TORONTO, Aug. 27, 2019 /PRNewswire/ - Denison
Mines Corp. ("Denison" or the "Company") (DML: TSX, DNN:
NYSE American) is pleased to announce positive initial test results
from Test Area 1, as part of the ongoing In-Situ Recovery ("ISR")
field test program at the Company's 90% owned Wheeler River Uranium
Project ("Wheeler River") in northern Saskatchewan, Canada.
View PDF version.
As outlined within the Company's Pre-Feasibility Study ("PFS")
for Wheeler River, which was completed in late 2018, additional
field work is required to increase the confidence and reduce the
risks associated with the application of ISR mining at the
Phoenix deposit. The field testing
program (outlined in Denison's press release dated June 26, 2019, and summarized below) is focused
on in-situ testing within the Phoenix orebody, using water to evaluate
hydrologic conditions that can be used to assess the hydraulic
connection and potential mining solution flow between a series of
test wells. The information collected through this process is
expected to increase the overall confidence of the application of
ISR mining and to facilitate detailed mine planning as part of the
Feasibility Study ("FS") process.
Importantly, the initial test results reported within this
release have confirmed hydraulic connectivity between multiple test
wells completed in Test Area 1 of the Phoenix deposit – providing significant
preliminary indications of the suitability of Test Area 1 for the
application of ISR mining.
David Cates, President and CEO of
Denison, commented, "We are very pleased with the initial
results from Test Area 1 as part of the ongoing ISR field test
program. The program is the first-of-its-kind for the Athabasca Basin – assessing the suitability of
the ISR mining method to the unique Phoenix deposit. The initial results
from Test Area 1 are quite encouraging – with initial pump and
injection tests confirming hydraulic connectivity between all of
the test wells within the ore zone. We are looking forward to
further results from Test Area 1 and Test Area 2, as well as the
results from two large-diameter commercial scale wells planned for
these Test Areas later this summer."
Well Installations
As part of the ISR field test program, two Pump/Injection
("P/I") wells and nine Observation wells were successfully
installed within Test Area 1 at Phoenix Zone A, as shown in Figures
1 and 2 and summarized in the table below.
Location
|
Test
Well
|
Type
|
Test
Formation
|
Test Area
1
|
GWR-001
|
Pump/Injection
|
Ore Zone
|
GWR-002
|
Observation
|
Overlying
Sandstone
|
GWR-004
|
Observation
|
Underlying
Basement
|
GWR-010
|
Pump/Injection
|
Ore Zone
|
GWR-011
|
Observation
|
Overlying
Sandstone
|
GWR-013
|
Observation
|
Overlying
Sandstone
|
GWR-015
|
Observation
|
Ore Zone
|
GWR-016
|
Observation
|
Ore Zone
|
GWR-017
|
Observation
|
Adjacent
Sandstone
|
GWR-020
|
Observation
|
Multiple
(VWP)
|
GWR-024
|
Observation
|
Ore Zone
|
The P/I wells were completed at an approximate spacing of 10
metres apart using PQ sized diamond drill holes allowing for the
installation of 2.5 inch diameter PVC pipe with a slotted
well-screen set at the targeted depth within the ore zone. The
Observation wells were completed using HQ sized diamond drill
holes, allowing for the installation of 1.5 inch diameter PVC pipe
with a slotted well-screen set at targeted depths within the ore
zone, overlying sandstone, adjacent sandstone, or underlying
basement. Test well GWR-020 contains a Vibrating Wire Piezometer
("VWP"), equipped with pressure transducers at five different depth
locations – including the overburden (1 transducer), overlying
sandstone (2 transducers), ore zone (1 transducer), and underlying
basement (1 transducer). The four ore zone Observation wells
(including GWR-020 VWP) are located either along strike or across
strike, in relation to the ore zone, from the P/I wells at a
spacing of between 10 and 23 metres from either of the P/I wells.
All P/I and Observation wells, apart from GWR-020, were completed
with inflatable packer systems installed directly above the
well-screens to ensure isolation of the test formation being
evaluated.
The larger diameter P/I wells allow for the completion of
various pump and injection tests within the Test Area, while the
Observation wells allow for the collection of important hydrologic
data during the pump and injection tests.
