Mr. David Cates of Denison reports

DENISON ANNOUNCES TRANSACTION TO OPTION MOORE LAKE PROPERTY TO SKYHARBOUR FOR CASH AND STOCK

Denison Mines Corp. has executed an agreement with Skyharbour Resources Ltd. that grants Skyharbour an option to acquire a 100-per-cent interest in Denison's wholly owned Moore Lake uranium exploration property in exchange for cash and stock.

The Moore Lake property consists of 12 contiguous claims, totalling 35,705 hectares, and is part of Denison's diverse exploration portfolio in the eastern portion of the Athabasca basin region. Under the terms of the option agreement, Denison will receive 18 million common shares of Skyharbour (on a preconsolidation basis, see below for details) and staged cash payments of $500,000, in aggregate, over the next five years. In order to acquire a 100-per-cent interest in the property Skyharbour must also spend $3.5-million in exploration expenditures on the property over the next five years. Under the terms of the option agreement, as outlined below, Denison also maintains various back-in rights on the property.

Highlights:

• Skyharbour will obtain an option to acquire a 100-per-cent interest in the Moore Lake property, a mature uranium exploration property located in the eastern Athabasca basin.
• Denison will receive 18 million common shares of Skyharbour and staged cash payments totalling $500,000, plus Skyharbour will incur $3.5-million in exploration expenditures on the property over the next five years to complete its acquisition of a 100-per-cent interest.
• Denison retains various back-in rights to reacquire a 51-per-cent interest in the property.
• Denison will become Skyharbour's largest shareholder, holding approximately 18.7 per cent of the shares outstanding (including Denison's existing share position in the company).
• Denison's president and chief executive officer, David Cates, is expected to join Skyharbour's board of directors.
• Skyharbour adds a large, well-situated and high-grade uranium exploration asset to its project portfolio and plans to raise $1.95-million through a non-brokered private placement for exploration and general working capital purposes.

Mr. Cates commented: "Denison is continuing to focus its efforts and budgets on the company's flagship Wheeler River project -- which is in the process of advancing from a successful preliminary economic assessment to a prefeasibility study, together with extensive exploration focused on delineating new and existing resources around the Gryphon deposit. Partnering with Skyharbour is the perfect way to ensure Moore Lake continues to be explored for potentially significant mineralization. While Denison wasn't actively looking to sell its position in the Moore Lake property, we couldn't pass on an opportunity to join forces with the dynamic leadership team at Skyharbour and their strong will to take Moore Lake through the next phase of exploration."

Skyharbour's president and CEO, Jordan Trimble, commented: "We are very pleased to have reached an agreement with Denison to acquire a 100-per-cent interest in Moore Lake. Uranium properties with the pedigree and potential of Moore Lake are few and far between -- having extensive historical exploration, high-grade mineralized results and several shallow exploration targets that remain with the potential to return further discoveries. With a recovery in the uranium market on the horizon, Skyharbour views this transaction as a unique opportunity to acquire a prime exploration property before the next uranium bull cycle begins. Having Denison on board as a strategic shareholder and David Cates join our board of directors also bolsters Skyharbour's profile and access to capital moving forward."

Moore Lake property

The Moore Lake uranium project consists of 12 contiguous claims totalling 35,705 hectares and is located 42 kilometres northeast of the Key Lake mill, approximately 20 kilometres east of Denison's Wheeler River project, and 39 kilometres south of Cameco Corp.'s McArthur River mine. Unconformity-hosted uranium mineralization was discovered on the property at the Maverick zone in 2000 and several high-grade intercepts have been drilled since. Drill hole ML-61 contained the best result drilled on the property to date, which returned 4.03 per cent equivalent triuranium octoxide over 10 metres, including 20 per cent eU3O8 over 1.4 metres, starting at a depth of 264.68 metres. The drill hole had significant core loss over the mineralized zone and therefore the grade is reported as radiometric equivalent U3O8 derived from a calibrated total gamma downhole probe. Drill holes ML-55 and ML-48 also encountered high-grade mineralization, returning 5.14 per cent U3O8 over 6.2 metres and 4.01 per cent U3O8 over 4.7 metres, respectively. The depth to the unconformity on the property is relatively shallow, with the thickness of the sandstone cover varying from less than 125 metres on the property's eastern side to over 325 metres on the property's northwestern side. Basement rocks are predominantly paragneisses belonging to the Wollaston domain. A large mafic sill known as the Moore Lake complex partially overlies a portion of the eastern side of the property. The property has been the subject of extensive historic exploration with approximately $30-million in expenditures and over 130,000 metres of diamond drilling completed in over 350 drill holes.

