Energy Fuels Inc.: Exhibit 99.45 - Filed by newsfilecorp.com

Note 15: Issued Capital

230,679,770 (2010: 207,096,144) fully paid ordinary shares

EX-99.45 46 exhibit99-45.htm EXHIBIT 99.45 Energy Fuels Inc.: Exhibit 99.45 - Filed by newsfilecorp.com

Exhibit 99.45

ENERGY FUELS INC.

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD ON MONDAY, JUNE 25, 2012

MANAGEMENT INFORMATION CIRCULAR

MAY 28, 2012

ENERGY FUELS INC.
NOTICE OF SPECIAL MEETING
OF SHAREHOLDERS TO BE HELD ON
MONDAY, JUNE 25, 2012

TO THE HOLDERS OF COMMON SHARES:

Notice is hereby given that a special meeting (the “Meeting”) of the holders of common shares of Energy Fuels Inc. (the “Corporation”) will be held at the National Club, 303 Bay Street, Toronto, Ontario, Canada on Monday, June 25, 2012 at 2:00 pm (Toronto time) for the following purposes:

1.	to consider and, if thought advisable, pass an ordinary resolution authorizing the issuance of common shares of the Corporation pursuant to an arrangement (the “Denison Arrangement”) between the Corporation and Denison Mines Corp. (“Denison”), pursuant to which, among other things, the Corporation will acquire, directly or indirectly, all of the shares and inter-company indebtedness of Denison’s subsidiaries holding all of Denison’s mining assets and operations located in the United States, in exchange for 425,441,494 common shares of the Corporation, all as more particularly described in the management information circular dated May 28, 2012 of the Corporation (the “Circular”);

2.	to consider and, if thought advisable, pass an ordinary resolution authorizing the issuance of common shares of the Corporation to Dundee Securities Ltd. in partial satisfaction of compensation payable to Dundee Securities Ltd. in connection with the Denison Arrangement, as more particularly described in the Circular;

3.	to consider and, if thought advisable, pass a special resolution authorizing an amendment to the articles of the Corporation providing that the Corporation’s issued and outstanding common shares be consolidated on the basis of one (1) new common share in the capital of the Corporation for every ten (10) existing common shares, as more particularly described in the Circular; and

4.	to transact such other business as may properly be brought before the Meeting or any adjournment thereof.

The accompanying Circular provides additional information relating to the matters to be dealt with at the Meeting and forms part of this Notice.

Shareholders who cannot attend the Meeting in person may vote by proxy. Instructions on how to complete and return the proxy are provided with the proxy form and are described in the Circular. To be valid, proxies must be received by CIBC Mellon Trust Company by mail at c/o Cover-All, P. O. Box 721, Agincourt, Ontario, Canada, M1S 0A1 or by fax to 1-866-781-3111 (toll free) or 416-368-2502, no later than 5:00 p.m. (Toronto time) on June 21, 2012, or if the Meeting is adjourned, no later than 10:00 a.m. (Toronto time) on the last business day preceding the day to which the Meeting is adjourned.

Dated this 28^thday of May, 2012.

BY ORDER OF THE BOARD

(signed) “Stephen P. Antony”
Stephen P. Antony, President
and Chief Executive Officer

MANAGEMENT INFORMATION CIRCULAR OF ENERGY FUELS INC.

(the “Circular”)

TABLE OF CONTENTS

GLOSSARY OF TERMS	3
INTRODUCTION	7
Information Concerning Denison Mines Corp	7
Cautionary Statement Regarding Forward-Looking Information and Statements	7
Notice to United States Shareholders	9
Cautionary Notice to Shareholders in the United States Regarding Mineral Reserves and Mineral Resources	10
DOCUMENTS INCORPORATED BY REFERENCE	10
GENERAL PROXY INFORMATION	11
Appointment and Revocation of Proxies	11
Voting of Shares Represented by Management Proxies	11
Voting by Non-Registered Shareholders	11
Distribution of Meeting Materials to Non-Objecting Beneficial Owners	12
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON	13
VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES	13
ACQUISITION OF THE DENISON US MINING DIVISION	13
Background to the Acquisition	13
Recommendation of the EFI Board	15
Reasons for the Transaction	15
Factors Considered by the EFI Board and Management	15
Fairness Opinion	16
The Denison Arrangement – Securities Issuable by EFI	17
EFI Shareholder Approval	18
Denison Shareholder Approval and Court Approval	19
Dissent Rights	19
Material Agreements Relating to the Acquisition	19
Arrangement Agreement	19
EFI Support Agreements	24
APPROVAL OF SHARE COMPENSATION ARRANGEMENT	25
RISK FACTORS	25
Risks of Proceeding with the Acquisition and the Denison Arrangement	25
Risks of Not Proceeding with the Acquisition	26
Risks Related to EFI Following the Acquisition	26
INFORMATION ABOUT EFI	27
Overview and Corporate Structure	27
Proposed Private Placement	28
THE DENISON US MINING DIVISION	29
Overview and Corporate Structure	29
Business	31
Operations	31
Interest of Certain Persons in the Acquisition	70
Material Contracts	70
Dividends	70

Management’s Discussion and Analysis	70
Consolidated Capitalization and Options to Purchase Securities	70
Prior Sales	71
Directors and Executive Officers	71
Indebtedness of Directors and Executive Officers	73
Legal Proceedings and Regulatory Actions	73
Auditors	74
INFORMATION ABOUT EFI AFTER GIVING EFFECT TO THE DENISON ARRANGEMENT	74
General	74
Business of EFI Post-Denison Arrangement	75
Corporate Structure Following the Completion of the Plan of Arrangement	76
Pro Forma Financial Information	77
Authorized and Issued Share Capital	78
Pro Forma Consolidated Capitalization	79
Principal Holders of Common Shares	79
SHARE CONSOLIDATION	79
Reasons For the Share Consolidation	80
Share Certificates	80
Risks Factors Associated with the Share Consolidation	80
Effects of the Share Consolidation on the EFI Common Shares	81
Procedure for Implementing the Share Consolidation	81
No Dissent Rights	82
U.S. Federal Income Tax Considerations	82
Share Consolidation Resolution	82
AUDIT COMMITTEE DISCLOSURE	82
INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS	82
INTERESTS OF EXPERTS	83
ADDITIONAL INFORMATION	83
EXEMPTIONS	83
DIRECTORS’ APPROVAL	84
CONSENT OF EXPERTS	85
SCHEDULE A - Acquisition Resolution	A-1
SCHEDULE B – Arrangement Agreement	B-1
SCHEDULE C - Fairness Opinion	C-1
SCHEDULE D – Pro forma Financial Statements of EFI	D-1
SCHEDULE E –Financial Statements of DMHC	E-1
SCHEDULE F - Financial Statements of White Canyon	F-1
SCHEDULE G - Share Consolidation Resolution	G-1

GLOSSARY OF TERMS

Unless the context indicates otherwise, the following terms shall have the meanings set out below when used in this Circular.

“$” means Canadian dollars;

“Acquired Debt” means all indebtedness of the Denison US Group owing to Denison and the subsidiaries of Denison other than the Denison US Group as of the Effective Time;

“Acquisition” means the Purchase and Sale Transaction referred to in the Arrangement Agreement, being the purchase by the Corporation from Denison of (i) the Purchased Shares in consideration of the payment of the Share Consideration, and (ii) the Acquired Debt in consideration of the issuance of the EFI Note, on the terms and subject to the conditions set out in the Arrangement Agreement;

“Acquisition Resolution” means the resolution to be considered at the Meeting with respect to the Acquisition of the Acquired Debt and the Purchased Shares pursuant to the Arrangement Agreement, the proposed form of which is attached as Schedule A to this Circular;

“Arizona Strip Technical Report” means the technical report entitled “Technical Report on the Arizona Strip Uranium Project, Arizona, USA” dated February 26, 2007 prepared for Denison by Thomas C. Pool, P.E. and David A. Ross, P.Geo. of Scott Wilson RPA, filed by Denison on SEDAR on March 26, 2007;

“Arrangement Agreement” means the arrangement agreement dated as of May 23, 2012 between EFI and Denison with respect to the Acquisition and the Denison Arrangement;

“Canadian GAAP” means generally accepted accounting principles in effect from time to time in Canada, determined with reference to the Handbook of the Canadian Institute of Chartered Accountants;

“Circular” means this management information circular of the Corporation, including the Notice of Meeting and all schedules attached hereto and all amendments hereto;

“Court” means the Ontario Superior Court of Justice (Commercial List);

“Denison” means Denison Mines Corp., a corporation incorporated under the laws of Ontario;

“Denison AIF” means the annual information form of Denison dated March 28, 2012 in respect of the year ended December 31, 2011;

“Denison Arrangement” means the arrangement to be effected by Denison under the provisions of Section 182 of the OBCA on the terms and subject to the conditions set forth in the plan of arrangement attached as Schedule A to the Arrangement Agreement;

“Denison Board” means the board of directors of Denison;

“Denison Circular” means the management information circular of Denison dated May 28, 2012, including the notice of meeting and all schedules attached hereto and all amendments thereof;

“Denison Common Shares” means the issued and outstanding common shares of Denison as constituted on the date hereof;

“Denison Meeting” means the special meeting of Denison Shareholders to be held on June 25, 2012, and any adjournment thereof;

“Denison Nominees” means Ron F. Hochstein and W. Robert Dengler, the two individuals nominated by Denison for a position on the EFI Board following completion of the Acquisition;

“Denison Resolution” means the special resolution of the Denison Shareholders to be considered at the Denison Meeting with respect to the Denison Arrangement;

“Denison Shareholder Approval” means the approval of the Denison Resolution by not less than two-thirds of the votes cast by Denison Shareholders voting in person or by proxy at the Denison Meeting;

“Denison Shareholders” means the holders of Denison Common Shares;

“Denison Support Agreements” means the support agreements between EFI and (i) each of Zebra Holdings and Investments SARL and Lorito Holdings SARL, and (ii) each of the directors and officers of Denison who are Denison Shareholders, pursuant to which each such person has agreed to vote their Denison Common Shares in favour of the Denison Resolution;

“Denison Technical Reports” means, collectively, the Arizona Strip Technical Report, the EZ Complex Technical Report, the Henry Mountains Technical Report, the Henry Mountains Tony M-Southwest Technical Report, ;

“Denison US Group” means, collectively, DMHC, White Canyon and the direct and indirect subsidiaries of DMHC which hold and operate the Denison US Mining Division, being Denison Mines (USA) Corp., Denison White Mesa LLC, Denison Colorado Plateau LLC, Utah Energy Corporation, Denison Arizona Strip LLC, Denison Henry Mountains LLC, and Denison Properties LLC;

“Denison US Mining Division” means all of Denison’s mining assets and operations located in the United States of America including DMHC, White Canyon and its subsidiaries;

“DMHC” means Denison Mines Holdings Corp., a corporation incorporated under the laws of Delaware;

“DMHC Shares” means the issued and outstanding common shares and preferred shares in the capital of DMHC;

“Dundee Securities” means Dundee Securities Ltd., a registered dealer which is acting as EFI’s financial advisor in connection with the Acquisition;

“Effective Date” means the date shown on the certificate of arrangement issued under the OBCA giving effect to the Denison Arrangement, which date is expected to be June 29, 2012;

“Effective Time” means the time at which the Denison Arrangement (including the Acquisition) becomes effective, being 11:59 pm (Eastern Daylight Time) on the Effective Date;

“EFI” or the “Corporation” means Energy Fuels Inc., a corporation existing under the laws of Ontario;

“EFI AIF” means the annual information form of EFI dated December 17, 2011 in respect of the year ended September 30, 2011;

“EFI Board” means the board of directors of EFI;

“EFI Common Shares” means the issued and outstanding common shares in the capital of EFI as constituted on the date hereof (and, without limiting the generality of the foregoing, before giving effect to the EFI Share Consolidation);

“EFI Note” means the non-interest bearing promissory note to be issued to Denison by EFI with a principal amount equal to the aggregate fair market value of the EFI Payment Shares on the Effective Date;

“EFI Payment Shares” means 425,441,494 EFI Common Shares, which shares are to be issued to Denison Shareholders on a pro rata basis pursuant to the Denison Arrangement;

“EFI Post-Consolidation Common Shares” means common shares in the capital of EFI after giving effect to the EFI Share Consolidation;

“EFI Share Consolidation” means the proposed share consolidation of the EFI Common Shares on the basis of one (1) EFI Post-Consolidation Common Share for each ten (10) EFI Common Shares, as described below under “Share Consolidation”;

“EFI Shareholder Approval” means the approval of the Acquisition Resolution by a majority of the votes cast by EFI Shareholders voting in person or by proxy at the Meeting;

“EFI Shareholders” means the holders of EFI Common Shares;

“EFI Support Agreements” means the support agreements between Denison and (i) each of Dundee Resources Limited, Pinetree Capital Ltd. and Mega Uranium Ltd., and (ii) each director and officer of EFI who are EFI Shareholders, pursuant to which each such person has agreed to vote their EFI Common Shares in favour of the Acquisition Resolution;

“eU₃O₈” refers to equivalent U₃O₈grade derived by gamma logging of drill holes;

“EZ Complex Technical Report” means the technical report entitled “Technical Report on the EZ1 and EZ2 Breccia Pipes, Arizona Strip District, USA” dated June 24, 2009 prepared for Denison by Christopher Moreton, Ph.D., P.Geo. and David Ross, M.Sc., P.Geo. of Scott Wilson RPA, filed by Denison on SEDAR on August 11, 2009;

“Fairness Opinion” means the written fairness opinion from Dundee Securities dated April 13, 2012 delivered to the EFI Board in connection with the Letter Arrangement, the full text of which is set out as Schedule C to this Circular;

“Final Order” means the order of the Court pursuant to Subsection 182(5)(f) of the OBCA approving the Denison Arrangement;

“Henry Mountains Technical Report” means the technical report entitled “Technical Report on the Henry Mountains Complex Uranium Project, Utah, USA” dated September 9, 2006 prepared for International Uranium Corporation (a predecessor of Denison) by Thomas C. Pool, P.E. of Scott Wilson RPA, filed by Denison on SEDAR on October 17, 2006;

“Henry Mountains Tony M–Southwest Technical Report” means the technical report entitled “Technical Report on the Tony M-Southwest Deposit, Henry Mountains Complex Uranium Project, Utah, USA” dated March 19, 2009 prepared for Denison by Douglas H. Underhill, Ph.D., C.P.G. and William E. Roscoe, Ph.D., P.Eng. of Scott Wilson RPA, filed by Denison on SEDAR on April 6, 2009;

“IFRS” means International Financial Reporting Standards, being the standards and interpretations adopted by the International Accounting Standards Board, as amended from time to time, in effect and generally accepted in Canada as applicable to publicly accountable enterprises;

“Interim Order” means the interim order of the Court granted to Denison on May 28, 2012 providing for, among other things, the calling and holding of the Denison Meeting;

“KEPCO” means Korea Electric Power Corporation, a significant shareholder of Denison;

“KEPCO Offtake Agreement” means the uranium offtake agreement dated June 15, 2009 among Denison, KEPCO and Korea Hydro & Nuclear Power Co., Ltd.;

“Letter Agreement” means the letter agreement signed by EFI and Denison dated April 16, 2012, as extended by letter dated May 11, 2012;

“Meeting” means the special meeting of EFI Shareholders to be held on June 25, 2012, and any adjournment thereof;

“NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects adopted by the Canadian Securities Administrators;

“NI 51-102” means National Instrument 51-102 – Continuous Disclosure Obligations adopted by the Canadian Securities Administrators;

“NI 54-101” means National Instrument 54-101 - Communication with Beneficial Owners of Securities of a Reporting Issuer adopted by the Canadian Securities Administrators;

“NI 58-101” means National Instrument 58-101 – Disclosure of Corporate Governance Practices adopted by the Canadian Securities Administrators;

“Notice of Meeting” means the notice of the special meeting of EFI Shareholders delivered to EFI Shareholders forming part of this Circular;

“OBCA” means the Business Corporations Act (Ontario);

“Piñon Ridge Mill” means the proposed Piñon Ridge Mill, which is located near Naturita, Colorado;

“Purchased Shares” means all of the issued and outstanding shares of DMHC (other than the shares of DMHC held by White Canyon) and all of the issued and outstanding shares of White Canyon;

“Record Date” means the close of business on May 16, 2012, being the time for determining EFI Shareholders entitled to vote at the Meeting;

“Share Consideration” means the payment of $10.00 to be paid by the Corporation in consideration of the Purchased Shares;

“Scott Wilson RPA” means Scott Wilson Roscoe Postle Associates Inc., an independent geological consulting firm which prepared the Denison Technical Reports;

“SEDAR” means the System for Electronic Document Analysis and Retrieval located at www.sedar.com;

“Share Consolidation Resolution” means the special resolution of the EFI Shareholders to be considered at the Meeting with respect to the Share Consolidation, the proposed form of which is attached as Schedule G to this Circular;

“Sheep Mountain Project” means the mining claims, state mining leases, private leases and surface rights comprising the Sheep Mountain uranium exploration property located in Fremont County, Wyoming;

“Tax Act” means the Income Tax Act (Canada);

“Titan” means Titan Uranium Inc., a wholly-owned subsidiary of EFI;

“TSX” means the Toronto Stock Exchange;

“U.S. Securities Laws” means all applicable U.S. federal and state securities laws and regulations, including, without limitation, the 1933 Act, the 1934 Act and the rules and regulations promulgated from time to time thereunder;

“U₃O₈” means triuranium octoxide;

“White Canyon” means White Canyon Uranium Limited, a corporation incorporated under the laws of Australia;

“White Mesa Mill” means the White Mesa mill, a 2,000-ton per day uranium and vanadium processing facility located near Blanding, Utah;

“1933 Act” means the Securities Act of 1933, as amended, of the United States of America, and the rules and regulations promulgated from time to time thereunder; and

“1934 Act” means the Securities Exchange Act of 1934, as amended, of the United States of America, and the rules and regulations promulgated from time to time thereunder.

INTRODUCTION

The information contained in this Circular is furnished in connection with the solicitation of proxies to be used at the Meeting of EFI Shareholders to be held at The National Club, Toronto, Ontario on June 25, 2012 at 2:00 p.m. (Toronto time), and at any adjournments thereof, for the purposes set forth in the accompanying Notice of Meeting. It is expected that the solicitation will be made primarily by mail but proxies may also be solicited personally by directors, officers or regular employees of EFI. The solicitation of proxies by this Circular is being made by or on behalf of the management of EFI. The total cost of the solicitation will be borne by EFI.

Unless otherwise noted, all information contained in this Circular is as of May 23, 2012.

Information Concerning Denison Mines Corp.

Certain information in this Circular pertaining to Denison, including but not limited to, information pertaining to Denison, the Denison US Group and the Denison US Mining Division under “Acquisition of the Denison US Mining Division” and “The Denison US Mining Division”, and including but not limited to, information derived from the Denison Technical Reports, available electronically under Denison’s profile on SEDAR at www.sedar.com, has been furnished by Denison or is derived from information provided by Denison. Although EFI does not have any knowledge that would indicate that such information is untrue or incomplete, neither EFI nor any of its directors or officers assumes any responsibility for the accuracy or completeness of such information including any of Denison’s financial statements or information derived from the Denison Technical Reports, or for the failure by Denison to disclose events or information that may affect the completeness or accuracy of such information. In the Arrangement Agreement, Denison has covenanted to EFI that, to the best of its knowledge, the information concerning Denison provided by Denison for inclusion in this Circular does not contain a misrepresentation.

Cautionary Statement Regarding Forward-Looking Information and Statements

This Circular contains or incorporates by reference forward-looking statements and forward-looking information (collectively, “forward-looking statements”) within the meaning of applicable Canadian securities legislation and U.S. Securities Laws. These statements relate to future events or the future activities or future performance of EFI and Denison. All statements, other than statements of historical fact, are forward-looking statements. Information concerning mineral resource and mineral reserve estimates also may be deemed to be forward-looking statements in that it reflects a prediction of the mineralization that would be encountered if a mineral deposit were developed and mined. Forward-looking statements are typically identified by words such as: “believe”, “expect”, “anticipate”, “intend”, “estimate”, “may”, “postulate”, “plans” and similar expressions, or which by their nature refer to future events. These forward-looking statements include, but are not limited to, statements concerning:

EFI’s strategies and objectives, both generally and specifically in respect of the Denison US Mining Division, the proposed Piñon Ridge Mill facility, the Sheep Mountain Project, and its other Colorado, Utah, Arizona, New Mexico and Canadian properties;
the potential for the development of the Piñon Ridge Mill;
the outcome of litigation;
the potential for the expansion of current mineral resources and reserves;
the timing of decisions and costs of exploration and development programs with respect to, and the issuance of the necessary permits and authorizations required for, EFI’s ongoing exploration and development programs on its properties;
EFI’s estimates of the quality and quantity of the resources at its mineral properties;

Denison’s estimates of the quality and quantity of the mineral resources at the mineral properties included in the Denison US Mining Division;
EFI’s future cash requirements;
general business, market and economic conditions;
EFI’s ability to meet its financial obligations as they come due, and to be able to generate the necessary funds to continue operations;
the receipt of the Final Order; and
information about Denison, the Acquisition and the Denison Arrangement, including but not limited to, EFI’s business, operations and financial performance following completion of the Acquisition.

Although EFI believes that such statements are reasonable, it can give no assurance that such expectations will prove to be correct. Inherent in forward-looking statements are risks and uncertainties beyond EFI’s ability to predict or control, including, but not limited to, risks related to EFI’s ability to identify one or more economic deposits on its properties, variations in the nature, quality and quantity of any mineral deposits that may be located, variations in the market price of any mineral products EFI may produce or plan to produce, EFI’s inability to obtain any necessary permits, consents or authorizations required for its activities, to produce minerals from its properties successfully or profitably, to continue its projected growth, to raise the necessary capital or to be fully able to implement its business strategies, and other risks identified under “Risk Factors” in this Circular and in the EFI AIF.

EFI cautions investors that any forward-looking statements by EFI are not guarantees of future performance, and that actual results are likely to differ, and may differ materially, from those expressed or implied by forward-looking statements contained or incorporated by reference in this Circular. Such statements are based on a number of assumptions which may prove incorrect, including, but not limited to, assumptions about:

the market, level and volatility of the price of commodities in general, and uranium and vanadium in particular;
conditions in the financial markets generally, and in particular the effect of those market conditions on the ability of EFI to obtain financing to carry out its plans;
general business and economic conditions;
the completion of the Acquisition and the Denison Arrangement;
the completion of the Share Consolidation;
the proposed timeline for the construction of the Piñon Ridge Mill and anticipated production dates;
the ability to operate and increase the feed stock for the White Mesa Mill;
EFI’s ability to secure the necessary consulting, drilling and related services and supplies on favourable terms in connection with its ongoing and planned exploration programs;
EFI’s ability to attract and retain key staff;
the accuracy of EFI’s and Denison’s reserve and resource estimates (including with respect to size and grade) and the geological, operational and price assumptions on which these are based;

the timing of the ability to commence and complete the planned work at the mineral properties currently held by EFI as well as the mineral properties forming part of the Denison US Mining Division;
the anticipated terms of the consents, permits and authorizations necessary to carry out the planned exploration and development programs at the mineral properties currently held by EFI as well as the mineral properties forming part of the Denison US Mining Division, and EFI’s ability to comply with such terms on a safe and cost-effective basis; and
the ongoing relations of EFI with the underlying optionors and/or lessors of its mineral properties and the applicable regulatory agencies.

In addition, forward-looking information and pro forma information contained or incorporated by reference herein is based on certain assumptions and involves risks related to the consummation or non-consummation of the Acquisition and the Denison Arrangement, the Share Consolidation and the business and operations of EFI following the Denison Arrangement and the Share Consolidation. Pro forma information contained herein is based on the assumption that the Denison Arrangement, including the Acquisition, will be completed. Other assumptions include, but are not limited to, the ability of EFI following the Acquisition and the Share Consolidation to realize the enhanced growth opportunities currently anticipated, in particular with respect to the Piñon Ridge Mill and its Sheep Mountain Project. Risks include the risks that the conditions to completion of the Acquisition and the Denison Arrangement will not be satisfied or waived, that the Arrangement Agreement may be terminated, that upon completion of the Acquisition and the Denison Arrangement the market value of EFI Common Shares will be different from the value at the time the Arrangement Agreement was agreed, and other risks discussed in this Circular and the EFI AIF. Although EFI has attempted to identify important factors that could cause actions, events or results to differ materially from those described in forward-looking statements and pro forma information in this Circular, and the documents incorporated by reference herein, there may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There is no assurance that such statements will prove to be accurate as actual results and future events could differ materially from those anticipated in such statements or information.

All of the forward-looking statements made in this Circular, including all documents incorporated by reference herein, are qualified by these cautionary statements. These forward-looking statements are made as of the date hereof and EFI does not intend and does not assume any obligation, to update these forward-looking statements, except as required by applicable securities law. For the reasons set forth above, investors should not attribute undue certainty to or place undue reliance on forward-looking statements.

Notice to United States Shareholders

EFI and Denison are corporations existing under the laws of the Province of Ontario, Canada. The solicitation of proxies and the transactions contemplated in this Circular involve securities of Canadian issuers and are being effected in accordance with Canadian corporate and securities laws. The solicitation of proxies is not subject to the requirements of Section 14(a) of the 1934 Act. Accordingly, this Circular has been prepared solely in accordance with applicable Canadian disclosure requirements. Shareholders in the United States should be aware that such requirements differ from such requirements under U.S. Securities Laws relating to United States companies.

The financial statements and pro forma and historical financial information included or incorporated by reference herein have been prepared in accordance with Canadian generally accepted accounting principles and are subject to auditing and auditor independence standards in Canada, which differ from U.S. generally accepted accounting principles and auditing and auditor independence standards in the U.S. in certain material respects, and thus may not be comparable to financial statements of U.S. companies. The financial statements of DMHC were prepared in accordance with IFRS, and the financial statements of White Canyon were prepared in accordance with Australian IFRS. Likewise, information concerning the properties and operations of EFI and Denison has been prepared in accordance with Canadian disclosure standards under applicable Canadian securities laws, which are not comparable to disclosure standards promulgated by the SEC under the 1933 Act and the 1934 Act. In particular, the information regarding mineral reserves and resources contained in this Circular was prepared pursuant to NI 43-101 adopted by the Canadian securities authorities. Information regarding mineral reserves and resources included or incorporated by reference herein is not comparable to similar information that would be disclosed by a U.S. company in its filings with the SEC. See “Introduction -Cautionary Notice to Shareholders in the United States Regarding Mineral Reserves and Mineral Resources”.

Cautionary Notice to Shareholders in the United States Regarding Mineral Reserves and Mineral Resources

Information concerning the mineral properties of EFI and Denison included or incorporated by reference herein has been prepared in accordance with the requirements of Canadian securities laws, which differ in material respects from the requirements of U.S. Securities Laws applicable to U.S. companies subject to the reporting and disclosure requirements of the SEC. Under SEC standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time of the reserve determination, and the SEC does not recognize the reporting of mineral deposits which do not meet the SEC Industry Guide definition of “reserve”. In accordance with NI 43-101, the terms “mineral reserve”, “proven mineral reserve”, “probable mineral reserve”, “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” used in this Circular or in the documents incorporated by reference in this Circular are defined in the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) Definition Standards for Mineral Resources and Mineral Reserves adopted by the CIM Council on November 27, 2010, as amended. While the terms “mineral resource”, “measured mineral resource”, “indicated mineral resource” and “inferred mineral resource” are recognized and required by NI 43-101, the SEC does not recognize them. Shareholders who are U.S. persons are cautioned that, except for that portion of the mineral resources classified as mineral reserves, mineral resources do not have demonstrated economic value. Inferred mineral resources have a high degree of uncertainty as to their existence and as to whether they can be economically or legally mined. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of an economic analysis, except under certain prescribed circumstances. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Therefore, shareholders are cautioned not to assume that all or any part of an inferred mineral resource exists, that it can be economically or legally mined, or that it will ever be upgraded to a higher category. Likewise, shareholders are cautioned not to assume that all or any part of measured or indicated mineral resources will ever be upgraded to mineral reserves.

DOCUMENTS INCORPORATED BY REFERENCE

The following documents relating to Denison are specifically incorporated by reference in this Circular:

the Denison AIF; and
the Denison Technical Reports.

Copies of the documents incorporated herein by reference may be obtained on request without charge from the Vice President, Corporate Marketing and Secretary of EFI at 2 Toronto Street, Suite 500, Toronto, Ontario M5C 2B6 Phone: 303-974-2140, Fax: 303-974-2141. These documents are also available electronically under Denison’s profile on SEDAR at www.sedar.com.

Any statement contained in this Circular or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this Circular, to the extent that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has been modified or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constitutes a misrepresentation, an untrue statement of a material fact or an omission to state a material fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which it was made. Any statement so modified or superseded shall not be deemed in its unmodified or superseded form to constitute part of this Circular.

GENERAL PROXY INFORMATION

Appointment and Revocation of Proxies

The persons named in the form of proxy accompanying this Circular are officers and/or directors of EFI.

An EFI Shareholder has the right to appoint a person other than the persons specified in such form of proxy and who need not be an EFI Shareholder to attend and act for him and on his behalf at the Meeting. Such right may be exercised by striking out the names of the persons specified in the proxy, inserting the name of the person to be appointed in the blank space provided in the proxy, signing the proxy and returning it in the reply envelope in the manner set forth in the accompanying Notice of Meeting.

An EFI Shareholder who has given a proxy may revoke it by an instrument in writing, including another completed form of proxy, executed by him or his attorney authorized in writing, deposited at the registered office of EFI, or at the offices of CIBC Mellon Trust Company by mail at c/o Cover-All, P.O. Box 721, Agincourt, Ontario, Canada, M1S 0A1 or by fax to 1-866-781-3111 (toll free) or 416-368-2502, up to 5:00 p.m. (Toronto time) on June 21, 2012, or if the Meeting is adjourned, no later than 10:00 a.m. (Toronto time) on the last business day preceding the day to which the Meeting is adjourned, or in any other manner permitted by law.

Voting of Shares Represented by Management Proxies

The persons named in the enclosed form of proxy will vote the EFI Common Shares in respect of which they are appointed by proxy on any ballot that may be called for in accordance with the instructions thereon. In the absence of such instructions, such shares will be voted in favour of each of the matters referred to herein.

The enclosed form of proxy confers discretionary authority upon the persons named therein with respect to amendments to or variations of matters identified in the Notice of Meeting and with respect to other matters, if any, which may properly come before the Meeting. At the date of this Circular, the management of EFI knows of no such amendments, variations, or other matters to come before the Meeting. However, if any other matters which are not known to management should properly come before the Meeting, the proxy will be voted on such matters in accordance with the best judgement of the named proxy holder.

Voting by Non-Registered Shareholders

Only registered shareholders or the persons they appoint as their proxies are permitted to vote at the Meeting. However, in many cases, EFI Common Shares owned by a person (a “non-registered owner”) are registered either (a) in the name of an intermediary (an “Intermediary”) that the non-registered owner deals with in respect of the EFI Common Shares (Intermediaries include, among others, banks, trust companies, securities dealers or brokers and trustees or administrators of self-administered registered savings plans, registered retirement income funds, registered education savings plans and similar plans); or (b) in the name of a clearing agency, such as The Canadian Depository for Securities Limited (“CDS”), of which the Intermediary is a participant. In accordance with the requirements of NI 54-101, EFI has distributed copies of the Circular and the accompanying Notice of Meeting together with the form of proxy (collectively, the “Meeting Materials”) (i) directly to non-registered owners who have advised their Intermediary that they do not object to the Intermediary providing their ownership information to issuers whose securities they beneficially own (“NOBOs”), and (ii) to the clearing agencies and Intermediaries for onward distribution to non-registered owners who have advised their Intermediary that they object to the Intermediary providing their ownership information (“OBOs”).

Intermediaries are required to forward the Meeting Materials to OBOs unless an OBO has waived the right to receive them. Very often, Intermediaries will use service companies to forward the Meeting Materials to OBOs. Generally, OBOs who have not waived the right to receive Meeting Materials will either:

be given a form of proxy which has already been signed by the Intermediary (typically by a facsimile stamped signature), which is restricted as to the number and class of securities beneficially owned by the OBO but which is not otherwise completed. Because the Intermediary has already signed the form of proxy, this form of proxy is not required to be signed by the non-registered owner when submitting the proxy. In this case, the OBO who wishes to vote by proxy should otherwise properly complete the form of proxy and deliver it as specified; or
be given a form of proxy which is not signed by the Intermediary and which, when properly completed and signed by the OBO and returned to the Intermediary or its service company, will constitute voting instructions (often called a “Voting Instruction Form”) which the Intermediary must follow. Typically the non-registered owner will also be given a page of instructions which contains a removable label containing a bar code and other information. In order for the form of proxy to validly constitute a Voting Instruction Form, the non-registered owner must remove the label from the instructions and affix it to the Voting Instruction Form, properly complete and sign the Voting Instruction Form and submit it to the Intermediary or its services company in accordance with the instructions of the Intermediary or its service company.

In either case, the purpose of this procedure is to permit non-registered owners to direct the voting of the EFI Common Shares they beneficially own. Should a non-registered owner who receives either form of proxy wish to vote at the Meeting in person, the non-registered owner should strike out the persons named in the form of proxy and insert the non-registered owner’s name in the blank space provided. Non-registered owners should carefully follow the instructions of their Intermediary including those regarding when and where the form of proxy or Voting Instruction Form is to be delivered.

Distribution of Meeting Materials to Non-Objecting Beneficial Owners

These Meeting Materials are being sent to both registered and non-registered owners of the securities. If you are a non-registered owner, and EFI or its agent has sent these materials directly to you, your name and address and information about your holdings of EFI Common Shares, have been obtained in accordance with applicable securities regulatory requirements from the Intermediary holding on your behalf.

By choosing to send these materials to you directly, EFI (and not the Intermediary holding on your behalf) has assumed responsibility for (i) delivering these materials to you, and (ii) executing your proper voting instructions. Please return your voting instructions as specified in the request for voting instructions.

INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON

Other than as set out herein, no director or executive officer of EFI, nor any proposed nominee of the EFI Board, nor any associate or affiliate of any one of them, has any material interest, direct or indirect, by way of beneficial ownership of securities or otherwise, in any matter to be acted on at the Meeting.

VOTING SECURITIES AND PRINCIPAL HOLDERS OF VOTING SECURITIES

The authorized capital of EFI consists of an unlimited number of EFI Common Shares, an unlimited number of Preferred Shares issuable in series, and an unlimited number Series A Preferred Shares. As of the Record Date, being the close of business on May 16, 2012, the Corporation had issued and outstanding 214,336,818 EFI Common Shares and nil Preferred Shares. The Corporation made a list of all persons who are registered holders of EFI Common Shares as of the Record Date, being the close of business on May 16, 2012, and the number of EFI Common Shares registered in the name of each person on that date. Each EFI Shareholder as of the Record Date is entitled to one vote for each EFI Common Share registered in his or her name as it appears on the list on all matters which come before the Meeting.

To the knowledge of the directors and senior officers of the Corporation, as of the Record Date the following shareholder is the only person or company that beneficially owns, directly or indirectly, or controls securities carrying more than 10% of the voting rights attached to any class of outstanding voting securities of the Corporation entitled to be voted at the Meeting:

Name of Shareholder and Municipality of Residence	Number of EFI Common Shares Owned, Controlled or Directed	% of the Outstanding EFI Common Shares
Dundee Resources Limited Toronto, Ontario	22,950,000	10.7%

ACQUISITION OF THE DENISON US MINING DIVISION

At the Meeting, EFI Shareholders will be asked to consider and, if thought advisable, to pass, the Acquisition Resolution, in the form attached as Schedule A to this Circular, to approve the issuance of the EFI Payment Shares pursuant to the Acquisition in accordance with the terms of the Arrangement Agreement.

In order to complete the Acquisition and the Denison Arrangement, the Acquisition Resolution must be approved by the affirmative vote of a simple majority of the votes cast by EFI Shareholders at the Meeting. Unless otherwise directed, it is EFI management’s intention to vote for the Acquisition Resolution. If you do not specify how you want your EFI Common Shares voted, the persons named as proxyholders will cast the votes represented by your proxy at the Meeting in favour of the Acquisition Resolution.

Background to the Acquisition

Between 2007 and September 2011, given the proximity of many of EFI’s mineral properties to Denison’s White Mesa Mill, EFI and Denison held various discussions regarding potential business transactions and relationships between the two companies including, but not limited to, business combinations, strategic alliances, joint ventures and toll-milling arrangements. While both companies recognized the potential strategic merit of a business transaction or relationship, these various discussions were not pursued until March 2012.

On March 6, 2012, Mr. Antony, the President and CEO of EFI, together with representatives of EFI’s financial advisor, Dundee Securities, met with Mr. Hochstein, the President & CEO of Denison and representatives of Denison’s financial advisor, Haywood Securities Inc., and initiated preliminary discussions regarding a possible transaction whereby EFI would acquire the Denison US Mining Division from Denison in exchange for EFI Common Shares which would be distributed to Denison Shareholders on a pro rata basis.

Discussions between the managements of the two companies and their respective advisors continued until March 12, 2012, on which date the parties entered into a confidentiality agreement, which included customary standstill and non-solicitation clauses. The parties began exchanging confidential information and commenced their respective due diligence reviews of one another.

On March 17, 2012, EFI submitted a non-binding letter of intent to Denison that set out a framework for continued discussions and negotiation of a transaction, as well as summarized the commercial terms upon which EFI would consider the Acquisition. Between March 18, 2012 and March 23, 2012, EFI, Denison and their respective financial and legal advisors negotiated the non-binding letter of intent. On March 23, 2012, EFI and Denison entered into the non-binding letter of intent and both parties continued their respective due diligence reviews of one another as well as evaluated the strategic merits of the Acquisition including potential synergies. Under the terms of the letter of intent, EFI and Denison agreed to proceed with discussions on an exclusive basis.

On April 2, 2012, Mr. Antony, together with Messrs. Goodman and Patricio, directors of EFI, met with Mr. Hochstein to discuss more specific transaction terms and structures. Among the topics discussed at this meeting was the proposal that two members of the Denison Board be appointed to the EFI Board following closing, and integration of the management personnel of each of EFI and the Denison US Group following completion of the transaction to ensure continuity for the Denison US Mining Division business going forward. Denison also raised the desire to retain two members of the Denison US Mining Division staff for its international projects. The parties also discussed matters related to the transaction structure and the nature and value of the consideration to be exchanged in the transaction. On April 4 and 5, 2012, Mr. Antony met with Mr. Hochstein in Denver, Colorado to discuss the potential transaction in more detail. On April 5, 2012, EFI and Denison reached a general understanding regarding the value for the Denison US Mining Division and the number of EFI Common Shares to be issued in the transaction. EFI, Denison and their respective financial and legal advisors continued negotiations towards the settlement of the Letter Agreement, and considered how to optimally structure the Acquisition and efficiently distribute the EFI Payment Shares to Denison Shareholders.

On Friday, April 13, 2012, the EFI Board met to consider the proposed terms of the Acquisition as set out in a draft of the Letter Agreement. At that meeting, Dundee Securities provided an oral fairness opinion to the EFI Board. (See “Acquisition of the Denison US Mining Division - Fairness Opinion” below.) The Fairness Opinion is not intended to be and does not constitute a recommendation to any EFI Shareholder as to how to vote or act at the Meeting.

On Monday, April 16, 2012, EFI and Denison entered into the Letter Agreement and issued a press release announcing the Letter Agreement that same day. The Letter Agreement set out the general terms of the proposed transaction, and the basis on which the parties were prepared to proceed to the completion of definitive documentation in respect of the Acquisition and the Denison Arrangement. The Letter Agreement specified a deadline of May 11, 2012 to enter into the Arrangement Agreement. Discussions with respect to the structure of the transaction, as well as the final terms of the Arrangement Agreement and the EFI Support Agreements and the Denison Support Agreements, were continuing at May 11, 2012. On May 11, 2012, the parties entered into an amendment to the Letter Agreement which extended the deadline for entering into the Arrangement Agreement to May 23, 2012.

At a meeting of the EFI Board held on May 22, 2012, the EFI Board unanimously approved the Arrangement Agreement. EFI and Denison then signed the Arrangement Agreement on May 23, 2012 and issued a press release announcing the Arrangement Agreement on May 24, 2012. See the more detailed discussion of the Arrangement Agreement below, under “Acquisition of the Denison US Mining Division – Material Agreements Relating to the Acquisition”.

Recommendation of the EFI Board

The EFI Board has unanimously determined that the Acquisition is in the best interests of EFI and EFI Shareholders, and recommends that EFI Shareholders vote FOR the Acquisition Resolution.

The directors and officers of EFI and their associates beneficially own, directly or indirectly, or exercise control or direction over, an aggregate of 5,126,759 EFI Common Shares, representing approximately 2.4% of the outstanding EFI Common Shares. All of the directors and officers of EFI who beneficially own EFI Common Shares have entered into EFI Support Agreements to vote all of their EFI Common Shares in favour of the Acquisition Resolution. In addition, Dundee Resources Limited, Pinetree Capital Ltd. and Mega Uranium Ltd., which collectively hold 42,482,292 EFI Common Shares, representing approximately 19.8% of the outstanding EFI Common Shares, have also entered into EFI Support Agreements to vote all of their EFI Common Shares in favour of the Acquisition Resolution.

Reasons for the Transaction

EFI is a uranium and vanadium exploration and mine development company with projects located in the states of Colorado, Utah, Wyoming, Arizona and New Mexico. EFI’s mission has been to build a fully integrated uranium and vanadium production company through exploration, development, mining, milling and sales, primarily targeting immediately economic uranium properties on the Colorado Plateau (Colorado and Utah) and in the broader western United States. In addition, EFI has a corporate strategy of consolidating prospective uranium properties within the western United States and has been actively seeking suitable acquisition candidates.

The Acquisition is consistent with EFI’s consolidation strategy. EFI believes that the Acquisition will provide a number of substantial benefits for EFI Shareholders including:

immediately making EFI the largest 100% U.S. pure-play uranium producer, along with being one of the largest holders of NI 43-101 compliant based uranium mineral resources in the U.S.;
EFI will achieve its mission of building a fully-integrated uranium and vanadium production company through the acquisition of the White Mesa Mill and the operating mines included in the Denison US Mining Division;
there are clear operational synergies resulting from the Acquisition which are expected to generate increased production growth and efficiencies;
the combination of mining and development assets will facilitate an accelerated rate of development of EFI’s mineral properties, provide higher throughput of mill feed, and potentially extend the number of years of production at the White Mesa Mill;
the Acquisition will assist EFI in the creation of a strategic platform for continued uranium consolidation within the U.S.;
potential for substantial vanadium by-product from the White Mesa Mill and Colorado Plateau Properties, where historic vanadium to uranium ratios have averaged approximately 5:1; and
combined management expertise, with decades of combined uranium mining and processing experience.

Factors Considered by the EFI Board and Management

In the course of their due diligence and evaluation of the Denison US Mining Division, the Arrangement Agreement, the Acquisition and the Denison Arrangement, the EFI Board consulted with EFI’s senior management and legal counsel, EFI’s financial advisor, Dundee Securities, and reviewed a significant amount of information and considered a number of factors including, among others, that the Denison Arrangement would increase EFI’s scale and market presence in the uranium sector, immediately position EFI as the largest US-based uranium producer, improve EFI’s financial position and lower its cost of capital, create synergies by combining EFI’s mineral properties with the Denison US Mining Division and consolidate and expand its US property holdings. The EFI Board also considered the factors described under “Acquisition of the Denison US Mining Division - Reasons for the Transaction” above, and the Fairness Opinion from Dundee Securities.

In the course of its deliberations, the EFI Board also identified and considered a variety of risks (as described in greater detail under “Risk Factors” in this Circular and in EFI’s AIF) and potentially negative factors in connection with the Acquisition, including, but not limited to:

the number of EFI Payment Shares is fixed and, as a result, the EFI Common Shares issued on the Effective Date may have a market value different than at the time of approval of the Letter Agreement by the EFI Board;
the completion of the Acquisition and the Denison Arrangement is subject to several conditions that must be satisfied or waived, including the approvals of EFI Shareholders and Denison Shareholders and satisfaction of regulatory conditions. There can be no certainty that these conditions will be satisfied or waived;
the issuance to Denison Shareholders of 425,441,491 EFI Payment Shares, which will result in Denison Shareholders owning approximately 66.5% of the outstanding EFI Common Shares immediately following the Acquisition and Denison Arrangement, and which could adversely affect the market price of EFI Common Shares;
risks associated with obtaining and maintaining permits and regulatory approvals for ongoing operations;
risks associated with ongoing litigation;
risks associated with global competition and market conditions;
EFI may not realize the benefits currently anticipated from the Acquisition due to challenges and costs associated with integrating the operations and personnel of EFI and the Denison US Mining Division; and
significant management time and attention will be diverted from the existing business of EFI in order to undertake the Acquisition, which could have an adverse impact on EFI;

The EFI Board’s reasons for recommending the Acquisition include certain assumptions relating to forward-looking statements and such information and assumptions are subject to various risks. See “Introduction - Cautionary Statement Regarding Forward-Looking Information and Statements” and “Risk Factors” in this Circular and in the EFI AIF, a copy of which is available under EFI’s profile on SEDAR at www.sedar.com.

The foregoing summary of the information and factors considered by the EFI Board is not intended to be exhaustive. The EFI Board’s recommendation was made after considering all of the above-noted factors and in light of the EFI Board’s knowledge of the business, financial condition and prospects of the Denison US Mining Division and was also based on the advice of management. In addition, individual members of the EFI Board may have assigned different weights to different factors.

Fairness Opinion

EFI entered into an engagement letter with Dundee Securities pursuant to which, among other things, Dundee Securities agreed to provide EFI with an opinion as to the fairness, from a financial point of view, of the issuance of the EFI Payment Shares pursuant to the Acquisition and the Denison Arrangement to EFI Shareholders. At a meeting of the EFI Board held on April 13, 2012, Dundee Securities provided the EFI Board with an oral opinion, subsequently confirmed in writing to the EFI Board, to the effect that, based upon and subject to the various assumptions, limitations and qualifications contained therein, as of such date the consideration offered to Denison pursuant to the Acquisition is fair, from a financial point of view, to EFI.

The full text of the Fairness Opinion, which sets forth, among other things, the assumptions made, information reviewed and matters considered, and limitations and qualifications on the review undertaken in connection with the opinion, is attached to this Circular as Schedule C. The Fairness Opinion is not intended to be and does not constitute a recommendation to any EFI Shareholder as to how to vote or act at the Meeting. The Fairness Opinion was one of a number of factors taken into consideration by the EFI Board in considering the Acquisition. This summary of the Fairness Opinion is qualified in its entirety by reference to the full text of the Fairness Opinion and EFI Shareholders are urged to read the Fairness Opinion in its entirety.

Dundee Securities has acted as financial advisor to EFI in connection with the Acquisition and will receive a fee for its services, including a fee for the delivery of the Fairness Opinion (no portion of which is conditional upon the Fairness Opinion being favourable) and an additional fee that is contingent upon the completion of the Acquisition or any alternative transaction. EFI has also agreed to reimburse Dundee Securities for reasonable out-of-pocket expenses and to indemnify Dundee Securities in respect of certain liabilities as may arise out of its engagement. See “Approval of Share Compensation Arrangement” below.

Dundee Resources Limited, which owned approximately 10.7% of the EFI Common Shares as at May 16, 2012, has entered into an EFI Support Agreement. Dundee Resources Limited is an affiliate of Dundee Securities. As of May 16, 2012, investment funds advised by Ned Goodman Investment Counsel Limited, an affiliate of Dundee Securities and Dundee Resources Limited, owned or controlled less than 1% of the outstanding EFI Common Shares.

The Denison Arrangement – Securities Issuable by EFI

If the Acquisition is completed, EFI will acquire the Denison US Mining Division and issue the EFI Payment Shares to Denison Shareholders as part of the Denison Arrangement. Specifically, if EFI Shareholder Approval is obtained for the Acquisition, and Denison Shareholder Approval and the Final Order of the Court is obtained for the Denison Arrangement, upon filing of the Articles of Arrangement giving effect to the Denison Arrangement, at the Effective Time of the Denison Arrangement the following transactions will occur sequentially in the following order without any further act or formality:

(a)	Denison will sell to EFI and EFI will purchase from Denison (i) all of the Purchased Shares in consideration of the payment by EFI to Denison of the Share Consideration, and (ii) all of the Acquired Debt in consideration of the issuance by EFI to Denison of a non-interest bearing promissory note with a principal amount equal to the aggregate fair market value of the EFI Payment Shares on the Effective Date (the “EFI Note”);

(b)	Each Denison Common Share held by a Denison Shareholder who validly exercises its rights of dissent in respect of the Denison Arrangement shall be deemed to be transferred by the holder thereof, without any act or formality on its part, free and clear of all liens, claims and encumbrances, to Denison and Denison shall thereupon be obliged to pay the amount therefor determined and payable in accordance with Article 4 of the plan of arrangement, and the name of such holder shall be removed from the central securities register as a holder of Denison Common Shares and such Denison Common Shares so transferred to Denison shall thereupon be cancelled;

(c)	Denison will undertake a reorganization of capital such that:

(i)

the authorized share capital of Denison shall be reorganized and altered to (A) rename and redesignate all of its issued and unissued Denison Common Shares as Class A common shares (the “Denison Class A Shares”) which shares shall have the same rights and restrictions as the Denison Common Shares except that each Denison Class A Share shall be entitled to two votes at any meeting of the Denison Shareholders, and (B) create an unlimited number of common shares without par value (the “New Denison Common Shares”) with rights, privileges, restrictions and conditions identical to the Denison Common Shares;

	(ii)	Denison’s Articles shall be amended to reflect the alterations in (c)(i) above;

	(iii)	pursuant to the reorganization, each issued and outstanding Denison Class A Share will be exchanged for one New Denison Common Share and an assignment by Denison of that portion of the principal amount of the EFI Note determined by dividing the fair market value of the EFI Note by the number of Denison Class A Shares outstanding;

	(iv)	the Denison Class A Shares, none of which will be allocated and issued once the steps referred to in (c)(iii) above are completed, will be cancelled and the authorized capital of Denison will be changed by deleting the Denison Class A Shares as a class of shares of Denison;

	(v)	the amount added to the stated capital of the New Denison Common Shares shall be the excess, if any, of (A) the paid-up capital (as that term is used for the purposes of the Tax Act) of the Denison Common Shares (other than the Denison Common Shares held by a Denison Shareholder who validly exercise its rights of dissent in respect of the Denison Arrangement) immediately prior to the Effective Time, less (B) the principal amount of the EFI Note; and the stated capital of the Denison Class A Shares shall, for greater certainty, be nil;

	vi.	Denison’s Articles shall be amended to reflect the alterations in (c)(iv) above;

(d)

pursuant to the terms of the EFI Note, EFI will repay the EFI Note by issuing the EFI Payment Shares to the Denison Shareholders in full and final satisfaction of the EFI Note. No fractional EFI Common Shares shall be issued. In the event that the repayment of a Denison Shareholder’s portion of the EFI Note would otherwise result in the issuance to the Denison Shareholder of a number of EFI Common Shares which is not a whole number, the number of EFI Common Shares to be issued to such Denison Shareholder shall be rounded down to the nearest whole number.

Upon completion of the Acquisition and the Denison Arrangement, EFI will have issued the EFI Payment Shares in full satisfaction of the EFI Note. Prior to giving effect to the Acquisition and Denison Arrangement, the issuance of the EFI Payment Shares represents a dilution to EFI Shareholders of approximately 198% of the current issued and outstanding share capital of EFI. See “Information About EFI After Giving Effect to the Denison Arrangement – Authorized and Issued Share Capital”.

In addition to the foregoing, upon completion of the Acquisition, subject to approval by EFI Shareholders at the Meeting, EFI will issue to Dundee Securities a number of EFI Common Shares having an aggregate market value of $1,000,000, valued based on the volume weighted average trading price of the EFI Common Shares for the five trading days immediately preceding the Effective Date. See “Approval of Share Compensation Arrangement” below.

EFI Shareholder Approval

The TSX requires that shareholder approval be obtained in those instances where the number of securities issued or made issuable in payment of the purchase price for an acquisition exceeds 25% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis prior to the transaction. Accordingly, EFI Shareholders will be asked at the Meeting to approve the issuance of the EFI Payment Shares to Denison Shareholders pursuant to the Acquisition and the Denison Arrangement.

The Acquisition Resolution must be approved by at least a simple majority of the votes cast by EFI Shareholders, in person or represented by proxy, at the Meeting. The complete text of the Acquisition Resolution to be presented to the Meeting is set forth in Schedule A to this Circular. It is the intention of the persons named in the enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote the proxy in favour of the Acquisition Resolution set forth in the attached Schedule A.

Denison Shareholder Approval and Court Approval

The Denison Arrangement is also subject to approval by the Denison Shareholders at the Denison Meeting, which has been called for June 25, 2012. The requisite approval for the Denison Resolution will be at least 66^2/3% of the votes cast on the Denison Resolution by Denison Shareholders present in person or represented by proxy at the Denison Meeting.

The OBCA requires that Denison obtain court approval in respect of the Denison Arrangement. On May 28, 2012, Denison obtained the Interim Order providing for the calling and holding of the Denison Meeting and other procedural matters and filed a Notice of Application for the Final Order to approve the Denison Arrangement. The court hearing in respect of the Final Order is expected to take place at 10:00 a.m. (Toronto time) on June 27, 2012, or as soon thereafter as counsel for Denison may be heard, subject to the approval of the Denison Resolution at the Denison Meeting. The Court will consider, among other things, the fairness of the Denison Arrangement to the Denison Shareholders. There can be no assurance that the Court will approve the Denison Arrangement.

Dissent Rights

Pursuant to the Interim Order, Denison Shareholders may exercise rights of dissent under the manner set forth in Section 185 of the OBCA, as may be modified by the Interim Order.

If any Denison Shareholders exercise their dissent rights and the Denison Arrangement is completed, such holders will be entitled to be paid by Denison the fair value of such holder’s securities, provided that such holder validly dissents to the Denison Arrangement and the Acquisition is completed. The exercise of dissent rights will not affect the number of EFI Payment Shares issuable pursuant to the Acquisition. If the holders of more than 5% of the outstanding Denison Common Shares exercise the Dissent Right, Denison has the right to terminate the Arrangement Agreement.

Material Agreements Relating to the Acquisition

Arrangement Agreement

The provisions of the Arrangement Agreement are the result of arm’s length negotiations conducted between representatives of EFI, Denison, and their respective legal and financial advisors.

The Acquisition and the Denison Arrangement will be carried out pursuant to the Arrangement Agreement. The following is a summary of the principal terms of the Arrangement Agreement. This summary does not purport to be complete and is qualified in its entirety by reference to the Arrangement Agreement attached as Schedule B to this Circular, and to the Denison Arrangement, which is attached as Schedule A to this Arrangement Agreement. EFI Shareholders are urged to read both the Arrangement Agreement and the Denison Arrangement carefully and in their entirety.

Completion of the Denison Arrangement and Issuance of EFI Payment Shares

In accordance with the Arrangement Agreement, Denison has applied to the Court and been issued an Interim Order pursuant to subsection 185 of the OBCA which provides for, among other things, the notice of the Denison Meeting, the record date for the Denison Meeting, the requisite approval for the Denison Resolution, the grant of dissent rights and the notice requirements for the presentation of the application to the Court for the Final Order.

Pursuant to the Denison Arrangement, immediately following the purchase by EFI of all of the Purchased Shares in consideration of the payment by EFI to Denison of the Share Consideration and the acquisition by EFI of the Acquired Debt in consideration of the issuance by EFI to Denison of the EFI Note, Denison will complete a reorganization of its capital pursuant to which each issued and outstanding Denison Common Share will be exchanged for one New Denison Common Share and an assignment by Denison of a portion of the EFI Note on a pro rata basis. EFI will then repay the EFI Note by issuing the EFI Payment Shares, being 425,441,494 EFI Common Shares, directly to Denison Shareholders in full and final satisfaction of the EFI Note. Based on the number of Denison Common Shares currently outstanding, Denison Shareholders will receive 1.106 of an EFI Common Share for every Denison Common Share held. Fractional EFI Common Shares will be rounded down to the nearest whole number.

Representations, Warranties and Covenants

The Arrangement Agreement contains representations, warranties and covenants made by EFI and Denison which are usual and customary for transactions of the nature contemplated by the Arrangement Agreement. These representations, warranties and covenants were made by and to the parties thereto for the purposes of the Arrangement Agreement and are subject to the limitations and qualifications agreed to by the parties in connection with negotiating and entering into the Arrangement Agreement.

The covenants made by EFI in favour of Denison include covenants (i) that EFI will carry on its business in the ordinary course of business consistent with past practice; (ii) that it will issue the EFI Note and the EFI Payment Shares and pay the Share Consideration in accordance with the terms of the Plan of Arrangement; (iii) to cause its insurance (or reinsurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse; (iv) not to settle or compromise any claim brought by any present, former or purported holder of any securities of EFI in connection with the Arrangement prior to the Effective Time without the prior written consent of Denison; and (v) not to undertake certain actions outside of the ordinary course of business without Denison’s consent. In addition, EFI has covenanted to not, without the prior consent of Denison, directly or indirectly do, agree to do, or permit to occur any of the following: (a) declare, set aside or pay any dividend or other distribution or payment in respect of any shares of EFI; (b) other than as provided for in the Arrangement Agreement, adopt resolutions or enter into any agreement providing for the amalgamation, merger, consolidation, reorganization, liquidation, dissolution or any other extraordinary transaction in respect of EFI or adopt any plan of liquidation; (c) issue, or enter into any agreement providing for the issuance of EFI Common Shares or securities exchangeable for or convertible into EFI Common Shares, other than pursuant to a private placement offering of EFI Common Shares and/or warrants to raise proceeds of up to $10,000,000; or (d) reduce its stated capital.

The covenants made by Denison in favour of EFI include covenants (i) that Denison and each member of the Denison US Group will carry on the business of the Denison US Mining Division in the ordinary course of business consistent with past practice; (ii) restricting inter-company transfers between Denison and the Denison US Group; (iii) that it will not withdraw any cash or assets from its restricted cash and investments deposited to collateralize reclamation obligations (the “Reclamation Account”) prior to the completion of the Arrangement; (iv) that it will not, without the prior written consent of EFI and, where applicable, the TSX, enter into or modify any employment, consulting, severance, collective bargaining or similar agreement, policy or arrangement with, or grant any bonus, salary increase, option to purchase Denison Common Shares, pension or supplemental pension benefit, profit sharing, retirement allowance, deferred compensation, incentive compensation, severance, change of control or termination pay to, or make any loan to, any officer, director, employee or consultant of any member of the Denison US Group; and (v) not to undertake certain actions outside of the ordinary course of business without EFI’s consent.

Conditions Precedent

The Arrangement Agreement contains conditions precedent, certain of which are mutual and others which are the specifically for the benefit of either EFI or Denison.

The obligations of EFI and Denison to complete the Acquisition and the Denison Arrangement are subject to the satisfaction of, among others, the following mutual conditions, which may be waived only with the consent of both EFI and Denison: (a) either the assignment of the KEPCO Offtake Agreement to EFI or a member of the Denison US Group, or EFI and Denison entering into an agreement whereby EFI would agree to supply to Denison sufficient quantities of U₃O₈concentrates to satisfy Denison’s obligations under the KEPCO Offtake Agreement; (b) receipt of the Interim Order and the Final Order; (c) receipt of Denison Shareholder Approval; and (d) receipt of EFI Shareholder Approval.

The obligation of EFI to complete the Acquisition and the Denison Arrangement is subject to the satisfaction of each of the following conditions precedent: (a) performance by Denison of its material obligations under the Arrangement Agreement; (b) the representations and warranties made by Denison in the Arrangement Agreement shall be true and correct as of the Effective Date; (c) there shall not have been any event or change that has had or would reasonably be expected to have a Material Adverse Effect (as defined in the Arrangement Agreement) on the Denison US Mining Division; (d) the consolidated net working capital of the Denison US Group as of the Effective Date shall be not less than US$28,000,000, provided that, in calculating the working capital, amounts owing pursuant to the Acquired Debt will be disregarded as current liabilities of the Denison US Group; (e) at the Effective Time, there shall be no encumbrances on the Purchased Shares or the Acquired Debt or the assets of the Denison US Group, other than Permitted Encumbrances (as defined in the Arrangement Agreement); (f) each of the Denison Shareholders who has entered into a Denison Support Agreement with EFI shall have complied in all material respects with its Denison Support Agreement; (g) there shall have been no material change in the existing employment or consulting arrangements of any senior officer of any material member of the Denison US Group from the date of the Arrangement Agreement to the Effective Date; (h) the Denison Board shall not have modified or amended, in a manner adverse to EFI, prior to the Denison Meeting, its recommendation that Denison Shareholders vote in favour of the Denison Resolution; (i) all necessary corporate actions to complete the Acquisition and the Denison Arrangement shall have been taken by Denison; and (j) Denison shall have delivered to EFI the specified transfer documents to convey the Purchased Shares and the Acquired Debt to EFI.

The obligation of Denison to complete the Acquisition and the Denison Arrangement is subject to the satisfaction of each of the following conditions precedent: (a) performance by EFI of its material obligations under the Arrangement Agreement; (b) the representations and warranties made by EFI in the Arrangement Agreement shall be true and correct as of the Effective Date; (c) there shall not have been any event or change that has had or would reasonably be expected to have a Material Adverse Effect on EFI; (d) the consolidated working capital of EFI as of the Effective Date, without giving effect to the Acquisition and the Denison Arrangement, shall be not less than US$4,000,000; (e) each of the EFI Shareholders who has entered into an EFI Support Agreement with Denison shall have complied in all material respects with its EFI Support Agreement; (f) the EFI Board shall not have modified or amended, in a manner adverse to Denison, prior to the Meeting, its recommendation that EFI Shareholders vote in favour of the Acquisition Resolution; (g) Denison Shareholders holding no more than 5% of the outstanding Denison Common Shares shall have exercised dissent rights (and not withdrawn such exercise); (h) all necessary corporate actions to complete the Acquisition shall have been taken by EFI; and (i) EFI shall have delivered to Denison the specified instruments and documentation to issue the EFI Note and the EFI Payment Shares in satisfaction of the EFI Note.

Covenants Relating to Non-Solicitation

Each of Denison and EFI has agreed that during the term of the Arrangement Agreement, neither it, its affiliates nor any of their respective representatives, officers, directors, employees, advisors or agents will, directly or indirectly, make, solicit or initiate enquiries from, or the submission of proposals or offers from, any other person relating to any Acquisition Proposal (as defined in the Arrangement Agreement) or participate in any discussions or negotiations regarding, or furnish to any other Person any further information with respect to, or otherwise co-operate in any way with, or assist or participate in or facilitate, any effort or attempt by any person to do or seek to do any of the foregoing and, to the extent any such discussions or negotiations have occurred with third parties prior to the date of the Arrangement Agreement, they shall be terminated immediately. Notwithstanding the foregoing, a party may participate in any such discussion or negotiations in respect of transactions which would not materially impede the ability of such party to complete the Acquisition and the Denison Arrangement, including without limitation, a sale of any of the assets of Denison not owned by the Denison US Group, an acquisition of any other assets by Denison or a transaction involving an acquisition of Denison or other business combination which occurs following or subject to the completion of the Acquisition and the Denison Arrangement.

A party (a “Receiving Party”) shall promptly notify the other party (the “Notified Party”) of any proposal, inquiry, offer or request received by the Receiving Party or its representatives: (i) relating to an Acquisition Proposal or potential Acquisition Proposal or inquiry that could reasonably lead or be expected to lead to an Acquisition Proposal; (ii) for discussions or negotiations in respect of an Acquisition Proposal or potential Acquisition Proposal; or (iii) for non-public information relating to the Receiving Party or a subsidiary of the Receiving Party, access to properties, books and records or a list of the holders of the Receiving Party shares or the shareholders of any subsidiary of the Receiving Party.

Following the receipt by the Receiving Party of a bona fide written Acquisition Proposal made after the date of the Arrangement Agreement (that was not solicited, assisted, initiated, knowingly encouraged or facilitated after the date of the Arrangement Agreement in contravention of the provisions of the Arrangement Agreement), the Receiving Party and its representatives may:

(a)	contact the person making such Acquisition Proposal and its Representatives solely for the purpose of clarifying the terms and conditions of such Acquisition Proposal and the likelihood of its consummation so as to determine whether such Acquisition Proposal is, or is reasonably likely to lead to, a Superior Proposal (as defined in the Arrangement Agreement); and

(b)	if the board of directors of the Receiving Party (the “Receiving Party Board”) determines, after consultation with its outside legal and financial advisors, that such Acquisition Proposal is, or is reasonably likely to lead to, a Superior Proposal: (i) furnish information with respect to the Receiving Party and its subsidiaries to the person making such Acquisition Proposal and its representatives only if such person has entered into a confidentiality agreement that contains provisions that are not less favourable to the Receiving Party than those contained in the Confidentiality Agreement between Denison and EFI, and which also includes a standstill covenant that prohibits such person, for a period of six months, from acquiring, or offering to acquire, any equity securities of the Receiving Party, provided that the Receiving Party sends a copy of such confidentiality agreement to the Notified Party promptly following its execution and the Notified Party is promptly provided with a list of, and access to (to the extent not previously provided to the Notified Party) the information provided to such person; and (ii) engage in discussions and negotiations with the person making such Acquisition Proposal and its representatives provided that all such information access and discussions shall cease during the Match Period (as defined in the Arrangement Agreement).

The Receiving Party may (i) enter into an agreement (other than a confidentiality agreement contemplated by (b) above) with respect to an Acquisition Proposal that is a Superior Proposal and/or (ii) withdraw, modify or qualify its approval or recommendation of the Acquisition and the Denison Arrangement and recommend or approve an Acquisition Proposal that is a Superior Proposal, provided: (A) the Receiving Party shall have complied with its obligations under the applicable provisions of the Arrangement Agreement; (B) the Receiving Party Board has determined, after consultation with its outside legal and financial advisors, that such Acquisition Proposal is a Superior Proposal; (C) the Receiving Party has delivered a Superior Proposal Notice to the Notified Party; (D) the Match Period has elapsed since the date the Superior Proposal Notice was received by the Notified Party and the exclusivity period of such Party set forth in the Arrangement Agreement shall automatically be extended so as to terminate no earlier than the second Business Day after the end of the Match Period; (E) if the Notified Party has offered to amend the terms of the Acquisition and the Denison Arrangement and the Arrangement Agreement during the Match Period as described in the following paragraph, such Acquisition Proposal continues to be a Superior Proposal compared to the amendment to the terms of the Acquisition, the Denison Arrangement and the Arrangement Agreement offered by the Notified Party at the termination of the Match Period; and (F) the Receiving Party terminates the Arrangement Agreement in compliance with the applicable terms of the Arrangement Agreement, the Receiving Party has shall pay in cash to the Notified Party a termination fee of $3,000,000.

During the Match Period, the Notified Party shall have the opportunity, but not the obligation, to offer to amend the terms of the Acquisition and the Arrangement Agreement and the Receiving Party shall cooperate with the Notified Party with respect thereto, including negotiating in good faith with the Notified Party to enable the Notified Party to make such adjustments to the provisions of the Acquisition and the Arrangement Agreement as the Notified Party deems appropriate and as would enable the Notified Party to proceed with the Acquisition and the Denison Arrangement on such adjusted provisions. The Receiving Party Board shall review any such offer by the Notified Party to amend the terms of the Acquisition and the Arrangement Agreement in order to determine, in good faith in the exercise of its fiduciary duties, whether the Notified Party’s offer to amend the Acquisition and the Arrangement Agreement, upon its acceptance, would result in the Acquisition Proposal ceasing to be a Superior Proposal compared to the amendment to the terms of the Acquisition and the Arrangement Agreement offered by the Notified Party. If the Receiving Party Board determines that the Acquisition Proposal would cease to be a Superior Proposal, the Receiving Party and the Notified Party shall enter into an amendment to the Arrangement Agreement reflecting the offer by the Notified Party to amend the terms of the Acquisition and the Arrangement Agreement.

Each successive material modification of any Acquisition Proposal shall constitute a new Acquisition Proposal for purposes of the applicable provision of the Arrangement Agreement.

Amendment

The Arrangement Agreement may, at any time and from time to time before or after the holding of the Meeting or the Denison Meeting be amended by mutual written agreement of EFI and Denison, subject to applicable laws, provided that (i) following the Meeting, the principal amount of the EFI Note and number of EFI Payment Shares shall not be amended (other than to reflect the EFI Share Consolidation) without the approval of the EFI Shareholders; (ii) following the Denison Meeting, the principal amount of the EFI Note and number of EFI Payment Shares shall not be amended (other than to reflect the EFI Share Consolidation) without the approval of the Denison Shareholders; and (iii) the Arrangement Agreement and the Denison Arrangement may be amended in accordance with the Final Order but, in the event that the terms of the Final Order require any such amendment, the rights of the Parties under Section 5.2, Section 5.3, Section 6.1 and Section 7.2 of the Arrangement Agreement shall remain unaffected.

Termination

The Arrangement Agreement may be terminated: (a) by either party if the conditions precedent to completion of the Denison Arrangement are not satisfied and are not reasonably capable of being satisfied on or prior to August 15, 2012; (b) by either party if such party determines, acting reasonably, that it or the other party will not be able to obtain the consents and approvals referred to in Arrangement Agreement in form satisfactory to either party, acting reasonably; (c) by either party in accordance with the Arrangement Agreement if such party receives a Superior Proposal; (d) by either party if such party determines that the representations and warranties of the other party set out in the Arrangement Agreement are materially incorrect, and are not capable of being corrected or remedied within a reasonable time period; or (e) by either party if such party determines that the other party has not complied with its material obligations under the Arrangement Agreement within the time period provided for in the Arrangement Agreement.

Termination Payment

In the event that the Arrangement Agreement is terminated: (a) as a consequence of the failure to obtain the approval of Denison Shareholders if a third party has announced prior to the time of the Denison Meeting an Acquisition Proposal relating to Denison or an intention to make an Acquisition Proposal relating to Denison, in either case which represents a Superior Proposal, and such proposal or intention is still in effect at the time of the Denison Meeting; (b) by Denison if it receives a Superior Proposal in accordance with the Arrangement Agreement; or (c) by EFI if Denison’s representations and warranties are materially incorrect or if Denison has not complied with its material obligations under the Arrangement Agreement, then Denison shall make a cash termination payment in the amount of $3,000,000 to EFI upon such termination in immediately available funds, as liquidated damages for the loss of EFI’s rights under the Arrangement Agreement. Denison is not obligated to make more than one payment.

In the event that this Agreement is terminated: (a) a consequence of the failure to obtain the approval of EFI Shareholders if a third party has announced prior to the time of the Meeting an Acquisition Proposal relating to EFI or an intention to make an Acquisition Proposal relating to EFI, in either case which represents a Superior Proposal, and such proposal or intention is still in effect at the time of the Denison Meeting; (b) by EFI if it receives a Superior Proposal in accordance with the Arrangement Agreement; or (c) by Denison if EFI’s representations and warranties are materially incorrect or if EFI has not complied with its material obligations under the Arrangement Agreement, then EFI shall make a cash termination payment in the amount of $3,000,000 to Denison at the time of such termination in immediately available funds, as liquidated damages for the loss of Denison’s rights under the Arrangement Agreement. EFI is not obligated to make more than one payment.

Reimbursement of Expenses

In the event that the Acquisition and the Denison Arrangement is not completed due to the number of dissenting Denison Shareholders being greater than 5% as a result of KEPCO exercising its dissent rights in respect of the Denison Arrangement, then Denison shall reimburse EFI up to $1,000,000 for its reasonable costs and expenses incurred in connection with the transaction contemplated by the Arrangement Agreement.

EFI Support Agreements

EFI Support Agreements have been entered into with Denison by each of Dundee Resources Limited, Pinetree Capital Ltd., Mega Uranium Ltd. and each of the directors and officers of EFI who were EFI Shareholders as of the date of the Arrangement Agreement. The EFI Shareholders who have entered into EFI Support Agreements (each, an “EFI Supporting Shareholder”) hold an aggregate of 47,609,051 EFI Common Shares, representing approximately 22.2% of the EFI Common Shares entitled to vote at the Meeting. Each EFI Supporting Shareholder has agreed, among other things, and subject to the terms of the EFI Support Agreements, to vote in favour of the Acquisition Resolution, not to sell or transfer any of their EFI Common Shares to any person other than Denison, and not to grant a security interest over such shareholder’s EFI Common Shares.

The EFI Support Agreements can only be terminated: (a) by mutual consent of Denison and the EFI Supporting Shareholder; (b) if the Arrangement Agreement is terminated in accordance with its terms; (c) by the EFI Supporting Shareholder if Denison has not complied in any material respect with its covenants contained in the EFI Support Agreement or if any representation or warranty of Denison in the Denison Support Agreement is untrue or incorrect in any material respect and, in each case, such non-compliance or inaccuracy is reasonably likely to prevent consummation of the Acquisition and the Denison Arrangement and is not curable or, if curable, is not cured by the earlier of: (i) the date that is five days from the date of written notice of such breach; and (ii) the business day prior to the Effective Time; provided that at the time of such termination pursuant to the provisions of the EFI Support Agreement by the EFI Supporting Shareholder, the EFI Supporting Shareholder is not in default in any material respect in the performance of its obligations under the EFI Support Agreement; or(d) by Denison if the Acquisition Resolution is not approved by the requisite majority of EFI Shareholders.

APPROVAL OF SHARE COMPENSATION ARRANGEMENT

Dundee Securities has acted as financial advisor to EFI pursuant to an engagement letter dated February 17, 2011. In such capacity, Dundee Securities has provided general financial advisory services as well as evaluating strategic alternatives such as potential joint ventures, mergers and acquisitions. The original engagement letter provided that if certain specified transactions (including transactions of the nature of the Acquisition) were completed during the term of the engagement, EFI and Dundee Securities would in good faith negotiate a completion fee (the “Completion Fee”) depending on the nature and size of the transaction consistent with fees paid to full-service North American investment dealers for transactions of a similar nature and size. By amending letter agreement dated April 12, 2012, EFI and Dundee Securities agreed that the Completion Fee payable in respect of the Acquisition and the Denison Arrangement would be $1,500,000, payable as to $500,000 in cash and as to $1,000,000 in EFI Common Shares, valued based on the five-day volume weighted average price of the EFI Common Shares for the five days immediately preceding the Effective Date. Based on the volume weighted average price of the EFI Common Shares for the five trading days ended May 25, 2012, being $0.24926, an aggregate of 4,011,875 EFI Common Shares would be issued to Dundee Securities in satisfaction of the $1,000,000 portion of the Completion Fee payable in shares.

