Denison Mines Corp. (TSX:DML) (NYSE MKT:DNN) (NYSE American:DNN) is pleased to announce an 88% increase in the Indicated Mineral Resources estimated for the Wheeler River project. Denison is also pleased to announce it has increased its interest in the Wheeler River project during 2017 from 60% to 63.3% in accordance with an agreement with its Wheeler River Joint Venture partners, as previously announced on January 10, 2017. The updated mineral resource estimate for Wheeler River is highlighted by a significant increase in the estimated mineral resources for the property’s basement-hosted Gryphon uranium deposit.
To view the Figures associated with this release, please visit the following link: http://media3.marketwire.com/docs/1106977_figs.pdf
Resource Update Highlights:
Wheeler River Property Mineral Resource Estimate Summary,
|including the updated mineral resource estimate for the Gryphon deposit|
|as of January30, 2018(the “Effective Date”)
|Million lbs U3O8
|Million lbs U3O8
David Cates, President and CEO of Denison commented, “This updated resource estimate for Gryphon marks an important milestone for the Wheeler River project – solidifying its ranking as the largest undeveloped uranium project in the infrastructure rich eastern Athabasca Basin, and positioning the project to be the next new mine developed in the region. The long-term fundamentals for the uranium mining business are certainly at the forefront of the market right now, with a series of production curtailments recently being announced. As a developer positioning to build a new mine for the next uranium bull market, we strongly believe that the ability to leverage existing infrastructure, and limit up-front costs and timelines to production, will make the difference in building and financing a new mine as the uranium market strengthens. This updated resource, is expected to bode well for our ongoing efforts related to the Wheeler River PFS, which is planned to be completed during 2018.”
Dale Verran, Vice President Exploration of Denison commented, “The results of this updated mineral resource estimate validates how the Gryphon deposit has continued to grow in size and confidence – having converted more than 100% of the inferred resources previously estimated for the A, B and C series lenses into indicated resources, and introducing an initial estimate of mineralization for the D and E series lenses. With over 97% of the total resources for the project classified as indicated, we have turned our focus in 2018 to step-out drilling where the Gryphon deposit offers numerous expansion opportunities – including along strike of the new D and E series lenses.”
The updated mineral resource estimate for the Gryphon deposit was prepared for the Company by RPA Inc. in accordance with CIM Definition Standards (2014) in National Instrument 43-101 – Standards of Disclosure for Mineral Projects.
Wheeler River Highlights
In addition, very little regional exploration has taken place on the property in recent years, with drilling efforts focussed on Phoenix and Gryphon, which were discovered in 2008 and 2014 respectively. The property is host to numerous uranium-bearing lithostructural corridors which are under- or unexplored and have the potential for additional large, high-grade unconformity or basement hosted deposits. Exploration drilling is warranted along these corridors to follow-up on previous mineralized drill results, or to test geophysical targets identified from past surveys.
Details of the Updated Mineral Resource Estimate for the Gryphon Deposit
Updated Mineral Resource Estimate
The Gryphon deposit was discovered in March 2014 and, following the completion of 66 drill holes (40,864 metres of drilling) on an approximate 50 x 50 metre spacing, a maiden resource estimate was completed by RPA in September 2015. The maiden estimate was comprised of Inferred Mineral Resources of 43.0 million pounds of U3O8 above a cut-off grade of 0.2% U3O8 (834,000 tonnes at 2.3% U3O8) and included the deposit’s A, B and C series lenses.
The updated mineral resource estimate, reported herein, was completed by RPA – a recognized independent consulting firm with significant resource estimation experience in high-grade Athabasca uranium deposits. For the updated mineral resource estimate, RPA used data collected from eight diamond drilling campaigns completed during the last four years, including a total of 117,788 metres of drilling in 210 drill holes. The updated mineral resource estimate includes the expanded A and B series lenses, C series lenses, and the recently delineated D and E series lenses, as detailed in the table below.
