home Equities T.DML: Announces Further Extension of High-Grade “Huskie” Zone at Waterbury Lake

T.DML: Announces Further Extension of High-Grade “Huskie” Zone at Waterbury Lake

Denison Mines Corp. has completed the summer exploration drilling program at Waterbury Lake, with the final five drill holes returning multiple additional high-grade intersections. The high-grade and basement-hosted uranium-mineralized zone has now been expanded to the extent of the current drilling — measuring approximately 100 metres in strike length. The results from the final drill holes of the summer program were highlighted by 1.0 per cent triuranium octoxide equivalent (eU3O8) over 7.6 metres (including 4.6 per cent eU3O8 over 1.4 metres) in drill hole WAT17-449, and 0.8 per cent eU3O8 over 7.9 metres (including 3.3 per cent eU3O8 over 1.0 metre and 1.3 per cent eU3O8 over 1.0 metre) in drill hole WAT17-450A.

The summer 2017 drill program at Waterbury Lake commenced in late July and has been highly successful returning several high-grade uranium intersections from a target area located approximately 1.5 kilometres to the northeast of the property’s J zone uranium deposit. Following the discovery of uranium mineralization in the first four drill holes of the program, the scope of the program was increased in late August to allow for a total of nine drill holes, all of which have now been completed. Taken together, the summer program included a total of 3,722 metres drilled and resulted in the wide-spaced definition (approximately 50-by-50-metre drill hole spacing) of a significant zone of entirely basement-hosted mineralization with geological features consistent with basement-hosted deposits in the Athabasca basin. The new zone of mineralization has been named the Huskie zone.

Today’s news is highlighted by the following:

  • Drill hole WAT17-449 (1.0 per cent eU3O8 over 7.6 metres) and drill hole WAT17-450A (0.8 per cent eU3O8 over 7.9 metres) were located approximately 50 metres to the west of drill hole WAT17-446A (3.7 per cent eU3O8 over 3.9 metres, see news release dated Aug. 22, 2017), and have resulted in the extension of the high-grade, basement-hosted mineralized zone to a total strike length of approximately 100 metres.
  • Drill results to date have defined a significant zone of basement-hosted mineralization, which remains open in all directions, and has been named the Huskie zone.
  • The notable increase in the size and intensity of the alteration envelope together with the thickening of the faulted, graphitic gneiss along the westernmost fence of holes suggest exploration potential is increasing to the west of discovery drill hole WAT17-443 (1.1 per cent eU3O8 over 0.8 metre, see news release dated Aug. 1, 2017). Results are reported herein as preliminary radiometric equivalent grades (eU3O8) derived from a calibrated downhole total gamma probe. The company subsequently reports definitive assay grades following sampling and chemical analysis of the mineralized drill core.

David Cates, Denison’s president and chief executive officer, commented: “The Huskie zone is an exciting addition to Denison’s eastern-Athabasca-basin-focused exploration and project development portfolio. Huskie is located in close proximity to regional infrastructure and other strategic Denison assets, including the McClean Lake mill and deposits (22.5 per cent Denison), J zone deposit (64.22 per cent Denison) and the Midwest deposits (25.17 per cent Denison). This discovery, together with continued exploration success on the company’s flagship Wheeler River project, speaks to the skill and commitment of our Saskatoon-based exploration team, and delivers on our strategy of focusing our exploration spending on a select group of high-priority projects with potential for high-impact results.”

Dale Verran, Denison’s vice-president of exploration, commented: “Our team is extremely encouraged by the results of the summer program at Waterbury and how we have built upon the initial high-grade intercept in discovery hole WAT17-443. The basement plumbing system appears to be improving as we move west — as indicated by the increased number of mineralized lenses, a broader and stronger alteration halo and a widening of the structured, graphitic package. An unconformity offset and associated sandstone alteration has also caught our attention and provides a further target for unconformity mineralization. The trend is wide open to the west and land based for over one kilometre. We look forward to reporting assay results over the coming weeks and planning the 2018 drill program.”