Under the rules of the TSX, the proposed issuance of EFI Common Shares to Dundee Securities in consideration of services is a share compensation arrangement. Because Dundee Securities is an affiliate of Dundee Resources Limited, which is an insider of EFI by virtue of holding 10.7% of the currently outstanding EFI Common Shares, TSX rules require that the share compensation arrangement must be approved by EFI Shareholders.

At the Meeting, EFI Shareholders will be asked to consider and, if thought fit, pass an ordinary resolution (the “Share Compensation Resolution”) approving the issuance of EFI Common Shares to Dundee Securities on the terms described above. To be effective, the Share Compensation Resolution must receive the affirmative vote of a majority of the votes cast, excluding votes attaching to EFI Common Shares held by Dundee Securities and its affiliates (including Dundee Resources Limited). The EFI Board unanimously recommends that EFI Shareholders vote in favour of the Share Compensation Resolution. It is the intention of the persons named in the enclosed form of proxy, if not expressly directed to the contrary in such form of proxy, to vote the proxy in favour of the Share Compensation Resolution.

RISK FACTORS

As a mineral exploration, development and mining company, EFI is subject to a number of risks. In addition to general corporate, financial and operational risks as outlined in the EFI AIF, a copy of which is available under EFI’s profile on SEDAR at www.sedar.com, EFI is also subject to a number of specific risks relating to the Acquisition and the Denison Arrangement.

Risks of Proceeding with the Acquisition and the Denison Arrangement

Market Value of EFI Common Shares

To complete the Acquisition, EFI will issue the EFI Payment Shares to Denison Shareholders pursuant to the Denison Arrangement. Regardless of market fluctuations, the number of EFI Payment Shares is fixed and will not be adjusted to reflect any changes in the market value of EFI Common Shares at the Effective Time. The market value of the EFI Common Shares at the Effective Time may vary significantly from the market value immediately prior to the announcement of the Acquisition and Denison Arrangement and at the date of this Circular. The market value may increase or decrease, but neither of these occurrences will change the EFI Payment Shares. Variations in the market value of EFI Common Shares may occur as a result of changes in, or market perceptions of changes in, the business, operations or prospects of EFI, Denison and EFI following the completion of the Acquisition, regulatory considerations, general market and economic conditions, changes in uranium and vanadium prices and other factors over which EFI has no control.

The issuance of a significant number of EFI Common Shares could adversely affect the market price of EFI Common Shares. If the Acquisition and Denison Arrangement are completed, a significant number of additional EFI Common Shares will be issued and will become available for trading in the public market. The increase in the number of EFI Common Shares may lead to sales of such shares or the perception that such sales may occur, either of which may adversely affect the market for, and the market price of, EFI Common Shares.

Conditions to Complete the Acquisition and the Denison Arrangement

There are a number of conditions precedent to the Acquisition and the Denison Arrangement which are outside the control of EFI, including, but not limited to, approval of the Acquisition Resolution and required satisfaction of the regulatory conditions to closing. Further, Denison is required to obtain Denison Shareholder Approval for the Denison Arrangement. If for any reason such conditions in the Arrangement Agreement are not satisfied or waived and the Acquisition and Denison Arrangement are not completed, the market price of EFI Common Shares and the financial position of EFI may be adversely affected.

Termination of the Arrangement Agreement

Each of EFI and Denison has the right to terminate the Arrangement Agreement in certain circumstances. There is no certainty that the Arrangement Agreement will not be terminated by either EFI or Denison before the completion of the Acquisition or the Denison Arrangement. For example, each of EFI and Denison has the right, in certain circumstances, to terminate the Arrangement Agreement if changes occur that, in the aggregate, have a material adverse effect on Denison or EFI, respectively. There is no assurance that a change having a material adverse effect on EFI or Denison will not occur before the completion of the Denison Arrangement, in which case Denison or EFI, as the case may be, could elect to terminate the Arrangement Agreement and the Acquisition and Denison Arrangement would not proceed.

Risks of Not Proceeding with the Acquisition

Existing Operational Risk and Costs

If the Acquisition and the Denison Arrangement are not completed, EFI will continue to face all of the existing operational and financial risks of its business as described in the documents incorporated by reference herein. Significant costs related to the Acquisition, such as legal and accounting fees incurred, must be paid even if the Acquisition is not completed. There are also opportunity costs associated with the diversion of management attention away from the conduct of EFI’s business in the ordinary course.

Impact on Share Price and Future Business Operations

If the Acquisition is not completed, there may be a negative impact on the price of EFI Common Shares, future business and operations to the extent that the current trading price of EFI Common Shares reflects an assumption that the Acquisition and Denison Arrangement will be completed. The price of EFI Common Shares may decline if the Acquisition and Denison Arrangement are not completed.

Risks Related to EFI Following the Acquisition

Post-Acquisition Success

EFI may not realize the currently anticipated benefits of acquiring the Denison US Mining Division due to integration and operational challenges. The success of EFI following the Acquisition will depend in large part on the success of EFI’s management in integrating the Denison US Mining Division with those of EFI. The failure of EFI to achieve such integration could result in the failure of EFI to realize the anticipated benefits of the Acquisition and could impair the results of operations, profitability and financial results of EFI.

Dilution

Issuances of EFI Common Shares including in connection with the the Acquisition and Denison Arrangement will result in a substantial dilution of the equity interests of any person who may become an EFI Shareholder as a result of or subsequent to the Acquisition and Denison Arrangement.

Environmental Laws

EFI is subject to a broad range of environmental laws and regulations in the jurisdictions in which it operates and will be exposed to potentially significant environmental costs and liabilities. By acquiring the Denison US Mining Division, EFI will be subject to additional liability for any environmental damage occurring on the properties comprising the Denison US Mining Division under such environmental laws. These laws and regulations, as interpreted by relevant agencies and the courts, impose increasingly stringent environmental protection standards regarding, among other things, air emissions, wastewater storage, treatment and discharges, the use and handling of hazardous or toxic materials, waste disposal practices, and the remediation of environmental contamination. The costs of complying with these laws and regulations, including participation in assessments and remediation of sites, could be significant. In addition, these standards can create the risk of substantial environmental liabilities, including liabilities associated with divested assets and past activities.

Financing Risks

If the Acquisition and Denison Arrangement are completed, additional funding will be required to further develop the Piñon Ridge Mill, expand exploration and production programs on the Sheep Mountain Project and the properties comprising the Denison US Mining Division. If EFI’s proposed programs are successful, additional funds will be required for the building of the Piñon Ridge Mill, and the mining of uranium from the Sheep Mountain Project. The primary sources of future funds presently available to EFI are the sale of equity capital, or the offering by EFI of an interest in its properties to be earned by another party or parties carrying out exploration or development thereof. There is no assurance that any such funds will be readily available for operations. Failure to obtain additional financing on a timely basis could cause EFI to reduce, delay or terminate its proposed operations, with the possible loss of such operations.

INFORMATION ABOUT EFI

Overview and Corporate Structure

EFI is a public company continued under the laws of Ontario. EFI was incorporated on June 24, 1987 in the Province of Alberta under the name Volcanic Metals Exploration Inc. On September 2, 2005, it was continued under the Business Corporations Act (Ontario). Volcanic Metals Exploration Inc. changed its name to Energy Fuels Inc. on May 26, 2006.

The registered office of the Corporation is located at 2 Toronto Street, Suite 500, Toronto, Ontario, Canada, M5C 2B6. The principal office of EFI’s U.S. subsidiaries is located at Suite 600, 44 Union Blvd., Lakewood, Colorado, 80228 USA.

Information relating to the business of EFI and EFI’s material mineral properties is set out in the EFI AIF, a copy of which has been filed on SEDAR.

Intercorporate Relationships

The following chart lists all of the Corporation’s material subsidiaries, their respective jurisdictions of incorporation, and the Corporation’s ownership interest in each:

Business of EFI

The Corporation is a Toronto, Ontario based uranium and vanadium exploration and mine development company listed on the TSX under the trading symbol “EFR”. The Corporation’s mission has been to build a fully integrated uranium and vanadium production company through exploration, development, mining, milling and sales; primarily targeting immediately economic uranium properties on the Colorado Plateau (Colorado and Utah) and in the broader western United States.

EFI currently has two permitted mines in its mineral property portfolio. The Whirlwind Mine is located in the northern Uravan Mineral Belt approximately four miles southwest of Gateway, Colorado. The Energy Queen Mine is located in the La Sal Mineral Belt near the town of La Sal, Utah.

The Sheep Mountain Project was acquired by EFI on February 29, 2012 upon the acquisition of Titan Uranium Inc. Detailed information concerning the Sheep Mountain Project is set out in EFI’s press release dated March 1, 2012, and in the technical report entitled “Sheep Mountain Uranium Project, Fremont County, Wyoming, USA; Updated Preliminary Feasibility Study, National Instrument 43-101 Technical Report” dated April 13, 2012, a copy of which was filed under EFI’s profile on SEDAR on April 13, 2012.

Management will continue to pursue and evaluate strategic options, including partnerships, joint ventures and acquisition opportunities that enhance shareholder value and which fit within the Corporation’s mineral resource development strategy. In the past, funding for exploration and development operations has been obtained through equity offerings. Future operations (and the ability to meet mineral property option commitments) are dependent upon the Corporation’s continuing ability to finance expenditures and achieve profitable operations. The Corporation continues to evaluate other funding sources such as debt, joint ventures, non-core asset divestitures, strategic partnerships and project financing to finance its growth.

Proposed Private Placement

A condition of completion of the Acquisition and the Denison Arrangement is that the consolidated working capital of EFI as of the Effective Date, without giving effect to the Acquisition and the Denison Arrangement, shall be not less than US$4,000,000. In order to meet this financial requirement, EFI will need to raise additional working capital prior to the Effective Date. It is currently contemplated that such additional working capital will be raised by way of a private placement of EFI Common Shares and warrants exercisable for EFI Common Shares. The terms of such private placement have not been finalized, and there is no assurance that such private placement will be completed.

THE DENISON US MINING DIVISION

Information pertaining to Denison, the Denison US Group and the Denison US Mining Division has been furnished by Denison or is derived from information provided by Denison. See “Introduction -Information Concerning Denison Mines Corp.”

Overview and Corporate Structure

Denison is a company subsisting under the OBCA. Denison is a reporting issuer in all of the Canadian provinces. The Denison Common Shares are listed on the TSX under the symbol “DML” and on the NYSE MKT LLC under the symbol “DNN.”

The registered and head office of Denison is located at Atrium on Bay, Suite 402, 595 Bay Street, Toronto, Ontario, M5G 2C2. Denison’s website address is www.denisonmines.com.

Intercorporate Relationships

All of Denison’s U.S. assets are held directly or indirectly through DMHC. DMHC currently has issued and outstanding 15.7 common shares and 2,000 preferred shares, of which Denison holds 11 common shares and all of the 2,000 preferred shares, and White Canyon holds 4.7 common shares. All of the issued and outstanding shares of White Canyon are held by Denison. The Purchased Shares to be acquired by EFI pursuant to the Acquisition consist of all of the issued and outstanding shares of White Canyon, and all of the issued and outstanding shares of DMHC, other than the 4.7 DMHC common shares held by White Canyon.

DMHC holds its interest in the Denison US Mining Division assets through subsidiaries, as follows:

the White Mesa Mill (“White Mesa”), a 2,000-ton per day uranium and vanadium processing facility near Blanding, Utah through Denison White Mesa LLC;
the Colorado Plateau uranium and vanadium mines (“Colorado Plateau”), straddling the Colorado and Utah border, through Denison Colorado Plateau LLC;
the Daneros uranium mine (“Daneros”) in the White Canyon district of southeastern Utah, and other exploration properties through Utah Energy Corporation;
the Arizona Strip properties, including Arizona 1, (the “Arizona Strip”) through Denison Arizona Strip LLC;
the Henry Mountains uranium complex in southern Utah (the “Henry Mountain Complex”) and other exploration properties through Denison Henry Mountains LLC; and
miscellaneous properties through Denison Properties LLC.

All of the U.S. properties are operated by Denison Mines (USA) Corp., a wholly-owned subsidiary of DMHC.

The following chart describes the intercorporate relationship of Denison and the Denison US Group:

Business

For information regarding the three-year history of DMHC and White Canyon, please see “General Development of the Business” in the Denison AIF, which is incorporated by reference in this Circular. The Denison AIF can be found under Denison’s SEDAR profile at www.sedar.com and was filed by Denison on March 29, 2012.

Operations

White Mesa Mill

White Mesa is a fully licensed uranium mill with a vanadium co-product recovery circuit located in southeastern Utah near the Colorado Plateau District (as defined below), the Henry Mountains Complex, the Arizona Strip and the White Canyon District. White Mesa is approximately six miles south of the city of Blanding, Utah. Access is by U.S. Highway 191.

Construction of White Mesa began in 1979, and conventionally-mined uranium/vanadium ore was first processed in May, 1980. The mill uses sulphuric acid leaching and a solvent extraction recovery process to extract and recover uranium and vanadium. The mill has been operated on a campaign basis since its initial start-up due to variable uranium market conditions.

In addition to the conventional ore circuit, a circuit for processing certain types of alternate feed materials was built in 2009. This circuit enables the mill to process both conventional ore and alternate feed materials simultaneously. See below under “The Denison US Mining Division - Operations –Alternate Feed Materials”.

White Mesa is licensed to process an average of 2,000 tons of ore per day and to produce up to 8.0 million pounds of U₃O₈per year. In full operation, White Mesa employs approximately 150 people.

Current Condition and Operating Status

In late 2006, Denison began a program to refurbish White Mesa. The refurbishment program included the purchase of mobile equipment, restoration of the vanadium roasting, fusion and packaging circuits, replacement of major pumps and component drives, modernization of the mill’s instrumentation and process control systems, and completion of the relining of tailings cell 4A (“Cell 4A”). The total cost of the refurbishment program was approximately US$31.0 million and was completed in 2008.

In April 2008, White Mesa began processing uranium/vanadium conventional ore and producing uranium concentrate. Production of vanadium began in July, 2008 after completion of the refurbishment of the vanadium circuit. Processing of conventional ore continued through the end of March, 2009 when the mill was shut down for approximately 30 days for relining of the semi-autogenous grinding mill and other critical maintenance activities. Processing of conventional ore recommenced near the end of April, 2009; however, conventional ore processing was discontinued near the end of May for the remainder of 2009 due to a decline in uranium prices. White Mesa began processing conventional ore again in March, 2010 and continued through to June, 2011. Conventional ore processing recommenced in November, 2011. During 2011, White Mesa processed approximately 110,000 tons of uranium/vanadium ore from the Colorado Plateau, 24,800 tons of ore from Arizona 1, 32,000 tons of ore from Daneros and 5,800 tons of ore from the Ore Purchase Program (defined below). See “The Denison US Mining Division –Operations – Ore Purchase and Toll Milling”.

Processing of two different alternate feed materials occurred in 2011 using the separate alternate feed circuit built in 2009. In addition, two other alternate feed materials were processed using the conventional ore circuit in October, 2011.

Production at White Mesa over the past five years is shown below.

	2011	2010	2009	2008	2007
Alternate Feed Milled (tons)	12,040	310	177	-	44,136
Conventional Ore Milled (tons)	172,600	194,440	144,434	248,744	-
Uranium Production
(‘000’s pounds U₃O₈)
Alternate Feed	200	299	191	94	254
Conventional Ore	811	754	423	791	-
Total Uranium Production	1,011	1,053	614	885	254

Vanadium Production	1,290	2,347	501	1,223	-
(‘000s pounds V₂O₅)
Year-end Ore Stockpile (tons)	91,430	92,821	174,358	122,477	84,943
Tolled Ore Milled (tons)	-	39,289	-	-	-

White Mesa processed conventional ore during the first two months of 2012, and conventional ore processing will resume in August, 2012. Conventional ore from Colorado Plateau, Daneros and Arizona 1 will be processed. Processing of four different alternate feed materials is expected to continue throughout 2012. Two of the alternate feed materials will be processed using the alternate feed circuit, while two other materials will be processed using the conventional ore circuit during the period when there is no conventional ore processing planned. EFI anticipates continuing with the implementation of Denison’s plans for the White Mesa Mill, and increasing production over time as mine development and market conditions warrant.

White Mesa Licence

White Mesa operates under a Radioactive Materials Licence issued by the State of Utah (the “Utah Radioactive License”). The licence came up for renewal on March 31, 2007. A Licence Renewal Application was submitted to the Utah Department of Environmental Quality (“UDEQ”), Division of Radiation Control (“DRC”) on February 28, 2007. The licence renewal process is underway. The licence remains in effect in its current form during the licence renewal process.

Tailings Disposal

Synthetic lined cells are used to contain tailings and, in one case, solutions for evaporation. As each tailings cell is filled with tailings, the water is drawn off and pumped to the evaporation pond and the tailings solids allowed to dry. As each cell reaches final capacity, reclamation will begin with the placement of interim cover over the tailings. Additional cells are excavated, and the overburden is used to reclaim previous cells. In this way, there is an ongoing reclamation process.

Denison completed a refurbishment of Cell 4A in August, 2008 and received an operating permit from the DRC in September 2008. Cell 4A has been in operation since that time and provides approximately 2.0 million tons of tailings capacity.

To ensure sufficient volume for tailings and surface area for tailings solution evaporation, Denison began the licensing process for tailings cell 4B (“Cell 4B”) in 2009. Construction of Cell 4B was completed in December 2010 and final approval to begin use of Cell 4B was received in January 2011. Cell 4B is currently being used for additional evaporation capacity and provides an additional approximately 2.0 million tons of tailings capacity.

Environmental

Denison detected some chloroform contamination at the White Mesa site that appears to have resulted from the operation of a temporary laboratory facility that was located at the site prior to and during the construction of the mill facility and from septic drain fields that were used for laboratory and sanitary wastes prior to construction of the mill’s tailings cells. Elevated concentrations of nitrate and chloride were also observed in some monitoring wells at the mill site in 2008, a number of which were up-gradient of the mill’s tailings cells. In addition, the mill has reported consecutive exceedances of Groundwater Compliance Limits (“GWCLs”) under White Mesa’s Groundwater Discharge Permit (a “GWDP”) for several constituents in several wells, and there is a decreasing trend in pH in a number of wells across the White Mesa site that have caused the pH in a number of compliance monitoring wells to have dropped below their GWCLs. These exceedances and pH trends include wells that are upgradient of the White Mesa facilities and are currently being evaluated. See “The Denison US Mining Division –Environmental and Safety Matters”.

Alternate Feed Materials

The Utah Radioactive Licence gives Denison the right to process other uranium-bearing materials known as “alternate feed materials” pursuant to an alternate feed guidance adopted by the US Nuclear Regulatory Commission (“NRC”). Alternate feed materials are uranium-bearing materials, which usually are classified as waste products by generators of the materials. Requiring a routine amendment to its licence for each different alternate feed, Denison can process these uranium-bearing materials and recover uranium, in some cases, at a fraction of the cost of processing conventional ore, alone or together with other valuable metals such as niobium, tantalum and zirconium. In other cases, generators of alternate feed materials are willing to pay a recycling fee to Denison to process these materials to recover uranium and then dispose of the remaining by-product in White Mesa’s licensed tailings cells, rather than directly disposing of the materials at a disposal site. By working with Denison and taking the recycling approach, suppliers of alternate feed materials can significantly reduce their remediation costs, as there are only a limited number of disposal sites for uranium-bearing materials in the United States.

To date, White Mesa has received 15 licence amendments, authorizing the mill to process 18 different alternate feed materials. Of these amendments, nine involve the processing of feeds provided by nuclear fuel cycle facilities and private industry and one has involved the processing of material from the United States Department of Energy (“DOE”). These ten feed materials have been relatively high in uranium content and relatively low in volume. The remaining five amendments have been to allow White Mesa to process uranium-bearing soils from former defence sites, known as FUSRAP sites, which were being remediated by the US Army Corps of Engineers. These materials are typically relatively low in uranium content but relatively high in volume.

US Mines

The Denison US Mining Division is currently involved in four mining districts: the Colorado Plateau District; the Henry Mountains District; the White Canyon District; and the Arizona Strip. The mines are shown in the figure below and are described in further detail below.

Colorado Plateau District

The Colorado Plateau District is an area encompassing approximately 20,000 square miles and straddles the border of southeastern Utah and southwestern Colorado (the “Colorado Plateau District”). Denison’s principal mining complexes in the Colorado Plateau District consist of the La Sal, Van 4, Sunday, and East Canyon (Rim) zones. The bulk of the mineral deposits in the Colorado Plateau District are contained in three areas: the Sunday Mine complex, which includes the Sunday/St. Jude, West Sunday, Topaz and Carnation mines (the “Sunday Mine Complex”); the La Sal complex, which includes the La Sal, Beaver and Pandora mines (the “La Sal Complex”); and the East Canyon Area, which includes the Rim mine. All of these areas have developed permitted mines either in operation or on standby. The mines are located approximately 65 to 100 miles northwest of White Mesa. Haulage of the ore from the mines to White Mesa is along county roads and state and federal highways.

Colorado Plateau

The Uravan mineral belt in the Colorado Plateau District has a lengthy mining history, with the first shipment of mined materials made to France in 1898. Vanadium was the focus of production from the 1920’s to the early 1940’s. World War II brought increased attention to the uranium mineralization in the area of the Uravan mineral belt, and by the 1950s this district was one of the world’s foremost producers of both uranium and vanadium. Historical production has yielded an overall V₂O₅to U₃O₈ratio of 5.79:1. Production continued more or less uninterrupted until 1984 when low uranium prices forced the closure of all operations. Production resumed in 1987 when vanadium prices spiked, but ceased in 1990. Except for limited production in 1998 and 1999, all operations were shut down until 2006 when several of the mines re-opened.

The uranium/vanadium deposits in the Colorado Plateau District were deposited as alluvial fans by braided streams and meander belts of larger streams. The shape and size of the mineralized seams are extremely variable. As a result, exploration and mining have historically involved conducting exploration to find a seam and then merely following its erratic path, with little exploration other than development drilling in the course of following the seam. The unusual nature of these deposits has therefore traditionally resulted in a limited amount of financial resources being dedicated to delineate mineral resources or mineral reserves prior to mining.

Mining properties in the Colorado Plateau District are held by a combination of unpatented claims and leases with third parties. On the leased properties, there are uranium royalties payable ranging from 2.5% to 10.0% and vanadium royalties payable ranging from 4% to 12.5% . These royalties are only payable on ore recovered from specific claim areas and do not necessarily apply to the entire deposit.

Operations

Sunday/St. Jude, Topaz, West Sunday, La Sal and Pandora are all accessed by declines from the surface. Beaver is accessed by a shaft and is connected underground to Pandora and La Sal. Rim is a combination of a shaft and decline access but at the present time is only accessed through the decline. Sunday/St. Jude, West Sunday, Pandora, Rim and Beaver are mature operating mines with extensive underground workings. Topaz is relatively new with the initial development drift completed in 2007. The mining method is random room and pillar in which no set pillar pattern is established but rather both the size of the rooms and the pillars are variable and are defined by the deposit geometry. A typical room is about 20 feet wide with pillars as small as 12 feet square in highly mined areas.

The limited height of the mineral deposit means that mining in this area must be quite selective in order to maintain a satisfactory production grade. This is done by closely following the mineralized zones and by using the technique of “split shooting” wherein the mineral deposit and waste are blasted separately in a two-stage operation.

In June 2006, Denison restarted mining activity in the United States with the re-opening of several mines in the Colorado Plateau District. Over a 12 month period, Denison re-opened five mines in the Colorado Plateau District. In late 2008, Denison began rehabilitation of Beaver which began shipping ore in February, 2009.

As a result of declining uranium prices, Denison placed Topaz on standby in January 2009. In March 2009, Denison placed Rim and Sunday/St. Jude on standby, followed by West Sunday in October 2009. These mines have been maintained so that they can be restarted with minimal effort. Beaver and Pandora are the only two operating mines in the Colorado Plateau District at the present time.

5 Year Production History – Colorado Plateau Mines
Mine	2011	2010	2009	2008	2007
Beaver
Tons	48,176	42,941	33,701	729	-
% U₃O₈	0.23%	0.21%	0.18%	0.26%	-
% V₂O₅	1.22%	1.11%	0.97%	1.41%	-
Pandora
Tons	41,254	48,099	79,750	52,623	32,444
% U₃O₈	0.22%	0.21%	0.23%	0.23%	0.25%
% V₂O₅	1.18%	1.15%	1.23%	1.22%	1.34%
Rim
Tons	-	-	3,475	2,238	-
% U₃O₈	-	-	0.07%	0.04%	-
% V₂O₅	-	-	0.70%	0.40%	-
Sunday/St. Jude
Tons	-	-	16,073	27,497	10,879
% U₃O₈	-	-	0.18%	0.19%	0.16%
% V₂O₅	-	-	0.97%	1.04%	0.86%
Topaz
Tons	-	-	1,506	9,707	7,753
% U₃O₈	-	-	0.09%	0.13%	0.16%
% V₂O₅	-	-	0.48%	0.70%	0.86%

Mine	2011	2010	2009	2008	2007
West Sunday
Tons	-	-	26,132	30,121	16,526
% U₃O₈	-	-	0.18%	0.21%	0.17%
% V₂O₅	-	-	0.97%	1.13%	0.92%

No Mineral Reserve or Mineral Resource estimates have been prepared in accordance with NI 43-101 for any of these mines. The uranium grades shown above are based on probe grades taken when the ore arrives at White Mesa. The vanadium grades are based on historical uranium/vanadium ratios.

In addition to the mine production detailed above, a number of low grade stockpiles from the Colorado Plateau Mines were shipped to White Mesa. In 2007 a total of 7,973 tons were shipped to White Mesa, grading 0.08% U₃O₈and 0.43% V₂O₅. In 2008, a total of 6,801 tons were shipped, grading 0.08% U₃O₈and 0.39% V₂O₅, and in 2010, 213 tons, grading 0.09% U₃O₈and 0.50% V₂O₅were shipped. There was no low grade material shipped in 2009 or 2011.

Permitting

Pandora, Beaver, La Sal and Rim are all permitted for current operations. At all of the Colorado Plateau Mines, air permits have been obtained or are in the process of being obtained. Storm water as well as spill prevention and pollution control plans were also updated for all Colorado Plateau Mines. These plans require regular monitoring and reporting.

Under Colorado laws, the Colorado Division of Reclamation, Mining and Safety (“CDRMS”) has determined that all uranium mines are Designated Mining Operations (“DMO”). If a mine is determined to be a DMO, there is a requirement that it submit an Environmental Protection Plan (“EPP”). An EPP must identify the methods the operator will utilize for the protection of human health, wildlife, property and the environment from the potential toxic or acid forming material associated with the operations. An EPP must be submitted to CDRMS for review and, after approval by CDRMS, will be subject to public comment.

Representative samples were collected of ore, waste rock, and soils surrounding the mine sites. These samples were analysed, and arsenic was the only constituent considered to be of possible concern. Studies were conducted on the mechanisms of arsenic liberation, transport, and possible exposure to the environment and biota. The surface and ground water environments were also investigated under the DMO assessment. Groundwater sampling wells were installed in West Sunday to obtain samples of undisturbed groundwater and to assess possible impacts to water in contact with mine workings and the atmosphere.

Upon joint consultation with CDRMS, plans were developed to collect the necessary data and perform characterization testing and prepare assessments of toxic substance exposures and transport necessary for preparation of an EPP for the Sunday Mine Complex.

The EPP for the Sunday Mine Complex and Van 4 was filed in 2009 (the “Sunday Mine EPP”). The Sunday Mine EPP is in final review by CDRMS and upon approval groundwater monitoring wells will be installed and a commitment to install ore pad liners will be finalized.

In February, 2009, the U.S. Bureau of Land Management (“BLM”) approved an amended Plan of Operations (“PO”) for Topaz incorporating all of the mines in the Sunday Mine Complex. The BLM made a Finding of No Significant Impact (“FONSI”), as a result of its Environmental Assessment (“EA”) of the project. CDRMS had already approved the conversion of the Topaz 110 permit (a permit for a mine with less than 10-acres of surface disturbance) to a 112 permit (a permit for a mine with greater than 10-acres of surface disturbance), allowing additional disturbance as needed for development and production at Topaz.

An appeal was made on the FONSI resulting in the state director of BLM remanding the decision record back to the local field office for further study and analysis (the “Remand Decision”). The data collection requirements mandated by the Remand Decision have been fulfilled and the reports of findings have been submitted. Upon finalization of the EPP approval by CDRMS, a dump leachate monitoring well will be installed at Topaz to address concerns raised by the remand and to fulfill EPP requirements.

As a result of routine permit applications for additional ventilation raises and exploration drilling for the La Sal Complex, the BLM, United States Forest Service (“USFS”) and State of Utah Department of Oil and Gas and Mining (“UDOGM”) requested that the PO (the “La Sal PO”) and Utah Mine Permit (the “La Sal Permit”) for the La Sal Complex be amended to include the current operating plans. Materials required for the formal amendment of the La Sal PO and La Sal Permit have been submitted and are under review by the BLM, USFS and UDOGM. The amendment involves the preparation of an EA and will proceed through public notice and a BLM decision record. Current operations have not been affected during this amendment process, but new disturbance activities, such as installation of new vent shafts and exploration drilling (on public lands), have been deferred until the amendment process is complete. The amendment process is expected to be completed and a decision record issued by the end of 2012.

Henry Mountains Complex

The Henry Mountains Complex is one contiguous property located in eastern Garfield County, Utah, 15 to 20 miles north of Bullfrog Basin Marina on Lake Powell and approximately 40 air miles south of Hanksville, Utah. It is situated three miles west of Utah State Highway 276. The Henry Mountains Complex includes the Bullfrog property on the north end of the property, hosting the Indian Bench, Copper Bench and Southwest uranium deposits (“Bullfrog”), and the Tony M property (the “Tony M Property”) located on the south end of the property, hosting the Tony M deposit and mine (“Tony M”). See “The Denison US Mining Division – Mineral Properties – Henry Mountains Complex”.

The Bullfrog property was extensively explored by Exxon Minerals Company (“Exxon”) and Atlas Minerals & Chemicals Inc. in the period from 1974 to 1990. Development of Tony M began in September, 1977, and nearly 17 miles of underground workings were developed prior to suspension of mining in 1985, following which the mine was allowed to flood. Tony M is located approximately 117 miles west of White Mesa. Ore haulage to the mill is along county and state highways.

Denison acquired the Bullfrog property when it purchased substantially all of the uranium producing assets of Energy Fuels Ltd., Energy Fuels Exploration Company and Energy Fuels Nuclear, Inc. (collectively, “EFN”) in 1997. In February, 2005, Denison acquired Tony M, bringing it under common ownership with Bullfrog. Prior to 2005, all exploration, mine development and related activities for the two properties were conducted independently.

The Henry Mountains Complex is comprised of 202 unpatented BLM mining claims and one 640 acre Utah State Mineral Lease (the “Tony M Lease”). Seventeen of the claims, comprising a portion of Tony M, are subject to an escalating annual advance minimum royalty based on the uranium spot price, and a 4% yellowcake royalty, less taxes and certain other deductions. There is also a vanadium production royalty which is a 2% gross royalty less certain deductions. The advance minimum royalties are deductible against the uranium and vanadium royalties payable. The Tony M Lease has an annual rental of US$640 and is subject to royalties set by the State of Utah including: an escalating annual advance minimum royalty based on the uranium spot price, a uranium royalty of 8% of gross value less certain deductions; and a vanadium royalty of 4% of gross value less certain deductions. Annual holding costs for Tony M (including advance royalties to the State of Utah and private parties and BLM claim maintenance fees) will total approximately $577,805 in 2012. The advance royalties on the Tony M Lease are only deductible against the uranium and vanadium royalties paid within the same year.

Operations

Upon receipt of an initial exploration permit, Denison engaged Dynatec Mining Corporation (“Dynatec”) as its mine contractor for Tony M. In May, 2007, Dynatec began limited rehabilitation work on the existing Tony M workings.

An operating permit for Tony M was received in September, 2007, allowing Dynatec to shift from rehabilitation work to mining of the Tony M deposit. As of the end of 2007, 9,368 tons of ore, grading 0.10% U₃O₈had been shipped to White Mesa from Tony M.

In addition to re-opening the mine, Denison also constructed a number of surface facilities including a power generation station, compressor station, fuel storage facilities, maintenance building, offices and employee shower facilities. An evaporation pond, originally constructed when Tony M was in operation in the 1980’s and which is used for storage and evaporation of mine water, was reconstructed to allow for dewatering of the mine.

In 2008, 87,421 tons, grading 0.15% U₃O₈, was shipped to White Mesa, as well as 64,755 tons of ore from the historic stockpiles, grading 0.11% U₃O₈. In November, 2008, Denison placed Tony M on temporary stand-by due to high operating costs and the weakening of the uranium spot price. Shipping of ore from the historic stockpiles continued after the mine was placed on stand-by.

In March, 2009, shipping of the historic ore stockpile to White Mesa was completed, shipping 29,737 tons of ore, grading 0.11% U₃O₈.

Tony M remains on care and maintenance, and dewatering activities are continuing so that mining operations can resume quickly, when uranium prices reach viable levels.

Permitting

A Record of Decision and approved PO was received in September, 2007 for the Henry Mountain Complex which comprises both Tony M and Bullfrog.

The PO was challenged and on November 21, 2007, the BLM State Director issued a decision vacating the previously issued permit and remanded the case in order that an EA for the PO for Tony M (the “Tony M PO”) could be amended and a new Record of Decision issued. A new Record of Decision was issued by the BLM on November 23, 2007 approving the Tony M PO. The new decision was again appealed. The Utah State Director issued a decision denying the appeal and upholding the Tony M PO on February 19, 2008.

A PO for phase two development has been filed with the BLM and UDOGM. Phase two activities include the addition of ventilation shafts, upgrading of the shaft and site access road, installation of a production shaft and expansion of the mine water evaporation reservoir. Phase two permitting efforts continue with the BLM and UDOGM.

White Canyon

The White Canyon District is located in southeastern Utah in the Colorado Plateau (the “White Canyon District”). The White Canyon District generally encompasses the local geographic areas of Red, White and Fry Canyons, and Elk Ridge along State Highway 95 between Blanding and Hite, Utah. EFI will hold a 100% interest in various groups of mining claims and Utah State Leases comprising its White Canyon District holdings, including Daneros and adjoining historical mine sites which can be developed in conjunction with the Daneros project. Denison’s holdings in the White Canyon District also include exploration properties.

Major uranium deposits in the east-central Colorado Plateau occur principally in two fluvial sandstone sequences. The older is located at or near the base of the Upper Triassic Chinle Formation and the other occurs in the Late Jurassic Salt Wash Member of the Morrison Formation. Nearly all of the mineral deposits in the White Canyon District occur in fluvial channel deposits of the Shinarump Member, the basal member of the Chinle Formation.

The Shinarump Member consists of predominantly trough-crossbedded, coarse-grained sandstone and minor gray, carbonaceous mudstone and is interpreted as a valley-fill sequence overlain by deposits of a braided stream system. Uranium mineralization appears to be related to low-energy depositional environments in that uranium is localized in fluvial sandstones that lie beneath organic-rich lacustrine-marsh mudstones and carbonaceous delta-front sediments. The reducing environment preserved in these facies played an important role in the localization of uranium.

Uranium deposits consist of closely-spaced, lenticular mineral pods which are generally concordant with bedding in paleochannel sediments. Single mineral pods range from a few feet to a few hundred feet in length and from less than one to more than ten feet in thickness. Deposits range in size from a few tons to more than 600,000 tons. Deposits in the Shinarump Member generally have low vanadium content, and are therefore not processed for vanadium recovery. Historical production from the White Canyon District exceeds 11 million pounds U₃O₈.

Between 1975 and 1985, Utah Power & Light (“UP&L”) conducted several phases of drilling in the White Canyon District near Daneros. Following 1985, the properties were idle and little or no exploration activity took place in the White Canyon District. From 2005 to 2007, predecessors of White Canyon began acquiring properties with known historic mineral deposits in the White Canyon District. In June, 2007, after consolidating a portfolio of properties and prospects, White Canyon initiated confirmation and definition drilling at Daneros. Based on the success of this initial drilling, 38 more holes were drilled in 2008, which provided the basis for mineral resource estimates relied upon by White Canyon to commence mine development work at Daneros.

Daneros is located 4.8 miles from Fry Canyon, Utah and is accessed via Radium King Road for approximately 14 miles, which is maintained by San Juan County. Daneros was developed and placed into active production by Utah Energy Corporation (“UEC”), the US operating entity for White Canyon at the time. The shipping distance from Daneros to White Mesa is 65 miles along county roads and state highways.

In January, 2010, Denison entered into a toll milling agreement with UEC, which was then a wholly-owned subsidiary of White Canyon. See “The Dension US Mining Division – Operations – Ore Purchase and Toll Milling”.

In June, 2011, Denison completed the White Canyon Acquisition. The assets acquired in the White Canyon Acquisition included all of White Canyon’s mining claims and mineral leases in Utah, including 547 claims and five Utah State Leases, totalling about 5,670 hectares (14,000 acres), all in southeastern Utah. The land holdings in the White Canyon District include 341 unpatented mining claims and two Utah State Leases, in total about 3,000 hectares (7,400 acres). The mining claims are maintained by making annual payments of US$140 per claim, and the Utah State Leases generally cost US$1 per acre annually.

A number of the properties acquired in the White Canyon Acquisition bear production royalties. Claims hosting Daneros are subject to royalties ranging between 15% of “market value” of the ore and 2.5% of gross proceeds. The exploration properties also have royalties in some cases, including Utah State Leases which provide for royalties of 8% on uranium and 4% on vanadium.

Operations

UEC gathered the necessary environmental data and submitted applications for approvals to open an underground mine at Daneros. A PO was submitted to the BLM and was approved in May, 2009 (the “Daneros PO”), following which UEC commenced active mine development, including driving a decline into the main deposit at Daneros. The first loads of ore from Daneros were delivered to White Mesa in December, 2009, and a toll milling campaign was conducted in the second half of 2010. Daneros is currently operated by Denison (through the use of contract miners) and ore from the mine is delivered to White Mesa and processed for Denison’s account.

The initial mine plan at Daneros involved driving twin declines (with the second decline for emergency escape and ventilation) into the center of the Daneros deposit and developing away from the entry point. Random room and pillar mining is employed, as is typical for the deposits in the local region. Mining utilizes rubber tired loaders and small trucks to transport ore to the surface, where it is loaded into over-the-road trucks, covered by a secure tarpaulin and transported to White Mesa.

The ore production from Daneros for 2010 and 2011 is shown below:

Source	2011	2010
UEC Production
Tons	19,415	46,150
% U₃O₈	0.26%	0.31%

Denison
Production
Tons	14,953	-
% U₃O₈	0.30%	-

When White Canyon owned Daneros it prepared mineral resource estimates in accordance with the requirements of the Code for Reporting of Mineral Resources and Ore Reserves of Australasian Joint Ore Reserves Committee (the “JORC Code”) in August, 2010. Denison disclosed this information as a historical estimate under NI 43-101. See “The Denison US Mining Division – Mineral Properties –Historical Resource Estimates – White Canyon”. Upon completion of the Acquisition, EFI intends to prepare mineral resource estimates in accordance with the requirements of NI 43-101 in due course for Daneros.

Permitting

The primary permits required for mining operations at Daneros include a mine permit issued by UDOGM and the Daneros PO approved by the BLM. The Daneros PO required document preparation and public notice of an EA. The permits obtained by UEC were for the initial stage of operations and contemplated eventual expansion of the mining operations, with the inclusion of additional surface area for support facilities. Daneros does not discharge any water, so no discharge permit is required.

An appeal of the approval of the Daneros PO was denied by the Utah BLM State office, and is currently under appeal to the Utah Department of Interior Board of Land Appeals.

Following the White Canyon Acquisition, work commenced to modify the Daneros PO to expand the footprint of mine operations to support continued production from Daneros and adjoining properties. Expansion of surface facilities at Daneros will require an Air Permit from UDEQ, Division of Air Quality. Daneros will also become subject to requirements for monitoring and reporting of radon emissions from the mine and its vents; this program (National Emissions Standards for Hazardous Air Pollutants (“NESHAP”)) is also administered by UDEQ, Division of Air Quality. Daneros is in compliance with all data collection and reporting requirements under storm water and spill prevention programs.

Arizona Strip

The Arizona Strip is an area largely bounded on the north by the Arizona/Utah state line; on the east by the Colorado River and Marble Canyon; on the west by the Grand Wash Cliffs; and on the south by a midpoint between the city of Flagstaff, Arizona and the Grand Canyon. The area encompasses approximately 13,000 square miles.

Denison owns four developed and partially developed mines in the Arizona Strip, being Arizona 1, Canyon, Pinenut and Kanab North, all of which had been shut down since the 1980s. In February, 2007, Denison purchased from Pathfinder Mines Corporation (“Pathfinder”) five additional uranium deposits in the Arizona Strip: EZ1, EZ2, DB 1, WHAT and Moonshine Springs. Denison recommenced development work on Arizona 1 in April, 2007, and restarted mining operations in November, 2009. Development work on the Pinenut mine commenced in November 2010.

Since 1980, when mine development first began at the Arizona Strip it has produced in excess of 19 million pounds of uranium from seven mines, each of which was owned and operated by EFN. Of these mines five are mined out and have been reclaimed.

Ore from the Arizona Strip mines is hauled by truck from the mine sites to White Mesa. Arizona 1 and Pinenut are approximately 307 road miles, and Canyon is 325 road miles from White Mesa.

Arizona Strip

The Arizona Strip mines are held by unpatented BLM claims, except for Moonshine Springs, which is held by a combination of mineral claims and a mineral lease. There is a 3.5% yellowcake royalty on Canyon.

Operations

In the mid-1980s, the shaft at Arizona 1 was sunk approximately 1,200 feet below surface before activity at the mine was shut down due to depressed uranium prices. The original target depth was 1,600 feet in order to reach the bottom of the mineral deposit. Denison decided to ramp down from the bottom of the existing shaft rather than deepen the shaft to access the lower parts of the mineral deposit.

Work began on the rehabilitation of the shaft in mid-2007. Denison engaged J.S. Redpath Corporation (“Redpath”) to work on rehabilitation of the surface facilities, the hoist and headframe and the underground workings. The rehabilitation of the shaft, underground development, sinking of an internal raise and the sinking of a ventilation shaft were completed in September, 2008. Due to ongoing delays in receipt of an air quality permit, Redpath was demobilized from the site at that time. The air quality permit for Arizona 1 was received in September, 2009. See “Permitting” below.

Arizona 1 is being mined using a combination of long hole and shrinkage stopping methods at a mining rate of up to 300 tons per day, four days per week. In 2010, Arizona 1 produced approximately 21,500 tons at an average grade of 0.56% U₃O₈and in 2011 produced 39,900 tons at an average grade of 0.66% U₃O₈. The mine is projected to operate through to the fourth quarter of 2012 unless additional ore resources can be identified through further drilling.

In November, 2009, a Complaint for Declaratory and Injunctive Relief against the Secretary of the Interior and the BLM was filed. See “The Denison US Mining Division – Legal and Regulatory Proceedings”. At this time, this legal action has not impacted the operations at Arizona 1.

In November, 2010, a production decision was made on Pinenut. Pinenut was partially developed in the late 1980’s and a limited amount of selective mining was conducted. A shaft was sunk to a depth of 1,350 feet and a high grade pod was mined in late summer 1988, yielding 25,500 tons, grading 1.03% U₃O₈, containing 526,000 pounds. Following extraction of the high grade pod, EFN placed the mine on standby in 1989.

Expansion of the storm water storage pond and rehabilitation of the surface facilities were completed in 2011 and the rehabilitation of the mine workings is ongoing. First ore production is expected in 2012. Uranium production is expected to total approximately 936,000 pounds U₃O₈, of which 526,000 pounds is expected to be produced in 2013, with the balance to be produced in 2014. EFI anticipates continuing with the implementation of Denison’s plan for the Pinenut Mine.

Canyon is proceeding through permitting based on the March, 2012 approval of the Denison Board to proceed with development. Kanab North remains on care and maintenance and a closure plan is being prepared for this mine site. EFI anticipates continuing with the implementation of Denison’s plan for the Canyon Mine and Kanab North Mine.

Permitting

Prior to 2009, Arizona 1 had received all required permits, with the exception of an Air Quality Permit which is required under new Arizona requirements. The air quality permit was issued by the Arizona Department of Environmental Quality (“ADEQ”), Department of Air Quality after a period of public comment in September, 2009.

In 1992, Arizona updated its laws relating to groundwater issues, requiring that an aquifer protection permit be obtained for each mine. The Arizona 1 mine has an individual aquifer protection permit. Denison prepared documents applying for groundwater general permits for the on-site ponds, ore storage and development waste storage pads and stormwater collection for Pinenut and Canyon. In September, 2009, the groundwater general permits were received for the stormwater storage ponds for the Pinenut and Canyon mines. Air Quality Permits for Pinenut, Canyon and EZ1/EZ2 were issued by ADEQ in March, 2011.

At Pinenut approval of the operation from the Environmental Protection Agency (the “EPA”) under NESHAP has been obtained. All other permits for operation are approved and in place for both operations.

The BLM has accepted the PO for EZ1 and EZ2 as complete and review is underway. A mineral examination by BLM is in progress and scoping for an Environmental Impact Statement is expected to commence in late 2012 or early 2013.

In July, 2009, the BLM issued a Notice of Proposed Withdrawal (“2009 Notice”). See “The Denison US Mining Division – Government Regulation – Land Tenure”. In January, 2012, the withdrawal proposed in the 2009 Notice was implemented. To confirm EFI’s rights to proceed with development and mining on its existing valid rights, mineral examinations will be prepared by the USFS for Canyon, and by the BLM for the EZ Complex and potentially DB 1 as well. Upon confirmation of a valid existing right at Canyon, commencement of site work is contemplated in early to mid-2012.

Ore Purchase and Toll Milling

In July, 2007, Denison initiated an ore purchase program to provide additional mill feed for White Mesa (the “Ore Purchase Program”). A schedule listing the price to be paid per ton is currently posted on Denison’s website at www.denisonmines.com from time to time. Denison adjusts the buying schedule periodically in response to changing factors such as uranium and vanadium prices, milling cost and uranium and vanadium recoveries. EFI plans to assess the current Ore Purchase Program and adjust as appropriate.

Under the Ore Purchase Program White Mesa received: 2,423 tons in 2008, at an average grade of 0.19% U₃O₈and 1.0% V₂O₅; 9,077 tons in 2009, at an average grade of 0.32% U₃O₈and 0.66% V₂O₅from 11 different mines; 110 tons in 2010 and 589 tons in 2011.

In January, 2010, Denison entered into a toll milling agreement with UEC, under which White Canyon transported up to 55,000 tons per year of ore produced from White Canyon’s mines to White Mesa for processing. White Canyon paid Denison the operating costs to mill its ore, a capital charge, plus a toll milling fee per ton of ore, which was linked to the long-term uranium price. During 2010, Denison toll milled approximately 39,300 tons of ore for White Canyon producing approximately 204,000 pounds U₃O₈. The toll milling agreement was terminated pursuant to the White Canyon Acquisition.

Mineral Properties

Summary of Mineral Reserves and Resources

The following tables show Denison’s estimate of mineral reserves and mineral resources attributable to the Denison US Mining Division as of December 31, 2011. NI 43-101 requires mining companies to disclose mineral reserves and mineral resources using the subcategories of proven mineral reserves, probable mineral reserves, measured mineral resources, indicated mineral resources and inferred mineral resources. Denison reports mineral reserves and mineral resources separately.

Proven Mineral Reserve Estimates

	100% Basis			Denison
				Share
			Pounds of	Pounds of
	Tonnes	Grade	U₃O₈	U₃O₈
Deposit	(,000)	% U₃O₈	(,000)	(,000)

White Mesa - Ore Stockpile⁽¹⁾	18.5	0.70	287	287
Total Proven Mineral				287
Reserves

Indicated Mineral Resource Estimates⁽²⁾⁽³⁾

		100% Basis		Denison
				Share
			Pounds of	Pounds of
	Tonnes	Grade	U₃O₈	U₃O₈
Deposit	(,000)	% U₃O₈	(,000)	(,000)

Henry Mountains - Bullfrog	651.7	0.33	4,674	4,674
Henry Mountains-Tony M	1,527.8	0.24	8,140	8,140
Total Indicated Mineral				12,814
Resources

Inferred Mineral Resource Estimates⁽²⁾⁽⁴⁾

		100% Basis		Denison
				Share
			Pounds of	Pounds of
	Tonnes	Grade	U₃O₈	U₃O₈
Deposit	(,000)	% U₃O₈	(,000)	(,000)

Henry Mountains - Bullfrog	685.2	0.35	5,332	5,332
Henry Mountains -Tony M	779.9	0.16	2,750	2,750
Arizona Strip - Arizona 1	48.9	0.64	685	685
Arizona Strip - Canyon	75.1	0.98	1,629	1,629
Arizona Strip - Pinenut	86.5	0.54	1,037	1,037
EZ Complex	203.4	0.47	2,105	2,105
Total Inferred Mineral				13,538
Resources

Notes:

(1)	“White Mesa – Ore Stockpile” does not include stockpiled U₃O₈which has been mined from deposits in the Colorado Plateau District or White Canyon District where no mineral reserve and mineral resource estimates have been prepared in accordance with NI 43-101.

(2)	Mineral resources that are not mineral reserves do not have demonstrated economic viability.

(3)	The measured mineral resources and indicated mineral resources were estimated at various block cut-off grades and 0.20% eU₃O₈with a minimum thickness of 4 feet was selected as most reasonable for Henry Mountains – Bullfrog and a 0.10% eU₃O₈with a minimum thickness of 2 feet for Henry Mountains – Tony M, 0.02% U (0.024% U₃O₈) .

(4)	The inferred mineral resources were estimated at various block cut-off grades and 0.20% eU₃O₈with a minimum thickness of 4 feet was selected as most reasonable for the for Henry Mountains – Bullfrog, 0.10% eU₃O₈with a minimum thickness of 2 feet for Henry Mountains – Tony M and 0.20% eU₃O₈for the Arizona Strip and EZ 1 and EZ 2.

Except as stated below, the mineral reserve and mineral resource information shown above is as reported in the Denison Technical Reports prepared in accordance with NI 43-101. See “The Denison US Mining Division – Mineral Properties – Henry Mountains Complex” and “The Denison US Mining Division –Mineral Properties – Arizona Strip”.

Information on the White Mesa – Ore Stockpile consists of ore mined from the Arizona 1 deposit and was prepared from mill feed and mine production data. Mineral reserve and mineral resource information in the reports has been adjusted to reflect ore mined into ore stockpile and updated, in the case of Arizona 1, Pinenut and Canyon, by Denison personnel.

The reconciliations shown below detail the changes from Denison’s Mineral Reserve and Mineral Resource estimates reported as of December 31, 2010.

Reconciliation of Denison’s Share of Uranium Mineral Reserves
(in thousands of pounds U₃O₈)

			2011
Reserves	December 31,	2011	Additions	December 31,
	2010	Throughput ⁽¹⁾	(Deletions) ⁽²⁾	2011
White Mesa – Ore	42	(280)	525	287
Stockpile⁽³⁾
Total Proven Reserves	42	(280)	525	287

Notes:

(1)	Corresponds to mill feed.

(2)	Additions or deletions of reserves include ore mined to stockpile and adjustments provided from mining and milling results.

(3)	“White Mesa – Ore Stockpile” does not include stockpiled U₃O₈which has been mined from deposits in the Colorado Plateau District or White Canyon District where no mineral reserve and mineral resource estimates have been prepared in accordance with NI 43-101.

Reconciliation of Denison’s Share of Uranium Mineral Resources
(in thousands of pounds U₃O₈)

	December 31,	2011	2011	December 31,
Mineral	2010	Ore Mined	Additions	2011
Resources			(Deletions) ⁽¹⁾

Henry Mountains –
Bullfrog⁽²⁾
indicated	4,674	0	0	4,674
inferred	5,332	0	0	5,332
Henry Mountains - Tony
M⁽³⁾
indicated	8,140	0	0	8,140
inferred	2,750	0	0	2,750
Arizona Strip – Arizona 1
inferred	869	(525)	341	685
Arizona Strip – Canyon
inferred	1,523	0	106	1,629
Arizona Strip – Pinenut
inferred	1,037	0	0	1,037
EZ Complex
inferred	2,105	0	0	2,105

Notes:

(1)	Additions or deletions of mineral resources include reassessment of geological data and new or updated technical reports.

Henry Mountains – Bullfrog includes the Indian Bench and Copper Bench deposits. The Henry Mountains – Tony M includes the Southwest and Tony M deposits. See “The Denison US Mining Division – Mineral Properties – Henry Mountains Complex”.

The Southwest deposit, which was included in the Bullfrog resources in the Henry Mountains Technical Report, was re-estimated as part of the Henry Mountains Tony M – Southwest Technical Report and these resources were moved from Henry Mountains – Bullfrog to Henry Mountains – Tony M. See “The Denison US Mining Division – Mineral Properties – Henry Mountains Complex”.

Henry Mountains Complex

The Henry Mountains Complex is currently 100% owned by Denison Henry Mountains LLC, part of the Denison US Group, and is comprised of the Bullfrog property, hosting Indian Bench and Copper Bench and the Tony M property, hosting Southwest and Tony M.

On October 17, 2006, Denison filed on the SEDAR website at www.sedar.com the Henry Mountains Technical Report, which report provided current estimates for Indian Bench, Copper Bench and Southwest and a historical resource estimate for Tony M.

On March 26, 2009, Denison received the Henry Mountains Tony M – Southwest Technical Report, which is an independent review of mineral resource estimates for Tony M and Southwest on the Henry Mountains Complex prepared in accordance with NI 43-101.

Property Description and Location

The Henry Mountains Complex is comprised of 202 unpatented BLM mining claims totalling approximately 3,665 acres and the Tony M Lease. The surface rights are owned by the federal government and administered by the BLM, with the exception of the Tony M Lease which has associated state surface rights. Seventeen of the claims, comprising a portion of the Tony M property, are subject to an escalating annual advance minimum royalty based on the uranium spot price, and a 4% yellowcake royalty, less taxes and certain other deductions. There is also a vanadium production royalty which is a 2% gross royalty less certain deductions. The Tony M Lease has an annual rental of US$640 and is subject to royalties set by Utah including: an escalating annual advance minimum royalty based on the uranium spot price; a uranium royalty of 8% of gross value less certain deductions; and a vanadium royalty of 4% of gross value less certain deductions.

Accessibility, Climate, Local Resources, Infrastructure and Physiography

Road access to the Henry Mountains Complex is by paved Highway 276, running between Hanksville and Bullfrog Basin Marina, Utah. A gravel road, maintained by Garfield County and extending west from Highway 276, provides access to the southern end of the property. An unimproved county road passes by the portal of Tony M and extends northerly across the property. A network of unimproved, dirt exploration roads provide access over the property except for areas of rugged terrain. The Bullfrog Basin Marina airstrip is located approximately 15 miles south of the Henry Mountains Complex. The Henry Mountains Complex is located in a relatively remote area of Utah, and the infrastructure is limited. The distance to White Mesa is 117 miles.

Relief over the combined Bullfrog and Tony M properties is about 2,250 feet. The elevation ranges from 4,550 feet above sea level at the portal of Tony M, near the southern end of the property, to 6,800 feet above sea level over the northern end of the property. The terrain is typical canyon lands topography, with some areas deeply dissected by gullies and headwalls of canyons and the rest consisting of gently sloping gravel benches covering the northern half of the properties.

History

The Bullfrog property was initially explored by Exxon, while the Tony M property was explored and developed by Plateau Resources Inc. (“Plateau”), at that time a subsidiary of Consumers Power of Michigan.

Denison acquired Bullfrog when it purchased substantially all of the uranium producing assets of EFN in 1997. In February, 2005, Denison acquired Tony M, thus bringing it under common ownership with Bullfrog.

Prior to 2005, all exploration, mine development, and related activities for the two properties were conducted independently. Bullfrog and Tony M are therefore discussed separately, except where correlations and comparisons are made.

Bullfrog Property

Exxon conducted reconnaissance in the area of Bullfrog in 1974 and 1975, and then staked its first claims in the area in 1975 and 1976. A first phase drilling program conducted in 1977 resulted in the discovery of Southwest. Additional claims were subsequently staked and drilling was continued by Exxon. Several uranium and vanadium zones were discovered in the Southwest, and Copper Bench and Indian Bench areas. With the declining uranium markets of the early 1980s, Exxon prepared a prefeasibility report and then discontinued development of the property.

From July, 1982 to July, 1983, 112 drill holes were completed by Atlas Corp., under a purchase option with Exxon, delineating the Southwest and Copper Bench deposits on approximately 100 foot centres. From July, 1983 to March, 1984, a core drilling program was completed throughout the Bullfrog property with 133 rotary drill holes to delineate the Indian Bench deposit on approximately 200 foot centres.

In late 1992, EFN purchased the Bullfrog property from Exxon and conducted a geologic review and internal economic analysis of the property. Denison became the owner of the Bullfrog property in 1997.

Tony M Property

Exploration drilling in the area around Shootaring Canyon was initiated by Plateau during 1976 in the vicinity of outcropping uranium mineralization. In February, 1977, drilling commenced in what was to become Tony M. More than 2,000 rotary drill holes totalling about one million feet were drilled.

Development of Tony M started in September, 1977. By mid-1984, nearly 17 miles of underground workings had been developed in Tony M. During development of the Tony M entryways and crosscuts, a total of 237,441 tons of material with an average grade of 0.121% U₃O₈was extracted and stockpiled.

In 1989, 30 to 40 rotary holes were drilled to delineate zones of high grade uranium mineralization.

Geological Setting

The Henry Mountains Complex uranium deposits occur within the Salt Wash Member of the Morrison Formation, located within the Colorado Plateau. The Morrison Formation is a complex fluvial deposit of Late Jurassic age that occupies an area of approximately 600,000 square miles, including parts of 13 western states and small portions of three Canadian provinces, far to the north and east of the boundary of the Colorado Plateau.

The Bullfrog and Tony M deposits consist of two extensive elongated, tabular zones containing a large concentration of mineralization. Together the Southwest deposit of the Bullfrog property and the Tony M deposit extend for a distance of about three miles along a north-south trend and have a maximum width of about one-half mile. The larger Indian Bench and Copper Bench deposits within the Bullfrog property extend about 3.5 miles along a northwesterly trend.

Mineralization in the Bullfrog property deposits occurs over three stratigraphic zones of the Salt Wash Member of the Morrison Formation, while mineralization at the Tony M property occurs over four zones. The Southwest deposit (like most of the adjacent Tony M property) occurs in the lowermost 35 feet to 40 feet of the Salt Wash Member sandstone. Mineralization forming the Copper Bench and Indian Bench deposits occurs between about 60 feet and 100 feet above the base of the Salt Wash Member.

The depth below the surface to the base of the three deposits ranges from about 475 feet (Southwest deposit) to nearly 1,100 feet in both the Copper Bench and Indian Bench deposits.

Exploration

Surface drilling using rotary tricone bit technology, together with radiometric gamma logging, was the primary exploration method used to discover and delineate uranium on the Bullfrog and Tony M properties.

During development of Tony M, Plateau also conducted an intensive mine geology program to collect detailed information on the occurrence of uranium, including its thickness, grade, and lateral extent. This was done through geological mapping, together with face and rib scanning, as well as gamma probing of short up and down holes extending to about eight feet. Probing was also done using long-hole drilling to test target zones up to about 150 feet from mine openings. The results of this program were recorded on a systematic set of cross sections through Tony M, developed at a scale of 10 feet to the inch. Scott Wilson RPA did not have access to the detailed information collected underground in Tony M.

Denison carried out no work on the Bullfrog and Tony M properties, with the exception of a review of available data and critical evaluation, until the end of 2005, when Denison initiated certain activities including underground reconnaissance and permitting on the Bullfrog and Tony M properties. See “The Denison US Mining Division - Operations – US Mines – Henry Mountains Complex”.

Mineralization

The uranium/vanadium mineralization in the Henry Mountains Complex is similar to deposits observed elsewhere in the Colorado Plateau. It occurs as intragranular disseminations within the fluvial sand facies of the Salt Wash Member. It also forms coatings on sand grains and associated organic masses. Coffinite is the dominant primary uranium mineral in the mineralized horizons, with uraninite occurring in only trace amounts.

Vanadium occurs as montroseite (hydrous vanadium oxide) and vanadium chlorite in primary mineralized zones located below the water table. Above the water table to the south, vanadium chlorite is absent, while montroseite and a suite of secondary uranium/vanadium minerals are present.

Drilling

Bullfrog Property

Most of the drilling done on the Southwest, Copper Bench, and Indian Bench deposits on the Bullfrog property was conducted by rotary drilling using a tricone bit. Additional drilling was done to collect core samples.

The Indian Bench deposit is delineated by drilling on approximately 200 foot centres, while the Southwest and Copper Bench deposits were drilled on 100 foot centres. In some areas, the rugged terrain made access difficult, resulting in an irregular drill pattern. A total of 2,232 drill holes were completed on the Bullfrog property.

The mineralization is approximately horizontal on the Bullfrog property, so vertical holes provide a reliable estimate of the thickness of the deposits.

Tony M Property

In February, 1977, drilling commenced in the Tony M deposit. Plateau drilled more than 2,000 rotary drill holes totalling about 1.0 million feet. The holes were drilled using rotary tricone technology. The rugged terrain over much of the Tony M property made drilling access difficult, resulting in an irregular drill pattern. The drilling includes 24 core holes. The core holes provided samples of the mineralized zone for chemical and amenability testing and to determine geologic and engineering properties of the mineralized zone.

Sampling and Analysis

Bullfrog Property

Downhole gamma logging of surface holes was done on the Bullfrog property. Standard logging suites included radiometric gamma, resistivity and self potential measurements, supplemented by neutron-neutron surveys for dry holes. Deviation surveys were conducted for most of the holes.

Assays of samples from core drilling were collected by company geologists and submitted to various commercial labs for analysis. Results of these analyses were compared to eU₃O₈values from gamma logs to evaluate radiometric equilibrium, logging tool performance, and validity of gamma logging.

Metallurgical testing included leach amenability studies, settling, and filtration tests.

Mineral resource estimates for the Bullfrog property are based on the eU₃O₈% gamma log conversion values used to identify the mineralized zone, its thickness and calculate an average grade. The procedures implemented to identify the minimum grade and cut-off GT (Grade in U₃O₈x thickness) product for mineral resource estimation are described below under the heading “The Denison US Mining Division – Mineral Properties – Henry Mountains Complex – Cut-Off Grade and Mining Considerations”.

Tony M Property

The same suite of logging surveys and procedures as employed at the Bullfrog property were conducted for the Tony M property. Assays of samples from core drilling were collected and submitted for analysis. Confirmation assays of chemical U₃O₈% were completed on drill core samples for comparison and calibration with eU₃O₈% values from gamma logging.

Status of Chemical Equilibrium of Uranium

Bullfrog Property

Exxon conducted analyses of samples from core drilling in the Southwest and Copper Bench deposits and found that the radioactive disequilibrium of potentially economic grade intercepts in cores, measured as the ratio of chemical U₃O₈% to gamma log radiometric equivalent (eU₃O₈%), varied from 0.80 to 1.35 and averaged 1.06, close to the equilibrium value of 1.0. Other investigations had identified no significant disequilibrium problem.

Tony M Property

Plateau conducted an extensive investigation of the state of chemical disequilibrium of uranium in the Tony M deposit. In 1989, Nuclear Assurance Corporation (“NAC”) reported that an analysis of results from 1,763 samples, including 1,137 composite samples collected from buggies coming from Tony M, was completed in 1983. Based on that analysis, it was concluded: (i) the state of disequilibrium varies from location to location within the deposit; (ii) with the exception of one small area in the southern part of the deposit, the equilibrium factor is positive; (iii) low grade material with less than 0.06% U₃O₈is depleted in uranium; and (iv) higher grade material containing more than 0.06% U₃O₈is enriched inuranium.

Scott Wilson RPA is of the opinion that based on the information available, the original gamma log data and subsequent conversion to eU₃O₈% values are reliable but slightly conservative estimates of the uranium U₃O₈% grade. Furthermore, there is no evidence that radiometric disequilibrium would be expected to negatively affect the uranium resource estimates of the Henry Mountains Complex.

Data Verification

Based on its review of the grade and thickness of uranium mineralization determined in the original gamma logs and a comparison with the computer generated GT composites, Scott Wilson RPA is of the opinion that the original gamma log data and subsequent conversion to eU₃O₈values are reliable.Furthermore, Scott Wilson RPA reviewed the chemical analyses of core from diamond drill holes from the Bullfrog property and is of the opinion that the gamma logging results for the Bullfrog property provide a reliable, but conservative, estimate of the uranium content. The review suggests that the mineral resource estimate may underestimate the uranium content of the Bullfrog property by up to about 5%.

Security of Samples

Procedures followed during exploration were well documented and at the time followed best practices and standards of companies participating in uranium exploration and development. Onsite collection of the downhole gamma data and onsite data conversion limit the possibility of sample contamination or tampering.

Mineral Resource Estimation

In the Henry Mountains Technical Report, Scott Wilson RPA audited the 1993 EFN mineral resource estimate of the Copper Bench and Indian Bench deposits on the Bullfrog property and the Southwest deposit on the Tony M property, accepted them as a current mineral resource estimate and classified them as indicated mineral resources and inferred mineral resources.

The basis for this mineral resource estimation is the gamma logs from 1,801 rotary drill holes located on the Southwest, Copper Bench and Indian Bench deposits. This represents about 80% of the 2,232 total holes drilled on these deposits. A total of 81 core holes were drilled to recover samples for chemical and geologic analysis and to establish stratigraphic relationships. All of the drilling and analyses were conducted prior to Denison’s tenure. See “The Denison US Mining Division – Mineral Properties –Henry Mountains Complex – Drilling” above for further detail.

The grades of the mineralized zones were calculated on a polygonal block-by-block basis. The pounds of eU₃O₈ for each polygon were then tabulated along with the area and calculated volume for each block. The total number of tons and pounds of eU₃O₈ contained in the blocks were summed to provide a total inventory for each of the three deposits. Average grades for each deposit were estimated from the grades of the drill hole intersections used in the mineral resource estimate weighted by tonnage.

In the preparation of the Henry Mountains Tony M – Southwest Technical Report, Scott Wilson RPA audited the mineral resource estimates of the Tony M and Southwest deposits prepared by Denison using the contour method in 2008 and accepted them as a current mineral resource estimate, and has classified them as indicated mineral resources and inferred mineral resources. This new estimate provides an update of the Southwest deposit which was previously included in the Henry Mountains Technical Report.

The results of 1,671 drill holes were used to prepare the mineral resource estimates for the Tony M and the Southwest deposits. A total of 32 core holes were drilled to recover samples for chemical and geologic analysis and to establish a stratigraphic relationship. All of the drilling and analyses were conducted prior to Denison’s tenure. See “Drilling” above for further detail.

The following table lists the mineral resources by deposit for the entire Henry Mountains Complex.

Henry Mountains Complex Mineral Resource Estimates^{(1) (2) (3)}

		Tons	Grade eU₃O₈	Contained eU₃O₈
Deposit	Category	(million)	(%)	(million pounds)
Tony M	Indicated	1.03	0.24	4.83
Southwest	Indicated	0.66	0.25	3.30
Indian Bench	Indicated	0.22	0.40	1.74
Copper Bench	Indicated	0.50	0.29	2.93
Total Indicated		2.41	0.27	12.80

Tony M	Inferred	0.65	0.17	2.17
Southwest	Inferred	0.21	0.14	0.58
Indian Bench	Inferred	0.25	0.42	2.09
Copper Bench	Inferred	0.50	0.32	3.24
Total Inferred		1.61	0.25	8.08

Notes:

(1)	The mineral resource estimates comply with the requirements of NI 43-101 and the classifications comply with CIM definition standards.

(2)	The Tony M and Southwest mineral resources were estimated at a cut-off grade of 0.10% eU₃O₈over a minimum thickness of 2 feet and a minimum GT of 0.2 feet-%.

(3)	The Indian Bench and Copper Bench mineral resources were estimated at a cut-off grade of 0.20% eU₃O₈, a minimum thickness of 4 feet and a minimum GT of 0.8 feet-% that does not include any intervals with less than a 0.5 foot intercept of 0.08% U₃O₈.

Cut-Off Grade and Mining Considerations

The selection of a 0.20% eU₃O₈ cut-off for the Copper Bench and Indian Bench was made by Scott Wilson RPA based on evaluations of current mining and processing costs made by both Denison and other operators in the region.

The 0.20% eU₃O₈ cut-off maximizes the tonnage of higher grade mineralization while maintaining strong positive value. Based on the extensive review of the drilling, Scott Wilson RPA notes that lowering the cut-off criteria will increase total tonnage by increasing the number of drill hole intercepts meeting the cut-off, while also increasing the apparent continuity of mineralization between adjacent drill holes.

For the Tony M and Southwest deposits, Denison established minimum grade, thickness and GT parameters based on conventional Colorado Plateau mining practices and recent operating costs at Tony M.

As an initial step for the compositing of the drill hole assays, minimum grades of 0.10%, 0.08%, 0.05% and 0.03% eU₃O₈were used over a minimum thickness of two feet, with a two foot minimum for exclusion of waste intervals. This resulted in minimum GT values of 0.20 feet-%, 0.16 feet-%, 0.10 feet% and 0.06 feet-%, respectively. The two-foot thicknesses are based on the mining technique of split shooting, which is commonly used in the Uravan District. For inclusion of blocks in the mineral resource estimate, Denison used a cut-off grade of 0.10% eU₃O₈.

Arizona Strip

Denison currently holds a 100% interest in eight breccia pipe uranium deposits in the Arizona Strip district of northwestern Arizona, being: Arizona 1, Canyon, Pinenut, EZ 1, EZ 2, WHAT, DB 1, and Kanab North. The EZ 1, EZ 2, WHAT, DB 1 and a fifth deposit, Moonshine Springs, were acquired from Pathfinder in 2007. Moonshine Springs is a sandstone hosted deposit near the surface which gradually becomes deeper toward the north.

On March 26, 2007, Denison filed, on the SEDAR website at www.sedar.com, the Arizona Strip Technical Report prepared by Scott Wilson RPA in accordance with the requirements of NI 43-101 with respect to Arizona 1, Canyon and Pinenut properties. The EZ Complex Technical Report prepared by Scott Wilson RPA in accordance with the requirements of NI 43-101 with respect to Denison’s EZ 1 and EZ 2 properties (“EZ Complex”) was filed on August 11, 2009.

Mining operations began at Arizona 1 in late 2009. At Pinenut, mine development activities began in late 2010. See “The Denison US Mining Division – Operations – US Mines – Arizona Strip”. At Canyon, all surface facilities for shaft sinking are in place, and development is anticipated to begin in 2012. Kanab North, mined previously, is reported to have only minor quantities of mineralized material remaining in place and is not included in the mineral resource estimates in the Arizona Strip Report. An EIS is being prepared for the EZ Complex. The DB 1 and Moonshine Springs properties have no development on site or plans for permitting at this time.

Property Description and Location

Prior to 1995, EFN located and developed to various stages, numerous uranium mineralized breccia pipe structures in northwestern Arizona, between Utah and the Grand Canyon, an area termed the “Arizona Strip.” Most of EFI’s breccia pipes are between the town of Fredonia, on the Arizona Utah state line, and Grand Canyon National Park. These include the Pinenut, Arizona 1 and EZ Complex pipes. Canyon is located south of the park.

Arizona 1 is located in Mojave County, Arizona, about 45 miles southwest from Fredonia, Arizona by unsurfaced road. EFI’s property position will consist of ten unpatented mining claims covering approximately 207 acres.

Pinenut consists of 10 unpatented mining claims encompassing 207 acres. It is located 45 miles south of Fredonia in Mojave County, Arizona and is accessible via an unsurfaced road.

Canyon is in north central Arizona, 153 miles north of Phoenix and ten miles south of Grand Canyon Village in the Kaibab National Forest, Coconino County and is accessible by an unsurfaced road. The Canyon site consists of nine unpatented mining claims encompassing approximately 186 acres. There is a 3.5% yellowcake royalty on Canyon.

The EZ Complex is also located in Mohave County, Arizona, about 30 miles southwest of Fredonia, Arizona. The EZ Complex is comprised of 12 unpatented mining claims covering approximately 248 acres. There is a 1.0% yellowcake royalty on the EZ Complex properties.

Accessibility, Local Resources, Physiography and Infrastructure

Climate in northern Arizona is semi-arid, with cold winters and hot summers. January temperatures range from about 7° F to 57° F and July temperatures range from 52° F to 97° F. Annual precipitation, mostly in the form of rain but some snow, is about 12 inches. Vegetation on the plateaus is primarily open piñon juniper woodland and shrubs. Mining operations can be conducted on a year around basis.

The region north of the Grand Canyon is very sparsely populated. Due to the inaccessibility and low population, infrastructure is not well developed. The nearest commercial centres to the Fredonia area are the towns of St. George and Cedar City, Utah, both approximately 88 miles to the northwest by road. White Mesa is approximately 275 miles by road from Fredonia and about 325 miles by road from Canyon.

Arizona 1 was substantially developed in the 1990’s with the production shaft completed 1,250 feet of the proposed final 1,650 foot depth. Drill stations were cut near the current shaft bottom, and some 40,000 feet of drilling were completed from those stations. A headframe, hoist and compressor are in place. Denison completed rehabilitation work, and following receipt of all necessary permits in 2009, recommenced mine development.

Pinenut is a fully developed underground mine that produced about 0.5 million pounds U₃O₈ in 1989. A hoist, headframe and compressor are in place. Denison completed the construction of a larger stormwater pond and has begun rehabilitation work in anticipation of commencing production in 2012.

Only surface development has been completed at Canyon with a headframe, hoist and compressor in place. The shaft has been collared to a depth of 50 feet. The Denison Board approved development of Canyon in March, 2012.

There is no infrastructure in place at the EZ Complex.

History

Uranium exploration and mining of uranium deposits started in 1951 when a geologist employed by the US Geological Survey noted uranium ore on the dump of an old copper prospect on the South Rim of the Grand Canyon in northern Arizona. The prospect was inside Grand Canyon National Park, but on fee land that predated the park. A mining firm acquired the prospect and mined a significant high grade uranium deposit, the Orphan Mine. By the time mining ended in the early 1960s, 4.26 million pounds of U₃O₈and some minor amounts of copper and silver had been produced.

After the discovery of the first deposit in the 1950s, an extensive search for other deposits was made by the government and industry, but only a few low grade prospects were found. Exploration started again in the early 1970s. In the mid 1970s, Western Nuclear Inc. acquired a prospect located about 25 miles north of the Grand Canyon and found high grade uranium mineralization offsetting an old shallow copper/uranium site. In the next few years, a second deposit was found approximately one mile away.