Since 1969, the property has undergone episodic exploration by several companies including Noranda, AGIP, BRINEX, Cogema, Kennecott/JNR Resources and IUC/Denison. Exploration programs carried out on the project lands include an assortment of airborne and ground electromagnetic and magnetic surveys, ground gravity, seismic, induced polarization/resistivity and geochemical surveys, mapping, prospecting, and lake sediment sampling programs, and the drilling of over 350 diamond drill holes. From mid-2000 onward, the primary focus of exploration has been the 3.5-kilometre-long Maverick structural corridor, where pods of high-grade unconformity-type uranium mineralization have been intersected. The best intercepts to date were obtained from drill holes testing the southwestern portion of this corridor.

In addition to the Maverick zone, diamond drilling in several other geophysical target areas has intersected multiple conductors associated with significant structural disruption, strong alteration, and anomalous uranium and pathfinder element concentrations.

Terms of the option agreement

Under the terms of the option agreement, Skyharbour may acquire a 100-per-cent interest in the Moore Lake property in consideration for the issuance of 18 million common shares and staged cash payments totalling $500,000 over the next five years. Skyharbour has also agreed to finance $3.5-million in exploration expenditures on the Moore Lake project over the same five-year period and will act as project operator. Skyharbour must make the staged cash payments to Denison and incur expenditures of $3.5-million on the property on or before July 31, 2021, in accordance with the following schedule:

• $50,000 in cash and $500,000 in exploration expenditures on or before July 31, 2017;
• $50,000 in cash and $500,000 in exploration expenditures on or before July 31, 2018;
• $100,000 in cash and $500,000 in exploration expenditures on or before July 31, 2019;
• $100,000 in cash and $1-million in exploration expenditures on or before July 31, 2020;
• $200,000 in cash and $1-million in exploration expenditures on or before July 31, 2021.

Once Skyharbour acquires a 100-per-cent interest in the property, Denison may exercise a buyback option to repurchase a 51-per-cent interest in the property by making an upfront cash payment to Skyharbour of $200,000 and spending $6.75-million in exploration expenditures on the property over the following three-year period. The parties would then form a joint venture. If Denison fails to complete the buyback option, Skyharbour would retain 100-per-cent ownership in the property.

Provided this first buyback option is not exercised by Denison, Skyharbour would own 100 per cent of the property and would have an additional five-year period to incur an additional $3-million in exploration expenditures on the project. At this point, Denison may elect to exercise a second buyback option to repurchase a 51-per-cent interest in the property by making an upfront cash payment of $500,000 to Skyharbour and spending $16.5-million in exploration expenditures on the property over the following four-year period. The parties would then form a joint venture. If Denison fails to complete this second buyback option, Skyharbour would retain 100-per-cent ownership in the property.

Provided the buyback option was not exercised by Denison and Skyharbour does not complete the additional expenditures within the allotted five-year period, Denison may elect to exercise a buyback option at any time to repurchase a 51-per-cent interest in the property by making an upfront cash payment of $500,000 to Skyharbour and spending at least 2.5 times the expenditures incurred by Skyharbour since the beginning of the option agreement. The parties would then form a joint venture.

As part of the option agreement, Denison is entitled to nominate a member to Skyharbour's board of directors, provided Denison maintains a minimum ownership position of 5 per cent.

The transactions contemplated by the option agreement are subject to Skyharbour obtaining the requisite TSX Venture Exchange approval.

Skyharbour private placement and share consolidation

Skyharbour announced that is has received board approval for a consolidation of the company's issued and outstanding share capital. The intended consolidation will be on a basis of one postconsolidation common share for every four preconsolidation common shares. This consolidation will reduce the issued and outstanding shares of the company from 89,043,594 (pre-Moore Lake option agreement) to approximately 22,260,890 shares. The consolidation is subject to approval by the TSX Venture Exchange.

Skyharbour also announced that it has arranged a non-brokered private placement of up to 13 million units at a price of 15 cents per unit, on a postconsolidation basis, to raise proceeds of up to $1.95-million. Each unit consists of one common share and one non-transferable share purchase warrant. Each warrant will entitle the holder to purchase one common share for a period of five years at a price of 27 cents per share, on a postconsolidation basis. Skyharbour intends to utilize the proceeds from this private placement for exploration and general working capital purposes. The private placement is subject to TSX Venture Exchange acceptance.

Qualified person

The disclosure of a scientific or technical nature contained in this news release was reviewed and approved by Dale Verran, MSc, PrSciNat, Denison's vice-president of exploration, who is a qualified person in accordance with the requirements of National Instrument 43-101. For a description of the assay procedures, and the quality assurance program and quality control measures applied by Denison, please see Denison's annual information form dated March 24, 2016, filed under the company's profile on SEDAR.

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