Exhibit 7

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


	At March 31			At December 31
	2010			2009

ASSETS
Current
Cash and cash equivalents	$	13,020		$	19,804
Trade and other receivables (Note 3)		16,301			13,773
Inventories (Note 4)		57,218			52,216
Prepaid expenses and other		1,181			1,607

		87,720			87,400

Inventories — ore in stockpiles (Note 4)		1,716			1,530
Investments (Note 5)		13,023			10,605
Prepaid expenses and other		248			287
Restricted cash and investments (Note 6)		21,412			21,656
Property, plant and equipment (Note 7)		706,294			691,039
Intangibles (Note 8)		4,371			4,436
Goodwill (Note 9)		52,792			51,028

	$	887,576		$	867,981


LIABILITIES
Current
Accounts payable and accrued liabilities	$	14,498		$	9,508
Current portion of long-term liabilities:
Post-employment benefits (Note 10)		394			380
Reclamation and remediation obligations (Note 11)		778			752
Debt obligations (Note 12)		581			869
Other long-term liabilities (Note 13)		323			313

		16,574			11,822

Deferred revenue		3,187			3,187
Provision for post-employment benefits (Note 10)		3,573			3,426
Reclamation and remediation obligations (Note 11)		17,306			17,154
Debt obligations (Note 12)		186			195
Other long-term liabilities (Note 13)		1,084			1,051
Future income tax liability (Note 23)		104,906			102,918

		146,816			139,753


SHAREHOLDERS’ EQUITY
Share capital (Note 14)		849,135			849,488
Share purchase warrants (Note 15)		5,830			5,830
Contributed surplus (Note 16 and 17)		40,317			39,922
Deficit		(251,583	)		(242,494	)
Accumulated other comprehensive income (Note 18)		97,061			75,482

		740,760			728,228

	$	887,576		$	867,981


Issued and outstanding common shares (Note 14)		339,720,415			339,720,415


Commitments and contingencies (Note 24)

See accompanying notes to the consolidated financial statements

- 1 -

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


	Three Months Ended
	March 31			March 31
	2010			2009

REVENUES (Note 20)	$	21,975		$	21,998


EXPENSES
Operating expenses (Note 19)		21,813			25,369
Sales royalties and capital taxes		234			353
Mineral property exploration		1,685			2,077
General and administrative		3,255			4,322
Stock option expense (Note 17)		395			167

		27,382			32,288


Loss from operations		(5,407	)		(10,290	)
Other income (expense) (Note 19)		(4,839	)		5,627

Loss before taxes		(10,246	)		(4,663	)

Income tax recovery (expense) (Note 23):
Current		—			1,308
Future		1,157			2,028

Net loss for the period	$	(9,089	)	$	(1,327	)


Net loss per share:
Basic	$	(0.03	)	$	(0.01	)
Diluted	$	(0.03	)	$	(0.01	)


Weighted-average number of shares outstanding (in thousands):
Basic		339,720			221,254
Diluted		339,720			221,254

See accompanying notes to the consolidated financial statements

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DENISON MINES CORP.
Consolidated Statements of Shareholders’ Equity and Comprehensive Income (Loss)
(Unaudited — Expressed in thousands of U.S. dollars)


	Three Months Ended
	March 31			March 31
	2010			2009

Share capital
Balance at beginning of period	$	849,488		$	666,278
New shares issued-net of issue costs		—			36,927
Renunciation of flow-through share liabilities		(353	)		(1,824	)

Balance at end of period	$	849,135		$	701,381


Share purchase warrants
Balance at beginning of period	$	5,830		$	11,728
Warrant expiries		—			—

Balance at end of period	$	5,830		$	11,728


Contributed surplus
Balance at beginning of period	$	39,922		$	30,537
Stock-based compensation expense		395			167

Balance at end of period	$	40,317		$	30,704


Deficit
Balance at beginning of period	$	(242,494	)	$	(95,482	)
Net loss for the period		(9,089	)		(1,327	)

Balance at end of period	$	(251,583	)	$	(96,809	)