EFN acquired the property from Western Nuclear Inc. in December, 1980. Development started promptly, with a mine in production by the end of 1981.

The Kanab North deposit was discovered in 1981, but development did not begin until late 1984. Kanab North was fully developed in 1988 and operated until December, 1990, when it was placed on standby. Production totalled about 2.8 million pounds of U₃O₈at an average grade of just over 0.50% U₃O₈. Some minor quantity of mineralized material remains.

EFN drilled a total of 253 drill holes at Arizona 1, including: 18 core holes from underground drill stations with a total footage of 6,122 feet; 17 rotary holes from surface with a total footage of 25,289 feet; and 218 long holes from underground drill stations with a total footage of 36,189 feet. Mine development at Arizona 1 began in 1990 but was suspended in 1992, with the shaft at a depth of 1,254 feet.

Canyon is located on mining claims that EFN acquired in 1982. Drilling completed by EFN in 1983 identified a significant deposit. EFN drilled 36 holes from May, 1983, through April, 1985, to delineate the uranium mineralization and to determine placement of the mine shaft and water supply well. Additional drilling of six holes was completed in 1994. Development of the site was discontinued as a result of low uranium prices.

Pinenut was developed in 1989, but saw only minor production, approximately 0.5million pounds U₃O₈at an average grade of 1.02% U₃O₈, before being placed on standby.

The EZ Complex was drilled in the 1980’s by Pathfinder. Pathfinder drilled 81 holes, totalling 139,118 feet. Pathfinder entered into a joint venture with EFN and prepared mineral resource estimates in 1988. When Denison acquired EFN’s mining properties in 1997, the EFN/Pathfinder joint venture was terminated and control of EZ 1 and EZ 2 had reverted back to Pathfinder. Denison acquired EZ 1 and EZ 2 from Pathfinder in 2007.

EFN identified and investigated more than 4,000 circular features in northern Arizona. One hundred and ten of the most prospective features were explored by deep drilling, and approximately 50% of those drilled were shown to contain uranium mineralization. Ultimately, nine pipes were deemed worthy of development. Total mine production from the EFN breccia pipes from 1980 through 1991 was approximately 19.1million pounds U₃O₈at an average grade of just over 0.60% U₃O₈.

Most of the assets of EFN were acquired by Denison in 1997. Since that time, Denison has maintained its ownership of Kanab North, Pinenut, Arizona 1, and Canyon. All other EFN prospects were dropped. In addition to the EFN breccia pipe deposits, Denison acquired four additional breccia pipe deposits (EZ 1, EZ 2, WHAT and DB 1) and one sandstone type deposit (Moonshine Springs) from Pathfinder.

Geological Setting

Parts of two distinct physiographic provinces are found within Arizona: the Basin and Range Province in the southern and western edge of the state, and the Colorado Plateau Province in most of northern and central Arizona. The Arizona Strip lies within the Colorado Plateau Province.

Surface exposures within the Arizona Strip reveal sedimentary and volcanic rocks ranging in age from Upper Paleozoic to Quaternary. The area is largely underlain by Mississippian through Triassic sedimentary rock; however, exposed within the Grand Canyon are older rocks reaching Precambrian in age.

Arizona 1, in common with all other breccia pipes within the Arizona Strip, was believed by EFN to have had its origin as a solution collapse of the Redwall Limestone. This collapse worked its way upward through the overlying formations where the throat diameter is between 200 feet to 300 feet. Vertical displacement in the throat averages 175 feet. Uranium mineralization is distributed irregularly over a depth interval of approximately 650 feet mainly at the level of the Hermit Shale formation to a maximum depth of 1,400 feet from surface.

At Canyon, the surface expression of the pipe is a broad shallow depression in the Permian Kaibab Formation. The pipe is essentially vertical with an average diameter of less than 200 feet, but it is considerably narrower through the Coconino and Hermit horizons (80 feet). The cross sectional area is probably between 20,000 and 25,000 square feet. The pipe extends for at least 2,300 feet from the Toroweap limestone to the upper Redwall horizons. The ultimate depth of the pipe is unknown.

Mineralization extends vertically both inside and outside Canyon over 1,700 vertical feet, but ore grade mineralization has been found mainly in the Coconino, Hermit, and Esplanade horizons and at the margins of the pipe in fracture zones. Sulphide zones are found scattered throughout the pipe but are especially concentrated (sulphide cap) near the Toroweap Coconino contact, where the cap averages 20 feet thick and consists of pyrite and bravoite, an iron-nickel sulphide. The mineral assemblage consists of uranium-pyrite-hematite with massive copper sulphide mineralization common in and near the ore zone. The strongest mineralization appears to occur in the lower Hermit-upper Esplanade horizons in an annular fracture zone.

Uranium mineralization in EZ 1 and EZ 2 is located primarily in the Coconino and Hermit horizons.

Deposit Types

Paleozoic sedimentary rocks of northern Arizona are host to thousands of breccia pipes. The pipes are known to extend from the Mississippian Redwall Limestone to the Triassic Chinle Formation, which makes for approximately 4,000 feet of section. However, because of erosion and other factors, no single pipe has been observed cutting through the entire section. No pipe is known to occur above the Triassic Chinle Formation or below the Mississippian Redwall Limestone.

Breccia pipes within the Arizona Strip are vertical or near vertical, circular to elliptical bodies of broken rock. Broken rock is comprised of slabs and rotated angular blocks and fragments of surrounding and stratigraphically higher formations. Hence, many geologists consider the pipes to have been formed by solution collapse of underlying calcareous rocks, such as the Redwall Limestone. Surrounding the blocks and slabs making up the breccia is a matrix of fine material comprised of surrounding and overlying rock from various formations. The matrix has been cemented mostly by silicification and calcification.

Breccia pipes are comprised of three interrelated features: a basinal or structurally shallow depression at surface (designated by some as a collapse cone); a breccia pipe which underlies the structural depression; and annular fracture rings which occur outside of, but at the margin of the pipes. Annular fracture rings are commonly, but not always, mineralized. The structural depression may range in diameter up to 0.5 miles or more, whereas breccia pipe diameters range up to about 600 feet; the normal range is 200 feet to 300 feet.

Mineralized breccia pipes found to date appear to occur in clusters or trends. Spacing between pipes ranges from some hundreds of feet within a cluster to several miles within a trend. Pipe location may have been controlled by deep seated faults, but karstification of the Redwall Limestone in Mississippian and Permian times is considered to have initiated formation of the numerous and widespread breccia pipes in the region.

Exploration

Denison has not carried out any exploration on Arizona 1, Pinenut, Canyon or the EX Complex since it acquired these properties.

Mineralization

In the breccia pipe deposits, uranium occurs largely as blebs, streaks, small veins, and fine disseminations of uraninite/pitchblende. Mineralization is mainly confined to matrix material, but may extend into clasts and larger breccia fragments, particularly where these fragments are of Coconino sandstone. In addition to uranium, an extensive suite of elements is reported to be anomalously concentrated in mineralized rock within breccia pipes throughout northern Arizona. Within many pipes, there is a definite mineralogical zoning in and around the uranium mineral deposit.

Breccia pipes are surrounded by bleached zones, particularly notable in the Hermit formation where unaltered red sediments contrast sharply with grey-green bleached material. Both age dating and disequilibrium determinations indicate that remobilization of uranium has occurred. Uranium concentrations in the upper levels of a pipe tend to be in equilibrium, with disequilibrium in the mineral deposits increasing in favour of the chemical assays in deeper levels of a pipe.

Uranium mineralization within Arizona 1 extends significantly in the vertical dimension. Continuous drill hole intersections of several tens of feet with grades exceeding 1.00% U₃O₈or more are not uncommon. The maximum continuous surface drill hole intersection was 92.5 feet at an average grade of 1.55% U₃O₈. On average, the 12 drill holes from surface which had intersected uranium mineralization recorded 75 feet of 0.62% U₃O₈.

Uranium mineralization at Canyon is concentrated in three stratigraphic levels: Coconino, Hermit/Esplanade, and a lower zone. Mineralization extends vertically from a depth of 600 feet to over 2,100 feet. Intercepts range widely up to several tens of feet with grades in excess of 1.00% U₃O₈. Twenty-two drill holes from surface encountered uranium mineralization averaging 100 feet of 0.45% U₃O₈.

Uranium mineralization at EZ 1 occurs at two distinct vertical intervals. The upper zone is contained within a 400-foot interval, 1,170 to 1,560 feet below surface and at its widest point has a diameter of approximately 183 feet. The lower zone is at a depth of 1,812 to 2,143 feet and at its widest point has a diameter of 45 feet. At EZ 2, the mineralization occurs in three distinct zones: an upper, middle and lower zone. The larger upper zone is mushroom shaped and is approximately 300 feet wide at its widest point and occurs from 952 feet to 1,153 feet below surface. The middle zone is made up of two central deposits surrounded by multiple ring deposits. An array of deposits in the middle zone occurs between depths of 1,194 to 1,356 feet. The lower zone also is a mushroom shaped deposit from 1,417 to 1,512 feet.

Drilling

Exploration drilling of breccia pipes is a difficult process. Substantial depths, approximately 2,000 feet, small targets, approximately 200 feet in diameter, and non-homogeneous rock formations combine to limit the accuracy of the drilling process. The presence of cavernous and brecciated sediments near the present land surface can result in loss of circulation of drilling fluid and as a result, much drilling is conducted “blind.” Periodic “spot cores” are taken to determine whether or not holes are within the target structure or have drifted away from the pipe. Indeed, most pipes cannot be completely drilled out from the surface due to deviation from desired targets. All drill holes are surveyed for deviation and logged with gamma logging equipment.

If surface drilling provides sufficient encouragement that a mine can be developed, on that basis a vertical shaft is sunk or drilled to its ultimate depth and underground drill stations are established at various levels to provide platforms for further exploration and delineation drilling. Drilling from underground stations typically utilizes large bore percussion drills. The resulting drill holes, out to as much as approximately 200 feet or so, are then gamma logged and surveyed as a supplement to surface drilling.

Sampling Method and Approach

All of the historical drill holes on the Arizona Strip properties were gamma logged and surveyed for deviation. This data provided the basic building blocks from which quantities of mineralized material were estimated. Core holes were drilled to supplement this data, to provide information for determination of disequilibrium, and to accommodate material for metallurgical testing. The process was consistent with industry standards when completed and the work carried out by EFN was judged by Scott Wilson RPA to have been of superior quality.

All of the basic data for calculation of quantities and grades of mineralized material for Arizona 1, Pinenut, Canyon, and EZ1 and EZ2 was derived directly by gamma log interpretation. Numerous checks were completed on this data by means of chemical assays, closed-can assays, and various beta gamma analyses.

Sample Preparation, Analyses and Protocols

Industry standards for uranium exploration in the western United States are based almost completely on the gamma logging process with a number of checks, including: (i) frequent calibration of logging tools, (ii) core drilling and chemical analysis of core as a check on gamma log values and the potential for disequilibrium; (iii) possible closed-can analysis as an adjunct to chemical assays; and (iv) possible gamma logging by different tools and/or companies.

EFN used the GAMLOG computer program to interpret gamma-ray logs (“GAMLOG”). GAMLOG was developed by the US Atomic Energy Commission. The essence of the method is a trial and error iterative process by which U₃O₈grades are determined for a series of ½-foot or 1-foot layers which can be considered to comprise the zone under analysis. The objective of the iterative process is to find a grade for each separate layer such that an imaginary set of separate gamma-ray anomalies (one from each separate layer) could be composited to form an overall anomaly which would closely match the real anomaly under analysis.

Security of Samples

There are no specific provisions for security of data or samples other than those employed for confidentiality. The previous property owners are deemed to have met or exceeded industry standards for the exploration process.

Data Verification

Data verification in uranium exploration in the western United States takes the form of a combination of logging tool calibration, chemical assays on core, and various checks by other logging units and outside laboratories. Most of this verification process is internal and company specific. Independent verification has not been part of the industry standard process. EFN operations in the Arizona Strip are judged by Scott Wilson RPA to have met or exceeded industry standards.

Mineral Resource and Mineral Reserve Estimates

Initial mineral resource estimates were prepared for Arizona 1, Canyon, Pinenut and the EZ Complex using historical drill hole data provided by Denison. Scott Wilson RPA interpreted a set of cross sections and plan views to construct 3-D grade-shell wireframe models at 0.2% eU₃O₈. Variogram parameters were interpreted and eU₃O₈ grades were estimated in the block model using kriging. The grade-shell wireframes were used to constrain the grade interpolation. All blocks within the 0.2% eU₃O₈ grade-shell wireframes, regardless of grade, were included in the mineral resource estimate. There are no mineral reserves estimated at any of the five deposits at this time. Scott Wilson RPA estimated the inferred mineral resources as shown below.

Arizona Strip Inferred Mineral Resource Estimates⁽¹⁾

	Tons	Grade eU₃O₈ ⁽²⁾⁽³⁾	Contained eU₃O₈
	(000s)	(%)	(000 pounds)

Arizona 1	70.3	0.68	956
Canyon	70.5	1.08	1,523
Pinenut	99.2	0.44	873
EZ 1	110.5	0.51	1,127
EZ 2	113.7	0.43	978

Notes:

(1)	The mineral resource estimates comply with the requirements of NI 43-101 and the classifications comply with CIM definition standards.

(2)	Interval grades were converted from the gamma log data and are therefore equivalent U₃O₈(eU₃O₈).

(3)	High eU₃O₈grades were cut to 6% at Arizona 1, 10% at Canyon, and 8% at Pinenut, EZ 1 and EZ 2.

Cut-off Grade

In its feasibility studies of the various Arizona Strip breccia pipes compiled during the 1980s and 1990s, EFN typically used a cut-off grade of 0.15% U₃O₈. A reasonable cut-off grade for long term sustainable market conditions would be approximately 0.20% U₃O₈. This cut-off grade was applied by Scott Wilson RPA to all the breccia pipes deposits.

Mineral Resource and Reserve Update

Since the mineral resource estimates were prepared by Scott Wilson RPA, the mineral resources were updated for Pinenut and Canyon by Denison. Furthermore, at Arizona 1, mining operations have been underway since late 2009. As a result of the updates and the mining operations, the following illustrates the current mineral resource estimates for the Arizona Strip properties.

Arizona Strip Inferred Mineral Resource Estimate Update
(in thousands of pounds U₃O₈)

	Initial			Current
	Resource	Uranium	Additions	Resource
Resources	Estimate	Mined	(Deletions) ⁽¹⁾	Estimate

Arizona 1	956	(765)	494	685
Canyon	1,523	0	106	1,629
Pinenut	873	0	164	1,037
EZ 1	1,127	0	0	1,127
EZ 2	978	0	0	978

Note:

(1)	Additions or deletions to mineral resource estimates include reassessment of geological data.

Historical Estimates

On several of the mineral properties, estimates of mineral reserves or mineral resources have not been prepared in accordance with NI 43-101; however, historical mineral resource estimates exist for the projects, as discussed below. Denison did not treat the following historical estimates as current mineral resources or mineral reserves. Denison did not undertake the work necessary to have the historical estimates verified by a qualified person (as defined in NI 43-101). These historical estimates have not been categorized. The properties will require confirmatory drilling and data collection to convert historical estimates into NI 43-101 compliant mineral resources.

In 2007, Denison acquired five uranium deposits located in the Arizona Strip district in northeastern Arizona from Pathfinder, including four breccia pipe type deposits (EZ 1, EZ 2, WHAT and DB 1) and a sandstone hosted deposit occurring at surface and gradually becoming deeper towards the north (Moonshine Springs).

Shown below are the historical mineral resource estimates for DB 1 and Moonshine Springs as presented by Pathfinder to Denison and estimated in 1996 (the “Pathfinder Historical Estimates”). No cut-off grades have been reported for DB 1, while a 0.05% U₃O₈cut-off has been used for Moonshine Springs.

Pathfinder Historical Estimates⁽¹⁾⁽²⁾

			Pounds of
	Tons	Grade	U₃O₈
Deposit	(000s)	% U₃O₈	(000s)

DB 1	103.6	0.44%	911
Moonshine Springs	761.7	0.16%	2,483

Notes:

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

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

The Pathfinder Historical Estimates are based on data, reports and documentation obtained from and prepared by previous operators, including AREVA, which were not verified by Denison. The properties will require considerable further evaluation to upgrade this historical estimate as a current mineral resource estimate, which, provided the Acquisition is completed, EFI’s management and consultants intend to carry out in due course.

In the Colorado Plateau District, Denison mined uranium and vanadium bearing ore from Sunday and Rim from November, 1997 to mid-1999, then Topaz, Sunday/St. Jude and West Sunday beginning in 2008 to 2009, and is currently mining ores from Pandora and Beaver. In 2011, 172,600 tons of ore from the Colorado Plateau were milled at White Mesa.

The mineral resource estimates shown below are based on historical estimates prepared by EFN, adjusted for production from the Colorado Plateau Mines.

Colorado Plateau Historical Estimate^(1)(2)(3)

					Pounds of
	Mineral Tons		Pounds U₃O₈		V₂O₅
	(000s)	% U₃O₈	(000s)	%V₂O₅	(000s)
Colorado Plateau	1,232	0.21	5,247	1.19	29,414

Notes:

(1)	The historical estimate does not comply with requirements of NI 43-101. CIM definitions are not used.

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

(3)	The historical estimate was adjusted by Denison to reflect actual mine production by Denison.

The Colorado Plateau historical estimates are based on data, reports and documentation obtained from and prepared by previous operators, including EFN, which have not been verified by Denison. The properties will require considerable further evaluation to upgrade this historical estimate as a current mineral resource estimate, which, provided the Acquisition is completed, EFI’s management and consultants intend to carry out in due course.

In June, 2011, Denison acquired uranium and vanadium properties in southeastern Utah pursuant to the White Canyon Acquisition. The properties are in two widely separated geographic areas: a northern area in the region of Thompson, Utah, which is in the Colorado Plateau District; and, a southern area called the White Canyon District. Historical estimates have been reported for the following White Canyon properties (the “White Canyon Historical Estimates”).

White Canyon Historical Estimates⁽¹⁾⁽²⁾

			Pounds of
	Tons	Grade	U₃O₈
Deposit	(,000)	% U₃O₈	(,000)

Daneros & Lark Royal⁽³⁾	184.0	0.33%	1,207
Geitus – Deer Flats	49.0	0.24%	239
Blue Jay	25.0	0.20%	99
Marcy Look	11.0	0.25%	52

Notes:

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

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

(3)	The Daneros and Lark Royal historical estimate has been adjusted to reflect actual mine production by White Canyon and Denison.

The White Canyon Historical Estimates for Daneros and Lark Royal are based on Denison’s analysis of work conducted by a previous operator, UP&L. In 2010 and 2011, White Canyon prepared the following estimates:

“Technical Report on Utah Energy Corporation’s Geitus - Deer Flat Project, San Juan County, Utah, February 15, 2011” prepared by Integrated Production Resources of Centennial, Colorado.

“Technical Report on Utah Energy Corporation’s Blue Jay Project, San Juan County, Utah, February 22, 2011” prepared by Integrated Production Resources of Centennial, Colorado.

“Technical Report on Utah Energy Corporation’s Geitus - Marcy Look Project ,San Juan County, Utah, December 28,2010” prepared by Integrated Production Resources of Centennial, Colorado.

These reports were prepared in accordance with the JORC Code prior to Denison’s involvement with White Canyon. These reports were based on analysis by Integrated Production Resources utilizing data, reports, and documentation obtained from and prepared by previous operators, which have not been verified by Denison. The properties will require considerable further evaluation to upgrade these historical estimates to mineral resource estimates pursuant to NI 43-101, which work EFI’s management and consultants intend to carry out in due course provided the Acquisition is completed.

To EFI’s knowledge, no mineral resources estimates have been prepared for the properties in the Colorado Plateau District.

Mineral Exploration

DMHC indirectly holds exploration properties in the Colorado Plateau, White Canyon, and Arizona Strip Districts. Exploration drilling has been conducted in the Colorado Plateau District in recent years, with the majority of the work directed to brown fields drilling to extend active mining areas.

In the Colorado Plateau District, exploration projects include extensions of the geologic trends in the vicinity of the Sunday Mines Complex. Properties are also held which cover areas that are favourable for exploration for new discoveries for Salt Wash uranium/vanadium deposits similar to the deposits in the Sunday Mines area.

The majority of 2010 drilling in the US was directed to the Beaver area. A total of 62 holes totalling 13,755 metres (45,129 feet) were completed along known trends and in areas between mineralized pods where historical drilling is limited. A new mineralized channel was delineated parallel to active mining in the west Beaver area; the new zone is approximately 300 metres long. Eleven holes totalling 1,963 metres (6,440 feet) were drilled in advance of active mine areas at Pandora. Results of this drilling were negative, and future drilling will focus on stepping out to new target areas further removed from current mining areas. EFI anticipates implementing Denison’s plans in the Beaver area.

Drilling at Beaver and Redd Block in 2011 totalled 15,510 metres (50,889 feet) in 68 holes, which includes nine monitoring wells installed at Redd Block for baseline data collection and future groundwater monitoring. Two new areas of mineralization were discovered which can be accessed from existing mine workings. These mineral resources more than replaced production from Beaver in 2011.

For 2012, Denison planned three drill programs in the vicinity of the Pandora, Beaver and Redd Block areas. In total, the program was anticipated to drill 20,125 metres in approximately 80 drill holes. EFI anticipates completing the drill program as planned.

In the Arizona Strip District, Denison holds 100% interest in several claims blocks, all of which host confirmed breccia pipe features. Mineralization has been encountered in past drilling on a number of these features, and additional deep drilling is required to confirm mineral resources. Denison had plans to drill six deep exploration holes, to confirm a known discovery and to support mineral resource estimation, on DB 1. DB 1, as well as nearly all of the known breccia pipes exploration targets on lands that will be held by EFI in the Arizona Strip District, is within the area withdrawn by the US Department of Interior. Drilling at DB 1 in 2012 is contingent upon BLM accepting Denison’s notice of intent to explore on withdrawal lands.

The White Canyon District includes claims and Utah State Leases covering historical mineral deposits in the Elk Ridge and Deer Flats areas. Exploration notices for surface drilling were obtained by UEC for the Geitus, Blue Jay, and Marcy Look areas. Denison is evaluating historic information on these areas to assess plans for exploration drilling.

Exploration notices have also been approved for brown fields drilling around Daneros. These Exploration notices cover the Daneros, Lark and Royal areas. EFI will review plans for additional surface drilling in the Daneros area.

Quality Assurance and Quality Control Procedures and Protocols

The following section details the Quality Assurance and Quality Control (“QA/QC”) procedures and protocols for all exploration programs operated by DMHC.

All uranium exploration technical information is obtained, verified and compiled under a formal QA/QC assurance and quality control program in the southwestern United States. The following details the protocols used by all Denison staff and consultants.

Processes for Determining Uranium Content by Gamma Logging

Exploration for uranium deposits in the southwest United States typically involves identification and testing of permeable sandstones within reduced sedimentary sequences. The primary method of collecting information is through extensive drilling and the use of down hole geophysical probes. The down hole geophysical probes measure natural gamma radiation, from which an indirect estimate of uranium content can be made.

The radiometric (gamma) probe measures gamma radiation which is emitted during the natural radioactive decay of uranium. The gamma radiation is detected by a sodium iodide crystal, which when struck by a gamma ray emits a pulse of light. This pulse of light is amplified by a photomultiplier tube, which outputs a current pulse. The gamma probe is lowered to the bottom of a drill hole and data is recorded as the tool is withdrawn up the hole. The current pulse is carried up a conductive cable and processed by a logging system computer which stores the raw gamma counts per second (“cps”) data.

If the gamma radiation emitted by the daughter products of uranium is in balance with the actual uranium content of the measured interval, then uranium grade can be calculated solely from the gamma intensity measurement. Down hole cps data is subjected to a complex set of mathematical equations, taking into account the specific parameters of the probe used, speed of logging, size of bore hole, drilling fluids and presence or absence of and type of drill hole casing. The result is an indirect measurement of uranium content within the sphere of measurement of the gamma detector.

The basis of the indirect uranium grade calculation (referred to as “eU₃O₈” or “equivalent U₃O₈”) is the sensitivity of the sodium iodide crystal used in each individual probe. Each probe’s sensitivity is measured against a known set of standard “test pits,” with various known grades of uranium mineralization, located at the DOE’s Grand Junction, Colorado office. The ratio of cps to known uranium grade is referred to as the probe “K-Factor”, and this value is determined for every gamma probe when it is first manufactured and is also periodically checked throughout the operating life of each probe. Application of the K-Factor, along with other probe correction factors, allows for immediate grade estimation in the field as each drill hole is logged.

Core Sampling, Processing, and Assaying

Core samples are collected for a number of purposes: verification of lithology as determined from geophysical logging and examination of drill cuttings; determination of uranium content as a general check of gamma probing to determine if gamma measurement and chemical uranium content are close to balance (“radiometric disequilibrium”); whole rock analysis; and specific geochemistry for uranium species and other minerals of interest. Typically core is only taken over select intervals of interest as identified from logging of drill holes. This reduces the amount of core through barren zones or horizons of no interest and greatly reduces overall exploration costs.

Core diameter is typically 2½ – 3¼ inches. For zones selected for laboratory analyses, one half of the core will normally be used. The minimum length of core submitted is usually one foot and the maximum length per sample is two feet. Sample intervals are selected by geologists in the field based on lithology, oxidation/reduction, and uranium grade (from gamma logging and from hand-held gamma counters).

Core samples are prepared at White Mesa. Samples are crushed and then ground to -200 mesh. The sample pulps are split to 250 to 300 grams for laboratory work.

Quality Assurance and Quality Control Measures

Drill hole logging is conducted by Denison in-house personnel. The logging capabilities are designed specifically to meet Denison’s logging requirements in the southwest United States. The tools, and a complete set of spares, were manufactured by Mount Sopris Instrument Company in Golden, Colorado. Denison has retained the services of a senior geophysical consultant to oversee training, implementation, and quality control protocols for the southwest United States’ operations. All tools are checked and calibrated before being used, and a variety of system checks and standards are also established for routine checking and calibration of tools.

Drill hole logging data is stored on digital media in the logging truck at the exploration sites. The digital data is periodically brought in from the field locations to the Egnar, Colorado field office. The raw and converted logging data are copied and then sent via e-mail to Denison’s Denver office, where all data is checked and reviewed.

Samples of core are chosen on the basis of radiometric data collected during core logging. This radiometric data is obtained by using a hand held scintillometer. The general concept behind the scintillometer is similar to the gamma probe except the radiometric pulses are displayed on a scale and the respective count rates are recorded manually by the geologist logging the core. The hand-held scintillometer provides quantitative data only and cannot be used to calculate uranium grades. However, it does allow the geologist to identify uranium mineralization in the core and to select intervals for geochemical sampling.

Additional samples are collected above and below the horizons of interest in order to “close-off” sample intervals. Sample widths are selected according to radiometric values and lithologic breaks or changes. All reasonable efforts are made to ensure that splitting of the core is representative and that no significant sampling biases occur. Once the sample intervals are identified, an exclusive sample number is assigned each interval and recorded by the on-site geologist.

After the geological logging of the core and sample selection, all of the selected sample intervals of drill core are split longitudinally at the drill site. One half of the core is placed in a new sample bag along with a sample tag corresponding to the sample number. The other half of the core is re-assembled in the core box and stored for future reference. Samples are stored at the Egnar, Colorado office under the supervision of the project geologists and delivered to either White Mesa or Activation Laboratories Ltd. for preparation. As standard procedure, field duplicates are included in assay suites sent to the laboratories, and reference samples are used to verify laboratory controls and analytical repeatability.

Environmental and Safety Matters

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

White Mesa

White Mesa processed conventional ore through June, 2011, at which time processing ceased for maintenance work. Conventional ore processing resumed in November, 2011. The alternate feed circuit was operating throughout 2011. Mill operations registered one lost time accident in 2011, ending White Mesa’s record of 1.6 million man-hours without a lost time accident.

Denison has detected some chloroform contamination at the mill site that appears to have resulted from the operation of a temporary laboratory facility that was located at the site prior to and during the construction of the mill facility, and from septic drain fields that were used for laboratory and sanitary wastes prior to construction of the mill’s tailings cells. In April, 2003, Denison commenced an interim remedial program of pumping the chloroform contaminated water from the groundwater to the mill’s tailings cells. This will enable Denison to begin clean up of the contaminated areas and to take a further step towards resolution of this outstanding issue. Pumping from the wells continued in 2011. Denison is continuing to work with Utah to develop a long-term corrective action plan. A draft corrective action plan was submitted and is currently being reviewed by Utah. While the investigations to date indicate that this chloroform contamination appears to be contained in a manageable area, the scope and costs of final remediation have not yet been determined and could be significant.

In 2008, elevated concentrations of nitrate and chloride were observed in some monitoring wells at the mill site, a number of which are upgradient of the mill’s tailings cells. Pursuant to a stipulated consent agreement with UDEQ, Denison retained INTERA, Inc. (“INTERA”), an independent professional engineering firm, to investigate these elevated concentrations and to prepare a contamination investigation report for submittal to UDEQ. The investigation was completed in 2009 and the contamination investigation report was submitted to UDEQ in January, 2010 (the “INTERA Report”). INTERA concluded in the INTERA Report that: (1) the nitrate and chloride are co-extensive and appear to originally come from the same source; and (2) the source is upgradient of the mill property and is not the result of mill activities. UDEQ reviewed the INTERA Report and concluded that further investigations were required before UDEQ can determine the source of the contamination or assign the responsibility for clean up. Such investigations were performed in 2010 and 2011, but were considered to be inconclusive by UDEQ. As a result, after over two years of investigation, it has been determined that there are site conditions that make it difficult to ascertain the source(s) of contamination at the site, and that it has therefore not been possible to date to determine the source(s), causes(s), attribution, magnitudes of contribution, and proportion(s) of the local nitrate and chloride in groundwater. For those reasons, UDEQ could not eliminate mill activities as a potential cause, either in full or in part, of the contamination. Denison and UDEQ have agreed that resources will be better spent in developing a corrective action plan, rather than continuing with further investigations as to the source(s) and attribution of the groundwater contamination. Pursuant to a revised stipulated consent agreement, Denison submitted to UDEQ in November, 2011 a draft corrective action plan for remediation of the contamination, which involves a program of pumping the nitrate contaminated groundwater to White Mesa’s tailings cells, similar to its chloroform remedial program. UDEQ is currently reviewing the proposed corrective action plan. Although the contamination appears to be contained in a manageable area, the scope and costs of final remediation have not yet been determined and could be significant.

Reclamation

White Mesa is subject to decommissioning liabilities. Denison, as part of the Utah Radioactive Licence, is required to annually review its estimate for the decommissioning of the White Mesa site and submit it to UDEQ for approval. The estimate of closure costs for the mill is US$19.4 million, and financial assurances are in place for the total amount.

US Mines

During 2011, Denison had four active mining operations, two in Utah and two in Arizona. There were five mines which were on care and maintenance.

In 2011, Arizona 1 received the 2010 US Department of Labor’s MSHA Sentinels of Safety Award in the small underground metal mine category. In 2010, Arizona 1 personnel worked a total of 56,417 injury-free hours. Daneros was recognized as a runner up with a total of 23,674 injury-free hours. The Sentinels of Safety Award acknowledges the men and women at those mines in the United States that have worked the most employee-hours without experiencing a lost-time injury.

There were two lost time accidents at the mining operations in 2011.

During 2011 and 2012, White Mesa reported consecutive exceedances of GWCLs under White Mesa’s GWDP for several constituents in several wells, and there is a decreasing trend in pH in a number of wells across the White Mesa site that have caused the pH in a number of compliance monitoring wells to have dropped below their GWCLs. These exceedances and pH trends include wells that are upgradient of the White Mesa facilities, far down-gradient of the White Mesa site and at the White Mesa site itself. These consecutive exceedances of GWCLs have resulted in violations of White Mesa’s GWDP, and Denison has submitted a plan and schedule to UDEQ to evaluate and further characterize the exceedances and trends. However, given the fact that trends in a number of constituents at the site have previously been determined to have been the result of natural causes, and that the exceedances and trends that have been recently identified and are the subject of current violations are widespread and include wells that are upgradient and far downgradient from the activities at White Mesa, Denison believes that these recently identified consecutive exceedances and trends are not the result of activities at White Mesa. If the exceedances and trends are determined to be the result of natural causes then the applicable GWCLs may have to be re-evaluated. If the exceedances are determined to be caused by activities at White Mesa, then a corrective action plan for remediation would be required, the scope and costs of which would have to be determined and could be significant.

Reclamation

All of the mines held by the Denison US Mining Division are subject to closure and reclamation liabilities. Denison estimated the reclamation costs for the various mining operations in Colorado, Utah and Arizona to be US$3.7 million. Financial bonds are in place for the total amount.

Government Regulation

Uranium milling in the US is primarily regulated by the NRC pursuant to the Atomic Energy Act of 1954, as amended. Its primary function is to ensure the protection of employees, the public and the environment from radioactive materials as well as regulating most aspects of the uranium recovery process. The NRC regulations pertaining to uranium recovery facilities are codified in Title 10 of the Code of Federal Regulations (“10 CFR”).

On August 16, 2004, Utah became an Agreement State for the regulation of uranium mills. This means that the primary regulator for White Mesa is now UDEQ rather than NRC. At that time, the mill’s NRC Source Material Licence was transferred to Utah and became the Utah Radioactive Licence. Utah incorporates, through its own regulations or by reference, all aspects of 10 CFR pertaining to uranium recovery facilities. White Mesa’s licence was due for renewal on March 31, 2007. Denison submitted its application for renewal of the licence on February 28, 2007. A draft renewal licence was published for comment by UDEQ in the fourth quarter of 2011 and will be republished for comment in the second quarter of 2012. UDEQ is currently in the process of reviewing the public comments. Denison expects that the renewed license will be issued by UDEQ by the end of 2012. During the period that Utah is reviewing the licence renewal application, the mill can continue to operate under the Utah Radioactive Licence. The mill’s licence was initially issued in 1980 and was renewed in 1987 and 1997.

When Utah became an Agreement State it required that a GWDP be put in place. The GWDP is required for all similar facilities in Utah, and specifically tailors the implementation of Utah groundwater regulations to the mill site. Utah requires that every operating uranium mill have a GWDP, regardless of whether or not the facility discharges to groundwater. The GWDP for White Mesa was finalized and implemented in March, 2005. The GWDP required that the mill add over 40 additional monitoring parameters and fifteen additional monitoring wells at the site. The GWDP came up for renewal in 2010, and is currently in the renewal process. During the review period the mill can continue to operate under its existing GWDP.

White Mesa also maintains permit approvals for air emissions with UDEQ, Division of Air Quality.

Uranium mining is subject to regulation by a number of agencies including: (1) local county and municipal government agencies; (2) the applicable state divisions responsible for mining and protecting the environment within Utah, Colorado, and Arizona; (3) the BLM and the USFS on public lands under their jurisdiction; (4) the U.S. Mine Safety and Health Administration, and (5) other federal agencies (e.g., U.S. Fish and Wildlife Service, U.S. Army Corp of Engineers), where certain conditions exist. A review of the major permits for each mine is included above under “Operations” sections herein.

Land Tenure

EFI’s land holdings in the US will be held either in fee simple by EFI, by leases from the fee simple owners (private parties, the state and/or the U.S. Government) or by patented and unpatented mining claims located on property owned by the US Government. Annual fees must be paid to maintain unpatented mining claims, but work expenditures are not required. Holders of unpatented mining claims are generally granted surface access to conduct mineral exploration and mining activities, however, additional mine permits and plans are generally required prior to conducting exploration or mining activities on such claims.

On July 9, 2009, BLM issued a notice of proposed withdrawal (“2009 Notice”) under which it proposed that a total of approximately one million acres of public lands around the Grand Canyon National Park be withdrawn from location and entry under the Mining Law of 1872 (the “Mining Law”), subject to valid existing rights. In the 2009 Notice, BLM stated that the purpose of the withdrawal, if determined to be appropriate, would be to protect the Grand Canyon watershed from any adverse effects of locatable hardrock mineral exploration and mining. The 2009 Notice segregated the lands from location and entry under the mining laws for up to two years to allow time for various studies and analysis, including appropriate National Environmental Policy Act (“NEPA”) analysis. In order to allow more time for BLM to complete its NEPA analysis, the US Department of the Interior (“DOI”) published Public Land Order 7773 on June 21, 2011, which effected a six-month emergency withdrawal of the area. The emergency withdrawal prevented the lands from opening to location and entry under the Mining Law upon expiration of the two-year segregation while the DOI completed the decision–making process on the proposed withdrawal. The emergency withdrawal was effective from July 21, 2011, to January 20, 2012. During the two-year segregation and six month emergency withdrawal, the BLM, along with its cooperating agencies, completed various studies and analyses of resources in the withdrawal area, including an Environmental Impact Statement (“EIS”) under NEPA. These studies and analyses were undertaken to provide the basis for the final decision regarding whether or not to proceed with the proposed withdrawal or to select an alternative action. Based on this analysis, on January 9, 2012, the Department of the Interior announced its final decision to withdraw from location and entry under the Mining Law, subject to valid existing rights, the total of approximately one million acres of lands originally proposed in the 2009 Notice, for a 20-year period. Lawsuits challenging this decision have been filed by various industry groups and interested parties.

No new mining claims may be filed on the withdrawn lands and no new POs may be approved, other than POs on mining claims that were valid at the time of withdrawal and that remain valid at the time of plan approval. Whether or not a mining claim is valid must be determined by a mineral examination conducted by BLM or the USFS, as applicable. The mineral examination, which involves an economic evaluation of a project, must demonstrate the existence of a locatable mineral resource and that the mineral resource constitutes the discovery of a valuable mineral deposit.

All Arizona Strip properties, with the exception of Moonshine Springs, are located within the withdrawn lands. BLM is currently undertaking a mineral examination on the EZ Complex, in conjunction with its review of the proposed PO for that project. Mineral examinations are not required for Arizona 1 and Pinenut, which have previously approved POs and are currently undergoing mining activities. Although Canyon also has an approved PO, and a mineral examination is not required, the USFS has elected to perform a mineral examination on that project, which is expected to be completed in the second quarter of 2012.

Denison believes that all of its material Arizona Strip projects are on valid mining claims that will each withstand a mineral examination. However, there can be no guarantee that a mineral examination will not result in one of more of Denison’s, and following the Acquisition, EFI’s, mining claims being considered invalid, which could prevent a project from proceeding.

Legal and Regulatory Proceedings

Arizona 1 Licence Challenge

On November 16, 2009, as amended on February 1, 2010 and July 22, 2011, the Center for Biological Diversity, Grand Canyon Trust, Sierra Club, Kaibab Band of Paiute Indians and Havasupai Tribe (the “Plaintiffs”) filed a lawsuit in the US District Court for the District of Arizona (the “District Court”) against the US Secretary of the Interior and the BLM (together, the “Defendants”) seeking an order declaring that the Defendants violated environmental laws in relation to Arizona 1 by not requiring a new PO in connection with the start of mining activities. The Plaintiffs also claim that, if a new PO is not required, the Defendants failed to conduct a review of potential environmental impacts from the mine since the existing PO for the mine was approved by BLM in 1988. The Plaintiffs are seeking an order declaring that the Defendants have violated these environmental laws in relation to Arizona 1, and an injunction directing operations to cease and stopping the Defendants from authorizing or allowing any further mining or exploration operations at Arizona 1 until BLM complies with all applicable laws. On October 7, 2011, the District Court issued its final ruling in favour of the Defendants on all counts. On November 28, 2011, the Plaintiffs appealed the District Court’s ruling to the Ninth Circuit Court of Appeals (the “Court of Appeals”), and on December 8, 2011 filed a motion in the District Court for preliminary injunction, pending appeal. That motion was denied by the District Court on January 11, 2012. On January 26, 2012, the Plaintiffs filed an emergency motion for an injunction pending appeal in the Court of Appeals, which was denied by the Court of Appeals on February 24, 2012. If the Plaintiffs are successful on the appeal, Denison, and following the Acquisition EFI, may be required to stop mining activities at Arizona 1 pending resolution of this matter. Any required stoppage of mining could have a significant adverse impact on Denison, and following the Acquisition EFI.

La Sal Complex

On February 17, 2012, Uranium Watch and Living Rivers filed a Notice of Appeal and Petition for Stay with the Interior Board of Land Appeals (“IBLA”), relating to a January 18, 2012 response by BLM to a request for information made by Uranium Watch and Living Rivers. In that request, Uranium Watch and Living Rivers asked BLM to confirm, among other things, that the existing PO and related EA for a portion of La Sal are sufficient under BLM regulations and NEPA. In responding to that request, BLM stated that the PO is sufficient, that no new decisions have been made and that the related EA is sufficient until a new decision needs to be made. Uranium Watch and Living Rivers have alleged that this response by BLM constitutes an appealable decision by BLM and have requested a stay of operations at La Sal pending a decision by IBLA on the appeal. Denison was added as an intervener in this action on March 7, 2012. Both BLM and Denison have filed responses and motions to dismiss this action for lack of standing, on the basis that an appealable decision has not been made by BLM. A decision from IBLA is pending at this time.

Daneros

On July 28, 2011, the Southern Utah Wilderness Alliance filed a Notice of Appeal with the IBLA challenging BLM’s FONSI for Daneros’ EA, requesting that IBLA set aside the FONSI and remand the EA to the BLM with instructions to prepare an EIS or to revise the EA. Denison has been added as an intervenor in this action and believes this challenge is without merit and should be dismissed. Responses were filed by BLM and Denison in early December, 2011, and a decision from IBLA is pending at this time.

Interest of Certain Persons in the Acquisition

EFI has been informed that, except as disclosed herein, none of the directors and executive officers of Denison has a material interest, direct or indirect by way of beneficial ownership of securities or otherwise in the Denison Arrangement. The officers and directors of Denison and their associates and affiliates beneficially own, directly or indirectly, or exercise control or direction over, in the aggregate, 2,819,382 Denison Common Shares, representing approximately 0.7% of the Denison Common Shares outstanding as of the close of business on May 25, 2012. All of the Denison Common Shares held by the executive officers and directors of Denison will be treated in the same fashion under the Denison Arrangement as Denison Common Shares held by any other Denison Shareholder.

Change of Control Provision under Employment Agreements

Pursuant to an employment agreement dated October 1, 2002 between International Uranium (USA) Corporation, a predecessor subsidiary of Denison, and David C. Frydenlund, Mr. Frydenlund is entitled to resign in the event of a change of control (as defined in the employment agreement) and in such event to receive severance equal to the greater of three month’s salary and the severance payable under Denison’s corporate severance policy, as well as reimbursement of certain specified relocation costs.

Pursuant to an employment agreement dated December 13, 2007 between Denison Mines (USA) Corp. and Philip G. Buck, Mr. Buck is entitled to resign in the event of a change of control of Denison (as defined in the employment agreement) and in such event to receive severance equal to twelve month’s salary.

The Acquisition and Denison Arrangement would constitute a change of control for purposes of the employment agreements with each of Mr. Frydenlund and Mr. Buck. It is expected that both Mr. Frydenlund and Mr. Buck will continue as officers and employees of DMHC following the Acquisition, and that neither Mr. Frydenlund nor Mr. Buck will exercise their right to resign. In the event that they do exercise the right to resign, the Arrangement Agreement provides that Denison shall reimburse EFI for all severance costs which are payable as a result of the change of control.

Material Contracts

Except as described above, the members of the Denison US Mining Group are not parties to any material contracts entered into outside of the ordinary course of business.

Dividends

DMHC and White Canyon have not paid cash dividends or made any distributions in the last three completed financial years.

Management’s Discussion and Analysis

For management’s discussion and analysis of DMHC and White Canyon, please see the management’s discussion and analysis of Denison for the year ended December 31, 2011 and for the three months ended March 31, 2012. The Denison MD&A can be found under Denison’s SEDAR profile at www.sedar.com.

Consolidated Capitalization and Options to Purchase Securities

DMHC has issued and outstanding 15.7 common shares and 2,000 preferred shares, of which Denison holds 11 common shares and all of the 2,000 preferred shares, and White Canyon holds 4.7 common shares. There are 230,679,770 common shares of White Canyon issued and outstanding, all of which are held by Denison.

As of the date hereof, there are no outstanding options to purchase securities of either DMHC or White Canyon.

Prior Sales

DMHC has not distributed DMHC Shares or securities convertible into DMHC Shares in the past twelve month period.

White Canyon has not distributed any of its common shares or securities that are convertible into common shares in the past twelve month period.

Directors and Executive Officers

The following tables set forth, for each director and executive officer of each of DMHC and White Canyon: his or her name; municipality, province or state and country of residence; all positions and offices held by him or her; the month and year in which he or she was first elected a director and his or her principal occupation during the preceding five years.

Directors and Officers of DMHC

Name and Municipality of Residence	Position with DMHC	Director or Officer Since	Principal Occupation During the Past Five Years
Ron F. Hochstein Coquitlam, B.C.	Director, President and Chief Executive Officer	2000	Ron Hochstein is the President and Chief Executive Officer of Denison, a position he assumed in 2009, after having served as its President and Chief Operating Officer since 2006.
David Frydenlund Lone Tree, Colorado	Director, Vice President, General Counsel and Corporate Secretary	1997	David Frydenlund is the Vice President, Regulatory Affairs, Counsel and Corporate Secretary of Denison Mines (USA) Corp., a position which he assumed in 2006.
James R. Anderson Mississauga, Ontario	Executive Vice President and Chief Financial Officer	2006	Jim Anderson is the Executive Vice- President and Chief Financial Officer of Denison Mines Corp., a position which he assumed in 2006.
Phil Buck Denver, Colorado	Vice President, Mining	2008	Mr. Buck joined Denison Mines (USA) Corp., as Vice President, U.S. Mining in 2008. Prior to that date, he was General Manager, Canada for Dynatec Corporation from 2006 to 2008.
Harold R. Roberts Cherry Hills Village, Colorado	Executive Vice President, U.S. Operations	2006	Harold Roberts is the Executive Vice President, U.S. Operations of Denison Mines (USA) Corp., a position which he assumed in 2006.
Curt Steel Sherman, Connecticut	Vice President, Marketing & Sales	2008	Curt Steel is the Vice President, Sales and Marketing of Denison Mines (USA) Corp., a position which he assumed in 2008. Prior to that date, Mr. Steel was Senior Trader with NUKEM, Inc. from 1998 to 2007.

Name and Municipality of Residence		Position with DMHC		Director or Officer Since		Principal Occupation During the Past Five Years
Todd S. Mears Littleton, Colorado		Controller		2007		Todd Mears is the Controller for Denison Mines (USA) Corp., a position which he assumed in 2007.

It is expected that Messrs. Frydenlund, Buck, Roberts, Steel and Mears will continue as officers of DMHC following the Acquisition, but that Messrs. Hochstein and Anderson will resign as directors and officers of DMHC at the Effective Time. It is further anticipated that Messrs. Roberts and Frydenlund will become officers of EFI following the Acquisition. (See “Information About EFI After Giving Effect to the Denison Arrangement – General – Directors and Officers”.) The compensation arrangements for the senior officers who continue with DMHC following the Acquisition will be negotiated between EFI and each of the officers.

Directors of White Canyon

Name and Municipality of Residence	Director/Officer Since	Principal Occupation During the Past Five Years
Lewis George Cross Dalkeith Western Australia	2007	Mr. Cross is a Corporate Director. Currently, Mr. Cross is a Non-Executive Director of Aspermont Ltd (since 2000) and was the Principal of the accounting firm CrossCorp Accounting from 1979 to 2009. Mr. Cross served as Non-Executive Chairman of White Canyon from 2007 to 2010 and Executive Chairman from 2010 to 2011, prior to its acquisition by Denison. Mr. Cross has continued as a Director of White Canyon since then. Mr. Cross also served as the Non-Executive Chairman of the Board of Polaris Metals NL until 2010. Mr Cross has served as Non- Executive Chairman of Golden State Resources Ltd from 2005 to the present.
Ron F. Hochstein Coquitlam, B.C.	2011	Ron Hochstein is the President and Chief Executive Officer of Denison, a position he assumed in 2009, after having served as its President and Chief Operating Officer since 2006.
Frank Knezovic Perth, Western Australia	2011	Mr. Knezovic is a Director of the law firm Price Sierakowski, where he has practiced corporate, commercial and securities law since 2005.

White Canyon does not have any senior officers.

Corporate Cease Trade Orders

None of either DMHC’s or White Canyon’s directors or executive officers, have, within 10 years prior to the date of this Circular, been a director, chief executive officer or chief financial officer of any company that:

was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued while the director or executive officer was acting in the capacity as director, chief executive officer or chief financial officer of the relevant company; or
was subject to a cease trade order, an order similar to a cease trade order or an order that denied the relevant company access to any exemption under securities legislation, that was in effect for a period of more than 30 consecutive days, that was issued after the director or executive officer ceased to be a director, chief executive officer or chief financial officer and which resulted from an event that occurred while that person was acting in the capacity as director, chief executive officer or chief financial officer.

Bankruptcies

None of either DMHC’s or White Canyon’s directors or executive officers, or a shareholder holding a sufficient number of securities of either DMHC or White Canyon to affect materially the control of DMHC or White Canyon, as applicable, has within 10 years prior to the date of this Circular:

been a director or executive officer of any company that, while that person was acting in that capacity, or within a year of that person ceasing to act in that capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency or was subject to or instituted any proceedings, arrangement or compromise with creditors or had a receiver, receiver manager, or trustee appointed to hold its assets; or
become bankrupt, made a proposal under any legislation relating to bankruptcy or insolvency, or become subject to or instituted any proceedings, arrangement or compromise with creditors, or had a receiver, receiver manager or trustee appointed to hold the assets of the director, executive officer or shareholder.

Indebtedness of Directors and Executive Officers

No officer or director of DMHC or White Canyon was indebted to DMHC or White Canyon, as applicable, at any time during such company’s last completed financial year.

Legal Proceedings and Regulatory Actions

Except as set out below, since the beginning of their respective most recently completed financial years, neither DMHC nor White Canyon has been a party to or was the subject of a legal or regulatory proceeding for which disclosure is required.

On November 16, 2009, as amended on February 1, 2010 and July 22, 2011, the Center for Biological Diversity, Grand Canyon Trust, Sierra Club, Kaibab Band of Paiute Indians and Havasupai Tribe (the “Plaintiffs”) filed a lawsuit in the U.S. District Court for the District of Arizona against the U.S. Secretary of the Interior and the U.S. Bureau of Land Management (“BLM”) (together, the “Defendants”) seeking an order declaring that the Defendants have violated environmental laws in relation to the Company’s Arizona 1 mine, by not requiring a new Plan of Operations in connection with the start of mining activities. The Plaintiffs are also claiming that, if a new Plan of Operations is not required, the Defendants failed to conduct a review of potential environmental impacts from the mine since the existing Plan of Operations for the mine was approved by BLM in 1988. The Plaintiffs are seeking an order declaring that the Defendants have violated these environmental laws in relation to the Arizona 1 mine, and an injunction directing operations to cease and stopping the Defendants from authorizing or allowing any further mining or exploration operations at the Arizona 1 mine until BLM complies with all applicable laws. On October 7, 2011, the District Court issued its final ruling in favour of BLM and Denison and against the Plaintiffs on all counts. On November 28, 2011, the Plaintiffs appealed the District Court’s ruling to the Ninth Circuit Court of Appeals, and on December 8, 2011 filed a motion in the District Court for preliminary injunction, pending appeal. That motion was denied by the District Court judge on January 11, 2012. On January 26, 2012, the Plaintiff’s filed an emergency motion for an injunction pending appeal in the Court of Appeals and on February 24, 2012, the Court of Appeals denied the motion for injunction. The appeal of the District Court’s ruling is under way, and oral argument and a decision from the Court of Appeals is expected in the 3rd or 4th quarter of 2012. If the Plaintiffs are successful on the appeal, Denison may be required to stop mining activities at the Arizona 1 mine pending resolution of this matter. Any required stoppage of mining could have an adverse impact on the Denison US Mining Division.

On February 17, 2012, Uranium Watch and Living Rivers filed a Notice of Appeal and Petition for Stay with the Interior Board of Land Appeals (“IBLA”), relating to a January 18, 2012 response by BLM to a request for information made by Uranium Watch and Living Rivers. In that request, Uranium Watch and Living Rivers asked BLM to confirm, among other things, that the existing Plan of Operations and related Environmental Assessment for a portion of the La Sal Mines Complex are sufficient under BLM regulations and NEPA. In responding to that request, BLM stated that the Plan of Operations is sufficient, that no new decisions have been made and that the related Environmental Assessment is sufficient until a new decision needs to be made. Uranium Watch and Living Rivers have alleged that this response by BLM constitutes an appealable “decision” by BLM and have requested a stay of operations at the La Sal mine pending a decision by IBLA on the appeal. Denison was added as an intervener in this action on March 7, 2012. Both BLM and Denison have filed responses and motions to dismiss this action for lack of standing, on the basis that an appealable decision has not been made by BLM. A decision from IBLA is pending at this time.

On July 28, 2011, the Southern Utah Wilderness Alliance filed a Notice of Appeal with IBLA challenging BLM’s Finding of No Significant Impact (“FONSI”) for Denison’s recently acquired Daneros Mine project’s Environmental Assessment, requesting that IBLA set aside the FONSI and remand the Environmental Assessment to the BLM with instructions to prepare an Environmental Impact Statement or to revise the Environmental Assessment. Denison has been added as an intervenor in this action, and believes this challenge is without merit and should be dismissed. Responses were filed by BLM and Denison in early December 2011, and a decision from IBLA is pending at this time.

Auditors

The auditors of DMHC are PricewaterhouseCoopers LLP, whose offices are located at PwC Tower, 18 York Street, Suite 2600, Toronto ON M5J 0B2.

The auditors of White Canyon are RSM Bird Cameron Partners, whose offices are located at 8 St Georges Terrace Perth WA 6000, GPO Box R1253 Perth WA 6844.

INFORMATION ABOUT EFI AFTER GIVING EFFECT TO THE DENISON ARRANGEMENT

General

On completion of the Acquisition and the Denison Arrangement, DMHC and White Canyon will be wholly owned subsidiaries of EFI. EFI will continue to be a corporation governed by the laws of Ontario and the EFI Common Shares will continue to trade on the TSX under the symbol “EFR”.

Head Office

On completion of the Acquisition, EFI’s registered office will remain at 2 Toronto Street, Suite 500, Toronto, Ontario M5C 2B6.

Transfer Agent and Auditor

On completion of the Acquisition, EFI’s transfer agent will continue to be CIBC Mellon Trust Company and the auditor will continue to be KPMG LLP.

Directors and Officers

On completion of the Acquisition and Plan of Arrangement, EFI has agreed to appoint two persons designated by Denison to the EFI Board. The Denison Nominees are Ron F. Hochstein and W. Robert Dengler. EFI intends to increase the size of the EFI Board to ten (10) directors to accommodate the appointment of the Denison Nominees. After giving effect to such changes, the EFI Board would consist of Stephen P. Antony, J. Birks Bovaird, Paul A. Carroll, Mark E. Goodman, Bruce D. Hansen, Larry Goldberg, Sheldon Inwentash, Richard Patricio, Ron F. Hochstein and W. Robert Dengler.

The following is a summary of the employment history for the preceding five years for each of the Denison Nominees:

Ron F. Hochstein was appointed President and Chief Executive Officer of Denison in 2009, after having served as its President and Chief Operating Officer since 2006, when IUC and DMI combined to form Denison. Mr. Hochstein served as President and Chief Executive Officer of IUC from 2000 to 2006 after service as Vice-President Corporate Development and Vice-President and Chief Operating Officer. Prior to joining IUC, Mr. Hochstein was a project manager with Simons Mining Group and was with Noranda Minerals as a metallurgical engineer. Mr. Hochstein is a Professional Engineer and holds an M.B.A. from the University of British Columbia and a B.Sc. from the University of Alberta.

W. Robert Dengler is currently engaged as a Corporate Director of Denison. In 2006, Mr. Dengler retired from his position as Non-Executive Vice-Chairman of Dynatec Corporation. Until January 2005, Mr. Dengler served as President and Chief Executive Officer of Dynatec Corporation, a position which he held for 25 years. Before founding Dynatec, Mr. Dengler was a partner and Vice-President & General Manager of J.S. Redpath Limited. Mr. Dengler has more than 40 years of management experience. Mr. Dengler obtained his B.Sc. from Queen’s University in 1964.

On completion of the Acquisition and the Denison Arrangement, Stephen P. Antony will continue as President and Chief Executive Officer of EFI, and Jeffrey L. Vigil will continue as Vice President and Chief Financial Officer of EFI. Gary R. Steele, currently Executive Vice President – Corporate Marketing will become Senior Vice President – Corporate Marketing. The current Executive Vice President, U.S. Operations of Denison, Harold R. Roberts, will become the Executive Vice President and Chief Operating Officer of EFI. The current Vice President, Regulatory Affairs and General Counsel of Denison Mines USA Ltd., Mr. David C. Frydenlund, will become the Senior Vice President, Regulatory Affairs and General Counsel of EFI.

Business of EFI Post-Denison Arrangement

Upon completion of the Acquisition and the Denison Arrangement, EFI’s primary assets will consist of:

the Whirlwind mine located in Mesa County, Colorado and Grand County, Utah;
the Energy Queen mine located in San Juan County, Utah;
the San Rafael Project, located in Emery County, Utah;
the Sage Plan Project, located in San Juan County, Utah and San Miguel County, Colorado;
the Sheep Mountain Project, located in Fremont County, Wyoming;
the White Mesa mill, a 2,000-ton per day uranium and vanadium processing plant near Blanding, Utah;
the Piñon Ridge Mill land and license, a proposed 500-ton per day uranium and vanadium processing facility located near Naturita, Colorado;
the Colorado Plateau mines, straddling the Colorado and Utah border;
the Daneros uranium mine in the White Canyon district of southeastern Utah;

the Arizona Strip properties; and
the Henry Mountains uranium complex in southern Utah.

Corporate Structure Following the Completion of the Plan of Arrangement

The following chart shows the inter-corporate relationships among EFI and its material subsidiaries, after completion of the Acquisition and Denison Arrangement:

Pro Forma Financial Information

Attached as Schedule D to this Circular is the unaudited pro forma consolidated financial information for EFI after giving effect to the Acquisition and issuance of the EFI Payment Shares and the acquisition of Titan, and is based on the assumptions described in the respective notes to EFI’s unaudited pro forma condensed consolidated financial statements as at and for the six month period ended March 31, 2012 and for the year ended September 30, 2011. The unaudited Pro Forma Condensed Consolidated Statement of Financial Position has been prepared based on the assumption that, among other things, the Denison Arrangement was completed as of March 31, 2012.

The unaudited pro forma consolidated financial statements do not purport to project EFI’s consolidated financial position or results of operations for any future period. The unaudited pro forma consolidated financial statements are based on certain assumptions and adjustments. The selected unaudited pro forma consolidated financial information set out below should be read in conjunction with the description of the Acquisition and the Denison Arrangement contained in this Circular, the unaudited pro forma condensed consolidated financial statements attached to this Circular as Schedule D, the financial statements of DMHC attached to this Circular as Schedule E, the financial statements of White Canyon attached to this Circular as Schedule F and the audited consolidated financial statements of EFI available under EFI’s profile on SEDAR at www.sedar.com.

Authorized and Issued Share Capital

The authorized share capital of EFI will remain unchanged as a result of the completion of the Acquisition and Denison Arrangement.

The following table sets out the approximate share capital of EFI that will be outstanding before and after giving effect to the Acquisition and Denison Arrangement, but before giving effect to the EFI Share Consolidation:

		Percentage of	Percentage of
	Number of EFI	Non-Diluted	Fully-Diluted
	Common Shares	Share Capital	Share Capital
EFI Common Shares outstanding pre- Acquisition and Denison Arrangement	214,336,818⁽¹⁾	33.2%	31.3%

EFI Payment Shares to be issued to Denison Shareholders	425,441,494	66.1%	62.1%

EFI Common Shares reserved for issuance upon the exercise of options	12,857,800	-	1.9%

EFI Common Shares reserved for issuance upon the exercise of warrants	26,426,881	-	3.9%

EFI Common Shares reserved for issuance upon the exercise of agents’ warrants	1,610,000	-	0.2%

EFI Common Shares to be issued to Dundee Securities as financial advisor	4,000,000⁽²⁾	0.6%	0.6%

Issued and Outstanding Total Post- Acquisition:	643,778,312⁽³⁾	100.0%	100.0%

Notes:

(1)	As of May 16, 2012.

(2)	As partial payment for the Completion Fee payable for financial advisory services, as described under “Approval of Share Compensation Arrangement”. The actual number of EFI Common Shares issuable will be based on the volume weighted average trading price of the EFI Common Shares for the five trading days immediately preceding the Effective Date. The number shown is based on an assumed weighted average price of $0.25.

(3)	684,672,993 fully diluted.

Pro Forma Consolidated Capitalization

The following table sets forth the consolidated capitalization of EFI effective March 31, 2012, both before and after giving effect to the Acquisition (all dollar amounts have been rounded to the nearest USD$1,000):

		Prior to giving effect to the	After giving effect to the
		Purchase and Sale	Purchase and Sale Transaction
		Transaction as at	as at
Designation	Authorized	March 31, 2012	March 31, 2012⁽²⁾
EFI Common Shares⁽¹⁾	Unlimited	USD$92,047 (213,274,084 shares)	USD$199,380 (642,715,578 shares)

Debt	USD$ -	USD$622	USD$622

Notes:

(1)	As at March 31, 2012, EFI also had options outstanding to purchase an aggregate of 12,957,800 EFI Common Shares all at an average exercise price of Cdn$0.48 per share, agents’ compensation warrants outstanding to purchase 1,610,000 EFI Common Shares at an exercise price of Cdn$0.50 per share, warrants outstanding to purchase 11,500,000 EFI Common Shares at an exercise price of Cdn$0.65 per share, and warrants outstanding to purchase 14,926,881 EFI Common Shares at an average exercise price of Cdn$0.36 per share.

(2)	Amounts and share numbers are provided without giving effect to the EFI Share Consolidation. It is the intention of EFI, provided that the requisite EFI Shareholder approval is obtained, to consolidate the EFI Common Shares on a 10-for-1 basis subsequent to the Effective Date.

Principal Holders of Common Shares

After giving effect to the Acquisition and Denison Arrangement, to the best of the knowledge of the directors and executive officers of EFI, no person will beneficially own, directly or indirectly, or exercise control or direction over, more than 10% of the then outstanding EFI Common Shares.

SHARE CONSOLIDATION

On April 16, 2012, the Corporation announced a proposed share consolidation for the Corporation. EFI Shareholders are being asked to consider, and if deemed appropriate, to approve, the Share Consolidation Resolution authorizing an amendment to the Corporation’s articles to consolidate the issued and outstanding EFI Common Shares on the basis of one (1) EFI Post-Consolidation Common Share for every ten (10) (pre-consolidation) EFI Common Shares (the “Consolidation Ratio”). No fractional shares will be issued under the Share Consolidation.

The Share Consolidation is subject to regulatory approval, including approval of the TSX. As a condition to the approval of a consolidation of shares listed for trading on the TSX, the TSX requires, among other things, that the Corporation must meet, post-consolidation, the continued listing requirements contained in Part VII of the TSX Company Manual. Specifically, the Corporation’s securities may be delisted if: (a) the market value of listed issued securities that is less than $3,000,000 over any period of 30 consecutive trading days; or (b) the market value of the Corporation’s listed issuer’s freely-tradable, publicly held securities is less than $2,000,000 over any period of 30 consecutive trading days; or (c) the number of freely-tradable, publicly held securities is less than 500,000; or (d) the number of public security holders, each holding a board lot or more, is less than 150.

If the Share Consolidation Resolution is approved, the EFI Board will determine when and if the Articles of Amendment giving effect to the Share Consolidation would be filed. The Share Consolidation will not be implemented prior to the Effective Date of the Acquisition and the Denison Arrangement. No further action on the part of Shareholders would be required in order for the EFI Board to implement the Share Consolidation following the Effective Date of the Denison Arrangement.

Notwithstanding approval of the proposed Share Consolidation by EFI Shareholders, the EFI Board, in its sole discretion, may delay implementation of the Share Consolidation or revoke the Share Consolidation Resolution and abandon the Share Consolidation without further approval or action by or prior notice to EFI Shareholders.

If the EFI Board does not implement the Share Consolidation prior to the next annual meeting of EFI Shareholders, the authority granted by the special resolution to implement the Share Consolidation on these terms would lapse and be of no further force or effect.

Reasons For the Share Consolidation

The EFI Board believes that it is in the best interests of the Corporation to reduce the number of outstanding EFI Common Shares by way of the Share Consolidation.

The potential benefits of the Share Consolidation to EFI Shareholders include:

Greater Investor Interest

A higher EFI Post-Consolidation Common Share price could help generate interest in the Corporation among investors, as a higher anticipated EFI Post-Consolidation Common Share price may meet investing guidelines for certain institutional investors and investment funds that may be prevented under their investing guidelines from investing in the EFI Common Shares at current price levels. In addition, a higher EFI Post-Consolidation Common Share could result in changes in the price levels of the EFI Common Shares making them less volatile on a percentage basis.

Reduction of Shareholder Transaction Costs

Investors may benefit from relatively lower trading costs associated with a higher EFI Post-Consolidation Common Share prices. It is likely that many investors pay commissions based on the number of EFI Post-Consolidation Common Shares traded when they buy or sell EFI Post-Consolidation Common Shares. If the EFI Post-Consolidation Common Share price was higher, investors may pay lower commissions to trade a fixed dollar amount than they would if the EFI Post-Consolidation Common Share price is lower.

Improved Trading Liquidity

The combination of potentially lower transaction costs and increased interest from investors may ultimately improve the trading liquidity of the EFI Post-Consolidation Common Shares.

Share Certificates

No delivery of a certificate evidencing a EFI Post-Consolidation Common Share will be made to an EFI Shareholder until the EFI Shareholder has surrendered the issued certificates representing its pre-consolidation EFI Common Shares. Until surrendered, each certificate formerly representing pre-consolidation EFI Common Shares shall be deemed for all purposes to represent the number of EFI Post-Consolidation Common Shares to which the holder is entitled as a result of the Share Consolidation.

Non-registered EFI Shareholders, holding their EFI Common Shares through a bank, broker, intermediary or other nominee should note that such banks, brokers, intermediaries or other nominees may have various procedures for processing the Share Consolidation. If an EFI Shareholder holds EFI Common Shares with such a bank, broker, intermediary or other nominee and has any questions in this regard, the EFI Shareholder is encouraged to contact its nominee.

Risks Factors Associated with the Share Consolidation

Decline in Market Capitalization

There are numerous factors and contingencies that could affect the pre-consolidation EFI Common Share and EFI Post-Consolidation Common Share prices, including the status of the Corporation’s reported financial results in future periods, and general economic, geopolitical, stock market and industry conditions. Accordingly, the market price of the EFI Post-Consolidation Common Shares may not be sustainable at the direct arithmetic result of the Share Consolidation, and may be lower. If the market price of the EFI Post-Consolidation Common Shares is lower than it was before the Share Consolidation on an arithmetic equivalent basis, the Corporation’s total market capitalization (the aggregate value of all EFI Post-Consolidation Common Shares at the then market price) after the Share Consolidation may be lower than before the Share Consolidation.

Potential for Adverse Affect on the Liquidity of the EFI Common Shares

If the Share Consolidation is implemented and the market price of the Post-Consolidation Common Shares declines, the percentage decline may be greater than would occur in the absence of the Share Consolidation. The market price of the EFI Post-Consolidation Common Shares will, however, also be based on the Corporation’s performance and other factors, which are unrelated to the number of EFI Post-Consolidation Common Shares outstanding. Furthermore, the liquidity of the EFI Post-Consolidation Common Shares could be adversely affected by the reduced number of EFI Post-Consolidation Common Shares that would be outstanding after the Share Consolidation.

No Fractional Shares to be Issued

No fractional EFI Post-Consolidation Common Shares will be issued in connection with the Share Consolidation and, in the event that an EFI Shareholder would otherwise be entitled to receive a fractional EFI Post-Consolidation Common Shares upon the Share Consolidation, such fraction will be rounded down to the nearest whole number.

The Share Consolidation may result in some EFI Shareholders owning “odd lots” of less than 100 EFI Post-Consolidation Common Shares on a post-consolidation basis. “Odd lots” may be more difficult to sell, or require greater transaction costs per EFI Post-Consolidation Common Share to sell, than EFI Post-Consolidation Common Shares held in “board lots” of even multiples of 100 EFI Post-Consolidation Common Shares.

Effects of the Share Consolidation on the EFI Common Shares

The Consolidation Ratio will be the same for all such EFI Common Shares. Except for any variances attributable to rounding down fractional shares, the change in the number of issued and outstanding EFI Post-Consolidation Common Shares that will result from the Share Consolidation will cause no change in the capital attributable to the EFI Post-Consolidation Common Shares and will not materially affect any EFI Shareholder’s percentage ownership in the Corporation, even though such ownership will be represented by a smaller number of EFI Post-Consolidation Common Shares.

In addition, the Share Consolidation will not materially affect any EFI Shareholder’s proportionate voting rights. Each EFI Post-Consolidation Common Share outstanding after the Share Consolidation will have the same rights and privileges as the pre-consolidation EFI Common Shares.

The principal effects of the Share Consolidation will be that the number of EFI Post-Consolidation Common Shares issued and outstanding will be reduced from 214,336,818 pre-consolidation EFI Common Shares as of May 16, 2012 to approximately 21,433,6,81 EFI Post-Consolidation Common Shares, pursuant to the Consolidation Ratio. The implementation of the Share Consolidation would not affect the total shareholders’ equity of the Corporation or any components of shareholders’ equity as reflected on the Corporation’s financial statements except: (i) to change the number of issued and outstanding EFI Post-Consolidation Common Shares; and (ii) to change the stated capital of the EFI Post-Consolidation Common Shares to reflect the Share Consolidation.

Procedure for Implementing the Share Consolidation.

The Share Consolidation will not be implemented prior to the Effective Date of the Denison Arrangement. If the Share Consolidation Resolution is approved by EFI Shareholders and the EFI Board decides to implement the Share Consolidation following the Effective Date, the Corporation will file Articles of Amendment with the Director under the OBCA in the form prescribed by the OBCA to amend the Corporation’s Articles. The Share Consolidation will become effective as specified in the articles of amendment and the certificate of amendment issued by the Director under the OBCA.

No Dissent Rights

Under the OBCA, EFI Shareholders do not have dissent and appraisal rights with respect to the proposed Share Consolidation.

U.S. Federal Income Tax Considerations

An EFI Shareholder taxable in the U.S. generally will not recognize gain or loss on the Share Consolidation. In general, the aggregate tax basis of the EFI Post-Consolidation Common Shares received will be equal to the aggregate tax basis of the EFI Common Shares exchanged therefor, and the holding period of the EFI Post-Consolidation Common Shares received will include the holding period of the EFI Common Shares exchanged.

SHAREHOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE TAX CONSEQUENCES OF THE SHARE CONSOLIDATION TO THEM, INCLUDING THE EFFECTS OF U.S. FEDERAL, STATE AND LOCAL, FOREIGN AND OTHER TAX LAWS.

CIRCULAR 230 WARNING: NOTHING HEREIN MAY BE USED BY ANY TAXPAYER FOR THE PURPOSE OF AVOIDING ANY PENALTIES THAT MAY BE IMPOSED UNDER THE INTERNAL REVENUE CODE OF 1986, AS AMENDED. EACH TAXPAYER SHOULD SEEK ADVICE BASED ON THE TAXPAYER’S PARTICULAR CIRCUMSTANCE FROM AN INDEPENDENT TAX ADVISOR.

Share Consolidation Resolution

The text of the Share Consolidation Resolution which will be submitted to EFI Shareholders at the Meeting is set forth in Schedule G attached to this Circular. To be effective the Share Consolidation must be approved by not less than two-thirds (66²/₃%) of the votes cast by holders of EFI Common Shares present in person or represented by proxy and entitled to vote at the Meeting. For the reasons indicated above, the EFI Board and management of the Corporation believe that the proposed Share Consolidation is in the best interests of the Corporation and, accordingly, recommend that Shareholders vote FOR the special resolution approving the Share Consolidation. Unless otherwise directed, the persons named in the enclosed instrument of proxy intend to vote in favour of the above resolutions.

AUDIT COMMITTEE DISCLOSURE

EFI is required to have an audit committee. The following directors, all of whom are independent directors, are currently members of EFI’s Audit Committee: Paul A. Carroll, Bruce D. Hansen, Mark E. Goodman, and Larry Goldberg. Bruce D. Hansen is the Chairman of the Audit Committee.

Additional information regarding EFI’s Audit Committee, its members and charter, as well as information concerning auditor compensation, is set out in EFI’s AIF which may be found on SEDAR at www.sedar.com.

INTEREST OF INFORMED PERSONS IN MATERIAL TRANSACTIONS

Except as disclosed herein, no insider of EFI or proposed nominee for election as director has any material interest in any transactions involving EFI since the commencement of the last financial year or in any proposed transaction which has materially affected or would affect EFI.

INTERESTS OF EXPERTS

Qualified Persons

The Denison Technical Reports were prepared by the following qualified persons: Douglas H. Underhill, Ph.D., C.P.G.; William Roscoe, Ph.D., P.Eng.; Thomas C. Pool, P.E.; Christopher Moreton, Ph.D., P.Geo.; and David A. Ross, M. Sc, P.Geo. As at the date hereof, to the knowledge of management of EFI, each of the aforementioned individuals and the directors, officers and employees in the aggregate, as applicable, of Scott Wilson RPA, beneficially own, directly or indirectly, less than 1% of the EFI Common Shares.

Auditors

The audited annual financial statements of EFI which are incorporated by reference in this Circular were audited by KPMG LLP. In connection with their audit of the annual financial statements, KPMG LLP reported to EFI’s Audit Committee that they are independent of EFI in accordance with the rules of professional conduct of the Institute of Chartered Accountants of Ontario.

The annual financial statements of DMHC which are attached as Schedule E to this Circular were audited by Pricewaterhouse Coopers LLP. Pricewaterhouse Coopers LLP is independent of DMHC in accordance with the rules of professional conduct of the Institute of Chartered Accountants of Ontario.

The financial statements of White Canyon which are attached as Schedule F to this Circular were prepared by RSM Bird Cameron Partners, Chartered Accountants. RSM Bird Cameron Partners have confirmed that they are independent with respect to White Canyon within the meaning of the auditor independence requirements defined in the Australian Corporations Act 2001 and the Australian Auditing Standard – ASA 102 Compliance with Ethical Requirements when Performing Audits, Reviews and Other Assurance Engagements.

