Toronto- and New York-listed Denison Mines, which is advancing the Wheeler River project in the Athabasca basin, has reported its highest earnings a share since 2007.
The company’s earnings a share surged from C$0.02 in 2022 to C$0.11 in 2023, driven by the recognition of a significantly larger gain on its physical uranium holdings.
“The evolution of the uranium market in 2023 has been quite interesting and has had a significant positive impact on Denison's balance sheet,” said CEO David Cates on Thursday.
With the uranium price rising from $48/lb uranium oxide (U3O8) at the start of the year to $91/lb U3O8 at year-end, Denison's strategic physical uranium holdings appreciated considerably with a $134.2-million fair value gain.
The company acquired 2.5-million pounds of U3O8 in 2021 at an average price of C$26.67/lb ($29.66/lb). In the fourth quarter of 2024, Denison sold 200 000 lb at an average of C$99.50/lb ($77.38/lb).
At December 31, 2023, Denison’s remaining uranium portfolio had increased in value by 228% to C$120.35/lb ($91/lb) for an aggregate value of about C$276.8-million.
Cates said that it was apparent that the uranium market had entered a new phase.
“We are pleased to see the market recognise the growing scarcity of available future uranium production and that higher prices are required to incentivise sufficient new uranium production to meet current and growing demand.
“Importantly, the higher price environment follows an initial wave of long-term contracting that has already incentivised a series of mine restarts from the industry's incumbent producers. This transition to a production-cost-based market environment is consistent with Denison's expectations and validates the company's tireless work to advance Phoenix towards a final investment decision during several challenging years of negative uranium market conditions,” he said.
Denison’s primary focus is the high-grade Phoenix in-situ recovery project, which forms part of the Wheeler River project.