(By Balaseshan) Denison Mines Corp. (NYSEAMEX: DNN) said it has bought ownership of 3.6 million units of International Enexco Ltd. at a price of $0.50 per unit pursuant to a subscription agreement effective as of November 29.
Each unit is comprised of one common share of Enexco and one-half of one common share purchase warrant. Each whole warrant entitles the holder thereof to purchase one common share at a price of $0.60 per share for a period of two years from the date of issuance, subject to acceleration in certain circumstances.
Denison acquired the common shares and warrants that are the subject of this press release as part of a private placement of 4.7 million units. An early warning report in respect of the transaction will be filed on SEDAR.
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The common shares and warrants acquired by Denison represent 5.4 million common shares, which is about 13.90% of the issued and outstanding common shares of Enexco after giving effect to the Enexco private placement, assuming the exercise by Denison of the Warrants.
Prior to the closing of the Enexco private placement, Denison did not hold any securities of Enexco. Concurrently with Denison''s purchase of units, Denison acquired the right to appoint one representative to the Board of Directors of Enexco and will be providing technical assistance to Enexco.
Denison will also have the right to participate in future equity offerings of Enexco in order to maintain its pro-rata equity interest up to a prescribed maximum.
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Denison has the right to subscribe for additional common shares sufficient to enable Enexco to meet its funding obligations under the Mann Lake Joint Venture Agreement in the event of a shortfall.
In exchange, Denison has agreed to vote its shareholding in favour of Enexco Management''s proposals on matters of routine business and not to tender its shareholding to any take-over bid if Enexco''s Board has not issued a recommendation in favour of the same.
DNN is trading down 0.89% at $1.11 on Thursday. The stock has been trading between $1.03 and $2.07 for the past 52 weeks.