Denison Mines : 2022 First Quarter Report

MANAGEMENT'S DISCUSSION & ANALYSIS

FOR THE THREE MONTHS ENDED

MARCH 31, 2022

TABLE OF CONTENTS

Q1 2022 PERFORMANCE HIGHLIGHTS 2

ABOUT DENISON 3

RESULTS OF OPERATIONS 4

Wheeler River Uranium Project 6

LIQUIDITY AND CAPITAL RESOURCES 15

OUTLOOK FOR 2022 19

ADDITIONAL INFORMATION 20

CAUTIONARY STATEMENT REGARDING FORWARD‐LOOKING STATEMENTS 21

This Management's Discussion and Analysis ('MD&A') of Denison Mines Corp. and its subsidiary companies and joint arrangements (collectively, 'Denison' or the 'Company') provides a detailed analysis of the Company's business and compares its financial results with those of the previous year. This MD&A is dated as of May 4, 2022 and should be read in conjunction with the Company's unaudited interim condensed consolidated financial statements and related notes for the three months ended March 31, 2022. The unaudited interim condensed consolidated financial statements are prepared in accordance with International Financial Reporting Standards ('IFRS') as issued by the International Accounting Standards Board ('IASB'), including IAS 34, Interim Financial Reporting. Readers are also encouraged to consult the audited consolidated financial statements and MD&A for the year ended December 31, 2021. All dollar amounts in this MD&A are expressed in Canadian dollars, unless otherwise noted.

Additional information about Denison, including the Company's press releases, quarterly and annual reports, Annual Information Form and Form 40-F is available through the Company's filings with the securities regulatory authorities in Canada atwww.sedar.com('SEDAR') and the United States at www.sec.gov/edgar.shtml ('EDGAR').

Q1 2022 PERFORMANCE HIGHLIGHTS

•  Commenced the 2022 In Situ Recovery ('ISR') field program at the Phoenix uranium deposit ('Phoenix')

  The Company's ambitious 2022 evaluation plan for the Wheeler River Project ('Wheeler River' or the 'Project') is designed to further de-risk the technical elements of the Phoenix ISR project ahead of the completion of the Feasibility Study ('FS') initiated for the project in late 2021. Key to the 2022 plan is the completion of additional field programs (the '2022 Field Program'), including the installation of additional PQ test wells in multiple three-spot test patterns to be used to assess the ISR mining conditions in additional areas of the Phoenix deposit, as well as the completion of a Feasibility Field Test ('FFT'). Efforts in support of the 2022 Field Program commenced in the first quarter, including initial mobilization of necessary equipment to the Wheeler River site, the collaring of the PQ wells, and the drilling of six of the nine planned PQ wells.

•  Obtained regulatory approval for the expansion of the McClean Lake Tailings Management Facility ('TMF')

  In January 2022, the Canadian Nuclear Safety Commission ('CNSC') approved an amendment to the operating license for the McClean Lake Joint Venture ('MLJV') and Midwest Joint Venture ('MWJV') operations, which allows for the expansion of the McClean Lake TMF, along with the associated revised Preliminary Decommissioning Plan ('PDP') and cost estimate. The McClean Lake mill is a strategically significant asset in the Athabasca Basin region and the approval of the TMF expansion ensures the facility will be well positioned to serve as a regional milling centre for current and future uranium mining projects in the eastern portion of the Athabasca Basin for many years to come.

  As a result of the updated PDP, the Company's pro rata share of the financial assurances required to be provided to the Province of Saskatchewan has decreased from $24,135,000 to $22,972,000. Accordingly, subsequent to quarter end, the pledged amount of cash required under the 2022 Facility has been decreased to $7,972,000, and the Company's additional cash collateral of $135,000 has been released - resulting in the return of $1,163,000 in previously restricted cash to the Company. Additionally, the Company's reclamation obligation has been updated to reflect the PDP, as well as other relevant estimates, resulting in a decrease in the obligation of $3,303,000.

