DNN Stock Price Increases Over 12% Pre-Market: Why It Happened

By Amit Chowdhry ● February 16, 2021
  • The stock price of Denison Mines Corp (NYSEAMERICAN: DNN) is trading at over 12% pre-market. This is why it happened.

The stock price of Denison Mines Corp (NYSEAMERICAN: DNN) is trading at over 12% pre-market. There appears to be continued momentum from an announcement published on Thursday, February 11.

On February 11, Denison Mines had announced that it entered into agreements with Cantor Fitzgerald Canada Corporation and Haywood Securities as co-lead underwriters and joint book-runners in each case on behalf of themselves and a syndicate of underwriters, under which the underwriters have agreed to purchase on a bought deal basis, (1) 27,473,000 units of the company at the price of USD$0.91 per unit for aggregate gross proceeds of approximately USD$25 million; and (2) 5,926,000 flow-through common shares at a price of CAD$1.35 per Flow-Through Share for total gross proceeds of approximately CAD$8 million.

Each unit is going to consist of one common share in the capital of Denison Mines and one-half of one transferable common share purchase warrant of the company. And each warrant is exercisable to acquire one common share at an exercise price of USD$2.00 per warrant share for 24 months after issuance. The warrants will not be listed.

Plus Denison has agreed to grant to the Underwriters an over-allotment option exercisable, in whole or in part, at the sole discretion of the underwriters to buy up to an additional 4,120,950 Units at the issue price for a period of up to 30 days after the closing of the unit offering for potential additional gross proceeds to Denison of up to approximately USD$3.75 million.

The proceeds of the Unit Offering are anticipated to be used to fund evaluation and environmental assessment activities on Denison’s Wheeler River Uranium Project, including the proposed Phoenix in-situ recovery uranium mining operation, as well as for general working capital purposes. And subject to a decision to advance to a formal Feasibility Study for Phoenix, the proceeds from the Unit Offering and current working capital are expected, based on current estimates, to be sufficient to complete such FS process.

Denison is going to pay to the Underwriters a cash commission equal to 6% of the gross proceeds of the Unit Offering, including any proceeds received from the exercise of the Over-Allotment Option.

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.