TORONTO, ON, March 4, 2021 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE
American: DNN) today filed its Audited Consolidated Financial
Statements and Management's Discussion & Analysis ("MD&A")
for the year ended December 31,
2020. Both documents can be found 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. View PDF version
David Cates, President and CEO of
Denison commented, "Confronted with the varied
challenges of the global COVID-19 pandemic, Denison's resilient
teams excelled in 2020 and early 2021 – accomplishing a significant
de-risking of our flagship Wheeler River project and the Company's
balance sheet.
At Wheeler River, our technical team achieved a key
milestone, receiving an independent confirmation of 'Proof of
Concept' for the application of the In-Situ Recovery ('ISR') mining
method at the high-grade Phoenix
deposit. We also completed an important trade-off study
leading to the adoption of a freeze 'wall' design for containment
of the ISR operation at Phoenix –
a decision that is expected to be favourable from an environmental
standpoint, reduce technical complexity and operational risks,
allow for a phased mining approach with lower up-front capital
costs, and strengthen project sustainability. With the
Environmental Assessment process fully resumed and a $21.8 million budget (Denison's share
$19.4 million) approved and funded
for evaluation and environmental assessment work at Wheeler River
in 2021, the entire team is now focused on advancing Phoenix through the regulatory and community
consultation process to support a future Feasibility Study ("FS"),
with the objective of pairing Phoenix, the world's highest grade undeveloped
uranium deposit, with ISR mining, the world's lowest cost uranium
mining method.
In 2020, the technical team also delivered positive results
from the Waterbury Lake Preliminary Economic Assessment ('PEA'),
which considered the potential future development of the Tthe
Heldeth Túé ('THT') uranium deposit as Denison's second ISR
amendable project in the Athabasca
Basin region. The results were highlighted by low initial
capital costs and globally competitive operating costs.
Adding to Wheeler River's Phoenix
and Gryphon deposits, THT represents Denison's third development
asset with fully loaded costs (including initial capital costs,
sustaining capital costs, and operating costs) estimated at under
US$25 per pound
U3O8.
On the Corporate side, the Company's financial situation has
also been significantly de-risked, having completed a round of
critical capital raising over the last 12 months that has
positioned the company with approximately $85 million in cash and investments, while
remaining debt-free. Taken together, Denison is uniquely
positioned as a well-capitalized uranium developer, with multiple
low-cost assets, at a time when the uranium market is showing signs
of incremental improvement underpinned by growing calls for nuclear
energy to re-emerge as a leading technology important to a
sustainable global energy transition."
HIGHLIGHTS
- Significant progress de-risking the Wheeler River project in
2020
In 2020, the Company made significant
progress on systematically de-risking the technical risks
identified for the ISR mining operation planned for the
Phoenix uranium deposit
('Phoenix') following completion
of the 2018 Pre-Feasibility Study ('PFS') for the Company's 90%
owned Wheeler River Uranium Project ('Wheeler River') (see Denison
news releases dated June 4, 2020,
Feb. 19, 2020, Oct. 28, 2020, and Dec. 1,
2020, respectively):
-
- Achieved independent "Proof of Concept" for application of ISR
mining method at Phoenix;
- Completed initial core leach tests, reporting uranium
concentrations up to four times the amount assumed in the PFS for
the Phoenix ISR operation;
- Completed a 2020 ISR Field Program designed to build additional
confidence in the results of the independent hydrogeologic model
developed by Petrotek Corporation ('Petrotek'), and to support the
design and permitting of further field work expected to be
incorporated into a future FS; and
- Completed a trade-off study demonstrating the merit of adopting
a freeze wall design, rather than the freeze "dome" design included
in the PFS, as part of the ISR mining approach planned for
Phoenix.
- Restarted the formal Environmental Assessment ('EA') process
for Wheeler Rive
In January 2021, Denison
restarted the formal EA process for Wheeler River. The
decision to resume the EA process marked the end of the temporary
suspension announced in March 2020
amidst the significant social and economic disruption that emerged
as a result of the onset of the COVID-19 pandemic.
- Successful series of equity financings to fund the EA and FS
process for Wheeler River
Denison completed equity financings for gross proceeds of
over US$56 million (including
approximately US$3 million from an
At-the-Market ('ATM') offering, excluding the flow-through
financings) in 2020 and early 2021. Subject to a decision to
advance to a formal FS for Phoenix, the proceeds from the offerings are
expected, based on current estimates, to be sufficient to complete
such FS process and the EA process.
- Completed flow-through equity financings to fund Canadian
exploration
The Company completed flow-through equity financings of
$8.9 million in late 2020 and early
2021. Proceeds of the financings are expected to be used for
eligible Canadian exploration activities in 2021 and 2022.
