TORONTO, Oct. 31, 2019 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (DML: TSX, DNN: NYSE
American) is pleased to report the successful installation of two
Commercial Scale Wells ("CSWs") within the Phoenix deposit ("Phoenix"), as part of the
ongoing In-Situ Recovery ("ISR") field test program at the
Company's 90% owned Wheeler River Uranium Project ("Wheeler
River"), located in northern Saskatchewan, Canada. Additionally, the
Company is pleased to report the successful deployment of the
MaxPERF Drilling Tool and its plans for completion of long-duration
hydrogeological test work during the remainder of the 2019 ISR
Field Test program.
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Operational Highlights
- Installation of the first CSWs designed for ISR mining in
the Athabasca Basin: CSW1
(drill hole GWR-031, in Test Area 1) and CSW2 (drill hole GWR-032,
in Test Area 2) represent the first large-diameter CSWs
successfully installed, for the purpose of ISR mining, in the
Athabasca Basin region. The
completion of each CSW included the drilling of a large-diameter
vertical borehole (~12 inches in diameter) approximately 400 metres
from surface, to intersect the Phoenix ore body, and the installation of well
materials designed to meet expected environmental and regulatory
standards for eventual ISR mining. Locations of the Phoenix Test
Areas and CSWs are shown in Figures 1, and Figures 2 and 3
respectively.
- Successful lateral penetrations of the Phoenix ore body using the MaxPERF Drilling
Tool: Penetrators Canada Inc. ("Penetrators"), developers and
operators of the MaxPERF Drilling Tool, successfully deployed the
tool within CSW1 and completed 28 lateral drill holes (penetration
tunnels) within a variety of ore types associated with the
Phoenix deposit. MaxPERF
deployment at CSW2 is planned to follow during the remainder of the
2019 ISR Field Test program.
- Initial short-duration hydrogeological tests demonstrate
effectiveness of MaxPERF at Phoenix: Initial short-duration
hydrogeological tests confirmed increased flow rates in Test
Area 1 following the completion of the MaxPERF drilling in CSW1.
These results demonstrate the effectiveness of the MaxPERF Drilling
Tool in providing increased access to hydraulic connectivity
associated with the existing permeability of the ore zone.
- Long-duration hydrogeological tests planned to complete the
2019 ISR Field Test: Based on the successful completion of CSW1
and CSW2, and following the successful deployment of the MaxPERF
Drilling Tool, long-duration hydrogeological tests are planned to
be completed during the remainder of the 2019 ISR Field Test. These
tests are expected to be carried out in both CSW1 and CSW2 to allow
for the simulation of fluid flow, within Test Area 1 and Test Area
2 of Phoenix, under conditions
similar to an envisioned commercial production environment.
David Bronkhorst, Denison's Vice
President Operations, commented, "We are very pleased to
have completed the successful installation of the first two
Commercial Scale Wells at Phoenix. As part of the Company's
risk managed approach to the 2019 ISR Field Test program, we
continue to build on operational successes and advance towards the
completion of all of our program objectives – including the testing
of the MaxPERF Drilling Tool, which has already proven to be
effective when deployed in a CSW. With the varied geology
interpreted at Phoenix, the
ability to use MaxPERF, to mechanically engineer increased access
to the existing permeability of the ore formation, bodes well for
potentially normalizing the geological variations in a production
environment."
Commercial Scale Well (CSW) Installations
CSW1 and CSW2 were successfully drilled to their designed depths
and locations within the Phoenix
deposit. A directional drilling methodology was employed in
conjunction with Measurement-While-Drilling ("MWD") surveying
technology to accurately determine the well path to its desired
target location.
