UPDATE 1-Denison says Midwest JV delayed, suspends mine in Utah

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Nov 25 (Reuters) - Uranium producer Denison Mines (DML.TO) said it postponed a Midwest joint venture and temporarily shut a mine in Utah due to rising costs and delays amid a weak economy, and added it was 'significantly' cutting its exploration budgets in 2009.

Capital costs associated with the Midwest project, which include venture partners AREVA Resources Canada Inc and OURD Co, have increased about 50 percent from previous estimates of C$435 million canadian dollars ($352.8 million), the company said.

Denison, which operates uranium mines in Canada and southwest United States and also owns properties in Mongolia and Zambia, said the status of Midwest venture will be reviewed every six months.

Operations at the company's Tony M mine in Utah will also be suspended resulting in a cut of about 200,000 pounds in Denison's U.S uranium production for 2009.

However, the company added that its 2009 Canadian production will remain unaffected.

The Tony M mine will resume production when uranium prices improve or when it is able to obtain favorable contracts from customers, the company said.

For 2009, exploration expenditures are estimated to be C$5.1 million in Canada and $1.6 million in the U.S.

Shares of the company, which have fallen 86 percent in the past year as demand for uranium has faltered recently, were down a further 14 percent, at C$1.16 in early trade on the Toronto Stock Exchange. (Reporting by Santosh Nadgir in Bangalore; Editing by Vikram S Subhedar)