- 2020 Phoenix expansion
drilling returns best results to date at Zone C
The primary focus of the Company's 2020 exploration
drilling program at Wheeler River centered on the area proximal to
the Phoenix deposit with the
potential to expand the extent of mineralization currently
estimated for Phoenix. Expansion
drilling in the Zone C area of Phoenix, which does not currently have an
estimate of mineral resources, returned high grade mineralization –
including 5.69% U3O8 over 5.0 metres in
WR-328D1, which represents the best mineralized intersection at
Zone C to date (see Denison press release dated February 9, 2021).
- Discovery of new high-grade uranium mineralization four
kilometres from Phoenix at Wheeler
River
As part of the Company's 2020 exploration drilling program
at Wheeler River, certain regional target areas were also tested,
which resulted in the discovery of new high-grade
unconformity-hosted uranium mineralization up to 7.66%
U3O8 along the K-West conductive trend (see
Denison press release dated January 28,
2021).
- Completed a Preliminary THT deposit on the Waterbury Lake
Property
On Dec. 30, 2020, Denison
filed the technical report "Preliminary Economic Assessment for the
Tthe Heldeth Túé (J Zone) Deposit, Waterbury Lake Property,
Northern Saskatchewan, Canada",
with an effective date of October 30,
2020 for the 66.90% Denison-owned Waterbury Lake property.
The technical report includes a PEA that demonstrates robust
economics for the potential future development of THT as a
small-scale Athabasca Basin ISR
uranium mining project – including low initial capital costs, low
average cash operating costs and globally competitive all-in costs
under US$25 per pound
U3O8.
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 (90% and operator) and JCU (Canada) Exploration Company Limited (10%). 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 (the 'TSX') under the symbol 'DML' and on
the NYSE American exchange under the symbol 'DNN'.
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. In addition to the Company's flagship project,
Wheeler River, Denison's interests in Saskatchewan 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 deposits
and a 66.90% interest in the THT 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.
Denison is engaged in mine decommissioning and environmental
services through its Closed Mines group (formerly Denison
Environmental Services), which manages Denison's Elliot Lake reclamation projects and provides
post-closure mine and maintenance services to a variety of industry
and government clients.
Denison is also the manager of Uranium Participation Corporation
('UPC'), a publicly traded company listed on the TSX under the
symbol 'U', which invests in uranium oxide in concentrates
('U3O8') and uranium hexafluoride
('UF6').
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.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain information contained in this press 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 press release contains forward-looking
information pertaining to the following: exploration, development
and expansion plans and objectives, including the results of, and
estimates and assumptions within, the PFS, the plans and objectives
for ISR and the related field and hydrogeological testing results,
models, "proof of concept", plans and objectives; expectations,
plans and objectives of a future FS for Wheeler and any work to be
undertaken in respect thereto, including any "de-risking" and the
EA process; the impact of COVID-19 on Denison's operations;
the results of, and estimates and assumptions within, the PEA for
the THT deposit at Waterbury Lake; projections with respect to use
of proceeds of recent financings; the estimates of Denison's
mineral reserves and mineral resources; expectations regarding
Denison's joint venture ownership interests; expectations regarding
the continuity of its agreements with third parties; and its
interpretations of, and expectations for, nuclear power and uranium
supply, demand and related market factors. Statements relating to
'mineral reserves' or 'mineral resources' are deemed to be
forward-looking information, as they involve the implied
assessment, based on certain estimates and assumptions that the
mineral reserves and mineral resources described can be profitably
produced in the future.
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.
For example, the results and underlying assumptions and
interpretations of the PFS as well as de-risking efforts such as
the ISR field tests and hydrogeological test programs discussed
herein may not be maintained after further testing or be
representative of actual conditions within the applicable
deposits. In addition, Denison may decide or otherwise be
required to extend the EA and/or otherwise discontinue testing,
evaluation and development work, including a FS at Wheeler River,
if it is unable to maintain or otherwise secure the necessary
approvals or resources (such as testing facilities, capital
funding, etc.). 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 the MD&A for
the year ended December 31, 2020
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 press 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 press release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this press 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 Mineral Resources and Mineral Reserves: This
press release may use terms such as "measured", "indicated" and/or
"inferred" mineral resources and "proven" or "probable" mineral
reserves, which are terms defined with reference to the guidelines
set out in the Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") CIM Definition Standards on Mineral Resources and
Mineral Reserves ("CIM Standards"). The Company's
descriptions of its projects using CIM Standards may not be
comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements under
the United States federal
securities laws and the rules and regulations thereunder. .
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.
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SOURCE Denison Mines Corp.