TORONTO, March 5, 2020 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (DML: TSX, DNN: NYSE
MKT) today filed its Audited Consolidated Financial Statements and
Management's Discussion & Analysis ("MD&A") for the quarter
ended December 31, 2019. 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, 2019 represented a year of transition
for Denison, as we aggressively moved forward to de-risk the
application of the ISR mining method at Phoenix – following the completion of the
highly successful Wheeler River PFS, and the Board's decision to
advance the project into permitting, in late 2018. In early
2019 we launched the Environmental Assessment process, with our
Project Description being accepted by the Federal and Provincial
regulators. By the end of the year, we received a positive
project scoping decision from the Federal regulators.
In the field, we completed a 23-week first-of-its-kind ISR
field test program designed to validate the permeability of the
Phoenix orebody, which was
identified as the most significant technical risk for the Phoenix
ISR operation in the Wheeler River PFS. The field program was
implemented in a staged manner, progressing from the completion of
preliminary hydrogeological tests in a series of small diameter
test wells, to the completion of the two large diameter, commercial
scale wells – the first wells in the history of the Athabasca Basin intended for ISR mining. The
results from this test work show significant hydraulic connectivity
within the test areas of the Phoenix orebody and have confirmed our ability
to achieve bulk hydraulic conductivity values, in a commercial
scale well, that are consistent with those used in the PFS.
Additionally, in early 2020 we have reported results from a
specialized core leach test that indicate the uranium
concentrations from solution to be recovered from the wellfield
have the potential to significantly exceed the concentrations
assumed in the PFS. Taken together, these results have
meaningfully increased our confidence in the application of ISR
mining at Phoenix. Today, the prospect of successfully
bringing ISR mining to the Athabasca Basin is higher than it has ever
been."
PERFORMANCE HIGHLIGHTS
- Initiation of the Environmental Assessment ('EA') at Wheeler
River
During the first quarter of 2019, Denison submitted a Project
Description ('PD') to the Canadian Nuclear Safety Commission
('CNSC') and a Technical Proposal to the Saskatchewan Ministry of
Environment ('SK MOE') to support the advancement of an
In-Situ Recovery ('ISR') uranium mine at the Company's 90% owned
Wheeler River Uranium Project ('Wheeler River'). The documents were
accepted in the second quarter of 2019, initiating the EA process
for the project in accordance with the requirements of both the
Canadian Environmental Assessment Act, 2012 ('CEAA 2012') and the
Saskatchewan Environmental Assessment Act. The submission of the PD
followed a decision by Denison's Board of Directors to approve the
advancement of the Phoenix deposit
('Phoenix') ISR operation outlined
in the Pre-Feasibility Study ('PFS') completed for Wheeler River in
2018. In late December 2019,
Denison received a Record of Decision from the CNSC on the scope of
the factors to be taken into account for the Wheeler EA, which
indicate that the EA will follow the CNSC's generic guidelines.
- Completion of Highly Successful 2019 ISR Field Test at
Phoenix
In December 2019, Denison reported
the completion of a highly successful ISR field test program, which
was carried out at the high-grade Phoenix on the Wheeler River property. The ISR
field test program was designed to validate the permeability of
Phoenix, and to collect an
extensive database of hydrogeological data to further evaluate the
ISR mining conditions present at Phoenix. This detailed data
is expected to facilitate detailed mine planning as part of the
completion of a future Feasibility Study ('FS'). The ISR field test
program included preliminary hydrogeological tests completed by
using a series of small diameter and large diameter test wells to
move water through two test areas defined within the Phoenix ore zone. The ISR field test
successfully achieved each of the program's planned objectives, and
is highlighted by several key de-risking accomplishments, including
the following:
- Confirmation of significant hydraulic connectivity within the
Phoenix ore zone;
- Installation of the Athabasca
Basin's first Commercial Scale Wells ('CSWs') for ISR;
- Confirmation of limited hydraulic connectivity within the
underlying basement units; and
- Demonstration of the effectiveness of MaxPerf to increase
access to existing permeability from a CSW.
Extensive hydrogeological data sets were collected during the
2019 ISR field program, and are being incorporated into a
hydrogeological model being developed for Phoenix. In February
2020, Denison reported that the results from the
hydrogeological test work, completed to-date, have confirmed the
ability to achieve bulk hydraulic conductivity values (a measure of
permeability) consistent with the PFS (see Denison press release
dated February 24, 2020).
- Denison Initiates ISR Metallurgical Testing for
the Phoenix Deposit and Reports Uranium Concentrations from Initial
Core Leach Tests up to Four Times the Amount Assumed in PFS for
Phoenix ISR
In December 2019, Denison
announced the initiation of the next phase of ISR metallurgical
laboratory testing for uranium recovery, which will utilize the
mineralized drill core recovered through the installation of
various test wells during the 2019 ISR field test program. The
metallurgical laboratory test program builds upon the laboratory
tests completed for the recovery of uranium as part of the
project's PFS and is expected to further increase confidence and
reduce risk associated with the application of ISR. The
results are expected to facilitate detailed mine and process plant
planning as part of a future FS, and will provide key inputs for
the EA process. Significant components of the metallurgical
laboratory test program include core leach tests, column leach
tests, bench-scale tests and metallurgical modelling.