Accumulated other comprehensive income (loss)
Balance at beginning of period	$	75,482		$	(4,709	)
Unrealized gain on investments change-net of tax		2,144			396
Foreign currency translation change		19,435			(14,090	)

Balance at end of period	$	97,061		$	(18,403	)


Total shareholders’ equity	$	740,760		$	628,601


Comprehensive income (loss)
Net loss for the period	$	(9,089	)	$	(1,327	)
Unrealized gain on investments change-net of tax		2,144			396
Foreign currency translation change		19,435			(14,090	)

Comprehensive income (loss) for the period	$	12,490		$	(15,021	)

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
	March 31			March 31
CASH PROVIDED BY (USED IN):	2010			2009

OPERATING ACTIVITIES
Net loss for the period	$	(9,089	)	$	(1,327	)
Items not affecting cash:
Depletion, depreciation, amortization and accretion		8,134			11,622
Investments impairment		177			—
Stock-based compensation		395			167
Losses (gains) on asset disposals		58			(142	)
Losses (gains) on restricted investments		(13	)		195
Non-cash inventory adjustments		(2,707	)		1,224
Future income tax expense (recovery)		(1,157	)		(2,028	)
Foreign exchange		4,993			(6,383	)

Net change in non-cash working capital items
Trade and other receivables		(2,245	)		(11,217	)
Inventories		(2,935	)		(10,518	)
Prepaid expenses and other assets		442			(189	)
Accounts payable and accrued liabilities		4,818			(11,427	)
Post-employment benefits		(53	)		(79	)
Reclamation and remediation obligations		(461	)		(118	)
Deferred revenue		—			215

Net cash provided by (used in) operating activities		357			(30,005	)


INVESTING ACTIVITIES
Decrease (increase) in notes receivable		(46	)		57
Proceeds from sale of investments		198			3,222
Expenditures on property, plant and equipment		(7,324	)		(10,372	)
Proceeds on sale of property, plant and equipment		—			6
Decrease (increase) in restricted cash and investments		318			(892	)

Net cash used in investing activities		(6,854	)		(7,979	)


FINANCING ACTIVITIES
Increase (decrease) in debt obligations		(320	)		496
Issuance of common shares for:
New share issues		—			36,927

Net cash provided by financing activities		(320	)		37,423


Decrease in cash and cash equivalents		(6,817	)		(561	)
Foreign exchange effect on cash and cash equivalents		33			(140	)
Cash and cash equivalents, beginning of period		19,804			3,206

Cash and cash equivalents, end of period	$	13,020		$	2,505

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)

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 of some of the Company’s mines is also produced and is in the form of vanadium pentoxide (“V₂O₅”). The Company is also in the business of processing uranium bearing waste materials, referred to as “alternate feed materials”.

Denison Mines Inc. (“DMI”), a subsidiary of DMC, 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 U₃O₈and UF₆ by UPC.

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, 2009.

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 three months ended March 31, 2010 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, 2009, 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 March 31, 2010:


		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, 2010:

CICA Handbook Section 1582 “Business Combinations”, Section 1601 “Consolidated Financial Statements” and Section 1602 “Non-Controlling Interests” which replace the former CICA 1581 “Business Combinations” and CICA 1600 “Consolidated Financial Statements” and establish a new section for accounting for a non-controlling interest in a subsidiary. These sections provide the Canadian equivalent to FASB Statements No.141(R) “Business Combinations” and No.160 “Non-Controlling Interests in Consolidated Financial Statements”. CICA 1582 is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period after January 1, 2011. CICA 1601 and CICA 1602 apply to interim and annual consolidated financial statements relating to years beginning on or after January 1, 2011 although early adoption is permitted. CICA 1582, which replaces Handbook Section 1581, Business Combinations, establishes standards for the measurement of a business combination and the recognition and measurement of assets acquired and liabilities assumed. CICA 1601, which replaces Handbook Section 1600, carries forward the existing Canadian guidance on aspects of the preparation of consolidated financial statements subsequent to acquisition other than non-controlling interests. CICA 1602 establishes guidance for the treatment of non-controlling interests subsequent to acquisition through a business combination. The Company has early adopted all three sections effective January 1, 2010. There was no impact to the Company’s financial statements from adopting these standards.

