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Denison Mines Inc. (the "Manager") has been engaged by Uranium Participation Corporation to manage the Corporation. The Management Services Agreement is available on this website under the heading "Other SEDAR Filings". The Manager does not have any ownership interest in Uranium Participation Corp., and the two companies do not have any directors in common.
Pursuant to the Management Services Agreement, the Manager is required to manage Uranium Participation Corporation’s activities in accordance with reasonable and prudent business practices and may delegate, with the approval of the Board and at its own cost, any of its duties or obligations under the Management Services Agreement to any third party. All purchases and sales of uranium are made by the Manager on behalf of Uranium Participation Corp. in accordance with the Management Services Agreement and title of uranium purchases remains with the Corporation. The Manager is obligated to use commercially reasonable efforts to purchase and sell the uranium at the best prices available to it over a prudent period of time.
In consideration of the Manager carrying out its duties and obligations under the terms of the Management Services Agreement, the Corporation will pay the following fees to the Manager:
(a) a commission of 1.5% of the gross value of any purchases or sales of uranium completed at the request of the Board; and
(b) $400,000 per annum, plus:
(i) a fee equal to 0.3% per annum of Uranium Participation Corp.'s total assets in excess of $100 million and up to $200 million; and
(ii) a fee equal to 0.2% per annum of Uranium Participation Corp.'s assets for any excess over $200 million of total assets;
(c) a fee of $200,000 upon the completion of each equity financing where the proceeds payable to Uranium Participation Corp. exceed $20 million;
(d) a fee of $200,000 for each transaction or arrangement (other than the acquisition or sale of uranium) of business where the gross value of such transaction exceeds $20 million (an “Initiative”);
(e) an annual fee up to a maximum of $200,000, at the discretion of the Board, for on-going monitoring or work associated with an Initiative, provided that in exercising its discretion the Board shall consider, among factors, the effort expended by the Manager and the value derived by the Corporation from such Initiative; and
(f) a fee equal to 1.5% of the gross value of any U3O8 and UF6 held by Uranium Participation Corporation as determined the month end immediately prior to the completion of any acquisition of at least ninety (90%) per cent of the common shares of Uranium Participation Corporation by any person or company, or more than one if acting jointly, ("Acquisition") payable on the date of completion of the Acquisition.
Provided that the Manager is paid the fee set forth in this sub-paragraph as a result of an Acquisition, no further fees shall be payable by Uranium Participation Corporation to the Manager with respect to the sale of such quantity of U3O8 and UF6 existing at the time of the Acquisition.
About Denison
Denison Mines Inc. is a wholly owned subsidiary of Denison Mines Corp. (DML: TSX, DNN: AMEX), which was formed on December 1, 2006 through the combination of the business and operations of Denison Mines Inc. and International Uranium Corporation.
Denison Mines is a diversified, growth-oriented, intermediate uranium producer. With seven active uranium mining projects in North America (six in the U.S. and one in Canada) and ownership interests in two of the four conventional uranium mills operating in North America today, Denison expects estimated production of five million lbs of U3O8 by 2011.
Denison enjoys a global portfolio of world-class exploration projects, including properties in close proximity to the company’s mills in the Athabasca Basin in Saskatchewan and in the Colorado Plateau, Henry Mountain and Arizona Strip regions of the Southwestern United States. Denison also has high potential exploration properties in Mongolia and Zambia.
Denison is also engaged in mine decommissioning and environmental services through its Denison Environmental Services (DES) division.
 Denison’s common shares trade on the Toronto Stock Exchange (TSX: DML) and the American Stock Exchange (AMEX:DNN). Denison's warrants trade on the Toronto Stock Exchange under the symbols “DML.WT” and "DML.WT.A". For more information on Denison Mines, please visit our website at www.denisonmines.com.
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Conflicts of Interest of the Manager
The Manager does not have an ownership interest in the Corporation. All of the Corporation’s Board members are independent of the Manager. As of the date hereof, the directors and officers of the Corporation in the aggregate own less than 1% of the outstanding capital of the Manager. As of the date hereof, the directors and officers of the Manager in the aggregate own less than 1% of the Common shares of the Corporation.
The Manager is a wholly-owned subsidiary of DMC, a public company which has uranium production in the United States and Canada, and uranium exploration and development in Canada, the United States, Mongolia and Zambia. DMC is involved in the exploration, development, production and marketing of uranium through its 100% ownership of the White Mesa mill in Utah and its 22.5% interest in the McClean Lake joint venture in northern Saskatchewan and a 30% ownership interest in McClean Uranium Limited, a company that markets a substantial portion of the McClean Lake uranium production. AREVA holds a 70% ownership interest in both the McClean Lake joint venture and McClean Uranium Limited.
The possible conflicts of interest between the Manager and Uranium Participation Corp. have been addressed as follows:
(i) limitations on the ability of the Manager to purchase uranium from or sell uranium to Related Parties (See “Business of Uranium Participation Corp. – Management of Uranium Participation Corp.”);
(ii) the ability of the Manager to lend uranium is at the Board’s discretion;
(iii) all board members are independent of the Manager;
(iv) restrictions on the business to be carried on by Uranium Participation Corp. (see “Business of Uranium Participation Corp.”); and
(v) oversight by the Independent Review Committee.
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