Financial Advisors

The Fairness Opinion, which is attached hereto as Schedule C, has been prepared by Dundee Securities. As of May 16, 2012, investment funds managed by Dundee Securities and sub-advised by Dundee Corporation owned or controlled less than 1% of the outstanding EFI Common Shares. As at the date hereof, Dundee Resources Limited, a wholly-owned subsidiary of Dundee Securities’ significant shareholder, owns approximately 10.7% of the EFI Common Shares.

Except as set out herein, to the knowledge of management of EFI and Denison as at the date hereof, none of the experts, or designated professionals of the experts named above have any registered or beneficial interest, direct or indirect, in any securities or other property of EFI or Denison or their respective associates or affiliates when the experts prepared their respective reports.

ADDITIONAL INFORMATION

Additional information relating to EFI may be found under EFI’s profile on SEDAR at www.sedar.com. Financial information is provided in EFI’s comparative financial statements and MD&A for its most recently completed financial year which are available on SEDAR or can be received upon written request to EFI.

EXEMPTIONS

As the completion of the Acquisition will constitute a significant acquisition (as defined by NI 51-102), pursuant to applicable Canadian Securities Laws, the Circular must include all of the disclosure prescribed by Section 14.2 of Form 51-102F5 – Information Circular of NI 51-102 (including certain financial statements, as set forth in Part 8 of NI 51-102). In connection with such requirements, EFI and Denison have made an application to the applicable securities regulatory authorities for and received exemptive relief from: (a) certain requirements in respect of permitted auditing standards in section 4.12 of National Instrument 52-107 – Acceptable Accounting Principals and Auditing Standards (“NI 52-107”) with respect to “acquisition statements” (as defined in NI 52-107) that are required to be included in this Circular; (b) the requirement in section 4.11(4) of NI 52-107 to reconcile acquisition statements to the issuer’s generally accepted accounting principles; (c) the requirement in section 4.14(1) of NI 52-107 that pro forma financial statements must be prepared in accordance with the issuer’s generally accepted accounting principles; and (d) the requirement in section 8.4(3) of NI 51-102 to provide interim financial statements for each related business for the most recently completed interim period. Pursuant to the exemptive relief received: (a) the annual financial statements of White Canyon, attached hereto at Schedule E, have been prepared in accordance with IFRS and audited in accordance with Australian Auditing Standards and are accompanied by an auditor’s report from the auditor of White Canyon that describes the material differences in the form and content of the auditor’s report as compared to an auditor’s report prepared in accordance with Canadian generally accepted auditing standards (“GAAS”) and indicates that an auditor’s report prepared in accordance with Canadian GAAS would not contain a reservation; (b) the pro forma financial statements respecting EFI attached hereto as Schedule C have been prepared in accordance with IFRS (as opposed to Canadian GAAP) and identify accounting policy differences between Canadian GAAP and IFRS that would potentially have a material impact and which could be reasonably estimated in the notes to such pro forma statements; and (c) no interim financial statements for White Canyon on a stand-alone basis for any period after June 30, 2011 have been provided; rather, for the period from July 1, 2011 to December 31, 2011 the results of White Canyon (including its subsidiary UEC) have been consolidated in the DMHC annual consolidated financial statements for the year ended December 31, 2011 and for the period from January 1, 2012 to March 31, 2012 the results of White Canyon (including its subsidiary UEC) have been consolidated in the DMHC interim consolidated financial statements for the three months ended March 31, 2012.

DIRECTORS’ APPROVAL

The board of directors of EFI has approved the contents and the sending of this Circular.

DATED at Toronto, Ontario this 28^thday of May, 2012.

BY ORDER OF THE BOARD

(signed) “Stephen P. Antony”
Stephen P. Antony, President
and Chief Executive Officer

CONSENT OF EXPERTS

Consent of Dundee Securities Ltd.

We refer to the written fairness opinion dated as of April 13, 2012 (the “Fairness Opinion”), which we prepared for the Board of Directors of Energy Fuels Inc. (‘‘EFI’’) in connection with the acquisition by EFI of all of the mining assets and operations of Denison Mines Corp. located in the United States.

We consent to the inclusion of the Fairness Opinion, a summary of the Fairness Opinion and our firm name in the management information circular of EFI dated May 28, 2012 (the “Circular”).

Toronto, Ontario
May 28, 2012

DUNDEE SECURITIES LTD.

By:: (signed) “Lindsay Adam Weiss”
Lindsay Adam Weiss
Managing Director, Investment Banking

AUDITORS’ CONSENT

To the Board of Directors of Energy Fuels Inc.

We have read the Notice of the Special Meeting of Shareholders and Management Information Circular dated May 28, 2012 (the ‘Management Information Circular’) in respect of the transaction involving the acquisition by Energy Fuels Inc. (the “Company”) of all of the outstanding shares of Denison Mines Holdings Corp. and White Canyon Uranium Limited. We have complied with Canadian generally accepted standards for an auditor's involvement with offering documents.

We consent to the incorporation by reference in the above-mentioned Management Information Circular of our report to the shareholders of the Company, on the consolidated financial statements of the Company, which comprise the consolidated balance sheets as at September 30, 2011 and 2010, the consolidated statements of comprehensive loss, shareholders’ equity and cash flows for each of the years in the two-year period ended September 30, 2011, and notes, comprising a summary of significant accounting policies and other explanatory information. Our report is dated December 21, 2011.

(signed) “KPMG LLP”

Chartered Accountants, Licensed Public Accountants
May 28, 2012
Toronto, Canada

May 28, 2012

Independent Auditor’s Consent

We have read the information circular of Energy Fuels Inc. dated May 28, 2012. We have complied with Canadian generally accepted standards for an auditor’s involvement with offering documents.

We consent to the inclusion in the above-mentioned information circular of our report to the Directors of Denison Mines Holdings Corp. (DMHC) on the consolidated statements of financial position of DMHC as at December 31, 2011, December 31, 2010 and January 1, 2010, the consolidated statements of income (loss) and comprehensive income (loss), consolidated statements of changes in equity and consolidated statements of cash flows for the years ended December 31, 2011 and December 31, 2010. Our report is dated May 22, 2012.

(Signed) “PricewaterhouseCoopers LLP”

Chartered Accountants, Licensed Public Accountants

PricewaterhouseCoopers LLP, Chartered Accountants
PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2
T: +1 416 863 1133, F: +1 416 365 8215, www.pwc.com/ca

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity.

RSM Bird Cameron Partners
8 St Georges Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 8 9261 9100 F +61 8 9261 9101
www.rsmi.com.au

Consent of RSM Bird Cameron Partners

We have read the information circular of Energy Fuels Inc. (the "Corporation") dated May 28, 2012 with respect to the acquisition of the shares of Denison Mines Corp.’s subsidiaries holding all of Denison’s mining assets and operations located in the United States (the "Information Circular"). We have complied with Australian generally accepted standards for an auditor's involvement with offering documents.

We consent to the inclusion in the above mentioned Information Circular of the consolidated statement of financial position of White Canyon as at June 30, 2011 and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year ended June 30, 2011, notes comprising a summary of significant accounting policies and other explanatory notes. Our report is dated May 21, 2012.

We consent to the inclusion in the above mentioned Information Circular of our report describing the material differences in the form and content of the auditor's report prepared in accordance with Australian Auditing Standards and International Standards on Auditing as compared to an auditor's report prepared in accordance with Canadian generally accepted auditing standards and indicating that that an auditor's report prepared in accordance with Canadian generally accepted auditing standards would not contain a reservation.

TUTU PHONG

Partner

RSM Bird Cameron Partners

Chartered Accountants

Dated at Perth, Australia on May 28, 2012

	Roscoe Postle Associates Inc.
	Suite 501, 55 University Avenue, Toronto, ON M5J 2H7
	T (416) 947-0907 F (416) 947-0395
	www.rpacan.com

CONSENT OF EXPERT

Energy Fuels Inc.
Ontario Securities Commission
British Columbia Securities Commission
Alberta Securities Commission
Saskatchewan Financial Services Commission
The Manitoba Securities Commission
Toronto Stock Exchange

Dear Sirs/Mesdames:

Re:	Energy Fuels Inc. (the “Company”)
	Management Information Circular dated May 28, 2012 (the “Circular”)

The undersigned hereby consents to being named in the Circular and to the use of and inclusion of reference in the Circular by the Company to the technical report entitled “Technical Report on the EZ1 and EZ2 Breccia Pipes, Arizona Strip District, U.S.A.” prepared for Denison Mines Corp. dated June 24, 2009 (the “Technical Report”). I also consent to any extracts from or summary of the Technical Report in the Circular or included by reference in the Circular of the Company.

I, Christopher Moreton, hereby confirm that I have read the Circular and have no reason to believe that there are any misrepresentations in the information contained in the Circular that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

Dated this 28th day of May, 2012.

(Signed) “Christopher Moreton”

Christopher Moreton, Ph.D., P.Geo.
Roscoe Postle Associates Inc. (formerly Scott Wilson Roscoe Postle Associates Inc.)

	Roscoe Postle Associates Inc.
	Suite 501, 55 University Avenue, Toronto, ON M5J 2H7
	T (416) 947-0907 F (416) 947-0395
	www.rpacan.com

CONSENT OF EXPERT

Dear Sirs/Mesdames:

Re:	Energy Fuels Inc. (the “Company”)
	Management Information Circular dated May 28, 2012 (the “Circular”)

The undersigned hereby consents to being named in the Circular and to the use of and inclusion of reference in the Circular by the Company to the technical reports entitled “Technical Report on the Arizona Strip Uranium Project, Arizona, U.S.A.” prepared for Denison Mines Corp. dated February 26, 2007 and “Technical Report on the EZ1 and EZ2 Breccia Pipes, Arizona Strip District, U.S.A.” prepared for Denison Mines Corp. dated June 24, 2009 (the “Technical Reports”). I also consent to any extracts from or summary of the Technical Reports in the Circular or included by reference in the Circular of the Company.

I, David A. Ross, hereby confirm that I have read the Circular and have no reason to believe that there are any misrepresentations in the information contained in the Circular that are: (a) derived from the Technical Reports; or (b) within my knowledge as a result of the services I performed in connection with the Technical Reports.

Dated this 28th day of May, 2012.

(Signed) “David A. Ross”

David A. Ross, M.Sc., P.Geo.
Roscoe Postle Associates Inc. (formerly Scott Wilson Roscoe Postle Associates Inc.)

	Roscoe Postle Associates Inc.
	Suite 501, 55 University Avenue, Toronto, ON M5J 2H7
	T (416) 947-0907 F (416) 947-0395
	www.rpacan.com

CONSENT OF EXPERT

Dear Sirs/Mesdames:

Re:	Energy Fuels Inc. (the “Company”)
	Management Information Circular dated May 28, 2012 (the “Circular”)

The undersigned hereby consents to being named in the Circular and to the use of and inclusion of reference in the Circular by the Company to the technical report entitled “Technical Report on the Tony M-Southwest Deposit, Henry Mountains Complex Uranium Project, Utah, U.S.A.” prepared for Denison Mines Corp. dated March 19, 2009 (the “Technical Report”). I also consent to any extracts from or summary of the Technical Report in the Circular or included by reference in the Circular of the Company.

I, Douglas H. Underhill, hereby confirm that I have read the Circular and have no reason to believe that there are any misrepresentations in the information contained in the Circular that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

Dated this 28th day of May, 2012.

(Signed) “Douglas H. Underhill”

Douglas H. Underhill, Ph.D., C.P.G.
Roscoe Postle Associates Inc. (formerly Scott Wilson Roscoe Postle Associates Inc.)

	Roscoe Postle Associates Inc.
	Suite 501, 55 University Avenue, Toronto, ON M5J 2H7
	T (416) 947-0907 F (416) 947-0395
	www.rpacan.com

CONSENT OF EXPERT

Dear Sirs/Mesdames:

Re:	Energy Fuels Inc. (the “Company”)
	Management Information Circular dated May 28, 2012 (the “Circular”)

The undersigned hereby consents to being named in the Circular and to the use of and inclusion of reference in the Circular by the Company to the technical reports entitled “Technical Report on the Arizona Strip Uranium Project, Arizona, U.S.A.” prepared for Denison Mines Corp. dated February 26, 2007 and “Technical Report on the Henry Mountains Complex Uranium Project, Utah, U.S.A.” prepared for International Uranium Corporation dated September 9, 2006 (the “Technical Reports”). I also consent to any extracts from or summary of the Technical Reports in the Circular or included by reference in the Circular of the Company.

I, Thomas C. Pool, hereby confirm that I have read the Circular and have no reason to believe that there are any misrepresentations in the information contained in the Circular that are: (a) derived from the Technical Reports; or (b) within my knowledge as a result of the services I performed in connection with the Technical Reports.

Dated this 28th day of May, 2012.

(Signed) “Thomas C. Pool”

Thomas C. Pool, P.E.
Roscoe Postle Associates Inc. (formerly Scott Wilson Roscoe Postle Associates Inc.)

	Roscoe Postle Associates Inc.
	Suite 501, 55 University Avenue, Toronto, ON M5J 2H7
	T (416) 947-0907 F (416) 947-0395
	www.rpacan.com

CONSENT OF EXPERT

Dear Sirs/Mesdames:

Re:	Energy Fuels Inc. (the “Company”)
	Management Information Circular dated May 28, 2012 (the “Circular”)

The undersigned hereby consents to being named in the Circular and to the use of and inclusion of reference in the Circular by the Company to the technical report entitled “Technical Report on the Tony M-Southwest Deposit, Henry Mountains Complex Uranium Project, Utah, U.S.A.” prepared for Denison Mines Corp. dated March 19, 2009 (the “Technical Report”). I also consent to any extracts from or summary of the Technical Report in the Circular or included by reference in the Circular of the Company.

I, William E. Roscoe, hereby confirm that I have read the Circular and have no reason to believe that there are any misrepresentations in the information contained in the Circular that are: (a) derived from the Technical Report; or (b) within my knowledge as a result of the services I performed in connection with the Technical Report.

Dated this 28th day of May, 2012.

(Signed) “William E. Roscoe”

William E. Roscoe, Ph.D., P.Eng.
Roscoe Postle Associates Inc. (formerly Scott Wilson Roscoe Postle Associates Inc.)

SCHEDULE A - ACQUISITION RESOLUTION

RESOLUTION OF THE SHAREHOLDERS OF ENERGY FUELS INC.
(the “Corporation”)

WHEREAS the Corporation has entered into an arrangement agreement dated May 23, 2012 (the “Arrangement Agreement”) with Denison Mines Corp. (“Denison”) to complete a transaction whereby the Corporation would acquire from Denison (the “Acquisition”) (i) all of the issued and outstanding shares of Denison Mines Holding Corp. (“DMHC”) held by Denison, (ii) all of the issued and outstanding shares of White Canyon Uranium Limited (“White Canyon”), and (iii) all indebtedness of DMHC, White Canyon and their direct and indirect subsidiaries (collectively, the (“Denison US Group”) owing to Denison and any affiliates of Denison (other than members of the Denison US Group), in exchange for 425,441,494 common shares of the Corporation (“EFI Payment Shares”) to be issued to the shareholders of Denison, as more fully described in the management information circular of the Corporation dated May 28, 2012 (the “Circular”);

AND WHEREAS in accordance with Section 611(c) of the Toronto Stock Exchange Company Manual, the Corporation wishes to obtain the requisite shareholder approval for the issuance of the EFI Payment Shares in connection with the completion of the Acquisition contemplated in the Arrangement Agreement;

NOW THEREFORE BE IT RESOLVED THAT:

1.	The issuance of the EFI Payment Shares pursuant to the terms of the Arrangement Agreement as described in the Circular is hereby approved.

2.	The Arrangement Agreement and all of the transactions contemplated therein, including but not limited to, the issuance of a maximum of 425,441,494 common shares of EFI to be issued and made issuable pursuant to the Arrangement, as described in the Circular, and the actions of the directors of the Corporation in approving the Arrangement Agreement and the actions of the officers of the Corporation in executing and delivering the Arrangement Agreement and any amendments thereto are hereby ratified, confirmed and approved.

3.	Any director or officer of the Corporation is hereby authorized and directed to execute or cause to be executed, whether under corporate seal of the Corporation or otherwise, and to deliver or cause to be delivered all such documents, and to do or cause to be done all such acts and things, as in the opinion of such director or officer may be necessary or desirable in connection with the foregoing.

4.	The board of directors of the Corporation be and it is authorized to delay, abandon all or any part of this resolution at any time prior to giving effect thereto.

A-1

SCHEDULE B – ARRANGEMENT AGREEMENT

ARRANGEMENT AGREEMENT

between

ENERGY FUELS INC.

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DENISON MINES CORP.

May 23, 2012

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TABLE OF CONTENTS

		Page No.
ARTICLE 1 - DEFINITIONS, INTERPRETATION AND SCHEDULES		1
1.1	Definitions	1
1.2	Interpretation Not Affected by Headings	12
1.3	Number, Gender and Persons	12
1.4	Date for any Action	12
1.5	Statutory References	12
1.6	Currency	12
1.7	Invalidity of Provisions	12
1.8	Accounting Matters	13
1.9	Knowledge	13
1.10	Meaning of Ordinary Course of Business	13
1.11	Schedules	13
ARTICLE 2 - THE TRANSACTION		13
2.1	Plan of Arrangement; Purchase and Sale of Purchased Shares	13
2.2	Interim Order	14
2.3	Final Order	15
2.4	Proxy Circulars	15
2.5	Effecting the Arrangement	16
2.6	Closing	16
2.7	U.S. Securities Law Matters	16
2.8	Consultation	17
2.9	Effective Date	17
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES		17
3.1	Representations and Warranties of EFI	17
3.2	Representations and Warranties of Denison	30
3.3	Additional Disclosures	44
3.4	Survival of Representations and Warranties	44
ARTICLE 4 - COVENANTS		44
4.1	Covenants of EFI	44
4.2	Covenants of Denison	50
ARTICLE 5 - CONDITIONS		56
5.1	Mutual Conditions	56
5.2	Conditions of EFI	58
5.3	Conditions of Denison	60
5.4	Notice and Cure Provisions	61
5.5	Merger of Conditions	62
ARTICLE 6 - SUPERIOR PROPOSALS AND TERMINATION		62
6.1	Covenants Regarding Superior Proposals	62
6.2	Termination	64
6.3	Termination Payment	65
6.4	Reimbursement of Expenses	66
ARTICLE 7 - AMENDMENT		66

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7.1	Amendment	66
7.2	Mutual Understanding Regarding Amendments	67
ARTICLE 8 - GENERAL		67
8.1	Denison Indemnity	67
8.2	EFI Indemnity	68
8.3	Notices	69
8.4	Remedies	70
8.5	Expenses	70
8.6	Time of the Essence	71
8.7	Entire Agreement	71
8.8	Further Assurances	71
8.9	Governing Law	71
8.10	Execution in Counterparts	71
8.11	Waiver	71
8.12	No Personal Liability	71
8.13	Enurement and Assignment	72
8.14	United States Tax Considerations	72

Schedule A - Plan of Arrangement under Section 182 of the Business Corporations Act (Ontario)

- ii -

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ARRANGEMENT AGREEMENT

THIS AGREEMENT is made as of May 23, 2012

BETWEEN:

ENERGY FUELS INC., a corporation existing under the Business Corporations Act (Ontario)

(“EFI”)

- and -

DENISON MINES CORP., a corporation existing under the Business Corporations Act (Ontario)

(“Denison”)

WHEREAS:

A.	The respective boards of directors of EFI and Denison have approved the transactions contemplated hereby, providing for, among other things, (A) the acquisition by EFI of the Purchased Shares and the Acquired Debt (as such terms are hereinafter defined) in consideration for the issuance of the EFI Note (as hereinafter defined); (B) the distribution of interests in the EFI Note to Denison Shareholders on a pro rata basis as part of a reorganization of the capital of Denison; and (C) the repayment of the EFI Note by way of the issuance of the EFI Payment Shares;

B.	The Parties intend to carry out the proposed transaction by way of a Plan of Arrangement under the provisions of Section 182 of the Business Corporations Act (Ontario);

C.	The board of directors of Denison has determined that the Plan of Arrangement is in the best interests of Denison, is fair to the Denison Shareholders and has recommended that the Denison Shareholders vote in favour of the Arrangement; and

D.	The board of directors of EFI has determined that the Purchase and Sale Transaction is in the best interests of EFI and has recommended that the EFI Shareholders vote in favour of the issuance of the EFI Payment Shares in satisfaction of the principal amount of the EFI Note.

NOW THEREFORE IN CONSIDERATION of the mutual covenants and agreements herein contained and other good and valuable consideration (the receipt and sufficiency of which are hereby acknowledged), THE PARTIES AGREE AS FOLLOWS:

ARTICLE 1 - DEFINITIONS, INTERPRETATION AND SCHEDULES

1.1

Definitions

In this Agreement, unless the context otherwise requires, the following words and terms with the initial letter or letters thereof capitalized shall have the meanings ascribed to them below:

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	(a)	“1933 Act” means the Securities Act of 1933, as amended, of the United States of America, and the rules and regulations promulgated from time to time thereunder;

	(b)	“1934 Act” means the Securities Exchange Act of 1934, as amended, of the United States of America, and the rules and regulations promulgated from time to time thereunder;

	(c)	“1940 Act” means the Investment Company Act of 1940, as amended, of the United States of America, and the rules and regulations promulgated from time to time thereunder;

	(d)	“Acquired Debt” means all indebtedness of the Denison US Group owing to Denison and the Subsidiaries of Denison other than the Denison US Group as of the Effective Time, as more particularly described in the Denison Disclosure Memorandum;

	(e)	“Acquisition Proposal” means any inquiry or the making of any proposal or offer, or public announcement of an intention to make a proposal or offer, to the Receiving Party or its securityholders from any Person or group of Persons “acting jointly or in concert” (within the meaning of Section 91(1) of the Securities Act (Ontario)) which constitutes, or may be reasonably expected to lead to (in either case whether in one transaction or a series of transactions):

	(i)	in the case of Denison, the acquisition of all or a substantial part of the US Mining Division; or

	(ii)	in the case of EFI, a significant business combination of EFI’s business with another business or other transaction which would be inconsistent with the Arrangement;

	(f)	“Additional Director Nominees” means two individuals designated by Denison, and approved by EFI, acting reasonably, prior to the Effective Date;

	(g)	“Affiliate” means an “affiliate” within the meaning of Part XX of the Securities Act (Ontario);

	(h)	“Agreement” means this Arrangement Agreement, together with the schedules attached hereto, as amended, amended and restated or supplemented from time to time;

	(i)	“Arrangement” means the arrangement under the provisions of Section 182 of the OBCA on the terms and conditions set forth in the Plan of Arrangement, subject to any amendment, variation or supplement thereto (i) made in accordance with Section 6.1 of the Plan of Arrangement or (ii) made at the direction of the Court in the Final Order and with the consent of EFI and Denison, each acting reasonably, or (iii) otherwise made in accordance with Section 7.1;

	(j)	“Business Day” means a day, other than a Saturday or a Sunday, on which the principal commercial banks located in Toronto, Ontario are open for the conduct of business;

	(k)	“Canadian GAAP” means generally accepted accounting principles in effect from time to time in Canada, being those accounting principles set forth by the Institute of Chartered Accountants in Canada;

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	(l)	“Claim” shall have the meaning ascribed to that term in Section 8.1(a) of this Agreement;

	(m)	“Code” means the United States Internal Revenue Code of 1986, as amended;

	(n)	“Completion Deadline” means August 15, 2012, being the latest date by which the Arrangement is to be completed;

	(o)	“Confidentiality Agreement” means the confidentiality agreement dated as of March 12, 2012 between EFI and Denison;

	(p)	“Court” in the context of Article 2 means the Ontario Superior Court of Justice;

	(q)	“Denison Common Shares” means common shares in the capital of Denison as constituted on the date hereof;

	(r)	“Denison Disclosure Memorandum” means the memorandum dated the date hereof delivered by Denison to EFI, as amended or supplemented from time to time in accordance with Section 3.3, with respect to certain matters in this Agreement;

	(s)	“Denison Material Agreements” shall have the meaning ascribed to that term in Section 3.2(p) of this Agreement;

	(t)	“Denison Material Entity” means each of DMHC, White Canyon, Denison Mines (USA) Corp., Denison White Mesa LLC, Denison Henry Mountains LLC, Denison Colorado Plateau LLC, Denison Arizona Strip LLC and Utah Energy Corporation;

	(u)	“Denison Material Properties” shall have the meaning ascribed to that term in Section 3.2(w) of this Agreement;

	(v)	“Denison Meeting” shall have the meaning ascribed to that term in Section 4.2(c) of this Agreement;

	(w)	“Denison New Common Shares” means the shares of a new class of voting common shares in the capital of Denison which Denison will create and issue under the Plan of Arrangement;

	(x)	“Denison Offtake Agreement” shall have the meaning ascribed to that term in subsection 5.1(a)(ii) of this Agreement;

	(y)	“Denison Proxy Circular” shall have the meaning ascribed to that term in Section 4.2(d) of this Agreement;

	(z)	“Denison Public Disclosure Documents” shall have the meaning ascribed to that term in Section 3.2(ee) of this Agreement;

	(aa)	“Denison Resolution” shall have the meaning ascribed to that term in Section 4.2(c) of this Agreement;

	(bb)	“Denison Secured Credit Facility” means Denison’s revolving secured term credit facility with The Bank of Nova Scotia pursuant to an amended and restated credit agreement dated as of June 30, 2011 as described in the Denison Disclosure Memorandum;

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	(cc)	“Denison Shareholder Approval” shall have the meaning ascribed to that term in subsection 2.2(a)(ii) of this Agreement;

	(dd)	“Denison Shareholders” means, at any time, the holders of Denison Common Shares;

	(ee)	“Denison Support Agreements” means the support agreements entered into between EFI and each of Zebra Holdings and Investments SARL, Lorito Holdings SARL, and each of the directors and officers of Denison who are Denison Shareholders as of the date of this Agreement;

	(ff)	“Denison US Group” means collectively, DMHC, White Canyon and each of the direct and indirect Subsidiaries of DMHC;

	(gg)	“Depositary” means such trust company, bank or financial institution that may be agreed to by the Parties;

	(hh)	“Dissent Rights” means the rights of dissent in respect of the Arrangement, as described in the Plan of Arrangement;

	(ii)	“DMHC” means Denison Mines Holdings Corp., a corporation existing under the laws of the State of Delaware, U.S.;

	(jj)	“DMHC Common Shares” means the shares of common stock, par value US$1.00 per share, in the capital of DMHC as constituted on the date hereof;

	(kk)	“DMHC Financial Statements” shall have the meaning ascribed to that term in subsection 3.2(r)(i) of this Agreement;

	(ll)	“DMHC Preferred Shares” means the shares of preferred stock, par value US$1,000 per share, in the capital of DMHC as constituted on the date hereof;

	(mm)	“DMHC Shares” means all of the issued and outstanding shares of DMHC, being 15.7 DMHC Common Shares and 2,000 DMHC Preferred Shares, subject to adjustment in accordance with Section 8.14(d);

	(nn)	“Effective Date” means the Effective Date as defined in the Plan of Arrangement;

	(oo)	“Effective Time” means the Effective Time as defined in the Plan of Arrangement;

	(pp)	“EFI Common Shares” means common shares in the capital of EFI as constituted on the date hereof (and, for greater certainty, before giving effect to the EFI Share Consolidation);

	(qq)	“EFI Disclosure Memorandum” means the memorandum dated the date hereof delivered by EFI to Denison, as amended or supplemented from time to time in accordance with Section 3.3, with respect to certain matters in this Agreement;

	(rr)	“EFI Financial Statements” means, collectively, the audited consolidated financial statements of EFI for the financial year ended September 30, 2011 and the unaudited condensed consolidated interim statements of EFI for the six months ended March 31, 2012;

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	(ss)	“EFI Material Agreements” shall have the meaning ascribed to that term in Section 3.1(l) of this Agreement;

	(tt)	“EFI Material Properties” has the meaning ascribed to that term in Section 3.1(r) of this Agreement;

	(uu)	“EFI Material Subsidiaries” means: (i) Energy Fuels Resources Corporation, a corporation existing under the laws of the State of Colorado, U.S.; (ii) Magnum Uranium Corp., a corporation existing under the laws of the province of British Columbia; (iii) Magnum Minerals USA Corp., a corporation existing under the laws of the State of Nevada, U.S.; (iv) Titan Uranium Inc., a corporation existing under the federal laws of the Canada; (v) Uranium Power Corp., a corporation existing under the laws of the province of British Columbia; and (vi) Energy Fuels Wyoming Inc., a corporation existing under the laws of the State of Nevada, U.S.;

	(vv)	“EFI Meeting” shall have the meaning ascribed to that term in Section 4.1(c) of this Agreement;

	(ww)	“EFI Note” means the non-interest bearing promissory note to be issued to Denison by EFI with a principal amount equal to the aggregate fair market value of the EFI Payment Shares on the Effective Date;

	(xx)	“EFI Payment Shares” means 425,441,494 EFI Common Shares or, if the EFI Share Consolidation is effected prior to the Effective Time, 42,544,149 EFI Post-Consolidation Common Shares, which shares are to be issued to Denison Shareholders pursuant to and as part of the Arrangement in satisfaction of the EFI Note;

	(yy)	“EFI Post-Consolidation Common Shares” means common shares in the capital of EFI after giving effect to the EFI Share Consolidation;

	(zz)	“EFI Proxy Circular” shall have the meaning ascribed to that term in Section 4.1(c) of this Agreement;

	(aaa)	“EFI Public Disclosure Documents” shall have the meaning ascribed to that term in Section 3.1(z) of this Agreement;

	(bbb)	“EFI Resolution” shall have the meaning ascribed to that term in Section 4.1(c) of this Agreement;

	(ccc)	“EFI Share Consolidation” means the proposed share consolidation of the EFI Common Shares on the basis of one (1) EFI Post-Consolidation Common Share for each ten (10) EFI Common Shares;

	(ddd)	“EFI Shareholder Approval” means the approval by ordinary resolution of the EFI Shareholders at the EFI Meeting of the issuance of the EFI Payment Shares, and, if required, the consent to the waiver of the application of EFI’s shareholder rights plan to the Arrangement;

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	(eee)	“EFI Shareholders” means, at any time, the holders of EFI Common Shares;

	(fff)	“EFI Support Agreements” means the support agreements entered into between Denison and each of Dundee Resources Limited, Pinetree Capital Ltd., Mega Uranium Ltd. and each of the directors and officers of EFI who are EFI Shareholders as of the date of this Agreement;

	(ggg)	“Encumbrance” means any mortgage, pledge, assignment, charge, lien, claim, security interest, adverse interest, other third person interest or encumbrance of any kind, whether contingent or absolute, and any agreement, option, right or privilege (whether by law, contract or otherwise) capable of becoming any of the foregoing;

	(hhh)	“Environmental Approvals” means all permits, certificates, licences, authorizations, consents, instructions, registrations, directions, orders, filings or approvals issued or required by any Governmental Entity pursuant to any Environmental Law;

	(iii)	“Environmental Laws” means all Laws, including applicable common law, relating to the protection of the environment and employee and public health and safety, and includes Environmental Approvals;

	(jjj)	“Final Order” means the order of the Court pursuant to Subsection 182(5)(f) of the OBCA approving the Arrangement in a form acceptable to the Parties, as such order may be amended at any time prior to the Effective Date with the consent of the Parties, acting reasonably, or if appealed, then unless such appeal is withdrawn or denied, as affirmed or as amended on appeal;

	(kkk)	“Governmental Entity” means any applicable (i) multinational, federal, provincial, territorial, state, regional, municipal, local or other government, governmental or public department, central bank, court, tribunal, arbitral body, commission, board, bureau or agency, whether domestic or foreign, (ii) any subdivision, agency, commission, board or authority of any of the foregoing, or (iii) any quasi-governmental or private body exercising any regulatory, expropriation or taxing authority under or for the account of any of the foregoing;

	(lll)	“Hazardous Substance” means any chemical, material or substance in any form, whether solid, liquid, gaseous, semisolid or any combination thereof, whether waste material, raw material, finished product, intermediate product, by-product or any other material or article, that is listed or regulated under any Environmental Laws as a hazardous substance, toxic substance, waste, contaminant, radioactive materials, radioactive waste, naturally-occurring radioactive materials, technologically-enhanced naturally-occurring radioactive materials or is otherwise listed or regulated under any Environmental Laws because it poses a hazard to human health or the environment, including petroleum products, asbestos, PCBs, urea formaldehyde foam insulation and lead-containing paints or coatings;

	(mmm)	“IFRS” means International Financial Reporting Standards, being the standards and interpretations adopted by the International Accounting Standards Board, as amended from time to time, in effect and generally accepted in Canada as applicable to publicly accountable enterprises;

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	(nnn)	“Interim Order” means the interim order of the Court in a form acceptable to the Parties providing for, among other things, the calling and holding of the Denison Meeting, as the same may be amended by the Court with the consent of the Parties, acting reasonably;

	(ooo)	“KEPCO” means Korea Electric Power Corporation;

	(ppp)	“KEPCO Offtake Agreement” shall have the meaning ascribed to that term in subsection 5.1(a)(i) of this Agreement;

	(qqq)	“KEPCO Strategic Relationship Agreement” the strategic relationship agreement dated as of June 15, 2009 among Denison, KEPCO, and KEPCO Canada Uranium Investment Limited Partnership;

	(rrr)	“KEPCO Waiver” means KEPCO’s waiver of its right of first opportunity provided for in Section 4.1 of the KEPCO Strategic Relationship Agreement, or the expiry of KEPCO’s right of first opportunity provided for therein without KEPCO exercising such right;

	(sss)	“Laws” means all applicable laws, including international, national, provincial, state, municipal and local laws (including common and civil law), treaties, statutes, by-laws, rules, regulations, orders, ordinances, protocols, codes, guidelines, instruments, policies, notices, directions, judgments, directives, decisions, rulings, decrees or other requirements of any Governmental Entity or Regulatory Authority having the force of law;

	(ttt)	“Letter Agreement” means the letter agreement between EFI and Denison dated April 16, 2012 relating to the transactions contemplated by this Agreement;

	(uuu)	“Liability” of any person means and includes: (i) any right against such person to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured; (ii) any right against such person to an equitable remedy for breach of performance if such breach gives rise to a right to payment, whether or not such right to any equitable remedy is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured; and (iii) any obligation of such person for the performance of any covenant or agreement (whether for the payment of money or otherwise);

	(vvv)	“Losses” shall have the meaning ascribed to that term in Section 8.1(a) of this Agreement;

	(www)	“Match Period” shall have the meaning ascribed to that term in Section 6.1(c) of this Agreement;

	(xxx)	“Material Adverse Effect” means, in respect of any Party, a state of facts, which either individually or in the aggregate, are or would reasonably be expected to be material and adverse to the business, properties, assets, liabilities (including any contingent liabilities that may arise through outstanding, pending or threatened litigation or otherwise), obligation, capitalization, condition (financial or otherwise), operations or results of operations of that Party or, in the case of Denison, the US Mining Division, taken as a whole, other than any change, effect, event or occurrence:

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	(i)	relating to the U.S., Canadian or global economy, political conditions or securities markets in general;

	(ii)	affecting the worldwide uranium mining industries in general and which does not have a materially disproportionate effect on the Party or, in the case of Denison, the US Mining Division; or

	(iii)	resulting from changes in the price of uranium;

	(yyy)	“misrepresentation” shall have the meaning ascribed to that term in the Securities Act (Ontario);

	(zzz)	“Notified Party” shall have the meaning ascribed to that term in Section 6.1(a);

	(aaaa)	“NYSE MKT” means the trading market operated by NYSE MKT LLC;

	(bbbb)	“OBCA” means the Business Corporations Act (Ontario);

	(cccc)	“Party” means either of EFI or Denison and “Parties” means both of them;

	(dddd)	“Permitted Encumbrances” means:

	(i)	minor title defects or irregularities or servitudes, easements, restrictions, encroachments, covenants, rights of way and other similar rights or restrictions in real property or mineral property, or any interest therein, whether registered or unregistered, provided the same are not of such nature as to materially adversely affect the use, operation or enjoyment of the property subject thereto;

	(ii)	undetermined or inchoate liens, charges and privileges (including mechanics’, construction, carriers’, workers’, repairers’, storers’ or similar liens) arising or incurred in the ordinary course of business of the Denison US Group, which individually or in the aggregate do not have a Material Adverse Effect on the Denison US Group;

	(iii)	statutory liens, adverse claims or Encumbrances of any nature whatsoever claimed or held by any Governmental Entity that have not at the time been filed or registered against the title to the properties owned by the Denison US Group or served upon Denison or any member of the Denison US Group pursuant to Laws or that relate to obligations not due or delinquent, save and except for statutory liens, adverse claims or Encumbrances related to Taxes which are due and payable; and

	(iv)	the reservations, limitations and exceptions in any original grants from any Governmental Entity of any real property or mineral property or interest therein and statutory exceptions to title that do not materially detract from the value of the properties of the Denison US Group or materially impair the operation or enjoyment of the properties;

(eeee)

“Person” includes an individual, corporation, partnership, trust, joint venture or other form of business organization;

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	(ffff)	“Plan of Arrangement” means the Plan of Arrangement set forth in Schedule A hereto;

	(gggg)	“Purchase and Sale Transaction” shall have the meaning ascribed to that term in Section 2.1(b);

	(hhhh)	“Purchased Shares” means all of the issued and outstanding White Canyon Shares and all of the issued and outstanding DMHC Shares (other than the DMHC Shares held by White Canyon);

	(iiii)	“Receiving Party” shall have the meaning ascribed to that term in Section 6.1(a) of this Agreement;

	(jjjj)	“Receiving Party Board” shall have the meaning ascribed to that term in Section 6.1(b) of this Agreement;

	(kkkk)	“Reclamation Account” shall have the meaning ascribed to that term in Section 3.2(s) of this Agreement;

	(llll)	“Regulatory Authority” means:

	(i)	any multinational or supranational body or organization, nation, government, state, province, country, territory, municipality, quasi-government, administrative, judicial or regulatory authority, agency, board, body, bureau, commission, instrumentality, court or tribunal or any political subdivision thereof, or any central bank (or similar monetary or regulatory authority) thereof, any taxing authority, any ministry or department or agency of any of the foregoing;

	(ii)	any self-regulatory organization or stock exchange, including the TSX and, as applicable to Denison only, the NYSE MKT;

	(iii)	any entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government; and

	(iv)	any corporation or other entity owned or controlled, through stock or capital ownership or otherwise, by any of such entities or other bodies pursuant to the foregoing;

	(mmmm)	“Release” means any release, spill, leak, discharge, abandonment, disposal, pumping, pouring, emitting, emptying, injecting, leaching, dumping, depositing, dispersing, passive migration, allowing to escape or migrate into or through the environment (including ambient air, surface water, ground water, land surface and subsurface strata or within any building, structure, facility or fixture) of any Hazardous Substance, including the abandonment or discarding of Hazardous Substances in barrels, drums, tanks or other containers, regardless of when discovered;

	(nnnn)	“Remedial Action” means any investigation, feasibility study, monitoring, testing, sampling, removal (including removal of underground storage tanks), restoration, clean- up, remediation, closure, site restoration, remedial response or remedial work;

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	(oooo)	“Representative” means, in respect of a person, its Subsidiaries and its Affiliates and its and their directors, officers, employees, agents and representatives (including any financial, legal or other advisors);

	(pppp)	“Section 3(a)(10) Exemption” shall have the meaning ascribed to that term in Section 2.7 of this Agreement;

	(qqqq)	“Securities Authorities” means, collectively, the U.S. Securities and Exchange Commission, the Ontario Securities Commission and the other securities regulatory authorities in each of the provinces of Canada;

	(rrrr)	“SEDAR” means the System for Electronic Document Analysis and Retrieval;

	(ssss)	“Share Consideration” means cash in the aggregate amount of Cdn$10.00 payable by cheque or wire transfer;

	(tttt)	“Subsidiary” means, with respect to a specified body corporate, any body corporate of which the specified body corporate is entitled to elect a majority of the directors thereof and shall include any body corporate, partnership, joint venture or other entity over which such specified body corporate exercises direction or control or which is in a like relation to such a body corporate, excluding any body corporate in respect of which such direction or control is not exercised by the specified body corporate as a result of any existing contract, agreement or commitment;

	(uuuu)	“Superior Proposal” means a bona fide Acquisition Proposal that is made in writing after the date of the Letter Agreement and did not result from the breach of Section 4.1(e) or Section 4.2(e), as the case may be, or Section 6.1 by the Receiving Party or its Representatives and that the Receiving Party Board determines in good faith after consultation with its legal and financial advisors:

	(i)	is made either to the Receiving Party or to all the Receiving Party common shareholders and in compliance with applicable securities Laws;

	(ii)	that funds or other consideration necessary for the consummation of such Acquisition Proposal are available to ensure that the third party will have the funds necessary for the consummation of the Acquisition Proposal;

	(iii)	if consummated in accordance with its terms, would result in a transaction financially superior for the Receiving Party and its securityholders than the Arrangement;

	(iv)	is reasonably capable of completion in accordance with its terms taking into account all legal, financial, regulatory and other aspects of such Acquisition Proposal; and

	(v)	that the taking of action in respect of such Acquisition Proposal is necessary for the Receiving Party Board in discharge of its fiduciary duties under applicable Laws.

(vvvv)

“Superior Proposal Notice” shall have the meaning ascribed to that term in Section 6.1(c) of this Agreement;

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	(wwww)	“Tax” and “Taxes” means all taxes, assessments, charges, dues, duties, rates, fees, imposts, levies and similar charges of any kind lawfully levied, assessed or imposed by any Governmental Entity, including all income taxes (including any tax on or based upon net income, gross income, income as specially defined, earnings, profits or selected items of income, earnings or profits) and all capital taxes, gross receipts taxes, environmental taxes, sales taxes, use taxes, ad valorem taxes, value added taxes, transfer taxes (including, without limitation, taxes relating to the transfer of interests in real property or entities holding interests therein), franchise taxes, licence taxes, withholding taxes, payroll taxes, employment taxes, Canada Pension Plan premiums, excise, severance, social security, workers’ compensation, employment insurance or compensation taxes or premium, stamp taxes, occupation taxes, premium taxes, property taxes, windfall profits taxes, alternative or add-on minimum taxes, goods and services tax, harmonized sales tax, customs duties or other taxes, fees, imports, assessments or charges of any kind whatsoever, together with any interest and any penalties or additional amounts imposed by any Governmental Entity;

	(xxxx)	“Tax Act” means the Income Tax Act (Canada) and the regulations thereunder, as amended;

	(yyyy)	“Tax Returns” means all returns, schedules, elections, declarations, reports, information returns, notices, forms, statements and other documents made, prepared or filed with any Governmental Entity or required to be made, prepared or filed with any Governmental Entity relating to Taxes;

	(zzzz)	“Titan” means Titan Uranium Inc.;

	(aaaaa)	“Titan Financial Statements” shall have the meaning ascribed to that term in subsection 3.1(n)(ii) of this Agreement;

	(bbbbb)	“TSX” means the Toronto Stock Exchange;

	(ccccc)	“U.S.” means the United States of America;

	(ddddd)	“U.S. Securities Laws” means all applicable U.S. federal and state securities laws and regulations, including, without limitation, the 1933 Act and the 1934 Act and the rules and regulations promulgated from time to time thereunder;

	(eeeee)	“US Mining Division” means all of Denison’s mineral exploration, development and mining assets and operations located in the United States of America owned directly or indirectly by the Denison US Group;

	(fffff)	“White Canyon” means White Canyon Uranium Limited, a corporation existing under the laws of Australia;

	(ggggg)	“White Canyon Financial Statements” shall have the meaning ascribed to that term in subsection 3.2(r)(ii) of this Agreement;

	(hhhhh)	“White Canyon Ordinary Shares” means ordinary shares in the capital of White Canyon as constituted on the date hereof; and

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(iiiii)

“White Canyon Shares” means all of the issued and outstanding shares of White Canyon, being 230,679,770 White Canyon Ordinary Shares.

1.2

Interpretation Not Affected by Headings

The division of this Agreement into articles, sections, subsections, paragraphs and subparagraphs and the insertion of headings herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. The terms “this Agreement”, “hereof”, “herein”, “hereto”, “hereunder” and similar expressions refer to this Agreement and the schedules attached hereto and not to any particular article, section or other portion hereof and include any agreement, schedule or instrument supplementary or ancillary hereto or thereto.

1.3

Number, Gender and Persons

In this Agreement, unless the context otherwise requires, words importing the singular only shall include the plural and vice versa, words importing the use of either gender shall include both genders and neuter, and the word person and all words importing persons shall include a natural person, firm, trust, partnership, association, corporation, joint venture or government (including any Governmental Entity, political subdivision or instrumentality thereof) and any other entity of any kind or nature whatsoever.

1.4

Date for any Action

If the date on which any action is required to be taken hereunder by either Party is not a Business Day, such action shall be required to be taken on the next succeeding day that is a Business Day.

1.5

Statutory References

Any reference in this Agreement to a statute includes all regulations and rules made thereunder, all amendments to such statute or regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.

1.6

Currency

Unless otherwise stated, all references in this Agreement to “U.S. dollars”, and “US$” are to lawful money of the United States of America, and references to “Canadian dollars”, “$” and “Cdn$” are to Canadian dollars.

1.7

Invalidity of Provisions

Each of the provisions contained in this Agreement is distinct and severable and a declaration of invalidity or unenforceability of any such provision or part thereof by a court of competent jurisdiction shall not affect the validity or enforceability of any other provision hereof. To the extent permitted by applicable Law, the Parties waive any provision of Law that renders any provision of this Agreement or any part thereof invalid or unenforceable in any respect. The Parties will engage in good faith negotiations to replace any provision hereof or any part thereof that is declared invalid or unenforceable with a valid and enforceable provision or part thereof, the economic effect of which approximates as much as possible the invalid or unenforceable provision or part thereof that it replaces.

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1.8

Accounting Matters

Unless otherwise stated, all accounting terms used in this Agreement shall have the meanings attributable thereto under IFRS and all determinations of an accounting nature required to be made hereunder shall be made in a manner consistent with IFRS.

1.9

Knowledge

Where the phrases “to the knowledge of EFI”, “to EFI’s knowledge”, “to the knowledge of Denison”, “to Denison’s knowledge” or phrases to similar effect are used: such phrase shall mean, in respect of each representation and warranty or other statement which is qualified by such phrase, that such representation and warranty or other statement is being made based upon: (a) in the case of EFI, the collective actual knowledge (after reasonable enquiry of those who ought to know) of the President and Chief Executive Officer and the Chief Financial Officer; and (b) in the case of Denison, the collective actual knowledge (after reasonable enquiry of those who ought to know) of the President and Chief Executive Officer and the Chief Financial Officer.

1.10

Meaning of Ordinary Course of Business

In this Agreement the phrase “in the ordinary course of business” shall mean and refer to those activities that are normally conducted by corporations engaged in the exploration, development and mining of uranium and/or vanadium, in the construction and operation of uranium and/or vanadium mines, and in the milling and processing of uranium and/or vanadium ores.

1.11

Schedules

The following schedule is attached to, and is deemed to be incorporated into and form part of, this Agreement:

	Schedule	Matter
	A	Plan of Arrangement

ARTICLE 2 - THE TRANSACTION

2.1

Plan of Arrangement; Purchase and Sale of Purchased Shares

	(a)	Subject to the terms and conditions of this Agreement, commencing as of the Effective Time, Denison and EFI shall effect the Arrangement as set forth in the Plan of Arrangement attached hereto in Schedule A.

	(b)	For greater certainty, as the first step of the Plan of Arrangement, Denison shall sell to EFI and EFI shall purchase from Denison (i) all of the Purchased Shares free and clear of all Encumbrances in consideration of the payment by EFI to Denison of the Share Consideration and (ii) all of the Acquired Debt free and clear of all Encumbrances, and in consideration therefor EFI shall issue the EFI Note to Denison (collectively, the “Purchase and Sale Transaction”).

	(c)	Unless this Agreement is earlier terminated in accordance with its terms, prior to the Effective Time, the parties shall execute and deliver in escrow all documents required to give effect to the Purchase and Sale Transaction. Without limiting the generality of the foregoing, at such time Denison shall deposit in escrow all certificates, agreements, documents and instruments as required under Section 5.2(j), and EFI shall deposit in escrow all payments, certificates, agreements, documents and instruments as required under Section 5.3(i). Subject to the terms and conditions of this Agreement, such documents shall become effective commencing at the Effective Time, and shall be released from escrow and delivered to the party entitled thereto forthwith after the Effective Time.

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(d)

Subject to the terms and conditions of this Agreement, the Plan of Arrangement shall become effective at the Effective Time on the Effective Date.

2.2

Interim Order

(a)

Denison shall, as soon as reasonably practicable, apply to the Court in a manner acceptable to EFI, acting reasonably, under Section 182 of the OBCA for the Interim Order, which application shall request that the Interim Order provide:

	(i)	for the class of persons to whom notice is to be provided in respect of the Arrangement and the Denison Meeting and for the manner in which such notice is to be provided;

	(ii)	that the requisite approval for the Denison Resolution shall be 66% of the votes cast on the Denison Resolution by the holders of Denison Common Shares present in person or by proxy at the Denison Meeting (the “Denison Shareholder Approval”);

	(iii)	that in all other respects, the terms, conditions and restrictions of the Denison constating documents, including quorum requirements and other matters, shall apply in respect of the Denison Meeting;

	(iv)	for the grant of Dissent Rights to the holders of Denison Common Shares;

	(v)	for notice requirements with respect to the presentation of the application to the Court for the Final Order;

	(vi)	that the Denison Meeting may be adjourned from time to time by management of Denison without the need for additional approval of the Court;

	(vii)	that the record date for Denison Shareholders entitled to notice of and to vote at the Denison Meeting will not change in respect of any adjournment(s) of the Denison Meeting;

	(viii)	that it is Denison’s intention to rely upon the Section 3(a)(10) Exemption with respect to the issuance of interests in the EFI Note, the Denison New Common Shares and the EFI Payment Shares to the Denison Shareholders pursuant to the Arrangement to implement the transactions contemplated hereby;

	(ix)	for notice to EFI of the Denison Meeting and the right of the representatives of EFI to attend such meeting;

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	(x)	that the Plan of Arrangement may be amended as contemplated herein and in accordance with Section 7.1 without notice to or approval of any Denison Shareholders except as required by Section 7.1 or the Interim Order; and

	(xi)	for such other matters as Denison may reasonably require, subject to obtaining the prior consent of EFI, such consent not to be unreasonably withheld or delayed.

(b)

The application and motion materials, including affidavit materials, draft orders and any amendments thereto for the Applications referred to in this Section shall be in a form satisfactory to EFI and Denison, acting reasonably.

2.3

Final Order

If the Interim Order is obtained and Denison Shareholder Approval is obtained as provided for in the Interim Order and EFI Shareholder Approval is obtained, then subject to the terms of this Agreement, Denison shall apply to the Court for the Final Order and shall diligently pursue such Application. The application and motion materials, including affidavit materials, draft orders and any amendments thereto for the Applications referred to in this Section shall be in a form satisfactory to EFI and Denison, acting reasonably.

2.4

Proxy Circulars

	(a)	EFI shall prepare and file the EFI Proxy Circular, together with any other documents required by applicable Laws, in all jurisdictions where the EFI Proxy Circular is required to be filed, and mail the EFI Proxy Circular as soon as practicable, but in any event within the prescribed time in order to hold the EFI Meeting and in accordance with all applicable Laws, in and to all jurisdictions where the EFI Proxy Circular is required to be mailed, complying in all material respects with all applicable Laws on the date of the mailing thereof and in the form and containing the information required by all applicable Laws, including all applicable securities requirements, and not containing any misrepresentation with respect thereto, other than with respect to any information relating to or provided by Denison. If, at any time prior to the Effective Date, EFI becomes aware that the EFI Proxy Circular contains a misrepresentation, EFI shall promptly prepare a supplement or amendment to the EFI Proxy Circular that corrects the misrepresentation, and will cause the same to be distributed to EFI Shareholders and filed in each jurisdiction where such supplement or amendment is required to be filed by applicable Laws. If, at any time prior to the Effective Date, Denison becomes aware that information relating to or provided by Denison for use in the EFI Proxy Circular contains a misrepresentation, Denison shall immediately advise EFI and EFI shall promptly prepare a supplement or amendment to the EFI Proxy Circular that corrects the misrepresentation, and will cause the same to be distributed to EFI Shareholders and filed in each jurisdiction where such supplement or amendment is required to be filed by applicable Laws.

	(b)	Denison shall prepare and file the Denison Proxy Circular, together with any other documents required by applicable Laws, in all jurisdictions where the Denison Proxy Circular is required to be filed, and mail the Denison Proxy Circular as soon as practicable, but in any event within the prescribed time in order to hold the Denison Meeting and as ordered by the Interim Order, and in accordance with all applicable Laws, in and to all jurisdictions where the Denison Proxy Circular is required to be mailed, complying in all material respects with all applicable Laws on the date of the mailing thereof and in the form and containing the information required by all applicable Laws, including all applicable securities requirements, and not containing any misrepresentation with respect thereto, other than with respect to any information relating to or provided by EFI. If, at any time prior to the Effective Date, Denison becomes aware that the Denison Proxy Circular contains a misrepresentation, Denison shall promptly prepare a supplement or amendment to the Denison Proxy Circular that corrects the misrepresentation, and will cause the same to be distributed to Denison Shareholders and filed in each jurisdiction where such supplement or amendment is required to be filed by applicable Laws. If, at any time prior to the Effective Date, EFI becomes aware that information relating to or provided by EFI for use in the Denison Proxy Circular contains a misrepresentation, EFI shall immediately advise Denison and Denison shall promptly prepare a supplement or amendment to the Denison Proxy Circular that corrects the misrepresentation, and will cause the same to be distributed to Denison Shareholders and filed in each jurisdiction where such supplement or amendment is required to be filed by applicable Laws.

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2.5

Effecting the Arrangement

Subject to the rights of termination contained in Section 6.2 hereof, upon the Denison Shareholders providing Denison Shareholder Approval in accordance with the Interim Order, the EFI Shareholders providing EFI Shareholder Approval at the EFI Meeting, the Final Order being issued and satisfaction or waiver of the conditions precedent set forth in Article 5, the Final Order shall be filed by Denison with the applicable government registrar together with such other documents as may be required to effect the Arrangement and from and after the Effective Time, the Plan of Arrangement shall have all of the effects contemplated by law, including the OBCA.

2.6

Closing

The closing of the Arrangement will take place at the offices of Blake, Cassels & Graydon LLP, counsel to Denison in Toronto, Ontario, at 11:00 a.m. (Toronto time) on the Effective Date or such other time on the Effective Date as agreed by Denison and EFI.

2.7

U.S. Securities Law Matters

The parties agree that the Arrangement will be carried out with the intention that all Denison New Common Shares, interests in the EFI Note and the EFI Payment Shares will be issued in reliance on the exemption from the registration requirements of the 1933 Act provided by Section 3(a)(10) of the 1933 Act (the “Section 3(a)(10) Exemption”) and will otherwise be in compliance with all U.S. Securities Laws. In order to ensure the availability of the Section 3(a)(10) Exemption, the parties agree that the Arrangement will be carried out on the following basis:

	(a)	the Arrangement will be subject to the approval of the Court;

	(b)	the Court will be advised as to the intention of the Parties to rely on the Section 3(a)(10) Exemption prior to the hearing required to approve the Arrangement;

	(c)	the Court will be required to satisfy itself as to the fairness of the terms and conditions of the Arrangement to the Denison Shareholders;

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	(d)	the Final Order approving the Arrangement that is obtained from the Court will expressly state that the terms and conditions of the Arrangement are approved by the Court as being fair to the Denison Shareholders;

	(e)	Denison will ensure that the Denison Shareholders will be given adequate notice advising them of their right to attend the hearing of the Court to give approval of the Arrangement and providing them with sufficient information necessary for them to exercise that right; and

	(f)	the Interim Order will specify that each Denison Shareholder will have the right to appear before the Court so long as they enter an appearance within a reasonable time.

2.8

Consultation

Other than with respect to a press release by either Party announcing the termination of this Agreement in accordance with Section 6.2 of this Agreement and provided the other Party has been notified, EFI and Denison will consult with each other in issuing any press release or otherwise making any public statement with respect to this Agreement or the Arrangement and in making any filing with any Governmental Entity, Securities Authority or stock exchange with respect thereto. Each of EFI and Denison shall use its reasonable commercial efforts to enable each of the other of them to review and comment on all such press releases and filings prior to the release or filing, respectively, thereof.

2.9

Effective Date

The Parties shall each use their reasonable commercial efforts to cause the Effective Date to occur on June 29, 2012.

ARTICLE 3 - REPRESENTATIONS AND WARRANTIES

3.1

Representations and Warranties of EFI

EFI hereby represents and warrants to Denison as follows and hereby acknowledges that Denison is relying upon such representations and warranties in connection with entering into this Agreement and agreeing to complete the Arrangement, as follows:

	(a)	Organization. Each of EFI and each EFI Material Subsidiary has been duly incorporated and is validly subsisting under its jurisdiction of incorporation and has full corporate or legal power and authority to own its property and assets and to conduct its business as currently owned and conducted. Each of EFI and each EFI Material Subsidiary is registered, licensed or otherwise qualified as an extra provincial corporation or a foreign corporation in each jurisdiction, as applicable, where the nature of the business or the location or character of the property and assets owned or leased by it requires it to be so registered, licensed or otherwise qualified, other than those jurisdictions where the failure to be so registered, licensed or otherwise qualified would not have a Material Adverse Effect on EFI.

	(b)	Capitalization. EFI is authorized to issue an unlimited number of EFI Common Shares, as well as an unlimited number of preferred shares issuable in series, and an unlimited number series A preferred shares (the preferred shares collectively, the “EFI Preferred Shares”). As at the date hereof, there are: (i) 214,336,818 EFI Common Shares issued and outstanding; (ii) 12,857,800 EFI Common Shares reserved for issuance upon exercise of currently outstanding options; (iii) no EFI Preferred Shares are issued or outstanding; and (iv) 28,036,881 EFI Common Shares reserved for issuance upon the exercise of currently outstanding warrants. The terms of EFI’s outstanding options and warrants are described in the EFI Disclosure Memorandum. Except for EFI’s outstanding options and warrants and as described in the EFI Disclosure Memorandum and pursuant to this Agreement and the Arrangement, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating EFI to issue or sell any shares of EFI or any securities or obligations of any kind convertible into or exchangeable for any shares of EFI. All outstanding EFI Common Shares have been authorized and are validly issued and outstanding as fully paid and non-assessable shares. There are no outstanding bonds, debentures or other evidences of indebtedness of EFI having the right to vote with the EFI Shareholders on any matter. Except as disclosed in the EFI Disclosure Memorandum, there are no outstanding contractual obligations of EFI to repurchase, redeem or otherwise acquire any outstanding EFI Common Shares or with respect to the voting or disposition of any outstanding EFI Common Shares.

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	(c)	Authority. EFI has all necessary power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by EFI as contemplated by this Agreement, and to perform its obligations hereunder and under such other agreements and instruments. The execution and delivery of this Agreement and the EFI Disclosure Memorandum by EFI and the completion by EFI of the Arrangement have been authorized by the directors of EFI and, other than the EFI Shareholder Approval, no other corporate proceedings on the part of EFI are necessary to authorize this Agreement or to complete the Arrangement.

	(d)	EFI Material Subsidiaries. EFI directly owns all of the issued and outstanding shares of each of Energy Fuels Resources Corporation, Magnum Uranium Corp., and Titan Uranium Inc. Magnum Uranium Corp. owns all of the issued and outstanding shares of Magnum Minerals USA Corp. Titan Uranium Inc. owns all of the issued and outstanding shares of Uranium Power Corp., which owns all of the issued and outstanding shares of Energy Fuels Wyoming Inc., in each case, which shares constitute all issued and outstanding shares of such respective EFI Material Subsidiary. Except as disclosed in the EFI Disclosure Memorandum, there are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating any of the EFI Material Subsidiaries to issue or sell any shares or any securities or obligations of any kind convertible into or exchangeable for any shares. All outstanding shares of the EFI Material Subsidiaries have been authorized and are validly issued and outstanding as fully paid and non-assessable shares.

	(e)	Subsidiaries. Except for the EFI Material Subsidiaries or as disclosed in the EFI Disclosure Memorandum, EFI does not own a direct or indirect voting or equity interest of greater than 10% in any corporation, partnership, joint venture or other entity.

	(f)	Enforceability. This Agreement and the EFI Disclosure Memorandum have been duly executed and delivered by EFI. This Agreement constitutes a legal, valid and binding obligations of EFI, enforceable against EFI in accordance with its terms, subject to bankruptcy, insolvency, and other similar Laws affecting creditors’ rights generally, and to general principles of equity.

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(g)

Absence of Conflict. Except as disclosed in the EFI Disclosure Memorandum, the execution and delivery by EFI of this Agreement and the EFI Disclosure Memorandum and the performance by EFI of its obligations hereunder and the completion of the Arrangement do not and will not:

	(i)	require any notice or consent or other material action by any person under, contravene, conflict with, violate, breach or constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, amendment, renegotiation, acceleration or other change of any right or obligation or the loss of any benefit to which EFI or any EFI Material Subsidiary is entitled under, or give rise to any rights of first refusal or trigger any change in control provisions or any restriction under, any provision of any contract, agreement, license, permit, certificate, authorization, consent, registration, order, filing, approval, instrument, franchise, lease, arrangement, commitment, understanding or other right, obligation (written or oral), instrument or approval to which EFI or any EFI Material Subsidiary is a party or by which EFI or any EFI Material Subsidiary is bound or affected or to which any of their properties or other assets is subject;

	(ii)	result in the breach, contravention or violation of any of the provisions of, or constitute a default under, or conflict with any of its obligations under:

	A.	any provision of the articles or by-laws (or their equivalent) or resolutions of the board of directors (or any committee thereof) or shareholders EFI or any EFI Material Subsidiary;

	B.	any judgment, decree, order or award of any Governmental Authority having jurisdiction over EFI or any EFI Material Subsidiary; or

	C.	any Laws; or

(iii)

result in the creation or imposition of any Encumbrance over any of the assets of EFI or any EFI Material Subsidiary;

		other than any such notices, consents, defaults, terminations, accelerations, rights, violations, contraventions, breaches, defaults or Encumbrances that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on EFI.

	(h)	Government Approvals. No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity or other person is required to be obtained by EFI (A) in connection with the execution and delivery of this Agreement or the consummation by EFI of the Arrangement, or (B) in order that the authority of EFI and the EFI Material Subsidiaries to carry on their respective businesses in the ordinary course and in the same manner as presently conducted remains in good standing and in full force and effect as of and following the closing of the Arrangement, other than: (i) filings with and approvals required by Securities Authorities and stock exchanges; (ii) any other consents, waivers, permits, orders or approvals referred to in the EFI Disclosure Memorandum; and (iii) any other consents, approvals, orders, authorizations, declarations or filings which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on EFI.

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(i)

Directors’ Approvals. The board of directors of EFI has received a verbal opinion from Dundee Securities Ltd., the financial advisor to EFI, that the EFI Payment Shares issuable pursuant to the Arrangement is fair, from a financial point of view, to EFI and the directors of EFI have unanimously:

	(i)	determined that the Arrangement is in the best interests of EFI;

	(ii)	resolved to waive the application of EFI’s shareholder rights plan to the Arrangement, subject to obtaining the prior consent of the EFI Shareholders at the EFI Meeting to such waiver;

	(iii)	resolved to recommend that the EFI Shareholders vote in favour of the EFI Resolution; and

	(iv)	authorized entering into, executing and delivering this Agreement, and performing the obligations set out herein and to proceed with the Arrangement.

	(j)	No Defaults. Except as disclosed in the EFI Disclosure Memorandum, neither EFI nor any EFI Material Subsidiary is in default under, and, there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute a default by any such Person under any contract, agreement, permit or licence that is material to the conduct of the business of EFI to which it is a party or by which it is bound that would, individually or in the aggregate, have a Material Adverse Effect on EFI.

	(k)	Absence of Changes. Since September 30, 2010, except as set out in the EFI Disclosure Memorandum, the EFI Public Disclosure Documents or expressly contemplated by this Agreement:

	(i)	EFI has conducted its business only in the ordinary course of business consistent with past practice;

	(ii)	EFI has not incurred or suffered a Material Adverse Effect;

	(iii)	EFI has not effected any amendment to, or proposed to amend, its articles or bylaws;

	(iv)	there has not been any acquisition or agreement to acquire by amalgamating, merging, consolidating or entering into a business combination with, purchasing substantially all the assets of or otherwise acquiring, any business or any corporation, partnership, association or other business organization or division thereof, which transaction would be material to EFI;

	(v)	there has not been any sale, lease, transfer, mortgage, hypothecation or other disposition of any of its assets or properties, real, personal or mixed, immovable or movable (including securities), that are material, individually or in the aggregate, to EFI;

	(vi)	other than in the ordinary course of business consistent with past practice, there has not been any incurrence, assumption or guarantee by EFI of any debt for borrowed money, any creation or assumption by EFI of any Encumbrance, any making by EFI of any loan, advance or capital contribution to or investment in any other person (other than loans and advances in an aggregate amount that do not exceed US$100,000 outstanding at any time) or any entering into, amendment of, relinquishment, termination or non-renewal by EFI of any contract, agreement, licence, lease transaction, commitment or other right or obligation that would, individually or in the aggregate, have a Material Adverse Effect on EFI;

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	(vii)	other than in the ordinary course of business consistent with past practice, there has not been, nor has EFI agreed to, any material increase in or modification of the compensation payable to or to become payable by EFI to any of its respective directors, officers, employees or consultants or any grant to any such director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement (including, without limitation, the granting of options) made to, for or with any of such directors or officers;

	(viii)	EFI has not effected or passed any resolution or agreed to any subdivision, consolidation, redemption, purchase, offer to purchase or any other acquisition or reclassification of any of the outstanding EFI Common Shares, declaration or payment of any dividends on or making of other distributions (whether in cash, shares or property, or any combination thereof) or reduction in the stated capital in respect of its shares;

	(ix)	other than the adoption of IFRS, EFI has not effected any material change in its accounting methods, principles or practices; and

	(x)	EFI has not adopted any, or materially amended any, collective bargaining agreement, bonus, pension, profit sharing, stock purchase, stock option or other benefit plan or shareholder rights plan.

	(l)	Contracts and Commitments. The EFI Disclosure Memorandum provides a list of all agreements to which EFI or any EFI Material Subsidiary is a party or by which such person is bound which is material to EFI, taken as a whole (the “EFI Material Agreements”). Except as disclosed in this Agreement or in the EFI Disclosure Memorandum, all EFI Material Agreements: (i) are valid, binding, in full force and effect in all material respects and enforceable by EFI or the applicable EFI Material Subsidiary in accordance with their respective terms, subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings, the equitable power of the courts to stay proceedings before them and the execution of judgments and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the courts from which they are sought and (ii) do not, by their terms, require the consent of any of the parties thereto to the Arrangement. Except as disclosed in the EFI Disclosure Memorandum, no agreement to which EFI or any EFI Material Subsidiary is a party commits EFI or any EFI Material Subsidiary to a capital expenditure in excess of US$100,000.

	(m)	Employment Agreements. Other than as disclosed in the EFI Public Disclosure Documents or the EFI Disclosure Memorandum:

(i)

Neither EFI nor any EFI Material Subsidiary is a party to any written or oral policy, agreement, obligation or understanding providing for severance or termination payments to, or any employment or consulting agreement with, any director or officer of EFI that cannot be terminated without payment of a maximum of three (3) times such individual’s monthly salary, recognising that a court of competent jurisdiction in an action for wrongful dismissal or otherwise has the authority to award damages in an amount greater than three (3) times an individual’s monthly salary;

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	(ii)	Neither EFI nor any EFI Material Subsidiary has any employee or consultant whose employment or contract cannot be terminated without payment upon a maximum of three (3) months’ notice;

	(iii)	Neither EFI nor any EFI Material Subsidiary is: (a) a party to any collective bargaining agreement, (b) to the knowledge of EFI, subject to any application for certification or threatened or apparent union organizing campaigns for employees not covered under a collective bargaining agreement, or (c) subject to any current or, to the knowledge of EFI, pending or threatened strike or lockout;

	(iv)	there are no change of control payments, severance payments or termination payments that EFI or any EFI Material Subsidiary is obligated to pay as a result of completion of the Arrangement, including without limitation, to any consultants, directors, officers, employees or agents;

	(v)	Neither EFI nor any EFI Material Subsidiary is subject to any claim for wrongful dismissal, constructive dismissal or any tort claim, actual or, to the knowledge of EFI, pending or threatened, or any litigation, actual or, to the knowledge of EFI, pending or threatened, relating to employment or termination of employment of employees or independent contractors; and

	(vi)	EFI and each EFI Material Subsidiary has operated in all material respects in accordance with all applicable Laws with respect to employment and labour, including, but not limited to, employment and labour standards, occupational health and safety, employment equity, pay equity, workers’ compensation, human rights and labour relations and there are no current, or, to the knowledge of EFI, pending or threatened, material proceedings before any board or tribunal with respect to any of the above areas.

(n)

Financial Matters.

(i)

The audited consolidated financial statements of EFI for the financial year ended September 30, 2011 were prepared in accordance with Canadian GAAP, consistently applied, and the unaudited condensed consolidated interim statements of EFI for the six months ended March 31, 2012 were prepared in accordance with IFRS, consistently applied. The EFI Financial Statements fairly present in all material respects the financial condition of EFI at the respective dates indicated and the results of operations of EFI for the periods covered on a consolidated basis. Except as disclosed in the EFI Financial Statements, EFI has no liability or obligation (including, without limitation, liabilities or obligations to fund any operations or work or exploration program, to give any guarantees or for Taxes), whether accrued, absolute, contingent or otherwise, which would reasonably be expected to have a Material Adverse Effect on EFI.

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(ii)

The audited consolidated financial statements of Titan for the financial year ended August 31, 2011 and the unaudited consolidated interim statements of Titan for the three months ended November 30, 2011 (collectively, the “Titan Financial Statements”), in each case as contained in the business acquisition report of EFI dated May 10, 2012, were prepared in accordance with IFRS, consistently applied. The Titan Financial Statements fairly present in all material respects the financial condition of Titan at the respective dates indicated and the results of operations of Titan for the periods covered on a consolidated basis. Except as disclosed in the Titan Financial Statements, Titan has no liability or obligation (including, without limitation, liabilities or obligations to fund any operations or work or exploration program, to give any guarantees or for Taxes), whether accrued, absolute, contingent or otherwise, would reasonably be expected to have a Material Adverse Effect on EFI.

	(o)	Books and Records. The corporate records and minute books of EFI and each EFI Material Subsidiary have been maintained in accordance with all applicable Laws and are complete and accurate in all material respects. Financial books and records and accounts of EFI and each EFI Material Subsidiary in all material respects: (i) have been maintained in accordance with good business practices on a basis consistent with prior years and past practice; (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and acquisitions and dispositions of assets of EFI and each EFI Material Subsidiary; and (iii) accurately and fairly reflect the basis for the EFI Financial Statements.

	(p)	Litigation. Except as disclosed in the EFI Disclosure Memorandum and except with respect to matters relating to the environment or Environmental Laws (which are addressed in Section 3.1(v) below), there is no claim, action, proceeding or investigation pending or in progress or, to the knowledge of EFI, threatened against or relating to EFI or any EFI Material Subsidiary or affecting any of their respective properties or assets before any Governmental Entity which individually or in the aggregate has, or could reasonably be expected to have, a Material Adverse Effect on EFI. None of EFI, any EFI Material Subsidiary, nor any of their respective properties or assets are subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict the right or ability of EFI and any EFI Material Subsidiary to conduct their respective businesses in all material respects as it has been carried on prior to the date hereof, or that would materially impede the consummation of the Arrangement, except to the extent any such matter would not have a Material Adverse Effect on EFI.

	(q)	Bankruptcy. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of EFI, threatened against or relating to EFI before any Governmental Entity.

	(r)	Title to Properties and Condition of Assets. The EFI Disclosure Memorandum provides a list of all of the mineral properties that are material to EFI, taken as a whole (the “EFI Material Properties”). Except as disclosed in either the EFI Disclosure Memorandum or the EFI Public Disclosure Documents, applying customary standards in the mining industry, EFI has sufficient title to or valid leasehold interests in the EFI Material Properties to operate such properties in the ordinary course and consistent with past practice, free and clear of any title defect or Encumbrance, except for such defects in title or Encumbrances that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a Material Adverse Effect on EFI. Each lease and agreement granting rights to the EFI Material Properties is in full force and effect and constitutes a legal, valid and binding agreement of EFI or an EFI Material Subsidiary thereof and EFI and/or the EFI Material Subsidiary, as the case may be, is not in violation or breach of or default under any such lease or agreement except such violations, breaches or defaults which, individually, or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on EFI. Furthermore, all real and tangible personal property of EFI and the EFI Material Subsidiaries is in generally good repair and is operational and usable in the manner in which it is currently being utilized, subject to normal wear and tear and technical obsolescence, repair or replacement except for such property where the failure to be in such condition would not reasonably be expected to have a Material Adverse Effect on EFI.

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	(s)	Mineral Reserves and Resources. The most recent estimated measured, indicated and inferred mineral resources and proven and probable mineral reserves of EFI disclosed in the EFI Public Disclosure Documents or the EFI Disclosure Memorandum have been prepared and disclosed in all material respects in accordance with all applicable Laws. There has been no material change (other than as a result of operations in the ordinary course of business) in the aggregate amount of estimated mineral resources of EFI, taken as a whole, from the amounts disclosed in the EFI Public Disclosure Documents.

	(t)	Operational Matters. Except as would not reasonably be expected to have a Material Adverse Effect on EFI:

	(i)	all rentals, payments and obligations (including maintenance for unpatented mining claims), royalties, overriding royalty interests, production payments, net profits, interest burdens and other payments due or payable on or prior to the date hereof under or with respect to the direct or indirect assets of EFI and the EFI Material Subsidiaries have been properly and timely paid or accrued;

	(ii)	all mines, mining-related activities and mineral processing activities where EFI or any EFI Material Subsidiary is operator at the relevant time have been developed and operated in accordance with good mining practices and in compliance with all applicable Laws;

	(iii)	all mines located in or on the lands of EFI or any EFI Material Subsidiary or lands pooled or unitized therewith, which have been abandoned by EFI or any EFI Material Subsidiary have been developed, managed and abandoned in accordance with good mining practices and in compliance with all applicable Laws; and

	(iv)	all future abandonment, remediation and reclamation obligations have been accurately disclosed publicly by EFI without omission of information that would result in a misrepresentation.

(u)

Insurance. EFI maintains policies of insurance with reputable insurers and in amounts covering such risks and with those deductibles as are adequate and usual for companies of similar size and operations in the mining and mineral processing industries. The policies and the coverage provided thereunder are in full force and effect and EFI is in good standing under each policy. EFI has not received notice of, nor has any knowledge of, any fact, condition or circumstance which might reasonably form the basis of any claim, dispute, liability, obligation, action, debt, proceeding or litigation against EFI or any EFI Material Subsidiary which is not in all material respects covered by insurance (subject to standard deductibles) maintained by it and which could have a Material Adverse Effect on EFI.