Comparative Numbers

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

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TRADE AND OTHER RECEIVABLES

The trade and other receivables balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Trade receivables — mineral concentrate sales	$	9,435	$	9,422
Trade receivables — other		4,156		2,114
Trade and other receivables in joint ventures		892		928
GST and VAT receivables		1,184		1,127
Sundry receivables		591		182
Notes receivable		43		—

	$	16,301	$	13,773

INVENTORIES

The inventories balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Uranium concentrates and work-in-progress ⁽¹⁾	$	22,373	$	19,921
Vanadium concentrates and work-in-progress ⁽²⁾		510		442
Inventory of ore in stockpiles		30,278		28,366
Mine and mill supplies		5,773		5,017

	$	58,934	$	53,746


Inventories — by duration:
Current	$	57,218	$	52,216
Long-term — ore in stockpiles		1,716		1,530

	$	58,934	$	53,746


(1)		The uranium concentrates and work-in-progress inventory is presented net of a provision of $5,448,000 as at March 31, 2010 and $5,910,000 as at December 31, 2009.

(2)		The vanadium concentrates and work-in-progress inventory is presented net of a provision of $5,144,000 as at March 31, 2010 and $7,302,000 as at December 31, 2009.

Operating expenses include write-downs (recoveries) of ($2,752,000) and $1,224,000 relating to the net realizable value of the Company’s uranium and vanadium inventories for the three months ended March 2010 and March 2009, respectively.

Long-term ore in stockpile inventory represents an estimate of the amount of ore on the stockpile in excess of the next twelve months of planned mill production.

INVESTMENTS

The investments balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Investments
Available for sale securities at fair value	$	13,023	$	10,605

	$	13,023	$	10,605

- 7 -

Investment Sales

During the three months ended March 2010, the Company sold equity interests in one public company for cash consideration of $198,000. The resulting gain of $122,000 has been included in “other income, net” in the statement of operations (see Note 19).

Investment Impairments

During the three months ended March 2010, the Company has taken impairment charges of $177,000 on its investments. The resulting loss has been included in “other income, net” in the statement of operations (see Note 19).

RESTRICTED CASH AND INVESTMENTS

The Company has certain restricted cash and investments deposited to collateralize its reclamation obligations. The restricted cash and investments balance consists of:


	At March 31,		At December 31,
(in thousands)	2010		2009

Cash	$	58	$	23
Cash equivalents		4,638		3,066
Investments		16,716		18,567

	$	21,412	$	21,656


Restricted cash and investments — by item:
U.S. mill and mine reclamation	$	19,738	$	19,564
Elliot Lake reclamation trust fund		1,674		2,092

	$	21,412	$	21,656

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 three months ended March 2010, the Company has not deposited any additional monies into its collateral account.

Elliot Lake Reclamation Trust Fund

During the three months ended March 2010, pursuant to its Reclamation Funding Agreement with the Governments of Canada and Ontario, the Company has not deposited any additional monies into the Elliot Lake Reclamation Trust Fund and has withdrew $480,000 (CDN$499,000).

- 8 -

PROPERTY, PLANT AND EQUIPMENT

The property, plant and equipment balance consists of:


	At March 31,			At December 31,
(in thousands)	2010			2009

Plant and equipment:
Cost	$	180,011		$	172,675
Construction-in-progress		12,106			11,861
Accumulated depreciation		(31,290	)		(27,916	)

	$	160,827		$	156,621


Mineral properties:
Cost	$	703,213		$	686,457
Impairment		(103,441	)		(103,441	)
Accumulated amortization		(54,305	)		(48,598	)

	$	545,467		$	534,418


Net book value	$	706,294		$	691,039

A continuity summary of property, plant and equipment is presented below:


	Three Months
	Ended
(in thousands)	March 31, 2010

Property, plant and equipment — net book value:
Beginning of period	$	691,039
Additions		8,322
Depreciation and amortization		(7,151	)
Write-down		(180	)
Foreign exchange		14,264

End of period	$	706,294

Plant and Equipment — Mining

During 2010, the Company increased the write-down associated with the planned disposal of certain of its mining equipment at its McClean Lake mining operation by $180,000. The net book value of the equipment, prior to the write-down, is $1,946,000. The write-down has been included in net other income (expense) in the statement of operations.