Mineral Resource Estimate for the Gryphon Deposit
|with an Effective Date of January 30,2017 (100% basis)
|Million lbs U3O8
Geology and Mineralization
The Gryphon uranium deposit occurs within southeasterly dipping crystalline basement rocks of the Wollaston Supergroup below the regional sub-Athabasca Basin unconformity. The deposit is located from 520 to 850 metres below surface and has an overall strike length of 610 metres, dip length of 390 metres and varies in thickness between 2 and 70 metres, depending on the number of mineralized lenses present. The mineralized lenses are controlled by reverse fault structures which are largely conformable to the basement stratigraphy and dominant foliation. The A, B and C series of lenses comprise stacked, parallel lenses which plunge to the northeast along a fault zone (“G-Fault”) which occurs between hanging wall graphite-rich pelitic gneisses and a more competent pegmatite-dominated footwall. A ubiquitous zone of silicification (“Quartz-Pegmatite Assemblage”) straddles the G-Fault and the A, B and C series of lenses occur hanging wall, within, and footwall to the Quartz-Pegmatite Assemblage respectively. The D series of lenses occur within the pegmatite-dominated footwall along a secondary fault zone (“Basal Fault”) or within extensional relay faults which link to the G-Fault. The E series of lenses occur along the G-Fault, up-dip and along strike to the northeast of the A and B series lenses, within the upper basement or at the sub-Athabasca unconformity. Mineralization within the Gryphon deposit lenses is dominated by massive, semi-massive or fracture-hosted uraninite associated with an alteration assemblage comprising hematite, dravitic tourmaline, illite, chlorite and kaolinite. Secondary uranium minerals, including uranophane and carnotite, and sulphides are trace in quantity.
Drilling, Sampling and Assay Procedures
The updated mineral resource estimate for the Gryphon deposit, reported herein, is based on a total of 210 drill holes. Drill collars were surveyed in the field utilizing a Differential Global Positioning System and the trajectory of all drill holes was determined with a Reflex survey instrument in single point mode, which measures the dip and azimuth at 50 metre intervals down the hole. Denison employed a directional drilling method to improve drilling accuracy and 120 of the 210 drill holes were completed as subsurface ‘daughter’ holes which were drilled as off-cuts from surface ‘parent’ holes.
Drill core with anomalous total gamma radioactivity (>300 counts per second utilizing a RS-120 or RS-125 scintillometer) was sampled over 0.5 metre intervals. Sampling is undertaken on site by splitting the core in half, with one half submitted for analysis and the other half retained in the core box for future reference. Uranium assays are performed by the Saskatchewan Research Council Geoanalytical Laboratories using an ISO/IEC 17025:2005 accredited method for the determination of U3O8 weight %. Sample preparation involves crushing and pulverizing core samples to 90% passing -106 microns. The resultant pulp is digested using aqua-regia and the solution analyzed for U3O8 weight % using ICP-OES. Other major and trace elements are determined using ICP-MS or ICP-OES after partial and total digestions. Boron values are obtained through NaO2/NaCO3 fusion followed by ICP-OES. In addition to internal checks by SRC Geoanalytical Laboratories, the Company has rigorous quality assurance and quality control procedures including the insertion of standard reference materials, blanks and field duplicates. The assay data is subject to verification procedures by qualified persons employed by Denison prior to disclosure. Core recovery at Gryphon is typically 100% and therefore radiometric equivalent U3O8 grades are seldom required as a substitute for chemical U3O8 assays. For the updated Gryphon mineral resource estimate, reported herein, 6.5 % of the assay intervals relied on eU3O8 grades where core recovery was less than 80%. For further details on the assay, QAQC and data verification procedures please see Denison’s Annual Information Form dated March 23, 2017 filed under the Company’s profile on SEDAR (www.sedar.com).
The three-dimensional mineralized wireframes were created by Denison utilizing Gemcom software following detailed interpretation of the deposit geology and structure. The wireframes were defined using a threshold of 0.05% U3O8 and minimum thickness of two metres. One higher grade domain was defined within the A1 lenses and three higher grade domains were defined in the D1 lenses based on a threshold of 4.0% U3O8. The wireframes and drilling database were sent to RPA for grade modelling following QAQC which included ensuring the wireframes were ‘snapped’ to the drill hole mineralized intervals.
Based on 279 dry bulk density determinations, a polynomial formula was determined relating bulk density to uranium grade which was used to assign a density value to each assay. Bulk density values were used to weight grades during the resource estimation process and to convert volume to tonnage. Uranium grade multiplied by density (GxD) values and density (D) values were interpolated into blocks measuring 5 metres by 1 metre by 2 metres using an inverse distance squared (ID2) algorithm since variograms were not considered good enough to derive kriging parameters. Hard domain boundaries were employed at the wireframe edges, so that blocks within a given wireframe were only informed by grade data from that wireframe. For the A1 high-grade domain, assays were capped at 30% U3O8 with a search restriction applied to composite grades over 20% and for the D1 high-grade domains, assays were capped at 20% U3O8 with no search restriction. For the A1-A4, B3-B7, C4-C5 and D2-D4 low-grade domains, assays were capped at 10% U3O8. For the C1 low-grade domain, assays were capped at 20% U3O8 with a search restriction applied to composite grades over 10%. For the B1, B2, E1 and E2 low-grade domains, assays were capped at 15% U3O8 with search restrictions applied to composite grades over 10% U3O8 for the B1 domain and 5.0% U3O8 for the E2 domain. For the D1 low-grade domain, assays were capped at 5% U3O8. Block grade was derived from the interpolated GxD value divided by the interpolated D value for each block. Block tonnage was based on volume times the interpolated D value.
