Denison Mines Corp.  (TSX: DML) (NYSE American: DNN) filed its Condensed Consolidated Financial Statements and Management’s Discussion & Analysis for the quarter ended June 30, 2021. Both documents will be available on the Company’s website at www.denisonmines.com or on SEDAR (at www.sedar.com) and EDGAR (at www.sec.gov/edgar.shtml). The highlights provided below are derived from these documents and should be read in conjunction with them. All amounts in this release are in Canadian dollars unless otherwise stated.

David Cates, President and CEO of Denison commented, “The Company continues to successfully advance on its ambition of developing the high-grade Phoenix deposit, as potentially one of the lowest cost uranium mines in the world, at a time when the uranium market is showing signs of a sustained recovery and the beginnings of a new contracting cycle.

Thus far in 2021, our corporate team has bolstered our balance sheet with our recent financings and uranium purchases, consolidated a further 5% ownership in our flagship Wheeler River project through our acquisition of 50% of JCU, and completed the transition of Uranium Participation Corp. to the Sprott Physical Uranium Trust.  On the technical side, in relation to our progress at Phoenix, we have reported several positive updates on ISR field testing activities, metallurgical studies in support of the ISR mining method, and the discovery of additional high-grade uranium in the area of our expected first mining phase. Taken together, we believe that Denison is well positioned to continue de-risking the use of the ISR mining method at Phoenix and ultimately compete with the incumbent uranium producers in the coming years when the market needs additional sources of production. 

Our focus for the remainder of 2021 is expected to be in the field, where we plan to be active on both the evaluation and exploration front.  Our evaluation team is preparing for full-scale pump and injection tests as well as ion tracer tests at Phoenix, making use of the commercial-scale 5-spot test pattern installed earlier this year.  Our exploration team is also readying to resume drill testing of various target areas at Wheeler River and nearby properties that are prospective for the discovery of additional potentially ISR amenable uranium resources. With results from these programs expected through the third and fourth quarter, it is an exciting time for investors to follow both the uranium market and Denison’s company-specific activities closely.”

HIGHLIGHTS 

• In-Situ Recovery field test activities at the Phoenix uranium deposit progress

A substantial portion of the ISR field test program has been successfully completed, including the installation of all five commercial-scale wells and nine of eleven monitoring wells planned for the 5-spot test pattern located in the Phase 1 area of Phoenix on the Company’s Wheeler River Uranium Project.  Based on the progress to date, multi-day pump and injection tests and ion tracer tests are planned to be initiated and completed on the full-scale Test Pattern during the third quarter.

• Discovered high-grade uranium outside of the Phoenix Zone A high-grade domain

Drill hole GWR-045 was completed as part of the ISR field test program to install MWs to the northwest of the CSW Test Pattern.  Based on the mineral resources currently estimated for Phoenix, GWR-045 was expected to intersect low grade uranium mineralization on the northwest margin of the deposit, approximately 5 metres outside of the boundary of the Phoenix Zone A high-grade resource domain.  The drill hole, however, intersected a thick interval of high-grade unconformity-associated uranium mineralization with grades of 22.0% eU₃O₈ over 8.6 metres. The intersection is presently open further to the northwest and represents an area for further exploration and potential mineral resource expansion of Phoenix.

• Decision to increase anticipated ISR mining head grade at Phoenix by 50%

Positive interim results, completed to date, from the ongoing metallurgical test program for the planned ISR mining operation at Phoenix have consistently supported uranium bearing solution head-grade for Phoenix well in excess of the 10 grams / Litre used in the Pre-Feasibility Study completed for Wheeler River in 2018.  Accordingly, the Company has decided to adapt its plans for the remaining metallurgical test work, including the bench-scale tests of the unit operations of the proposed process plant, to reflect a 50% increase in the head-grade of UBS to be recovered from the well-field.

• Completed acquisition of 50% of JCU (Canada) Exploration Company, Limited (‘JCU’) for $20.5 million

In June 2021, Denison announced that it had entered into a binding agreement with UEX Corporation to acquire 50% of JCU from UEX for cash consideration of $20.5 million following UEX’s acquisition of 100% of JCU from Overseas Uranium Resources Development Co., Ltd. for $41 million. Denison’s acquisition of 50% of JCU was completed on August 3, 2021.  JCU holds a portfolio of 12 uranium project joint venture interests in Canada, including a 10% interest in Wheeler River, a 30.099% interest in the Millennium project (Cameco Corporation 69.901%), a 33.8123% interest in the Kiggavik project (Orano Canada Inc. 66.1877%), and a 34.4508% interest in the Christie Lake project (UEX 65.5492%).