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(v)

Environmental. Except as disclosed in the EFI Public Disclosure Documents or in the EFI Disclosure Memorandum:

	(i)	EFI and each EFI Material Subsidiary has been and is operated in compliance with all applicable Environmental Laws, except to the extent that a failure to be in such compliance, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on EFI;

	(ii)	all material Environmental Approvals which are necessary under any applicable Environmental Law for the ownership and operation by EFI and each EFI Material Subsidiary of the real property, assets, mines and other facilities owned or used by EFI and each EFI Material Subsidiary and all of the properties related thereto have been duly obtained, made or taken and are in full force and effect, are not subject to further Environmental Approvals or appeal, or to the knowledge of EFI, any pending or threatened legal or administrative proceedings, will not be subject to requirements under Environmental Laws for amendment, replacement, or further Environmental Approvals, based on the execution of this Agreement or the consummation of the Arrangement, and to the knowledge of EFI, no proposals have been made to amend, revoke or replace such material Environmental Approvals;

	(iii)	EFI’s and the EFI Material Subsidiaries’ properties have not been used by EFI or any EFI Material Subsidiary, or to the knowledge of EFI, any other person previously or currently in control of EFI’s and the EFI Material Subsidiaries’ properties, to generate, manufacture, refine, treat, recycle, transport, store, handle, dispose, transfer, produce or process Hazardous Substances, except in compliance in all material respects with all Environmental Laws and except to the extent that such non-compliance would not reasonably be expected to have a Material Adverse Effect on EFI. None of EFI, any EFI Material Subsidiary, nor, to the knowledge of EFI, any other person in control of any of EFI’s and the EFI Material Subsidiaries’ properties, has caused or permitted the Release of any Hazardous Substances at, in, on, under or from any of EFI’s and the EFI Material Subsidiaries’ properties, except in compliance, individually or in the aggregate, with all Environmental Laws, except to the extent that a failure to be in such compliance would not reasonably be expected to have a Material Adverse Effect on EFI. To the knowledge of EFI, all Hazardous Substances handled, recycled, disposed of, treated or stored on or off site of EFI’s and the EFI Material Subsidiaries’ properties have been handled, recycled, disposed of, treated and stored in material compliance with all Environmental Laws except to the extent that a failure to be in such compliance, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on EFI. To the knowledge of EFI, there are no Hazardous Substances at, in, on, under or migrating from any of EFI’s and the EFI Material Subsidiaries’ properties, except in material compliance with all Environmental Laws and except to the extent that any failures to be in compliance would not reasonably be expected to have a Material Adverse Effect on EFI;

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	(iv)	None of EFI, any EFI Material Subsidiary nor any other person for whose actions EFI or any EFI Material Subsidiary may be partially or wholly liable, has treated or disposed, or arranged for the treatment or disposal, of any Hazardous Substances at any location: (i) listed on any list of hazardous sites, or sites requiring Remedial Action issued by any Governmental Entity, or to EFI’s knowledge, any similar federal or state lists; (ii) to the knowledge of EFI, proposed for listing on any list issued by any Governmental Entity of hazardous sites or sites requiring Remedial Action, or any similar federal, state or provincial lists; or (iii) which is the subject of enforcement actions by any Governmental Entity that creates the reasonable potential for any proceeding, action, or other claim against EFI or any EFI Material Subsidiary, except to the extent that any enforcement action would not reasonably be expected to have a Material Adverse Effect on EFI. To the knowledge of EFI, no site or facility now or previously owned, operated or leased by EFI or any EFI Material Subsidiary is listed or, to the knowledge of EFI, is proposed for listing on any list issued by any Governmental Entity of hazardous sites or sites requiring Remedial Action, or similar federal or state lists, or is the subject of Remedial Action;

	(v)	except to the extent that would not reasonably be expected to have a Material Adverse Effect on EFI, none of EFI, any EFI Material Subsidiary nor any other person for whose actions EFI or any EFI Material Subsidiary may be partially or wholly liable has caused or permitted the Release of any Hazardous Substances on or to any of EFI’s and EFI Material Subsidiaries’ properties in such a manner as: (i) would reasonably be expected to impose Liability for cleanup, natural resource damages, loss of life, personal injury, nuisance or damage to other property, except to the extent that such Liability would not to the knowledge of EFI have a Material Adverse Effect on EFI; or (ii) would reasonably be expected to result in imposition of an Encumbrance or the expropriation on any of the properties or the assets of EFI or any EFI Material Subsidiary; and

	(vi)	except to the extent that would not reasonably be expected to have a Material Adverse Effect with respect to EFI, EFI has not received from any person or Governmental Entity any notice, formal or informal, of any proceeding, action, enforcement, order, or other claim, Liability or potential Liability arising under any Environmental Law that is pending as of the date hereof.

(w)

Tax Matters. Except as disclosed in the EFI Public Disclosure Documents or the EFI Disclosure Memorandum or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect on EFI:

	(i)	Each of EFI and each EFI Material Subsidiary has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Entity and has, in all material respects, completely and correctly reported all income and all other amounts or information required to be reported thereon;

	(ii)	Each of EFI and each EFI Material Subsidiary has: (A) duly and timely paid all Taxes due and payable by it; (B) duly and timely withheld all Taxes, payroll deductions and other amounts required by Law to be withheld by it and has duly and timely remitted to the appropriate Governmental Entity such Taxes and other amounts required by Law to be remitted by it; and (C) duly and timely collected all amounts on account of sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by Law to be remitted by it;

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	(iii)	the charges, accruals and reserves for Taxes reflected on the EFI Financial Statements (whether or not due and whether or not shown on any Tax Return but excluding any provision for deferred income taxes) are adequate under Canadian GAAP or IFRS, as applicable, to cover Taxes accruing through the date hereof;

	(iv)	there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or to the knowledge of EFI, threatened against EFI or any EFI Material Subsidiary that propose to assess Taxes in addition to those reported in the Tax Returns; and

	(v)	no waiver of any statute of limitations with respect to Taxes has been given or requested with respect to EFI or any EFI Material Subsidiary.

	(x)	Pension and Employee Benefits. Where applicable, EFI and each EFI Material Subsidiary has complied with all of the terms of the pension and other employee compensation and benefit obligations of EFI and each such Subsidiary, including the provisions of any collective agreements, funding and investment contracts or obligations applicable thereto, arising under or relating to each of the pension or retirement income plans or other employee compensation or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, which are maintained by or binding upon EFI and each EFI Material Subsidiary other than such non-compliance that would not reasonably be expected to have a Material Adverse Effect on EFI.

	(y)	Reporting Status. EFI is a reporting issuer or its equivalent in each of the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. The EFI Common Shares are listed on the TSX.

	(z)	Reports. Since September 30, 2010, EFI has timely filed with the Securities Authorities, stock exchanges and all applicable self-regulatory authorities a true and complete copy of all forms, reports, schedules, statements, certifications, material change reports and other documents required to be filed by it (such forms, reports, schedules, statements, certifications and other documents, including any financial statements or other documents, including any schedules included therein, are referred to herein as the “EFI Public Disclosure Documents”). The EFI Public Disclosure Documents, at the time filed or, if amended, as of the date of such amendment: (i) did not contain any misrepresentation and did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and (ii) complied with the requirements of applicable securities Laws, including the rules, policies and instruments of all Securities Authorities having jurisdiction over EFI, except where such non- compliance has not and would not reasonably be expected to have a Material Adverse Effect on EFI. EFI has not filed any confidential material change or other report or other document with any Securities Authorities or stock exchange or other self-regulatory authority which at the date hereof remains confidential.

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	(aa)	Compliance with Laws. Except with respect to matters relating to the environment or Environmental Laws (which are addressed in Section 3.1(v) above), EFI and each EFI Material Subsidiary has complied with and is not in violation of any applicable Law other than such non-compliance or violations that would not, individually or in the aggregate, have a Material Adverse Effect on EFI.

	(bb)	Restrictions on Business Activities. Except as disclosed in the EFI Disclosure Memorandum, there is no agreement, judgment, injunction, order or decree binding upon EFI or any EFI Material Subsidiary that has or could reasonably be expected to have the effect of prohibiting, restricting or impairing any material business practice of EFI or any EFI Material Subsidiary, any acquisition of material property by EFI or any EFI Material Subsidiary or the conduct of business by EFI and the EFI Material Subsidiaries as currently conducted.

	(cc)	No Cease Trade. EFI is not subject to any cease trade or other order of any applicable stock exchange or Securities Authority and, to the knowledge of EFI, no investigation or other proceedings involving EFI that may operate to prevent or restrict trading of any securities of EFI are currently in progress or pending before any applicable stock exchange or Securities Authority.

	(dd)	No Option on Assets. Except as disclosed in the EFI Disclosure Memorandum, no person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from EFI or any EFI Material Subsidiary any of the material assets of EFI, other than as described or contemplated herein.

	(ee)	Certain Contracts. Except as disclosed in the EFI Disclosure Memorandum, none of EFI or any EFI Material Subsidiary is a party to or bound by any non-competition agreement or any other agreement, obligation, judgment, injunction, order or decree that purports to: (i) limit the manner or the localities in which all or any material portion of the business of EFI and the EFI Material Subsidiaries is conducted; (ii) limit any business practice of EFI or any EFI Material Subsidiary in any material respect; or (iii) restrict any acquisition or disposition of any property by EFI or any EFI Material Subsidiary in any material respect.

	(ff)	No Indebtedness. None of EFI nor any EFI Material Subsidiary owes any money to, has any present loans to, has borrowed any monies from, or is otherwise indebted to any officer, director, employee, shareholder or any person not dealing at “arm’s length” (as such term is defined in the Tax Act) with EFI and the EFI Material Subsidiaries, except as set forth in the EFI Financial Statements.

	(gg)	No Agreement to Merge. Except for the Letter Agreement and this Agreement, none of EFI nor any EFI Material Subsidiary has any agreement of any nature whatsoever to acquire, merge or enter into any business combination with any entity, or to acquire or lease any other business operations.

	(hh)	Disclosure Controls and Procedures. EFI has devised and maintained a system of disclosure controls and procedures designed to ensure that information required to be disclosed by EFI under applicable Laws (including applicable securities Laws) is recorded, processed, summarized and reported within the time periods specified in the applicable Laws. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by EFI in EFI’s reports and other filings under applicable laws (including applicable securities Laws) is accumulated and communicated to EFI’s management, including its chief executive officer and chief financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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	(ii)	Accounting Controls. EFI maintains internal control over financial reporting. EFI believes such internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and includes policies and procedures that: (i) pertain to the maintenance of records that accurately and fairly reflect the transactions and dispositions of the assets of EFI; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS that the receipts and expenditures of EFI is being made only in accordance with authorizations of management and directors of EFI; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of EFI’s assets that could have a material effect on its financial statements. There are no significant deficiencies in the design or operation of, or material weaknesses in, EFI’s internal controls over financial reporting that are reasonably likely to adversely affect its ability to record, process, summarize and report financial information, and there is no known fraud that involves management or other employees who have a significant role in EFI’s internal control over financial reporting. Since September 30, 2010, EFI has received no (x) material complaints from any source regarding accounting, internal accounting controls or auditing matters or (y) expressions of concern from employees of EFI regarding questionable accounting or auditing matters.

	(jj)	Disclosure of Material Contracts. Since September 30, 2010, all contracts and agreements required to be filed by EFI on SEDAR pursuant to applicable securities Laws have been filed on SEDAR by EFI and, except as set out in the EFI Disclosure Memorandum, or as contemplated herein, none of EFI nor any EFI Material Subsidiary has approved, entered into any binding agreement in respect of, or has any knowledge of, the purchase of any material property or assets or any interest therein or the sale, transfer or other disposition of any material property or assets or any interest therein currently owned, directly or indirectly, by EFI or any EFI Material Subsidiary, whether by asset sale, transfer of shares or otherwise.

	(kk)	Foreign Private Issuer. EFI is a “foreign private issuer” as defined in Rule 405 under the 1933 Act.

	(ll)	Investment Company Status. EFI is not registered, and is not required to be registered, as an “investment company” under the 1940 Act.

	(mm)	Property and Related Payments. Except as disclosed in the EFI Disclosure Memorandum, none of EFI or any of the EFI Material Subsidiaries is required, pursuant to any agreement to which it is a party, to make any payment to earn or acquire an interest in any EFI Material Property or on account of any royalty in respect of any EFI Material Property, other than payments to Governmental Entities in the ordinary course of business.

	(nn)	Vote Required. EFI Shareholder Approval requires the approval as required by the TSX pursuant to section 611 of the TSX Company Manual, and is necessary to approve the Arrangement. The amendment to the articles of incorporation of EFI relating to the EFI Share Consolidation requires the approval of a special resolution of the EFI Shareholders. Other than the approvals set forth in this Section 3.1(nn), no other approvals or authorizations of the EFI Shareholders are required to give effect to the Arrangement and the transactions contemplated by this Agreement.

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	(oo)	No Broker’s Commission. Except as disclosed in the EFI Disclosure Memorandum, EFI has not entered into any agreement that would entitle any person to any valid claim against EFI for a broker’s commission, finder’s fee or any like payment in respect of the Arrangement.

	(pp)	1934 Act Matters. No securities of EFI or any EFI Material Subsidiary are registered or required to be registered under Section 12 of the 1934 Act, and neither EFI nor any EFI Material Subsidiary is required to file reports under Section 13 or Section 15(d) of the 1934 Act.

3.2

Representations and Warranties of Denison

Denison hereby represents and warrants to EFI as follows and hereby acknowledges that EFI is relying upon such representations and warranties in connection with entering into this Agreement and agreeing to complete the Arrangement as follows:

	(a)	Organization. Each of Denison and each Denison Material Entity has been duly incorporated and is validly subsisting under its jurisdiction of incorporation, and has full corporate or legal power and authority to own its property and assets and to conduct its business as currently owned and conducted. Each Denison Material Entity is registered, licensed or otherwise qualified as an extra provincial corporation or a foreign corporation in each jurisdiction, as applicable, where the nature of the business or the location or character of the property and assets owned or leased by it requires it to be so registered, licensed or otherwise qualified, other than those jurisdictions where the failure to be so registered, licensed or otherwise qualified would not have a Material Adverse Effect on the Denison US Group.

	(b)	White Canyon Capitalization. White Canyon is authorized to issue an unlimited number of ordinary shares. As of the date hereof, there are 230,679,770 White Canyon Shares issued and outstanding, and such shares are the only issued and outstanding shares of White Canyon. There are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating White Canyon to issue or sell any shares of White Canyon or any securities or obligations of any kind convertible into or exchangeable for any shares of White Canyon. All outstanding White Canyon Shares have been authorized and are validly issued and outstanding as fully paid and non-assessable shares, free of pre-emptive rights.

	(c)	DMHC Capitalization. DMHC is authorized to issue 100 DMHC Common Shares and 5,000 DMHC Preferred Shares. As of the date hereof, there are 15.7 DMHC Common Shares and 2,000 DMHC Preferred Shares issued and outstanding, and such shares are the only issued and outstanding shares of DMHC. There are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre- emptive, contingent or otherwise) obligating DMHC to issue or sell any shares of DMHC or any securities or obligations of any kind convertible into or exchangeable for any shares of DMHC, other than pursuant to this Agreement. All outstanding DMHC Shares have been authorized and are validly issued and outstanding as fully paid and non- assessable shares, free of pre-emptive rights,

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	(d)	White Canyon Shares and DMHC Shares. Denison is the registered and beneficial owner of all of the issued and outstanding White Canyon Shares, with good and marketable title thereto, free and clear of all Encumbrances other than under the Denison Secured Credit Facility and as set out in the Denison Disclosure Memorandum, and has the exclusive right to dispose of the White Canyon Shares as provided in this Agreement. Denison and White Canyon are the registered and beneficial owners of all of the issued and outstanding DMHC Shares, with good and marketable title thereto, free and clear of all Encumbrances other than under the Denison Secured Credit Facility, and have the exclusive right to dispose of the White Canyon Shares as provided in this Agreement. Other than pursuant to the Denison Secured Credit Facility, none of the DMHC Shares or the White Canyon Shares is subject to (i) any contract or agreement or restriction which in any way limits or restricts the transfer to EFI of the DMHC Shares and the White Canyon Shares or (ii) any voting trust, pooling agreement, shareholder agreement, voting agreement or other contract, arrangement or understanding with respect to the voting of the DMHC Shares or the White Canyon Shares. On completion of the Transaction, Denison will have no ownership interest in DMHC and White Canyon, whether direct or indirect, actual or contingent, and EFI shall have good title to the DMHC Common Shares the White Canyon Shares, free and clear of all Encumbrances created by Denison or its Affiliates. DMHC and White Canyon own all of the assets, undertakings and operations of the US Mining Division.

	(e)	White Canyon. White Canyon holds no material assets other than 4.7 DMHC Common Shares, and has no material liabilities or obligations, whether accrued, absolute, contingent or otherwise, other than a portion of the Acquired Debt owing to Denison, as set forth in the Denison Disclosure Memorandum to be assigned by Denison to EFI as part of the Purchase and Sale Transaction.

	(f)	Subsidiaries. DMHC directly owns all of the issued and outstanding shares of each member of the Denison US Group, in each case which shares constitute all issued and outstanding shares of such respective member of the Denison US Group. There are no options, warrants, conversion privileges or other rights, agreements, arrangements or commitments (pre-emptive, contingent or otherwise) obligating any member of the Denison US Group to issue or sell any shares or any securities or obligations of any kind convertible into or exchangeable for any shares. All outstanding shares of each member of the Denison US Group have been authorized and are validly issued and outstanding as fully paid and non-assessable shares.

	(g)	Denison Material Entities. The Denison Material Entities are the only members of the Denison US Group that (i) are material to the Denison US Group taken as a whole and (ii) hold assets or properties which are material to the Denison US Group taken as a whole. Except for the Denison Material Entities, none of Denison, DMHC or White Canyon owns a direct or indirect voting or equity interest of greater than 10% in any corporation, partnership, joint venture or other entity which forms part of the US Mining Division, other than Denison Mines Recovery Corp., Denison Recovery LLC, Urizon Recovery Systems LLC, Denison Properties LLC, IUC Reno Creek LLC, and Denison Environmental Services LLC.

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	(h)	Acquired Debt. The Acquired Debt is as described in Schedule A to the Denison Disclosure Memorandum, and is collectible at full face value without set-off or counterclaim, and is free and clear of all Encumbrances.

	(i)	Authority. Denison has all necessary power, authority and capacity to enter into this Agreement and all other agreements and instruments to be executed by Denison as contemplated by this Agreement, and to perform its obligations hereunder and under such other agreements and instruments. The execution and delivery of this Agreement and the Denison Disclosure Memorandum by Denison and the completion by Denison of the Arrangement have been authorized by the directors of Denison and, other than the Denison Shareholder Approval required in connection with the completion of the Arrangement, no other corporate proceedings on the part of Denison are necessary to authorize this Agreement or to complete the Arrangement.

	(j)	Enforceability. This Agreement and the Denison Disclosure Memorandum have been duly executed and delivered by Denison, This Agreement constitutes a legal, valid and binding obligation of Denison, enforceable against Denison in accordance with its terms, subject to bankruptcy, insolvency and other similar Laws affecting creditors’ rights generally, and to general principles of equity.

	(k)	Absence of Conflicts. Except as disclosed in the Denison Disclosure Memorandum, the execution and delivery by Denison of this Agreement and the Denison Disclosure Memorandum and the performance by Denison of its obligations hereunder and the completion of the Arrangement do not and will not:

	(i)	require any notice or consent or other material action by any person under, contravene, conflict with, violate, breach or constitute a default or an event that, with or without notice or lapse of time or both, would constitute a default, under, or cause or permit the termination, cancellation, amendment, renegotiation, acceleration or other change of any right or obligation or the loss of any benefit to which any Denison Material Entity is entitled under, or give rise to any rights of first refusal or trigger any change in control provisions or any restriction under, any provision of any contract, agreement, license, permit, certificate, authorization, consent, registration, order, filing, approval, instrument, franchise, lease, arrangement, commitment, understanding or other right, obligation (written or oral), instrument or approval to which any Denison Material Entity is a party or by which any Denison Material Entity is bound or affected or to which any of its properties or other assets is subject;

	(ii)	result in the breach, contravention or violation of any of the provisions of, or constitute a default under, or conflict with any of its obligations under:

	A.	any provision of the articles or by-laws (or their equivalent) or resolutions of its board of directors (or any committee thereof) or shareholders of any of Denison or any Denison Material Entity;

	B.	any judgment, decree, order or award of any Governmental Authority having jurisdiction over Denison or any Denison Material Entity; or

	C.	any Laws; or

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(iii)

result in the creation or imposition of any Encumbrance over any of the DMHC Shares, the White Canyon Shares, or the assets of the Denison US Group,

		other than any such notices, consents, defaults, terminations, accelerations, rights, violations, contraventions, breaches, defaults or Encumbrances that individually or in the aggregate would not reasonably be expected to have a Material Adverse Effect on the Denison US Group.

	(l)	Government Approvals. No consent, approval, order or authorization of, or declaration or filing with, any Governmental Entity or other person is required to be obtained by Denison or any Denison Material Entity (A) in connection with the execution and delivery of this Agreement or the consummation by Denison of the Arrangement, or (B) in order that the authority of the Denison US Group to carry on its business in the ordinary course and in the same manner as presently conducted remains in good standing and in full force and effect as of and following the closing of the Arrangement, other than: (i) filings with and approvals required by Securities Authorities and stock exchanges; (ii) any other consents, waivers, permits, orders or approvals referred to in the Denison Disclosure Memorandum; and (iii) any other consents, approvals, orders, authorizations, declarations or filings which, if not obtained, would not, individually or in the aggregate, have a Material Adverse Effect on the Denison US Group.

	(m)	Directors’ Approvals. The board of directors of Denison has received a verbal opinion from Haywood Securities Inc., the financial advisor to Denison, that the consideration to be received by Denison Shareholders in connection with the Arrangement is fair, from a financial point of view, to the Denison Shareholders, and the directors of Denison have unanimously:

	(i)	determined that the Arrangement is fair to the Denison Shareholders and is in the best interests of Denison;

	(ii)	resolved to recommend that the Denison Shareholders vote in favour of the Denison Resolution; and

	(iii)	authorized entering into, executing and delivering this Agreement, and performing the obligations set out herein and to proceed with the Arrangement.

	(n)	No Defaults. Except as disclosed in the Denison Disclosure Memorandum, neither Denison nor any Denison Material Entity is in default under, and, there exists no event, condition or occurrence which, after notice or lapse of time or both, would constitute a default by Denison or any Denison Material Entity under any contract, agreement, permit or licence that is material to the conduct of the business of the US Mining Division to which it is a party or by which it is bound that would, individually or in the aggregate, have a Material Adverse Effect on the Denison US Group.

	(o)	Absence of Changes. Since December 31, 2010, except as disclosed in the Denison Disclosure Memorandum or expressly contemplated by this Agreement:

(i)

Denison and each Denison Material Entity have conducted their business only in the ordinary course of business consistent with past practice;

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	(ii)	Neither Denison nor any Denison Material Entity has incurred or suffered a Material Adverse Effect;

	(iii)	Neither Denison nor any Denison Material Entity has effected any amendment to, or proposed to amend, its articles or bylaws;

	(iv)	there has not been any acquisition or agreement to acquire by amalgamating, merging, consolidating or entering into a business combination with, purchasing substantially all the assets of or otherwise acquiring, any business or any corporation, partnership, association or other business organization or division thereof, which transaction would be material to the Denison US Group;

	(v)	there has not been any sale, lease, transfer, mortgage, hypothecation or other disposition of any of the assets or properties, real, personal or mixed, immovable or movable (including securities) of any Denison Material Entity, that are material, individually or in the aggregate, to the Denison US Group;

	(vi)	other than in the ordinary course of business consistent with past practice, there has not been any incurrence, assumption or guarantee by Denison or any Denison Material Entity of any debt for borrowed money, any creation or assumption by Denison or a Denison Material Entity of any Encumbrance, any making by Denison or a Denison Material Entity of any loan, advance or capital contribution to or investment in any other person (other than loans and advances in an aggregate amount that does not exceed US$250,000 outstanding at any time) or any entering into, amendment of, relinquishment, termination or non-renewal by Denison or a Denison Material Entity of any contract, agreement, licence, lease transaction, commitment or other right or obligation that would, individually or in the aggregate, have a Material Adverse Effect on the Denison US Group;

	(vii)	other than in the ordinary course of business consistent with past practice, there has not been, nor has Denison nor any Denison Material Entity agreed to, any material increase in or modification of the compensation payable to or to become payable by Denison or any Denison Material Entity to any of their respective directors, officers, employees or consultants or any grant to any such director, officer, employee or consultant of any increase in severance or termination pay or any increase or modification of any bonus, pension, insurance or benefit arrangement (including, without limitation, the granting of options) made to, for or with any of such directors or officers;

	(viii)	Denison has not effected or passed any resolution or agreed to any subdivision, consolidation, redemption, purchase, offer to purchase or any other acquisition or reclassification of any of the outstanding Denison Common Shares, declaration or payment of any dividends on or making of other distributions (whether in cash, shares or property, or any combination thereof) or reduction in the stated capital in respect of its shares;

	(ix)	other than the adoption of IFRS, Denison has not effected any material change in its accounting methods, principles or practices; and

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(x)

neither Denison nor any Denison Material Entity has adopted any, or materially amended any, collective bargaining agreement, bonus, pension, profit sharing, stock purchase, stock option or other benefit plan or shareholder rights plan.

	(p)	Contracts and Commitments. The Denison Disclosure Memorandum provides a list of all agreements to which Denison or a Denison Material Entity is a party or by which it is bound which are material to the Denison US Group, taken as a whole (the “Denison Material Agreements”). Except as disclosed in this Agreement or in the Denison Disclosure Memorandum, all Denison Material Agreements: (i) are valid, binding, in full force and effect in all material respects and enforceable by Denison or such Denison Material Entity in accordance with their respective terms, subject, however, to limitations with respect to enforcement imposed by Law in connection with bankruptcy or similar proceedings, the equitable power of the courts to stay proceedings before them and the execution of judgments and to the extent that equitable remedies such as specific performance and injunction are in the discretion of the courts from which they are sought and (ii) do not, by their terms, require the consent of any of the parties thereto to the Arrangement. Except as disclosed in the Denison Disclosure Memorandum, no agreement to which Denison or any Denison Material Entity is a party commits Denison or any Denison Material Entity to a capital expenditure in excess of US$250,000.

	(q)	Employment Agreements. Other than as disclosed in the Denison Public Disclosure Documents or the Denison Disclosure Memorandum:

	(i)	Neither Denison nor any Denison Material Entity is a party to any written or oral policy, agreement, obligation or understanding providing for severance or termination payments to, or any employment or consulting agreement with, any director or officer of any Denison Material Entity that cannot be terminated without payment of a maximum of three (3) times such individual’s monthly salary, recognising that a court of competent jurisdiction in an action for wrongful dismissal or otherwise has the authority to award damages in an amount greater than three (3) times an individual’s monthly salary;

	(ii)	no Denison Material Entity has any employee or consultant whose employment or contract with such member of the Denison US Group cannot be terminated without payment upon a maximum of three (3) months’ notice;

	(iii)	no Denison Material Entity is subject to any claim for wrongful dismissal, constructive dismissal or any tort claim, actual or, to the knowledge of Denison, pending or threatened, or any litigation, actual or, to the knowledge of Denison, pending or threatened, relating to employment or termination of employment of employees or independent contractors;

	(iv)	each Denison Material Entity has operated in all material respects in accordance with all applicable Law with respect to employment and labour, including, but not limited to, employment and labour standards, occupational health and safety, employment equity, pay equity, workers’ compensation, human rights and labour relations and there are no current, or, to the knowledge of Denison, pending or threatened, material proceedings before any board or tribunal with respect to any of the above areas;

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	(v)	there are no change of control payments, severance payments or termination payments that any Denison Material Entity is obligated to pay, including without limitation, to any consultants, directors, officers, employees or agents; and

	(vi)	no Denison Material Entity: (a) is a party to any collective bargaining agreement; (b) is, to the knowledge of Denison, subject to any application for certification or threatened or apparent union organizing campaigns for employees not covered under a collective bargaining agreement; or (c) is subject to any current, or to the knowledge of Denison, pending or threatened, strike or lockout.

(r)

Financial Matters.

	(i)	The audited consolidated financial statements of DMHC as at and for the financial years ended December 31, 2011 and 2010 and the unaudited condensed interim consolidated financial statements of DMHC as at and for the three months ended March 31, 2012 (collectively, the “DMHC Financial Statements”) were prepared in accordance with IFRS, consistently applied, and will fairly present in all material respects the financial condition of DMHC at the respective dates indicated and the results of operations of DMHC for the periods covered on a consolidated basis. Except as disclosed in the DMHC Financial Statements, DMHC has no liabilities and obligations (including, without limitation, liabilities or obligations to fund any operations or work or exploration program, to give any guarantees or for Taxes), whether accrued, absolute, contingent or otherwise, which would reasonably be expected to have a Material Adverse Effect on DMHC.

	(ii)	The audited financial statements of White Canyon for the financial years ended June 30, 2010 and June 30, 2011 (collectively, the “White Canyon Financial Statements”) were prepared in accordance with IFRS and audited in accordance with Australian Auditing Standards, consistently applied, and the White Canyon Financial Statements fairly present in all material respects the financial condition of White Canyon at the respective dates indicated and the results of operations of White Canyon for the periods covered on a consolidated basis. Except as disclosed in the White Canyon Financial Statements, White Canyon has no liabilities and obligations (including, without limitation, liabilities or obligations to fund any operations or work or exploration program, to give any guarantees or for Taxes), whether accrued, absolute, contingent or otherwise, which would reasonably be expected to have a Material Adverse Effect on White Canyon.

	(s)	Reclamation Account. As of March 31, 2012, DMHC held no less than US$24,668,000 in restricted cash and investments deposited to collateralize reclamation obligations (the “Reclamation Account”), as more particularly described in the Denison Disclosure Memorandum.

	(t)	Books and Records. The corporate records and minute books of Denison and each Denison Material Entity have been maintained in accordance with all applicable Laws and are complete and accurate in all material respects. Financial books and records and accounts of Denison and each Denison Material Entity in all material respects: (i) have been maintained in accordance with good business practices on a basis consistent with prior years and past practice; (ii) are stated in reasonable detail and accurately and fairly reflect the transactions and acquisitions and dispositions of assets of Denison, and each Denison Material Entity, respectively; and (iii) accurately and fairly reflect the basis for the DMHC Financial Statements and the White Canyon Financial Statements, as the case may be.

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	(u)	Litigation. Except as disclosed in the Denison Disclosure Memorandum and except with respect to matters relating to the environment or Environmental Laws (which are addressed in Section 3.2(aa) below), there is no claim, action, proceeding or investigation pending or in progress or, to the knowledge of Denison, threatened against or relating to Denison or any Denison Material Entity or affecting any of the properties or assets of the US Mining Division before any Governmental Entity which individually or in the aggregate has, or could reasonably be expected to have, a Material Adverse Effect on the Denison US Group. Neither Denison nor any Denison Material Entity or any of the properties or assets comprising the US Mining Division is subject to any outstanding judgment, order, writ, injunction or decree that involves or may involve, or restricts or may restrict the right or ability of Denison or any Denison Material Entity to conduct the business of the US Mining Division in all material respects as it has been carried on prior to the date hereof, or that would materially impede the consummation of the Arrangement, except to the extent any such matter would not have a Material Adverse Effect on the Denison US Group.

	(v)	Bankruptcy. There is no bankruptcy, liquidation, winding-up or other similar proceeding pending or in progress, or, to the knowledge of Denison, threatened against or relating to Denison or any Denison Material Entity before any Governmental Entity.

	(w)	Title to Properties and Condition of Assets. The Denison Disclosure Memorandum provides a list of all of the mineral properties that are material to the Denison US Group, taken as a whole (the “Denison Material Properties”). Except as disclosed in either the Denison Disclosure Memorandum or the Denison Public Disclosure Documents, applying customary standards in the mining industry, the Denison Material Entities have sufficient title to or valid leasehold interests in the properties comprising the US Mining Division to operate such properties in the ordinary course and consistent with past practice, free and clear of any title defect or Encumbrance, except for such defects in title or Encumbrances that, individually or in the aggregate, do not have, and would not reasonably be expected to have, a Material Adverse Effect on the Denison US Group. Each lease and agreement granting rights to the properties comprising the US Mining Division is in full force and effect and constitutes a legal, valid and binding agreement of a Denison Material Entity and such Denison Material Entity is not in violation or breach of or default under any such lease or agreement except such violations, breaches or defaults which, individually, or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Denison US Group. Furthermore, all real and tangible personal property of the Denison US Group is in generally good repair and is operational and usable in the manner in which it is currently being utilized, subject to normal wear and tear and technical obsolescence, repair or replacement except for such property where the failure to be in such condition would not reasonably be expected to have a Material Adverse Effect on the Denison US Group.

	(x)	Mineral Reserves and Resources. The most recent estimated measured, indicated and inferred mineral resources and proven and probable mineral reserves of the Denison US Group disclosed in the Denison Public Disclosure Documents have been prepared and disclosed in all material respects in accordance with all applicable Laws. There has been no material change (other than as a result of operations in the ordinary course of business) in the aggregate amount of estimated mineral resources of the Denison US Group, taken as a whole, from the amounts disclosed in the Denison Public Disclosure Documents.

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(y)

Operational Matters. Except as would not reasonably be expected to have a Material Adverse Effect on the Denison US Group:

	(i)	all rentals, payments and obligations (including maintenance for unpatented mining claims), royalties, overriding royalty interests, production payments, net profits, interest burdens and other payments due or payable on or prior to the date hereof under or with respect to the direct or indirect assets of the Denison US Group have been properly and timely paid or accrued;

	(ii)	all mines, mining-related activities and mineral processing activities where a Denison Material Entity is operator at the relevant time have been developed and operated in accordance with good mining practices and in compliance with all applicable Laws;

	(iii)	all mines located in or on the lands of any Denison Material Entity or lands pooled or unitized therewith, which have been abandoned by any Denison Material Entity have been developed, managed and abandoned in accordance with good mining practices and in compliance with all applicable Laws; and

	(iv)	all future abandonment, remediation and reclamation obligations of the Denison US Group have been accurately disclosed publicly by Denison without omission of information that would result in a misrepresentation.

	(z)	Insurance. Denison maintains policies of insurance relating to the US Mining Division with reputable insurers and in amounts covering such risks and with those deductibles as are adequate and usual for companies of similar size and operations in the mining and mineral processing industries. The policies and the coverage provided thereunder are in full force and effect and Denison is in good standing under each policy. Denison has not received notice of, nor has any knowledge of, any fact, condition or circumstance which might reasonably form the basis of any claim, dispute, liability, obligation, action, debt, proceeding or litigation against any Denison Material Entity which is not in all material respects covered by insurance (subject to standard deductibles) maintained by it and which could have a Material Adverse Effect on the Denison US Group.

	(aa)	Environmental. Except as disclosed in the Denison Disclosure Memorandum or the Denison Public Disclosure Documents:

	(i)	each Denison Material Entity has been and is operated in compliance with all applicable Environmental Laws, except to the extent that a failure to be in such compliance, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Denison US Group;

	(ii)	all material Environmental Approvals which are necessary under any applicable Environmental Law for the ownership and operation by any Denison Material Entity of the real property, assets, mines and other facilities owned or used by any Denison Material Entity and all of the properties related thereto have been duly obtained, made or taken and are in full force and effect, are not subject to further Environmental Approvals or appeal, or to the knowledge of Denison, any pending or threatened legal or administrative proceedings, will not be subject to requirements under Environmental Laws for amendment, replacement or further Environmental Approvals, based on the execution of this Agreement or the consummation of the Arrangement, and to the knowledge of Denison, no proposals have been made to amend, revoke or replace such material Environmental Approvals;

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	(iii)	the properties comprising the US Mining Division have not been used by any Denison Material Entity, or to the knowledge of Denison, any other person previously or currently in control of the properties comprising the US Mining Division, to generate, manufacture, refine, treat, recycle, transport, store, handle, dispose, transfer, produce or process Hazardous Substances, except in compliance in all material respects with all Environmental Laws and except to the extent that such non-compliance would not reasonably be expected to have a Material Adverse Effect on the Denison US Group. No Denison Material Entity, nor, to the knowledge of Denison, any other person in control of any of the properties comprising the US Mining Division, has caused or permitted the Release of any Hazardous Substances at, in, on, under or from any of the properties comprising the US Mining Division, except in compliance, individually or in the aggregate, with all Environmental Laws, except to the extent that a failure to be in such compliance would not reasonably be expected to have a Material Adverse Effect on the Denison US Group. To the knowledge of Denison, all Hazardous Substances handled, recycled, disposed of, treated or stored on or off site of the properties comprising the US Mining Division have been handled, recycled, disposed of, treated and stored in material compliance with all Environmental Laws except to the extent that a failure to be in such compliance, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect on the Denison US Group. To the knowledge of Denison, there are no Hazardous Substances at, in, on, under or migrating from any of the properties comprising the US Mining Division, except in material compliance with all Environmental Laws and except to the extent that any failures to be in compliance would not reasonably be expected to have a Material Adverse Effect on the Denison US Group;

	(iv)	no Denison Material Entity nor any other person for whose actions Denison may be partially or wholly liable, has treated or disposed, or arranged for the treatment or disposal, of any Hazardous Substances at any location: (i) listed on any list of hazardous sites, or sites requiring Remedial Action issued by any Governmental Entity, or to Denison’s knowledge, any similar federal or state lists; (ii) to the knowledge of Denison, proposed for listing on any list issued by any Governmental Entity of hazardous sites or sites requiring Remedial Action, or any similar federal, state or provincial lists; or (iii) which is the subject of enforcement actions by any Governmental Entity that creates the reasonable potential for any proceeding, action, or other claim against any Denison Material Entity, except to the extent that any enforcement action would not reasonably be expected to have a Material Adverse Effect on the Denison US Group. To the knowledge of Denison, no site or facility now or previously owned, operated or leased by any Denison Material Entity is listed or, to the knowledge of Denison, is proposed for listing on any list issued by any Governmental Entity of hazardous sites or sites requiring Remedial Action, or similar federal or state lists, or is the subject of Remedial Action;

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	(v)	except to the extent that would not reasonably be expected to have a Material Adverse Effect on the Denison US Group, no Denison Material Entity nor any other person for whose actions any Denison Material Entity may be partially or wholly liable has caused or permitted the Release of any Hazardous Substances on or to any of Denison’s of the Denison US Group’s properties in such a manner as: (i) would reasonably be expected to impose Liability for cleanup, natural resource damages, loss of life, personal injury, nuisance or damage to other property, except to the extent that such Liability would not to the knowledge of Denison have a Material Adverse Effect on the Denison US Group; or (ii) would reasonably be expected to result in imposition of an Encumbrance or the expropriation on any of the properties or the assets of any Denison Material Entity; and

	(vi)	except to the extent that would not reasonably be expected to have a Material Adverse Effect with respect to the Denison US Group, neither Denison nor any Denison Material Entity has received from any person or Governmental Entity any notice, formal or informal, of any proceeding, action, enforcement, order or other claim, Liability or potential Liability arising under any Environmental Law that is pending as of the date hereof.

(bb)

Tax Matters. Except as disclosed in the Denison Public Disclosure Documents or as would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect with respect to the Denison US Group:

	(i)	Denison and each member of the Denison US Group has duly and timely made or prepared all Tax Returns required to be made or prepared by it, has duly and timely filed all Tax Returns required to be filed by it with the appropriate Governmental Entity and has, in all material respects, completely and correctly reported all income and all other amounts or information required to be reported thereon, in Denison’s case as such matters relate to the Denison US Group only;

	(ii)	Denison and each member of the Denison US Group has: (A) duly and timely paid all Taxes due and payable by it; (B) duly and timely withheld all Taxes, payroll deductions and other amounts required by Law to be withheld by it and has duly and timely remitted to the appropriate Governmental Entity such Taxes and other amounts required by Law to be remitted by it; and (C) duly and timely collected all amounts on account of sales or transfer taxes, including goods and services, harmonized sales and provincial or territorial sales taxes, required by Law to be collected by it and has duly and timely remitted to the appropriate Governmental Entity any such amounts required by Law to be remitted by it, in Denison’s case as such matters relate to the Denison US Group only;

	(iii)	the charges, accruals and reserves for Taxes reflected on the DMHC Financial Statements and the White Canyon Financial Statements (whether or not due and whether or not shown on any Tax Return but excluding any provision for deferred income taxes) are adequate under IFRS to cover Taxes with respect to DMHC, White Canyon and any member of the Denison US Group accruing through the date hereof;

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	(iv)	there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or to the knowledge of Denison, threatened against any member of the Denison US Group that propose to assess Taxes in addition to those reported in the respective Tax Returns;

	(v)	there are no proceedings, investigations, audits, assessments, reassessments or claims now pending or to the knowledge of Denison, threatened against Denison that propose to assess Taxes on the Denison US Group in addition to those reported in the Tax Returns or that would otherwise impose tax obligations on the Denison US Group;

	(vi)	no waiver of any statute of limitations with respect to Taxes has been given or requested with respect to any member of the Denison US Group;

	(vii)	Denison will not owe any United States federal income tax as a result of Purchase and Sale Transaction; and

	(viii)	Neither Denison nor any member of the Denison US Group has an unsatisfied withholding liability as that term is used in United States Treasury Regulation section 1.1445-3(c)(3).

	(cc)	Pension and Employee Benefits. Where applicable, Denison and each Denison Material Entity has complied with all of the terms of the pension and other employee compensation and benefit obligations of Denison and such Denison Material Entity, as the case may be, including the provisions of any collective agreements, funding and investment contracts or obligations applicable thereto, arising under or relating to each of the pension or retirement income plans or other employee compensation or benefit plans, agreements, policies, programs, arrangements or practices, whether written or oral, which are maintained by or binding upon Denison or such Denison Material Entity other than such non-compliance that would not reasonably be expected to have a Material Adverse Effect on the Denison US Group.

	(dd)	Reporting Status. Denison is a reporting issuer or its equivalent in each of the Provinces of Canada. The Denison Common Shares are listed on the TSX and the NYSE MKT.

	(ee)	Reports. Since December 31, 2010, Denison has timely filed with the Securities Authorities, stock exchanges and all applicable self-regulatory authorities a true and complete copy of all forms, reports, schedules, statements, certifications, material change reports and other documents required to be filed by it (such forms, reports, schedules, statements, certifications and other documents, including any financial statements or other documents, including any schedules included therein, are referred to herein as the “Denison Public Disclosure Documents”). The Denison Public Disclosure Documents, at the time filed or, if amended, as of the date of such amendment: (i) did not contain any misrepresentation and did not contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (ii) complied with the requirements of applicable securities Laws, including the rules, policies and instruments of all Securities Authorities having jurisdiction over Denison, except where such non- compliance has not and would not reasonably be expected to have a Material Adverse Effect on the Denison US Group. Denison has not filed any confidential material change or other report or other document with any Securities Authorities or stock exchange or other self-regulatory authority which at the date hereof remains confidential.

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	(ff)	Compliance with Laws. Except with respect to matters relating to the environment or Environmental Laws (which are addressed in Section 3.2(aa) above), each Denison Material Entity has complied with and is not in violation of any applicable Law other than such non-compliance or violations that would not, individually or in the aggregate, have a Material Adverse Effect on the Denison US Group.

	(gg)	Restrictions on Business Activities. Except as disclosed in the Denison Disclosure Memorandum, there is no agreement, judgment, injunction, order or decree binding upon Denison or any Denison Material Entity that has or could reasonably be expected to have the effect of prohibiting, restricting or impairing any material business practice of any member of the Denison US Group or any acquisition of material property by any member of the Denison US Group or the conduct of business by the Denison US Group as currently conducted.

	(hh)	No Cease Trade. Denison is not subject to any cease trade or other order of any applicable stock exchange or Securities Authority and, to the knowledge of Denison, no investigation or other proceedings involving Denison that may operate to prevent or restrict trading of any securities of Denison are currently in progress or pending before any applicable stock exchange or Securities Authority.

	(ii)	No Option on Assets. Other than KEPCO or its Affiliates pursuant to the KEPCO Strategic Relationship Agreement, or as otherwise described or contemplated herein, no person has any agreement or option or any right or privilege capable of becoming an agreement or option for the purchase from Denison or any member of the Denison US Group of any of the securities of any member of the Denison US Group or any of the material assets of the US Mining Division.

	(jj)	Certain Contracts. Except as disclosed in the Denison Disclosure Memorandum, neither Denison nor any member of the Denison US Group is a party to or bound by any non- competition agreement or any other agreement, obligation, judgment, injunction, order or decree that purports to: (i) limit the manner or the localities in which all or any material portion of the business of the US Mining Division; (ii) limit any business practice of any member of the Denison US Group in any material respect; or (iii) restrict any acquisition or disposition of any property by any member of the Denison US Group in any material respect.

	(kk)	No Indebtedness. No member of the Denison US Group owes any money to, has any present loans to, has borrowed any monies from, or is otherwise indebted to any officer, director, employee, shareholder or any person not dealing at “arm’s length” (as such term is defined in the Tax Act) with Denison and the Denison US Group.

	(ll)	No Agreement to Merge. Except for the Letter Agreement and this Agreement, neither Denison nor any member of the Denison US Group has any agreement of any nature whatsoever to acquire, merge or enter into any business combination with any entity, or to acquire or lease any other business operations which would affect or relate to the US Mining Division.

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	(mm)	Disclosure Controls and Procedures. Denison has devised and maintained a system of disclosure controls and procedures designed to ensure that information required to be disclosed by Denison under applicable Laws (including applicable securities Laws) is recorded, processed, summarized and reported within the time periods specified in the applicable Laws. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by Denison in Denison’s reports and other filings under applicable laws (including applicable securities Laws) is accumulated and communicated to Denison’s management, including its President and Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

	(nn)	Accounting Controls. Denison maintains internal control over financial reporting. Denison believes such internal control over financial reporting is effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and includes policies and procedures that: (i) pertain to the maintenance of records that accurately and fairly reflect the transactions and dispositions of the assets of Denison; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS that the receipts and expenditures of Denison being made only in accordance with authorizations of management and directors of Denison; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Denison’s assets that could have a material effect on its financial statements. There are no significant deficiencies in the design or operation of, or material weaknesses in, Denison’s internal controls over financial reporting that are reasonably likely to adversely affect its ability to record, process, summarize and report financial information, and there is no known fraud that involves management or other employees who have a significant role in Denison’s internal control over financial reporting. Since December 31, 2010, Denison has received no (x) material complaints from any source regarding accounting, internal accounting controls or auditing matters or (y) expressions of concern from employees of Denison regarding questionable accounting or auditing matters.

	(oo)	Disclosure of Material Contracts. Since December 31, 2010 all contracts and agreements required to be filed on SEDAR by Denison pursuant to applicable securities Laws have been filed on SEDAR by Denison and, except as set out in the Denison Disclosure Memorandum, or as contemplated herein, Denison has not approved, entered into any binding agreement in respect of, or has any knowledge of, the purchase of any material property or assets located in the United States or any interest therein or the sale, transfer or other disposition of any material property or assets located in the United States or any interest therein currently owned, directly or indirectly, by Denison, whether by asset sale, transfer of shares or otherwise.

	(pp)	Foreign Private Issuer. Denison is a “foreign private issuer” as defined in Rule 405 under the 1933 Act.

	(qq)	Investment Company Status. Denison is not registered, and is not required to be registered, as an “investment company”, under the 1940 Act.

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	(rr)	Vote Required. Subject to the Interim Order, the Denison Shareholder Approval is the only vote of the holders of any class or series of the Denison Common Shares or Denison options, as applicable, necessary to approve this Agreement, the Arrangement.

	(ss)	No Broker’s Commission. Except as disclosed in the Denison Disclosure Memorandum, Denison has not entered into any agreement that would entitle any person to any valid claim against Denison for a broker’s commission, finder’s fee or any like payment in respect of the Arrangement or any other matter contemplated by this Agreement.

	(tt)	Property and Related Payments. Except as disclosed in the Denison Disclosure Memorandum, no member of the Denison US Group is required, pursuant to any agreement to which it is a party, to make any payment to earn or acquire an interest in any Denison Material Property or on account of any royalty in respect of any Denison Material Property, other than payments to Governmental Entities in the ordinary course of business.

	(uu)	1934 Act Matters. Other than the Denison Common Shares, no securities of Denison or any of its Subsidiaries are registered or required to be registered under Section 12 of the 1934 Act.

	(vv)	KEPCO Strategic Relationship Agreement. Denison delivered on April 17, 2012 the requisite notice to KEPCO as required pursuant to the KEPCO Strategic Relationship Agreement, and the KEPCO Waiver was received by Denison on May 14, 2012. As a result of the receipt of the KEPCO Waiver, the KEPCO Strategic Relationship Agreement shall not apply to EFI or any member of the Denison US Group following completion of the Arrangement.

3.3

Additional Disclosures

All exceptions to the warranties and covenants in this Agreement that refer to the EFI Disclosure Memorandum, the EFI Public Disclosure Documents, the Denison Disclosure Memorandum, or the Denison Public Disclosure Documents shall mean the information disclosed in such documents as at the date of this Agreement. No information disclosed in any additional public filings or amendments or supplements to any such disclosure documents or memoranda by a Party after the date of this Agreement shall be binding on the other Party unless the other Party otherwise agrees in writing. A Party may consent in writing to changes to the representations and warranties of the other Party after the date of this Agreement.

3.4

Survival of Representations and Warranties

The representations and warranties contained in this Agreement and the covenants and other obligations contained in this Agreement shall, except as otherwise provided in this Agreement, survive the execution and delivery of this Agreement and the completion of the Arrangement and shall continue for a period of six months from the Effective Date. Any investigation by EFI or Denison and their respective advisors shall not mitigate, diminish or affect the representations and warranties contained in this Agreement.

ARTICLE 4 - COVENANTS

4.1

Covenants of EFI

EFI hereby covenants and agrees with Denison as follows:

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	(a)	Provide Information. Subject to obtaining any required consents or waivers (which EFI will use its reasonable commercial efforts to obtain) and subject to confidentiality obligations, EFI will provide Denison with reasonable access to its facilities, personnel, books, records and documents and promptly provide to Denison any information in the possession or control of EFI and relating to EFI that is reasonably requested by Denison or its counsel so that Denison may complete its due diligence investigations and prepare the Denison Proxy Circular.

	(b)	Denison Proxy Circular. EFI hereby covenants that information furnished by EFI in connection with the Denison Proxy Circular will not contain, to the best of the knowledge of EFI, any misrepresentation or any untrue statement of a material fact or omit to state a material fact required to be stated therein in order to make any information so furnished for use in any such document not misleading in light of the circumstances in which it is provided. EFI shall use its reasonable commercial efforts to obtain consents of auditors and other advisors to use the use of financial, technical or other expert information in the Denison Proxy Circular.

	(c)	EFI Meeting. EFI will convene and hold a special meeting of its shareholders (including any adjournment, the “EFI Meeting”) as soon as possible for the purpose of approving the issuance of the EFI Payment Shares contemplated hereunder, waiving the application of the EFI shareholder rights plan to the Arrangement (the “EFI Resolution”) and approving the EFI Share Consolidation, and in any event no later than July 31, 2012, or such other date that may be agreed to by EFI and Denison. Except as otherwise provided in this Agreement, EFI shall not adjourn or otherwise change the timing of the EFI Meeting without the prior written consent of Denison, such consent not to be unreasonably withheld.

	(d)	EFI Proxy Circular. In connection with the EFI Meeting, as promptly as reasonably practicable, EFI shall prepare a management information circular including amendments thereto required as a result of the adjournment of the EFI Meeting (the “EFI Proxy Circular”) together with any other documents required by applicable Laws in connection with the approval of the EFI Resolution and the EFI Share Consolidation and EFI shall give Denison the opportunity to review and comment on the EFI Proxy Circular and all such other documents and the EFI Proxy Circular and all such other documents shall be reasonably satisfactory to Denison, acting reasonably, before they are filed or distributed to the shareholders of EFI, subject to any disclosure and filing obligations imposed by any Securities Authority or any stock exchange. EFI shall ensure that the EFI Proxy Circular complies with all applicable Laws and, without limiting the generality of the foregoing, shall ensure that the EFI Proxy Circular does not contain any misrepresentation (other than with respect to any information relating solely to and provided by Denison, the accuracy of which information shall be the responsibility of Denison). In a timely and expeditious manner, EFI shall prepare (in consultation with Denison) and file any mutually agreed (or as otherwise required by applicable Laws) amendments or supplements to the EFI Proxy Circular (which amendments or supplements shall be in a form satisfactory to Denison, acting reasonably) with respect to the EFI Meeting and mail such amendments or supplements, in accordance with all applicable Laws, in and to all jurisdictions where such amendments or supplements are required to be mailed, complying in all material respects with all applicable Laws on the date of the mailing thereof.

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	(e)	Exclusivity. Subject to Article 6, EFI agrees that, during the term of this Agreement, neither it, its affiliates nor any of their respective representatives, officers, directors, employees, advisors or agents will, directly or indirectly, make, solicit or initiate enquiries from, or the submission of proposals or offers from, any other Person relating to any Acquisition Proposal or participate in any discussions or negotiations regarding, or furnish to any other Person any further information with respect to, or otherwise co- operate in any way with, or assist or participate in or facilitate, any effort or attempt by any person to do or seek to do any of the foregoing and, to the extent any such discussions or negotiations have occurred with third parties prior to the date hereof, they shall be terminated immediately. For greater certainty, EFI may participate in any such discussion or negotiations in respect of transactions which would not materially impede the ability of EFI to complete the Arrangement.

	(f)	Ordinary Course. EFI shall conduct its business only in, and shall not take any action except in the usual, ordinary course of the business of EFI, consistent with the past practices of EFI or as contemplated by the EFI Disclosure Memorandum or this Agreement.

	(g)	No Dividends, Amalgamation, Financings or Capital Reduction. EFI shall not, except as provided for in this Agreement or in the EFI Disclosure Memorandum, without prior consultation with and the consent of Denison, directly or indirectly do, agree to do, or permit to occur any of the following: (i) declare, set aside or pay any dividend or other distribution or payment in respect of any of the shares of EFI; (ii) adopt resolutions or enter into any agreement providing for the amalgamation, merger, consolidation, reorganization, liquidation, dissolution or any other extraordinary transaction in respect of EFI or adopt any plan of liquidation; (iii) issue, or enter into any agreement providing for the issuance of, EFI Common Shares or securities exchangeable for, or convertible into, EFI Common Shares, other than pursuant to a private placement offering of EFI Common Shares and/or warrants to raise proceeds of up to Cdn$10,000,000; or (iv) reduce its stated capital.

	(h)	Listing. EFI shall use its reasonable commercial efforts to cause the EFI Payment Shares to be listed on the TSX at the Effective Time as of the Effective Time.

	(i)	Copy of Documents. Except for proxies and other non-substantive communications, EFI shall furnish promptly to Denison a copy of each notice, report, schedule or other document or communication delivered, filed or received by EFI in connection with this Agreement, the Arrangement, the EFI Meeting or any other meeting at which the EFI Shareholders are entitled to attend relating to special business, any filings made under any applicable Law and any dealings or communications with any Governmental Entity, Securities Authority or stock exchange in connection with, or in any way affecting, the Purchase and Sale Transaction contemplated by this Agreement.

	(j)	Certain Actions Prohibited. Other than as disclosed in the EFI Disclosure Memorandum, or in contemplation of or as required to give effect to the Arrangement, EFI shall not, without the prior written consent of Denison, directly or indirectly do or permit to occur any of the following except where to do so would be in the ordinary course of business and consistent with past practice:

(i)

issue, sell, pledge, lease, dispose of, encumber or create any Encumbrance on or agree to issue, sell, pledge, lease, dispose of, or encumber or create any Encumbrance on any shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares of, EFI, other than the issue of EFI Common Shares pursuant to the exercise of EFI’s options or warrants, all as issued and outstanding on the date hereof in accordance with their terms as of the date hereof;

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	(ii)	other than pursuant to obligations or rights under existing contracts, agreements and commitments (to the extent such rights have been exercised or initiated by other persons), sell, lease or otherwise dispose of any property or assets or enter into any agreement or commitment in respect of any of the foregoing;

	(iii)	amend or propose to amend the Articles or by-laws (or their equivalent) of EFI or any of the terms of outstanding options as they exist at the date of this Agreement;

	(iv)	split, combine or reclassify any of the shares of EFI;

	(v)	redeem, purchase or offer to purchase any EFI Common Shares and, other than pursuant to any EFI stock option plan, any options or obligations or rights under existing contracts, agreements and commitments;

	(vi)	acquire or agree to acquire any corporation or other entity (or material interest therein) or division of any corporation or other entity;

	(vii)	return capital to its shareholders or repay any indebtedness for borrowed money before it is due;

	(viii)	(A) satisfy or settle any claim or dispute, except such as have been included in the financial statements of EFI or which are, individually or in the aggregate, in an amount in excess of US$100,000; (B) relinquish any contractual rights that are, individually or in the aggregate, in an amount in excess of US$100,000; or (C) enter into any interest rate, currency or commodity swaps, hedges, caps, collars, forward sales or other similar financial instruments other than in the ordinary course of business and not for speculative purposes;

	(ix)	incur, authorize, agree or otherwise become committed to provide guarantees for borrowed money or incur, authorize, agree or otherwise become committed for any indebtedness for borrowed money;

	(x)	enter into or amend any agreements, arrangements or transactions with any related entity;

	(xi)	except as required by IFRS or any other generally accepted accounting principle to which EFI may be subject or any applicable Law, make any changes to the existing accounting practices of EFI or make any material tax election inconsistent with past practice; or

	(xii)	enter into new commitments of a capital expenditure nature or incur any new contingent liabilities other than: (A) ordinary course expenditures; (B) expenditures required by law; and (C) expenditures made in connection with Arrangement.

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	(k)	Insurance. EFI shall use its reasonable commercial efforts to cause its current insurance (or reinsurance) policies not to be cancelled or terminated or any of the coverage thereunder to lapse, unless simultaneously with such termination, cancellation or lapse, replacement policies underwritten by insurance and re-insurance companies of internationally recognized standing providing coverage equal to or greater than the coverage under the cancelled, terminated or lapsed policies for substantially similar premiums are in full force and effect.

	(l)	Certain Actions. EFI shall:

	(i)	use its reasonable commercial efforts to comply promptly with all requirements which applicable Law may impose on EFI with respect to the Arrangement;

	(ii)	not take any action, or refrain from taking any action (subject to reasonable commercial efforts), or permit any action to be taken or not taken, inconsistent with the provisions of this Agreement or which would reasonably be expected to materially impede the completion of the Arrangement or would render, or that could reasonably be expected to render, any representation or warranty made by EFI in this Agreement untrue or inaccurate in any material respect at any time prior to the Effective Time if then made, or which would or could have a Material Adverse Effect on EFI, provided that EFI may take any such action or refrain from taking such action (subject to reasonable commercial efforts) as a result of this Agreement, in the event EFI immediately notifies Denison in writing of such circumstances;

	(iii)	promptly notify Denison of: (A) any Material Adverse Effect, or any change, event, occurrence or state of facts that could reasonably be expected to have a Material Adverse Effect, in respect of the business or in the conduct of the business of EFI; (B) any material Governmental Entity or third person complaints, investigations or hearings (or communications indicating that the same may be contemplated); (C) any breach by EFI of any covenant or agreement contained in this Agreement; and (D) any event occurring subsequent to the date hereof that would render any representation or warranty of EFI contained in this Agreement, if made on or as of the date of such event or the Effective Date, to be untrue or inaccurate in any material respect;

	(iv)	obtain all third party consents and approvals and give any notices required under any of the EFI Material Agreements; and

	(v)	subject to the terms of this Agreement: (A) take all commercially reasonable lawful action to solicit proxies in favour of the EFI Resolution (provided that, for the avoidance of doubt, EFI shall not be required to engage a third party proxy solicitation firm unless it determines to do so in its own discretion); and (B) recommend (and the board of directors of EFI shall recommend) to all EFI Shareholders that they vote in favour of the EFI Resolution.

(m)

No Compromise. EFI shall not settle or compromise any claim brought by any present, former or purported holder of any securities of EFI in connection with the Arrangement prior to the Effective Time without the prior written consent of Denison.

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	(n)	Contractual Obligations. EFI shall not, and shall not cause or permit any of the EFI Material Subsidiaries to, enter into, renew or modify in any respect any EFI Material Agreement except with the consent of Denison or insofar as may be necessary to permit or provide for the completion of the Arrangement or where to do so is in the ordinary course of business.

	(o)	Satisfaction of Conditions. EFI shall use its reasonable commercial efforts to satisfy, or cause to be satisfied, all conditions precedent to its obligations to the extent that the same is within its reasonable control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Arrangement, including using its reasonable commercial efforts to:

	(i)	obtain the EFI Shareholder Approval in accordance with the OBCA and the requirements of the TSX and any other applicable Governmental Authority;

	(ii)	obtain consents, approvals and authorizations as are required to be obtained by EFI under any applicable Law or from any Governmental Entity that would, if not obtained, materially impede the completion of the Arrangement or have a Material Adverse Effect on EFI;

	(iii)	effect all necessary registrations, filings and submissions of information requested by Governmental Entities required to be effected by it in connection with the Arrangement and participate and appear in any proceedings of any party before any Governmental Entity;

	(iv)	oppose, lift or rescind any injunction or restraining order or other order or action challenging or affecting this Agreement, the Arrangement or seeking to stop, or otherwise adversely affecting the ability of the parties to consummate, the Arrangement;

	(v)	fulfill all conditions and satisfy all provisions of this Agreement and the Plan of Arrangement required to be fulfilled or satisfied by EFI; and

	(vi)	cooperate with Denison in connection with the performance by it of its obligations hereunder, provided however that the foregoing shall not be construed to obligate EFI to pay or cause to be paid any monies to cause such performance to occur.

	(p)	Representations. EFI shall use its reasonable commercial efforts to conduct its affairs so that all of the representations and warranties of EFI contained herein shall be true and correct on and as of the Effective Date as if made on and as of such date, unless Denison consents to a change to any representation or warranty.

	(q)	Closing Documents. EFI shall execute and deliver, or cause to be executed and delivered, at the closing of the Arrangement such customary agreements, certificates, resolutions, opinions and other closing documents as may be required by Denison or Denison’s counsel, all in form satisfactory to Denison or Denison’s counsel, acting reasonably.

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	(r)	Composition of Board. At the Effective Time, EFI shall take all actions necessary to reconfigure the board of directors to consist of ten (10) directors of whom two (2) will be the Additional Director Nominees.

	(s)	Completion Date. EFI shall use its reasonable commercial efforts to complete the Arrangement on or prior to the Completion Deadline.

	(t)	Agreements. Until the Effective Time, EFI shall not release any third party from any confidentiality or standstill agreement to which EFI and such third party are parties or amend any of the foregoing, and shall exercise all rights to require the return of information regarding EFI previously provided to such parties and shall exercise all rights to require the destruction of all materials including or incorporating any information regarding EFI.

	(u)	Issuance of EFI Note and EFI Payment Shares. In accordance with the Plan of Arrangement and the sequence specified therein, EFI shall issue (i) the EFI Note to Denison and (ii) the EFI Payment Shares to the Denison Shareholders in repayment of the EFI Note pursuant to the Arrangement.

	(v)	Insurance Claim Reimbursement. In the event that, following the Effective Date, EFI, a member of the Denison US Group or any other affiliate of EFI receives any payment from Denison’s insurer (or a successor thereto) with respect to the insurance claim relating to the failure of leach tanks #1 and #2 at the White Mesa mill, then EFI shall pay to Denison the amount paid by the insurer in respect of such claim, up to the total of Denison’s expenditures made on the replacement of the leach tanks.

4.2

Covenants of Denison

Denison hereby covenants and agrees with EFI as follows:

	(a)	Provide Information. Subject to obtaining any required consents or waivers (which Denison will use its reasonable commercial efforts to obtain) and subject to any confidentiality obligations, Denison will provide EFI with reasonable access to its facilities, personnel, books, records and documents and will promptly provide to EFI any information in the possession or control of Denison and relating to the US Mining Division that is reasonably requested by EFI or its counsel so that EFI may complete its due diligence investigations and prepare the EFI Proxy Circular.

	(b)	EFI Proxy Circular. Denison hereby covenants that information furnished by Denison in connection with the EFI Proxy Circular will not contain, to the best of the knowledge of Denison, any misrepresentation or any untrue statement of a material fact or omit to state a material fact required to be stated therein in order to make any information so furnished for use in any such document not misleading in light of the circumstances in which it is provided. Denison shall use its reasonable commercial efforts to obtain consents of auditors and other advisors to use the use of financial, technical or other expert information in the EFI Proxy Circular.

	(c)	Denison Meeting. Denison will convene and hold a special meeting of its shareholders (including any adjournment, the “Denison Meeting”) as soon as possible for the purpose of approving the Arrangement (the “Denison Resolution”) and in any event no later than July 31, 2012, or such other date that may be agreed to by EFI and Denison. Except as otherwise provided in this Agreement, Denison shall not adjourn or otherwise change the timing of the Denison Meeting without the prior written consent of EFI, such consent not to be unreasonably withheld.

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	(d)	Denison Proxy Circular. In connection with the Denison Meeting, as promptly as reasonably practicable, Denison shall prepare a management information circular including amendments thereto required as a result of the adjournment of the Denison Meeting (the “Denison Proxy Circular”) together with any other documents required by applicable Laws in connection with the approval of the Denison Resolution and Denison shall give EFI the opportunity to review and comment on the Denison Proxy Circular and all such other documents and the Denison Proxy Circular and all such other documents shall be reasonably satisfactory to EFI, acting reasonably, before they are filed or distributed to the shareholders of Denison, subject to any disclosure and filing obligations imposed by any Securities Authority or any stock exchange. Denison shall ensure that the Denison Proxy Circular complies with all applicable Laws and, without limiting the generality of the foregoing, shall ensure that the Denison Proxy Circular does not contain any misrepresentation (other than with respect to any information relating solely to and provided by EFI, the accuracy of which information shall be the responsibility of EFI). In a timely and expeditious manner, Denison shall prepare (in consultation with EFI) and file any mutually agreed (or as otherwise required by applicable Laws) amendments or supplements to the Denison Proxy Circular (which amendments or supplements shall be in a form satisfactory to EFI, acting reasonably) with respect to the Denison Meeting and mail such amendments or supplements, in accordance with the Interim Order and all applicable Laws, in and to all jurisdictions where such amendments or supplements are required to be mailed, complying in all material respects with all applicable Laws on the date of the mailing thereof.

	(e)	Exclusivity. Subject to Article 6, Denison agrees that, during the term of this Agreement, neither it, its affiliates nor any of their respective representatives, officers, directors, employees, advisors or agents will, directly or indirectly, make, solicit or initiate enquiries from, or the submission of proposals or offers from, any other Person relating to any Acquisition Proposal or participate in any discussions or negotiations regarding, or furnish to any other Person any further information with respect to, or otherwise co-operate in any way with, or assist or participate in or facilitate, any effort or attempt by any person to do or seek to do any of the foregoing and, to the extent any such discussions or negotiations have occurred with third parties prior to the date hereof, they shall be terminated immediately. For greater certainty, Denison may participate in any such discussion or negotiations in respect of transactions which would not materially impede the ability of Denison to complete the Arrangement, including, without limitation, a sale of any of the assets of Denison not owned by the Denison US Group, an acquisition of any other assets by Denison or a transaction involving an acquisition of Denison or other business combination which occurs following or subject to the completion of the Arrangement.

	(f)	Ordinary Course. Denison and each member of the Denison US Group shall conduct the business of the US Mining Division only in, and shall not take any action except in the usual, ordinary course of business of such member of the Denison US Group and consistent with past practices of Denison or as contemplated in the Denison Disclosure Memorandum and except as contemplated by this Agreement.

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	(g)	No Distributions. Denison will not permit the Denison US Group to transfer or distribute accounts receivable, inventories and/or material fixed assets related to the US Mining Division to Denison or a subsidiary of Denison other than the Denison US Group, other than as described in the Denison Disclosure Memorandum and in the ordinary course of business and consistent with past practices, and shall not make payments on account of the Acquired Debt except in the ordinary course of business and consistent with past practices as described in the Denison Disclosure Memorandum; provided that this Section 4.2(g) shall not restrict Denison, prior to the completion of the Transaction, from transferring to Denison or an affiliate of Denison other than the Denison US Group, by way of partial payment of the debt owed by the Denison US Group to Denison, amounts owing to the Denison US Group by certain subsidiaries of Denison, in an amount not exceeding US$10,000,000, as disclosed in the Denison Disclosure Memorandum.

	(h)	Encumbrances. Denison will use its reasonable commercial efforts to cause all Encumbrances against the Denison US Group, including Encumbrances against the assets comprising the US Mining Division that are in place under the Denison Secured Credit Facility, to be released prior to the completion of the Arrangement.

	(i)	Reclamation Account. Denison shall not withdraw any cash or assets from the Reclamation Account prior to the completion of the Arrangement. For greater certainty, it is acknowledged and agreed that upon completion of the Arrangement, the aggregate value of cash and investments in the Reclamation Account shall be not less than the value of the US mining and mill bonds posted as security for the reclamation obligations.

	(j)	Copy of Documents. Except for proxies and other non-substantive communications, Denison shall furnish promptly to EFI a copy of each notice, report, schedule or other document or communication delivered, filed or received by Denison in connection with this Agreement, the Arrangement, the Interim Order, the Denison Meeting or any other meeting at which the Denison Shareholders are entitled to attend relating to special business, any filings made under any applicable Law and any dealings or communications with any Governmental Entity, Securities Authority or stock exchange in connection with, or in any way affecting, the Arrangement.

	(k)	Certain Actions Prohibited. Other than as disclosed in the Denison Disclosure Memorandum, or in contemplation of or as required to give effect to the Arrangement, Denison shall not, without the prior written consent of EFI, directly or indirectly do or permit to occur any of the following except where to do so would be in the ordinary course of business and consistent with past practice:

	(i)	issue, sell, pledge, lease, dispose of, encumber or create any Encumbrance on or agree to issue, sell, pledge, lease, dispose of, or encumber or create any Encumbrance on, any shares of, or any options, warrants, calls, conversion privileges or rights of any kind to acquire any shares of, any member of the Denison US Group, all as issued and outstanding on the date hereof in accordance with their terms as of the date hereof;

	(ii)	other than pursuant to obligations or rights under existing contracts, agreements and commitments (to the extent such rights have been exercised or initiated by other persons), sell, lease or otherwise dispose of any property or assets of the Denison US Group, or enter into any agreement or commitment in respect of any of the foregoing;

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	(iii)	amend or propose to amend the Articles or by-laws (or their equivalent) of any member of the Denison US Group as they exist at the date of this Agreement;

	(iv)	split, combine or reclassify any of the shares of any member of the Denison US Group;

	(v)	redeem, purchase or offer to purchase any securities issued by any member of the Denison US Group;

	(vi)	cause or permit any member of the Denison US Group to acquire or agree to acquire any corporation or other entity (or material interest therein) or division of any corporation or other entity;

	(vii)	cause or permit any member of the Denison US Group to return capital to its shareholders or repay any indebtedness for borrowed money before it is due;

	(viii)	cause or permit any member of the Denison US Group to (A) satisfy or settle any claim or dispute which are, individually or in the aggregate, in an amount in excess of US$250,000; (B) relinquish any contractual rights that are, individually or in the aggregate, in an amount in excess of US$250,000; or (C) enter into any interest rate, currency or commodity swaps, hedges, caps, collars, forward sales or other similar financial instruments other than in the ordinary course of business and not for speculative purposes;

	(ix)	cause or permit any member of the Denison US Group to incur, authorize, agree or otherwise become committed to provide guarantees for borrowed money or incur, authorize, agree or otherwise become committed for any indebtedness for borrowed money;

	(x)	cause or permit any member of the Denison US Group to enter into or amend any agreements, arrangements or transactions with any related entity;

	(xi)	except as required by IFRS or any other generally accepted accounting principle to which DMHC or White Canyon may be subject or any applicable Law, make any changes to the existing accounting practices of DMHC or White Canyon;

	(xii)	cause or permit any member of the Denison US Group to enter into, new commitments of a capital expenditure nature or incur any new contingent liabilities other than (A) expenditures in the ordinary course of business; (B) expenditures required by law; and (C) expenditures made in connection with the Arrangement as contemplated in this Agreement; or

	(xiii)	with respect to any member of the Denison US Group (A) fail to prepare and timely file all Tax Returns required to be filed before the Effective Date (taking into account any timely filed extensions) or timely withhold and remit any employment Taxes; (B) file any amended Tax Return; (C) make or change any election with respect to Taxes; or (D) settle or compromise any material Tax liability, enter into any Tax closing agreement, surrender any right to claim a refund of Taxes, waive any statute of limitations regarding any Tax, agree to any extension of time regarding the assessment of any Tax deficiency or take any other similar action relating to any Tax.

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	(l)	Employment Arrangements. Denison shall not, without the prior written consent of EFI and where applicable the TSX, enter into or modify any employment, consulting, severance, collective bargaining or similar agreement, policy or arrangement with, or grant any bonus, salary increase, option to purchase shares, pension or supplemental pension benefit, profit sharing, retirement allowance, deferred compensation, incentive compensation, severance, change of control or termination pay to, or make any loan to, any officer, director, employee or consultant of any member of the Denison US Group.

	(m)	Certain Actions. Denison shall:

	(i)	carry out the terms of the Interim Order (including mailing the Denison Proxy Circular to Denison Shareholders as ordered by the Interim Order) and the Final Order applicable to it and use its reasonable commercial efforts to comply promptly with all requirements which applicable Law may impose on Denison with respect to the Arrangement;

	(ii)	not take any action, or refrain from taking any action (subject to reasonable commercial efforts), or permit any action to be taken or not taken, inconsistent with the provisions of this Agreement or which would reasonably be expected to materially impede the completion of the Arrangement or would render, or that could reasonably be expected to render, any representation or warranty made by Denison in this Agreement untrue or inaccurate in any material respect at any time prior to the Effective Time if then made, or which would or could have a Material Adverse Effect on the Denison US Group, provided that Denison may take any such action or refrain from taking such action (subject to reasonable commercial efforts) as a result of this Agreement, in the event Denison immediately notifies EFI in writing of such circumstances;

	(iii)	promptly notify EFI of: (A) any Material Adverse Effect, or any change, event, occurrence or state of facts that could reasonably be expected to have a Material Adverse Effect, in respect of the business or in the conduct of the business of Denison or the Denison US Group; (B) any material Governmental Entity or third person complaints, investigations or hearings (or communications indicating that the same may be contemplated); (C) any breach by Denison of any covenant or agreement contained in this Agreement; and (D) any event occurring subsequent to the date hereof that would render any representation or warranty of Denison contained in this Agreement, if made on or as of the date of such event or the Effective Date, to be untrue or inaccurate in any material respect;

	(iv)	obtain all third party consents and approvals and give any notices required under any of the Denison Material Agreements; and

	(v)	subject to the terms of this Agreement: (A) take all commercially reasonable lawful action to solicit proxies in favour of the Denison Resolution (provided that, for the avoidance of doubt, Denison shall not be required to engage a third party proxy solicitation firm unless it determines to do so in its own discretion); and (B) recommend (and the board of directors of Denison shall recommend) to all Denison Shareholders that they vote in favour of the Denison Resolution.