The mineral resource estimate for the Gryphon deposit was classified according to the drill hole spacing and the apparent continuity of mineralization, as either Indicated Mineral Resources (generally, drill hole spacing of 25 x 25 meters) or Inferred Mineral Resources (generally, drill hole spacing of 50 x 50 metres). The block models were validated by comparison of domain wireframe volumes with block volumes, visual comparison of composite grades with block grades, comparison of block grades with composite grades used to interpolate grades, and comparison with estimation by a different method.
Updated Wheeler River Technical Report
RPA, an independent technical consulting firm, was retained by Denison on behalf of the Wheeler River Joint Venture to prepare the updated mineral resource estimate for the Gryphon deposit. An updated independent Technical Report will be prepared for the Wheeler River Project, including both the Gryphon and Phoenix deposits, and will be filed on SEDAR (www.sedar.com) within 45 days of this news release.
The Mineral Resource Estimate was prepared by Mr. Mark Mathisen, C.P.G., Principal Geologist at RPA and Mr. William Roscoe, PhD, P. Geo, Principal Geologist at RPA, who read and approved the related disclosure about the mineral resources in this press release. Both are independent Qualified Persons in accordance with the requirements of NI 43-101.
The technical information contained in this release has been reviewed and approved by Mr. Dale Verran, MSc, P.Geo, Pr.Sci.Nat., Denison’s Vice President, Exploration, who is also a Qualified Person in accordance with the requirements of NI 43-101.
About Wheeler River
Wheeler River is the largest undeveloped high-grade uranium project in the infrastructure rich eastern portion of the Athabasca Basin region, in northern Saskatchewan. The project is a joint venture between Denison (63.3% and operator), Cameco Corp. (26.7%), and JCU (Canada) Exploration Company Limited (10%), and is host to the high-grade Gryphon and Phoenix uranium deposits discovered by Denison in 2014 and 2008, respectively.
On April 4th, 2016, Denison announced the results of a Preliminary Economic Assessment for the Wheeler River Project, which considers the potential economic merit of co-developing the high-grade Gryphon and Phoenix deposits as a single underground mining operation. The PEA returned a base case pre-tax Internal Rate of Return of 20.4% based on the current long term contract price of uranium (US$44.00 per pound U3O8), and Denison’s share of estimated initial capital expenditures of CAD$336M (CAD$560M on 100% ownership basis). Exploration results from the subsequent drilling programs have not been incorporated into the resource estimate or the PEA. The PEA is preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves and do not have demonstrated economic viability. On July 19th, 2016 Denison announced the initiation of a Pre-Feasibility Study (“PFS”) for the Wheeler River property and the complimentary commencement of an infill drilling program at the Gryphon deposit.
As previously announced on January 10, 2017, Denison has entered into an agreement with its Wheeler River Joint Venture partners, Cameco and JCU, to fund 75% of Joint Venture expenses in 2017 and 2018 (ordinarily 60%) in exchange for an increase in Denison’s interest in the project to up to approximately 66%. Under the terms of the agreement, Cameco will fund 50% of its ordinary 30% share in 2017 and 2018, and JCU is expected to continue to fund its 10% interest in the project. Pursuant to the agreement, as at December 31, 2017, Denison has increased its interest in the Wheeler River project from 60% to 63.3%.
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. In addition to its 63.3% owned Wheeler River project, which hosts the high-grade Phoenix and Gryphon uranium deposits, Denison’s exploration portfolio consists of numerous projects covering approximately 347,000 hectares in the Athabasca Basin region, including 327,000 hectares in the infrastructure rich eastern portion of the Athabasca Basin. Denison’s interests in Saskatchewan also include a 22.5% ownership interest in the McClean Lake joint venture which includes several uranium deposits and the McClean Lake uranium mill, which is currently processing ore from the Cigar Lake mine under a toll milling agreement, plus a 25.17% interest in the Midwest and Midwest A deposits, and a 64.22% interest in the J Zone deposit and Huskie discovery on the Waterbury Lake property. Each of Midwest, Midwest A, J Zone and Huskie are located within 20 kilometres of the McClean Lake mill.
Denison is also engaged in mine decommissioning and environmental services through its Denison Environmental Services division and is the manager of Uranium Participation Corp., a publicly traded company which invests in uranium oxide and uranium hexafluoride.
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