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 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 March 31, 2010, the Company has incurred a total of CDN$4,161,000 towards the option and has earned a 49% ownership interest in the project under the phase-in-ownership provisions of the agreement.

- 9 -

INTANGIBLES

The intangibles balance consists of:


	At March 31,			At December 31,
(in thousands)	2010			2009

Cost
UPC management services agreement	$	7,285		$	7,041
Urizon technology licenses		750			750

	$	8,035		$	7,791

Impairment
Urizon technology licenses		(359	)		(359	)

	$	(359	)	$	(359	)

Accumulated amortization
UPC management services agreement		(2,914	)		(2,605	)
Urizon technology licenses		(391	)		(391	)

	$	(3,305	)	$	(2,996	)


Net book value	$	4,371		$	4,436

A continuity summary of intangibles is presented below:


	Three Months
	Ended
(in thousands)	March 31, 2010

Intangibles — net book value:
Beginning of period	$	4,436
Amortization		(213	)
Foreign exchange		148

Net book value, end of period	$	4,371

GOODWILL

The goodwill balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Goodwill, allocation by business unit:
Canada mining segment	$	52,792	$	51,028

A continuity summary of goodwill is presented below:


	Three Months
	Ended
(in thousands)	March 31, 2010

Goodwill:
Beginning of period	$	51,028
Foreign exchange		1,764

End of period	$	52,792

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10.

POST-EMPLOYMENT BENEFITS

The post-employment benefits balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Accrued benefit obligation	$	3,755	$	3,594
Unamortized experience gain		212		212

	$	3,967	$	3,806


Post-employment benefits — by duration:
Current		394		380
Non-current		3,573		3,426

	$	3,967	$	3,806

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


	Three Months
	Ended
(in thousands)	March 31, 2010

Post-employment benefits:
Beginning of period	$	3,806
Benefits paid		(53	)
Interest cost		88
Amortization of experience gain		(7	)
Foreign exchange		133

End of period	$	3,967

11.

RECLAMATION AND REMEDIATION OBLIGATIONS

The reclamation and remediation obligations balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Reclamation obligations — by location:
U.S Mill and Mines	$	8,767	$	8,609
Elliot Lake		8,115		8,155
McClean and Midwest Joint Ventures		1,202		1,142

	$	18,084	$	17,906


Reclamation obligations — by duration:
Current		778		752
Non-current		17,306		17,154

	$	18,084	$	17,906

- 11 -

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


	Three Months
	Ended
(in thousands)	March 31, 2010

Reclamation and remediation obligations:
Beginning of period	$	17,906
Accretion		326
Expenditures incurred		(461	)
Foreign exchange		313

End of period	$	18,084

12.

DEBT OBLIGATIONS

The debt obligations balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Revolving line of credit	$	—	$	—
Notes payable and other financing		767		1,064

	$	767	$	1,064


Debt obligations, by duration:
Current		581		869
Non-current		186		195

	$	767	$	1,064

Revolving Line of Credit

The Company has in place a $60,000,000 revolving term credit facility (the “facility”) with the Bank of Nova Scotia. The maturity date of the facility is June 30, 2011.

As at March 31, 2010, the Company has no outstanding borrowings under the facility (December 31, 2009 — $Nil). At March 31, 2010, approximately $9,547,000 of the facility is being utilized as collateral for certain letters of credit and is not available to draw upon (December 31, 2009 - $9,228,000). During the three months ending March 31, 2010, the Company has not incurred any interest under the facility.

The Company has deferred $1,230,000 (CDN$1,250,000) of incremental costs associated with the set-up and subsequent amendment of the facility. These costs are being amortized over the three year term of the facility. The unamortized portion of the asset is included in “prepaid expenses and other” on the consolidated balance sheet.