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	(n)	Contractual Obligations. Denison shall not cause or permit any member of the Denison US Group to enter into, renew or modify in any respect any material contract, agreement, lease, commitment or arrangement to which such member of the Denison US Group is a party or by which it is bound, except with the consent of EFI or insofar as may be necessary to permit or provide for the completion of the Arrangement or where to do so is in the ordinary course of business.

	(o)	Net Working Capital. If necessary, Denison shall loan such funds to DMHC (which loans shall form part of the Acquired Debt to be assigned to EFI) as are necessary to satisfy the condition concerning consolidated net working capital of the Denison US Group set out in Section 5.2(d) of this Agreement.

	(p)	Satisfaction of Conditions. Denison shall use its reasonable commercial efforts to satisfy, or cause to be satisfied, all conditions precedent to its obligations to the extent that the same is within its reasonable control and to take, or cause to be taken, all other action and to do, or cause to be done, all other things necessary, proper or advisable under all applicable Laws to complete the Arrangement, including using its reasonable commercial efforts to:

	(i)	obtain the Denison Shareholder Approval in accordance with the provisions of the OBCA, the Interim Order and the requirements of any applicable Governmental Authority;

	(ii)	obtain all other consents, approvals and authorizations as are required to be obtained by Denison under any applicable Law or from any Governmental Entity that would, if not obtained, materially impede the completion of the Arrangement or have a Material Adverse Effect on Denison or the Denison US Group;

	(iii)	effect all necessary registrations, filings and submissions of information requested by Governmental Entities required to be effected by it in connection with the Arrangement and participate and appear in any proceedings of any party before any Governmental Entity;

	(iv)	oppose, lift or rescind any injunction or restraining order or other order or action challenging or affecting this Agreement, the Arrangement or seeking to stop, or otherwise adversely affecting the ability of the parties to consummate, the Arrangement;

	(v)	fulfill all conditions and satisfy all provisions of this Agreement and the Plan of Arrangement required to be fulfilled or satisfied by Denison; and

	(vi)	cooperate with EFI in connection with the performance by it of its obligations hereunder, provided however that the foregoing shall not be construed to obligate Denison to pay or cause to be paid any monies to cause such performance to occur.

(q)

Representations. Denison shall use its reasonable commercial efforts to conduct its affairs so that all of the representations and warranties of Denison contained herein shall be true and correct on and as of the Effective Date as if made on and as of such date, unless EFI consents to a change to any representation or warranty.

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	(r)	Closing Documents. Denison shall execute and deliver, or cause to be executed and delivered, at the closing of the Arrangement such customary agreements, certificates, resolutions, opinions and other closing documents as may be required by EFI or EFI’s counsel, all in form satisfactory to EFI or EFI’s counsel, acting reasonably.

	(s)	Completion Date. Denison shall use its reasonable commercial efforts to complete the Arrangement on or prior to the Completion Deadline.

	(t)	Agreements. Until the Effective Time, Denison shall not release any third party from any confidentiality or standstill agreement to which Denison and such third party are parties with respect to a potential acquisition of the Denison US Division or amend any of the foregoing and shall exercise all rights to require the return of information regarding the Denison US Division previously provided to such parties and shall exercise all rights to require the destruction of all materials including or incorporating any information regarding the Denison US Division.

ARTICLE 5 - CONDITIONS

5.1

Mutual Conditions

The obligations of EFI and Denison to complete the Arrangement shall be subject to the satisfaction of each of the following mutual conditions at or before the Effective Time:

(a)

KEPCO Offtake Agreement. Either:

	(i)	the rights and obligations of Denison under the uranium offtake agreement dated June 15, 2009 among Denison, KEPCO and Korea Hydro & Nuclear Power Co., Ltd. (the “KEPCO Offtake Agreement”) shall have been assigned to and assumed by EFI, DMHC or another member of the Denison US Group, and KEPCO shall have provided its consent to such assignment and released Denison from its obligations thereunder; or

	(ii)	in the event that KEPCO shall not have provided its consent to the assignment contemplated in subsection 5.1(a)(i) above, Denison and EFI shall have entered into an agreement (the “Denison Offtake Agreement”) pursuant to which EFI will agree to supply to Denison, and Denison will agree to purchase from EFI, sufficient U₃O₈concentrates to satisfy Denison’s obligation to deliver the minimum quantities specified in Section 2.02 of the KEPCO Offtake Agreement; the Denison Offtake Agreement shall be in form and substance satisfactory to each of Denison and EFI, shall have provisions relating to pricing, delivery mechanics, minimum delivery requirements, and damages upon default that are substantially equivalent to those set forth in the KEPCO Offtake Agreement and shall otherwise include customary terms and conditions for an agreement of its nature;

(b)

Orders. The Interim Order and the Final Order shall have been granted on terms acceptable to the Parties, acting reasonably, and shall not have been set aside or modified in a manner unacceptable to the Parties, acting reasonably.

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	(c)	Denison Shareholder Approval. The shareholders of Denison shall have approved the Arrangement, including this Agreement, and shall have approved or consented to such other matters as Denison shall consider necessary or desirable in connection with the Arrangement, acting reasonably.

	(d)	EFI Shareholder Approval. The shareholders of EFI shall have approved the issuance of the EFI Payment Shares and consented to the waiver of the application of EFI’s shareholder rights plan to the Arrangement and shall have approved or consented to such other matters as EFI shall consider necessary or desirable in connection with the Arrangement, acting reasonably.

	(e)	Consents. Approval of the TSX and the NYSE MKT and all necessary consents, waivers, permits, exemptions, order and approvals of, and any registrations and filings with, any Governmental Entity, all third person and other consents, waivers, permits, exemptions, orders, approvals, agreements and amendments and modifications to agreements, indentures or arrangements, which either EFI or Denison shall consider necessary or advisable, acting reasonably, in connection with the Arrangement, shall have been obtained or received on terms that are reasonably satisfactory to each Party, acting reasonably.

	(f)	No Lawsuits. Except for the matters disclosed in the EFI Disclosure Memorandum, there shall not be pending or threatened any suit, action or proceeding by any Governmental Entity or other person, in each case that has a reasonable likelihood of success: (i) seeking to prohibit or restrict the acquisition by EFI of any DMHC Shares or White Canyon Shares, seeking to restrain or prohibit the consummation of the Plan of Arrangement or seeking to obtain from EFI or Denison any damages that are material in relation to Denison taken as a whole or material to EFI taken as a whole; (ii) seeking to prohibit or materially limit the ownership or operation by EFI of any portion of the business or assets of the Denison US Group or to compel EFI to dispose of or hold separate any portion of the business or assets of the Denison US Group as a result of the Arrangement; (iii) seeking to impose limitations on the ability of EFI to acquire or hold, or exercise full rights of ownership of, any DMHC Shares or White Canyon Shares, including the right to vote such shares purchased by it on all matters; (iv) seeking to prohibit EFI from effectively controlling the business or operations of the Denison US Group; or (v) which otherwise is reasonably likely to have a Material Adverse Effect on EFI taken as a whole or the Denison US Group taken as a whole.

	(g)	No Action. There shall have been no action taken under any applicable Law or by any government or governmental or Regulatory Authority which:

	(i)	makes it illegal or otherwise directly or indirectly restrains, enjoins or prohibits the completion of the Arrangement; or

	(ii)	results or could reasonably be expected to result in a judgment, order, decree or assessment of damages, directly or indirectly, relating to the Arrangement which is, or could be, reasonably expected to have a Material Adverse Effect on EFI taken as a whole or the Denison US Group taken as a whole, respectively.

(h)

Prospectus Exemptions. The distribution of the securities pursuant to the Arrangement shall be exempt from the prospectus and registration requirements of applicable Canadian securities Laws either by virtue of exemptive relief from the Securities Authorities of each of the provinces of Canada or by virtue of applicable exemptions under Canadian securities Laws and shall not be subject to resale restrictions under applicable Canadian securities Laws (other than as applicable to control persons).

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	(i)	U.S. Registration Exemption. The Denison New Common Shares, the interests in the EFI Note and the EFI Payment Shares shall be exempt from the registration requirements of the 1933 Act pursuant to Section 3(a)(10) thereof and shall otherwise be in compliance with all U.S. Securities Laws.

	(j)	Listing of EFI Common Shares. The EFI Common Shares to be issued to holders of Denison Common Shares in connection with the Arrangement shall have been conditionally approved for listing on the TSX, subject to official notice of issuance and other normal conditions.

	(k)	No Termination. This Agreement shall not have been terminated pursuant to Section 6.2 hereof.

The foregoing conditions are for the mutual benefit of the Parties and may be waived only with the consent of both of the Parties. If any of such conditions shall not be complied with or waived as aforesaid on or before the Completion Deadline or, if earlier, the date required for the satisfaction thereof, then, subject to Section 5.4, Section 6.2 and Section 6.3, either Party may terminate this Agreement by written notice to the other Party in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by such Party.

5.2

Conditions of EFI

The obligations of EFI to complete the Arrangement shall be subject to the satisfaction of each of the following conditions precedent in full at or before the Effective Time:

	(a)	Performance by Denison. Denison shall have performed and complied with all of the covenants, obligations and agreements under this Agreement to be performed by or complied with by Denison prior to the Effective Date, to the satisfaction of EFI, acting reasonably.

	(b)	Representations and Warranties. The representations and warranties made by Denison in this Agreement shall be true and correct as of the Effective Date with the same effect as if made on and as of such date (except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date), and Denison shall have provided to EFI a certificate of two officers thereof certifying such accuracy on the Effective Date. No representation or warranty made by Denison hereunder shall be deemed not to be true and correct if the facts or circumstances that make such representation or warranty untrue or incorrect are disclosed or referred to in the Denison Disclosure Memorandum, or provided for or stated to be exceptions under this Agreement.

	(c)	No Material Adverse Effect. There shall not have been any event or change that has had or would reasonably be expected to have a Material Adverse Effect on the US Mining Division.

	(d)	Working Capital. The consolidated net working capital of the Denison US Group as of the Effective Date shall be not less than US$28,000,000, provided that, in calculating the working capital, amounts owing pursuant to the Acquired Debt will be disregarded as current liabilities of the Denison US Group.

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	(e)	No Encumbrances. At the Effective Time, there shall be no Encumbrances on the DMHC Shares, the White Canyon Shares, the Acquired Debt or the assets of the Denison US Group, other than Permitted Encumbrances.

	(f)	Support Agreements. Each of the Denison Shareholders who has entered into a Denison Support Agreement with EFI shall have complied in all material respects with its Denison Support Agreement.

	(g)	No Material Change in Employment Arrangements. There shall have been no material change in the existing employment or consulting arrangements of any senior officer of any Denison Material Entity from the date hereof and no Denison Material Entity shall have hired any additional senior officers.

	(h)	No Modification. The board of directors of Denison shall not have modified or amended, in a manner adverse to EFI, prior to the Denison Meeting, its recommendation that Denison Shareholders vote in favour of the Denison Resolution, provided that, for the avoidance of doubt, for the purposes of this subsection 5.2(h), a resolution confirming the recommendation that Denison Shareholders vote in favour of the Denison Resolution that is not unanimous shall not be considered a modification or amendment to the board of directors’ existing recommendation.

	(i)	Necessary Corporate Actions Taken. The board of directors of Denison shall have adopted all necessary resolutions and all other necessary corporate action shall have been taken by Denison to permit the consummation of the Arrangement, in form and substance satisfactory to EFI, acting reasonably.

	(j)	Denison Deliverables. Denison shall have caused to be delivered to EFI the following:

	(i)	Certificates representing the Purchased Shares, accompanied by stock transfer powers duly executed in blank or duly executed instruments of transfer, and all such other assurances, consents and other documents as EFI reasonably requests to effectively transfer to EFI title to the Purchased Shares free and clear of all Encumbrances;

	(ii)	Original share registers, share transfer ledgers, minute books and corporate seals (if any) of each of DMHC and White Canyon;

	(iii)	An assignment of the Acquired Debt in form and substance satisfactory to EFI, acting reasonably;

	(iv)	All other books, records, files and papers of each of DMHC and White Canyon, including computer programs (including source codes and software programs), computer manuals, computer data, financial and tax working papers, financial and tax books and records, personnel and employment records and minute and share certificate books;

	(v)	A certified copy of resolutions of the board of directors and shareholders of each of DMHC and White Canyon consenting to the transfer of the Purchased Shares to EFI as contemplated by this Agreement and authorizing the execution, delivery and performance of all contracts, agreements, instruments, certificates and other documents required by this Agreement to be delivered by DMHC and White Canyon, respectively;

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	(vi)	Written resignations of those directors and officers of each of DMHC and White Canyon specified by EFI, in each case with effect from the Effective Time;

	(vii)	Such other documentation as EFI reasonably requests on a timely basis in order to establish the completion of the Arrangement and the taking of all corporate proceedings in connection with the Arrangement, in each case in form and substance satisfactory to EFI, acting reasonably.

The foregoing conditions are for the exclusive benefit of EFI and may be waived, in whole or in part, by EFI in writing at any time. If any of such conditions shall not be complied with or waived by EFI on or before the Effective Time or, if earlier, the date required for the performance thereof, then, subject to Section 5.4 and Section 6.2 and Section 6.3, EFI may terminate this Agreement by written notice to Denison in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by EFI.

5.3

Conditions of Denison

The obligation of Denison to complete the Arrangement shall be subject to the satisfaction of each of the following conditions precedent in full at or before the Effective Time:

	(a)	Performance by EFI. EFI shall have performed and complied with all of the covenants and obligations under this Agreement to be performed by or complied with by EFI prior to the Effective Date, to the satisfaction of Denison, acting reasonably.

	(b)	Representations and Warranties. The representations and warranties made by EFI in this Agreement shall be true and correct as of the Effective Date with the same effect as if made on and as of such date (except to the extent that such representations and warranties speak as of an earlier date, in which event such representations and warranties shall be true and correct as of such earlier date), and EFI shall have provided to Denison a certificate of two officers thereof certifying such accuracy on the Effective Date. No representation or warranty made by EFI hereunder shall be deemed not to be true and correct if the facts or circumstances that make such representation or warranty untrue or incorrect are disclosed or referred to in the EFI Disclosure Memorandum, or provided for or stated to be exceptions under this Agreement.

	(c)	No Material Adverse Effect. There shall not have been any event or change that has had or would reasonably be expected to have a Material Adverse Effect on EFI.

	(d)	Working Capital. The consolidated working capital of EFI as of the Effective Date, without giving effect to the Arrangement, shall be not less than US$4,000,000.

	(e)	Support Agreements. Each of the EFI Shareholders who has entered into an EFI Support Agreement with Denison shall have complied in all material respects with its EFI Support Agreement.

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	(f)	No Modification. The board of directors of EFI shall not have modified or amended, in a manner adverse to Denison, prior to the EFI Meeting, its recommendation that EFI Shareholders vote in favour of the EFI Resolution, provided that, for the avoidance of doubt, for the purposes of this Section 5.3(f), a resolution confirming the recommendation that EFI Shareholders vote in favour of the EFI Resolution that is not unanimous shall not be considered a modification or amendment to the board of directors’ existing recommendation.

	(g)	Necessary Corporate Actions Taken. The board of directors of EFI shall have adopted all necessary resolutions and all other necessary corporate action shall have been taken by EFI to permit the consummation of the Arrangement and the other transaction contemplated hereby, including the appointment of the Additional Director Nominees to the board of directors of EFI effective at the Effective Time.

	(h)	Dissents. Denison Shareholders holding no more than 5% of the outstanding Denison Common Shares shall have exercised the right to dissent contemplated by Section 4.1 of the Plan of Arrangement (and not withdrawn such exercise).

	(i)	EFI Deliverables. EFI shall have caused to be delivered to Denison the following:

	(i)	the EFI Note;

	(ii)	evidence that it has irrevocably instructed the registrar and transfer agent for the EFI Common Shares to issue the EFI Payment Shares to the Denison Shareholders in accordance with the Plan of Arrangement;

	(iii)	a certified copy of the proceedings of the EFI board of directors giving effect to the appointment of the Additional Director Nominees effective as of the Effective Time; and

	(iv)	such other documentation as Denison reasonably requests on a timely basis in order to establish the completion of the Arrangement and the taking of all corporate proceedings in connection with the Arrangement, in each case in form and substance satisfactory to Denison, acting reasonably.

The foregoing conditions are for the benefit of Denison and may be waived, in whole or in part, by Denison in writing at any time. If any of such conditions shall not be complied with or waived by Denison on or before the Completion Deadline or, if earlier, the date required for the performance thereof, then, subject to Section 5.4 and Section 6.2 and Section 6.3, Denison may terminate this Agreement by written notice to EFI in circumstances where the failure to satisfy any such condition is not the result, directly or indirectly, of a breach of this Agreement by Denison.

5.4

Notice and Cure Provisions

Each Party shall give prompt notice to the other Party of the occurrence, or failure to occur, at any time from the date hereof until the Effective Date, of any event or state of facts which occurrence or failure would, would be likely to or could:

(a)

cause any of the representations or warranties of such Party contained herein to be untrue or inaccurate in any respect on the date hereof or on the Effective Date;

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	(b)	result in the failure to comply with or satisfy any covenant or agreement to be complied with or satisfied by such party prior to the Effective Date; or

	(c)	result in the failure to satisfy any of the conditions precedent in favour of the other Party contained in Section 5.1, Section 5.2 and Section 5.3 hereof, as the case may be.

Neither Party may (a) elect not to complete the Arrangement by virtue of the conditions contained in Section 5.1, Section 5.2 and Section 5.3 hereof, as applicable, not being satisfied or waived or (b) exercise any termination right arising therefrom; unless (i) promptly and in any event prior to the Effective Date, the Party intending to rely thereon has delivered a written notice to the other Party specifying in reasonable detail the breaches of covenants or untruthfulness or inaccuracy of representations and warranties or other matters that the Party delivering such notice is asserting as the basis for the exercise of the termination right, as the case may be, and (ii) if any such notice is delivered, and a Party is proceeding diligently, at its own expense, to cure such matter, if such matter is susceptible to being cured, the Party that has delivered such notice may not terminate this Agreement until the earlier of the Completion Deadline and the expiration of a period of 15 days from date of delivery of such notice. If such notice has been delivered prior to the date of the Denison Meeting or EFI Meeting, then such meeting(s) shall be adjourned or postponed until the expiry of such period.

5.5

Merger of Conditions

Upon the issuance of the Final Order and the closing of the Arrangement, the conditions set out in Section 5.1, Section 5.2 and Section 5.3 hereof shall be conclusively deemed to have been satisfied, fulfilled or waived as of the Effective Time.

ARTICLE 6 - SUPERIOR PROPOSALS AND TERMINATION

6.1

Covenants Regarding Superior Proposals

	(a)	Notice. A Party (in this Section 6.1, a “Receiving Party”) shall promptly (and in any event within 24 hours) notify the other Party (in this Section 6.1, a “Notified Party”), at first orally and then in writing, of any proposal, inquiry, offer or request received by the Receiving Party or its Representatives: (i) relating to an Acquisition Proposal or potential Acquisition Proposal or inquiry that could reasonably lead or be expected to lead to an Acquisition Proposal; (ii) for discussions or negotiations in respect of an Acquisition Proposal or potential Acquisition Proposal; or (iii) for non-public information relating to the Receiving Party or a Subsidiary of the Receiving Party, access to properties, books and records or a list of the holders of the Receiving Party shares or the shareholders of any Subsidiary of the Receiving Party. Such notice shall include the identity of the person making such proposal, inquiry, offer or request, a description of the terms and conditions thereof and the Receiving Party shall provide a copy of any Acquisition Proposal and all written communications with such person and such details of the proposal, inquiry, offer or request that the Notified Party may reasonably request. The Receiving Party shall keep the Notified Party promptly and fully informed of the status, including any change to the material terms, of such proposal, inquiry, offer or request and shall respond promptly to all inquiries by the Notified Party with respect thereto.

	(b)	Superior Proposal. Following the receipt by the Receiving Party of a bona fide written Acquisition Proposal made after the date of this Agreement (that was not solicited, assisted, initiated, knowingly encouraged or facilitated after the date hereof in contravention of Section 4.1(e) or Section 4.2(e), as the case may be), the Receiving Party and its Representatives may:

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	(i)	contact the person making such Acquisition Proposal and its Representatives solely for the purpose of clarifying the terms and conditions of such Acquisition Proposal and the likelihood of its consummation so as to determine whether such Acquisition Proposal is, or is reasonably likely to lead to, a Superior Proposal; and

	(ii)	if the board of directors of the Receiving Party (the “Receiving Party Board”) determines, after consultation with its outside legal and financial advisors, that such Acquisition Proposal is, or is reasonably likely to lead to, a Superior Proposal:

	A.	furnish information with respect to the Receiving Party and its Subsidiaries to the person making such Acquisition Proposal and its Representatives only if such person has entered into a confidentiality agreement that contains provisions that are not less favourable to the Receiving Party than those contained in the Confidentiality Agreement, and which also includes a standstill covenant that prohibits such person, for a period of 6 months, from acquiring, or offering to acquire, any equity securities of the Receiving Party, provided that the Receiving Party sends a copy of such confidentiality agreement to the Notified Party promptly following its execution and the Notified Party is promptly provided with a list of, and access to (to the extent not previously provided to the Notified Party) the information provided to such person; and

	B.	engage in discussions and negotiations with the person making such Acquisition Proposal and its Representatives provided that all such information access and discussions shall cease during the Match Period (as defined below).

(c)

Change in Recommendation. Notwithstanding Section 6.1(b), the Receiving Party may (i) enter into an agreement (other than a confidentiality agreement contemplated by subsection 6.1(b)(ii)A hereof) with respect to an Acquisition Proposal that is a Superior Proposal and/or (ii) withdraw, modify or qualify its approval or recommendation of the Arrangement and recommend or approve an Acquisition Proposal that is a Superior Proposal, provided:

	(i)	the Receiving Party shall have complied with its obligations under Section 4.1(e) or Section 4.2(e), as the case may be, and under this Section 6.1;

	(ii)	the Receiving Party Board has determined, after consultation with its outside legal and financial advisors, that such Acquisition Proposal is a Superior Proposal;

	(iii)	the Receiving Party has delivered written notice to the Notified Party of the determination of the Receiving Party Board that the Acquisition Proposal is a Superior Proposal and of the intention of the Receiving Party Board to approve or recommend such Superior Proposal and/or of the Receiving Party to enter into an agreement with respect to such Superior Proposal, together with a copy of such agreement executed by the person making such Superior Proposal that is capable of acceptance by the Receiving Party and a summary of the valuation analysis attributed by the Receiving Party Board in good faith to any non-cash consideration included in such Acquisition Proposal after consultation with its financial advisors (the “Superior Proposal Notice”);

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	(iv)	at least five Business Days have elapsed since the date the Superior Proposal Notice was received by the Notified Party, which five Business Day period is referred to as the “Match Period” and the exclusivity period in Section 4.1(e) or Section 4.2(e), as the case may be, shall automatically be extended so as to terminate no earlier than the second Business Day after the end of the Match Period;

	(v)	if the Notified Party has offered to amend the terms of the Arrangement and this Agreement during the Match Period pursuant to paragraph (d) below, such Acquisition Proposal continues to be a Superior Proposal compared to the amendment to the terms of the Arrangement and this Agreement offered by the Notified Party at the termination of the Match Period; and

	(vi)	the Receiving Party terminates this Agreement in compliance with the terms of this Section 6.1 and the Receiving Party has previously paid or, concurrently with termination, pays in cash the termination payment referred to in Section 6.3 to the Notified Party.

	(d)	Amendments. During the Match Period, the Notified Party shall have the opportunity, but not the obligation, to offer to amend the terms of the Arrangement and this Agreement and the Receiving Party shall cooperate with the Notified Party with respect thereto, including negotiating in good faith with the Notified Party to enable the Notified Party to make such adjustments to the provisions of the Arrangement and this Agreement as the Notified Party deems appropriate and as would enable the Notified Party to proceed with the Arrangement on such adjusted provisions. The Receiving Party Board shall review any such offer by the Notified Party to amend the terms of the Arrangement and this Agreement in order to determine, in good faith in the exercise of its fiduciary duties, whether the Notified Party’s offer to amend the Arrangement and this Agreement, upon its acceptance, would result in the Acquisition Proposal ceasing to be a Superior Proposal compared to the amendment to the terms of the Arrangement and this Agreement offered by the Notified Party. If the Receiving Party Board determines that the Acquisition Proposal would cease to be a Superior Proposal, the Receiving Party and the Notified Party shall enter into an amendment to this Agreement reflecting the offer by the Notified Party to amend the terms of the Arrangement and this Agreement.

	(e)	Successive Modifications. Each successive material modification of any Acquisition Proposal shall constitute a new Acquisition Proposal for purposes of this Section 6.1.

6.2

Termination

This Agreement may be terminated:

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	(a)	by either party if the conditions precedent to completion of the Arrangement set out in Section 5.1, Section 5.2 and Section 5.3, are not satisfied and are not reasonably capable of being satisfied on or prior to the Completion Deadline;

	(b)	by either party if such party determines, acting reasonably, that it or the other party will not be able to obtain the consents and approvals referred to in Sections 5.1(b), 5.1(c) and 5.1(d) in form satisfactory to either party, acting reasonably;

	(c)	by either party in accordance with Section 6.1 if such party receives a Superior Proposal;

	(d)	by either party if such party determines that the representations and warranties of the other party set out in this Agreement are materially incorrect, and are not capable of being corrected or remedied within a reasonable time period; or

	(e)	by either party if such party determines that the other party has not complied with its material obligations under this Agreement within the time period provided for herein or therein.

6.3

Termination Payment

(a)

In the event that this agreement is terminated:

	(i)	as a consequence of the failure to obtain the approval of Denison shareholders as contemplated by Section 5.1(c) if a third party has announced prior to the time of the Denison Meeting an Acquisition Proposal relating to Denison or an intention to make an Acquisition Proposal relating to Denison, in either case which represents a Superior Proposal, and such proposal or intention is still in effect at the time of the Denison Meeting;

	(ii)	by Denison pursuant to Section 6.2(c);

	(iii)	by EFI pursuant to Section 6.2(d) or Section 6.2(e),

		then Denison shall pay a termination payment in the amount of Cdn$3,000,000 as liquidated damages for the loss of Denison’s rights under this Agreement to EFI at the time of such termination in immediately available funds. Denison shall not be obligated to make more than one payment pursuant to this Section 6.3(a). Denison hereby acknowledges that the payment amount set out in this section is a payment of liquidated damages which are a genuine pre-estimate of the damages which EFI will suffer or incur as a result of the event giving rise to such damages and the resultant non-completion of the Arrangement and are not penalties. Denison hereby irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. Upon receipt of payment of the amount set out in this subsection by EFI, EFI shall have no further claim against Denison in respect of the failure to complete the Arrangement, provided that nothing herein shall preclude EFI from seeking injunctive relief to restrain any breach or threatened breach by Denison of any of its obligations hereunder or otherwise to obtain specific performance without the necessity of posting a bond or security in connection therewith as described in Section 8.4.

	(b)	In the event that this Agreement is terminated:

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	(i)	as a consequence of the failure to obtain the approval of EFI Shareholders as contemplated by Section 5.1(d) if a third party has announced prior to the time of the EFI Meeting an Acquisition Proposal relating to EFI or an intention to make an Acquisition Proposal relating to EFI, in either case which represents a Superior Proposal, and such proposal or intention is still in effect at the time of the Denison Meeting;

	(ii)	by EFI pursuant to Section 6.2(c); or

	(iii)	by Denison pursuant to Section 6.2(d) or Section 6.2(e),

then EFI shall pay a termination payment in the amount of Cdn$3,000,000 as liquidated damages for the loss of EFI’s rights under this Agreement to Denison at the time of such termination in immediately available funds. EFI shall not be obligated to make more than one payment pursuant to this Section 6.3(b) . EFI hereby acknowledges that the payment amount set out in this section is a payment of liquidated damages which are a genuine pre-estimate of the damages which Denison will suffer or incur as a result of the event giving rise to such damages and the resultant non-completion of the Arrangement and are not penalties. EFI hereby irrevocably waives any right it may have to raise as a defence that any such liquidated damages are excessive or punitive. Upon receipt of payment of the amount set out in this subsection by Denison, Denison shall have no further claim against EFI in respect of the failure to complete the Arrangement, provided that nothing herein shall preclude Denison from seeking injunctive relief to restrain any breach or threatened breach by EFI of any of its obligations hereunder or otherwise to obtain specific performance without the necessity of posting a bond or security in connection therewith as described in Section 8.4.

6.4

Reimbursement of Expenses

In the event that the Arrangement is not completed due to the condition in Section 5.3(h) not being satisfied as a result of KEPCO exercising its dissent rights contemplated by Section 4.1 of the Plan of Arrangement, then Denison shall reimburse EFI for its reasonable costs and expenses incurred in connection with the transactions contemplated by this Agreement, provided that Denison’s reimbursement obligation under this Section 6.4 shall not exceed Cdn$1,000,000.

ARTICLE 7- AMENDMENT

7.1

Amendment

This Agreement may, at any time and from time to time before or after the holding of the Denison Meeting or EFI Meeting, be amended by mutual written agreement of the Parties without, subject to applicable Law, further notice to or authorization on the part of the Denison Shareholders or the EFI Shareholders, as the case may be, and any such amendment may, without limitation:

	(a)	change the time for the performance of any of the obligations or acts of any Party;

	(b)	waive any inaccuracies in or modify any representation or warranty contained herein or in any document delivered pursuant hereto;

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	(c)	waive compliance with or modify any of the covenants herein contained and waive or modify the performance of any of the obligations of any of the Parties; and

	(d)	waive compliance with or modify any condition herein contained;

provided, however, that notwithstanding the foregoing: (i) following the Denison Meeting, the principal amount of the EFI Note and number of EFI Payment Shares shall not be amended (other than to reflect the EFI Share Consolidation) without the approval of the Denison Shareholders given in the same manner as required for the approval of the Arrangement or as may be ordered by the Court; (ii) following the EFI Meeting, the principal amount of the EFI Note and number of EFI Payment Shares shall not be amended (other than to reflect the EFI Share Consolidation) without the approval of the EFI Shareholders; and (iii) this Agreement and the Plan of Arrangement may be amended, in accordance with the Final Order but, in the event that the terms of the Final Order require any such amendment, the rights of the Parties under Section 5.2, Section 5.3, Section 6.1 and Section 7.2 hereof shall remain unaffected.

7.2

Mutual Understanding Regarding Amendments

	(a)	In addition to the Arrangement or at the request of a Party, the Parties will continue from and after the date hereof and through and including the Effective Date to use their respective reasonable commercial efforts to maximize present and future planning opportunities for Denison, the Denison Shareholders and EFI and the EFI Shareholders as and to the extent that the same shall not prejudice any Party or the shareholders thereof. The parties will ensure that such planning activities do not impede the progress of the Arrangement in any material way.

	(b)	The Parties agree that, if either Party proposes to the other Party any amendment to this Agreement or the Plan of Arrangement, both Parties will reasonably consider such amendment. The Parties further agree that if neither Party nor its respective shareholders will be materially prejudiced, and the completion of the Arrangement will not be delayed, by reason of any such amendment, then the Parties will co-operate to, subject to applicable Laws, effect the amendment or amendments.

ARTICLE 8 - GENERAL

8.1

Denison Indemnity

(a)

Indemnification by Denison. Denison shall indemnify and save harmless EFI and the Denison US Group from, and shall pay to EFI and the Denison US Group, on demand, the amount of any and all loss, liability, damage, cost, expense, charge, fine, penalty or assessment, suffered or incurred by EFI or the Denison US Group, directly resulting from or arising out of any act, omission or state of facts and any demand, action, investigation, inquiry, suit, proceeding, claim, assessment, judgment or settlement or compromise relating thereto (a “Claim”), including the costs and expenses of any action, suit, proceeding, investigation, inquiry, arbitration award, grievance, demand, assessment, judgment, settlement or compromise relating thereto (“Losses”), as a result of or arising in connection with:

(i)

any inaccuracy of or any breach of any representation or warranty made by Denison in this Agreement or in any contract, agreement, instrument, certificate or other document delivered pursuant to this Agreement, whether or not EFI relied on or had knowledge of it;

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	(ii)	the litigation relating to the contractor for the construction of tailings pond cell 4b at the White Mesa Mill, provided that Denison shall be entitled to receive the proceeds of any amounts received or recovered by Denison or by the Denison US Group as a result of a favourable ruling in favour of Denison or the Denison US Group in connection with such litigation;

	(iii)	any severance payments payable to employees of the Denison US Group who are entitled to receive such severance payments due to the change of control of DMHC resulting from the Transaction; and

	(iv)	any Claim against, or Losses suffered by, EFI arising from matters which occurred prior to the Effective Date relating to White Canyon as a corporate entity, not including its former subsidiary Utah Energy Corporation or the assets thereof.

	(b)	Notice of Claim. EFI or the Denison US Group, promptly on becoming aware of any circumstances that have given or could give rise to a Claim, shall give notice of those circumstances to Denison. The notice will specify with reasonable particularity (to the extent the information is available) the factual basis for the Claim and the amount of the Losses, if known. The failure to give, or delay in giving, a notice does not relieve Denison of its obligations except and only to the extent of any prejudice caused to Denison by that failure or delay.

	(c)	Investigation. Following receipt of a notice in respect of a Claim, Denison has 60 days to make such investigation of the Claim as is considered necessary or desirable. For the purpose of that investigation, EFI shall make available to Denison the information relied on by EFI or the Denison US Group to substantiate the Claim, together with such information as Denison may reasonably request. If the Parties agree at or prior to the expiry of this 60 day period (or prior to the expiry of any extension of this period agreed to by the Parties) as to the validity and amount of that Claim, Denison shall immediately pay to EFI or the Denison US Group the full amount as agreed to by the Parties of the Claim. For clarity, EFI is deemed to have incurred or suffered Losses as of and from the Effective Date as a consequence of any reduction in the value of the US Mining Division resulting from an inaccuracy or breach of any representation or warranty by Denison under this Agreement.

8.2

EFI Indemnity

	(a)	Indemnification by EFI. EFI shall indemnify and save harmless Denison from, and shall pay to Denison, on demand, the amount of any and all loss, liability, damage, cost, expense, charge, fine, penalty or assessment, suffered or incurred by Denison directly resulting from or arising out of any act, omission or state of facts and any Claim, including any Losses, as a result of or arising in connection with any inaccuracy of or any breach of any representation or warranty made by EFI in this Agreement or in any contract, agreement, instrument, certificate or other document delivered pursuant to this Agreement, whether or not Denison relied on or had knowledge of it.

	(b)	Notice of Claim. Denison, promptly on becoming aware of any circumstances that have given or could give rise to a Claim, shall give notice of those circumstances to EFI, The notice will specify with reasonable particularity (to the extent the information is available) the factual basis for the Claim and the amount of the Losses, if known. The failure to give, or delay in giving, a notice does not relieve EFI of its obligations except and only to the extent of any prejudice caused to EFI by that failure or delay.

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(c)

Investigation. Following receipt of a notice in respect of a Claim, EFI has 60 days to make such investigation of the Claim as is considered necessary or desirable. For the purpose of that investigation, Denison shall make available to EFI the information relied on by Denison to substantiate the Claim, together with such information as EFI may reasonably request. If the Parties agree at or prior to the expiry of this 60 day period (or prior to the expiry of any extension of this period agreed to by the Parties) as to the validity and amount of that Claim, EFI shall immediately pay to Denison the full amount as agreed to by the Parties of the Claim. For clarity, Denison is deemed to have incurred or suffered Losses as of and from the Effective Date as a consequence of any reduction in the value of the EFI Payment Shares resulting from an inaccuracy or breach of any representation or warranty by EFI under this Agreement.

8.3

Notices

Any notice, consent, waiver, direction or other communication required or permitted to be given under this Agreement by a Party shall be in writing and shall be delivered by hand to the Party to which the notice is to be given at the following address or sent by facsimile to the following numbers or to such other address or facsimile number as shall be specified by a party by like notice. Any notice, consent, waiver, direction or other communication aforesaid shall, if delivered, be deemed to have been given and received on the date on which it was delivered to the address provided herein (if a Business Day or, if not, then the next succeeding Business Day) and if sent by facsimile be deemed to have been given and received at the time of receipt (if a Business Day or, if not, then the next succeeding Business Day) unless actually received after 4:00 p.m. (Toronto time) at the point of delivery in which case it shall be deemed to have been given and received on the next Business Day.

The address for service of each of the parties shall be as follows:

(a)

if to EFI:

44 Union Blvd., Suite 600
Lakewood, CO 80228
USA

Attention: Stephen P. Antony, President and Chief Executive Officer
Facsimile: 303-974-2141

With a copy to:

Borden Ladner Gervais LLP
Scotia Plaza, 40 King Street West
Toronto, ON M5H 3Y4
Canada

Attention: Mark F. Wheeler
Facsimile: 416-361-7376

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(b)

if to Denison:

595 Bay Street, Suite 402
Toronto, ON M5G 2C2
Canada

Attention: Ron F. Hochstein, President and Chief Executive Officer
Facsimile: 416-979-5893

With a copy to:

Blake, Cassels & Graydon LLP
855 – 2^nd Street S.W.
Suite 3500, Bankers Hall East Tower
Calgary, AB T2P 4J8
Canada

Attention: Daniel McLeod
Facsimile: 403-260-9700

8.4

Remedies

The Parties acknowledge and agree that an award of money damages may be inadequate for any breach of this Agreement by either Party or its representatives and advisors and that such breach may cause the non-breaching Party irreparable harm. Each Party agrees that it will not request that the court find that its breach or threatened breach has not or will not cause the other Party irreparable harm and neither Party will lend assistance to such a request. The Parties agree that, in the event of any such breach or threatened breach of this Agreement by one of the Parties, Denison (if EFI is the breaching Party) or EFI (if Denison is the breaching Party) will be entitled to seek equitable relief, including interim, interlocutory and permanent injunctive relief and specific performance. Each Party agrees that it will not take the position in court or otherwise that its breach or threatened breach has not or will not cause the other Party irreparable harm and neither Party will lend assistance to such position.

Each Party agrees that it will not request that the court require the Party or Parties seeking such relief to provide an undertaking as to damages or to post a bond or security as a condition of granting such relief. Without limiting the generality of the foregoing, the Parties acknowledge and agree that a mandatory order or other injunctive relief may be granted to enforce any negative covenant in this Agreement without the requirement to demonstrate irreparable harm or that the balance of convenience favours the Party seeking such relief. Subject to any other provision hereof including, without limitation, Section 8.4 hereof, such remedies will not be the exclusive remedies for any breach of this Agreement but will be in addition to all other remedies available hereunder at law or in equity to each of the Parties.

8.5

Expenses

The Parties agree that, except for the termination payment provided for in Section 6.3, each Party shall be responsible for its own expenses including all out-of-pocket expenses incurred in connection with this Agreement and the Arrangement, the EFI Meeting, the Denison Meeting and the preparation and mailing of the EFI Proxy Circular and the Denison Proxy Circular, including legal and accounting fees, printing costs, financial advisor fees and all disbursements by advisors and that nothing in this Agreement shall be construed so as to prevent the payment of such expenses. The provisions of this Section 8.5 shall survive the termination of this Agreement.

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8.6

Time of the Essence

Time shall be of the essence in this Agreement.

8.7

Entire Agreement

The Confidentiality Agreement and this Agreement, together with the agreements and other documents herein or therein referred to, constitute the entire agreement between the Parties pertaining to the subject matter hereof and supersede all prior agreements, understandings, negotiations and discussions, whether oral or written, between the Parties with respect to the subject matter hereof. There are no representations, warranties, covenants or conditions with respect to the subject matter hereof except as contained herein. For the avoidance of doubt, this Agreement supersedes and replaces the Letter Agreement in its entirety.

8.8

Further Assurances

Each Party shall, from time to time, and at all times hereafter, at the request of the other of them, but without further consideration, do, or cause to be done, all such other acts and execute and deliver, or cause to be executed and delivered, all such further agreements, transfers, assurances, instruments or documents as shall be reasonably required in order to fully perform and carry out the terms and intent hereof including, without limitation, the Plan of Arrangement.

8.9

Governing Law

This Agreement shall be governed by, and be construed in accordance with, the laws of the Province of Ontario and the laws of Canada applicable therein but the reference to such laws shall not, by conflict of laws rules or otherwise, require the application of the law of any jurisdiction other than the Province of Ontario.

8.10

Execution in Counterparts

This Agreement may be executed in one or more counterparts, each of which shall conclusively be deemed to be an original and all such counterparts collectively shall be conclusively deemed to be one and the same. Delivery of an executed counterpart of the signature page to this Agreement by facsimile or electronic scanned copy shall be effective as delivery of a manually executed counterpart of this Agreement, and either Party delivering an executed counterpart of the signature page to this Agreement by facsimile or electronic scanned copy to the other Party shall thereafter also promptly deliver a manually executed original counterpart of this Agreement to such other Party, but the failure to deliver such manually executed original counterpart shall not affect the validity, enforceability or binding effect of this Agreement.

8.11

Waiver

No waiver or release by either Party shall be effective unless in writing and executed by the Party granting such waiver or release and any waiver or release shall affect only the matter, and the occurrence thereof, specifically identified and shall not extend to any other matter or occurrence. Waivers may only be granted upon compliance with the provisions governing amendments set forth in Section 7.1 hereof.

8.12

No Personal Liability

(a)

No director or officer of EFI shall have any personal liability whatsoever (other than in the case of fraud or wilful misconduct) to Denison under this Agreement or any other document delivered in connection with this Agreement or the Arrangement by or on behalf of EFI.

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(b)

No director or officer of Denison shall have any personal liability whatsoever (other than in the case of fraud or wilful misconduct) to EFI under this Agreement or any other document delivered in connection with this Agreement or the Arrangement by or on behalf of Denison.

8.13

Enurement and Assignment

This Agreement shall enure to the benefit of the Parties and their respective successors and permitted assigns and shall be binding upon the Parties and their respective successors. This Agreement may not be assigned by either Party without the prior written consent of each of the other Parties.

8.14

United States Tax Considerations

	(a)	The Parties contemplate that this Agreement, together with the Plan of Arrangement annexed hereto, shall not constitute a plan to effectuate a partial liquidation of Denison within the meaning of Sections 302(b)(4) and 302(e) of the Code.

	(b)	Promptly upon signing this Agreement, Denison will apply for a withholding certificate from the United States Internal Revenue Service under United States Treasury Regulation section 1.1445-3(b) stating that no withholding on the Purchase and Sale Transaction or any other transaction described in the Plan of Arrangement is required under section 1445(a) of the Code. In reliance on representations in this Agreement and on Denison’s agreement to apply for a withholding certificate, EFI agrees to not reduce the EFI Note by the amount of withholding otherwise required under section 1445(a) of the Code. Denison will indemnify EFI for any amount that should have been withheld under section 1445(a) of the Code if the Internal Revenue Service fails to issue a withholding certificate or issues a withholding certificate that does not completely exempt Denison from withholding. Denison will provide EFI with a copy of the application and will forward all related correspondence to EFI immediately upon receipt. For purposes of the indemnification under this Section 8.14(b), Section 3.4 shall not apply to the representations contained in Section 3.2(bb)(vii) and Section 3.2(bb)(viii), and such representations and warranties shall survive the execution and delivery of this Agreement and the completion of the Arrangement and shall continue for a period of ending on the earlier of the receipt of the withholding certificate from the United States Internal Revenue Service showing no withholding is required or 24 months from the Effective Date.

	(c)	The Parties agree that the sole consideration for the Purchased Shares is the Share Consideration, allocated 70% to the DMHC Common Shares and 30% to the White Canyon Ordinary Shares and no portion of the EFI Note or the EFI Payment Shares shall constitute consideration for the sale of the Purchased Shares. The Parties agree to characterize for all tax purposes the sale by Denison and the purchase by EFI of (i) the Purchased Shares in consideration of the payment of the Share Consideration and (ii) the Acquired Debt in consideration of the issuance of the EFI Note as a sale in which gain or loss is recognized. Neither Party shall take a position on any tax return inconsistent with such sale treatment except as required by a taxing authority and each Party hereby indemnifies the other for any loss realized by such other party arising out of a Party taking a tax position inconsistent with this Section 8.14(c) unless required by a taxing authority, in which case there will be no indemnification by either Party.

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(d)

Notwithstanding any other provisions of this Agreement, if, five days before the Effective Time, the amount of the Acquired Debt exceeds the estimated value of the EFI Payment Shares (the difference being the “Acquired Debt Excess”), Denison will contribute a portion of the Acquired Debt to DMHC in an amount equal to the Acquired Debt Excess in exchange for newly issued equity securities of DMHC; provided, however, that Denison will not be required to make this contribution if doing so would give rise to additional tax to Denison under the Tax Act.

(remainder of page intentionally left blank)

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IN WITNESS WHEREOF the Parties have executed this Agreement as of the date first above written.

ENERGY FUELS INC.

Per: (signed) “Stephen P. Antony”
Name: Stephen P. Antony
Title: President and Chief Executive Officer

DENISON MINES CORP.

Per: (signed) “Ron F. Hochstein”
Name: Ron F. Hochstein
Title: President and C.E.O.

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SCHEDULE A

PLAN OF ARRANGEMENT
UNDER SECTION 182 OF THE
BUSINESS CORPORATIONS ACT (ONTARIO)

ARTICLE 1 - DEFINITIONS AND INTERPRETATION

1.1

Definitions

In this Plan of Arrangement, unless the context otherwise requires, the following words and terms with the initial letter or letters thereof capitalized shall have the meanings ascribed to them below:

	(a)	“Arrangement” means the arrangement under the provisions of the OBCA on the terms and subject to the conditions set forth in this Plan of Arrangement, subject to any amendment or supplement hereto made in accordance with the Arrangement Agreement, the provisions hereof or at the direction of the Court in the Final Order;

	(b)	“Acquired Debt” shall have the meaning ascribed thereto in the Arrangement Agreement;

	(c)	“Arrangement Agreement” means the Arrangement Agreement dated as of May 23, 2012, between EFI and Denison, as amended, amended and restated or supplemented prior to the Effective Date;

	(d)	“Business Day” means any day other than a Saturday, a Sunday or a statutory holiday in Toronto, Ontario;

	(e)	“Court” means the Ontario Superior Court of Justice;

	(f)	“Denison” means Denison Mines Corp., a corporation existing under the OBCA;

	(g)	“Denison Class A Shares” shall have the meaning ascribed thereto in section 3.1(c)(i)(A);

	(h)	“Denison Meeting” means the special meeting of the Denison Shareholders and any adjournments thereof, to be held to, among other things, consider and, if deemed advisable, approve the Arrangement;

	(i)	“Denison Shareholders” means the holders of Denison Shares;

	(j)	“Denison Shares” means the voting, common shares in the capital of Denison as constituted immediately prior to the Effective Time;

	(k)	“Depositary” means such trust company, bank or financial institution agreed to in writing between EFI and Denison for the purpose of, among other things, issuing certificates representing EFI Payment Shares to the Denison Shareholders in connection with the Arrangement;

	(l)	“Dissent Procedures” shall have the meaning ascribed thereto in section 4.1;

	(m)	“Dissent Right” shall have the meaning ascribed thereto in section 4.1;

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	(n)	“Dissenting Shareholder” means a holder of Denison Shares who dissents in respect of the Arrangement in strict compliance with the Dissent Rights and who is ultimately entitled to be paid fair value for their Denison Shares;

	(o)	“Distribution Record Date” means the close of business on the Business Day immediately preceding the Effective Date, established for the purpose of determining the Denison Shareholders entitled to receive New Common Shares and an assignment of a portion of the principal amount of the EFI Note pursuant to this Plan of Arrangement;

	(p)	“Effective Date” means the date shown on the certificate of arrangement issued under the OBCA giving effect to the Arrangement;

	(q)	“Effective Time” means 11:59 p.m. (Toronto time) on the Effective Date;

	(r)	“EFI” means Energy Fuels Inc., a corporation continued under the OBCA;

	(s)	“EFI Common Shares” means the issued and outstanding common shares of EFI as constituted on the Effective Date;

	(t)	“EFI Note” means the non-interest bearing promissory note issued to Denison by EFI with a principal amount equal to the aggregate fair market value, determined as of the Effective Date, of the EFI Payment Shares;

	(u)	“EFI Payment Shares” means 425,441,494 common shares in the capital of EFI as constituted on May 23, 2012 or, if the EFI Share Consolidation is effected prior to the Effective Date, 42,544,149 common shares in the capital of EFI after giving effect to the EFI Share Consolidation;

	(v)	“EFI Post-Consolidation Common Shares” means common shares in the capital of EFI after giving effect to the EFI Share Consolidation;

	(w)	“EFI Share Consolidation” means the proposed share consolidation of the EFI Common Shares on the basis of one (1) EFI Post-Consolidation Common Share for each ten (10) EFI Common Shares;

	(x)	“Final Order” means the final order of the Court approving the Arrangement;

	(y)	“Interim Order” means the interim order of the Court made pursuant to subsection 182(5) of the OBCA in connection with the Arrangement, including any amendment thereto;

	(z)	“New Common Shares” means a new class of voting common shares without par value which Denison will create and issue as described in section 3.1 of this Plan of Arrangement and for which the Denison Shares are, in part, to be exchanged under this Plan of Arrangement and which, immediately after completion of the transactions comprising the Plan of Arrangement, will be identical in every relevant respect to the Denison Shares immediately prior to the Effective Time;

	(aa)	“OBCA” means the Business Corporations Act (Ontario);

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	(bb)	“Plan of Arrangement” means this plan of arrangement, as amended, modified or supplemented from time to time;

	(cc)	“Purchase and Sale Transaction” shall have the meaning ascribed thereto in the Arrangement Agreement;

	(dd)	“Purchased Shares” shall have the meaning ascribed thereto in the Arrangement Agreement;

	(ee)	“Share Consideration” means cash in the aggregate amount of Cdn$10.00; and

	(ff)	“Tax Act” means the Income Tax Act (Canada);

1.2

Meaning

Words and phrases used herein and defined in the OBCA and not otherwise defined herein shall have the same meaning herein as in the OBCA unless the context otherwise requires.

1.3

Interpretation Not Affected by Headings

The division of this Plan of Arrangement into articles, sections, paragraphs and subparagraphs and the insertion of headings herein are for convenience of reference only and shall not affect the construction or interpretation of this Plan of Arrangement. The terms “this Plan of Arrangement”, “hereof’, “herein”, “hereto”, “hereunder” and similar expressions refer to this Plan of Arrangement and not to any particular article, section or other portion hereof and include any instrument supplementary or ancillary hereto.

1.4

Number, Gender and Persons

In this Plan of Arrangement, unless the context otherwise requires, words importing the singular shall include the plural and vice versa, words importing the use of either gender shall include both genders and neuter and the word person and words importing persons shall include a natural person, firm, trust, partnership, association, corporation, joint venture or government (including any governmental agency, political subdivision or instrumentality thereof) and any other entity or group of persons of any kind or nature whatsoever.

1.5

Date for any Action

If the date on which any action is required to be taken hereunder is not a Business Day, such action shall be required to be taken on the next succeeding day which is a Business Day.

1.6

Statutory References

Any reference in this Plan of Arrangement to a statute includes all regulations made thereunder, all amendments to such statute or regulation in force from time to time and any statute or regulation that supplements or supersedes such statute or regulation.

1.7

Currency

Unless otherwise stated, all references herein to amounts of money are expressed in lawful money of Canada.

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1.8

Time of the Essence

Time shall be of the essence with respect to every provision of this Plan of Arrangement.

ARTICLE 2 - ARRANGEMENT AGREEMENT

2.1

Arrangement Agreement

This Plan of Arrangement is made pursuant to, and is subject to the provisions of, the Arrangement Agreement, except in respect of the sequence of the steps comprising the Arrangement, which shall occur in the order set forth herein.

ARTICLE 3 - ARRANGEMENT

3.1

Arrangement

Commencing at the Effective Time, the following shall occur and shall be deemed to occur sequentially in the following order at separate moments in time without any further act or formality:

	(a)	Denison and EFI shall complete the Purchase and Sale Transaction pursuant to which Denison shall sell to EFI, and EFI shall purchase from Denison (i) all of the Purchased Shares in consideration for payment of the Share Consideration to Denison and (ii) all of the Acquired Debt in consideration for the issuance of the EFI Note to Denison;

	(b)	each Denison Share held by a Dissenting Shareholder shall be deemed to be transferred by the holder thereof, without any further act or formality on its part, free and clear of all liens, claims and encumbrances, to Denison and Denison shall thereupon be obliged to pay the amount therefor determined and payable in accordance with Article 4 hereof, and the name of such holder shall be removed from the central securities register as a holder of Denison Shares and such Denison Shares so transferred to Denison shall thereupon be cancelled;

	(c)	in the course of a reorganization of capital:

(i)

the authorized share capital of Denison shall be reorganized and altered by:

	A.	renaming and re-designating all of the issued and unissued Denison Shares as Class A common shares (the “Denison Class A Shares”) which shares shall have the same rights and restrictions as the Denison Shares except that each Denison Class A Share shall be entitled to two votes at any meeting of the Denison Shareholders, and

	B.	creating an unlimited number of common shares without par value (the “New Common Shares”) with rights, privileges, restrictions and conditions identical to the Denison Shares;

	(ii)	Denison’s Articles of Incorporation shall be amended to reflect the alterations in section 3.1(c)(i);

	(iii)	pursuant to the reorganization, each issued and outstanding Denison Class A Share shall be exchanged for one New Common Share and an assignment by Denison of that portion of the principal amount of the EFI Note determined by dividing the fair market value of the EFI Note by the number of Denison Class A Shares outstanding;

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	(iv)	the Denison Class A Shares, none of which will be allocated and issued once the steps referred to in section 3.1(c)(iii) are completed, shall be cancelled and the authorized capital of Denison shall be changed by deleting the Denison Class A Shares as a class of shares of Denison;

	(v)	the amount added to the stated capital of the New Common Shares shall be the excess, if any, of (1) the paid-up capital (as that term is used for the purposes of the Tax Act) of the Denison Shares (other than the Denison Shares held by the Dissenting Shareholders) immediately prior to the Effective Time, less (2) the principal amount of the EFI Note; and the stated capital of the Denison Class A Shares shall, for greater certainty, be nil;

	(vi)	Denison’s Articles of Incorporation shall be amended to reflect the alterations in section 3.1(c)(iv); and

(d)

pursuant to the terms of the EFI Note, EFI will repay the EFI Note by issuing the EFI Payment Shares to the Denison Shareholders in full and final satisfaction of the EFI Note. No fractional EFI Common Shares shall be issued. In the event that the repayment of the EFI Note would otherwise result in the issuance to a Denison Shareholder of a number of EFI Common Shares which is not a whole number, the number of EFI Common Shares to be issued to such Denison Shareholder shall be rounded down to the nearest whole number.

3.2

Post-Effective Date Procedures

	(a)	On or promptly after the Effective Date, EFI shall deliver or arrange to be delivered to the Depositary certificates representing the EFI Payment Shares to be issued to the Denison Shareholders on the repayment of the EFI Note and in accordance with the provisions of the Arrangement, which certificates shall be held by the Depositary as agent and nominee for such Denison Shareholders for distribution to such Denison Shareholders in accordance with the provisions of Article 5 hereof.

	(b)	Subject to the provisions of Article 5 hereof, Denison Shareholders (other than Dissenting Shareholders) shall be entitled to receive delivery of the certificates representing the EFI Common Shares to which they are entitled pursuant to the Arrangement.

3.3

Deemed Fully Paid and Non-Assessable Shares.

All New Common Shares and EFI Payment Shares issued pursuant hereto shall be deemed to be validly issued and outstanding as fully paid and non-assessable shares for all purposes of the OBCA.

3.4

Supplementary Actions.

Notwithstanding that the transactions and events set out herein shall occur and shall be deemed to occur in the order set out in this Plan of Arrangement without any further act or formality, each of the parties to the Arrangement Agreement shall make, do and execute, or cause to be made, done and executed, all such further acts, deeds, agreements, transfers, assurances, instruments or documents as may reasonably be required by either of them in order further to document or evidence any of the transactions or events set out herein.

B - 82

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ARTICLE 4 - DISSENT RIGHTS

4.1

Dissent Rights

Holders of Denison Shares may exercise rights of dissent (the “Dissent Right”) pursuant to and in the manner set forth under the OBCA, as modified by the Interim Order (the “Dissent Procedures”), with respect to Denison Shares in connection with the Arrangement, provided that holders who exercise such rights of dissent and who:

	(a)	are ultimately entitled to be paid fair value for their Denison Shares, which fair value shall be the fair value of the Denison Shares immediately before the passing by the holders of the Denison Shares of the resolution approving the Arrangement, shall be paid an amount equal to such fair value by Denison; or

	(b)	are ultimately not entitled, for any reason, to be paid fair value for their Denison Shares shall be deemed to have participated in the Arrangement, commencing at the Effective Time, on the same basis as a non-dissenting holder of Denison Shares and shall be entitled to receive only the consideration contemplated in Section 3.1 hereof that such holder would have received pursuant to the Arrangement if such holder had not exercised Dissent Rights,

but in no case shall EFI, Denison or any other person be required to recognize holders of Denison Shares who exercise Dissent Rights as holders of Denison Shares after the time that is immediately prior to the Effective Time, and the names of such holders of Denison Shares who exercise Dissent Rights shall be deleted from the central securities register as holders of Denison Shares at the Effective Time.

ARTICLE 5 - CERTIFICATES

5.1

Denison Class A Shares

Recognizing that the Denison Shares shall be renamed and re-designated as Denison Class A Shares pursuant to subsection 3.1(c)(i)(A) and that the Denison Class A Shares shall be exchanged partially for New Common Shares pursuant to subsection 3.1(c)(iii), Denison shall not issue replacement share certificates representing the Denison Class A Shares.

5.2

EFI Payment Shares

On or immediately prior to the Effective Time, EFI shall deliver or arrange to be delivered to the Depositary certificates representing the EFI Payment Shares for distribution to the Denison Shareholders, together with an irrevocable direction to distribute and transfer the EFI Payment Shares to the Denison Shareholders in accordance with this Plan of Arrangement.

5.3

New Common Shares

From and after the Effective Date, share certificates representing Denison Shares not deemed to have been cancelled pursuant to Article 4 shall for all purposes be deemed to be share certificates representing New Common Shares, and no new share certificates shall be issued with respect to the New Common Shares issued in connection with the Arrangement.

B - 83

- A7 -

5.4

Interim Period

Any Denison Shares traded after the Distribution Record Date will represent New Common Shares as of the Effective Date and shall not carry any rights to receive a pro rata portion of the EFI Note or EFI Payment Shares.

5.5

Withholding Rights

Denison and the Depositary shall be entitled to deduct and withhold from all dividends or other distributions otherwise payable to any Denison Shareholder such amounts as Denison or the Depositary is required or permitted to deduct and withhold with respect to such payment under the Tax Act, the United States Internal Revenue Code of 1986, as amended, or any provision of any applicable federal, provincial, state, local or foreign tax law or treaty, in each case, as amended. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes hereof as having been paid to the Denison Shareholder in respect of which such deduction and withholding was made, provided that such withheld amounts are actually remitted to the appropriate taxing authority.

5.6

Legality of Distribution of EFI Payment Shares

Notwithstanding anything else in this Plan of Arrangement, if it appears to EFI that it would be contrary to applicable law to issue EFI Payment Shares in repayment of the EFI Note pursuant to the Arrangement to a person that is not a resident of Canada or the United States, the EFI Payment Shares that otherwise would be issued, as the case may be, to that person will be issued, as the case may be, and delivered to the Depositary for sale of the EFI Payment Shares by the Depositary on behalf of that person. The EFI Payment Shares delivered to the Depositary will be pooled and sold as soon as practicable after the Effective Date, on such dates and at such prices as the Depositary determines in its sole discretion. The Depositary shall not be obligated to seek or obtain a minimum price for any of the EFI Payment Shares sold by it. Each such person will receive a pro rata share of the cash proceeds from the sale of the EFI Payment Shares sold by the Depositary (less commissions, other reasonable expenses incurred in connection with the sale of the EFI Payment Shares and any amount withheld in respect of applicable taxes) in lieu of EFI Payment Shares. The payment of the net proceeds will be subject to Section 5.5. None of EFI, Denison or the Depositary will be liable for any loss arising out of any such sales.

ARTICLE 6 - AMENDMENTS

6.1

Amendments to Plan of Arrangement

	(a)	EFI and Denison reserve the right to amend, modify or supplement this Plan of Arrangement at any time and from time to time, provided that each such amendment, modification or supplement must be (i) set out in writing, (ii) agreed to in writing by EFI and Denison, (iii) filed with the Court if required by the Interim Order and, if made following the Denison Meeting, approved by the Court, and (iv) communicated to holders or former holders of Denison Shares if and as required by the Court.

	(b)	Any amendment, modification or supplement to this Plan of Arrangement may be proposed by Denison at any time prior to the Denison Meeting provided that EFI shall have consented thereto in writing, and, if so proposed and accepted by the persons voting at the Denison Meeting (other than as may be required under the Interim Order), shall become part of this Plan of Arrangement for all purposes.

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(c)

Any amendment, modification or supplement to this Plan of Arrangement that is approved by the Court following the Denison Meeting shall be effective only if: (i) it is consented to in writing by each of EFI and Denison; and (ii) if required by the Court, it is consented to by holders of the Denison Shares voting in the manner directed by the Court.

B - 85

SCHEDULE C - FAIRNESS OPINION

April 13, 2012

The Board of Directors of Energy Fuels Inc.
2 Toronto Street, Suite 500
Toronto, Ontario
M5C 2B6

To the Board of Directors of Energy Fuels Inc.:

Dundee Securities Ltd. (“Dundee Securities”, “we”, or “us”) understands that Energy Fuels Inc. (“Energy Fuels”) and Denison Mines Corp. (“Denison”) intend to enter into a binding letter of intent (the “Letter Agreement”) to be dated as of April 16, 2012 providing for the acquisition by Energy Fuels (the “Transaction”) of all of Denison’s mining assets and operations located in the United States (the “Denison U.S. Business”). We further understand that Denison has represented to Energy Fuels that the Denison U.S. Business is held, directly or indirectly, by Denison Mines Holdings Corp. (“DMHC”), and that all of the issued and outstanding shares of DMHC are held by Denison and White Canyon Uranium Ltd. (“White Canyon”). Pursuant to the Letter Agreement, we understand that Energy Fuels and Denison have agreed to enter into exclusive negotiations with a view of entering into a definitive agreement in respect of the Transaction (the “Arrangement Agreement”). We further understand that through a series of transactions to be more fully described in the Energy Fuels Circular (defined below): (i) Energy Fuels will acquire, either directly or through a wholly-owned subsidiary, (x) all of the outstanding shares of DMHC held by Denison and all of the outstanding shares of White Canyon (collectively, the “Acquired Shares”), and (y) an assignment of all amounts owing to Denison or any affiliate of Denison (other than DMHC, White Canyon or any direct or indirect subsidiary of DMHC) by DMHC, White Canyon or any direct or indirect subsidiary of DMHC (the “Acquired Debt”), and will issue to Denison in consideration for the Acquired Shares and the Acquired Debt approximately 425.4 million common shares of Energy Fuels (the “Consideration”); (ii) either concurrently with or immediately after the issuance of the Consideration to Denison, Denison will complete a plan of arrangement (the “Arrangement”) under the Business Corporations Act (Ontario), pursuant to which it will complete a reorganization of its capital and will distribute the Consideration to the common shareholders of Denison (each a “Denison Shareholder”) on a pro rata basis as a return of capital; (iii) upon completion of the Arrangement, each Denison Shareholder will receive approximately 1.106 common shares of Energy Fuels (the “Energy Fuels Shares”) for each Denison Share held and Denison Shareholders will in aggregate own approximately 66.5% of the issued and outstanding Energy Fuels Shares; and (iv) at the Energy Fuels Meeting (defined below), Energy Fuels will seek approval from the common shareholders of Energy Fuels (the “Energy Fuels Shareholders”) to implement a 10-for-1 consolidation of the Energy Fuels Shares.

We also understand that all material terms of the Transaction will be described fully in a management information circular (the “Energy Fuels Circular”), which will be prepared by Energy Fuels and mailed to the Energy Fuels Shareholders in connection with the special meeting of the Energy Fuels Shareholders (the “Energy Fuels Meeting”) to be held to consider the Transaction. We further understand that Denison will be preparing a management information circular (the “Denison Circular”) to be mailed to the Denison Shareholders in connection with the special meeting of the Denison Shareholders (the “Denison Meeting”) to be held to consider the Transaction and the Arrangement.

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We understand that the Transaction will require the approval of at least 66 2/3% of the votes cast by the Denison Shareholders represented in person or by proxy at the Denison Meeting and at least 50% of the votes cast by the Energy Fuels Shareholders represented in person or by proxy at the Energy Fuels Meeting and the approval of the Ontario Superior Court of Justice. We further understand that the Transaction will be conditional upon, among other things, (i) receiving a waiver from Korea Electric Power Corporation (“KEPCO”) regarding its right of first opportunity provided for in the strategic relationship agreement dated as of June 15, 2009 among Denison, KEPCO and a subsidiary of KEPCO, or the 30-day period for exercising such right will have expired without KEPCO exercising such right; (ii) the entering into the Support Agreements (defined below) with directors, officers and significant shareholders of both Denison and Energy Fuels; (iii) the prior approval by the boards of directors of each of Denison and Energy Fuels; (iv) receipt of all necessary regulatory approvals; (v) approvals from the Toronto Stock Exchange (“TSX”); (vi) the consolidated net working capital of the companies comprising the Denison U.S. Business as of the date of the completion of the Transaction not being less than US$28 million; and (vii) the consolidated working capital of Energy Fuels as of the completion of the Transaction, without giving effect to the Transaction, not being less than US$4 million.

We understand that Denison and Energy Fuels are proposing to enter into support agreements (collectively, the “Support Agreements”) with the directors and senior officers of Denison and Energy Fuels, respectively, along with certain affiliates of Dundee Corporation, our parent company, Pinetree Capital Ltd., Mega Uranium Ltd., Zebra Holdings and Investment S.a.r.l. and Lorito Holdings S.a.r.l. (collectively, the “Supporting Shareholders”) pursuant to which such Supporting Shareholders have agreed to vote all of the Denison Shares and Energy Fuels Shares held by them, which comprises approximately 9.9% and 22.7% of the total issued and outstanding Denison Shares and Energy Fuels Shares, respectively, in favour of the Transaction, on the terms and subject to the conditions set forth in the Support Agreements.

Engagement of Dundee Securities

The board of directors of Energy Fuels (the “Board of Directors”) initially contacted Dundee Securities regarding a potential advisory engagement in February 2011. By letter agreement dated February 17, 2011 and amended as of October 31, 2011 and April 12, 2012 (collectively, the “Engagement Agreement”), the Board of Directors retained Dundee Securities to act as its financial advisor, including in connection with the Transaction. Pursuant to the Engagement Agreement, Energy Fuels has requested that we prepare and deliver to the Board of Directors our opinion (the “Opinion”) as to the fairness, from a financial point of view, of the Consideration offered to Denison by Energy Fuels pursuant to the Transaction to Energy Fuels.

Dundee Securities will be paid a fee for rendering this Opinion, no portion of which is conditional upon this Opinion being favourable and will be paid an additional fee (payable in a combination of cash and Energy Fuels Shares) that is contingent upon completion of the Transaction or any alternative transaction. Dundee Securities is also entitled to be reimbursed for reasonable out-of-pocket expenses incurred by Dundee Securities in carrying out its obligations under the Engagement Agreement, whether or not the Transaction is completed. Energy Fuels has also agreed to indemnify Dundee Securities in respect of certain liabilities that might arise out of our engagement.

Subject to the terms of the Engagement Agreement, Dundee Securities consents to the inclusion of this Opinion in its entirety, together with a summary hereof, in a form acceptable to Dundee Securities, in the Energy Fuels Circular, and to the filing thereof with the TSX and the securities commissions or similar regulatory authorities in each province and territory of Canada where such filing is required.

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Relationship with Interested Parties

Other than Dundee Securities and Dundee Corporation, the parent company of Dundee Securities and an insider of Energy Fuels, none of Dundee Securities’ associates or affiliates, is an insider, associate or affiliate (as those terms are defined in the Securities Act (Ontario)) of Energy Fuels, Denison or any of their respective associates or affiliates. As of the date hereof, Dundee Securities, its affiliate and investment funds managed by Dundee Securities and sub-advised by an affiliate own or control 11.4% of the total issued and outstanding Energy Fuels Shares (12.1% of the total issued and outstanding Energy Fuels Shares assuming exercise of warrants). None of Dundee Securities, its affiliates, associates or investment funds managed thereby own or control any Denison Shares.

Neither Dundee Securities nor any of its associates or affiliates have provided any financial advisory services or participated in any financings involving Energy Fuels, Denison or any of their respective associates or affiliates within the past two years other than (i) acting as lead agent to Energy Fuels with respect to its March 31, 2011 offering of units (each unit consisting of one Energy Fuels Share and one-half of one Energy Fuels Share purchase warrant) for total gross proceeds of $11.5 million (the “March 2011 Energy Fuels Offering”); (ii) acting as exclusive financial advisor to Energy Fuels with respect to its acquisition of Titan Uranium Inc. that closed on February 29, 2012; and (iii) acting as co-manager to Denison with respect to its March 15, 2011 offering of Denison Shares for total gross proceeds of $65.0 million (the “March 2011 Denison Offering”). Except for a right of first refusal granted by Energy Fuels to Dundee Securities in connection with any Energy Fuels capital markets financing during the term of the Engagement Agreement there are no understandings, agreements or commitments between Dundee Securities and Energy Fuels or any of their respective associates or affiliates with respect to future business dealings.

Dundee Securities may, in the future, in the ordinary course of business, perform financial advisory or investment banking services for Energy Fuels, Denison or any of their respective associates or affiliates. Dundee Securities acts as an investment fund manager and as a trader and dealer, both as principal and agent, in major financial markets and, as such, may, in the ordinary course of its business, have had and may in the future have positions in the securities of Energy Fuels, Denison or any of their respective associates or affiliates and, from time to time, may have executed or may execute transactions on behalf of such companies or clients (including investment funds managed by Dundee Securities) for which it received or may receive compensation. As an investment dealer, Dundee Securities conducts research on securities and may, in the ordinary course of its business, provide research reports and investment advice to its clients on investment matters, including with respect to Energy Fuels, Denison or the Transaction. The rendering of this Opinion will not in any way affect Dundee Securities’ ability to continue to conduct such activities.

Credentials of Dundee Securities

Dundee Securities is one of Canada’s leading independent full-service investment dealers with operations in mergers and acquisitions, corporate finance, equity sales and trading and investment research and a member of the IIROC and the Canadian Investor Protection Fund. The Opinion expressed herein is the opinion of Dundee Securities, the form and content of which have been approved for release by a committee of its managing directors, each of whom is experienced in merger, acquisition, divestiture and valuation matters.

C-3

Scope of Review

The assessment of fairness, from a financial point of view, must be determined in the context of the particular transaction. In connection with rendering our Opinion, we have reviewed, considered and relied upon, among other things, the following:

	a)	a draft of the Letter Agreement dated April 12, 2012;

	b)	the annual reports and audited consolidated financial statements of Energy Fuels for the years ended September 30, 2009, 2010 and 2011 and the related management, discussion and analyses;

	c)	the interim reports, comparative unaudited financial statements and management’s discussion and analyses of Energy Fuels for the three months ended December 31, 2011;

	d)	the annual information form of Energy Fuels dated December 17, 2011 for the year ended September 30, 2011;

	e)	the management information circular of Energy Fuels dated January 10, 2012 relating to the annual and special meeting of shareholders held on February 10, 2012;

	f)	the final short-form prospectus of Energy Fuels relating to the March 2011 Energy Fuels Offering dated March 31, 2011;

	g)	the annual reports and audited consolidated financial statements of Denison for the years ended December 31, 2009, 2010 and 2011 and the related management, discussion and analyses;

	h)	the management information circular of Denison dated March 16, 2011 relating to the annual meeting of shareholders held on May 12, 2011;

	i)	the final short-form prospectus of Denison relating to the March 2011 Denison Offering dated March 8, 2011;

	j)	recent press releases and other documents filed by Energy Fuels and Denison on SEDAR (System for Electronic Document Analysis and Retrieval) at www.sedar.com;

	k)	the updated National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) compliant technical report prepared by Peters Geosciences, dated March 15, 2011, relating to the Energy Queen project of Energy Fuels;

	l)	the updated NI 43-101 compliant technical report prepared by North American Exploration Inc., dated March 21, 2011, relating to the San Rafael uranium project of Energy Fuels;

	m)	the updated NI 43-101 compliant technical report prepared by Peters Geosciences, dated March 15, 2011, relating to the Whirlwind property of Energy Fuels;

	n)	the updated NI 43-101 compliant technical report prepared by Alinco GeoServices Inc., dated December 16, 2008, relating to the Farmer Girl project of Energy Fuels;

	o)	the amended NI 43-101 compliant technical report prepared by Alinco GeoServices Inc., dated January 7, 2009, relating to the Torbyn property of Energy Fuels;

C-4

	p)	the amended NI 43-101 compliant technical report prepared by Peters Geosciences, dated November 30, 2008, relating to the Willhunt property of Energy Fuels;

	q)	the NI 43-101 compliant technical report prepared by Scott Wilson Mining, dated June 24, 2009, relating to the EZ1 and EZ2 Breccia Pipes, Arizona Strip District of Denison;

	r)	the NI 43-101 compliant technical report prepared by Scott Wilson Mining, dated March 19, 2009, relating to the Tony M-Southwest Deposit, Henry Mountains Complex Uranium Project of Denison;

	s)	the NI 43-101 compliant technical report prepared by Scott Wilson Mining, dated February 26, 2007, relating to the Arizona Strip Uranium Project of Denison;

	t)	certain internal financial, operational, business and other information concerning Energy Fuels that was prepared or provided to us by management of Energy Fuels including internal operating and financial budgets, models and projections;

	u)	certain internal financial, operational, business and other information concerning Denison that was prepared or provided to us by or on behalf of Denison including internal operating and financial budgets, models and projections;

	v)	trading statistics and selected financial information of Energy Fuels, Denison and other selected public entities and comparable acquisition transactions considered by us to be relevant;

	w)	various reports published by equity research analysts and industry sources regarding Energy Fuels, Denison and other publicly-traded entities, to the extent deemed relevant by us;

	x)	a certificate addressed to us, dated as of the date hereof, from two senior officers of Energy Fuels as discussed below under “Assumptions and Limitations”; and

	y)	such other information, analyses, investigations and discussions as we considered necessary or appropriate in the circumstances.

