The standard is effectivefor the Company's 2009 fiscal year, commencing January 1, 2009 and isrequired to be applied retrospectively without restatement to priorperiods. The adoption of this pronouncement did not have a materialimpact on the valuation of the Company's financial assets or financialliabilities.c) In March 2009, the CICA issued an EIC Abstract on Impairment Testingof Mineral Exploration Properties, EIC 174. This abstract discusses theanalysis recommended to be performed to determine if there has been animpairment of mineral exploration properties. The Company considered therecommendations discussed in the Abstract effective for fiscal periodsbeginning January 1, 2009 when testing for impairment of mineralproperties in the period and no impairment adjustments were required.INTERNATIONAL FINANCIAL REPORTING STANDARDSIn February 2008, the Canadian Accounting Standards Board ("AcSB")announced that changeover for publicly-listed companies to adopt IFRS,replacing Canada's own GAAP, will be effective for interim and annualfinancial statements relating to fiscal years beginning on or afterJanuary 1, 2011. There was no impact to the Company's financial statementsfrom the adoption of this standard.b) In January 2009, the CICA issued EIC 173 "Credit Risk and the FairValue of Financial Assets and Financial Liabilities" which requires theentity to consider its own credit risk as well as the credit risk of itscounterparties when determining the fair value of financial assets andliabilities, including derivative instruments. Thisstandard is effective for fiscal years beginning on or after October 1,2008 and requires retroactive application to prior period financialstatements.

Any system of internal controlover financial reporting, no matter how well designed, has inherentlimitations. Total gross proceeds under this MOUis CDN$94,900,000.OFF-BALANCE SHEET ARRANGEMENTSThe Company does not have any off-balance sheet arrangements.TRANSACTIONS WITH RELATED PARTIESThe Company is a party to a management services agreement with UPC. At March 31, 2009, no amount was due tothis company.OUTSTANDING SHARE DATAAt May 13, 2009, there were 226,045,415 common shares issued andoutstanding, stock options outstanding to purchase a total of 5,581,350common shares and warrants outstanding to purchase a total of 9,564,915common shares, for a total of 241,191,680 common shares on afully-diluted basis.MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTINGOur management is responsible for establishing and maintaining adequateinternal control over financial reporting. The MOU with KEPCOalso stipulates that entities nominated by or affiliated with Denison'schairman and interim CEO, Lukas Lundin, will acquire approximately15,000,000 common shares at CDN$1.30. The facility is subject to a standby fee of60 to 75 basis points depending upon the ratio. A standby fee of 75 basispoints applies in all circumstances where the amounts drawn under thefacility are less than $62,500,000.

As of the date hereof, the Company isin compliance with all covenants.Based on the Company's current financial projections, a breach of thetotal net debt to EBITDA covenant is possible by the fourth quarter of2009 (see note 1 to the consolidated financial statements).In April 2009, the Company entered into a non-binding memorandum ofunderstanding ("MOU") with Korea Electric Power Corporation ("KEPCO") toissue 58,000,000 common shares at a price of CDN$1.30. The margin used is between 75 and 275 basis points depending onthe credit instrument used and the magnitude of the net total debt toEBITDA ratio (the "ratio"). EBITDA is calculated on a rolling four quarters'basis commencing with the third quarter 2008;- Minimum interest coverage ratio of 3.0 to 1.0 using rolling EBITDA androlling interest expense for each fiscal quarter starting with the fiscalquarter ending December 31, 2008; and- Minimum current ratio of 1.1 to 1.0.Interest payable under the facility is bankers' acceptance rate or LondonInterbank Offered Rate ("Libor") plus a margin or prime rate plus amargin. The borrower underthe facility is DMI and the Company has provided an unlimited fullrecourse guarantee and a pledge of all of the shares of DMI. DMI hasprovided a first-priority security interest in all present and futurepersonal property and an assignment of its rights and interests under allmaterial agreements relative to the McClean Lake and Midwest projects. The increase in trade and other receivables is primarily theresult of the timing of uranium sales in the period. The increase ininventories consists primarily of the increase in ore in stockpile, workin progress and finished goods.

The decrease in accounts payable andaccrued liabilities is the result of decreased activity in the period.Net cash used in investing activities was $7,979,000 consisting primarilyof expenditures on property, plant and equipment of $10,372,000 andproceeds from investment sales of $3,222,000.Net cash from financing activities consisted of $496,000 from debtobligations and $36,927,000 from the issue of common shares.In total, these sources and uses of cash resulted in a net cash outflowafter the effect of foreign exchange of $701,000 during the quarter.The Company has in place a $125,000,000 revolving term credit facility.The facility is repayable in full on June 30, 2011. Net cash from operating activities iscomprised of net income for the period, adjusted for non-cash items andfor changes in working capital items. Significant changes in workingcapital items during the period include an increase of $11,217,000 intrade and other receivables, an increase of $10,518,000 in inventories,and a decrease in accounts payable and accrued liabilities of$11,427,000. There is no exploration or other developmentactivities planned for 2009.LIQUIDITY AND CAPITAL RESOURCESCash and cash equivalents were $2,505,000 at March 31, 2009 compared with$3,206,000 at December 31, 2008. The decrease of $701,000 was dueprimarily to expenditures of $10,372,000 for property, plant andequipment, and cash used in operations of $30,005,000 financed byproceeds from investment sales of $3,222,000 and the issue of new commonshares of $36,927,000.Net cash used in operating activities was $30,005,000 during the threemonths ended March 31, 2009. This document, along with an Environmental Report,will form the basis for the mining application which will be submittedshortly thereafter. In April 2009, the GSJV exploration licences were extendedfor a three-year period.ZambiaBased on the results of the alkaline leach pilot plant test work and heapleach test work, which was undertaken in parallel with the pilot plantwork, a decision has been made to change the processing flow sheet fromthe alkaline leach to an acid heap leach flowsheet.

The acid heap leachprovides similar recoveries to the alkaline leach, but at much lowercapital and operating cost. The acid leach is also more flexible giventhe distance between the Mutanga and Dibwe orebodies.Denison will be completing a feasibility study on the heap leach in thesecond quarter 2009. OnDenison's operated and non-operated projects, a total of approximately25,000 metres of drilling was carried out this winter. Near the McCleanmill, joint venture partner ARC is operator of the Midwest, Wolly,Waterfound and McClean projects, where 74 holes totaling approximately18,640 metres in aggregate were drilled.