Well materials, designed for commercial ISR production, were
successfully installed as planned – providing a double-walled and
fully-sealed piping system. Additionally, the outer casing of each
CSW was successfully grouted in place with a single-stage cement
application, providing a further seal between the CSW and outlying
sandstone formation. The piping system installed for both CSWs is
ISR mining solution ready and is expected to meet environmental and
regulatory standards. A CSW is considered complete once the piping
system has been installed and the outer casing grouted into
position. Further details regarding the design of the CSWs are
provided in Denison's news release dated September 19, 2019.
Deployment of the MaxPERF Drilling Tool and Preliminary
Hydrogeological Test Results
Penetrators successfully deployed the MaxPERF Drilling Tool
within CSW1 and completed a total of 28 lateral drill holes
(penetration tunnels), with an approximate length of 72 inches
(1.83 metres) and diameter of 0.7 inches (1.78 centimetres)
each, within the ore zone from seven different elevations spaced 30
centimeters vertically apart. The penetration tunnels were
completed in a variety of ore types associated with the
Phoenix deposit, including a wide
variety of uranium grades (massive to disseminated uraninite), clay
contents, and rock competencies.
Initial short-term hydrogeological injection testing was carried
out both before, and after, the application of MaxPERF drilling in
CSW1, to evaluate the relative differences of injection pressure,
flow rate, permeability, and borehole connectivity with adjacent
monitoring wells. The preliminary hydrogeological test results from
CSW1 indicate that the ore zone was able to accept increased flow
rates following the application of the MaxPERF drilling.
Importantly, this result suggests that the penetration tunnels have
successfully provided increased access to hydraulic connectivity
associated with the existing permeability of the ore zone.
Long-Duration Hydrogeological ISR Testing and
Modelling
The integration and evaluation of the hydrogeological data
collected from the 2019 ISR Field Test is ongoing. Data collected,
to date, includes the initial results from Test Area 1 and Test
Area 2 (see Denison's press releases dated August 27, 2019, and September 19, 2019), and the initial
short-duration test results from CSW1 (described in this press
release). Additional hydrogeological data is expected from initial
short-duration tests in CSW2 (both pre- and post-MaxPERF drilling),
and from long-duration tests carried out in both CSW1 and CSW2. The
long-duration tests are expected to allow for the simulation of
fluid flow under conditions similar to an envisioned commercial
production environment.
These data sets, as outlined above, will be incorporated into
the hydrogeological model being developed for Phoenix, which will facilitate detailed mine
planning as part of a future Feasibility Study.
The hydrogeological testing and modelling is being undertaken by
Petrotek Corporation ("Petrotek") – specialists in the technical
evaluation and field operation of subsurface fluid flow and
injection projects, including significant ISR experience in various
jurisdictions.
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 – including 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
project is host to the high-grade Phoenix and Gryphon uranium deposits,
discovered by Denison in 2008 and 2014, respectively, and is a
joint venture between Denison (90% and operator) and JCU
(Canada) Exploration Company
Limited (10%).
A PFS was completed for Wheeler River 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 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 is 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.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. In addition to the Wheeler River project, Denison's
Athabasca Basin exploration
portfolio consists of numerous projects covering approximately
305,000 hectares. Denison's interests in the Athabasca Basin also include a 22.5% ownership
interest in the McClean Lake joint venture ("MLJV"), 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 66.51% interest in the J Zone and Huskie
deposits 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.
Follow Denison on Twitter @DenisonMinesCo
Qualified Persons
The hydrogeological results and interpretations thereof
contained in this release were prepared by Mr. Errol Lawrence, PG (Senior Hydrogeologist), and
Mr. Aaron Payne, PG (Senior
Hydrogeologist) at Petrotek, independent Qualified Persons in
accordance with the requirements of NI 43-101.
The other 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, a Qualified Person in accordance with the requirements
of NI 43-101.
Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this news release
constitutes 'forward-looking information', within the meaning of
the applicable United States and
Canadian legislation concerning the business, operations and
financial performance and condition of Denison.