- 12 -

13.

OTHER LONG-TERM LIABILITIES

The other long-term liabilities balance consists of:


	At March 31		At December 31
(in thousands)	2010		2009

Unamortized fair value of sales contracts	$	323	$	313
Unamortized fair value of toll milling contracts		984		951
Other		100		100

	$	1,407	$	1,364


Other long-term liabilities — by duration:
Current		323		313
Non-current		1,084		1,051

	$	1,407	$	1,364

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

14.

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, 2009		339,720,415	$	849,488


Renunciation of flow-through share liability		—		(353	)

		—		(353	)

Balance at March 31, 2010		339,720,415	$	849,135

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.

As at March 31, 2010, the Company has fully met its CDN$1,471,500 June 2009 flow-through share obligation. The Company renounced the tax benefit of the issue to its subscriber in February 2010.

- 13 -

15.

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, 2009 and March 31, 2010		6,408,000	$	5,830


Share purchase warrants, by series:
March 2006 series ⁽²⁾		6,408,000		5,830

		6,408,000	$	5,830


(1)		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.

16.

CONTRIBUTED SURPLUS

A continuity summary of contributed surplus is presented below:


	Three Months
	Ended
(in thousands)	March 31, 2010

Contributed surplus:
Beginning of period	$	39,922
Stock-based compensation expense (note 17)		395

End of period	$	40,317

17.

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 March 31, 2010, an aggregate of 12,185,526 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.

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		8,084,990		$	2.97
Granted		32,000			1.41
Exercised		—			—
Cancellations		(1,310,850	)		2.62

Stock options outstanding — end of period		6,806,140		$	3.03

Stock options exercisable — end of period		3,891,973		$	3.54

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A summary of the Company’s stock options outstanding at March 31, 2010 is presented below:

Weighted

Weighted-

Average

Remaining

Exercise

Range of Exercise

Contractual

Number of

Price per

Prices per Share

Life

Common

(CDN$)

(Years)

(CDN $)

Stock options outstanding

$1.37 to $4.99

4.15

5,411,675

2.06

$5.00 to $9.99

4.68

1,107,639

5.71

$10.00 to $15.30

0.41

286,826

11.09

Stock options outstanding — end of period

4.08

6,806,140

3.03

Options outstanding at March 31, 2010 expire between April 2010 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:


	Three Months
	Ended
	March 31, 2010

Risk-free interest rate		2.49	%
Expected stock price volatility		87.4	%
Expected life	3.8 years
Expected forfeitures		—
Expected dividend yield		—
Fair value per share under options granted	CDN$0.88

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


	Three Months Ended
	March 31		March 31
(in thousands)	2010		2009

Operating expenses	$	168	$	112
Mineral property exploration		41		4
General and administrative		186		51

	$	395	$	167

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 March 31, 2010, the Company had an additional $3,049,000 in stock-based compensation expense to be recognized periodically to September 2012.

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18.

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)

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


	Three Months Ended
	March 31		March 31
(in thousands)	2010		2009

AOCI — beginning of period	$	75,482	$	(4,709	)


Cumulative foreign currency translation gain (loss)
Beginning of period	$	71,898	$	(4,925	)
Change in foreign currency translation		19,435		(14,090	)

End of period		91,333		(19,015	)


Unrealized gains (losses) on investments
Beginning of period		3,584		216
Net unrealized gains (losses), net of tax ⁽¹⁾		2,144		396

End of period		5,728		612


AOCI — end of period	$	97,061	$	(18,403	)


(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 ended March 2010, approximately $122,000 of gains from investment disposals and $177,000 of other than temporary losses were recognized and reclassified to the income statement within “Other income (expense)”. During the three months ending March 2009, approximately $136,000 of gains from investment disposals and $nil of other than temporary losses were recognized and reclassified to the income statement within “Other income (expense)”.

19.