The Huskie zone

Nine drill holes, completed on an approximate 50-by-50-metre spacing, have allowed for the wide-spaced definition of a zone of entirely basement-hosted mineralization with geological features consistent with basement-hosted deposits in the Athabasca basin. The mineralized zone is hosted primarily within a faulted, graphite-bearing pelitic gneiss which forms part of an east-west-striking, northerly dipping package of metasedimentary rocks flanked to the north and south by granitic gneisses. The Athabasca group sandstones that unconformably overly the basement rocks are approximately 210 metres thick. A major reverse fault, occurring along the upper contact of the graphitic gneiss, has resulted in approximately 15 metres of offset of the sub-Athabasca unconformity. Preliminary interpretation indicates the mineralization occurs as parallel, stacked lenses which are conformable to the foliation and fault planes within the graphitic gneiss. The high-grade mineralization comprises massive to semi-massive uraninite (pitchblende) and subordinate bright yellow secondary uranium minerals occurring along fault or fracture planes, or as replacement along foliation planes. Disseminations of lower-grade mineralization occur within highly altered rocks proximal to fault planes. The mineralization is intimately associated with hematite, which both occur central to a broad and pervasive alteration envelope of white clays, chlorite and silicification.

Of the eight drill holes designed to test for basement-hosted mineralization, seven holes intersected significant mineralization — including high-grade intersections in four of the holes. A single hole was designed to test for unconformity mineralization and encountered bleaching, silicification, clay alteration and weak radioactivity in the lower sandstone, proximal to a 15-metre unconformity offset which suggests additional potential at the unconformity.

The mineralized zone defined to date occurs between 50 and 175 metres vertically below the sub-Athabasca unconformity (265 and 390 metres vertically below surface) and measures approximately 100 metres along strike (current extent of drilling), up to 120 metres along dip, with individual lenses varying in interpreted true thickness between approximately two and seven metres. The zone is wide open in all directions in terms of the mineralization and associated alteration intersected.

A location map of the Huskie zone is provided on the company’s website. A simplified basement geology map, representative cross-section and inclined longitudinal section of the Huskie zone are provided on the company’s website. Preliminary radiometric equivalent grades for the summer 2017 drill program are provided in the associated table. The radiometric equivalent grades are provided as composites using a minimum thickness of one metre and a minimum cut-off of 0.05 per cent eU3O8.

          PRELIMINARY RADIOMETRIC EQUIVALENT GRADES FOR 
           THE WATERBURY LAKE SUMMER 2017 DRILL PROGRAM

Drill              From        To   Length (5)     eU3O8 (1) (2) (4)
hole                (m)       (m)          (m)                   (%)

WAT17-443         280.5     293.1         12.6                  0.13
and (6)           296.8     298.0          1.2                  0.77
WAT17-444         339.8     340.8          1.0                  0.08
and               345.8     346.8          1.0                  0.44
and               360.6     361.6          1.0                  0.14
WAT17-445         277.0     278.0          1.0                  0.13
WAT17-446A        305.7     309.6          3.9                   3.7
including (3)     307.0     308.8          1.8                   7.8
and               334.9     335.9          1.0                  0.24
and               341.2     342.8          1.6                  0.07
WAT17-447                      no  significant        mineralization
WAT17-448                      no  significant        mineralization
WAT17-449         321.9     323.2          1.3                  0.10
and               344.9     345.9          1.0                  0.25
and               349.2     350.2          1.0                  0.06
and               369.2     376.8          7.6                   1.0
including (3)     375.0     376.4          1.4                   4.6
and               379.4     384.5          5.1                  0.21
WAT17-450A        279.7     282.6          2.9                  0.08
and               315.1     323.0          7.9                  0.77
including (3)     319.2     320.2          1.0                   3.3
including (3)     321.4     322.4          1.0                   1.3
and               335.2     336.4          1.2                  0.11
WAT17-451         390.4     391.9          1.5                  0.15
and               399.4     403.1          3.7                  0.27
and               405.6     406.6          1.0                  0.09
and               418.1     419.1          1.0                  0.07
      
Notes 
(1) eU3O8 is radiometric equivalent U3O8 derived from 
a calibrated total gamma downhole probe. eU3O8 results 
are preliminary in nature and all mineralized intervals 
will be sampled and submitted for chemical U3O8 assay. 
(2) Intersection interval is composited above a cut-off 
grade of 0.05 per cent eU3O8 unless otherwise indicated. 
(3) Intersection interval is composited above a cut-off 
grade of 1.0 per cent eU3O8. 
(4) Composites are compiled using 1.0-metre minimum ore 
thickness and 2.0-metre maximum waste.
(5) As the drill holes are oriented steeply toward the 
south-southeast and the mineralized lenses are 
interpreted to dip moderately to the north, the true 
thickness of mineralization is expected to be 
approximately 75 per cent of the intersection lengths.
(6) This interval includes 1.1 per cent eU3O8 over 
0.8 metre as reported previously.

