TORONTO, Feb. 24, 2020 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (DML: TSX, DNN: NYSE
American) is pleased to report that the results from
hydrogeological test work, completed in 2019 at the high-grade
Phoenix uranium deposit
("Phoenix"), have confirmed the ability to achieve bulk hydraulic
conductivity values (a measure of permeability) consistent with the
Pre-Feasibility Study ("PFS") completed for the Company's 90% owned
Wheeler River Uranium Project ("Wheeler River"), located in
northern Saskatchewan,
Canada. View PDF version
During the summer and fall months of 2019, Denison collected an
extensive database of hydrogeological data as part of an In-Situ
Recovery ("ISR") field test program (the "2019 Field Test") at
Phoenix. The 2019 Field Test was designed to further evaluate
the ISR mining conditions present at Phoenix and is expected to support the
completion of a future Feasibility Study ("FS") (see Denison's
press release dated December 18, 2019
for additional details regarding the 2019 Field Test).
A key element of the 2019 Field Test was the completion of
various pump and injection tests in two large diameter commercial
scale wells ("CSWs") installed within the Phoenix orebody. These tests were designed to
allow for the simulation of fluid flow under conditions similar to
an envisioned commercial ISR production environment – ultimately
facilitating a quantitative assessment of the bulk hydraulic
conductivity of the Phoenix
orebody and surrounding rock formations. For ISR mining
operations, the term "hydraulic conductivity" is used to describe
the ease with which a fluid can move through the pore spaces or
fractures within a host rock. Hydraulic conductivity, commonly
represented by the symbol "K", is often stated as a rate of
flow (under a unit hydraulic gradient through a unit
cross-sectional area of aquifer) and is typically reported in units
of metres/sec ("m/s"), or metres/day ("m/d").
Highlights
- Numerical groundwater simulations in the PFS use a K value of
approximately 1 x 10-6 (or 0.000001) m/s, or 8.6 x
10-2 (or 0.086) m/d in order to achieve a flow rate of
500 litres per minute;
- Pump and injection tests completed from CSW2 (drill hole
GWR-032), after deployment of the MaxPerf Drilling Tool, produced K
values ranging from 3.7 x 10-7
(or 0.00000037) to 9.6 x 10-7 (0.00000096) m/s or 3.3 x 10-2 (or
0.033) to 8.4 x 10-2 (or 0.084) m/d, which is consistent
with the K values used in the PFS;
- Twenty-three (23) packer tests were conducted as part of the
2019 Field Test. Packer testing also measures bulk hydraulic
conductivity, with 14 of 23 results (60%) producing K values in
excess of the values used in the PFS, without using the MaxPerf
Drilling Tool; and
- Matrix permeability test work demonstrated that several
competent high-grade massive uraninite samples contain unique
honeycomb-like interconnected pore spaces that exhibit permeability
and hydraulic conductivity values consistent with the PFS.
David Bronkhorst, Denison's Vice
President Operations, commented, "The initial data from the 2019
Field Test shows that the K values in the immediate vicinity of
GWR-032, after deploying the MaxPerf Drilling Tool, are consistent
with the K values used in the PFS for the application of ISR mining
at Phoenix. This is an important milestone from a de-risking
perspective and is especially rewarding for our technical team –
having recently completed the first-of-its-kind ISR field test in
the Athabasca Basin
region.
Permeability is an important consideration for the refinement
of the wellfield parameters for Phoenix – impacting our future plans for well
spacing, number of active wells, pressure differential between
wells, and ultimately flow rate required to achieve a desired level
of annual production. Combined with the recently announced
metallurgical test results, we are encouraged by the potential for
additional technical work to support meaningful optimization of the
PFS mine plan, and the addition of enhanced operational
flexibility, in a future Feasibility Study."
Background
The hydrogeological test work incorporated into the PFS (see
Denison's press release dated September 24,
2018) included limited packer (32) and open hole (3) tests,
equating to 35 combined tests. An additional 11 permeability tests
were completed on intervals of competent core. These data sets were
incorporated into a numerical groundwater model to assess the
sensitivity of ISR wellfield design and operating practices to
various rates of fluid flow.
The PFS production plan is based on many variables, including
the assumption that 10 active hexagonal well patterns would produce
a sufficient flow-rate (500 litres per minute) at a given uranium
concentration (10 g/L) to achieve an overall production level of 6
million pounds U3O8 per year. Based on
the numerical groundwater model, a well spacing of 10 metres, a
pressure differential of 1 MPa, and a K value of approximately 1 x
10-6 (0.000001) m/s or 8.6
x 10-2 (0.086) m/d on
average, is expected to be required to achieve the targeted
flow-rate of 500 litres per minute.
The 2019 Field Test was designed to build on the hydrogeological
data collected as part of the PFS and to further evaluate the ISR
mining conditions present at Phoenix as part of the preparations for a
future FS. The 2019 Field Test significantly expanded upon the
hydrogeological investigations undertaken as part of the PFS –
including test work designed to evaluate both the bulk hydraulic
conductivity and matrix permeability within the orebody of Test
Area 1 and Test Area 2 (see Figure 1), in order to understand the
large- and small-scale fluid flow characteristics,
respectively.