In February 2020, Denison reported
that initial data from core leach tests includes elemental uranium
concentrations, after test startup, in the range of 13.5 grams per
litre ('g/L') to 39.8 g/L, with an average of 29.8 g/L over 20 days
of testing (see Denison's press release dated February 19, 2020). This compares favourably to
the previous metallurgical test work completed to assess the use of
the ISR mining method at Phoenix –
which supported a uranium concentration of 10 g/L for the ISR
processing plant design used in the PFS.
- Denison Reports Favorable Results from Exploration at
Wheeler River and Waterbury Lake
Denison conducted winter and summer diamond drilling programs at
Wheeler River during 2019 – totaling 10,573 metres in 20 holes. The
programs were focused on initial testing of regional target areas
(K West, Q South East, K South, O Zone) with the potential to
result in the discovery of additional high-grade deposits that
could form satellite ISR operations. During the 2019 winter
program, unconformity-hosted uranium mineralization was discovered
along the southern portion of the K West trend (approximately 2
kilometres southwest of the Gryphon deposit) accompanied by strong
sulphide mineralization and other geological features commonly
associated with unconformity-related uranium deposits. Drill hole
WR-756 was highlighted by 0.03% U3O8 over 1.5
metres, 1.3% Cu over 4.0 metres, 0.13% Ni over 4.0 metres, and
0.18% Co over 6.0 metres, located immediately above the
sub-Athabasca unconformity.
Additional follow-up drilling during the 2019 summer program at K
West intersected strong hydrothermal alteration associated with
highly anomalous geochemistry within the basal Athabasca sandstone, indicative of a fertile
uranium mineralizing system along the K West trend and providing
evidence for additional exploration targets.
At Waterbury Lake a winter diamond drilling program was
completed during 2019 – totaling 5,735 metres in 15 holes.
The program was focused on drill testing priority target areas (GB
Zone, Oban South, GB Northeast and the Midwest Extension)
associated with the regional Midwest Structure, which is
interpreted to be located along the eastern portion of the
Waterbury Lake property. The program was highlighted by
intersections of basement-hosted uranium mineralization at the GB
Zone including 0.15% U3O8 over 6.0 metres in
drill hole WAT19-480, and 0.25% U3O8 over 2.0
metres and 0.22% U3O8 over 1.5 metres in
drill hole WAT19-486.
- Execution of Memoranda of Understanding ('MOUs') with Local
Communities for Wheeler River
As reported in the PD, Denison executed a series of MOUs, in
support of the advancement of Wheeler River, with certain
Indigenous communities who assert that Wheeler River falls
partially or entirely within their traditional territories and
where traditional land use activities are currently practiced
within the local and regional area surrounding the project. These
non-binding MOUs formalize the signing parties' intent to work
together in the spirit of mutual respect and cooperation, in order
to collectively identify practical means by which to avoid,
mitigate, or otherwise address potential impacts of the project
upon the exercise of Indigenous rights, Treaty rights, and other
interests, as well as to facilitate sharing in the benefits that
are expected to flow from the project.
- Renewal of Management Services Agreement with Uranium
Participation Corp.
The Company, through its wholly owned subsidiary Denison Mines
Inc., entered into a new five year agreement to provide management
services to Uranium Participation Corp. ('UPC'). The new agreement
has the potential to generate $10,000,000 in management fees to Denison over
the five year term.
- Denison's Closed Mines Group Renews Cornerstone
Environmental Services Contract with BHP Group Limited
('BHP')
Effective July 1, 2019, Denison's
Closed Mines group entered into a new two year services agreement
with Rio Algom Limited, a subsidiary of BHP. Under the terms of the
agreement, the Closed Mines group is responsible for carrying out
the management and operation of nine of BHP's decommissioned mine
sites in Ontario and Quebec.
- Obtained Financing for the Company's 2020 Canadian
Exploration Activities
In December 2019, the Company
completed a $4,715,000 bought deal
private placement equity offering for the issuance of 6,934,500
common shares on a flow-through basis at a price of $0.68 per share. The proceeds from the financing
will be used to fund Canadian exploration activities through to the
end of 2020.
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 pre-feasibility study ('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),
internal rate of return ('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.
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. The
Company's flagship project is the 90% owned Wheeler River Uranium
Project. Denison's interests in Saskatchewan 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 deposits
and a 66.57% interest in the J Zone and Huskie deposits on the
Waterbury Lake property. The Midwest, J Zone 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 disclosure of scientific and technical information regarding
Denison's material properties in this MD&A was prepared by, or
reviewed and approved by, Dale
Verran, MSc, Pr.Sci.Nat., the Company's Vice President
Exploration, or David Bronkhorst,
PEng., the Company's Vice President Operations, each a Qualified
Person in accordance with the requirements of NI 43-101. For a
description of the quality assurance program and quality control
measures applied by Denison, please see Denison's Annual
Information Form dated March 12, 2019
available under Denison's profile on SEDAR at www.sedar.com, and
its Form 40-F available on EDGAR at www.sec.gov/edgar.shtml.
Follow Denison on Twitter @DenisonMinesCo
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: 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,
plans and objectives; expectations regarding environmental and
regulatory standards and permitting processes; the estimates of
Denison's mineral reserves and mineral resources; plans for any FS,
and any work to be undertaken in respect thereto; expectations
regarding Denison's joint venture ownership interests; and
expectations regarding the continuity of its agreements with third
parties. 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 the ISR field test and
hydrogeological test programs 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.
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SOURCE Denison Mines Corp.