•  Discovered high-grade uranium mineralization at 24.68% owned Waterfound River Joint Venture ('Waterfound')

  In March 2022, multiple new high-grade intercepts of unconformity-hosted uranium mineralization were discovered in the final three drill holes completed during the winter 2022 exploration program at Waterfound. The results were highlighted by drill hole WF-68, which returned a broad zone of uranium mineralization, including a peak interval of 5.91% eU3O8 over 3.9 metres (0.05% eU3O8 cut-off) with a sub-interval grading 25.30% eU3O8 over 0.7 m, located approximately 800 metres west, along the La Rocque Conductive Corridor, of the previously discovered high-grade mineralization (including 4.49% U3O8 over 10.53 metres) at the Alligator Zone. The newly identified mineralization remains open along strike in both directions and additional drilling to test the extent of mineralization is expected to be completed during the planned summer exploration drilling program.

•  Received US$2.1 million from Uranium Industry a.s ("UI") pursuant to new Repayment Agreement

  During the first quarter of 2022, the Company received US$2.1 million from UI pursuant to the terms of a Repayment Agreement that was executed in January 2022. Under the Repayment Agreement, UI has agreed to make scheduled payments on account of an arbitration award in favour of Denison (with respect to the arbitration proceedings between the Company and UI related to the 2015 sale by Denison to UI of its mining assets and operations located in Mongolia), plus additional interest and fees. The total amount due to Denison under the Repayment Agreement, including amounts already received in 2022, is approximately US$16 million, which is payable over a series of quarterly installments and annual milestone payments ending on December 31, 2025.

•  Welcomed new additions to the Board of Directors and the Management Team

  In January 2022, Ms. Laurie Sterritt was appointed to Denison's Board of Directors and Mr. Kevin Himbeault was appointed to the position of Vice President of Plant Operations & Regulatory Affairs. Ms. Sterritt has over 25 years of experience in the fields of Indigenous, government, and community relations, is a member of the Kispiox Band of the Gitxsan Nation, and is a Partner at Leaders International, an executive search firm in Canada. Mr. Himbeault has over 25 years of diverse involvement in the mining industry, including an 18-year career with Cameco Corporation ('Cameco') where he most recently held the position of Operations Manager for the Key Lake mill. Mr. Himbeault will be tasked with oversight of all matters related to process plant operations and regulatory affairs for Denison.

  Additionally, in February 2022, Mr. Yun Chang Jeong joined the Board of Directors as a nominee of Korea Hydro 2

Nuclear Power ('KHNP') pursuant to the KHNP Strategic Relationship Agreement ('KHNP SRA'). Mr. Jeong currently serves as the General Manager of the Nuclear Fuel Supply Section of KHNP, and fills the vacancy on Denison's Board created by the resignation of KHNP's previous nominee, Mr. Jun Gon Kim.

ABOUT DENISON

Denison Mines Corp. was formed under the laws of Ontario and is a reporting issuer in all Canadian provinces and territories. Denison's common shares are listed on the Toronto Stock Exchange (the 'TSX') under the symbol 'DML' and on the NYSE American exchange under the symbol 'DNN'.

Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. The Company has an effective 95% interest in its flagship Wheeler River Uranium Project, which is the largest undeveloped uranium project in the infrastructure rich eastern portion of the Athabasca Basin region of northern Saskatchewan. A Pre-Feasibility Study ('PFS') was completed for Wheeler River in late 2018, considering the potential economic merit of developing Phoenix as an ISR operation and the Gryphon deposit as a conventional underground mining operation. Denison's interests in Saskatchewan also include a 22.5% ownership interest in the MLJV, which includes several uranium deposits and the McClean Lake uranium mill, which is contracted to process the ore from the Cigar Lake mine under a toll milling agreement (see RESULTS OF OPERATIONS below for more details), plus a 25.17% interest in the Midwest Main and Midwest A deposits and a 66.90% interest in the Tthe Heldeth Túé ('THT,' formerly J Zone) and Huskie deposits on the Waterbury Lake property. The Midwest Main, Midwest A, THT and Huskie deposits are located within 20 kilometres of the McClean Lake mill.

Through its 50% ownership of Japan (Canada) Exploration Company, Ltd ('JCU'), Denison holds additional interests in various uranium project joint ventures in Canada, including the Millennium project (JCU, 30.099%), the Kiggavik project (JCU, 33.8123%) and Christie Lake (JCU, 34.4508%).

Denison's exploration portfolio includes further interests in properties covering approximately 297,000 hectares in the Athabasca Basin region.

Denison is also engaged in mine decommissioning and environmental services through its Closed Mines group, which manages Denison's Elliot Lake reclamation projects and provides third-party post-closure mine care and maintenance services.

