In the Matter of Energy Fuels Inc., 2012 CanLII 28339

Headnote Multilateral Instrument 11-102 Passport System and National Policy 11-203 Process for Exemptive Relief applications in Multiple Jurisdictions – Exemption from requirements in subsection 4.11(4), 4.12(1) and 4.14(1) of National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards (NI 52-107) to reconcile acquisition statements to the issuer’s GAAP, permit the use of ISAs and to prepare the pro forma financial statements in accordance with issuer’s GAAP – The issuer wants relief from the requirement to include a reconciliation to Canadian GAAP in annual financial statements of the acquired business and to have those statements audited in accordance with Canadian or US GAAS – The issuer will prepare pro forma financial statements in accordance with the guidance set out in section 8.7(9) of Companion Policy 51-102CP as it applies to financial years beginning on or after January 1, 2011 for all periods presented.

Applicable Legislative Provisions

National Instrument 52-107 Acceptable Accounting Principles and Auditing Standards, s.5.1.

DATE: May 24, 2012

IN THE MATTER OF THE SECURITIES LEGISLATION OF ONTARIO (the “Jurisdiction”)

AND

IN THE MATTER OF THE PROCESS FOR EXEMPTIVE RELIEF APPLICATIONS IN MULTIPLE JURISDICTIONS

AND

IN THE MATTER OF ENERGY FUELS INC. (the “Filer”)

DECISION

Background

The principal regulator in the Jurisdiction has received an application from the Filer for a decision under the securities legislation of the Jurisdiction of the principal regulator (the “Legislation”) exempting the Filer from certain requirements in National Instrument 52-107 – Acceptable Accounting Principles and Auditing Standards (“NI 52-107”). Specifically, the Filer seeks the following relief:

(a) that the annual acquisition statements as at and for the year ended June 30, 2011 (the “White Canyon Financial Statements”) of White Canyon Uranium Limited (“White Canyon”) to be included in the information circular of the Filer (the “EFI Circular”) relating to a special meeting of shareholders (the “EFI Meeting”) to approve an issunace of securities in connection with a transaction between the Filer and Denison Mines Corp. (“Denison”) and in the Filer’s business acquisition report in respect of such transaction (the “EFI BAR”) may be audited in accordance with Australian Auditing Standards, which are the same as International Standards on Auditing (“ISA”) issued by the International Auditing and Assurance Standards Board (the “IAASB”) notwithstanding section 4.12(1) of NI 52-107;

(b) that the requirement under section 4.11(4) of NI 52-107 to reconcile acquisition statements to the issuer’s generally accepted accounting principles (“GAAP”) does not apply to the White Canyon Financial Statements and to the annual acquisition statements as at and for the year ended December 31, 2011 (the “DMHC Financial Statements”) of Denison Mines Holdings Corp. (“DMHC”); and

(c) that the pro forma statements of the Filer to be included in the EFI Circular and the EFI BAR be prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”).

Under the Process for Exemptive Relief Applications in Multiple Jurisdictions (for a passport application):

1. the Ontario Securities Commission is the principal regulator for this application; and

2. the Filer has provided notice that section 4.7(1) of Multilateral Instrument 11-102 Passport System (“MI 11-102”) is intended to be relied upon in British Columbia, Alberta, Saskatchewan and Manitoba, except Ontario.

Interpretation

Terms defined in National Instrument 14-101 Definitions and MI 11-102 have the same meaning if used in this decision, unless otherwise defined.

Representations

This decision is based on the following facts represented by the Filer:

The Filer and Other Parties to the Proposed Transaction

1. The Filer’s head office is located at 2 Toronto Street, Suite 500, Toronto, Ontario M5C 2B6.

2. The Filer is a corporation existing under the Business Corporations Act (Ontario) (the “OBCA”).

3. The Filer is a reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba and Ontario. The common shares of the Filer are listed and posted for trading on the Toronto Stock Exchange (“TSX”) under the symbol “EFR”.

