TORONTO (miningweekly.com) – Canadian uranium-miner Denison Mines has entered into a new long-term sales contract for uranium produced at the firm's US and Canadian operations, it announced on Monday.

Denison will supply a total of one-million pounds of yellowcake to an unnamed customer over a period of five years, starting in 2011.

The company said the contract prices the uranium through a combination of an escalated base price and published market price indicators at the time of delivery, subject to escalated floors and ceilings.

The firm already has three other long-term sales contracts in place, and is in talks with more prospective clients, it said.

“Denison will continue to enter into similar long-term uranium sales contracts with nuclear utilities world-wide at prices which will support the continued development of its uranium reserves and resources and the operation of its uranium production facilities,” said CEO Peter Farmer.

Earlier this month, Denison announced it had agreed to sell 20% of its uranium output from 2010 to Korea Electric Power Corporation, which will also buy a 19,9% stake in the miner.

Denison has uranium mining assets in the US and Canada, as well as exploration properties in Zambia and Mongolia, and the firm has been hard hit by recent falls in prices for the nuclear fuel, prompting it to close some higher-cost mines in the US.

Uranium spot prices have declined to just $42/lb, which puts pressure on companies like Denison to secure longer-term, better-priced sales contracts.

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