TORONTO, May 4, 2022
/CNW/ - Denison Mines Corp. ('Denison' or the
'Company') (TSX: DML) (NYSE: DNN) today filed its Condensed
Consolidated Financial Statements and Management's Discussion &
Analysis ('MD&A') for the quarter ended March 31, 2022. Both documents will be available
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. The Company's results
reflect earnings attributable to Denison shareholders of
$0.05 per share for the quarter ended
March 31, 2022 – including
mark-to-market gains of $47.8 million
on the Company's investment in 2.5 million pounds
U3O8 of physical uranium holdings. All
amounts in this release are in Canadian dollars unless otherwise
stated. View PDF
David Cates, President and CEO of
Denison commented, "Our results from the first quarter of
2022 reflect further improvements in the uranium market, as well as
an active start to the year for the Company's Wheeler River and
McClean Lake projects.
The spot price of U3O8 increased by
nearly 40% during the first quarter, reflecting the relative
scarcity of discretionary uranium holdings available to the spot
market amidst an environment of significant geopolitical
uncertainty, which drove a substantial increase in the value of
Denison's physical uranium holdings and the Company's earnings per
share of $0.05. Denison remains
committed to holding its physical uranium position for the
long-term as both a means to enhance our shareholders' exposure to
the uranium market and a tool for the future financing of the
development of the Wheeler River project. At the end of the
first quarter, Denison's physical uranium holdings had a market
value of approximately $181 million,
representing ~60% of Denison's share of the initial capital costs
estimated for the Wheeler River project in the Pre-Feasibility
Study.
At Wheeler River, we have commenced and made significant
progress towards the execution of the first of two planned
evaluation field programs in 2022. Our first field program
for the year, involves additional ISR testing and includes the
installation of multiple small diameter three-spot test patterns
designed to facilitate the collection of information from
additional areas of the Phoenix
deposit and support the finalization of our plans for the second
field program planned for the year – the Feasibility Field Test
('FFT'). The FFT is scheduled for completion by the end of the
fourth quarter of 2022 and is intended to support the Feasibility
Study for the project by providing further verification of the
permeability, leachability and containment parameters needed for
the successful application of the ISR mining method at Phoenix.
At our 22.5% owned McClean Lake project, which is a joint
venture with French nuclear giant Orano, we achieved a significant
milestone with receipt of regulatory approval for the expansion of
the McClean Lake Tailings Management Facility ('TMF'). With
the TMF expansion approved, the McClean Lake mill is well
positioned to remain a strategically significant asset in the
Athabasca Basin for many years to
come.
Overall, it has been a busy quarter for the Denison team, as
we advance several key projects related to Wheeler River and our
portfolio of development and exploration projects, during a very
dynamic time for the uranium industry. This work is part of
an ambitious plan for 2022, which is expected to involve several
potential catalysts and the completion of various key milestones
through the end of 2022 and into 2023."
Highlights
- Commenced the 2022 In Situ Recovery ('ISR') field program at
the Phoenix uranium deposit
('Phoenix')
The Company's ambitious 2022 evaluation plan for the Wheeler
River Project ('Wheeler River' or the 'Project') is designed to
further de-risk the technical elements of the Phoenix ISR project
ahead of the completion of the Feasibility Study ('FS') initiated
for the project in late 2021. Key to the 2022 plan is the
completion of additional field programs ('2022 Field Program'),
including the installation of additional PQ test wells in multiple
three-spot test patterns to be used to assess the ISR mining
conditions in additional areas of the Phoenix deposit, as well as the completion of
a FFT. Efforts in support of the 2022 Field Program commenced in
the first quarter, including initial mobilization of necessary
equipment to the Wheeler River site, the collaring of the PQ wells,
and the drilling of six of the nine planned PQ wells.
- Obtained regulatory approval for the expansion of the
McClean Lake Tailings Management Facility
In January 2022, the Canadian
Nuclear Safety Commission ('CNSC') approved an amendment to the
operating license for the McClean Lake Joint Venture ('MLJV') and
Midwest Joint Venture ('MWJV') operations, which allows for the
expansion of the McClean Lake TMF, along with the associated
revised Preliminary Decommissioning Plan ('PDP') and cost estimate.
The McClean Lake mill is a strategically significant asset in the
Athabasca Basin region and the
approval of the TMF expansion ensures the facility will be well
positioned to serve as a regional milling centre for current and
future uranium mining projects in the eastern portion of the
Athabasca Basin for many years to
come.