4. The Filer’s financial year end is September 30 of each year. DMHC’s financial year end is December 31 of each year. White Canyon’s financial year end is June 30 of each year.

5. Denison is a corporation existing under the OBCA.

6. Denison is a reporting issuer in each of the provinces of Canada and is not currently in default of the securities legislation in any of these jurisdictions as of the date hereof. The common shares of the Filer are listed and posted for trading on the TSX under the symbol “DML” and on the NYSE MKT LLC under the symbol “DNN”.

7. Denison holds all of the outstanding shares of White Canyon. Denison and White Canyon together hold all of the outstanding shares of DMHC.

8. DMHC is a corporation organized under the laws of Delaware that holds shares of various subsidiaries that operate Denison’s U.S. mining exploration and development business (the “US Mining Division”).

9. White Canyon is a corporation organized under the laws of Australia. White Canyon was previously listed on the Australian Stock Exchange (“ASX”) and was a reporting issuer in Alberta and British Columbia with a secondary listing on the TSX Venture Exchange (the “TSXV”).

10. Denison acquired approximately 96% of outstanding shares of White Canyon effective July 1, 2011 in a take-over transaction under Corporations Act 2001 (Australia) that was exempt from the formal bid requirements of Part XX of the Securities Act (Ontario) (the “Act”) pursuant to section 100.3 of the Act. Denison acquired the remaining shares of White Canyon on July 28, 2012 under the compulsory acquisition provisions of Australian corporate law.

11. Denison’s acquisition of White Canyon was not a significant acquisition for Denison for the purposes of Part 8 of National Instrument 51-102 – Continuous Disclosure Obligations (“NI 51-102”).

12. On September 1, 2011, as part of an internal reorganization, White Canyon transferred its operating subsidiary in the United States to DMHC for shares of DMHC. Since that date, White Canyon’s only material asset has been shares of DMHC, and White Canyon has no further material obligations or liabilities other than inter-company debt to the Filer or other of its subsidiaries.

13. Prior to the acquisition by Denison of White Canyon, White Canyon was a “designated foreign issuer” as defined in NI 52-107. Upon the completion of Denison’s acquisition of White Canyon, White Canyon terminated its listings on the ASX and the TSXV, and ceased to be a reporting issuer in any Canadian province.

The Proposed Transaction

14. On April 16, 2012, the Filer entered into a letter agreement (the “Letter Agreement”) with Denison to complete a transaction whereby the Filer will acquire from Denison all of the outstanding shares of DMHC held by Denison and all of the outstanding shares of White Canyon.

15. As consideration for the shares of DMHC and White Canyon, the Filer will issue 425,441,494 of its common shares (the “EFI Share Consideration”). In connection with the transaction, Denison will complete a corporate reorganization under a plan of arrangement pursuant to the OBCA. The plan of arrangement will provide that the EFI Share Consideration will be distributed to Denison’s shareholders on a pro rata basis as a return of capital by Denison.

16. Upon completion of the proposed transaction, the Filer will hold all of the shares of DMHC and White Canyon, and Denison’s shareholders will in aggregate own approximately 66.5% of the outstanding shares of the Filer.

17. Completion of the transaction is subject to the parties negotiating and entering into a definitive agreement, as well as other customary closing conditions.

18. The Filer will require shareholder approval under the rules of the TSX with respect to the issuance of the EFI Share Consideration, due to the number of shares of the Filer to be issued at the EFI Meeting.

19. Denison will require shareholder approval of the Arrangement under the OBCA. In that regard, Denison will seek such shareholder approval at a special meeting.

Financial Disclosure Requirements for the EFI Circular and the EFI BAR

20. Because the Filer will be distributing its securities to Denison’s shareholders in the transaction, the EFI Circular will require prospectus-level disclosure of Denison in accordance with Item 14.2 of Form 51-102F5.

