McClean Lake mill, Canada

In 2017, Ecora s provided Denison Mines Inc (‘Denison’) with a C$40.8m, 13-year loan bearing interest at a rate of 10% per annum. The interest payments are payable from the cash flows received by Denison from the toll revenue generated from its 22.5% interest in the McClean Lake Mill. In any period where the cash flow from the toll revenue exceeds the interest payment, the balance is received by Ecora as a repayment of principal. In any period where the cash flows are less than the interest, the interest will capitalise and be repaid out of cash flows in the following period. Any amounts outstanding at maturity are due and payable regardless of the cash generated from the toll. As the income from the toll revenue is based on a C$/lb of throughput, it is not sensitive to movements in the uranium price. As such, the Group’s cash flows will not alter with uranium price fluctuations. The risk to the Group’s cash flow is instead from any shut-down of the mine or the mill.

In addition to the loan, the Group also entered into a subsequent stream with Denison to purchase the entire share of its toll receipts received from Cigar Lake for C$2.7m. This allows for potential mine life extension at Cigar Lake.