Denison takeover of Rockgate Capital TORONTO, ONTARIO, Sep 17 (Marketwired) -- Denison Mines Corp. ("Denison") (TSX:DML)(NYSE MKT:DNN) (Currency: CAD$) today announced that it intends to make a takeover bid to acquire all of the outstanding shares of Rockgate Capital Corp. ("Rockgate") in exchange for shares of Denison. Under the terms of the offer, each Rockgate common share will be exchanged for 0.192 of a common share of Denison (the "Offer") with an implied value of $0.23 per Rockgate share and a total purchase price for all outstanding Rockgate shares of approximately $26.7 million. The Offer represents a 47% premium over the closing price of Rockgate shares on the Toronto Stock Exchange (the "TSX") on September 16, 2013, the last trading day prior to Denison's announcement of its intention to make the Offer and a 38% premium to both companies' trailing 20-day volume-weighted average prices ("VWAP"). Denison has entered into lock-up agreements covering 20,381,900 Rockgate shares, representing 17.4% of Rockgate's total shares outstanding. Under the lock-up agreements, the shareholders have agreed, among other things, to tender their Rockgate shares to the Offer. Separately, Denison has been advised by shareholders holding 31.5% of the shares of Rockgate, including the shareholders who have signed lock-up agreements, that they currently intend to vote against the proposed transaction between Rockgate and Mega Uranium Ltd. ("Mega") that was announced on June 6, 2013 (the "Mega Transaction"). Sprott U.S. Holdings, Inc., incorporating all US Sprott affiliates ("Sprott"), has also advised Denison that it currently intends to recommend to its clients (who hold approximately 11.2% of the shares of Rockgate) that they vote against the Mega Transaction. Denison President and Chief Executive Officer, Ron Hochstein, commented, "We believe that the Offer represents a superior alternative for Rockgate shareholders. Following the announcement of the Mega Transaction, Denison was contacted by several of Rockgate's largest shareholders who were unhappy with the Mega Transaction. For its part, Denison had previously viewed Rockgate's Falea asset as a compelling potential addition to its own African uranium portfolio. We therefore welcomed the opportunity given by key Rockgate shareholders to assist in undertaking this Offer. This acquisition does not signal a reduced focus on the Athabasca Basin for Denison, but instead is intended to result in a stronger Denison African asset base, in pursuit of an eventual spin-out of that portfolio. With this transaction, Rockgate shareholders will enjoy exposure to not only a broadened African asset portfolio, but also to Denison's extensive Athabasca Basin portfolio." Upon the completion of the Offer, Denison intends to undertake an evaluation of the merits of a spin-out into a new company of Denison's African assets including its Mutanga development project in Zambia, its exploration joint ventures with Rio Tinto in Namibia, as well as Rockgate's Falea project in Mali. Any such transaction would allow Denison to focus on its Athabasca Basin uranium exploration and development assets, while continuing to provide diversification to Denison and Rockgate shareholders alike. The timing and structure of any such subsequent transaction will be decided in the context of prevailing market conditions and optimal financial considerations. Reasons to Accept the Offer Denison believes that Rockgate shareholders will enjoy the following significant benefits from the Offer: -- Significant Premium - The Offer represents a premium of approximately 47% over the closing price of $0.155 per Rockgate share on the TSX, and a premium of 38% based on the trailing 20 day VWAP of both companies on the TSX as of September 16, 2013; -- Premium to Implied Mega Offer - The Offer represents a 38% premium over the Mega Transaction exchange ratio based on the closing prices on the TSX as of September 16, 2013; -- Superior Asset Value Recognition - Based on its closing share prices during the trailing three months as of September 16, 2013, Rockgate has not attained a market capitalization in excess of its June 30, 2013 net cash value per share; -- Major Shareholder Rejection of the Mega Transaction - Denison has been advised by holders of 31.5% of the Rockgate shares outstanding that they will vote against the Mega Transaction. Sprott has also advised Denison that it currently intends to recommend to its clients (who hold approximately 11.2% of the shares of Rockgate) that they vote against the Mega Transaction; -- Premier Uranium Exploration Company - The opportunity for Rockgate shareholders to participate in the assets of Denison, which include a best-in-class pipeline of advanced exploration, development and capital assets in the Athabasca Basin, including the Wheeler River Project, as well as the Mutanga Project in Zambia; -- Superior Capital Markets Presence - Rockgate shareholders to benefit from larger scale (Denison's market capitalization is $549 million as of September 16, 2013), superior trading liquidity (Denison's three month average daily trading value in Canada and the United States is $3.5 million per day), and increased research analyst coverage (11 research analysts actively cover Denison); -- Superior African Synergies - Denison's African and global exploration team is more complementary to Falea's development than what is offered by the Mega Transaction; -- Business Activity Alignment - Denison's active business is the exploration and development of uranium projects, which better complements Rockgate's asset base as compared to Mega's primary business activity of holding small-cap uranium equity investments. Denison offers Rockgate shareholders the added potential benefit from any future increases in value associated with the continued exploration and development of Denison's current portfolio of assets; and -- Reduced Exposure to Third-Party Equity Risk - Mega's underlying asset valuation is heavily influenced by the potential success and liquidity of externally operated portfolio holdings, in particular that of Toro Energy Ltd. of Australia as a result of a transaction announced by Mega on August 12, 2013. About the Offer A summary of the terms of the Offer will be published in newspaper advertisements in the national edition of the Globe and Mail and in La Presse on September 19, 2013. Full details of the Offer will be included in the formal offer and takeover bid circular, which is expected to be filed on September 19, 2013 with securities regulatory authorities (together with all related documents) and will be available under Rockgate's profile on SEDAR. The Offer will remain open until 4:00 p.m. Toronto time on October 25, 2013, unless otherwise withdrawn or extended by Denison. Denison will be making a formal request for the list of Rockgate shareholders from Rockgate and expects to mail the offer circular to Rockgate's shareholders as soon as reasonably practicable following receipt of such shareholder list. The Offer will be subject to certain customary conditions, including confirmation to the satisfaction of Denison that the Rockgate shareholder rights plan will not adversely affect the Offer. Denison intends to apply to the British Columbia Securities Commission immediately after the Offer is commenced for an order that Rockgate's shareholder rights plan be rendered inapplicable to the Offer. Other conditions will include acceptance of the Offer by Rockgate shareholders owning not less than 90 percent of Rockgate's outstanding shares on a fully-diluted basis, receipt of all necessary regulatory approvals, no material adverse change in Rockgate and other conditions customary for transactions of this nature. The Offer will not be subject to any financing condition or Denison shareholder approval.