TORONTO, April 21, 2021 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE
American: DNN) is pleased to announce the initiation and ramp-up of
In-Situ Recovery ("ISR") field test activities, including the
installation of a five-spot ISR test pattern ("Test Pattern"), at
the Company's 90% owned Wheeler River Uranium Project ("Wheeler
River" or the "Project"). Mobilization of drilling equipment
necessary to complete the large diameter drill holes, for each
Commercial Scale Well ("CSW") planned for the Test Pattern, was
completed in early April 2021 and, to
date, four of the five planned CSWs have been successfully drilled
to target depths, cased, and cemented into position. The
fifth CSW is in progress and is expected to be completed within the
next week. The installation of the Test Pattern is the first step
in an ambitious 2021 ISR field program, which is designed to
support the further de-risking of the application of the ISR mining
method at the high-grade Phoenix
uranium deposit ("Phoenix"). View PDF version.
David Bronkhorst, Denison's VP
Operations, commented, "We are excited to have our 2021 ISR
field program underway at Wheeler River. Our Saskatoon based
technical team has assembled an industry-leading group of experts
to design, install and operate the Test Pattern as part of our 2021
ISR field program. We are very pleased with the productivity
achieved to date, for the installation of the large diameter CSWs,
and are looking forward to further validating the effectiveness of
various permeability enhancement tools and collecting additional
hydrogeologic data to support the permitting and set-up of a
lixiviant test in 2022. The lixiviant test is expected to be
a key de-risking milestone for the Project – as it is intended to
confirm technical feasibility by verifying the permeability,
leachability, and containment parameters needed for the successful
application of the ISR mining method at Phoenix."
The 2021 ISR field program is expected to involve the following
key components:
- Installation of a Five-spot Test
Pattern: The Test Pattern is located in the Phase 1 area of the
Phoenix deposit and is planned to
consist of five new CSWs (see Figure 1 and Figure 2). The Test
Pattern has been designed to facilitate the further evaluation of
the ISR mining conditions at Phoenix – for incorporation into detailed mine
planning that is expected to be completed as part of a future
Feasibility Study ("FS") for the Project;
- Installation of 11 Additional Monitoring Wells ("MWs"):
In addition to the existing small-diameter MWs, eleven further MWs
are planned to be installed in the Phase 1 area (see Figure 1 and
Figure 2) and are designed to surround the Test Pattern on all
sides and above the ore zone horizon, in order to facilitate
detailed monitoring of pressure changes and observations of fluid
flow patterns during active hydrogeological tests. Certain MWs will
also allow for water quality sampling over the duration of test
work;
- Extensive Hydrogeologic Testing: Approximately
twenty-five hydrogeologic tests are planned to be completed during
the ISR field program. Tests are expected to (1) evaluate baseline
conditions, (2) evaluate the effectiveness of permeability
enhancement tools deployed on an individual well basis, and (3)
assess the Test Pattern's total permeability on a full-scale basis.
Additionally, ion tracer tests using inorganic salts are expected
to be conducted on the full Test Pattern to establish breakthrough
times for each CSW and confirm sub-surface pathways – thus allowing
for a more complete understanding of the hydrogeologic
characteristics expected throughout Phase 1, which is expected to
support the permitting and design of a lixiviant test, planned for
2022, utilizing the existing Test Pattern.
Please refer to the Company's news release dated February 8, 2021 for additional details related
to the Company's 2021 evaluation program plans for Wheeler River,
which also includes information about the resumption of the
Environmental Assessment process.
Phoenix Phase 1
As outlined in the Company's freeze wall trade-off study (see
news release dated Dec. 1, 2020),
Denison has decided to adapt its plans for the Project to use a
freeze wall in future Project design and environmental assessment
efforts. The trade-off study highlighted a key opportunity for the
Project – whereby the freeze wall could be installed in stages to
facilitate a phased mining approach at Phoenix. In a phased
mining approach, only a limited portion of the freeze wall is
required to support first production, with the subsequent expansion
of the freeze wall perimeter allowing for additional mining phases
to be brought into production over the duration of the mine
life.
The phased mining approach is expected to allow for the targeted
extraction of the least capital-intensive reserves first, based on
the grade and distribution of ore in various areas of the deposit.
The trade-off study provides for mining to occur over 5 phases.
Phase 1 of the deposit is estimated to contain approximately
22.2 million pounds U3O8 (37,242 tonnes at
27.1% U3O8, above a cut-off grade of 0.8%
U3O8) in Probable mineral reserves.