SUPPLEMENTAL FINANCIAL INFORMATION

The elements of operating expenses in the statement of operations are as follows:


	Three Months Ended
	March 31			March 31
(in thousands)	2010			2009

Cost of goods sold — mineral concentrates	$	18,428		$	21,008
Mining and development		8,938			14,670
Less: absorption to stockpiles, mineral properties		(8,782	)		(14,060	)
Mineral property amortization and stockpile depletion		7,010			17,692
Milling and conversion		12,047			15,905
Less: absorption to concentrates		(17,577	)		(33,213	)
Reclamation — accretion, adjustments		386			371
Post-employment — accretion, adjustments		80			51
Selling expenses		359			215
Cost of services		3,631			1,533
Inventory — non-cash adjustments		(2,707	)		1,197

Operating expenses	$	21,813		$	25,369

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The elements of other income (expense) in the statement of operations are as follows:


	Three Months Ended
	March 31			March 31
(in thousands)	2010			2009

Interest income	$	194		$	197
Interest expense		(6	)		(694	)
Gains (losses) on:
Foreign exchange		(4,993	)		6,383
Land, plant and equipment		(180	)		6
Investment disposals		122			136
Investment other than temporary losses		(177	)		—
Restricted cash and investments — fair value change		13			(195	)
Other		188			(206	)

Other income (expense)	$	(4,839	)	$	5,627

20.

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 three months ended March 31, 2010, 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		3,186			13,803			—			—			4,986			21,975


Expenses
Operating expenses		5,609			12,574			—			—			3,630			21,813
Sales royalties and capital taxes		221			—			—			—			13			234
Mineral property exploration		1,404			3			—			278			—			1,685
General and administrative		—			897			249			211			1,898			3,255
Stock option expense		—			—			—			—			395			395

		7,234			13,474			249			489			5,936			27,382

Income (loss) from operations		(4,048	)		329			(249	)		(489	)		(950	)		(5,407	)


Revenues — supplemental:
Uranium concentrates		3,186			11,823			—			—			—			15,009
Vanadium concentrates		—			1,917			—			—			—			1,917
Environmental services		—			—			—			—			3,684			3,684
Management fees and commissions		—			—			—			—			1,302			1,302
Alternate feed processing and other		—			63			—			—			—			63

		3,186			13,803			—			—			4,986			21,975


Capital additions:
Property, plant and equipment		402			7,432			322			153			13			8,322


Long-lived assets:
Plant and equipment
Cost		101,916			85,780			969			523			2,929			192,117
Accumulated depreciation		(6,134	)		(22,786	)		(421	)		(313	)		(1,636	)		(31,290	)
Mineral properties		328,469			82,206			126,597			8,195			—			545,467
Intangibles		—			—			—			—			4,371			4,371
Goodwill		52,792			—			—			—			—			52,792

		477,043			145,200			127,145			8,405			5,664			763,457

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For the three months ended March 31, 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		5,481			14,878			—			—			1,639			21,998


Expenses
Operating expenses		6,087			17,749			—			—			1,533			25,369
Sales royalties and capital taxes		347			—			—			—			6			353
Mineral property exploration		1,856			4			—			217			—			2,077
General and administrative		4			1,087			333			272			2,626			4,322
Stock option expense		—			—			—			—			167			167

		8,294			18,840			333			489			4,332			32,288

Loss from operations		(2,813	)		(3,962	)		(333	)		(489	)		(2,693	)		(10,290	)


Revenues — supplemental:
Uranium concentrates		5,481			14,857			—			—			—			20,338
Environmental services		—			—			—			—			1,344			1,344
Management fees and commissions		—			—			—			—			295			295
Alternate feed processing and other		—			21			—			—			—			21

		5,481			14,878			—			—			1,639			21,998


Capital additions:
Property, plant and equipment		1,694			8,834			947			284			6			11,765


Long-lived assets:
Plant and equipment
Cost		80,465			72,224			1,044			523			2,383			156,639
Accumulated depreciation		(4,003	)		(14,435	)		(409	)		(209	)		(1,206	)		(20,262	)
Mineral properties		277,368			64,994			224,389			6,916			—			573,667
Intangibles		—			406			—			—			4,224			4,630
Goodwill		61,068			—			—			—			—			61,068

		414,898			123,189			225,024			7,230			5,401			775,742

Revenue Concentration

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 three months ended March 2010, two customers from the mining segment and one customer from the services and other segment accounted for approximately 80% of total revenues. For the comparative three month period ended March 2009, two customers from the mining segment accounted for approximately 93% of total revenues.