SELECTED FINANCIAL INFORMATION

(in thousands)	2021
Financial Position:
Cash and cash equivalents	$	63,998
Working capital(1)	$	76,785
Investments in uranium	$	133,114
Property, plant and equipment	254,462
Total assets	510,284
Total long-term liabilities(2)	97,242

253,377 562,698 71,625

As at March 31, 2022
$	65,290
$	77,960
$	180,870
$	253,377
$	562,698
$	71,625

As at

December 31,

$ $ $

• (1) Working capital is a non-IFRS financial measure and is calculated as the value of current assets less the value of current liabilities, excluding non-cash current liabilities (i.e., working capital at March 21, 2022 excludes $27,755 in non-cash current liabilities from the current portion of deferred revenue, warrants on investments, and share purchase warrant liabilities). At March 31, 2022, the Company's working capital includes $18,615,000 in portfolio investment (December 31, 2021 - $14,437,000 in portfolio investments).

• (2) Predominantly comprised of the non-current portion of deferred revenue, non-current reclamation obligations, and deferred income tax liabilities.

SELECTED QUARTERLY FINANCIAL INFORMATION

2021	2021	2021
(in thousands, except for per share amounts)	Q1	Q4	Q3	Q2
Total revenues	$	4,125	$	3,337	$	9,541 $	4,626
Net earnings (loss)	$	42,623	$	(2,648)	$	32,866 $	(2,357)
Basic and diluted earnings (loss) per share	$	0.05	$	(0.01)	$	0.04 $	(0.00)
2021	2020	2020	2020
(in thousands, except for per share amounts)	Q1	Q4	Q3	Q2
Total revenues	$	2,496	$	4,094	$	2,743 $	2,926
Net loss	$	(8,884)	$	(3,095)	$	(5,482) $	(1,043)
Basic and diluted loss per share	$	(0.01)	$	(0.01)	$	(0.01) $	(0.00)

2022

Significant items causing variations in quarterly results

•  The Company's toll milling revenues fluctuate due to the timing of uranium processing at the McClean Lake mill, as well as changes to the estimated mineral resources of the Cigar Lake mine. Toll milling at McClean Lake was suspended during the first and beginning of the second quarters of 2021, due to the suspension of mining at the Cigar Lake mine as a result of the COVID-19 pandemic ('COVID-19'). See RESULTS OF OPERATIONS below for further details.

•  Revenues from the Closed Mines group fluctuate due to the timing of projects, which vary throughout the year in the normal course of business.

•  Operating expenses fluctuate due to the timing of projects at both the MLJV and the Closed Mines group, which vary throughout the year in the normal course of business.

•  Exploration expenses are generally largest in the first and third quarters, due to the timing of the winter and summer exploration seasons in northern Saskatchewan. However, the 2021 summer exploration program commenced in mid-September and continued into the fourth quarter of 2021 due to the timing of the 2021 ISR field program.

•  Other income and expense fluctuates due to changes in the fair value of the Company's portfolio investments, share purchase warrants, and uranium investments, all of which are recorded at fair value through profit or loss and are subject to fluctuations in the underlying share / commodity price. The Company's uranium investments and certain of its share purchase warrants are also subject to fluctuations in the US dollar to Canadian dollar exchange rate.

•  The Company's results are also impacted, from time to time, by other non-recurring events arising from its ongoing activities, as discussed below where applicable.

RESULTS OF OPERATIONS

REVENUES

McClean Lake Uranium Mill

McClean Lake is located on the eastern edge of the Athabasca Basin in northern Saskatchewan, approximately 750 kilometres north of Saskatoon. Denison holds a 22.5% ownership interest in the MLJV and the McClean Lake uranium mill, one of the world's largest uranium processing facilities, which is contracted to process ore from the Cigar Lake mine under a toll milling agreement. The MLJV is a joint venture between Orano Canada Inc. ('Orano Canada') with a 77.5% interest and Denison with a 22.5% interest.

In February 2017, Denison closed an arrangement with Anglo Pacific Group PLC ('APG') and one of its wholly owned subsidiaries (the 'APG Arrangement') under which Denison received an upfront payment of $43,500,000 in exchange for its right to receive future toll milling cash receipts from the MLJV under the current toll milling agreement with the Cigar Lake Joint Venture ('CLJV') from July 1, 2016 onwards. The APG Arrangement consists of certain contractual obligations of Denison to forward to APG the cash proceeds of future toll milling revenue earned by the Company related to the processing of the specified Cigar Lake ore through the McClean Lake mill, and as such, the upfront payment was accounted for as deferred revenue.