In addition, we have participated in discussions with members of senior management of Energy Fuels regarding its past and current business operations, financial condition and future business prospects. We have also participated in discussions with members of senior management of Denison regarding Denison’s past and current business operations, financial condition and future business prospects. We have also participated in discussions with Borden Ladner Gervais LLP, external legal counsel to Energy Fuels, and Blake, Cassels and Graydon LLP, external legal counsel to Denison regarding the Transaction, the Letter Agreement, the Support Agreements, due diligence and related matters.

We have not, to the best of our knowledge, been denied access by Energy Fuels or Denison to any information which we requested.

Assumptions and Limitations

Our Opinion is subject to the assumptions, explanations and limitations set forth below.

We have not been asked to prepare and have not prepared a formal valuation or appraisal of Energy Fuels, Denison or any of their respective affiliates or of any of the assets, liabilities or securities of Energy Fuels, Denison or any of their respective affiliates, and our Opinion should not be construed as such. In addition, this Opinion is not, and should not be construed as, advice as to the price at which Energy Fuels Shares may trade at any future date.

C-5

With your approval, we have relied upon and have assumed the completeness, accuracy and fair presentation of all financial and other information, data, advice, opinions and representations obtained by us from public sources, or provided to us by Energy Fuels, Denison and their respective affiliates or otherwise obtained pursuant to our engagement and our Opinion is conditional upon such completeness, accuracy and fair presentation. We have not been requested to, or attempted to verify independently the completeness, accuracy or fairness of presentation of any of such information. We have not conducted or provided any valuation or appraisal of any assets or liabilities, nor have we evaluated the solvency of Energy Fuels, Denison or any of their respective affiliates under any provincial or federal laws relating to bankruptcy, insolvency or similar matters. Without limiting the foregoing, we have not separately met with the independent auditors of Energy Fuels or Denison in connection with preparing this Opinion and with your permission we have assumed the accuracy and fair presentation, and relied upon, Energy Fuels’ and Denison’s respective audited financial statements and the reports of auditors thereon and the interim unaudited financial statements of Energy Fuels and Denison.

With respect to historical financial data, operating and financial forecasts and budgets and other forward-looking information provided to us concerning Energy Fuels or Denison described under the heading “Scope of Review” and relied upon in our analysis, we have assumed that they have been reasonably prepared on bases reflecting the most reasonable assumptions, estimates and judgments of Energy Fuels management and Denison management having regard to their respective business, plans, financial conditions and future prospects.

In preparing this Opinion, we have also assumed that: (i) the final executed form of the Letter Agreement does not differ in any material respect from the drafts that were reviewed; (ii) the final executed form of the Arrangement Agreement to be negotiated does not differ materially from the terms in the Letter Agreement and will contain customary representations, warranties, covenants and conditions (the “Final Terms”), each of which are materially correct as of the date hereof and will be materially correct as of the date of execution of the Arrangement Agreement; (iii) Energy Fuels and Denison will each comply in all material respects with the terms of the Letter Agreement and the Final Terms; (iv) any governmental, regulatory or other consents and approvals necessary for the completion of the Transaction will be waived or satisfied without any adverse effect on Energy Fuels, Denison or the Transaction; (v) the Transaction will be completed substantially in accordance with its terms without any adverse waiver or amendment of any material term or condition thereof and all applicable laws; and (vi) the Energy Fuels Circular (including all documents incorporated by reference therein) and the Denison Circular (including all documents incorporated by reference therein) will both disclose all material facts related to the Transaction and will satisfy all applicable legal requirements.

Energy Fuels has represented to us, in a certificate of two senior officers of Energy Fuels (the “Energy Fuels Officers”), dated as of the date hereof, among other things, that (i) with the exception of forecasts, projections or estimates referred to in (iv) below, the information, data and other material (financial or otherwise) with respect to Energy Fuels or its subsidiaries and provided to us by or on behalf of Energy Fuels (collectively the “Energy Fuels Information”) is, or in the case of historical information was, at the date of preparation, true and accurate in all material respects and does not or did not, as the case may be, contain any untrue statement of a material fact or omit to state any material fact necessary to make the statements therein not misleading in light of the circumstances in which such statements were made; (ii) to the extent that any of the Energy Fuels Information is historical, there have been no material changes or changes in material facts or new material facts since the respective dates thereof that have not been generally disclosed or disclosed to Dundee Securities or updated by more current information, data or other materials provided to Dundee Securities; (iii) there are no material facts or circumstances relating to Energy Fuels or any of its subsidiaries not disclosed to Dundee Securities, which would reasonably be expected to affect materially the Opinion, including the assumptions used, procedures adopted or the scope of review undertaken by Dundee Securities in connection with the Opinion; and (iv) with respect to any portions of the Energy Fuels Information that constitute forecasts, projections or estimates regarding Energy Fuels or its business, such forecasts, projections or estimates (x) were prepared using the assumptions identified therein, which in the reasonable belief of the Energy Fuels Officers are (or were at the time of preparation) reasonable in the circumstances, and (y) are not, in the reasonable belief of the Energy Fuels Officers, misleading in any material respect in light of the assumptions used therefor.

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Except as expressly noted above under the heading “Scope of Review”, we have not conducted any investigation concerning the financial condition, assets, liabilities (contingent or otherwise), business, operations or prospects of Energy Fuels, Denison or any of their respective affiliates.

We are not legal, tax or accounting experts and we express no opinion concerning any legal, tax or accounting matters concerning the Transaction or the sufficiency of this letter for your purposes.

Although the Transaction is subject to certain conditions outside the control of Energy Fuels and Denison, Dundee Securities has assumed that all conditions precedent to the completion of the Transaction will be satisfied in due course or waived and that all consents, permissions, exemptions or orders of relevant regulatory authorities, courts and other third parties will be obtained, without adverse conditions or qualifications. In rendering the Opinion, Dundee Securities expresses no view as to the likelihood that the conditions to the Transaction will be satisfied or waived or that the Transaction will be implemented within the time frame to be set out in the Energy Fuels Circular and the Denison Circular.

Our Opinion is rendered on the basis of securities markets, economic, financial and general business conditions prevailing as at the date hereof and the conditions and prospects, financial and otherwise, of (i) Energy Fuels, as they are reflected in the Energy Fuels Information or otherwise obtained by us from public sources and as they were represented to us in our discussions with management of Energy Fuels and its affiliates and advisors and (ii) Denison obtained by us from public sources and as they were represented to us in our discussions with management of Denison and its affiliates and advisors. In our analyses and in connection with the preparation of our Opinion, we made numerous assumptions with respect to industry performance, general business, capital markets and economic conditions and other matters, many of which are beyond the control of Dundee Securities and any party involved in the Transaction. The Opinion is conditional on all assumptions being correct.

The Opinion has been provided to the Board of Directors for its exclusive use only in considering the Transaction and may not be relied upon by any other person, used for any other purpose or published or disclosed to any other person (except as otherwise provided herein) without the prior written consent of Dundee Securities. Our Opinion is not intended to be and does not constitute a recommendation to the Board of Directors or to any Energy Fuels Shareholder as to whether such Energy Fuels Shareholders should approve the Transaction. The Opinion does not address the relative merits of the Transaction compared to any other business strategies or transactions that might be available to Energy Fuels or Denison.

Dundee Securities believes that its financial analyses must be considered as a whole and that selecting portions of its analyses and the factors considered by it, without considering all factors and analyses together, could create a misleading view of the process underlying our Opinion. The preparation of a fairness opinion is complex and is not necessarily susceptible to partial analysis or summary description and any attempt to carry this out could lead to undue emphasis on any particular factor or analysis.

The Opinion is given as of the date hereof and we disclaim any undertaking or obligation to advise any person of any change in any matter or fact affecting the Opinion that may come or be brought to our attention after the date hereof. Without limiting the foregoing, in the event there is any material change in any fact or matter affecting the Opinion after the date hereof, we reserve the right to change or withdraw the Opinion.

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Opinion

Based upon and subject to the foregoing and such other matters as we have considered relevant, it is our opinion, as of the date hereof, that the Consideration offered to Denison pursuant to the Transaction is fair, from a financial point of view, to Energy Fuels.

Yours very truly,

Dundee Securities Ltd.

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SCHEDULE D – PRO FORMA FINANCIAL STATEMENTS OF EFI

D-1

ENERGY FUELS INC.

Pro Forma Condensed Consolidated Statement of Financial Position

As at March 31, 2012

(Unaudited)

(Expressed in US dollars)

												Pro Forma
		Energy Fuels Inc.			DMHC				Pro Forma			Consolidated
		March 31, 2012			March 31, 2012		Note		Adjustments			Energy Fuels Inc.
ASSETS
Current assets
Cash and cash equivalents	$	2,135,158		$	281,570		4(b)	$	(1,189,223	)	$	1,227,505
Accounts receivable		776,169			16,494,220				-			17,270,389
Marketable securities		3,102,793			-				-			3,102,793
Deferred Denison Mines transaction cost		35,552			-		4(b)		(35,552	)		-
Raw materials inventories		-			20,862,910				-			20,862,910
Concentrate inventories		-			12,300,540		4(m)		558,000			12,858,540
Prepaid expenses and other assets		122,773			856,495				-			979,268
		6,172,445			50,795,735				(666,775	)		56,301,405
Non-current
Investments		-			50,200				-			50,200
Property, plant and equipment		13,461,805			39,199,424				-			52,661,229
Mineral properties		-			43,051,430				-			43,051,430
Exploration and evaluation costs		56,669,536			-				-			56,669,536
Restricted cash		4,582,987			24,668,620				-			29,251,607
Long-term receivables		-			9,616,302		4(e)		(9,616,302	)		-
	$	80,886,773		$	167,381,711			$	(10,283,077	)	$	237,985,407
LIABILITIES & SHAREHOLDER'S EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	2,576,090		$	6,613,373		4(e)		(1,061,786	)		8,127,677
Due to related parties		1,017,861			-				-			1,017,861
Current portion of decommissioning		58,771			-				-			58,771
Current portion of deferred revenue		-			1,150,275				-			1,150,275
Current portion of debt obligations		1,308,145			124,624,560		4(e)		(124,624,560	)		1,308,145
		4,960,867			132,388,208				(125,686,346	)		11,662,729
Non-current
Long-term decommissioning liability		1,660,918			7,237,861				-			8,898,779
Long-term portion of debt obligations		622,261			-				-			622,261
Other liabilities		-			2,034,538		4(e)		(1,934,945	)		99,593
		7,244,046			141,660,607				(127,621,291	)		21,283,362
SHAREHOLDERS' EQUITY
Capital stock		92,046,632			189,164,457		4(c)		106,360,374			199,380,206
							4(b)		973,200
							4(d)		(189,164,457	)
Preferred stock		-			2,000,000		4(n)		(2,000,000	)		-
Contributed surplus		15,683,307			-				-			15,683,307

Share purchase warrants		4,836,119			-				-			4,836,119

Accumulated deficit		(37,579,106	)		(165,493,553	)	4(f)		165,493,553			(1,853,362	)
							4(b)		(2,197,975	)
							4(a)		37,923,719
Accumulated other comprehensive income (loss)		(1,344,225	)		50,200		4(g)		(50,200	)		(1,344,225	)
		73,642,727			25,721,104				117,338,214			216,702,045
	$	80,886,773		$	167,381,711			$	(10,283,077	)	$	237,985,407

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

D-2

ENERGY FUELS INC.

Pro Forma Condensed Consolidated Statement of Comprehensive Loss

For the Year Ended September 30, 2011

(Unaudited)

(Expressed in U.S. Dollars)

					Titan Uranium
		Energy Fuels Inc.			Inc.			DMHC
		Year Ended			Year Ended			Year Ended							Pro Forma
		September 30,			August 31,			December 31,				Pro Forma			Consolidated
		2011			2011			2011		Note		Adjustments			Energy Fuels Inc
REVENUES	$	-		$	-		$	71,003,000			$	-		$	71,003,000

EXPENSES
Operating expenses		-			-			(76,923,000	)			-			(76,923,000	)
General & administrative		(3,583,935	)		(2,722,378	)		(5,253,000	)			-			(11,559,313	)
Goodwill impairment		-			-			(32,625,261	)	4(h)		32,625,261			-
Impairment of property, plant & equipment		-			(15,301,101	)		(44,079,000	)	4(i)		44,079,000			(15,301,101	)
		(3,583,935	)		(18,023,479	)		(158,880,261	)			76,704,261			(103,783,414	)
OTHER
Finance income		11,492			46,528			614,000		4(k)		(14,356	)		657,664
Finance expense		(396	)		-			(2,350,000	)	4(l)		1,819,494			(530,902	)
Other income		5,567			455,006			912,000		4(j)		(242,647	)		1,129,926
Income taxexpense:
Current		-			-			(26,000	)			-			(26,000	)
Deferred		-			1,496,132			(565,000	)			-			931,132
NET LOSS FOR THE YEAR		(3,567,272	)		(16,025,813	)		(89,292,261	)			78,266,752			(30,618,594	)
Foreign currency translation reserve		(1,251,438	)		-			-				-			(1,251,438	)
Unrealized derivative liability loss		-			(1,332,520	)		-				-			(1,332,520	)
Unrealized loss on investments		-			(1,080,362	)		(154,000	)			-			(1,234,362	)
COMPREHENSIVE LOSS FOR THE YEAR	$	(4,818,710	)	$	(18,438,695	)	$	(89,446,261	)		$	78,266,752		$	(34,436,914	)

LOSS PER COMMON SHARE
- BASIC AND DILUTED	$	(0.03	)											$	(0.05	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (Note 5)		111,376,261													631,138,241

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

D-3

ENERGY FUELS INC.

Pro Forma Condensed Consolidated Statement of Comprehensive Loss

For the Six Months Ended March 31, 2012

(Unaudited)

(Expressed in U.S. Dollars)

								DMHC							Pro Forma
		Energy Fuels Inc.			Titan Uranium Inc.			Six Months							Consolidated
		Six Months Ended			Six Months Ended			Ended				Pro Forma			Energy Fuels
		March 31, 2012			February 29, 2012			March 31, 2012		Note		Adjustments			Inc.
REVENUES	$	-		$	-		$	54,327,827			$	-		$	54,327,827

EXPENSES
Operating expenses		-			-			(52,684,189	)			-			(52,684,189	)
General & administrative		(3,296,628	)		(1,444,738	)		(3,129,833	)			-			(7,871,199	)
Goodwill impairment		-			-			(32,625,261	)	4(h)		32,625,261			-
Impairment of property, plant & equipment		-			(973,980	)		(44,079,000	)	4(i)		44,079,000			(973,980	)
		(3,296,628	)		(2,418,718	)		(132,518,283	)			76,704,261			(61,529,368	)
OTHER
Finance income		7,246			3,447			329,567		4(k)		(14,356	)		325,904
Finance expense		(38,510	)		-			(1,269,614	)	4(l)		1,061,786			(246,338	)
Other income (expense)		323,831			531,134			(430,347	)	4(j)		(242,647	)		181,971
Income taxexpense		-			-			(25,221	)			-			(25,221	)
NET LOSS FOR THE PERIOD		(3,004,061	)		(1,884,137	)		(79,586,071	)			77,509,044			(6,965,225	)
Unrealized loss on marketable securities		(343,386	)		-			(1,300	)			-			(344,686	)
Unrealized derivative liability gain		-			112,782			-				-			112,782
Foreign currency translation reserve		250,599			23,257			-				-			273,856
COMPREHENSIVE LOSS FOR THE PERIOD	$	(3,096,848	)	$	(1,748,098	)	$	(79,587,371	)		$	77,509,044		$	(6,923,273	)

LOSS PER COMMON SHARE
- BASIC AND DILUTED	$	(0.02	)											$	(0.01	)

WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING (Note 5)		123,999,665													643,761,645

See accompanying notes to the unaudited pro forma condensed consolidated financial statements.

D-4

ENERGY FUELS INC.

Notes to the Pro Forma Condensed Consolidated Financial Statements

For the Six Months Ended March 31, 2012 and the Year Ended September 30, 2011

(Unaudited)

(Expressed in U.S. dollars)

1.	Basis of presentation

These unaudited pro forma condensed consolidated financial statements have been prepared in connection with the proposed acquisition (the “Acquisition”) of Denison Mines Holding Corp. (“DMHC”) and White Canyon Uranium Limited (“White Canyon”) by Energy Fuels Inc. (“EFI” or the “Company”).

These unaudited pro forma condensed consolidated financial statements have been prepared for illustrative purposes only and give effect to the Acquisition pursuant to the assumptions described in Note 4 to these unaudited pro forma condensed consolidated financial statements. The unaudited pro forma condensed consolidated statement of financial position as at March 31, 2012 gives effect to the proposed Acquisition by EFI as if it had occurred as at March 31, 2012. The unaudited pro forma condensed consolidated statement of comprehensive loss for the twelve month period ended September 30, 2011 and for the six month period ended March 31, 2012 give effect to the proposed Acquisition as if it had occurred as at October 1, 2010. These unaudited pro forma condensed consolidated statements of comprehensive loss also give effect to the acquisition of Titan Uranium Inc. (“Titan”) by Energy Fuels as if the acquisition occurred on October 1, 2010.

White Canyon’s net assets and comprehensive loss have been excluded from these pro forma financial statements. White Canyon’s primary asset is its investment in DMHC and its remaining net assets are immaterial.

These unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the operating results or financial condition that would have been achieved if the proposed Acquisition had been completed on the dates or for the periods presented, nor do they purport to project the results of operations or financial position of the consolidated entities for any future period or as of any future date. Any potential synergies that may be realized after consummation of the proposed Acquisition, if successful, have been excluded from the unaudited pro forma condensed consolidated financial statement information.

The pro forma adjustments and allocations of the purchase price for DMHC are based on estimates of the fair value of assets acquired and liabilities to be assumed. The final purchase price allocation will be completed after the asset and liability valuations are finalized.

In preparing the unaudited pro forma condensed consolidated statement of financial position and the unaudited pro forma condensed consolidated statements of comprehensive loss, the following historical information, which was prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board, was used:

D-5

	a.	Pro forma statement of financial position as at March 31, 2012 combines the unaudited condensed consolidated statement of financial position of EFI as at March 31, 2012 and the unaudited condensed consolidated statement of financial position of DMHC as at March 31, 2012.

	b.	Pro forma statement of comprehensive loss for the year ended September 30, 2011 combines the unaudited condensed consolidated statement of comprehensive loss of EFI for the year ended September 30, 2011 (as disclosed in the Company’s December 31, 2011 financial report), the unaudited condensed consolidated statement of comprehensive loss for Titan for the year ended August 31, 2011 (as disclosed in Titan’s November 30, 2011 financial report, which was translated to the U.S. dollar for the period shown using the average exchange rate of 1.0109) and the audited condensed consolidated statement of comprehensive loss of DMHC for the year ended December 31, 2011.

	c.	Pro forma statement of comprehensive loss for the six months ended March 31, 2012 combines the unaudited condensed consolidated statement of comprehensive loss for the six months ended March 31, 2012 of EFI, the unaudited condensed consolidated statement of comprehensive loss for the period beginning on September 1, 2011 and ending on February 28, 2012 of Titan (the construction was based on Titan’s unaudited condensed consolidated statement of comprehensive loss for the three-month period ended November 30, 2011 and Titan’s internal unaudited condensed consolidated statement of comprehensive loss from the period beginning on December 1, 2011 and ending on February 28, 2012, which was translated to the U.S. dollar for the period shown using the average exchange rate of 1.0055) and the constructed pro forma statement of condensed comprehensive loss of DMHC for the six months ended March 31, 2012 (the construction was based on the DMHC’s internal unaudited condensed consolidated statement of comprehensive loss for the three-month period ended December 31, 2011 and the unaudited condensed consolidated statement of comprehensive income for the three months ended March 31, 2012)

D-6

ENERGY FUELS INC.

Notes to the Pro Forma Condensed Consolidated Financial Statements

For the Six Months Ended March 31, 2012 and the Year Ended September 30, 2011

(Unaudited)

(Expressed in U.S. dollars)

1.	Basis of presentation (continued)

The comprehensive loss of DMHC for the three months ended December 31, 2011 has been included in both the pro forma statement of comprehensive loss for the year ended December 31, 2011 and in the six months ended March 31, 2012, respectively.

The unaudited pro forma condensed consolidated statement of financial position and the unaudited pro forma condensed consolidated statements of comprehensive loss should be read in conjunction with the above noted financial statements, including the notes thereto. Certain of DMHC’s assets, liabilities, income and expenses have been reclassified to conform to EFI’s consolidated financial statement presentation.

2.	Significant accounting policies

The accounting policies used in preparing the unaudited pro forma condensed consolidated financial statements are consistent with those set out in EFI’s unaudited condensed consolidated financial statements as at December 31, 2011. In preparing the unaudited pro forma condensed consolidated financial statements a review was undertaken by management of EFI to identify accounting policy differences where the impact was potentially material and could be reasonably estimated, to which none were identified. DMHC’s policy with respect to exploration expenditures is to expense these costs as incurred; this difference in accounting policy is not considered to be material by EFI. Accounting differences may be identified after consummation of the proposed Acquisition.

D-7

3.	Share acquisition of Denison Mines Holding Corp. and White Canyon Uranium Limited

	On May 23, 2012 the Company and Denison Mines Corp. (“Denison”) entered into an Arrangement Agreement (“Arrangement”) to complete a transaction whereby EFI will acquire from Denison all of the outstanding shares of DMHC and White Canyon held by Denison. Upon completion of the Arrangement, EFI will hold all of the shares of DMHC and White Canyon, and Denison’s shareholders will in aggregate own approximately 66.5% of the issued and outstanding common shares of EFI.

	The obligations of EFI and Denison to complete the Arrangement shall be subject to the satisfaction of the following mutual conditions:

	(1)	Waiver by Korea Electric Power Corporation (“KEPCO”) to its right of first opportunity.
	(2)	The assignment of KEPCO’s Offtake Agreement with Denison to EFI or DMHC.
	(3)	Approval of the Arrangement by Denison shareholders.
	(4)	Approval of the Arrangement by EFI shareholders.

D-8

ENERGY FUELS INC.

Notes to the Pro Forma Condensed Consolidated Financial Statements

For the Six Months Ended March 31, 2012 and the Year Ended September 30, 2011

(Unaudited)

(Expressed in U.S. dollars)

3.	Share acquisition of Denison Mines Holding Corp. and White Canyon Uranium Ltd. (continued)


	(5)	Approval of the Toronto Stock Exchange and the NYSE MKT, including requisite consents, waivers, permits, exemptions, order and approvals of, and any registrations and filings with any Governmental Entities and other essential parties.
	(6)	No pending or threatened lawsuits, actions or proceedings by any Governmental Entity, unless previously disclosed.

The Arrangement contains customary deal protection mechanisms, including a break fee payable in certain events, non-solicitation provisions and rights to match a superior proposal.

The cost of the acquisition will include the fair value of the issuance of 425,441,494 EFI common shares (based on the five-day average closing price of $0.25 for the Company’s shares ended May 18, 2012) plus EFI estimated transaction costs of $2,197,975.

The acquisition is expected to be accounted for as a business combination under IFRS. For the purposes of the pro forma statement of financial position, the value of the share consideration has been based on the five-day average closing price of the Company’s shares ended May 18, 2012 (the effective date of presentation of the Acquisition for purposes of the unaudited pro forma statement of financial position). The Company will value the share consideration component based on the closing price of the Company’s shares on the date the Acquisition closes, which may result in an increase or decrease in the consideration for accounting purposes. For every $0.01 change in share price of the Company, the purchase price will change by $4,254,415.

The allocation of the purchase price is based upon management’s preliminary estimates and certain assumptions with respect to the fair value associated with the assets and the liabilities to be acquired. Moreover, this preliminary fair value is supported by an earlier fairness opinion provided to EFI. The actual fair values of the assets and liabilities may differ materially from the amounts disclosed below in the assumed pro forma purchase price allocation as further analysis (including identification of intangible assets, if any, for which no amounts have been estimated and included in the preliminary amounts shown below) is completed. Consequently, the actual allocation of the purchase price is likely to result in different adjustments than those in the unaudited pro forma consolidated statements. EFI will complete a full and detailed valuation of the DMHC assets. Therefore, it is likely that the fair values of assets and liabilities acquired, including mineral properties and property, plant & equipment, will vary from those shown below and the differences may be material.

D-9

ENERGY FUELS INC.

Notes to the Pro Forma Condensed Consolidated Financial Statements

For the Six Months Ended March 31, 2012 and the Year Ended September 30, 2011

(Unaudited)

(Expressed in U.S. dollars)

3.	Share acquisition of Denison Mines Holding Corp. and White Canyon Uranium Ltd. (continued)

The preliminary allocation of fair value assumed in these unaudited pro forma condensed consolidated financial statements is subject to change and is summarized as follows:

					Fair Value
		Book Value			Adjustments			Fair Value
Purchase price
Issuance of 425,441,494 common shares of EFI							$	106,360,374

Fair value of assets and liabilities acquired
Cash and cash equivalents	$	281,570		$	-		$	281,570
Accounts receivable		16,494,220			-			16,494,220
Raw material inventories		20,862,910			-			20,862,910
Concentrate inventories		12,300,540			558,000			12,858,540
Prepaid expenses and other assets		856,495			-			856,495
Investments		50,200			-			50,200
Property, plant and equipment		39,199,424			-			39,199,424
Mineral properties		43,051,430			-			43,051,430
Restricted cash		24,668,620			-			24,668,620
Accounts payable and accrued liabilities (1)		(5,551,587	)		-			(5,551,587	)
Deferred revenue		(1,150,275	)		-			(1,150,275	)
Decommissioning liabilities		(7,237,861	)		-			(7,237,861	)
Other liabilities (1)		(99,593	)		-			(99,593	)
Gain on bargain purchase		-			(37,923,719	)		(37,923,719	)
	$	143,726,093		$	(37,365,719	)	$	106,360,374

(1) The book value reported has been adjusted to exclude intercompany accounts.

4.	Effect of Acquisition on the unaudited pro forma consolidated financial statements

	The unaudited pro forma condensed consolidated financial statements incorporate the following adjustments:

	a.	An adjustment of $37,923,719 to reflect the excess of the fair value of the assets acquired by EFI over the consideration transferred, which has been recognized as a gain on bargain purchase. The bargain purchase resulted from the share price used in calculating the purchase price decreasing without a subsequent change in the underlying fair value of the DMHC assets and liabilities;

	b.	An adjustment of $2,197,975 to reflect EFI’s estimated costs and expenses of the transaction. EFI’s transaction costs are comprised of previously deferred costs of $35,552, additional cash costs of $1,189,223, and by the issuance of 4,000,000 EFI common shares having an aggregate market price of $973,200, valued based on the five-day average price the Company’s shares at the date ended May 18, 2012.

D-10

	c.	An adjustment of $106,360,374 to reflect the issuance of 425,441,494 common shares of EFI for the common shares of DMHC and White Canyon;

	d.	An adjustment of $189,164,457 to eliminate the historical capital stock account of DMHC;

	e.	An adjustment to eliminate acquired intercompany balances;

D-11

ENERGY FUELS INC.

Notes to the Pro Forma Condensed Consolidated Financial Statements

For the Six Months Ended March 31, 2012 and the Year Ended September 30, 2011

(Unaudited)

(Expressed in U.S. dollars)

	f.	An adjustment of $165,493,553 to eliminate DMHC’s accumulated deficit;

	g.	An adjustment of $50,200 to eliminate DMHC’s accumulated other comprehensive income;

	h.	An adjustment of $32,625,261 to eliminate DMHC’s goodwill impairment related to its proposed transaction with EFI;

	i.	An adjustment of $44,079,000 to eliminate DMHC’s impairment of U.S. mining assets related to its proposed transaction with EFI;

	j.	An adjustment of $242,647 to eliminate DMHC’s intercompany-related consulting income related to Denison’s Mongolia projects;

	k.	An adjustment of $14,356 to eliminate DMHC’s intercompany-related interest income related to Denison’s Mongolia projects;

	l.	An adjustment to eliminate DMHC’s intercompany-related interest expense;

	m.	An adjustment of $558,000 to reflect the increase in the fair value of uranium concentrates; and

	n.	An adjustment of $2,000,000 to eliminate the historical preferred stock account of DMHC.

5.	Pro forma shares outstanding

	The average number of shares used in the computation of pro forma basic and diluted loss per share has been determined as follows:

	Six Months Ended	Year Ended
	March 31, 2012	September 30, 2011
Weighted average shares outstanding of EFI (excluding Titan)	123,999,665	111,376,261
Shares issued to acquire Titan	89,063,997	89,063,997
Shares issued to settle Titan transaction costs	1,256,489	1,256,489
Shares issued to acquire DMHC	425,441,494	425,441,494
Shares issued to settle transaction costs	4,000,000	4,000,000
Pro forma weighted average shares of EFI (1)	643,761,645	631,138,241

(1)

The pro forma weighted average shares of EFI does not reflect the consolidation of EFI shares on a 10-for-1 basis which is expected to occur subsequent to the acquisition.

D-12

SCHEDULE E - FINANCIAL STATEMENTS OF DMHC

DENISON MINES HOLDINGS CORP.
Condensed Interim Consolidated Statements of Financial Position
(Unaudited - Expressed in thousands of U.S. dollars)
		At March 31			At December 31
		2012			2011
ASSETS
Current
Cash	$	282		$	230
Trade and other receivables (note 4)		16,494			7,940
Inventories (note 5)		33,164			34,496
Prepaid expenses and other		856			1,120
		50,796			43,786
Non-Current
Investments		50			46
Restricted cash and investments (note 6)		24,669			24,651
Property, plant and equipment (note 7)		82,251			80,678
Long-term receivables (note 11)		9,616			9,595
Total assets	$	167,382		$	158,756

LIABILITIES
Current
Accounts payable and accrued liabilities	$	6,613		$	7,462
Current portion of long-term liabilities:
Deferred revenue		1,150			893
Debt obligations (note 11)		124,625			-
		132,388			8,355
Non-Current
Debt obligations (note 11)		-			116,755
Reclamation obligations (note 8)		7,238			7,140
Other liabilities (note 11)		2,035			2,035
Total liabilities		141,661			134,285

EQUITY
Share capital (note 9)		191,164			191,164
Deficit		(165,493	)		(166,739	)
Accumulated other comprehensive income		50			46
Total equity		25,721			24,471
Total liabilities and equity	$	167,382		$	158,756

Commitments and contingencies (note 12)
Subsequent events (note 13)

The accompanying notes are an integral part of the condensed interim consolidated financial statements

E-1

DENISON MINES HOLDINGS CORP.

Condensed Interim Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Unaudited - Expressed in thousands of U.S. dollars)

		Three Months Ended
		March 31			March 31
		2012			2011

REVENUES (note 10)	$	22,755		$	22,733

EXPENSES
Operating expenses (note 10)		(19,163	)		(22,211	)
Mineral property exploration		(15	)		(36	)
General and administrative		(1,715	)		(1,269	)
Other income (expense) (note 10)		(143	)		689
		(21,036	)		(22,827	)
Income (loss) before finance charges		1,719			(94	)

Finance expense (note 10)		(473	)		(471	)
Income (loss) before taxes		1,246			(565	)

Income tax expense		-			-
Net income (loss) for the period	$	1,246		$	(565	)

Comprehensive income (loss):
Unrealized gain (loss) on investments		4			(53	)
Comprehensive income (loss) for the period	$	1,250		$	(618	)

The accompanying notes are an integral part of the condensed interim consolidated financial statements

E-2

DENISON MINES HOLDINGS CORP.

Condensed Interim Consolidated Statements of Changes in Equity

(Unaudited - Expressed in thousands of U.S. dollars)

		Three Months Ended
		March 31			March 31
		2012			2011

Share capital
Balance-beginning of period	$	191,164		$	128,894
Share issues-net of issue costs		-			-
Balance-end of period		191,164			128,894

Deficit
Balance-beginning of period		(166,739	)		(77,447	)
Net income (loss)		1,246			(565	)
Balance-end of period		(165,493	)		(78,012	)

Accumulated other comprehensive income
Balance-beginning of period		46			200
Unrealized gain (loss) on investments		4			(53	)
Balance-end of period		50			147

Total Equity
Balance-beginning of period	$	24,471		$	51,647
Balance-end of period	$	25,721		$	51,029

The accompanying notes are an integral part of the condensed interim consolidated financial statements

E-3

DENISON MINES HOLDINGS CORP.

Condensed Interim Consolidated Statements of Cash Flow

(Unaudited - Expressed in thousands of U.S. dollars)

		Three Months Ended
		March 31			March 31
CASH PROVIDED BY (USED IN):		2012			2011

OPERATING ACTIVITIES
Net income (loss) for the period	$	1,246		$	(565	)
Items not affecting cash:
Depletion, depreciation, amortization and accretion		10,765			8,971
Losses on asset disposals		-			8
Gains on restricted investments		135			127
Non-cash inventory adjustments		(27	)		1,374
Deferred income tax expense (recovery)		-			-
Change in non-cash working capital items (note 10):		(14,624	)		(759	)
Net cash provided by (used in) operating activities		(2,505	)		9,156

INVESTING ACTIVITIES
Decrease in notes receivable		9			759
Expenditures on property, plant and equipment		(5,169	)		(5,048	)
Increase in restricted cash and investments		(153	)		(3,061	)
Net cash used in investing activities		(5,313	)		(7,350	)

FINANCING ACTIVITIES
Increase (decrease) in debt obligations		7,870			(10,630	)
Net cash provided by (used in) financing activities		7,870			(10,630	)

Increase (decrease) in cash		52			(8,824	)
Cash, beginning of period		230			9,551
Cash, end of period	$	282		$	727

The accompanying notes are an integral part of the condensed interim consolidated financial statements

E-4

DENISON MINES HOLDINGS CORP.

Notes to the Condensed Interim Consolidated Financial Statements for the three months ended March 31, 2012 and 2011

(Unaudited - Expressed in U.S. dollars except for shares and per share amounts)

1.	NATURE OF OPERATIONS

	Denison Mines Holdings Corp. and its subsidiary companies (collectively, the “Company”) are engaged in uranium mining and related activities, including acquisition, exploration and development of uranium bearing properties, extraction, processing and selling of uranium.

	The Company has a 100% interest in the White Mesa mill located in Utah, United States and has interests in a number of nearby mines. 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 Holdings Corp. (“DMHC”) is incorporated in the State of Delaware and domiciled in the United States. The address of its registered head office is 1050 17^thStreet, Suite 950, Denver, Colorado, United States, 80265. The Company is a wholly owned subsidiary of Denison Mines Corp. (the “Parent”), which holds all of the Company’s common shares either directly or indirectly through White Canyon Uranium Limited (“WCU”), another subsidiary of the Parent. The Parent is a publicly listed corporation incorporated under the Business Corporations Act (Ontario) and domiciled in Canada.

2.	BASIS OF PRESENTATION AND ADOPTION OF IFRS

	These condensed interim consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board applicable to the preparation of interim financial statements, including IAS 34 Interim Financial Reporting. The condensed interim consolidated financial statements should be read in conjunction with the annual financial statements for the year ended December 31, 2011.

	The Company’s presentation currency is U.S dollars.

	These financial statements were approved by the board of directors for issue on May 22, 2012.

3.	SIGNIFICANT ACCOUNTING POLICIES

	The significant accounting policies used in the preparation of these condensed interim consolidated financial statements are the same as those applied in the Company’s annual financial statements for the year ended December 31, 2011.

E-5

4.	TRADE AND OTHER RECEIVABLES

	The trade and other receivables balance consists of:

		At March 31		At December 31
(in thousands)		2012		2011

Trade receivables - mineral concentrate sales	$	16,226	$	7,762
Trade receivables - other		56		105
Sundry receivables		148		-
Notes and lease receivables		64		73
	$	16,494	$	7,940

5.	INVENTORIES

	The inventories balance consists of:

		At March 31		At December 31
(in thousands)		2012		2011

Uranium concentrates and work-in-progress	$	12,283	$	14,672
Vanadium concentrates and work-in-progress		18		18
Inventory of ore in stockpiles		17,581		15,360
Mine and mill supplies		3,282		4,446
	$	33,164	$	34,496

Inventories - by duration:
Current	$	33,164	$	34,496
Long-term - ore in stockpiles		-		-
	$	33,164	$	34,496

	Operating expenses include write-downs of $nil and $868,000 relating to the net realizable value of the Company’s uranium and vanadium inventories for the three months ended March 2012 and March 2011, 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.

6.	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)		2012		2011

Cash equivalents	$	564	$	371
Investments		24,105		24,280
	$	24,669	$	24,651

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 mining properties. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. During the three months ended March 31, 2012, the Company deposited $nil into its collateral account.

E-6

7.	PROPERTY, PLANT AND EQUIPMENT

	The property, plant and equipment balance consists of:

		At March 31			At December 31
(in thousands)		2012			2011

Plant and equipment:
Cost	$	82,738		$	82,138
Construction-in-progress		1,381			223
Accumulated depreciation		(44,919	)		(42,448	)
Net book value	$	39,200		$	39,913

Mineral properties:
Cost	$	52,015		$	48,018
Accumulated amortization		(8,964	)		(7,253	)
Net book value	$	43,051		$	40,765

Net book value	$	82,251		$	80,678

The property, plant and equipment continuity summary is as follows:

					Accumulated
					Amortization /			Net
(in thousands)		Cost			Depreciation			Book Value

Plant and equipment:
Balance - December 31, 2011	$	82,361		$	(42,448	)	$	39,913
Additions		1,844			-			1,844
Amortization		-			(11	)		(11	)
Depreciation		-			(2,546	)		(2,546	)
Disposals		(86	)		86			-
Balance - March 31, 2012	$	84,119		$	(44,919	)	$	39,200

Mineral properties:
Balance - December 31, 2011	$	48,018		$	(7,253	)	$	40,765
Additions		3,997			-			3,997
Amortization		-			(1,711	)		(1,711	)
Balance - March 31, 2012	$	52,015		$	(8,964	)	$	43,051

Plant and Equipment-Mining

The Company has a 100% interest in the White Mesa mill located in Utah and mines located in Arizona, Colorado and Utah. Mined ore from these mines is processed at the White Mesa mill.

Mineral Properties

The Company has 100% interests in various mines in the Colorado Plateau, Arizona Strip, Henry Mountain and White Canyon mining districts located in Colorado, Arizona and Utah which are either in operations, development or on standby.

E-7

8.	RECLAMATION OBLIGATIONS

	The reclamation obligations balance consists of:

		At March 31		At December 31
(in thousands)		2012		2011

Reclamation liability	$	7,238	$	7,140
	$	7,238	$	7,140

Reclamation and remediation liability - by duration:
Current		-		-
Non-current		7,238		7,140
	$	7,238	$	7,140

The reclamation obligations continuity summary is as follows:

(in thousands)

Balance - December 31, 2011	$	7,140
Accretion		98
Balance - March 31, 2012	$	7,238

	Site Restoration: U.S. Mill and Mines

	The decommissioning and reclamation of the White Mesa mill and U.S. mines are subject to legal and regulatory requirements. Estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The above accrual represents the Company’s best estimate of the present value of future reclamation costs, discounted at rates ranging from 4.98% to 5.67%. As at December 31, 2011, the undiscounted amount of estimated future reclamation costs was $23,082,000. Reclamation costs are expected to be incurred between 2013 and 2040.

9.	SHARE CAPITAL

	The Company is authorized to issue 5,000 preferred shares with a par value of $1,000 and 100 common shares without par value. A continuity summary of the issued and outstanding shares and the associated dollar amounts is presented below:

Number of

Preferred

Number of

Common

Preferred

Common

(in thousands except share amounts)

Shares ⁽¹⁾

Amount

Balance at December 31, 2011 and March 31, 2012

2,000

15.7

189,164

(1)

The Parent holds all of the Company’s preferred shares. These preferred shares have no voting rights, are redeemable on demand, and are entitled to receive cumulative dividends at the rate of 7% per annum, payable quarterly out of the earnings of the Company, when declared by the Board of Directors. The Parent has not and has no intention to exercise any of its rights with respect to its preferred share holdings, including the right to demand redemption of the shares and receive the cumulative dividends which would otherwise have arisen to date.

E-8

10.	SUPPLEMENTAL FINANCIAL INFORMATION

	The components of revenues are as follows:

		Three Months Ended
		March 31		March 31
(in thousands)		2012		2011

Uranium concentrates	$	22,703	$	16,870
Vanadium concentrates		-		5,579
Commission fees		-		185
Alternate feed processing and other		52		99
Revenues	$	22,755	$	22,733

The components of operating expenses are as follows:

		Three Months Ended
		March 31			March 31
(in thousands)		2012			2011

Cost of goods and services sold:
COGS – mineral concentrates	$	(18,824	)	$	(20,253	)
Operating Overheads:
Mining, other development expense		(11,835	)		(9,137	)
Milling, conversion expense		(9,246	)		(27,220	)
Mill feed cost:
-Stockpile depletion		(5,582	)		(8,623	)
-Mineral property amortization		(1,711	)		(764	)
Less absorption:
-Stockpiles, mineral properties		11,798			9,111
-Concentrates		16,435			36,485
Inventory–non-cash adjustments		27			(1,374	)
Cost of goods and services sold		(18,938	)		(21,775	)
Reclamation obligations
Asset amortization		(11	)		(15	)
Liability adjustments		-			-
Selling expenses		(214	)		(421	)
Operating expenses	$	(19,163	)	$	(22,211	)

The components of other income (expense) are as follows:

		Three Months Ended
		March 31			March 31
(in thousands)		2012			2011

Gains (losses) on:
Disposal of property, plant and equipment	$	-		$	(7	)
Restricted cash and investments-fair value change		(135	)		(127	)
Other		(8	)		823
Other income (expense)	$	(143	)	$	689

The components of finance expense are as follows:

		Three Months Ended
		March 31			March 31
(in thousands)		2012			2011

Interest income	$	155		$	125
Interest expense		(530	)		(486	)
Accretion expense-reclamation obligations		(98	)		(110	)
Finance expense	$	(473	)	$	(471	)

E-9

A summary of depreciation expense recognized in the statement of operations is as follows:

		Three Months Ended
		March 31			March 31
(in thousands)		2012			2011

Operating expenses:
Mining, other development expense	$	(1,261	)	$	(1,289	)
Milling, conversion expense		(1,264	)		(1,543	)
General and administrative		(21	)		(5	)
Depreciation expense - gross	$	(2,546	)	$	(2,837	)

A summary of employee benefits expense recognized in the statement of operations is as follows:

		Three Months Ended
		March 31			March 31
(in thousands)		2012			2011

Salaries and short-term employee benefits	$	(6,241	)	$	(5,003	)
Employee benefits expense	$	(6,241	)	$	(5,003	)

The change in non-cash working capital items in the consolidated statements of cash flows is as follows:

		Three Months Ended
		March 31			March 31
(in thousands)		2012			2011

Change in non-cash working capital items:
Trade and other receivables	$	(8,563	)	$	10,827
Inventories		(5,712	)		(11,370	)
Prepaid expenses and other assets		264			259
Long-term receivables		(21	)		(31	)
Accounts payable and accrued liabilities		(849	)		(604	)
Deferred revenue		257			160
Change in non-cash working capital items	$	(14,624	)	$	(759	)

11.

RELATED PARTY TRANSACTIONS

		March 31			December 31
(in thousands)		2012			2011

Long-term receivables:
Receivable from Denison Mines (Bermuda) I Ltd.	$	9,616		$	9,595
Total long-term receivables		9,616			9,595

Accounts payable and accrued liabilities:
Due to Parent		(1,062	)		(530	)
Total accounts payable and accrued liabilities		(1,062	)		(530	)

Debt obligations:
Due to Parent		(124,625	)		(116,755	)
Total debt obligations		(124,625	)		(116,755	)

Other liabilities:
Due to Denison Mines Inc.		(1,935	)		(1,935	)
Total other liabilities		(1,935	)		(1,935	)
Net amounts due to related parties	$	(118,006	)	$	(109,625	)

E-10

Denison Mines Corp.

The Company’s operations are funded by its Parent through cash advances, debt obligations and capital contributions. The Company is a party to a revolving credit facility (the “Facility”) with the Parent for up to $125,000,000 subject to an interest rate of LIBOR plus 1.2% . During the three months ended March 31, 2012, the Company drew $7,870,000 on the Facility, increasing the debt obligation to $124,625,000 at March 31, 2012 (December 31, 2011: $116,755,000). Interest charged on this Facility totaled $532,000 in the three months ended March 31, 2012 with interest payable of $1,062,000 at March 31, 2012 (December 31, 2011: $530,000). The maturity date of the Facility is January 1, 2013.

No sales were made to the Parent in the three months ended March 31, 2012. The Company sold 117,000 pounds of U₃O₈at a fair value of $7,178,000 to the Parent in the three months ended March 31, 2011.

The Company has pledged of all of its shares in its material subsidiaries and a first-priority security interest in all of its present and future personal property as collateral for a revolving term credit facility held by the Parent with the Bank of Nova Scotia. As at March 31, 2012, the Parent did not meet the minimum tangible net worth covenant. However, the Bank of Nova Scotia has waived this requirement and the Parent was not in default under the facility. A support agreement is in place whereby the Parent has committed to provide financial support to the Company until at least March 31, 2013, or until there is a change in control of the Company.

Denison Mines Inc.

In prior periods, the Company purchased uranium from Denison Mines Inc. (“DMI”), a subsidiary of the Parent. DMI also made payments on behalf of the Company. Consideration of $1,935,000 for these uranium purchases and payments is payable to DMI at March 31, 2012 (December 31, 2011: $1,935,000).

Denison Mines (Bermuda) I Ltd.

Denison Mines (Bermuda) I Ltd. (“DMB”) is a wholly owned subsidiary of the Parent. The Company earns consulting income from and makes payments on behalf of DMB and its subsidiaries in support of its Gurvan Saihan Joint Venture in Mongolia. Payments totaling $21,000 were made on behalf of DMB and its subsidiaries in the three months ended March 31, 2012. Receivable balances from DMB and its subsidiaries totaled $9,616,000 at March 31, 2012 (December 31, 2011: $9,595,000).

Compensation of Key Management Personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. Key management personnel includes the Company’s executive officers, vice-presidents and members of its Board of Directors.

The following compensation was awarded to key management personnel:

		Three Months Ended
		March 31		March 31
(in thousands)		2012		2011

Salaries and short-term employee benefits	$	299	$	182
Key management personnel compensation	$	299	$	182

E-11

12.	COMMITMENTS AND CONTINGENCIES

	General Legal Matters

	The Company is involved, from time to time, in various 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.

	Performance Bonds and Letters of Credit

	In conjunction with various contracts, reclamation and other performance obligations, the Company may be required to issue performance bonds and letters of credit as security to creditors to guarantee the Company’s performance. Any potential payments which might become due under these items would be related to the Company’s non-performance under the applicable contract. As at March 31, 2012, the Company had outstanding bonds of $23,699,000 (December 31, 2011: $23,526,000), collateralized by restricted cash and investments of $24,669,000 (see note 6).

13.	SUBSEQUENT EVENTS

	On April16, 2012, the Parent entered into a Letter Agreement to complete a transaction with EFR whereby EFR will acquire the Parent’s interest in the Company and WCU in exchange for 425,441,494 common shares of EFR. Immediately following the closing of the transaction, the Company is expected to become a wholly-owned subsidiary of EFR. Completion of the transaction is subject to a number of conditions and contingencies, and is anticipated to be closed by the end of June 2012.

E-12

INDEPENDENT AUDITOR’S REPORT

To the Directors of Denison Mines Holdings Corp.

We have audited the accompanying consolidated financial statements of Denison Mines Holdings Corp. (the “Company”), which comprise the consolidated statements of financial position as at December 31, 2011, December 31, 2010 and January 1, 2010 and the consolidated statements of income (loss) and comprehensive income (loss), the consolidated statements of changes in equity, and the consolidated statements of cash flow for the years ended December 31, 2011 and December 31, 2010, and the related notes, which comprise a summary of significant accounting policies and other explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards (“IFRS”), and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audits to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of Denison Mines Holdings Corp. as at December 31, 2011, December 31, 2010 and January 1, 2010 and its results of operations and its cash flows for the years ended December 31, 2011 and December 31, 2010 in accordance with IFRS.

Original signed by “PricewaterhouseCoopers LLP”

Chartered Accountants, Licensed Public Accountants
May 22, 2012

E-13

DENISON MINES HOLDINGS CORP.

Consolidated Statements of Financial Position

(Expressed in thousands of U.S. dollars)

		At December 31			At December 31			At January 1
		2011			2010			2010
ASSETS
Current
Cash	$	230		$	9,551		$	232
Trade and other receivables (note 6)		7,940			14,892			2,279
Inventories (note 7)		34,496			26,368			31,228
Prepaid expenses and other		1,120			1,221			938
		43,786			52,032			34,677
Non-Current
Investments		46			200			117
Restricted cash and investments (note 8)		24,651			20,315			19,564
Property, plant and equipment (note 9)		80,678			94,400			79,948
Long-term receivables (note 15)		9,595			9,151			8,525
Total assets	$	158,756		$	176,098		$	142,831

LIABILITIES
Current
Accounts payable and accrued liabilities	$	7,462		$	8,926		$	6,562
Current portion of long-term liabilities:
Deferred revenue		893			-			-
		8,355			8,926			6,562
Non-Current
Deferred revenue		-			3,339			3,186
Debt obligations (note 15)		116,755			103,993			100,322
Reclamation obligations (note 11)		7,140			6,383			8,609
Other liabilities (note 15)		2,035			1,810			100
Total liabilities		134,285			124,451			118,779

EQUITY
Share capital (note 13)		191,164			128,894			117,450
Deficit		(166,739	)		(77,447	)		(93,515	)
Accumulated other comprehensive income		46			200			117
Total equity		24,471			51,647			24,052
Total liabilities and equity	$	158,756		$	176,098		$	142,831

Commitments and contingencies (note 17)
Subsequent events (note 18)

The accompanying notes are an integral part of the consolidated financial statements

On behalf of the Board of Directors:

Original signed by “Ron F. Hochstein”	Original signed by “David C. Frydenlund”
Director	Director

E-14

DENISON MINES HOLDINGS CORP.

Consolidated Statements of Income (Loss) and Comprehensive Income (Loss)

(Expressed in thousands of U.S. dollars)

		Year Ended
		December 31			December 31
		2011			2010

REVENUES (note 14)	$	71,003		$	79,142

EXPENSES
Operating expenses (note 14)		(76,245	)		(66,602	)
Mineral property exploration		(678	)		(566	)
General and administrative		(5,253	)		(5,276	)
Goodwill impairment (note 10)		(32,625	)		-
Impairment of property, plant and equipment (note 9)		(44,079	)		-
Other income (note 14)		912			11,566
		(157,968	)		(60,878	)
Income (loss) before finance charges		(86,965	)		18,264

Finance expense (note 14)		(1,736	)		(1,728	)
Income (loss) before taxes		(88,701	)		16,536

Income tax recovery (expense) (note 12):
Current		(26	)		(468	)
Deferred		(565	)		-
Net income (loss) for the period	$	(89,292	)	$	16,068

Comprehensive income (loss):
Unrealized gain (loss) on investments		(154	)		83
Comprehensive income (loss) for the period	$	(89,446	)	$	16,151

The accompanying notes are an integral part of the consolidated financial statements

E-15

DENISON MINES HOLDINGS CORP.

Consolidated Statements of Changes in Equity

(Expressed in thousands of U.S. dollars)

		Year Ended
		December 31			December 31
		2011			2010

Share capital
Balance-beginning of period	$	128,894		$	117,450
Capital contribution		-			11,444
Share issues		62,270			-
Balance-end of period		191,164			128,894

Deficit
Balance-beginning of period		(77,447	)		(93,515	)
Net income (loss)		(89,292	)		16,068
Balance-end of period		(166,739	)		(77,447	)

Accumulated other comprehensive income
Balance-beginning of period		200			117
Unrealized gain (loss) on investments		(154	)		83
Balance–end of period		46			200

Total Equity
Balance-beginning of period	$	51,647		$	24,052
Balance-end of period	$	24,471		$	51,647

The accompanying notes are an integral part of the consolidated financial statements

E-16

DENISON MINES HOLDINGS CORP.

Consolidated Statements of Cash Flow

(Expressed in thousands of U.S. dollars)

		Year Ended
		December 31			December 31
CASH PROVIDED BY (USED IN):		2011			2010

OPERATING ACTIVITIES
Net income (loss) for the period	$	(89,292	)	$	16,068
Items not affecting cash:
Depletion, depreciation, amortization and accretion		33,934			30,803
Goodwill impairment		32,625			-
Impairment on property, plant and equipment		44,079			-
Losses (gains) on asset disposals		534			(56	)
Gains on restricted investments		(401	)		(207	)
Non-cash inventory adjustments		150			(10,235	)
Deferred income tax expense (recovery)		565			-
Change in non-cash working capital items (note 14):		(22,151	)		(17,384	)
Net cash provided by operating activities		43			18,989

INVESTING ACTIVITIES
Cash acquired from business transfer (note 5)		1,197			-
Decrease (increase) in notes receivable		784			(857	)
Expenditures on property, plant and equipment		(20,352	)		(23,494	)
Proceeds on sale of property, plant and equipment		33			110
Increase in restricted cash and investments		(3,788	)		(544	)
Net cash used in investing activities		(22,126	)		(24,785	)

FINANCING ACTIVITIES
Increase in debt obligations		12,762			3,671
Capital contributions		-			11,444
Net cash provided by financing activities		12,762			15,115

Increase (decrease) in cash		(9,321	)		9,319
Cash, beginning of period		9,551			232
Cash, end of period	$	230		$	9,551

Supplemental cash flow disclosure:
Interest paid		1,809			1,658
Income taxes paid (recovered)	$	25		$	(1,386	)

The accompanying notes are an integral part of the consolidated financial statements

E-17

DENISON MINES HOLDINGS CORP.

Notes to the consolidated financial statements for the years ended December 31, 2011 and 2010

(Expressed in U.S. dollars except for shares and per share amounts)

1.	NATURE OF OPERATIONS

	Denison Mines Holdings Corp. and its subsidiary companies (collectively, the “Company”) are engaged in uranium mining and related activities, including acquisition, exploration and development of uranium bearing properties, extraction, processing and selling of uranium.

	The Company has a 100% interest in the White Mesa mill located in Utah, United States and has interests in a number of nearby mines. 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 Holdings Corp. (“DMHC”) is incorporated in the State of Delaware and domiciled in the United States. The address of its registered head office is 1050 17^thStreet, Suite 950, Denver, Colorado, United States, 80265. The Company is a wholly owned subsidiary of Denison Mines Corp. (the “Parent”), which holds all of the Company’s common shares either directly or indirectly through White Canyon Uranium Limited (“WCU”), another subsidiary of the Parent. The Parent is a publicly listed corporation incorporated under the Business Corporations Act (Ontario) and domiciled in Canada.

	References to “2011” and “2010” refer to the year ended December 31, 2011 and the year ended December 31, 2010 respectively.

2.	BASIS OF PRESENTATION AND ADOPTION OF IFRS

	The consolidated financial statements are the Company’s first annual financial statements and have been prepared in compliance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. All adjustments considered necessary by management for fair presentation have been included in these financial statements.

	The Company’s presentation currency is U.S dollars.

	These financial statements were approved by the board of directors for issue on May 22, 2012.

3.	SIGNIFICANT ACCOUNTING POLICIES

	The significant accounting policies used in the preparation of these consolidated financial statements are described below:

	(a)	Consolidation

		The financial statements of the Company consolidate the accounts of DMHC and its subsidiaries. Subsidiaries are those entities which DMHC controls by having the power to govern the financial and operating policies. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether DMHC controls another entity. Subsidiaries are fully consolidated from the date on which control is obtained by DMHC and are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealized gains and losses from intercompany transactions are eliminated.

	(b)	Foreign currency translation

	(i)	Functional and presentation currency

		Items included in the financial statements of each entity in the DMHC group are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). Primary and secondary indicators are used to determine the functional currency (primary indicators have priority over secondary indicators). Primary indicators include the currency that mainly influences sales prices and the currency that mainly influences labour, material and other costs. Secondary indicators include the currency in which funds from financing activities are generated and the currency in which receipts from operating activities are usually retained. The U.S. dollar has been determined to be the functional currency for the Company and its subsidiaries.

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		The consolidated financial statements are presented in U.S. dollars, unless otherwise stated.

	(ii)	Transactions and balances

		Foreign currency transactions are translated into an entity’s functional currency using the exchange rates prevailing at the dates of the transactions. Generally, foreign exchange gains and losses resulting from the settlement of foreign currency transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in currencies other than an operation’s functional currency are recognized in the statement of income.

	(c)	Business combinations

		A business combination is defined as an acquisition of assets and liabilities that constitute a business. A business consists of inputs, including non-current assets, and processes, including operational processes, that when applied to those inputs, have the ability to create outputs that provide a return to the Company and its shareholders. A business also includes those assets and liabilities that do not necessarily have all the inputs and processes required to produce outputs, but can be integrated with the inputs and processes of the Company to create outputs.

		Business combinations are accounted for using the acquisition method whereby identifiable assets acquired and liabilities assumed, including contingent liabilities, are recorded at 100% of their acquisition-date fair values. The acquisition date is the date the Company acquires control over the acquiree. The Company considers all relevant facts and circumstances in determining the acquisition date.

		Acquisition related costs, other than costs to issue debt or equity securities of the acquirer, including investment banking fees, legal fees, accounting fees, valuation fees and other professional or consulting fees are expensed as incurred.

		If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports in its financial statements provisional amounts for the items for which the accounting is incomplete. During the measurement period, the Company will retrospectively adjust the provisional amounts recognized at the acquisition date to reflect new information obtained about facts and circumstances that existed as of the acquisition date and, if known, would have affected the measurement of the amounts recognized as of that date. The maximum length of time for the measurement period is one year from the acquisition date.

	(d)	Cash

		Cash includes cash on hand and deposits held with banks which are subject to an insignificant risk of changes in value.

	(e)	Financial instruments

		Financial assets and financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. Financial assets are derecognized when the rights to receive cash flows from the assets have expired or have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial liabilities are derecognized when the obligations specified in the contract is discharged, cancelled or expires.

		At initial recognition, the Company classifies its financial instruments in the following categories:

	(i)	Financial assets and liabilities at fair value through profit or loss (“FVPL”)

		A financial asset or liability is classified in this category if acquired principally for the purpose of selling or repurchasing in the short-term. Financial instruments in this category are recognized initially and subsequently at fair value. Transaction costs are expensed in the consolidated statement of income. Gains and losses arising from changes in fair value are presented in the consolidated statement of income in the period in which they arise.

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	(ii)	Available-for-sale investments

		Available-for-sale investments are recognized initially at fair value plus transaction costs and are subsequently carried at fair value. Gains or losses arising from re-measurement are recognized in other comprehensive income. When an available-for-sale investment is sold or impaired, the accumulated gains or losses are moved from accumulated other comprehensive income to the statement of income.

	(iii)	Loans and receivables

		Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Loans and receivables are initially recognized at the amount expected to be received, less a discount (when material) to reduce the loans and receivables to fair value. Subsequently, loans and receivables are measured at amortized cost using the effective interest method less a provision for impairment.

	(iv)	Financial liabilities at amortized cost

		Financial liabilities are initially recognized at the amount required to be paid, less a discount (when material) to reduce the financial liabilities to fair value. Subsequently, financial liabilities are measured at amortized cost using the effective interest method.

The Company has designated its financial assets and liabilities as follows:

“Restricted cash and investments” are classified as FVPL and any period change in fair value is recorded through the results from operations.
The Company’s current holdings of equity instruments in “Investments” are classified as available-for- sale and any period change in fair value is recorded through other comprehensive income. When the investment’s value becomes impaired, the loss is recognized in the results of operations in the period of impairment.
“Cash”, “Trade and other receivables” and “Long-term receivables” are classified as loans and receivables and are measured at amortized cost using the effective interest rate method. Interest income is recorded in net income, as applicable.
“Accounts payable and accrued liabilities”, “Debt obligations” and “Other liabilities” are classified as other financial liabilities and are measured at amortized cost using the effective interest rate method. Interest expense is recorded in net income, as applicable.

	(f)	Impairment of financial assets

		At each reporting date, the Company assesses whether there is objective evidence that a financial asset (other than a financial asset classified as fair value through profit and loss) is impaired. Objective evidence of an impairment loss includes: i) significant financial difficulty of the obligor; ii) delinquencies in interest or principal payments; iii) increased probability that the borrower will enter bankruptcy or other financial reorganization; and iv) in the case of equity securities, a significant or prolonged decline in the fair value of the security below its cost.

		If such evidence exists, the Company recognizes an impairment loss, as follows:

	(i)	Financial assets carried at amortized cost: The loss is the difference between the amortized cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account.

	(ii)	Available-for-sale financial assets: The impairment loss is the difference between the original cost of the asset and its fair value at the measurement date, less any impairment losses previously recognized in the statement of income. This amount represents the cumulative loss in accumulated other comprehensive income that is reclassified to net income.

	(g)	Inventories

		Expenditures, including depreciation, depletion and amortization of production assets, incurred in the mining and processing activities that will result in the future concentrate production are deferred and accumulated as ore in stockpiles and in-process and concentrate inventories. These amounts are carried at the lower of average costs or net realizable value (“NRV”). NRV is the difference between the estimated future concentrate price (net of selling costs) and estimated costs to complete production into a saleable form.

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		Stockpiles are comprised of coarse ore that has been extracted from the mine and is available for further processing. Mining production costs are added to the stockpile as incurred and removed from the stockpile based upon the average cost per ton of ore produced from mines considered to be in commercial production. The current portion of ore in stockpiles represents the amount expected to be processed in the next twelve months.

		In-process and concentrate inventories include the cost of the ore removed from the stockpile, a pro-rata share of the amortization of the associated mineral property, as well as production costs incurred to process the ore into a saleable product. Processing costs typically include labor, chemical reagents and directly attributable mill overhead expenditures. Items are valued according to the first-in first-out method (FIFO) or at weighted average cost, depending on the type of inventory or work-in-process.

		Materials and other supplies held for use in the production of inventories are carried at average cost and are not written down below that cost if the finished products in which they will be incorporated are expected to be sold at or above cost. However, when a decline in the price of concentrates indicates that the cost of the finished products exceeds net realizable value, the materials are written down to net realizable value. In such circumstances, the replacement cost of the materials may be the best available measure of their net realizable value.

	(h)	Property, plant and equipment

		Property, plant and equipment are recorded at acquisition or production cost and carried net of depreciation and impairments. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Repairs and maintenance costs are charged to the statement of income during the period in which they are incurred.

		Depreciation is calculated on a straight line or unit of production basis as appropriate. Where a straight line methodology is used, the assets are depreciated to their estimated residual value over an estimated useful life which ranges from three to fifteen years depending upon the asset type. Where a unit of production methodology is used, the assets are depreciated to their estimated residual value over the useful life defined by management’s best estimate of recoverable reserves and resources in the current mine plan. When assets are retired or sold, the resulting gains or losses are reflected in current earnings as a component of other income or expense. The Company allocates the amount initially recognized in respect of an item of property, plant and equipment to its significant parts and depreciates separately each such part. Residual values, method of depreciation and useful lives of the assets are reviewed at least annually and adjusted if appropriate.

		Where straight-line depreciation is utilized, the range of useful lives for various asset classes is generally as follows:

•	Buildings	15 years;
•	Production machinery and equipment	5 - 7 years;
•	Other	3 - 5 years.

	(i)	Mineral property acquisition, exploration and development costs

		Costs relating to the acquisition of acquired mineral rights and acquired exploration rights are capitalized.

		Exploration and evaluation expenditures are expensed as incurred on mineral properties not sufficiently advanced. At the point in time that a mineral property is considered to be sufficiently advanced, it is classified as a development mineral property and all further expenditures for the current year and subsequent years are capitalized as incurred. These costs will include costs of maintaining the site until commercial production, costs to initially delineate the ore body, costs for shaft sinking and access, lateral development, drift development and infrastructure development. Such costs represent the net expenditures incurred and capitalized as at the balance sheet date and do not necessarily reflect present or future values.

		Once a development mineral property goes into commercial production, the property is classified as “Producing” and the accumulated costs are amortized over the estimated recoverable resources in the current mine plan using a unit of production basis. Commercial production occurs when a property is substantially complete and ready for its intended use.

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	(j)	Goodwill

		Goodwill represents the excess of the cost of an acquisition over the fair value of the Company’s share of the identifiable net assets of the acquired subsidiary at the date of acquisition. Goodwill is carried at cost less accumulated impairment losses. Impairment losses are recognized in the statement of income when recognized. Goodwill is allocated to each cash generating unit (“CGU”) or group of CGUs that are expected to benefit from the related business combination. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

	(k)	Impairment of non-financial assets

		Property, plant and equipment and intangible assets are tested for impairment when events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows or CGUs. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU, as determined by management). An impairment loss is recognized for the amount by which the CGU’s carrying amount exceeds its recoverable amount.

		Goodwill is reviewed for impairment annually or at any time if an indicator of impairment exists.

	(l)	Reclamation provisions

		Reclamation provisions are any legal and constructive obligation related to the retirement of tangible long- lived assets and are recognized when such obligations are incurred, if a reasonable estimate of the value can be determined. These obligations are measured initially at the present value of expected cash flows using a pre-tax discount rate reflecting risks specific to the liability and the resulting costs are capitalized and added to the carrying value of the related assets. In subsequent periods, the liability is adjusted for the accretion of the discount and the expense is recorded in the income statement. Changes in the amount or timing of the underlying future cash flows or changes in the discount rate are immediately recognized as an increase or decrease in the carrying amounts of the related assets and liability. These costs are amortized to the results of operations over the life of the asset. Reductions in the amount of the liability are first applied against the amount of the net reclamation asset on the books with any excess value being recorded in the statement of operations.

		The Company’s activities are subject to numerous governmental laws and regulations. Estimates of future reclamation liabilities for asset decommissioning and site restoration are recognized in the period when such liabilities are incurred. These estimates are updated on a periodic basis and are subject to changing laws, regulatory requirements, changing technology and other factors which will be recognized when appropriate. Liabilities related to site restoration include long-term treatment and monitoring costs and incorporate total expected costs net of recoveries. Expenditures incurred to dismantle facilities, restore and monitor closed resource properties are charged against the related reclamation and remediation liability.

	(m)	Provisions

		Provisions for restructuring costs and legal claims, where applicable, are recognized in liabilities when the Company has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period, and are discounted to present value where the effect is material. The Company performs evaluations to identify onerous contracts and, where applicable, records provisions for such contracts.

	(n)	Current and Deferred Income tax

		Income taxes are accounted for using the liability method of accounting for deferred income taxes. Under this method, the tax currently payable is based on taxable income for the period. Taxable income differs from income as reported in the consolidated statement of income (loss) because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

		Deferred income tax assets and liabilities are recognized based on temporary differences between the financial statement carrying values of the existing assets and liabilities and their respective income tax bases used in the computation of taxable income. Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it is probable that taxable income will be available against which deductible temporary differences can be utilized. Such assets and liabilities are not recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable income nor the accounting income. Deferred tax liabilities are recognized for taxable temporary differences arising on investments in subsidiaries and investments, except where the Company is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future. Deferred tax assets are recognized to the extent that taxable income will be available against which the deductible temporary differences can be utilized. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable earnings will be available to allow all or part of the asset to be recovered.

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		Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realized, based on tax rates and tax laws that have been enacted or substantively enacted by the balance sheet date. Deferred tax is charged or credited to income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

		Income tax assets and liabilities are offset when there is a legally enforceable right to offset the assets and liabilities and when they relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entities where there is an intention to settle the balance on a net basis.

	(o)	Revenue recognition

		Revenue from the sale of mineral concentrates is recognized when it is probable that the economic benefits will flow to the Company and delivery has occurred, the sales price and costs incurred with respect to the transaction can be measured reliably and collectability is reasonably assured. For uranium, revenue is typically recognized when delivery is evidenced by book transfer at the applicable uranium storage facility. For vanadium related products, revenue is typically recognized at the time of shipment to the customer.

		Revenue from toll milling services is recognized as material is processed in accordance with the specifics of the applicable toll milling agreement. Revenue and unbilled accounts receivable are recorded as related costs are incurred using billing formulas included in the applicable toll milling agreement.

		Revenue from alternate feed process milling is recognized as material is processed, in accordance with the specifics of the applicable processing agreement. In general, the Company collects a recycling fee for receipt of the material and/or receives the proceeds from the sale of any uranium concentrate and other metals produced. Deferred revenues represent processing proceeds received on delivery of materials but in advance of the required processing activity.

	(p)	Borrowing costs

		Borrowing costs attributable to the acquisition, construction or production of qualifying assets are added to the cost of those assets, until such time as the assets are substantially ready for their intended use. All other borrowing costs are recognized as interest expense in the statement of income in the period in which they are incurred.

	(q)	Accounting standards issued but not yet applied

		The Company is currently evaluating the impact of the following pronouncements and has not yet determined the impact of the following pronouncements or whether to early adopt any of the new requirements:

	(i)	International Financial Reporting Standard 7, Financial Instruments - Disclosure (“IFRS 7”)

		IFRS 7 was amended to provide guidelines on the eligibility criteria for offsetting assets and liabilities as a single net amount in the balance sheet. This amendment is effective for annual periods beginning on or after January 1, 2013.

	(ii)	International Financial Reporting Standard 9, Financial Instruments (“IFRS 9”)

		IFRS 9 was issued in November 2009 and contained requirements for financial assets. This standard addresses classification and measurement of financial assets and replaces the multiple category and measurement models in IAS 39 for debt instruments with a new mixed measurement model having only two categories: amortized cost and fair value through profit or loss. IFRS 9 also replaces the models for measuring equity instruments, and such instruments are either recognized at fair value through profit or loss or at fair value through other comprehensive income. Where such equity instruments are measured at fair value through other comprehensive income, dividends are recognized in profit or loss to the extent not clearly representing a return of investment; however, other gains and losses (including impairments) associated with such instruments remain in accumulated comprehensive income indefinitely.

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		Requirements for financial liabilities were added in October 2010 and they largely carried forward existing requirements in IAS 39, Financial Instruments – Recognition and Measurement, except that fair value changes due to credit risk for liabilities designated at fair value through profit and loss would generally be recorded in other comprehensive income.

		This standard is required to be applied for accounting periods beginning on or after January 1, 2015, with earlier adoption permitted.

	(iii)	International Financial Reporting Standard 10, Consolidated Financial Statements (“IFRS 10”)

		IFRS 10 was issued in May 2011 and it establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces the consolidation requirements in SIC-12 Consolidation—Special Purpose Entities and IAS 27 Consolidated and Separate Financial Statements. This standard is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

	(iv)	International Financial Reporting Standard 12, Disclosure of Interest in Other Entities (“IFRS 12”)

		IFRS 12 was issued in May 2011 and it is a new and comprehensive standard on disclosure requirements for all forms of interests in other entities, including subsidiaries, joint arrangements, associates and unconsolidated structured entities. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity’s interest in other entities. The standard is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

	(v)	International Financial Reporting Standard 13, Fair Value Measurement (“IFRS 13”)

		IFRS 13 was issued in May 2011 and it establishes new guidance on fair value measurement and disclosure requirements for IFRS and completes a major project to improve the convergence of IFRS and US GAAP. The new standard clarifies that fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. The standard is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

	(vi)	International Accounting Standard 1, Presentation of Financial Statements (“IAS 1”)

		IAS 1 was amended to require entities to group items within other comprehensive income based on an assessment of whether such items may or may not be reclassified to profit or loss at a subsequent date. This standard is effective for annual periods beginning on or after July 1, 2012. Earlier application is permitted.

	(vii)	International Accounting Standard 32, Financial Instruments - Presentation (“IAS 32”)

		IAS 32 was amended to clarify the criteria that should be considered in determining whether an entity has a legally enforceable right of set off in respect of its financial instruments. Amendments to IAS 32 are applicable to annual periods beginning on or after January 1, 2014 with retrospective application required. Earlier application is permitted.

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4.	CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

	The preparation of consolidated financial statements in accordance with IFRS requires the use of certain critical accounting estimates and judgements that affect the amounts reported. It also requires management to exercise judgement in applying the Company’s accounting policies. These judgements and estimates are based on management’s best knowledge of the relevant facts and circumstances taking into account previous experience. Although the Company regularly reviews the estimates and judgements made that affect these financial statements, actual results may be materially different.

	Significant estimates and judgements made by management relate to:

	(a)	Depreciation and Amortization of Property, Plant and Equipment

		Property, plant and equipment comprise a large component of the Company’s assets and, as such, the depreciation and amortization of those assets have a significant effect on the Company’s financial statements. Depreciation and amortization of property, plant and equipment used in production is calculated on a straight line basis or a unit of production basis as appropriate.

		Plant and equipment assets depreciated using a straight-line basis require estimates of residual values and allocate the cost of an asset to production cost evenly over the assets useful life defined as a period of time. Plant and equipment assets depreciated using a units of production basis require estimates of residual values and allocate the cost of an asset to production cost based on current period production in proportion to total anticipated production from the facility.

		Mineral property assets are amortized using a units of production basis that allocates the cost of the asset to production cost based on the current period’s mill feed as a proportion of the total estimated resources in the related ore body. The process of making these estimates requires significant judgment in evaluating and assessing available geological, geophysical, engineering and economic data, projected rates of production, estimated commodity price forecasts and the timing of future expenditures, all of which are, by their very nature, subject to interpretation and uncertainty.

		Changes in these estimates may materially impact the carrying value of the Company’s property, plant and equipment and the recorded amount of depletion and depreciation.

	(b)	Valuation of Long-lived Assets

		The Company undertakes a review of the carrying values of mining properties and related expenditures whenever events or changes in circumstances indicate that their carrying values may exceed their estimated net recoverable amounts determined by reference to estimated future operating results and discounted net cash flows. An impairment loss is recognized when the carrying value of those assets is not recoverable. In undertaking this review, management of the Company is required to make significant estimates of, amongst other things, future production and sale volumes, forecast commodity prices, future operating and capital costs and reclamation costs to the end of the mine’s life. These estimates are subject to various risks and uncertainties, which may ultimately have an effect on the expected recoverability of the carrying values of the mining properties and related expenditures.