Further Discussion of the 2019 ISR Field Test Program
Hydrogeological tests of bulk hydraulic conductivity were
completed using a series of monitoring wells and CSWs to pump or
inject water through the orebody of Test Area 1 and Test Area 2
(see Denison's press release dated December
18, 2019). The most representative test work completed
involved CSW2 (GWR-032), installed within the Phoenix orebody. Highlight results from
the CSWs can be summarized as follows:
- Test Area 2 – CSW2 (drill hole GWR-032)
-
- Pump and injection tests completed from CSW2 (drill hole
GWR-032) (see Figure 2), after deployment of the MaxPerf Drilling
Tool, produced K values ranging from 3.7 x 10-7 (or
0.00000037) to 9.6 x 10-7 (or 0.00000096) m/s or 3.3 x
10-2 (or 0.033) to 8.4 x 10-2 (or 0.084) m/d,
which is consistent with the K values used in the PFS;
- The demonstrated ability to achieve hydraulic conductivity
values, estimated from the tests completed in Test Area 2, that are
consistent with the values used in the PFS is highly significant –
considering Test Area 2 contains approximately 30% of the Phoenix
Zone A Indicated Mineral Resource.
- Test Area 1- CSW1 (drill hole GWR-031)
-
- Pump and injection tests completed from CSW1 (drill hole
GWR-031) (see Figure 3), after deployment of the MaxPerf Drilling
Tool, produced K values as high as 6.0 x 10-8 (or
0.00000006) m/s or 5.2 x 10-3 (or 0.0052) m/d;
- While CSW1 was successfully completed to its desired depth,
certain technical challenges associated with the installation of
the well screen assembly impacted the effectiveness of a
significant portion of the well screening. Upon receipt of
results, the obstructed well screening has been interpreted to have
rendered the well less effective for the purposes of pump and
injection testing and ultimately the estimation of K values. These
challenges were corrected during the installation of CSW2.
Taken together, the ranges of bulk hydraulic conductivity
observed during the 2019 Field Test are supportive of the numerical
groundwater modelling conducted as part of the PFS.
Additional Supportive Permeability and Porosity Tests
Additional supportive test work completed during the 2019 Field
Test included permeability and porosity tests conducted either
downhole, or on mineralized drill core recovered during the test
program (see Denison's press release dated December 18, 2019 for further details).
- Downhole Packer Tests
-
- Twenty-three (23) additional packer tests were conducted as
part of the 2019 Field Test. Packer testing measures bulk hydraulic
conductivity, with 14 of 23 results (60%) producing K values in
excess of the values used in the PFS, without using the MaxPerf
Drilling Tool;
- These packer tests significantly expanded on the previous data
sets from the PFS.
- Matrix Permeability Test Work
-
- The tests were conducted using a gas probe permeameter and
included over 1,200 measurements from individual core samples
collected from Test Area 1 and Test Area 2;
- This level of detailed permeability testing is specialized –
adding unique value to the ISR industry by providing considerable
detail regarding permeability values within the ore zone;
- The matrix permeability test work examines the porous rock
volume, including microfractures and pore spaces, but excludes most
of the macroscopic faults or fractures, which are typically
evaluated during bulk hydraulic conductivity testing. As
such, matrix permeability generally refers to the small-scale fluid
flow regimes associated with areas of highly competent host
rock;
- The matrix permeability test work shows hydraulic conductivity
values ranging from 1.5 x 10-13 to 5.0 x 10-6
m/s (or 1.30 x 10-8 to 0.43
m/d), which are broadly in line with the PFS and in some
instances exceed the values used in the PFS for bulk hydraulic
conductivity;
- Importantly, matrix permeability test work demonstrated that
several competent high-grade massive uraninite samples contain
unique honeycomb-like interconnected pore spaces that exhibit
permeability and hydraulic conductivity values consistent with the
PFS.
Taken together, the ranges of bulk hydraulic conductivity and
matrix permeability observed during the 2019 Field Test are
supportive of the numerical groundwater modelling conducted as part
of the PFS. Additional hydrogeological test work is necessary
to further understand the small- and large-scale fluid flows at
Phoenix to support the completion
of a future FS.
The extensive hydrogeological data sets collected during the
2019 Field Test, discussed herein, are expected to be incorporated
into the comprehensive hydrogeological model being developed by
Petrotek Corporation ("Petrotek") for Phoenix. This exercise,
combined with future field testing, is expected to facilitate
detailed mine planning as part of a future FS. Petrotek is a
specialist in the technical evaluation and field operation of
subsurface fluid flow and injection projects, including significant
ISR uranium mining experience in various jurisdictions. Denison
expects the hydrogeological model and final report to be completed
in late Q1 2020, which will also allow for further planning of
additional ISR field tests.
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
280,000 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 66.57% 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 Closed Mines Operations division
and is the manager of Uranium Participation Corp., a publicly
traded company which invests in uranium oxide and uranium
hexafluoride.
Qualified Persons
Certain hydrogeological results and interpretations thereof
contained in this release related to the 2019 Field Test (including
the hydrogeological investigations carried out via pump and
injection tests and associated analyses) were prepared by Mr.
Errol Lawrence, PG (Senior
Hydrogeologist), and Mr. Aaron
Payne, PG (Senior Hydrogeologist), at Petrotek, each of whom
is an independent Qualified Person in accordance with the
requirements of NI 43-101.
The other technical information contained in this release has
been reviewed and approved by Mr. David
Bronkhorst, P.Eng, Denison's Vice President, Operations, or
Mr. Dale Verran, MSc, P.Geo,
Pr.Sci.Nat., Denison's Vice President, 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 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 2019 Field Test and
related evaluation assumptions, 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.
For example, the results and underlying assumptions and
interpretations of the field test program discussed herein 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 testing, evaluation and development work at
Wheeler River, and may not complete a FS, 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 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 and well installations completed during 2019.
Figure 2: Plan map and long section showing
Pump/Injection wells, Observation wells and CSW2 completed for ISR
field testing in Test Area 2.
Figure 3: Plan map and long section showing
Pump/Injection wells, Observation wells and CSW1 completed for ISR
field testing in Test Area 1.
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SOURCE Denison Mines Corp.