• Received $5.8 million in connection with conversion of Uranium Participation Corporation into the Sprott Physical Uranium Trust

In April 2021, UPC announced that it had reached an agreement with Sprott Asset Management LP to convert UPC into the Sprott Physical Uranium Trust. Upon completion of this transaction on July 19, 2021, Sprott became the manager of the Sprott Physical Uranium Trust, and the management services agreement between Denison and UPC was terminated. In accordance with the terms of the MSA, Denison received a cash payment of approximately $5.8 million in connection with the termination.

About Wheeler River

Wheeler River is the largest undeveloped uranium project in the infrastructure rich eastern portion of the Athabasca Basin region, in northern Saskatchewan and is a joint venture between Denison and Denison’s 50%-owned JCU (Canada) Exploration Company Limited.  Denison is the operator of the project and holds an effective 95% ownership interest. The project is host to the high-grade Phoenix and Gryphon uranium deposits, discovered by Denison in 2008 and 2014, respectively, estimated to have combined Indicated Mineral Resources of 132.1 million pounds U₃O₈ (1,809,000 tonnes at an average grade of 3.3% U₃O₈), plus combined Inferred Mineral Resources of 3.0 million pounds U₃O₈ (82,000 tonnes at an average grade of 1.7% U₃O₈).

The PFS was completed in late 2018, considering the potential economic merit of developing the Phoenix deposit as an ISR operation and the Gryphon deposit as a conventional underground mining operation. Taken together, the project is estimated to have mine production of 109.4 million pounds U₃O₈ over a 14-year mine life, with a base case pre-tax net present value (‘NPV’) of $1.31 billion (8% discount rate), Internal Rate of Return (‘IRR’) of 38.7%, and initial pre-production capital expenditures of $322.5 million. The Phoenix ISR operation is estimated to have a stand-alone base case pre-tax NPV of $930.4 million (8% discount rate), IRR of 43.3%, initial pre-production capital expenditures of $322.5 million, and industry leading average operating costs of US$3.33/lb U₃O₈. The PFS was prepared on a project (100% ownership) and pre-tax basis, as each of the partners to the Wheeler River Joint Venture are subject to different tax and other obligations.

Further details regarding the PFS, including additional scientific and technical information, as well as after-tax results attributable to Denison’s ownership interest, are described in greater detail in the NI 43-101 Technical Report titled “Pre-feasibility Study for the Wheeler River Uranium Project, Saskatchewan, Canada” dated October 30, 2018 with an effective date of September 24, 2018. A copy of this report is available on Denison’s website and under its profile on SEDAR at www.sedar.com and on EDGAR at www.sec.gov/edgar.shtml.

Given the social, financial and market disruptions related to COVID-19, and certain fiscally prudent measures, Denison temporarily suspended certain activities at Wheeler River starting in April 2020, including the formal parts of the EA program, which is on the critical path to achieving the project development schedule outlined in the PFS Technical Report. While the formal EA process has resumed in early 2021, the Company is not currently able to estimate the impact to the project development schedule, outlined in the PFS Technical Report, and users are cautioned that certain of the estimates provided therein, particularly regarding the start of pre-production activities in 2021 and first production in 2024 should not be relied upon.

About Denison

Denison Mines Corp. was formed under the laws of Ontario and is a reporting issuer in all Canadian provinces. Denison’s common shares are listed on the Toronto Stock Exchange  and on the NYSE American exchange.

Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada.  In addition to its flagship Wheeler River uranium project, Denison’s interests in Saskatchewan 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 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 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, THT and Huskie deposits are located within 20 kilometres of the McClean Lake mill. In addition, Denison has an extensive portfolio of exploration projects in the Athabasca Basin region.

Through its 50% ownership of JCU, Denison also holds 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 is engaged in mine decommissioning and environmental services through its Closed Mines group, which manages Denison’s Elliot Lake reclamation projects and provides post-closure mine and maintenance services to a variety of industry and government clients.