		The Company reviews goodwill at least annually. The Company has estimated the fair value of operating segments to which goodwill is allocated using discounted cash flow models that require assumptions about future cash flows, expenditures and an assumed discount rate. Changes in these estimates could have a material impact on the carrying value of the goodwill.

	(c)	Inventory

		The Company values its concentrate, work in process and ore stockpile inventories at the lower of cost or net realizable value at the end of the reporting period. Costs represent the average cost, and include direct labour and materials costs, mine site overhead, plant and equipment depreciation, mineral property amortization and stockpile depletion. Net realizable value is based on estimated future commodity prices and estimated costs required to convert work in process and ore stockpile inventories into saleable form. These estimates are subject to change from period-to-period that may materially impact the carrying value of the Company’s inventories resulting in inventory write-downs and recoveries.

	(d)	Deferred Tax Assets and Liabilities

		Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted or substantially enacted tax rates expected to apply when the differences are expected to be recovered or settled. The determination of the ability of the Company to utilize tax loss carry forwards to offset deferred tax liabilities requires management to exercise judgment and make certain assumptions about the future performance of the Company. Management is required to assess whether it is “probable” that the Company will benefit from these prior losses and other deferred tax assets. Changes in economic conditions, commodity prices and other factors could result in revisions to the estimates of the benefits to be realized or the timing of utilizing the losses.

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	(e)	Business Combinations

		Management uses judgment in applying the acquisition method of accounting for business combinations and in determining fair values of the identifiable assets and liabilities acquired. The value placed on the acquired assets and liabilities, including identifiable intangible assets, will have an effect on the amount of goodwill that the Company may record on an acquisition. Changes in economic conditions, commodity prices and other factors between the date that an acquisition is announced and when it finally is consummated can have a material difference on the allocation used to record a preliminary purchase price allocation versus the final purchase price allocation which can take up to one year after acquisition to complete.

	(f)	Reclamation Obligations

		Asset retirement obligations are recorded as a liability when the asset is initially constructed. The Company has accrued its best estimate of its share of the cost to decommission its mining and milling properties in accordance with existing laws, contracts and other policies. The estimate of future costs involves a number of estimates relating to timing, type of costs, mine closure plans, and review of potential methods and technical advancements. Furthermore, due to uncertainties concerning environmental remediation, the ultimate cost of the Company’s decommissioning liability could differ from amounts provided. The estimate of the Company’s obligation is subject to change due to amendments to applicable laws and regulations and as new information concerning the Company’s operations becomes available. The Company is not able to determine the impact on its financial position, if any, of environmental laws and regulations that may be enacted in the future.

5.	TRANSFER OF URANIUM ENERGY CORPORATION

	On June 17, 2011, the Parent’s offer to acquire all of the outstanding shares of WCU closed with 96.98% of shares outstanding accepting the offer. Compulsory acquisition proceedings to acquire the remaining shares of WCU were initiated on June 20, 2011 and were completed in early August 2011.

	WCU’s key assets were held through its subsidiary, Uranium Energy Corporation (“UEC”) which had assets located in southeastern Utah, near the Company’s White Mesa mill. Its holdings comprised 100% interests in the Daneros producing mine, the Lark Royal advanced project and the Thompson, Geitus, Blue Jay and Marcy Look exploration projects. UEC commenced production of uranium ore in December 2009 from its 100% owned Daneros uranium mine.

	On September 1, 2011, as a result of a group reorganization, the ownership of UEC was transferred from WCU to the Company. Consideration of 4.7 shares valued at $62,270,000 was paid to WCU in return for all of the outstanding shares of UEC.

	The reorganization has been accounted for as a transfer of assets between entities under common control. Accordingly, the transaction is excluded from the scope of IFRS 3(R) Business Combinations and the Company has adopted the predecessor values method to account for the transaction. These financial statements have been presented with balance sheet amounts based on amounts recorded by the Parent on June 17, 2011 when the Parent acquired WCU and UEC. It is the Company's judgment that carrying values as of June 17, 2011 provide the most relevant and reliable information and should be used as the basis for valuation as it reflects that economically, nothing has changed regarding the assets as they were under the same common control both before and after the acquisition by the Company on September 1, 2011. The statement of comprehensive income (loss) includes the results of UEC from June 17, 2011.

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The following table summarizes the consideration paid for UEC and the carrying value of assets acquired and liabilities assumed at the date of transfer:

		UEC
		Fair Value
(in thousands)		June 17, 2011

Cash	$	1,197
Inventories
Ore-in-stockpiles		3,711
Uranium concentrates and work-in-progress		584
Prepaid expenses and other		26
Restricted cash and investments		147
Property, plant and equipment
Plant and equipment		26
Mineral properties		23,916
Deferred income tax asset		565
Goodwill		32,625
Total assets		62,797

Accounts payable and accrued liabilities		446
Reclamation obligations		81
Total liabilities		527
Total consideration	$	62,270

During 2011, the Company recorded an impairment charge of $32,625,000 related to the goodwill recognized in the UEC business transfer (see notes 9 and 10).

The consolidated statement of comprehensive income (loss) for 2011 includes the following with respect to the operations of UEC:

(in thousands)		Year Ended
		December 31
		2011

Operating expenses	$	24
General and administrative		(45	)
Goodwill impairment		(32,625	)
Impairment of property, plant and equipment		(7,834	)
Other income		2
Income tax recovery (expense)		(565	)
	$	(41,043	)

The following unaudited pro forma summary presents the Company’s consolidated results as if UEC had been acquired on January 1, 2011. The pro forma information is provided for comparative purposes only and does not necessarily reflect the actual results that would have occurred, nor is it necessarily indicative of future results of operations of the combined companies.

(in thousands)		Revenue		Net loss

As reported for the period	$	71,003	$	(89,292	)
Adjustments to revenue ⁽¹⁾		7,142		-
Adjustments to net income (loss) ⁽²⁾		-		(3,433	)
Pro forma amounts for the period	$	78,145	$	(92,725	)

	(1)	Revenue adjustments include UEC’s revenue for the six month period ended June 30, 2011 adjusted to eliminate revenue transactions between the Company and UEC;
	(2)	Net income (loss) adjustments include revenue adjustments above, UEC’s net income (loss) for the six month period ended June 30, 2011 and adjustments to UEC’s financial results to conform to Denison’s policy of expensing exploration.

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6.	TRADE AND OTHER RECEIVABLES

	The trade and other receivables balance consists of:

		At December 31		At December 31		At January 1
(in thousands)		2011		2010		2010

Trade receivables – mineral concentrate sales	$	7,762	$	3,115	$	363
Trade receivables – other		105		4,814		-
Sundry receivables		-		6,106		1,916
Notes and lease receivables		73		857		-
	$	7,940	$	14,892	$	2,279

7.	INVENTORIES

	The inventories balance consists of:

		At December 31		At December 31		At January 1
(in thousands)		2011		2010		2010

Uranium concentrates and work-in-progress ⁽¹⁾	$	14,672	$	5,987	$	5,666
Vanadium concentrates and work-in-progress ⁽²⁾		18		4,198		442
Inventory of ore in stockpiles		15,360		12,568		22,481
Mine and mill supplies		4,446		3,615		2,639
	$	34,496	$	26,368	$	31,228

Inventories - by duration:
Current	$	34,496	$	26,368	$	31,228
Long-term – ore in stockpiles		-		-		-
	$	34,496	$	26,368	$	31,228

	(1)	The uranium concentrates and work-in-progress inventory is presented net of a provision of $nil as at December 31, 2011, $nil as at December 31, 2010 and $3,469,000 as at January 1, 2010.
	(2)	The vanadium concentrates and work-in-progress inventory is presented net of a provision of $nil as at December 31, 2011, $17,000 as at December 31, 2010 and $7,302,000 as at January 1, 2010.

	Operating expenses include recoveries of $17,000 and $10,754,000 relating to the net realizable value of the Company’s uranium and vanadium inventories for the years ended December 2011 and December 2010, 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.

8.	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 December 31		At December 31		At January 1
(in thousands)		2011		2010		2010

Cash equivalents	$	371	$	6,459	$	997
Investments		24,280		13,856		18,567
	$	24,651	$	20,315	$	19,564

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 mining properties. Cash equivalents are short-term highly liquid investments with original maturities of three months or less. In 2011, the Company deposited an additional $3,200,000 into its collateral account (2010: $nil).

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9.	PROPERTY, PLANT AND EQUIPMENT

	The property, plant and equipment balance consists of:

		At December 31			At December 31			At January 1
(in thousands)		2011			2010			2010

Plant and equipment:
Cost	$	82,138		$	83,500		$	77,526
Construction-in-progress		223			13,050			3,951
Accumulated depreciation		(42,448	)		(32,131	)		(20,649	)
Net book value	$	39,913		$	64,419		$	60,828

Mineral properties:
Cost	$	48,018		$	31,156		$	19,120
Accumulated amortization		(7,253	)		(1,175	)		-
Net book value	$	40,765		$	29,981		$	19,120

Net book value	$	80,678		$	94,400		$	79,948

The property, plant and equipment continuity summary is as follows:

					Accumulated
					Amortization /			Net
(in thousands)		Cost			Depreciation			Book Value

Plant and equipment:
Balance - January 1, 2010	$	81,477		$	(20,649	)	$	60,828
Additions		14,905			-			14,905
Depreciation		-			(11,551	)		(11,551	)
Disposals		(120	)		66			(54	)
Transfers		(3	)		3			-
Reclamation adjustment		291			-			291
Balance - December 31, 2010	$	96,550		$	(32,131	)	$	64,419
Additions		6,830			-			6,830
Amortization		-			(59	)		(59	)
Business transfer (note 5)		70			(44	)		26
Depreciation		-			(10,802	)		(10,802	)
Disposals		(1,095	)		528			(567	)
Reclamation adjustment		218			60			278
Impairment		(20,212	)		-			(20,212	)
Balance - December 31, 2011	$	82,361		$	(42,448	)	$	39,913

Mineral properties:
Balance - January 1, 2010	$	19,120		$	-		$	19,120
Additions		12,036			-			12,036
Amortization		-			(1,175	)		(1,175	)
Balance - December 31, 2010	$	31,156		$	(1,175	)	$	29,981
Additions		16,813			-			16,813
Amortization		-			(6,078	)		(6,078	)
Business transfer (note 5)		23,916			-			23,916
Impairment		(23,867	)		-			(23,867	)
Balance - December 31, 2011	$	48,018		$	(7,253	)	$	40,765

Plant and Equipment-Mining

The Company has a 100% interest in the White Mesa mill located in Utah and mines located in Arizona, Colorado and Utah. Mined ore from these mines is processed at the White Mesa mill.

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	Mineral Properties

	The Company has various wholly owned interests in development and exploration projects located in the U.S. Amounts spent on development projects are capitalized as mineral property assets. Exploration projects are expensed.

	The most significant of the Company’s mineral property interests are as follows:

	The Company has 100% interests in various mines in the Colorado Plateau, Arizona Strip, Henry Mountain and White Canyon mining districts located in Colorado, Arizona and Utah which are either in operations, development or on standby.

	On September 1, 2011, the Company acquired certain uranium deposits located in the White Canyon district in Utah in conjunction with the group reorganization which transferred ownership of UEC to the Company (see note 5).

	Impairment of Property, Plant and Equipment and Goodwill

	As discussed in note 18, the Parent has entered into a proposed transaction with Energy Fuels Inc. (“EFR”) whereby EFR will acquire the Parent’s interest in the Company and WCU in exchange for 425,441,494 common shares of EFR.

	The Company identified a potential impairment triggering event as a result of the Parent entering into the proposed transaction with EFR and has therefore undertaken an impairment test on its U.S. mining segment CGU as at December 31, 2011. The Company used a fair value less costs to sell analysis to determine the recoverable amount of this CGU based on the terms of the proposed transaction with EFR. For the purposes of the impairment test, the recoverable amount was based on 425,441,494 common shares of EFR to be received by the Parent and a volume weighted average share price for EFR shares of $0.30 per share.

	In performing the impairment test, the Company concluded that the recoverable amount of the CGU was lower than the carrying value. As a result, the Company has recognized a goodwill impairment charge of $32,625,000 and an impairment loss of $44,079,000, allocated on a pro rata basis between plant and equipment and mineral property assets. Each $0.01 decrease (increase) in the EFR share price would have resulted in a corresponding $4,254,000 increase (decrease) in the impairment charge for the CGU.

10.	GOODWILL

	The goodwill continuity summary is as follows:

		December 31,			December 31,		January 1
(in thousands)		2011			2010		2010

Balance - beginning of period	$	-		$	-	$	-
Business transfer (note 5)		32,625			-		-
Impairment charge		(32,625	)		-		-
Balance - end of period	$	-		$	-	$	-

The transfer of ownership of UEC in 2011 from WCU to the Company was accounted for using the predecessor values method (see note 5) which included goodwill of $32,625,000.

Goodwill impairment

The Company performs an impairment test annually or any time there are impairment indicators for the carrying amounts of its CGUs. Where a CGU has goodwill allocated to it, the goodwill in that CGU must be tested annually for impairment.

As discussed in note 9, the Company performed an impairment test on its U.S. mining segment CGU as at December 31, 2011 using a fair value less costs to sell analysis based on the terms of the proposed transaction with EFR. As a result, the Company has recognized an impairment loss of $32,625,000.

E-30

11.	RECLAMATION OBLIGATIONS

	The reclamation obligations balance consists of:

		At December 31		At December 31		At January 1
(in thousands)		2011		2010		2010

Reclamation liability	$	7,140	$	6,383	$	8,609
	$	7,140	$	6,383	$	8,609

Reclamation and remediation liability - by duration:
Current		-		-		-
Non-current		7,140		6,383		8,609
	$	7,140	$	6,383	$	8,609

The reclamation obligations continuity summary is as follows:

(in thousands)

Balance - January 1, 2010	$	8,609
Accretion		636
Liability adjustments-income statement		(3,152	)
Liability adjustments-balance sheet		290
Balance - December 31, 2010	$	6,383
Accretion		440
Business transfer (see note 5)		81
Liability adjustments-income statement		(42	)
Liability adjustments-balance sheet		278
Balance - December 31, 2011	$	7,140

Site Restoration: U.S. Mill and Mines

The decommissioning and reclamation of the White Mesa mill and U.S. mines are subject to legal and regulatory requirements. Estimates of the costs of reclamation are reviewed periodically by the applicable regulatory authorities. The above accrual represents the Company’s best estimate of the present value of future reclamation costs, discounted at rates ranging from 4.98% to 5.67% (2010: 6.19% to 7.17%) . As at December 31, 2011, the undiscounted amount of estimated future reclamation costs is $23,082,000 (December 31, 2010: $22,318,000). Reclamation costs are expected to be incurred between 2013 and 2040.

E-31

12.	INCOME TAXES

	The income tax recovery (expense) balance consists of:

(in thousands)		2011			2010

Current income tax:
Based on taxable income for the period	$	-		$	-
Prior period (under) over provision		(26	)		(468	)
		(26	)		(468	)
Deferred income tax:
Write off of UEC tax asset		(565	)		-
		(565	)		-
Income tax expense	$	(591	)	$	(468	)

The Company operates in multiple jurisdictions, and the related income is subject to varying rates of taxation. The combined tax rate reflects the federal and state tax rates in effect in Colorado, United States for each applicable year. A reconciliation of the combined tax rate to the Company’s effective rate of income tax is as follows:

(in thousands)		2011			2010

Income (loss) before taxes	$	(88,701	)	$	16,536
Combined federal and state tax rate		38.01%			38.01%
Income tax recovery (expense) at combined rate		33,715			(6,285	)
Difference in state tax rates		3,397			(542	)
Non-deductible amounts		(13,712	)		(63	)
Change in deferred tax assets not recognized		(24,451	)		7,771
Prior year (under) over provision		(26	)		(468	)
Other		486			(881	)
Income tax expense	$	(591	)	$	(468	)

The deferred income tax assets (liabilities) balance reported on the balance sheet is comprised of the temporary differences as presented below:

		December 31,			December 31,			January 1,
(in thousands)		2011			2010			2010

Deferred income tax assets:
Deferred revenue	$	373		$	1,378		$	-
Reclamation and remediation obligations		2,987			2,635			-
Tax loss carry forwards		3,972			12,480			-
Other		222			178			48
Deferred income tax assets-gross		7,554			16,671			48
Set-off against deferred income tax liabilities		(7,554	)		(16,671	)		(48	)
Deferred income tax assets-per balance sheet	$	-		$	-		$	-

Deferred income tax liabilities:
Inventory	$	(1,268	)	$	(2,113	)	$	-
Investments		(19	)		(83	)		(48	)
Property, plant and equipment		(5,744	)		(14,123	)		-
Other		(523	)		(352	)		-
Deferred income tax liabilities-gross		(7,554	)		(16,671	)		(48	)
Set-off of deferred income tax assets		7,554			16,671			48
Deferred income tax liabilities-per balance sheet	$	-		$	-		$	-

E-32

The deferred income tax liability continuity summary is as follows:

(in thousands)

Balance - January 1, 2010 and December 31, 2010	$	-
Recognized in profit/loss		(565	)
Acquired in business transfer (note 5)		565
Balance - December 31, 2011	$	-

Management believes that it is not probable that sufficient taxable profit will be available in future years to allow the benefit of the following deferred tax assets to be utilized:

		December 31		December 31		January 1
(in thousands)		2011		2010		2010

Deferred income tax assets not recognized
Tax losses	$	58,905	$	34,455	$	34,071
Deductible temporary differences		-		-		8,155
Deferred income tax assets not recognized	$	58,905	$	34,455	$	42,226

A geographic split of the Company’s tax losses and tax credits not recognized and the associated expiry dates of those losses and credits is as follows:

	Expiry		December 31			December 31			January 1
(in thousands)	Date		2011			2010			2010

Tax losses - gross
United States	2026-2031	$	150,281		$	113,709		$	83,406
Tax losses - gross			150,281			113,709			83,406
Tax benefit at tax rate of 40.85% - 41.84%			62,877			46,935			34,071
Set-off against deferred tax liabilities			(3,972	)		(12,480	)		-
Total tax loss assets not recognized		$	58,905		$	34,455		$	34,071

Tax credits
United States	Unlimited	$	-		$	-		$	339
Total tax credit assets not recognized		$	-		$	-		$	339

13.	SHARE CAPITAL

	The Company is authorized to issue 5,000 preferred shares with a par value of $1,000 and 100 common shares without par value. A continuity summary of the issued and outstanding shares and the associated dollar amounts is presented below:

	Number of		Preferred	Number of		Common
	Preferred		Shares	Common		Shares
(in thousands except share amounts)	Shares ⁽¹⁾		Amount	Shares		Amount

Balance at January 1, 2010	2,000	$	2,000	11.0	$	115,450
Capital contributions	-		-	-		11,444
Balance at December 31, 2010	2,000	$	2,000	11.0	$	126,894
Business transfer (note 5)	-		-	4.7		62,270
Balance at December 31, 2011	2,000	$	2,000	15.7	$	189,164

(1)

New issues

On September 1, 2011, as a result of a group reorganization, the Company issued 4.7 of its common shares valued at $62,270,000 in return for all of the outstanding shares of UEC (see note 5).

E-33

14.	SUPPLEMENTAL FINANCIAL INFORMATION

	The components of revenues are as follows:

		Year Ended
		December 31		December 31
(in thousands)		2011		2010

Uranium concentrates	$	56,148	$	56,868
Vanadium concentrates		11,551		16,934
Commission fees		185		-
Alternate feed processing and other		3,119		5,340
Revenues	$	71,003	$	79,142

The components of operating expenses are as follows:

		Year Ended
		December 31			December 31
(in thousands)		2011			2010

Cost of goods and services sold:
COGS – mineral concentrates	$	(69,319	)	$	(72,785	)
Operating Overheads:
Mining, other development expense		(40,469	)		(28,084	)
Milling, conversion expense		(55,249	)		(42,761	)
Mill feed cost:
-Stockpile depletion		(25,260	)		(25,842	)
-Mineral property amortization		(6,078	)		(1,175	)
Less absorption:
-Stockpiles, mineral properties		40,322			27,965
-Concentrates		81,397			64,399
Inventory–non-cash adjustments		(150	)		10,235
Cost of goods and services sold		(74,806	)		(68,048	)
Reclamation obligations
Asset amortization		(59	)		-
Liability adjustments		42			3,152
Selling expenses		(1,422	)		(1,706	)
Operating expenses	$	(76,245	)	$	(66,602	)

The components of other income are as follows:

		Year Ended
		December 31			December 31
(in thousands)		2011			2010

Gains (losses) on:
Disposal of property, plant and equipment	$	(534	)	$	56
Restricted cash and investments–fair value change		401			207
Contract settlement fee income ⁽¹⁾		-			11,000
Consulting income (note 16)		243			307
Other		802			(4	)
Other income	$	912		$	11,566

(1)

In June 2010, the Company agreed to terminate one of its sales contracts in exchange for a termination fee of $11,000,000. The fee was payable in two instalments - $6,000,000 in June 2010 and $5,000,000 in March 2011. Both instalment payments have been received.

E-34

The components of finance expense are as follows:

		Year Ended
		December 31			December 31
(in thousands)		2011			2010

Interest income	$	614		$	615
Interest expense		(1,910	)		(1,707	)
Accretion expense-reclamation obligations		(440	)		(636	)
Finance expense	$	(1,736	)	$	(1,728	)

A summary of depreciation expense recognized in the statement of operations is as follows:

		Year Ended
		December 31			December 31
(in thousands)		2011			2010

Operating expenses:
Mining, other development expense	$	(5,232	)	$	(5,300	)
Milling, conversion expense		(5,524	)		(6,233	)
General and administrative		(46	)		(18	)
Depreciation expense - gross	$	(10,802	)	$	(11,551	)

A summary of employee benefits expense recognized in the statement of operations is as follows:

		Year Ended
		December 31			December 31
(in thousands)		2011			2010

Salaries and short-term employee benefits	$	(21,590	)	$	(20,080	)
Employee benefits expense	$	(21,590	)	$	(20,080	)

The change in non-cash working capital items in the consolidated statements of cash flows is as follows:

		Year Ended
		December 31			December 31
(in thousands)		2011			2010

Change in non-cash working capital items:
Trade and other receivables	$	6,168		$	(11,756	)
Inventories		(23,871	)		(8,945	)
Prepaid expenses and other assets		127			(283	)
Long-term receivables		(444	)		(626	)
Accounts payable and accrued liabilities		(1,910	)		2,364
Deferred revenue		(2,446	)		152
Other liabilities		225			1,710
Change in non-cash working capital items	$	(22,151	)	$	(17,384	)

E-35

15.

RELATED PARTY TRANSACTIONS

		December 31			December 31			January 1
(in thousands)		2011			2010			2010

Long-term receivables:
Receivable from Denison Mines (Bermuda) I Ltd.	$	9,595		$	9,151		$	8,525
Total long-term receivables		9,595			9,151			8,525

Accounts payable and accrued liabilities:
Due to Parent		(530	)		(429	)		(381	)
Total accounts payable and accrued liabilities		(530	)		(429	)		(381	)

Debt obligations:
Due to Parent		(116,755	)		(103,993	)		(100,322	)
Total debt obligations		(116,755	)		(103,993	)		(100,322	)

Other liabilities:
Due to Denison Mines Inc.		(1,935	)		(1,710	)		-
Total other liabilities		(1,935	)		(1,710	)		-
Net amounts due to related parties	$	(109,625	)	$	(96,981	)	$	(92,178	)

Denison Mines Corp.

The Company’s operations are funded by its Parent through cash advances, debt obligations and capital contributions. The Company is a party to a revolving credit facility (the “Facility”) with the Parent for up to $125,000,000 subject to an interest rate of LIBOR plus 1.2% . In 2011, the Company drew $12,762,000 on the Facility (2010: $3,671,000), increasing the debt obligation to $116,755,000 at December 31, 2011 (December 31, 2010: $103,993,000). Interest charged on this Facility totaled $1,819,000 in 2011 (2010: $1,707,000) with interest payable of $530,000 at December 31, 2011 (December 31, 2010: $429,000). The maturity date of the Facility is January 1, 2013.

The Company sold 233,000 pounds of U₃O₈to its Parent at a fair value of $14,215,000 in 2011 and 207,000 pounds of U₃O₈at a fair value of $11,399,000 in 2010.

The Parent also provided capital contributions of $nil in 2011 (2010: $11,444,000).

Denison Mines Inc.

The Company purchased from Denison Mines Inc. (“DMI”), a subsidiary of the Parent, 2,800 pounds of U₃O₈for $104,000 in April 2011, equivalent to DMI’s book value of the U₃O₈on the purchase date. The Company also purchased 30,000 pounds of U₃O₈from DMI in March 2010 for $1,710,000, the fair value of the U₃O₈on the purchase date.

In 2011, DMI also paid letter of credit fees amounting to $121,000 on behalf of the Company, to facilitate a loan of 150,000 pounds of U₃O₈from Uranium Participation Corporation (“UPC”), a company managed by DMI in January 2011.

Consideration of $1,935,000 for these purchases and fees remains payable to DMI at December 31, 2011 (December 31, 2010: $1,710,000).

Denison Mines (Bermuda) I Ltd.

Denison Mines (Bermuda) I Ltd. (“DMB”) is a wholly owned subsidiary of the Parent. The Company earns consulting income from and makes payments on behalf of DMB and its subsidiaries in support of its Gurvan Saihan Joint Venture in Mongolia. Consulting income of $243,000 was earned in 2011 (2010: $307,000) and payments totaling $201,000 were made in 2011 (2010: $419,000). Receivable balances from DMB and its subsidiaries totaled $9,595,000 at December 31, 2011 (December 31, 2010: $9,151,000).

E-36

Uranium Participation Corporation

On January 3, 2011, the Company borrowed 150,000 pounds of U₃O₈from UPC, a company managed by DMI. The loan was made pursuant to a uranium concentrate loan agreement between the parties. As collateral for the loan, DMI issued an irrevocable standby-letter of credit in favour of UPC in the amount of $12,045,000. On March 30, 2011, the Company repaid 150,000 pounds of U₃O₈to UPC. Loan fees incurred by the Company under the agreement were $91,000. In 2011, the loan fees have been paid and the irrevocable standby-letter of credit has been cancelled.

Compensation of Key Management Personnel

The following compensation was awarded to key management personnel:

		Year Ended
		December 31		December 31
(in thousands)		2011		2010

Salaries and short-term employee benefits	$	806	$	949
Key management personnel compensation	$	806	$	949

16.	FINANCIAL RISK MANAGEMENT

	The Company is exposed to a variety of financial risks: credit risk, liquidity risk, interest rate risk, and price risk. The source of risk exposure and how each is managed is outlined below:

	(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 Company believes that the carrying amount its cash, trade and other receivables, restricted cash and investments, and long-term receivables represent its maximum credit exposure.

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

		December 31		December 31		January 1
(in thousands)		2011		2010		2010

Cash	$	230	$	9,551	$	232
Trade and other receivables		7,940		14,892		2,279
Restricted cash and investments		24,651		20,315		19,564
Long-term receivables		9,595		9,151		8,525
	$	42,416	$	53,909	$	28,716

The Company limits cash and restricted cash and investment risk by dealing with credit worthy financial institutions.

Typically, the majority of the Company’s trade and other receivables balance is related to the sale of mineral concentrates. These sales typically occur to a small number of customers who are credit worthy and with whom the Company has established a relationship with through its past dealings.

Long-term receivables are comprised of amounts receivable from related parties. Operations of these related parties are ultimately funded by the Parent therefore risk of loss from these receivables is limited.

E-37

(b) Liquidity Risk

Liquidity risk is the risk that the Company will encounter difficulties in meeting obligations associated with its financial liabilities. The Company’s operations are funded through cash advances, debt obligations and capital contributions from its Parent. A support agreement is in place whereby the Parent has committed to provide financial support to the Company until at least March 31, 2013, or until there is a change in control of the Company.

		Within 1		1 to 5
(in thousands)		Year		Years

Accounts payable and accrued liabilities	$	7,462	$	-
Debt obligations (note 15)		-		116,755
	$	7,462	$	116,755

(c) 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 liabilities through its outstanding borrowings and on its assets through its investments in debt instruments. The Company monitors its exposure to interest rates and has not entered into any derivative contracts to manage this risk.

(d) Price Risk

The Company is exposed to commodity price risk on the commodities it produces and sells. The impact on income (loss) before tax from a 10% increase in the spot prices at December 31, 2011, with all other variables held constant, is as follows:

	Dec.31’2011	Sensitivity
	USD$	USD$ spot		Change in
	spot price	price per		pre-tax net
(in thousands except commodity prices)	per lb	lb increase		income (loss)

Commodity price risk
Uranium	51.75	5.175	$	3,756
Vanadium	5.75	0.575		1,005
			$	4,761

Fair Value of Financial Instruments

IFRS requires disclosures about the inputs to fair value measurements, including their classification within a hierarchy that prioritizes the inputs to fair value measurement. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and
Level 3 – Inputs that are not based on observable market data.

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.

Except as otherwise disclosed, the fair values of cash, trade and other receivables, accounts payable and accrued liabilities, restricted cash and cash equivalents and debt obligations approximate their carrying values as a result of the short-term nature of the instruments, or the variable interest rate associated with the instruments, or the fixed interest rate of the instruments being similar to market rates.

E-38

The following table illustrates the classification of the Company’s financial assets within the fair value hierarchy as at December 31, 2011:

	Financial	Fair		December 31, 2011
	Instrument	Value		Fair		Carrying
(in thousands)	Category⁽¹⁾	Hierarchy		Value		Value

Financial Assets:
Cash	Category C		$	230	$	230
Trade and other receivables	Category C			7,940		7,940
Investments	Category B	Level 1		46		46
Restricted cash and equivalents	Category A	Level 1		24,651		24,651
Long-term receivables	Category C			9,595		9,595
			$	42,462	$	42,462

Financial Liabilities:
Account payable and accrued liabilities	Category D			7,462		7,462
Debt obligations	Category D			116,755		116,755
Other liabilities	Category D			1,935		1,935
			$	126,152	$	126,152

(1)

Financial instrument designations are as follows: Category A=Financial assets and liabilities at fair value through profit and loss; Category B=Available for sale investments; Category C=Loans and receivables; and Category D=Financial liabilities at amortized cost.

17.	COMMITMENTS AND CONTINGENCIES

	General Legal Matters

	The Company is involved, from time to time, in various 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.

	Performance Bonds and Letters of Credit

	In conjunction with various contracts, reclamation and other performance obligations, the Company may be required to issue performance bonds and letters of credit as security to creditors to guarantee the Company’s performance. Any potential payments which might become due under these items would be related to the Company’s non-performance under the applicable contract. As at December 31, 2011, the Company had outstanding bonds of $23,526,000, collateralized by restricted cash and investments of $24,651,000 (see note 8).

	Others

	The Company has committed to payments under various operating leases and other commitments. The future minimum payments are as follows:

(in thousands)

2012	$	7,256
2013		3,360
2014		1,624
2015		366
2016		63
2017 and thereafter		-
	$	12,669

E-39

18.	SUBSEQUENT EVENTS

	On April 16, 2012, the Parent entered into a Letter Agreement to complete a transaction with EFR whereby EFR will acquire the Parent’s entire interest in the Company and WCU in exchange for 425,441,494 common shares of EFR. Immediately following the closing of the transaction, the Company is expected to become a wholly- owned subsidiary of EFR. Completion of the transaction is subject to a number of conditions and contingencies, and is anticipated to be closed by the end of June 2012.

E-40

SCHEDULE F - FINANCIAL STATEMENTS OF WHITE CANYON

F-1

FINANCIAL REPORT

30 JUNE 2011

F-2

WHITE CANYON URANIUM LIMITED

DIRECTORS REPORT

Your Directors submit the financial report of White Canyon Uranium Limited for the year ended 30 June 2011.

Directors

The names of persons who have held the position of Director of White Canyon Uranium Limited at any time during the financial year and up to the date of this report are:

Lewis Cross
Ron Hochstein (appointed 31 August 2011)
Frank Knezovic (appointed 31 August 2011)
Peter Batten (resigned 2 July 2010)
Richard Sciano (resigned 20 August 2010)
Melvin Swanson (resigned 1 September 2011)
Kelly Shumway (resigned 1 September 2011)
Gregory Burns (resigned 1 September 2011)
John Ramsey (resigned 1 September 2011)
Michael Bynum (resigned 1 September 2011)

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

Principal Activities

The principal activity of the company during the year has been exploration for uranium and the development of uranium mining activities.

Review of Operations

The consolidated operating loss after income tax amounted to $7,778,575 (2010: loss $2,629,247).

White Canyon Uranium Limited holds 100% of the advanced Thompson, Daneros, Geitus, Blue Jay and Marcy Look Projects in south-east Utah, comprising over 15,500 acres of mining claims and mineral leases. The projects contain historically defined high grade uranium deposits. First mining revenues were received during the year ended 30 June 2011.

Dividends Paid or Recommended

There have been no dividends declared or recommended and no distributions made to shareholders or other persons during the year.

Significant Changes in the State of Affairs

To fund the acquisition, exploration and development of the company’s projects the following capital raising activities were undertaken during the financial year:

(i)	On the 16 July 2010, the company signed a convertible note funding agreement for an amount of US$2,500,000;

(ii)	On 14 October 2010, the company finalised a Sales agency agreement with Denison Mines for the sale of uranium concentrate;

(iii)	On 31 December 2010, the company entered into a short term loan agreement for $750,000 with Denison Mines;

(iv)	On the 11 February 2011, the convertible note holder elected to convert the total notes held of US$2,500,000 into company shares at a rate of AUD10.75 cents per share.

On 23 February 2011, the company announced that it had received a takeover offer from Denison Mines for 100% of the issued capital in the company at a price of 24 cents cash per share. The takeover was completed in June 2011 and the company delisted from the ASX on 7 July 2011.

In the opinion of the Directors, there were no other significant changes in the state of affairs of the company that occurred during the financial year under review, not otherwise disclosed in these financial statements and the Director’s report.

F-3

WHITE CANYON URANIUM LIMITED

DIRECTORS REPORT

Events subsequent to the end of the reporting period

Effective 1 September 2011, the intercompany loan balances totaling US$30,388,871 between White Canyon (the “Company”) and its wholly owned subsidiary, Utah Energy Corporation were converted into a capital contribution by the Company to UEC. Subsequent to this conversion, the Company entered into a Share Exchange Agreement dated 1 September 2011 with Denison Mines Holdings Corp., a Delaware corporation, ("Denison"), whereby the Company will assign and transfer to the Company 100% of the issued and outstanding stock of Utah Energy Corporation, a Delaware corporation ("UEC"), in return for Denison issuing to White Canyon 4.7 shares of the Denison's voting common stock, $1.00 par value.

No matter or circumstance has arisen since 30 June 2011 that has significantly affected, or may significantly affect:

(a)	the company’s operations in future financial years, or
(b)	the results of those operations in future financial years; or
(c)	the company’s state of affairs in future financial years.

Officer’s Indemnities and Insurance

For the year ended 30 June 2011, all directors and the specified executives of the consolidated group were insured by the Company. The insurance covers legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the consolidated entity, and any other payments arising from liabilities incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the company. The total amount of insurance contract premiums paid was $16,786.

Options

At the date of this report, there were no unissued ordinary shares of the company under option.

Option holders do not have any rights to participate in any issues of shares or other interests in the company or any other entity.

No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate.

Future Developments, Prospects and Business Strategies

Further information on likely developments in the operations of the company has not been included in this report because at this stage the directors believe it would be likely to result in unreasonable prejudice to the company.

Environmental Regulation

White Canyon Uranium is committed to environmental care and aims to carry out its activities in an environmentally-responsible and scientifically-sound way. In performing exploration activities, some disturbance of the land in the creation of tracks, drill rig pads, sumps and the clearing of vegetation occurs. These activities have been managed in a way that reduces environmental impact to a practical minimum and rehabilitation of any land disturbance commences after exploration activity in an area has been completed.

White Canyon Uranium has complied with all statutory requirements involving protection of the environment as specified and enforced by the federal Bureau of Land Management and the State of Utah.

Legal Proceedings

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237 of the Corporations Act 2001.

F-4

WHITE CANYON URANIUM LIMITED

DIRECTORS REPORT

Auditor’s Independence Declaration and Non-Audit Services

RSM Bird Cameron Partners continues in office in accordance with section 327 of the Corporations Act 2001.

A copy of the auditor’s independence declaration as required by Section 307C of the Corporations Act 2001 is included with the financial statements.

Details of non-audit services provided by the company’s auditor are set out below. The directors are satisfied that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 and APES 110 Code of Ethics for Professional Accountants. The nature and scope of each type of non-audit service provide means that auditor independence has not been compromised. RSM Bird Cameron Partners received the following amount for provision of non-audit service:

• Preparation of tax returns and other advisory $8,700 (2010: $4,885)

This report is signed in accordance with a resolution of the Board of Directors.

Lewis Cross
Director

Signed at Perth on 21 May 2012

F-5

RSM Bird Cameron Partners
8 St Georges Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 8 9261 9100 F +61 8 9261 9111
www.rsmi.com.au

AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the audit of the financial report of White Canyon Uranium Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i)	the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii)	any applicable code of professional conduct in relation to the audit.

RSM BIRD CAMERON PARTNERS
Chartered Accountants


Perth, WA	TUTU PHONG
Dated: 21 May 2012	Partner

F-6

WHITE CANYON URANIUM LIMITED

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR YEAR ENDED 30 JUNE 2011

	Note	2011		2010
		$		$



Revenue	2	12,411,760		114,741

Milling expense		(4,430,270	)	-
Production expense		(7,426,260	)	-
Royalty expense		(460,251	)	-
Impairment expense		(2,487,156	)	-
Director and employee benefits expense		(570,080	)	(899,522	)
Share based payment expense		(1,728,000	)	(130,336	)
Legal fees		(317,019	)	(90,903	)
Toronto listing sponsorship expense		-		(503,143	)
Corporate and administration expenses		(2,771,299	)	(1,120,084	)

Loss before income tax	3	(7,778,575	)	(2,629,247	)
Income tax expense	4	-		-
Loss for the year		(7,778,575	)	(2,629,247	)

Other Comprehensive Income
Foreign currency translation		(6,647,453	)	(1,791,145	)
Income tax relating to components of other comprehensive income for the year		-		-
Other comprehensive income for the year		(6,647,453	)	(1,791,145	)

Total comprehensive income for the year		(14,426,028	)	(4,420,392	)

Loss attributable to:
Members of the parent entity		(7,778,575	)	(2,629,247	)

Total comprehensive income attributable to:
Members of the parent entity		(14,426,028	)	(4,420,392	)

The accompanying notes form part of these financial statements.

F-7

WHITE CANYON URANIUM LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2011

	Note	2011		2010
		$		$
CURRENT ASSETS
Cash and cash equivalents	7	1,233,712		813,737
Trade and other receivables	8	149,459		16,539
Other assets	11	39,363		14,156
Inventory	9	3,850,361		4,404,264
TOTAL CURRENT ASSETS		5,272,895		5,248,696
NON-CURRENT ASSETS
Other assets	11	137,121		171,320
Plant and equipment	10	24,256		79,370
Deferred exploration and evaluation expenditure	12	8,204,903		10,172,026
Mine properties	13	11,424,932		18,172,817
TOTAL NON-CURRENT ASSETS		19,791,212		28,595,533
TOTAL ASSETS		25,064,107		33,844,229
CURRENT LIABILITIES
Trade and other payables	14	1,872,781		564,362
TOTAL CURRENT LIABILITIES		1,872,781		564,362
NON-CURRENT LIABILITIES
Provisions		75,539		-
TOTAL NON-CURRENT LIABILITIES		75,539		-
TOTAL LIABILITIES		1,948,320		564,362
NET ASSETS		23,115,787		33,279,867
EQUITY
Issued capital	15	37,673,112		35,139,164
Reserves	16	(2,872,867	)	2,046,586
Accumulated losses		(11,684,458	)	(3,905,883	)
TOTAL EQUITY		23,115,787		33,279,867

The accompanying notes form part of these financial statements.

F-8

WHITE CANYON URANIUM LIMITED

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 30 JUNE 2011

					Foreign
	Issued		Accumulated		Currency		Option
	Capital		Losses		Translation		Reserve		Total
	$		$		$		$		$

Balance at 1 July 2009	30,662,559		(1,276,636	)	3,031,198		836,199		33,253,320

Loss after income tax	-		(2,629,247	)	-		-		(2,629,247	)
Other comprehensive income:
Foreign currency translation	-		-		(1,791,145	)	-		(1,791,145	)
Total other comprehensive income for the year	-		(2,629,247	)	(1,791,145	)	-		(4,420,392	)
Transactions with owners, directly in equity
Shares issued during the year	4,001,304		-		-		-		4,001,304
Capital raising costs	(324,641	)	-		-		-		(324,641	)
Share based payment expense	639,147		-		-		131,129		770,276
Options exercised	160,795		-		-		(160,795	)	-
Balance at 30 June 2010	35,139,164		(3,905,883	)	1,240,053		806,533		33,279,867

Balance at 1 July 2010	35,139,164		(3,905,883	)	1,240,053		806,533		33,279,867

Loss after income tax	-		(7,778,575	)	-		-		(7,778,575	)
Other comprehensive income:
Foreign currency translation	-		-		(6,647,453	)	-		(6,647,453	)
Total other comprehensive income for the year	-		(7,778,575	)	(6,647,453	)	-		(14,426,028	)
Transactions with owners, directly in equity
Shares issued during the year	2,533,948		-		-		-		2,533,948
Options exercised	-		-		-		-		-
Share based payment expense	-		-		-		1,728,000		1,728,000
Balance at 30 June 2011	37,673,112		(11,684,458	)	(5,407,400	)	2,534,533		23,115,787

The accompanying notes form part of these financial statements.

F-9

WHITE CANYON URANIUM LIMITED

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2011

	Note	2011		2010
		$		$
CASH FLOWS FROM OPERATING ACTIVITES
Payments to suppliers and employees		(8,200,897	)	(4,540,039	)
Payments for exploration and development expenditure		(6,206,309	)	(2,741,199	)
Interest received		128,640		72,046
Receipts from customers		12,312,701		41,095
Net cash used in operating activities	20	(1,965,865	)	(7,168,097	)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets		(166,644	)	(61,382	)
Purchase of plant and equipment		-		(36,837	)
Payment of bonds		-		(171,320	)
Net cash used in investing activities		(166,644	)	(269,539	)
CASH FLOWS FROM FINANCING ACTIVITES
Proceeds from issue of shares and options		-		4,001,304
Payments for costs of shares and options issued		-		(324,641	)
Proceeds from borrowings		3,290,455		-
Repayment of borrowings		(737,971	)	-
Net cash provided by financing activities		2,552,484		3,676,663
Net increase/(decrease) in cash held		419,975		(3,760,973	)
Cash at beginning of financial year		813,737		4,574,710
Cash at end of financial year	7	1,233,712		813,737

The accompanying notes form part of these financial statements.

F-10

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 1: Statement of Significant Accounting Policies

These financial statements cover White Canyon Uranium Limited and its controlled entities. White Canyon Uranium Limited is an unlisted public company, incorporated and domiciled in Australia.

Reporting Basis and Conventions

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations), other authoritative pronouncements of the Australian Accounting Standards Board and the Corporation Act 2001.

The financial report of the company complies with all Australian equivalents to International Financial Reporting Standards (IFRS) in their entirety. Compliance with AIFRS ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS).

The financial statements have been prepared on an accruals basis and are based on historical costs unless otherwise stated in the notes. The material accounting policies that have been adopted in preparation of these statements are presented below.

These financial statements were authorised for issue by the Board on 21 May 2012.

(a)	Principles of Consolidation

	The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by White Canyon Uranium Limited at the end of the reporting period. A controlled entity is any entity over which White Canyon Uranium Limited has the power to govern the financial and operating policies so as to obtain benefits from the entity’s activities. Control will generally exist when the parent owns, directly or indirectly through subsidiaries, more than half of the voting power of an entity. In assessing the power to govern, the existence and effect of holdings of actual and potential voting rights are also considered.

	Where controlled entities have entered or left the consolidated entity during the year, the financial performance of those entities are included only for the period of the year that they were controlled.

	In preparing the consolidated financial statements, all inter-group balances and transactions between entities in the consolidated entity have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those adopted by the parent entity.

	Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are shown separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

(b)	Income Tax

	The income tax expense (revenue) for the year comprises current income tax expense (income) and deferred tax expense (income).

	Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the end of the reporting period. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

	Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses.

	Current and deferred income tax expense (income) is charged or credited directly to equity instead of the profit or loss when the tax relates to items that are credited or charged directly to equity.

F-11

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 1: Statement of Significant Accounting Policies (Cont.)

(b)	Income Tax (Cont.)

	Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also result where amounts have been fully expensed but future tax deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

	Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the end of the reporting period. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

	Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised.

	Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.

	Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

(c)	Plant and Equipment

	Each class of plant and equipment is carried at cost of fair value, less, where applicable, any accumulated depreciation and impairment losses. The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

	Depreciation

	The depreciable amount of all fixed assets is depreciated on the reducing balance method over their useful lives commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

	The depreciation rates used for each class of depreciable assets are:

	Class of Fixed Asset	Depreciation Rate
	Furniture and Fixtures	15%
	Plant and Equipment	15% - 33.3%
	Leasehold Improvements	12%

The asset’s residual values and useful lives are reviewed and adjusted, if appropriate, at the end of each reporting period.

F-12

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 1: Statement of Significant Accounting Policies (Cont.)

(c)	Plant and Equipment (Cont.)

	An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

	Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income.

(d)	Exploration and Development Expenditure

	Exploration and evaluation incurred is accumulated in respect of each identifiable area of interest. These costs are only carried forward to the extent that they are expected to be recouped through the successful development of the area of interest or sale of that area of interest, or exploration and evaluation activities have not reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves and active or significant operations in, or in relation to, the area of interest are continuing.

	Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made.

	A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward cots in relation to the area of interest.

(e)	Impairment of Assets

	At the end of each reporting period, the directors review the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any asset’s carrying value over its recoverable amount is expensed to the statement of comprehensive income.

	Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

(f)	Inventories

	Inventories are valued at the lower of cost and net realisable value.

	Cost comprises direct material, labour and expenditure in getting such inventories to their existing location and condition, based on weighted average costs incurred during the period in which such inventories were produced.

	Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

F-13

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 1: Statement of Significant Accounting Policies (Cont.)

(g)	Mine Properties

	Mine properties represent the accumulation of all acquisition, exploration, evaluation and development expenditure incurred by or on behalf of the company in relation to areas of interest in which mining of mineral resource has commenced. When further development expenditure, is incurred in respect of a mine property after the commencement of production, such expenditure is carried forward as part of the cost of that mine property only when substantial future economic benefits are established, otherwise such expenditure is classified as part of the cost of production.

	Amortisation is provided on the units-of-production method, with separate calculations being made for each mineral resource. Estimated future capital costs to be incurred in accessing the reserves and measured resources are taken into account in determining amortisation charges. The units-of-production method results in an amortisation charge proportional to the depletion of the economically recoverable mineral resources.

	A regular review is undertaken of each area of interest to determine the appropriateness of continuing to carry forward costs in relation to that area of interest. Should the carrying value of the expenditure not yet amortised exceed its estimated recoverable amount in any year, the excess is written off to the statement of comprehensive income.

(h)	Rehabilitation costs

	Long-term environmental obligations are based on the company’s environmental management plans, in compliance with current environmental and regulatory requirements.

	Full provision is made based on the net present value of the estimated cost of restoring the environmental disturbance that has occurred up to the reporting date. Increases due to additional environmental disturbances, relating to the development of an asset, are capitalised and amortised over the remaining lives of the area of interest.

	The estimated costs of rehabilitation are reviewed annually and adjusted as appropriate for changes in legislation, technology or other circumstances. Cost estimates are not reduced by potential proceeds from the sale of assets.

(i)	Leases

	Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

(j)	Foreign Currency Transactions and Balances

	Functional and Presentation Currency

	The functional currency of each of the entities in the consolidated entity is measured using the currency of the primary economic environment in which that entity operates. The consolidated financial statements are present in Australian dollars which is the parent entity’s functional and presentation currency.

	Transactions and Balances

	Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date when fair values were determined.

	Exchange differences arising on the translation of monetary items are recognised directly in the statement of comprehensive income except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity, otherwise the exchange difference is recognised in the statement of comprehensive income.

F-14

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 1: Statement of Significant Accounting Policies (Cont.)

(j)

Foreign Currency Transactions and Balances (Cont.)

Group companies

The financial results and position of foreign operations whose functional currency is different from the presentation currency are translated as follows:

assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.

	Exchange differences arising on translation of foreign operations are transferred directly to the foreign currency translation reserve in the statement of comprehensive income. These differences are recognised in the statement of comprehensive income in the period in which the operation is disposed.

(k)	Employee Entitlements

	Liabilities for employee benefits for wages, salaries and annual leave expected to be settled within 12 months of the year end represent present obligations resulting from employees services provided to reporting date, calculated at the undiscounted amounts based on remuneration wage and salary rates that the company expects to pay as at reporting date including related on-costs.

	Provision is made for the company’s liabilities for employee’s annual leave benefits arising from service rendered by employees to balance date.

	Equity-settled compensation

	The company operates equity-settled share-based payment employee share and option schemes. The fair value of the equity to which employees become entitled is measured at grant date and recognised as an expense over the vesting period, with a corresponding increase to an equity account. The fair value of shares is ascertained as the market bid price. The fair value of options is ascertained using a valuation model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting date such that the amount recognised for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

(l)	Cash and Equivalents

	Cash and equivalents include cash on hand, deposits held at call with banks and other short term highly liquid investments. For the purpose of the statement of cash flows, cash includes deposits at call, which are readily convertible to cash on hand and subject to an insignificant risk of changes in value.

(m)	Revenue

	Sales of goods

	Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably.

	Interest

	Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the financial assets.

	All revenue is stated net of the amount of goods and services tax (GST)

(n)	Goods and Services Tax (GST)

	Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from, or payable to, the ATO, is included as a current asset or liability in the statement of financial position.

	Cash flows are included in the statement of cash flows on a gross basis except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

F-15

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 1: Statement of Significant Accounting Policies (Cont.)

(o)	Comparative Figures

	When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

	Critical Accounting Estimates and Judgements

	The directors evaluate estimates and judgements incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the company.

	The areas that may have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

	Exploration and evaluation expenditure

	The board of directors determines when an area of interest should be abandoned. When a decision is made that an area of interest is not commercially viable, all costs that have been capitalised in respect of that area of interest are written off. The Directors’ decision is made after considering the likelihood of finding commercially viable reserves.

	No areas of interest have been abandoned at the date of this report.

	Determination of mineral resources and ore reserves

	The company estimates its mineral resources and ore reserves in accordance with the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves 2004 (the ‘JORC code’). The information on mineral resources and ore reserves were prepared by or under the supervision of Competent Persons as defined in the JORC code. The amounts presented are based on the mineral resources and ore reserves determined under the JORC code.

	There are numerous uncertainties inherent in estimating mineral resources and ore reserves and assumptions that are valid at the time of estimation may change significantly when new information becomes available.

	Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated. Such changes in the reserves could impact on depreciation and amortisation rates, asset carrying values, deferred stripping costs and provisions for decommissioning and restoration.

	Impairment of capitalised mine development expenditure

	The future recoverability of capitalised mine development expenditure is dependent on a number of factors, including the level of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

	To the extent that capitalised mine development expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.

	Environmental Issues

	Balances disclosed in the financial statements and notes thereto are not adjusted for any pending or enacted environmental legislation, and the directors understanding thereof. At the current stage of the company’s development and its current environmental impact the directors believe such treatment is reasonable and appropriate.

F-16

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
	$	$
Note 2: Revenue and Other Income

Sales revenue	12,283,120	42,695

Other revenue
Interest received	128,640	72,046

	12,411,760	114,741
Note 3: Loss for the year

The loss before income tax includes the following:

Rental expenses on operating leases	67,483	79,130
Share registry, promotion and investor relations	185,968	91,494
Travel and accommodation	67,262	107,497
Depreciation	16,870	30,476

Note 4: Income Tax Expense

(a) Reconciliation

The prima facie tax on the loss is reconciled to income tax expense as follows:

Loss for the year	7,778,575		2,629,247

Prima facie tax benefit at 30%	2,333,573		788,774
Non-assessable/(non-deductible) items	(514,376	)	68,371
Tax losses of non-resident controlled entities	(507,103	)	(86,418	)
Deferred tax asset not brought to account	(804,991	)	(684,309	)
Difference in foreign income tax rates	(507,103	)	(86,418	)

Income tax benefit relating to loss	-		-

(b) Deferred Tax Asset & Liability

Deferred tax asset not brought to account compromises the future benefits at applicable tax rates:

Tax losses – revenue (resident)	1,392,232		816,007
Tax losses – revenue (non-resident)	660,753		153,650
Tax losses – capital	-		419
Temporary differences	702,338		474,765

Deferred tax asset	2,755,323		1,444,841

Deferred tax liability	(473	)	(1,666	)

Net deferred tax asset	2,754,850		1,443,175

F-17

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 4: Income Tax Expense (Cont.)

Resident tax losses calculated at the Australian income tax rate of 30%.

Non-resident tax losses calculated at the lowest US corporate tax rate threshold of 15% as the non-resident companies did not derive any taxable income.

This asset has not been recognised as an asset in the statement of financial position as its realisation is not considered probable. The asset will only be obtained if:

(a)	the company derives future assessable income of a nature and of an amount sufficient to enable the asset from the deductions for the loss to be realised;

(b)	the company continues to comply with the conditions for deductibility imposed by the law; and

(c)	no changes in tax legislation adversely affect the company in realising the asset from deductions for the losses.

Note 5: Key Management Personnel

a)	Key Management Personnel Remuneration

	The totals of remuneration paid to key management personnel during the year are as follows:

	2011	2010
	$	$
Short-term employee benefits	599,469	1,021,289
Post-employment benefits	24,778	48,748
Share based payments	1,555,000	130,336
	2.179,247	1,200,373

b)	Other Key Management Personnel Transactions

	For details of other transactions with Key Management Personnel, refer to Note 22: Related Party Transactions.

	2011	2010
	$	$
Note 6: Auditors’ Remuneration
Remuneration of the auditor of the parent entity for:
- auditing or reviewing the financial report	43,500	52,000
- tax compliance services	8,700	4,885
	52,200	56,885
Note 7: Cash and Cash Equivalents
Cash at bank and in hand	1,233,712	813,737
Short-term bank deposits	-	-
	1,233,712	813,737
Note 8: Trade and Other Receivables
GST receivable	149,459	16,539

F-18

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

	2011		2010
	$		$
Note 9: Inventory
Ore - at cost	6,194,257		4,404,264
Impairment	(2,343,896	)	-
	3,850,361		4,404,264
Note 10: Plant and Equipment
Plant and equipment
At cost	81,504		116,519
Foreign currency adjustment	(16,484	)	-
Accumulated depreciation	(40,764	)	(37,149	)
	24,256		79,370
Movements in Carrying Amounts
Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the current financial year:
Balance at the beginning of year	79,370		52,215
Foreign currency translation	(8,662	)	-
Additions	-		57,631
Disposals	(29,582	)	-
Depreciation expense	(16,870	)	(30,476	)
Carrying amount at the end of year	24,256		79,370
Note 11: Other Assets
CURRENT
Prepayments	39,363		14,156
NON-CURRENT
Reclamation bonds	137,121		171,320

Note 12: Deferred Exploration and Evaluation Expenditure
Cost brought forward	10,172,026		28,856,548
Expenditure incurred during year	380,937		141,107
Foreign currency translation adjustment	(2,348,060	)	(1,742,849	)
Transfer to mine properties	-		(17,082,780	)
Cost carried forward	8,204,903		10,172,026

The ultimate recoupment of exploration expenditure carried forward is dependent upon successful development and commercial exploration, or sale of the respective areas.

F-19

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

	2011		2010
	$		$

Note 13: Mine Properties

	16,307,684		20,020,968
Mine development expenditure	(4,882,752	)	(1,848,151	)
Accumulated amortisation	11,424,932		18,172,817

Cost brought forward	18,172,817		-
Transfer from deferred exploration and evaluation expenditure	-		17,082,780
Foreign currency translation adjustment	(3,878,668	)	-
Additions	165,384		2,938,188
Amortisation capitalised under inventory	(3,034,601	)	(1,848,151	)

Cost carried forward	11,424,932		18,172,817

	2011	2010
	$	$

Note 14: Trade and Other Payables

CURRENT
Trade payables and accruals	1,872,781	564,362

Trade creditors are expected to be paid on 30 day terms.

F-20

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
(a) Ordinary Shares	No.	No.

At the beginning of reporting period	207,096,144	187,941,631
- 14 August 2009 : Exercise of options	-	216
- 4 January 2010 : Exercise of options	-	260,125
- 15 January 2010 : Exercise of options	-	1,453,061
- 22 January 2010 : Exercise of options	-	942,315
- 28 January 2010 : Exercise of options	-	2,280,920
- 12 February 2010 : Exercise of options	-	11,068,579
- 18 February 2010 : Share based payment	-	2,349,273
- 11 May 2010 : Share based payment	-	800,024
- 23 February 2011 : Issued from conversion of convertible note	23,583,626	-

At reporting date	230,679,770	207,096,144

At shareholders meetings each ordinary share is entitled to one vote. The company does not have authorised share capital and there is no par value for shares.

(b)	Unlisted Options

	There are 20,000,000 unlisted options at 30 June 2011 (30 June 2010: 9,000,000).

(c)	Listed Options

	There are no listed options at 30 June 2011 (30 June 2010: Nil).

(d)	Capital Risk Management

	The company is not subject to any externally imposed capital requirements.

	Management’s objectives when managing capital is to ensure the croup continues as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.

	Due to the nature of the company’s activities, being mineral exploration, the company does not have ready access to credit facilities, with the primary source of funding being equity raisings. Therefore, the focus of the company’s capital risk management is the current working capital position against the requirements of the company to meet exploration programmes and corporate overheads.

F-21

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 15: Issued Capital (Cont.)

There is no current intention to incur debt funding on behalf of the company as on-going exploration expenditure will be funded via cash reserves, equity or joint ventures with other companies.

The company’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required.

The working capital position of the company at 30 June 2011 and 30 June 2010 are as follows:

	2011		2010
	$		$


Cash and cash equivalents	1,233,712		813,737
Trade and other receivables	149,459		16,539
Inventory	3,850,361		4,404,264
Trade and other payables	(1,872,781	)	(564,362	)
Working capital position	3,360,751		4,670,178

Note 16: Reserves

The foreign currency translation reserve records exchange differences arising on translation of foreign controlled subsidiaries.

The options reserve records amounts received when the company issues options or records items recognised as expenses on the valuation of employee share options where relevant.

F-22

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

	2011		2010
	$		$

Note 17: Parent Entity Disclosures

Statement of Financial Position
Assets
Current assets	283,346		788,443
Non-current assets	28,297,805		33,751,382
Total assets	28,581,151		34,539,825

Liabilities
Current liabilities	1,456,644		134,154
Non-current liabilities	-		-
Total liabilities	1,456,644		134,154

Equity
Issued capital	37,673,112		35,139,164
Reserves:
Option reserve	2,534,534		806,533
Foreign currency translation reserve	(5,947,733	)	1,197,493
Accumulated losses	(7,135,406	)	(2,737,519	)
Total Equity	27,124,507		34,405,671

Statement of Comprehensive Income
Loss for the year	(4,397,887	)	(2,053,123	)
Other comprehensive income	(7,145,226	)	(1,808,546	)
Total comprehensive income	(11,543,113	)	(3,861,669	)

(a) Contingent liabilities of the parent entity

The parent entity has no contingent liabilities as at 30 June 2011 (30 June 2010: NIL).

(b) Commitments for expenditure

The parent entity has no capital expenditure commitments as at 30 June 2011 (30 June 2010: NIL).

F-23

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 18: Controlled Entities

Ultimate Parent Entity:

White Canyon Uranium Limited

	Country of	Class of
Subsidiaries	incorporation	shares	Ownership Interest
			2011	2010

Utah Energy Corporation	USA	Ordinary	100%	100%

Note 19: Contingent Liabilities and Contingent Assets

Contingent Liabilities

There were no known contingent liabilities at reporting date.

Contingent Assets

There were no known contingent assets at reporting date.

F-24

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

	2011		2010
	$		$

Note 20: Cash Flow Information

(a) Reconciliation of Cash Flow from Operations with Loss after Income Tax

Loss after income tax	(7,778,575	)	(2,629,247	)
Non-cash flows
Impairment expense	2,343,896		-
Profit on sale of investments	-		(1,600	)
Foreign currency movements	(21,798	)	(1,212	)
Share based payments	1,728,000		635,487
Depreciation	16,870		30,476
Changes in assets and liabilities:
Inventories	553,903		(2,449,560	)
- Receivables	(132,920	)	(41,643	)
- Prepayments	(25,207	)	30,260
- Other	(34,199	)	(21,596	)
- Trade payables and accruals	1,384,165		21,737
- Exploration expenditure capitalised	-		(2,741,199	)

Cash flow used in operating activities	(1,965,865	)	(7,168,097	)

Note 21: Share Based Payments

On 30 November 2010, 20,000,000 options were granted to directors and the company secretary to encourage them to have a greater involvement in the achievement of the company’s objectives and provide an incentive to strive to that end by participating in the future growth and prosperity of the company through share ownership.

All options granted are ordinary shares in the company, which confer a right of one ordinary share for every option held. There were no options exercised during the year ended 30 June 2011 (16,005,216 options were exercised during the year ended 30 June 2010). The fair value of options granted during the year recognized in the statement of comprehensive income was $1,728,000 (2010: $130,336). These options are exercisable from grant date. These values were calculated using the Black-Scholes option pricing model applying the following inputs:-

Number of options		20,000,000
Share price at grant date	$	0.175
Exercise price	$	0.150
Expected share price volatility		50%
Option life		4 years
Risk-free rate		5.18%
Fair value per option	$	0.086

		Weighted average
	Number	exercise price
Options outstanding as at 30 June 2009	-	-
Granted	9,000,000	$0.50
Options outstanding as at 30 June 2010	9,000,000	-
Granted	20,000,000	$0.15
Forfeited	(9,000,000)	$0.50
Options outstanding as at 30 June 2011	20,000,000

F-25

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 22: Related Party Transactions

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Key Management Personnel

Kelly Shumway is a 50% shareholder of KM Real Estate Enterprises LLC. The Company entered into an Administrative Services Agreement with KM Real Estate Enterprises LLC and has paid KM Real Estate Enterprises LLC $14,229 (2010: $16,251) as payment for rental of office and warehouse space and provision of office and accounting services at 1300 S Highway 191, Moab, Utah.

Kelly Shumway is the owner of Ksue Corporation LLC, a construction, earthworks and machinery hire business. The Company has paid Ksue Corporation LLC $Nil (2010: $53,458) as payment for earthworks and site infrastructure costs.

Kelly and Michael Shumway are shareholders and managers of Reliance Resources LLC. The Company has paid Reliance Resources LLC $5,617,083 (2010: $4,095,703) for rotary and diamond drilling services at the Company’s Daneros Uranium Project.

Messrs Cross and Sciano are directors of Golden State Resources Limited. The Company entered into an Administrative Services Agreement with Golden State Resources Limited for the provision of office and administrative services at 181 Roberts Road, Subiaco and Unit 18, St Quentin Avenue, Claremont Western Australia for which the Company has paid $33,527 (2010: $62,321).

Other than disclosed above, there were no other transactions of directors and their related entities during the year.

Note 23: Financial Risk Management

Financial Risk Management Policies

In managing risk, it is the company's practice to take advantage of potential opportunities while managing potential adverse effects. The Board is responsible for reviewing the company's policies on risk oversight and management and satisfying itself that management has developed and implemented a sound system of risk management and internal control. Implementation of the risk management system and day-to-day management of risk is the responsibility of the Board, with the assistance of senior management, as required.

The Board monitors the company’s financial risk management policies and exposures and approves financial transactions within the scope of its authority. It also reviews the effectiveness of internal controls relating to commodity price risk, currency risk, financing risk and interest rate risk.

The Board’s overall risk management strategy seeks to assist the company in meeting its financial targets, while minimising potential adverse effects on financial performance. Its functions include the review of the use of credit risk policies and future cash flow requirements.

The company’s financial instruments consist mainly of deposits with banks, short term investments and accounts receivable and payables. The main risks the company is exposed to through its financial instruments are interest rate risk, foreign currency risk and credit risk

F-26

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 23: Financial Risk Management (Cont.)

(a)	Interest rate risk

	The company’s exposure to interest rate risk, which is the risk that a financial instrument will fluctuate as a result of changes in market interest rates and effective average interest rates on those financial assets and liabilities, is set out below.

				Fixed
	Weighted		Fixed	Interest Rate
	Average	Floating	Interest Rate	Within 1-5	Non-Interest
	Interest Rate	Interest Rate	Within 1 Year	Years	Bearing		Total
	%	$	$	$	$		$
2011
Financial Assets:
Cash	0.30	1,233,712	-	-	-		1,233,712
Receivables	-	-	-	-	149,459		149,459
Other assets	0.09	-	-	137,121	39,363		176,484

Total financial assets		1,233,712	-	137,121	188,822		1,559,655

Financial Liabilities:
Payables	-	-	-	-	(1,872,781	)	(1,872,781	)

Total financial liabilities		-	-	-	(1,872,781	)	(1,872,781	)

Net financial assets		1,233,712	-	137,121	(1,683,959	)	(313,126	)

				Fixed
	Weighted		Fixed	Interest Rate
	Average	Floating	Interest Rate	Within 1-5	Non-Interest
	Interest Rate	Interest Rate	Within 1 Year	Years	Bearing		Total
	%	$	$	$	$		$
2010
Financial Assets:
Cash	3.70	813,737	-	-	-		813,737
Receivables	-	-	-	-	16,539		16,539
Other assets	0.40	-	-	171,320	14,156		185,476

Total financial assets		813,737	-	171,320	30,695		1,015,752

Financial Liabilities:
Payables	-	-	-	-	(564,362	)	(564,362	)

Total financial liabilities		-	-	-	(564,362	)	(564,362	)

Net financial assets		813,737	-	171,320	(533,667	)	451,390

F-27

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 23: Financial Risk Management (Cont.)

	2011		2010
	$		$
Reconciliation of Net Financial Assets to Net Assets
Net financial assets as above	(313,126	)	451,390
Inventory	3,850,361		4,404,264
Plant and equipment	24,256		79,370
Exploration and evaluation expenditure	8,204,903		10,172,026
Mining properties	11,424,932		18,172,817
Provisions	(75,539	)	-

Net assets per statement of financial position	23,115,787		33,279,867

(b)	Sensitivity Analysis

	At 30 June 2011, if interest rates had changed by -/+ 200 basis points from the weighted average rate for the year with all other variables held constant, post-tax loss for the company would have been $24,674 lower/higher respectively (2010 - $16,275) lower/higher respectively) as a result of lower/higher interest income from cash and cash equivalents.

(c)	Foreign Currency Risk

	The company is exposed to fluctuations in foreign currencies arising from the purchase of goods and services in currencies other than the company’s measurement currency.

(d)	Credit Risk

	The maximum exposure to credit risk, excluding the value of any collateral or other security, at reporting date to recognised financial assets is the carrying amount as disclosed in the statement of financial position and the notes to the financial statements. The company does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the company.

	Credit risk related to balances with banks and other financial institutions is managed by the company in accordance with approved Board policy. Such policy requires that surplus funds are only invested with counterparties with a Standard and Poor’s rating of at least AA-. The following table provides information regarding the credit risk relating to cash and money market securities based on Standard and Poor’s counterparty credit ratings.

	Note	2011	2010
		$	$
Cash and cash equivalents
- AA Rated	7	1,233,712	813,737

	No material exposure is considered to exist by virtue of the possible non performance of the counterparties to financial instruments and cash deposits.

(e)	Net Fair Values

	The net fair value of financial assets and liabilities of the company approximated their carrying amount.

	The company has no financial assets and liabilities where the carrying amount exceeds the net fair value at balance date.

	The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and notes to the financial statements.

F-28

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 23: Financial Risk Management (Cont.)

(f)	Liquidity Risk

	Liquidity risk arises from the possibility that the company might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The company manages this risk through the following mechanisms:

		preparing forward looking cash flow analysis in relation to its operational, investing and financing activities

		obtaining funding from a variety of sources

		maintaining a reputable credit profile

		managing credit risk related to financial assets

		investing only in surplus cash with major financial institutions

		comparing the maturity profile of financial liabilities with the realisation profile of financial assets

	The company does not have a significant exposure in terms of financial liabilities or illiquid financial assets and is able to settle its debts or otherwise meet its obligations related to financial liabilities. Financial asset and financial liability are expected to mature within 30 days.

(g)	Price Risk

	Price risk relates to the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices largely due to demand and supply factors for commodities. As at 30 June 2011 and 30 June 2010, the company is not exposed to equity securities price risk or commodity price risk.

Note 24: Events subsequent to the end of the reporting period

No matter or circumstance has arisen since 30 June 2011 that has significantly affected, or may significantly affect:

(a) the company’s operations in future financial years, or
(b) the results of those operations in future financial years; or
(c) the company’s state of affairs in future financial years.

Note 25: Commitments for Expenditure

Exploration Expenditure

With respect to the tenements in United States, the company is committed to meet the annual tenement rental commitments of US$73,306 payable to the U.S. Department of the Interior Bureau of Land Management and the Utah Trust Lands Administration.

F-29

WHITE CANYON URANIUM LIMITED

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 30 JUNE 2011

Note 26: Company Details

The registered office is:

Suite 101, 48 Outram Street, West Perth, WA, 6005

The principal places of business are:

Suite 101, 48 Outram Street, West Perth, WA, 6005
1300 S Highway 191, Moab, Utah, USA, 84532

Note 27: New Accounting Standards for Application in future periods

Reference	Title	Summary	Application date (financial years beginning)	Expected Impact
AASB 9	Financial Instruments	Replaces the requirements of AASB 139 for the classification and measurement of financial assets. This is the result of the first part of Phase 1 of the IASB’s project to replace IAS 39.	1 January 2013	No expected material impact on the Company
AASB 124	Related Party Disclosures	Revised standard. The definition of a related party is simplified to clarify its intended meaning and eliminate inconsistencies from the application of the definition	1 January 2011	Disclosure only

F-30

WHITE CANYON URANIUM LIMITED

DIRECTORS’ DECLARATION

In the opinion of the directors:

a)	The financial statements and notes are in accordance with the Corporations Act 2001, and:

	i)	give a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and

	ii)	comply with Accounting Standards, which, as stated in accounting policy Note 1 to the financial statements constitutes explicit and unreserved compliance with International Financial Reporting Standards (IFRS); and

b)	There are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Directors.

Lew Cross
Director

Dated this 21 May 2012

F-31

RSM Bird Cameron Partners
8 St George’s Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 8 9261 9100 F +61 8 9261 9101
www.rsmi.com.au

INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
WHITE CANYON URANIUM LIMITED

Report on the Financial Report

We have audited the accompanying financial report of White Canyon Uranium Limited, which comprises the consolidated statement of financial position as at 30 June 2011, and the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors' declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards.

Auditor’s Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

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Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of White Canyon Uranium Limited, would be in the same terms if given to the directors as at the time of this auditor's report.

Opinion

In our opinion:

(a)	the financial report of White Canyon Uranium Limited is in accordance with the Corporations Act 2001, including:

	(i)	giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and

	(ii)	complying with Australian Accounting Standards and the Corporations Regulations 2001; and

(b)	the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

RSM BIRD CAMERON PARTNERS
Chartered Accountants


Perth, WA	TUTU PHONG
Dated: 21 May 2012	Partner

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RSM Bird Cameron Partners
8 St Georges Terrace Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 8 9261 9100 F +61 8 9261 9111
www.rsmi.com.au

COMMENTS BY AUDITOR FOR CANADIAN READERS ON REPORTING DIFFERENCES
BETWEEN CANADIAN GENERALLY ACCEPTED AUDITING STANDARDS AND
AUSTRALIAN AND INTERNATIONAL STANDARDS ON AUDITING

To the Directors of White Canyon Uranium Limited

We conducted our audit for the 12 months ended 30 June 2011 and 30 June 2010 in accordance with Australian Auditing Standards and International Standards on Auditing. There are no material differences in the form or content of our report (except as noted in the paragraph below) as compared to an auditor’s report prepared in accordance with Canadian Generally Accepted Auditing Standards (GAAS) and if this report was prepared in accordance with Canadian GAAS, it would not contain a reservation.

Canadian GAAS requires that an auditor’s opinion state that the consolidated financial statements of the company present fairly, in all material respects, the financial position of the consolidated entity as at year end and its results of operations and cash flows for the year then ended. In Australia, reporting standards for auditors require that an auditor’s opinion state that the consolidated financial statements of the company give a true and fair view of the consolidated entity’s financial position as at year end and of its performance for the year then ended.

RSM BIRD CAMERON PARTNERS
Chartered Accountants


Perth, WA	TUTU PHONG
Dated: 21 May 2012	Partner

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SCHEDULE G - SHARE CONSOLIDATION RESOLUTION

RESOLUTION OF THE SHAREHOLDERS OF ENERGY FUELS INC.
(the “Corporation”)

BE IT RESOLVED, AS A SPECIAL RESOLUTION, THAT:

1.	The Corporation is hereby authorized to amend its articles of incorporation to provide that:

	(a)	the authorized capital of the Corporation is altered by consolidating all of the issued and outstanding common shares of the Corporation (“Common Shares”) on the basis of one (1) post-consolidation Common Share for every ten (10) pre-consolidation Common Shares;

	(b)	in the event that the consolidation would otherwise result in the issuance of a fractional Common Share, no fractional Common Share shall be issued and such fraction will be rounded down to the nearest whole number; and

	(c)	the effective date and time of such consolidation shall be the date and time shown in the articles of amendment and certificate of amendment issued by the Director appointed under the Business Corporations Act (Ontario) or such other date and time indicated in the articles of amendment provided that, in any event, such date shall be prior to the next annual meeting of Shareholders.

2.	Any director or officer of the Corporation is hereby authorized and directed for and in the name of and on behalf of the Corporation to execute, or to cause to be executed, whether under the corporate seal of the Corporation or otherwise, and to deliver or cause to be delivered all such other documents and instruments, and to do or cause to be done all such other acts and things as, in the opinion of such director or officer, may be necessary or desirable in order to carry out the intent of this special resolution, including, without limitation, the determination of the effective date and time of the consolidation and the delivery of articles of amendment in the prescribed form to the Director appointed under the Business Corporations Act (Ontario), the execution of any such document or the doing of any such other act or thing being conclusive evidence of such determination.

3.	Notwithstanding the foregoing, the directors of the Corporation are hereby authorized, without further approval of or notice to the Shareholders of the Corporation, to revoke this special resolution at any time before a certificate of amendment is issued by the Director.

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