Party Indemnities
The Company has agreed to indemnify Calfrac Well Services against certain specified future liabilities it may incur related to the assets or liabilities assumed by Calfrac on March 8, 2004.

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