Mr. Julian Treger reports

ANGLO PACIFIC GROUP PLC PROPOSED ACQUISITION, EQUITY PLACING AND REFINANCING

Anglo Pacific Group PLC has entered into a conditional financing agreement relating to the portion of the toll milling proceeds from the McClean Lake mill attributable to Denison Mines Inc., together with an associated conditional streaming agreement, for total cash consideration of $43.5-million (26.4 million British pounds).

The McClean Lake mill, operated by Areva Resources Canada Inc. (ARC), receives all of the output from the Tier 1 Cigar Lake uranium (triuranium octoxide) mine, operated by Cameco Corp. Denison is entitled to 22.5 per cent of the proceeds from the mill, which earns toll revenue on each pound of triuranium octoxide that it processes. Anglo Pacific is entitled to payment in respect of toll milling revenues backdated to July 1, 2016.

The Denison financing is structured as: (i) an initial $40.8-million (24.8-million-British-pound), 13-year loan with an interest rate of 10 per cent per year payable to Anglo Pacific; and (ii) the acquisition of a right to receive Denison's portion of the toll milling proceeds from the McClean Lake mill after the first 215 million pounds of throughput for an upfront payment of $2.7-million (1.64 million British pounds).

The Denison loan is payable quarterly in cash and is structured so as to entitle Anglo Pacific to accelerated repayments of the loan principal when toll revenues exceed scheduled interest payments. In the event that toll revenues do not equal the accrued interest in any one period, the interest will capitalize and become due in the next period. The Denison financing will be guaranteed by a parent company guarantee from Denison Mines Corp. (DMC) (with recourse limited to the toll milling proceeds) and includes certain security arrangements.

The Denison financing is expected to be partly financed through the issue of new ordinary shares in the company to raise up to 13.7 million British pounds. The balance of the consideration payable is intended to be financed by drawdown on a new revolving credit facility that becomes available upon receipt by the company of the placing funds (1) and will replace the previous $30-million (U.S.) three-year facility, which was due to expire in February, 2018.

The placing is being conducted through an accelerated bookbuilding process, which will be launched immediately following release of this announcement and which is expected to close on Feb. 1, 2017. The timing of the closing of the book, pricing and allocations are at the discretion of the joint bookrunners and the company.

(1) In the event that 13.7 million British pounds is not received but the company proceeds with the transaction, the remaining funds will be drawn on the existing revolving credit facility.

Key highlights of the Denison financing

• Immediately accretive to adjusted earnings per share and dividend cover*;
• Producing asset with immediate cash flow generation and expected to have a stable cash flow; Denison's portion of toll milling revenue received from Cigar Lake production of 18 million pounds per year will be subject to the Denison financing profile;
• Production upside potential from Cigar Lake phase 2 mine life extension expected to be captured in the Denison stream; McClean Lake mill has scope to increase production to 24 million pounds, which may, in turn, result in an increase in income for the group;
• Exposure to the highest-grade uranium operation globally, which is well positioned on the global uranium cost curve and has a 12-year reserve-based mine life;
• The mine and mill are operated by established uranium majors Cameco and ARC, respectively;
• Reduced commodity price risk given the toll milling nature of the asset;
• Transaction delivers further diversified asset base, commodity exposure and geography, as well as increased exposure, to non-carbon energy.

* No statement in this announcement is intended to be a profit forecast and no statement in this announcement should be interpreted to mean that earnings per share of the company for the current or future financial years would necessarily match or exceed the historical published earnings per share of the company.

Commenting on the acquisition, Julian Treger, chief executive officer of Anglo Pacific, said: "This transaction ticks all the boxes for Anglo Pacific and moves forward our growth and diversification in a material way. The transaction should be accretive to our 2017 income, building on the more than doubling of income in 2016, which we now estimate to be in the range of 19.5 million British pounds to 20.5 million British pounds following receipt of the final payment amount from Rio Tinto in respect of our Kestrel royalty.

"We are looking forward to working in partnership with Denison and are pleased the structure of the transaction will facilitate their continued development."

Denison's president and chief executive officer, David Cates, commented: "This financing represents a truly creative partnership between Anglo Pacific and Denison -- whereby Denison is able to use its existing asset base to provide the company with the financial flexibility needed to advance our flagship Wheeler River project towards a development decision. With recourse being limited to the proceeds from Denison's interest in the toll milling revenues from the processing of Cigar Lake ore at the McClean Lake mill, this financing allows Denison to benefit immediately from the cash flow expected to be produced from the McClean Lake mill over the next several years, without the overhang of a bullet payment or convert at the end of a debt and without selling its strategic ownership stake in the McClean Lake mill or the McClean Lake joint venture."

About Anglo Pacific Group PLC

Anglo Pacific Group's strategy is to develop a leading international diversified royalty and streaming company with a portfolio centred on base metals and bulk materials, focusing on accelerating income growth through acquiring royalties and streams on projects that are in the main currently cash flow generating or are expected to be within the next 24 months. It is a continuing policy of the company to pay a substantial portion of these royalties and streams to shareholders as dividends.

We seek Safe Harbor.