21. The acquisition of DMHC and White Canyon by the Filer will be a significant acquisition for the Filer under Part 8 of NI 51-102. For this reason, certain annual audited and unaudited interim financial statements of the business to be acquired in the transaction, along with pro forma financial information of the Filer, will be required to be included in the EFI Circular and the EFI BAR.

22. The acquired business consists of the shares of DMHC held by Denison, and all of the White Canyon shares.

23. Because White Canyon and DMHC have only been under common control since June 2011, it will not be possible for the financial statements of DMHC and White Canyon to be presented on a combined basis under Section 8.4(8) of NI 51-102 for all periods for which acquisition statements will be required.

24. In accordance with Section 8.4 of NI 51-102, the financial statements relating to the Filer and the businesses to be acquired in the transaction to be included or incorporated by reference in the EFI Circular and the EFI BAR will include:

(a) audited annual financial statements of the Filer for the two years ended September 30, 2011, which statements were prepared in accordance with Canadian GAAP;

(b) unaudited interim financial statements of the Filer for the six month periods ended March 31, 2012 and 2011, which statements were prepared in accordance with IFRS;

(c) the DMHC Financial Statements, being annual financial statements of DMHC for the two years ended December 31, 2011, of which the statements as at and for the year ended December 31, 2011 will be audited, which statements are being prepared in accordance with IFRS;

(d) the White Canyon Financial Statements, being annual financial statements of White Canyon for the two years ended June 30, 2011, of which the statements as at and for the year ended June 30, 2011 will be audited, which statements have been prepared in accordance with IFRS;

(e) pro forma financial statements of the Filer for the periods ended September 30, 2011 and March 31, 2012, and a pro forma balance sheet of the Filer as at March 31, 2012 (the “Pro Forma Statements”).

In addition, interim financial statements of the acquired business, as well as financial statements relating to an earlier significant acquisition by the Filer, will be included or incorporated by reference in the EFI Circular and the EFI BAR.

25. White Canyon has prepared audited financial statements (the “WC Special Purpose Financial Statements”) for the two years ended June 30, 2011. The WC Special Purpose Financial Statements are special purpose financial statements to meet White Canyon’s statutory reporting requirements as a private company under the Corporations Act 2001 (Australia). The Special Purpose Financial Statements were prepared in accordance with IFRS; however they did not include all the note disclosure that would be required under IFRS for a public company.

26. Denison will supplement the note disclosure to the WC Special Purpose Statements to complete the White Canyon Financial Statements, so that such financial statements will be presented in full compliance with IFRS. The Filer will include the White Canyon Financial Statements in the EFI Circular and the EFI BAR.

27. White Canyon’s auditor is RSM Bird Cameron Partners (“RSM”), a member of RSM International, an international network of independent accounting and consulting firms around the world, with over 700 offices in 86 countries. RSM has represented to Denison that it has expertise and experience in ISA as adopted by the IAASB.

28. The WC Special Purpose Financial Statements were audited in accordance with Australian Auditing Standards. RSM has represented to Denison that Australian Auditing Standards are the same auditing standards as ISA as adopted by the IAASB. Accordingly, the WC Special Purpose Statements were audited in accordance with ISA.

29. RSM will update its audit in respect of the White Canyon Financial Statements, and such statements will be audited in accordance with Australian Auditing Standards.

30. The Filer will include in the EFI Circular and the EFI BAR clear disclosure as to the basis of presentation of the White Canyon Financial Statements and the DMHC Financial Statements (collectively, the “Acquisition Statements”) and the fact that the White Canyon Financial Statements have been audited in accordance with Australian Auditing Standards, which are equivalent to ISA.

31. The Pro Forma Statements will be prepared in accordance with the guidance in section 8.7(9) of Companion Policy 51-102CP as it applies to financial years beginning on or after January 1, 2011. As part of the preparation of the required Pro Forma Statements, the Filer will identify accounting policy differences between Canadian GAAP and IFRS that would potentially have a material impact and which could be reasonably estimated, and will describe such differences in the notes to the Pro Forma Statements in the course of describing the adjustments presented relating to the financial results of the Filer.

