TORONTO (CP) -- The CEO of Denison Mines Corp. [AMEX:DNN; TSX:DML] lamented stock market conditions on Friday as investors pummelled the uranium producer despite second-quarter results that showed a swing firmly into the black due to significant asset sales and higher revenue.
The Toronto-based company, which reports in U.S. dollars, earned almost $41 million in profit for the three months ended June 30, versus a net loss of $3 million last year.
The bulk of the black ink recorded in the quarter came from net asset sales of almost $38 million - primarily the disposition of Denison's stake in Fortress Minerals Corp. for $29 million and other portfolio investments for $16.5 million.
For the quarter, Denison revenues were just shy of $19 million, compared with just $2,000 in 2006, but expenses jumped to $18 million from $4.5 million last year.
Investors appeared unimpressed with the results, as Denison share prices, which have shed about 40% of their value in the last three or four months, plunged 4% Friday in heavy selling.
Denison stock closed at C$9.38 the Toronto Stock Exchange, a loss of 41 cents or 4%.
''I desperately hope that we get through this terrible market situation as far as the stock market is concerned,'' CEO Peter Farmer said on a conference call from Saint John, N.B.
''It always surprises me when you have a company that's stronger than it's ever been and yet the stock price today ... is some 40 odd percent lower than we were earlier in the year (but) we are strong and we're moving forward to get stronger.''
Second-quarter profits amounted to 21 cents a share, as opposed to a loss of three cents per share in the same period of 2006.
Quarterly revenues totalled $15 million from the sale of 145,000 pounds of uranium-3O8.
Sales from Canadian production from the McClean Lake joint venture amounted to 70,000 pounds, at an average price of $80.51 per pound. U.S. production totalled 75,000 pounds at an average price of $130 per pound.
Spot prices for U308 reached $136 a pound at the end of June, up sharply from $95 three months earlier, but have since fallen back to about $110.
''We've always considered 2007 as the year for building Denison for a prosperous future in a dynamic uranium market primarily by setting the stage for rapidly increasing uranium production,'' Farmer said.
Denison expected to see production soar from about 705,000 pounds this year to more than 3.5 million pounds next year and higher than 5 million in 2011.
To prepare for the extra production, Denison has acquired the Kariba project in Zambia, is moving forward with projects in Mongolia, has reopened a mine in Colorado and is rehabilitating another in Utah for $15 million, he said.
The company is essentially debt-free and has about $60 million in cash, Farmer said.
Denison has mining assets in the Athabasca Basin region of Saskatchewan and the southwestern United States including Colorado, Utah, and Arizona, as well as ownership interests in two of the four uranium mills now operating in North America.
Also in the quarter, Denison bought shares leading to the takeover of Australia's OmegaCorp Ltd. and now owns 96% of its outstanding shares and plans to buy the remaining shares as soon as possible.
(c) The Canadian Press 2007