As a result of the updated PDP, the Company's pro rata share of
the financial assurances required to be provided to the Province of
Saskatchewan has decreased from
$24,135,000 to $22,972,000. Accordingly, subsequent to quarter
end, the pledged amount of cash required under the 2022 Facility
has been decreased to $7,972,000, and
the Company's additional cash collateral of $135,000 has been released – resulting in the
return of $1,163,000 in previously
restricted cash to the Company. Additionally, the Company's
reclamation obligation has been updated to reflect the PDP, as well
as other relevant estimates, resulting in a decrease in the
obligation of $3,303,000.
- Discovered high-grade uranium mineralization at 24.68% owned
Waterfound River Joint Venture ('Waterfound')
In March 2022, multiple new
high-grade intercepts of unconformity-hosted uranium mineralization
were discovered in the final three drill holes completed during the
winter 2022 exploration program at Waterfound. The results were
highlighted by drill hole WF-68, which returned a broad zone of
uranium mineralization, including a peak interval of 5.91%
eU3O8 over 3.9 metres (0.05%
eU3O8 cut-off) with a sub-interval grading
25.30% eU3O8 over 0.7
m, located approximately 800 metres west, along the La
Rocque Conductive Corridor, of the previously discovered high-grade
mineralization (including 4.49% U3O8 over
10.53 metres) at the Alligator Zone. The newly identified
mineralization remains open along strike in both directions and
additional drilling to test the extent of mineralization is
expected to be completed during the planned summer exploration
drilling program.
- Received US$2.1 million from
Uranium Industry a.s ("UI") pursuant to new Repayment
Agreement
During the first quarter of 2022, the Company received
US$2.1 million from UI pursuant to
the terms of a Repayment Agreement that was executed in January
2022. Under the Repayment Agreement, UI has agreed to make
scheduled payments on account of an arbitration award in favour of
Denison (with respect to the arbitration proceedings between the
Company and UI related to the 2015 sale by Denison to UI of its
mining assets and operations located in Mongolia), plus additional interest and
fees. The total amount due to Denison under the Repayment
Agreement, including amounts already received in 2022, is
approximately US$16 million, which is
payable over a series of quarterly installments and annual
milestone payments ending on December 31,
2025.
- Welcomed new additions to the Board of Directors and
the Management Team
In January 2022, Ms. Laurie Sterritt was appointed to Denison's Board
of Directors and Mr. Kevin Himbeault
was appointed to the position of Vice President of Plant Operations
& Regulatory Affairs. Ms. Sterritt has over 25 years of
experience in the fields of Indigenous, government, and community
relations, is a member of the Kispiox Band of the Gitxsan Nation,
and is a Partner at Leaders International, an executive search firm
in Canada. Mr. Himbeault has over 25 years of diverse
involvement in the mining industry, including an 18-year career
with Cameco Corporation ('Cameco') where he most recently held the
position of Operations Manager for the Key Lake mill. Mr.
Himbeault will be tasked with oversight of all matters related to
process plant operations and regulatory affairs for Denison.
Additionally, in February 2022,
Mr. Yun Chang Jeong joined the Board
of Directors as a nominee of Korea Hydro Nuclear Power ('KHNP')
pursuant to the KHNP Strategic Relationship Agreement ('KHNP SRA').
Mr. Jeong currently serves as the General Manager of the
Nuclear Fuel Supply Section of KHNP and fills the vacancy on
Denison's Board created by the resignation of KHNP's previous
nominee, Mr. Jun Gon Kim.
About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. The Company has an effective 95% interest in its
flagship Wheeler River Uranium Project, which is the largest
undeveloped uranium project in the infrastructure rich eastern
portion of the Athabasca Basin
region of northern Saskatchewan.
Denison's interests in Saskatchewan also include a 22.5% ownership
interest in the McClean Lake Joint Venture, 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 Main 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. Each of Midwest Main, Midwest A, THT and
Huskie are located within 20 kilometres of the McClean Lake
mill.
Through its 50% ownership of JCU (Canada) Exploration Company, Limited ('JCU'),
Denison holds additional interests in various uranium project joint
ventures in Canada, including the
Millennium project (JCU, 30.099%), the Kiggavik project (JCU,
33.8123%) and Christie Lake (JCU,
34.4508%).
Denison's exploration portfolio includes further interests in
properties covering approximately 297,000 hectares in the
Athabasca Basin region.
Denison is also engaged in post-closure mine care and
maintenance services through its Closed Mines group, which manages
Denison's Elliot Lake reclamation
mine sites in the Elliot Lake
region and provides related services to certain third-party
projects.
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: projections with respect
to exploration, development and expansion plans and objectives,
including the plans and objectives for Wheeler River and the
related evaluation field program; the interpretation of the results
of its exploration drilling programs; plans and objectives for the
feasibility study; its investments in uranium; 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 energy and
uranium demand. 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 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 its evaluation activities and/or
the FS and/or otherwise discontinue testing, evaluation and
development work 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 25, 2022 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.
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SOURCE Denison Mines Corp.