Exploration potential

The increase in the number of mineralized lenses together with the notable increase in the size and intensity of the alteration envelope and the thickening of the faulted graphitic gneiss, along the westernmost fence of holes, suggest exploration potential is increasing to the west of discovery drill hole WAT17-443. Accordingly, several priority target areas have been identified which warrant follow-up in future drilling programs, summarized as follows:

  • Along strike to the west: The final three drill holes of the summer 2017 program (WAT17-449, WAT17-450A and WAT17-451), along the westernmost drill fence, all intersected significant mineralization, which is wide open along strike to the west.
  • Updip and downdip: Along the westernmost drill fence, mineralization remains open updip of WAT17-450A (0.8 per cent eU3O8 over 7.9 metres) and downdip of WAT17-451 (0.3 per cent eU3O8 over 3.7 metres). Furthermore, the 25-metre interval of strong clay alteration and bleaching intersected in WAT17-448, approximately 57 metres downdip of WAT17-446A (3.7 per cent eU3O8 over 3.9 metres, including 7.8 per cent eU3O8 over 1.8 metres), indicates the mineralizing system remains open at depth in this area.
  • At the unconformity: Drill hole WAT17-447, which was designed to test the unconformity above the faulted graphitic gneiss, encountered bleaching, silicification, clay alteration and weak radioactivity in the lower sandstone proximal to the interpreted 15-metre unconformity offset. These features suggest potential for unconformity-hosted deposits along strike.

Waterbury Lake property

The Waterbury Lake property consists of multiple claims covering 40,256 hectares and is located in the infrastructure-rich eastern portion of the Athabasca basin region in Northern Saskatchewan. The property is jointly owned by Denison (63.63 per cent) and Korea Waterbury Uranium LP (KWULP) (36.37 per cent) through the Waterbury Lake Uranium LP (WLULP). KWULP consists of a consortium of investors in which Korea Hydro & Nuclear Power (KHNP) holds a majority position. KWULP has elected not to finance the 2017 exploration program and, as a result, will incur dilution of its ownership interest in the WLULP. KHNP is also a significant shareholder in Denison, holding 58,284,000 common shares of Denison, which represent approximately 10.42 per cent of the company’s issued and outstanding common shares.

The J zone deposit, located on the Waterbury Lake property, occurs at the sub-Athabasca unconformity and is estimated to contain indicated resources of 12.8 million pounds U3O8 based on 291,000 tonnes of mineralization an average grade of 2.0 per cent U3O8. The Roughrider deposit on Rio Tinto’s Roughrider property is located immediately along strike to the east of J zone deposit and occurs at the sub-Athabasca unconformity and below within the basement rocks. Prior to acquisition by Rio Tinto in 2012, the Roughrider deposit was estimated to contain indicated resources of 17.2 million pounds U3O8 based on 394,200 tonnes of mineralization at an average grade of 1.98 per cent U3O8 and inferred resources of 40.7 million pounds U3O8 based on 161,600 tonnes of mineralization at an average grade of 11.43 per cent U3O8.

For more information on the J zone deposit, please refer to the technical report on the mineral resource estimate on the J zone uranium deposit, Waterbury Lake property, dated Sept. 6, 2013, by Dr. Allan Armitage, PhD, PGeo, and Alan Sexton, MSc, PGeo, of GeoVector Management Inc., available on Denison’s website and under the company’s profile on SEDAR. For further details on the Roughrider deposit, prior to acquisition by Rio Tinto in 2012, please refer to the preliminary economic assessment technical report for the east and west zones, Roughrider uranium project, Saskatchewan, dated Sept. 13, 2011, by SRK Consulting (Canada) Inc. available under Hathor Exploration Ltd.’s profile on SEDAR.

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