32. Paragraph 20 of Part 1 of the Assurance Handbook of the Canadian Institute of Chartered Accountants provides that the ISA issued by the IAASB have been adopted as Canadian Auditing Standards for audits of financial statements for periods ending on or after December 14, 2010.

33. Subsection 4.11(4) of NI 52-107 provides that if acquisition statements are prepared using accounting principles that are different from the issuer’s GAAP, the acquisition statements must, among other things, be reconciled to the issuer’s GAAP.

34. Subsection 4.12(1) of NI 52-107 provides that the acquisition statements for financial years beginning before January 1, 2011 must be audited in accordance with Canadian GAAS or U.S. GAAS. Although subsection 4.12(2) of NI 52-107 provides limited exceptions to the general requirements set out in subsection 4.12(1) of NI 52-107, the exceptions do not apply in the context of the acquisition of White Canyon.

35. Subsection 4.14(1) of NI 52-107 provides that pro forma financial statements must be prepared in accordance with the issuer’s GAAP.

36. The substance of the White Canyon Financial Statements have been audited in accordance with Australian Auditing Standards which are equivalent to ISA, being auditing standards that would be permitted under NI 52-107 if the White Canyon Financial Statements were in respect of a financial year beginning on or after January 1, 2011.

37. It would cause undue delay and expense to the Filer if the audit of the White Canyon Financial Statements had to be performed again under Canadian GAAS.

38. The Filer is seeking to present the most meaningful financial information to investors in the context of its transition to IFRS. The Filer believes that the presentation of the Acquisition Statements and the Pro Forma Statements to be included in the EFI Circular and the EFI BAR in IFRS would constitute higher quality financial information than if the Acquisition Statements are reconciled to, and the pro forma financial statements presented in, Canadian GAAP.

39. The Filer believes that the rationale for presenting the Acquisition Statements and the Pro Forma Statements in IFRS is supported by the facts that the Filer will have filed interim financial statements under IFRS for two fiscal quarters prior to the completion of the EFI Circular and the EFI BAR, and that interim financial statements regarding the Filer prepared in accordance with IFRS will be incorporated by reference in the EFI Circular and the EFI BAR.

40. The reconciliation requirement does not apply to the interim statements to be included or incorporated by reference in the EFI Circular and the EFI BAR as they relate to a financial year beginning on or after January 1, 2011.

41. Due to these facts, it is the Filer’s view that the relief sought herein is appropriate in the context of its transition to IFRS and would ultimately provide investors with the most meaningful financial information regarding the Filer and the business to be acquired in the transaction. The Filer believes that the reconciliation of the Acquisition Statements to Canadian GAAP will not present investors with any incremental or useful information.

Decision

The principal regulator is satisfied that the decision meets the test set out in the Legislation for the principal regulator to make the decision.

The decision of the principal regulator under the Legislation is that the Requested Relief is granted provided that:

1. the White Canyon Financial Statements to be included in the EFI Circular and the EFI BAR will have been prepared in accordance with IFRS and audited in accordance with ISA;

2. the White Canyon Financial Statements to be included in the EFI Circular and the EFI BAR are accompanied by an auditor’s report from the auditor of White Canyon, which contains or is accompanied by a statement by the auditor that:

(a) describes any material differences in the form and content of the auditor’s report as compared to an auditor’s report prepared in accordance with Canadian GAAS; and

(b) indicates that an auditor’s report prepared in accordance with Canadian GAAS would not contain a reservation; and

3. the Pro Forma Statements in the EFI Circular and the EFI BAR are prepared in accordance with the guidance in section 8.7(9) of Companion Policy 51-102CP as it applies to financial years beginning on or after January 1, 2011 for all periods presented.

“Lisa Enright”

Ontario Securities Commission