21.

RELATED PARTY TRANSACTIONS

Uranium Participation Corporation

The following transactions were incurred with UPC for the periods noted:


	Three Months Ended
	March 31		March 31
(in thousands)	2010		2009

Revenue:
Management fees	$	340	$	295
Commission and transaction fees		962		—

	$	1,302	$	295

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At March 31, 2010, accounts receivable includes $149,000 due from UPC with respect to the fees and transactions 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 representing approximately 17% of the issued and outstanding capital at the time of acquisition. Pursuant to a strategic relationship agreement, one representative from KEPCO has been appointed to Denison’s board of directors as of the date hereof.

Other

During the three months ended March 2010, the Company has incurred management and administrative service fees of $21,000 (three months ended March 2009: $15,000) with a company owned by the Chairman of the Company which provides corporate development, office premises, secretarial and other services. At March 31, 2010, an amount of $nil was due to this company.

22.

CAPITAL MANAGEMENT AND FINANCIAL INSTRUMENTS

Capital Management

The Company’s capital includes cash 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.

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 its obligations under a financial instrument that will result in a financial loss to the Company. The carrying amount of financial assets represents the maximum credit exposure. The Company trades only with recognized, credit worthy third parties.

The maximum exposure to credit risk at the reporting date is as follows:


	At March 31
(in thousands)	2010

Cash and cash equivalents	$	13,020
Trade and other receivables		16,301
Investments		13,023
Restricted cash and investments		21,412

	$	63,756

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(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 ensures that there is 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 maturities of the Company’s financial liabilities are as follows:


	Within 1		1 to 5
(in thousands)	Year		Years

Accounts payable and accrued liabilities	$	14,498	$	—
Debt obligations (Note 12)		581		186

	$	15,079	$	186

(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 operates internationally and is exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk arises from assets and liabilities that are denominated in a currency that is not the functional currency for the relevant subsidiary company.

Currently, the Company does not have any foreign exchange hedge programs in place and manages its operational foreign exchange requirements through spot purchases in the foreign exchange markets.

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 March 31, 2010 is summarized below:


				Change in
	Change in			Comprehensive
(in thousands)	Net Income ⁽¹⁾			Net Income ⁽¹⁾

Canadian dollar
10% increase in value	$	(14,800	)	$	57,285
10% decrease in value	$	14,800		$	(57,285	)
Zambian kwacha
10% increase in value	$	(2,867	)	$	(2,867	)
10% decrease in value	$	2,867		$	2,867


(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. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk.

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(e) Price Risk

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 analysis below has been determined based on the exposure to equity price risk at March 31, 2010:


			Change in
	Change in		Comprehensive
(in thousands)	Net Income ⁽¹⁾		Net Income ⁽¹⁾

Equity price risk
10% increase in equity prices	$	—	$	1,302
10% decrease in equity prices	$	—	$	(1,302	)


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

(f) Fair Value Estimation

The following table illustrates the classification of the Company’s financial assets within the fair value hierarchy as at March 31, 2010:


							Fair
(in thousands)	Level 1		Level 2		Level 3		Value

Financial assets at fair value:
Investments-available for sale securities ⁽¹⁾	$	13,021	$	2	$	—	$	13,023
Restricted investments ⁽²⁾		16,716		—		—		16,716


(1)		Classification designated as “available-for-sale”.

(2)		Classification designated as “held-to-trading”. See note 6 for amount of restricted investments within restricted cash and investments asset amount.

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 marked 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 investments approximate carrying values.

The fair value of the Company’s debt obligations approximate their carrying value because over 67% of the total obligation is new debt issued within the past four months.

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23.

INCOME TAXES

For the three months ended March 31, 2010, the Company has recognized future tax recoveries of $1,157,000. The future tax recovery includes the recognition of previously unrecognized Canadian tax assets of $695,000.

24.

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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