Denison Mines Corp. (TSX: DML) (NYSE American: DNN) filed its Condensed Interim Consolidated Financial Statements and Management’s Discussion & Analysis for the quarter ended September 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, “Our recent In-Situ Recovery (‘ISR’) field test results reflect several years of progress made towards systematically de-risking the use of the ISR mining method at the high-grade Phoenix deposit – culminating in the successful, and first of its kind, field test of a commercial-scale well pattern located in the expected first phase of the Phoenix orebody. Our accomplishments in the field and the laboratory have significantly increased our confidence in the use of the ISR mining method and support our landmark decision to advance the planned Phoenix ISR operation to the Feasibility Study design stage.
With increased interest in the uranium market and a recent lift in both spot and long-term uranium prices, we are encouraged that future utility customers are returning to the market and looking at Denison’s Wheeler River project as a potentially viable source of reliable and low-cost future supply. Taken together with our effective 95% interest in Wheeler River and strong balance sheet, which, as of today, includes 2.5M lbs U3O8 of physical uranium holdings acquired at a price under US$30/lb U3O8, we believe Denison is well positioned to become an intermediate supplier of choice in the second half of the decade at a time when market fundamentals are predicted to be favourable as a result of growing demand for uranium and a relative shortage of advanced low-cost uranium development assets in stable jurisdictions.
Our team is focused on advancing Phoenix in the coming months and years to realize on our vision of becoming the next new uranium producer in the Athabasca Basin region.”
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. 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 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.
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 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 effective 95% interest in the 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, 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 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 280,000 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 post-closure mine and maintenance services to a variety of industry and government clients.
Technical Disclosure and Qualified Person
The technical information contained in this press release has been reviewed and approved by David Bronkhorst, P.Eng, Denison’s Vice President, Operations and/or Andrew Yackulic, P. Geo, Denison’s Director, Exploration, each of whom is a Qualified Person in accordance with the requirements of NI 43-101.
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We acknowledge the [financial] support of the Government of Canada.