Generally, these forward-looking statements can be identified
by the use of forward-looking terminology such as 'plans',
'expects', 'budget', 'scheduled', 'estimates', 'forecasts',
'intends', 'anticipates', or 'believes', or the negatives and/or
variations of such words and phrases, or state that certain
actions, events or results 'may', 'could', 'would', 'might' or
'will be taken', 'occur', 'be achieved' or 'has the potential
to'.
In particular, this news release contains forward-looking
information pertaining to the following: the field test program
(including drilling) and evaluation interpretations, activities,
plans and objectives; the current and continued use and
availability of third party technologies, such as MaxPERF, as
applicable; the results of the PFS and expectations with respect
thereto; development and expansion plans and objectives, including
plans for a feasibility study; and expectations regarding its joint
venture ownership interests and the continuity of its agreements
with its partners.
Forward looking statements are based on the opinions and
estimates of management as of the date such statements are made,
and they are subject to known and unknown risks, uncertainties and
other factors that may cause the actual results, level of activity,
performance or achievements of Denison to be materially different
from those expressed or implied by such forward-looking statements.
Denison believes that the expectations reflected in this
forward-looking information are reasonable but no assurance can be
given that these expectations will prove to be accurate and results
may differ materially from those anticipated in this
forward-looking information. For a discussion in respect of risks
and other factors that could influence forward-looking events,
please refer to the factors discussed in Denison's Annual
Information Form dated March 12, 2019
under the heading 'Risk Factors'. These factors are not, and should
not be construed as being exhaustive.
Accordingly, readers should not place undue reliance on
forward-looking statements. The forward-looking information
contained in this news release is expressly qualified by this
cautionary statement. Any forward-looking information and the
assumptions made with respect thereto speaks only as of the date of
this news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news release to conform such information to actual
results or to changes in Denison's expectations except as otherwise
required by applicable legislation.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Mineral Resources and
Probable Mineral Reserves: This news release may
use the terms 'measured', 'indicated' and 'inferred' mineral
resources. United States investors
are advised that while such terms have been prepared in accordance
with the definition standards on mineral reserves of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
Canadian National Instrument 43-101 Mineral Disclosure Standards
("NI 43-101") and are recognized and required by Canadian
regulations, the United States Securities and Exchange Commission
("SEC") does not recognize them. 'Inferred mineral resources' have
a great amount of uncertainty as to their existence, and as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or other
economic studies. United States
investors are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. United
States investors are also cautioned not to assume that all
or any part of an inferred mineral resource exists, or is
economically or legally mineable. The estimates of
mineral reserves in this news release have been prepared in
accordance with NI 43-101. The definition of probable mineral
reserves used in NI 43-101 differs from the definition used by the
SEC in the SEC's Industry Guide 7. Under the requirements of
the SEC, mineralization may not be classified as a "reserve" unless
the determination has been made, pursuant to a "final" feasibility
study that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is
made. Denison has not prepared a feasibility study for the purposes
of NI 43-101 or the requirements of the SEC. Accordingly,
Denison's probable mineral reserves disclosure may not be
comparable to information from U.S. companies subject to the
reporting and disclosure requirements of the SEC.
![Figure 1. Phoenix Zone A plan view showing Test Areas delineated for ISR field testing. (CNW Group/Denison Mines Corp.) Figure 1. Phoenix Zone A plan view showing Test Areas delineated for ISR field testing. (CNW Group/Denison Mines Corp.)](https://mma.prnewswire.com/media/1020592/Denison_Mines_Corp__Denison_Reports_Installation_of_Commercial_S.jpg)
Figure 1. Phoenix Zone A plan view showing Test Areas
delineated for ISR field testing. (Full Resolution)
Figure 2. Plan map and long section showing Pump/Injection
wells, Observation wells and CSW1 completed for ISR field testing
in Test Area 1. (Full Resolution)
Figure 3. Plan map showing Pump/Injection wells, Observation
wells and CSW2 completed for ISR field testing in Test Area
2. (Full Resolution)
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SOURCE Denison Mines Corp.