SPINOFF: Energy Fuels from Denison Mining

Issue: How do I enter the spinoff of Energy Fuels from Denison Mining?

Cause: Dennison Mining made a transaction with Energy Fuels that looks like a spin-off of Energy Fuels from Dennison Mining. This is not the case. Energy Fuels bought a portion of Denison Mining and essentially paid for the purchase with stock of Energy Fuels.

Information about this transaction can be found in IRS Form 8397. That form can be accessed at the Denison web site at the URL below.

http://www.denisonmines.com/s/SiteResources/data/MediaArchive/pdfs/investor_information/us%20shareholder%20tax%20information%20-%20form%208937.pdf

Resolution:

To get the tax consequences of this transaction correct this transaction will be split into 3 entries. The first is a return of capital transaction from Denison. The second is a buy transaction of the Energy Fuels shares received. The final transaction is a sale of any fractional shares of Energy Fuels.

The Return of Capital

Go to Transactions > Dividend or distribution or Accounting > Securities > Record cash dividend, depending on the version of the software being used.

Here is the information you need to complete the return of capital

Date: 6/29/2012

Amount : .206 x (Denison shares owned).

If you owned 100 Denison shares you would enter .206 x 100 = 20.60

Type: Return of capital

Cash received: See your broker statement for cash-in-lieu received

Select Security : Denison Mining

When you choose Return of capital as the Type the field Ex-Dividend Date should be unavailable for entry, greyed out.

Save the transaction and the return of capital has been entered.

Please note: If you purchased some Denison shares for less than the .206 per share of this return of capital, the program will correctly convert some of the return of capital into a capital gain. This fits the structure of this transaction.

The Energy Fuels Purchase

Here is the information you need to complete the purchase.

Date: 6/29/2012

Select Security : Energy Fuels

Shares Bought : 1.106 x (#of Denison Shares owned)

If you owned 100 Denison shares you would enter 1.106 x 100 = 110.60 shares

Total Purchase Price : 206 x (Denison shares owned).

If you owned 100 Denison shares you would enter .206 x 100 = 20.60. Yes the same amount as the return of capital from above.

Save the transaction and the buy has been entered.

The Sale of Fractional Shares

Here is the information you need to complete the fractional share sale

Date: 6/30/2012 (One day after the other transactions)

Select Security : Energy Fuels

Shares Sold : The fractional part of the shares purchased in the step above

If you owned 100 Denison shares you would enter .60, the fractional part of 110.60, the number of Energy Fuels shares received.

Sale Total : Check your broker statement for cash-in-lieu received. This will vary with each

shareholder.

Save the transaction and the sell has been entered.