In response to the COVID-19 pandemic, the CLJV temporarily suspended production at the Cigar Lake mine from the end of March 2020 until September 2020, and then again from the end of December 2020 until April 2021. The MLJV temporarily suspended operations at the mill for the duration of the CLJV shutdowns. As noted above, Denison sold the toll milling revenue to be earned from the processing of the Cigar Lake ore pursuant to the APG Arrangement. While the temporary suspension of operations at the McClean Lake mill resulted in a decrease in revenue recognized by Denison, the impact was non-cash and was limited to a reduction in the drawdown of the Company's deferred revenue balance.

During the three months ended March 31, 2022, the McClean Lake mill processed 3.7 million pounds U3O8 for the CLJV (March 31, 2021 - nil pounds U3O8 ) and Denison recorded toll milling revenue of $2,471,000 (March 31, 2021 - $137,000). The increase in toll milling revenue in the current quarter, as compared to the prior year, is due to the temporary shutdown of the mill in the prior year in response to the COVID-19 pandemic. Additionally, a $1,444,000 non-cash cumulative accounting adjustment was recorded in the current quarter, which was predominantly driven by a change in the estimated timing of the milling of the Cigar Lake ore following an announcement from the operators of the Cigar Lake mine that mine production would be reduced from previous planned amounts of 18 million pounds U3O8 per year to 15 million pounds U3O8 per year in 2022 and 2023, and then to 13.5 million pounds U3O8 per year thereafter. Under IFRS 15, Revenue from Contracts with Customers, the change in the estimated timing of the toll milling of the CLJV ores resulted in an increase to the implied financing component of the toll milling transaction, thus increasing the total deferred revenue to be recognized over the life of the toll milling contract as well as the deferred revenue drawdown rate. The updated drawdown rate has been applied retrospectively to all pounds produced for the CLJV since the inception of the APG arrangement in July 2016, resulting in the current period true-up.

During the three months ended March 31, 2022, the Company also recorded accounting accretion expense of $442,000 on the toll milling deferred revenue balance (March 31, 2021 - $754,000). While the annual accretion expense will decrease over the life of the contract as the deferred revenue liability decreases over time, the decrease in accretion expense in the first quarter of 2022, as compared to the prior year, was predominantly due a $297,000 true up recorded to reduce the life-to-date accretion expense recognized due to the change in timing in the estimated CLJV toll milling activities discussed above.

Closed Mine Services

Post-closure mine care and maintenance services are provided through Denison's Closed Mines group, which has provided long-term care and maintenance for closed mine sites since 1997. With offices in Ontario and Quebec, the Closed Mines group manages Denison's Elliot Lake reclamation projects and provides related services for certain third-party projects.

Revenue from Closed Mines services during the three months ended March 31, 2022 was $1,654,000 (March 31, 2021 - $1,744,000). The decrease in revenue in the first quarter of 2022, as compared to 2021, was due to a customer contract that was not renewed for 2022.

Management Services Agreement with UPC

Prior to July 19, 2021, Denison provided general administrative and management services to Uranium Participation Corp. ('UPC'), for which Denison earned management fees and commissions on the purchase and sale of uranium holdings. In April 2021, UPC announced that it had entered into an agreement with Sprott Asset Management LP ('Sprott') to convert UPC into the Sprott Physical Uranium Trust. This transaction closed on July 19, 2021, and the management services agreement ('MSA') between Denison and UPC was terminated. Accordingly, the Company had no revenue from UPC in 2022 (March 31, 2021 - $615,000).

OPERATING EXPENSES

Mining

Operating expenses of the mining segment include depreciation and development costs, as well as cost of sales related to the sale of uranium, when applicable. Operating expenses in the three months ended March 31, 2022 were $725,000 (March 31, 2021 - $295,000).

Included in operating costs is depreciation expense relating to the McClean Lake mill of $625,000 (March 31, 2021 - $nil), as a result of processing approximately 3.7 million pounds U3O8 for the CLJV (March 31, 2021 - nil pounds U3O8).