Positive Initial Test Results from Test Area 1
Initial pump and injection tests were completed by Petrotek
Corporation ("Petrotek") by pumping water from, or injecting water
into, the P/I wells installed within Test Area 1. In each of
the tests completed, a hydraulic response has been observed at the
other P/I well and at all four Observation wells located within the
ore zone test formation (GWR-015, GWR-016, GWR-020 and GWR-024).
Taken together, hydraulic responses have been observed over
the entire 34 metres of strike length associated with the ore zone
formation within Test Area 1 (from GWR-024 to GWR-016 and GWR-020
VWP) – representing the maximum strike length response possible in
Test Area 1 given the design of the field test (see Figure 2).
A hydraulic response was also observed in one of the three
overlying sandstone Observation wells (GWR-013) but was not
observed in the underlying basement well (GWR-004) or the adjacent
sandstone well (GWR-017). The lack of response in GWR-004 is
considered potentially indicative of low permeability conditions
within the basement units below the Phoenix deposit – which is generally
supportive of the Company's expectation that the basement units
below the Phoenix deposit will be
able to provide containment of the ISR mining solution in
conjunction with the planned freeze dome.
The primary purpose of the initial tests within Test Area 1 was
to test for hydraulic connectivity between wells and collect a
preliminary data set. This information will be used to inform the
location of a large-diameter (5 inch) commercial-scale well ("CSW")
within the Test Area. The large-diameter well designs are
expected to allow for the insertion of larger pumps and additional
downhole equipment that will facilitate CSW pump and injection
tests and the evaluation of certain permeability enhancement
techniques as part of a comprehensive program of hydrological data
collection within the Test Area.
Following the completion of various pump and injection tests,
permeameter testing, hydraulic packer testing and downhole
geophysical logging within the Test Area; quantitative analysis and
integration of data from the various tests will be used to prepare
a hydrogeological model. The model will be used to simulate
ground water flow and evaluate system sensitivity to key parameters
such as hydraulic conductivity, specific storage, dispersivity,
porosity, as well as head and flow vectors. The model will form an
important basis for detailed mine planning required as part of the
FS process.
Additional Background on the ISR Field Test
Program
Denison has engaged Petrotek to facilitate the design and
implementation of ISR field testing at Phoenix. Petrotek specializes in technical
evaluation and field operations regarding subsurface fluid flow and
injection projects, with experience ranging from feasibility
studies to facility operation. The firm has more than 20 years of
experience in the ISR uranium mining industry and currently
provides consulting services to each of the ISR uranium miners in
the United States.
Petrotek and Denison have designed an ISR field testing program
specific to the unique geological characteristics of the
Phoenix deposit. The testing
program aims to provide hydrogeological testing across four Test
Areas of Phoenix Zone A (see Figure 1), covering approximately 65%
of the Indicated Mineral Resource estimated for the deposit. The
Test Areas have been selected with the objective of covering each
of the various fluid flow domains, and combinations thereof,
expected to exist within the deposit. The domains have been
defined from detailed geological databases and associated models,
with the intention that the Test Areas are collectively
representative of the deposit as a whole. Data acquired from the
ISR field testing program will be utilized to create an integrated
hydrogeological model, which will form the basis for ISR wellfield
and freeze dome design necessary for the FS and to support the
environmental assessment process.
The summer 2019 program is designed to assess Test Area 1 and
Test Area 2. The remaining Test Areas (Test Area 3 and 4) are
expected to be evaluated in future years to support the completion
of a FS. The main objective within each Test Area is to efficiently
establish the fundamental hydrogeologic characteristics of the
orebody, the overlying sandstone and overburden formations, and the
underlying basement rocks.
Additional supportive permeability and porosity tests are
planned through the ore zone and are expected to include hydraulic
conductivity tests (packer testing) and downhole geophysics
(nuclear magnetic resonance and neutron), where borehole conditions
allow. Mineralized core samples from the ore zone, obtained in new
holes or by wedging from existing boreholes, will be subject to
detailed onsite geological and geotechnical logging and
permeability (permeameter) testing, and will be preserved to
facilitate future planned laboratory-based metallurgical test
work.
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 results of the PFS and expectations with
respect thereto; development and expansion plans and objectives,
including plans for a feasibility study and environmental
assessments for Wheeler River; 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 (Full Resolution)
Figure 2. Plan map and long section showing Pump/Injection
and Observation wells completed for ISR field testing in
Test Area 1 (Full Resolution)
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SOURCE Denison Mines Corp.