Denison Mines Corp. (“Denison” or the “Company”) (TSX: DML) (NYSE American: DNN) is pleased to announce the successful completion of an internal conceptual mining study (the “Concept Study”) examining the potential future development of the J Zone uranium deposit (“J Zone”) using the In-Situ Recovery (“ISR”) mining method. Based on the results from the Concept Study, the Company has decided to initiate the preparation of a Preliminary Economic Assessment (“PEA”), which is expected to be completed during the second half of 2020.
The Concept Study was prepared by Denison’s in-house project development team under the oversight of David Bronkhorst, P.Eng., the Company’s Vice President, Operations, and was reviewed and approved by the Technical Committee of the Company’s Board of Directors.
The J Zone deposit is located on the Company’s Waterbury Lake property (“Waterbury”), which is owned by Denison (66.71%) and Korea Waterbury Lake Uranium Limited Partnership (“KWULP”) (33.29%), which is comprised of a consortium of investors, in which Korea Hydro & Nuclear Power (“KHNP”) holds a majority position. KHNP is also a significant shareholder in Denison.
David Cates, Denison’s President & CEO, commented, “We are encouraged by the results of the J Zone Concept Study, and we are pleased to advance to a PEA. The ability to complete the J Zone Concept Study with our internal project development team showcases the depth of talent that Denison has recruited since the completion of the Wheeler River Pre-Feasibility Study in 2018 – which study was highlighted by the selection of the ISR mining method for the Phoenix deposit. While investing in advancing our understanding of the potential applicability of the ISR mining method at Phoenix, we also invested in our team – bringing on key project development staff with expertise in hydrogeology, mine engineering, environmental permitting, and corporate social responsibility. This approach allows us to internalize critical technical project knowledge related to Phoenix, and facilitates opportunities to apply this knowledge to the Company’s other potentially ISR amenable uranium deposits – like J Zone. Having the benefit of completing a first-of-its-kind ISR field test at Phoenix in 2019, our team was well positioned to carry out the J Zone Concept Study and is expected to play an important role in facilitating future studies.”
Property Location
Waterbury Lake is located within the eastern portion of the Athabasca Basin in northern Saskatchewan. The property can be accessed year-round by provincial highway or by air to Points North Landing, a privately owned service centre with accommodations and airfield, which is located near the eastern edge of the property. The J Zone deposit is located on the eastern portion of the property approximately 15 km from Denison’s 22.5% owned McClean Lake uranium mill (See Figure 1).
Estimated Mineral Resources
J Zone is estimated to contain Indicated mineral resources totaling 12,810,000 lbs U3O8, based on 291,000 tonnes at an average grade of 2.00% U3O8. The deposit is defined by 268 drill holes intersecting uranium mineralization over a combined east-west strike length of up to 700 metres and a maximum north-south lateral width of 70 metres. Uranium mineralization is generally found within several metres of the unconformity at depth ranges of 195 to 230 metres below surface, with vertical thicknesses ranging from tens of centimeters to over 19.5 metres.
The mineral resource estimate for the J Zone deposit (and the technical information described herein) is described in an independent technical report, prepared in accordance with NI 43-101, titled “Technical Report with an Updated Mineral Resource Estimate for the Waterbury Lake Property, Northern Saskatchewan, Canada“, dated December 21, 2018, by SRK Consulting. .
Concept Study
The Concept Study evaluated the potential use of the ISR mining method for the J Zone deposit. In an ISR uranium mining operation, a mining solution (lixiviant) is injected into the ore zone through a series of drill holes known as injection wells. The lixiviant leaches the uranium as it travels through the ore zone and is then recovered as a uranium bearing solution (“UBS”), which is pumped back to surface via a series of recovery wells. Once on surface, the UBS is sent to a surface processing plant for the chemical separation of the uranium. Following the uranium removal, the lixiviant is reconditioned and returned to the wellfield for further production. The ISR mining method accounts for a significant portion of uranium mine production globally and is generally considered the lowest cost uranium mining method in the world – owing to the fact that the method eliminates the surface disturbances and costs associated with physically removing ore and waste from the ground, as well as the tailings treatment and storage, that are normally associated with underground or open pit mining operations.
J Zone shares many geological characteristics with the high-grade Phoenix deposit, which is part of the Company’s 90% owned Wheeler River Uranium Project (“Wheeler River”). J Zone is situated at the unconformity contact, between the overlying sandstone and underlying basement rocks, the mineralization is characterized as variably fractured, broken and desilicified with zones of strong clay and high-grade uranium metals. For these reasons, the mineralization is largely believed to be highly permeable with the ability to increase areas of lower permeability with the use of permeability enhancement techniques. Additionally, J Zone is similar to Phoenix in that it is underlain by relatively impermeable basement rocks providing the natural underlying aquitard necessary for the containment of lixiviant within the overlying sandstone units.
The internal studies undertaken by the Company on J Zone are preliminary in nature and there is significant uncertainty with respect to the potential for, and the economic and technical risks associated with, advancing to a PEA for J Zone, and such further studies may not be undertaken or completed if the preliminary results of internal studies are not maintained after further testing and/or analysis.
About Denison
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, 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 (‘MLJV’), which includes several uranium deposits and the McClean Lake uranium mill, which is contracted to process the ore from the Cigar Lake mine under a toll milling agreement, plus a 25.17% interest in the Midwest deposits and a 66.71% 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, which manages Denison’s Elliot Lake reclamation projects and provides post-closure mine and maintenance services to industry and government clients.
Denison is also the manager of Uranium Participation Corporation, a publicly traded company listed on the TSX under the symbol ‘U’, which invests in uranium oxide in concentrates and uranium hexafluoride.
Source: Denison Mines Corp.
