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DENISON MINES (USA) CORPORATION <br />2006 ANNUAL REPORT ~~~~l~q/.~i~ <br />JAN 17 2p01 <br />Topaz Mine Permit M-1980-055 HR <br />Division of Reclamation, <br />Mining and Safety <br />As noted in the "Notice of Intent to Resume Operations" to the Division of Reclamation, <br />Mining and Safety (the "Division") dated July 13, 2006, operations have resumed at the <br />Topaz Mine. In September 2006, a mine development contractor was mobilized to the <br />site. After setting up mine services (power, compressed air, ventilation, etc.), the <br />contractor resumed underground exploration and development work at the Topaz site. <br />In September 2006, the Operator increased the reclamation surety at the Topaz Mine to <br />$38,433 from $22,689. The amount of the increase was based on the periodic review and <br />update of surety conducted by the Division. <br />All operations at the Topaz Mine are being conducted within the existing 110 Permit <br />Affected Area boundary. The Operator is preparing to submit an application to convert <br />110 Permit M-1980-055 HR to a 112 Permit in order to accommodate planned future <br />mine operations. <br />November 2, 2006 the Operator submitted a "Notice of Intent to Conduct Prospecting <br />Operations" in order to drill a hole to establish adequate ventilation for underground <br />exploration activities in the Topaz Mine. A reclamation surety of $7,488 was estimated <br />by the Division, and the Operator posted a bond in this amount. Site preparation work <br />was conducted in early December. <br />The Operator is assembling materials to submit an application to convert Topaz Mine 110 <br />Permit M-1980-055 HR to a 112 Permit. In association with this submittal, the Operator <br />will provide updated site maps to show expected future activities at the mine portal/yard <br />site as well as the addition of remote sites for ventilation shafts. The existing site maps 7 <br />on file with the Division remain current; the on-site contractor has not installed any <br />permanent facilities which will affect the current reclamation surety for the site. <br />