Based on current designs, the Company estimates approximately 6.6
million pounds U3O8 (7,717 tonnes at 39.2%
U3O8, above a cut-off grade of 0.8%
U3O8) in Probable mineral reserves are
contained within the expected operating perimeter of the Test
Pattern (see Figure 1). These estimates are derived as a direct
subset of those reported in the 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. The key
assumptions, parameters and methods used to estimate the mineral
reserves herein remain unchanged.
COVID-19
The Company is committed to ensuring that the Wheeler River site
is a safe operating environment for its staff and contractors and
that the Company's field activities do not compromise the health
and safety of the residents of northern Saskatchewan. In
2020, the Company's Occupational Health and Safety Committee in
Saskatoon developed a
comprehensive guide for the safe resumption of work at Wheeler
River. The protocols consider the unique health and safety
risks associated with operating a remote work camp amidst the
ongoing COVID-19 pandemic. Public health guidelines and best
practices (including testing) have been incorporated into the
Company's protocols.
Despite the Company's current intentions, it is possible that
the 2021 ISR field program may be disrupted by the continuously
evolving social and/or economic disruptions associated with the
COVID-19 pandemic, which are outside of the control of the Company
– for example, the ability of Company or contractor staff to attend
to the site, Provincial or local travel restrictions, and changing
public health guidelines.
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.
Denison suspended certain activities at Wheeler River during
2020, including the EA process, which is on the critical path to
achieving the project development schedule outlined in the
PFS. While the EA process has resumed, the Company is not
currently able to estimate the impact to the project development
schedule outlined in the PFS, and users are cautioned against
relying on the estimates provided therein regarding the start of
pre-production activities in 2021 and first production in
2024.
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
interests in the Athabasca Basin
include a 22.5% ownership interest in the McClean Lake joint
venture ("MLJV"), which includes several uranium deposits and the
McClean Lake uranium mill that is contracted to process the 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 66.90%
interest in the Tthe Heldeth Túé ("THT," formerly J Zone) and
Huskie deposits on the Waterbury Lake property. The Midwest,
Midwest A, THT and Huskie deposits are located within 20 kilometres
of the McClean Lake mill. In addition, Denison has an extensive
portfolio of exploration projects covering approximately 280,000
hectares 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 care and maintenance services to a variety of
industry and government clients.
Denison is also the manager of Uranium Participation Corp., a
publicly traded company which invests in uranium oxide and uranium
hexafluoride.
Qualified Persons
The technical information contained in this release has been
reviewed and approved by Mr. David
Bronkhorst, P.Eng, Denison's Vice President, Operations, who
is 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 planned scope,
elements, and objectives of the 2021 ISR field programs, including
the drilling of CSWs and MWs and development of the Test Pattern;
other evaluation activities, including a planned future lixiviant
test and those connected with the EA process; the results of the
PFS and expectations with respect thereto; expectations with
respect to freeze wall containment and phased development, and the
estimates of reserves in each such phase; other 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.
For example, the modelling and assumptions upon which the work
plans are based may not be maintained after further testing or be
representative of actual conditions within the Phoenix deposit. In addition, Denison
may decide or otherwise be required to discontinue its field test
activities or other testing, evaluation and development work at
Wheeler River if it is unable to maintain or otherwise secure the
necessary resources (such as testing facilities, capital funding,
regulatory approvals, etc.) or operations are otherwise affected by
COVID-19 and its potentially far-reaching impacts. 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 29, 2021 or subsequent
quarterly financial reports 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 press 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, these terms are not defined under Industry Guide 7
under the United States Securities Act and, until recently, have
not been permitted to be used in reports and registration
statements filed with the United States Securities and Exchange
Commission ('SEC'). '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. In addition, the terms "mineral reserve",
"proven mineral reserve" and "probable mineral reserve" for the
purposes of NI 43-101 differ from the definitions and allowable
usage in Industry Guide 7. Effective February 2019, the SEC adopted amendments to its
disclosure rules to modernize the mineral property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act and as a result, the SEC now recognizes
estimates of "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources". In addition, the SEC
has amended its definitions of "proven mineral reserves" and
"probable mineral reserves" to be "substantially similar" to the
corresponding definitions under the CIM Standards, as required
under NI 43-101. However, information regarding mineral
resources or mineral reserves in Denison's disclosure may not be
comparable to similar information made public by United States companies.
Figure 1: Plan Map Showing Location of Phoenix Deposit (Phase 1)
– ISR Test Pattern
Figure 2: 3D Isometric Views of the Phoenix Deposit (Phase 1) –
ISR Test Pattern
Showing Locations of Monitoring Well Horizons
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SOURCE Denison Mines Corp.