home Equities T.DML Announces Completion of ISR Field Program and Initiation of Exploration Program at Wheeler River

T.DML Announces Completion of ISR Field Program and Initiation of Exploration Program at Wheeler River

TORONTOOct. 28, 2020 /CNW/ – Denison Mines Corp. (“Denison” or the “Company”) (TSX: DML) (NYSE American: DNN) is pleased to announce that field activities at Denison’s 90% owned Wheeler River Uranium Project (“Wheeler River”) have safely and successfully transitioned from the In-Situ Recovery (“ISR”) field program at the high-grade Phoenix uranium deposit (“Phoenix”), which was initiated in July (see press release dated July 27, 2020), to a ~12,000 metre exploration drilling program designed to test initially for extensions to known mineralization at Phoenix and then advance to regional targets for the discovery of satellite uranium deposits potentially amenable to ISR mining.

David Cates, Denison’s President & CEO, commented “Having recently raised US$19 million through a well supported public offering, Denison remains debt free and is well funded with over CAD$29 million in cash.  We are now turning our attention to finalizing our plans for 2021 and beyond, as well as completing our planned activities in 2020 – including an exciting exploration program at Wheeler River and the Preliminary Economic Assessment (‘PEA’) planned for the J Zone deposit on the Waterbury Lake property. I’m proud of the effort that our team has put in to make the most of 2020, despite a temporary suspension of the formal part of the Wheeler River Environmental Assessment (‘EA’) – carrying out important scopes of work, including the 2020 ISR field program, in order for the company to be poised for a strong future re-start to the formal EA process.”

ISR Field Program

The ISR field work completed in 2020 (the “2020 Field Program”) was designed with the primary objective of building additional confidence in the results of an independent hydrogeologic “Proof of Concept” model developed for Phoenix by Petrotek Corporation (“Petrotek”) for the application of the ISR mining method (see press release dated June 4, 2020). Taken together with the installation of additional environmental monitoring wells, the data collected during the 2020 Field Program is expected to support the design and permitting of further field tests to be incorporated into a future Feasibility Study (“FS”).

David Bronkhorst, Denison’s Vice President Operations, commented, “While the formal EA process for Wheeler River was suspended in March 2020, in response to the COVID-19 pandemic, Denison’s Wheeler River project team has been busy advancing certain scopes of work during the year – including the 2020 Field Program.  Our activities in 2020 have been designed to ensure the EA and future FS support activities can advance as quickly as possible, and with minimized impact to the Project schedule, following a decision to resume the formal EA process. 

The 2020 ISR Field Program at Phoenix was completed safely and successfully, despite the disruptions related to COVID-19 – resulting in the collection of an extensive hydrogeological data set based on seventeen additional pump and injection tests, permeameter test work and groundwater sampling.  This work is expected to further validate and increase our confidence in the previously announced independent ‘proof of concept’ model developed by Petrotek.”

Key elements of the completed 2020 Field Program included:

  • Hydrogeological test work
    • 17 pump and injection tests were completed between Test Area 1 and Tests Area 2 at Phoenix Zone A (see Figure 1 for Wheeler River location, and Figure 2 for Phoenix);
    • Data collected from these tests will supplement the extensive dataset acquired as part of the 2019 ISR field testing program (see press release dated December 18, 2019), and is expected to provide additional insight into individual well capacities and the overall hydrogeological network of the deposit areas.
  • Permeameter analysis
    • Over 1,000 additional drill core samples were collected from historic holes, dried, and analyzed for permeability and porosity;
    • Samples were selected to refine our understanding of the mineralized hydrogeologic horizons, including the low permeability basement rocks and the overlying sandstone.
  • Rock mechanics
    • Mineralized core samples were collected and shipped to SNC Lavalin (Saskatoon) for rock mechanics tests, including tensile strength and uniaxial compressive strength;
    • The samples targeted various previously identified hydrogeologic units, including the Upper Clay Zone, Lower Clay Zone and High-Grade Friable Zone;
    • Results from these tests will be utilized to better define the design of certain permeability enhancement techniques for subsequent field programs.
  • Groundwater sampling
    • Groundwater samples were collected from eight different environmental monitoring wells in the Phoenix deposit area;
    • Sampling occurred at several horizons within each well – including the horizons above, below, and within the Phoenix ore body;
    • Samples have been submitted to the Saskatchewan Research Council (“SRC”) for analysis. Once received, data from these samples will be utilized to support the design and permitting of additional field tests expected to be incorporated into a future FS.
  • Installation of additional environmental monitoring wells
    • Five additional monitoring wells were installed in two clusters, located approximately 500 metres northeast of Phoenix, and 750 metres southeast of Phoenix (see Figure 2);
    • The additional monitoring wells will allow for the collection of groundwater flow information at locations further away from the Phoenix deposit than had been previously studied, providing additional data for the site groundwater model – which will allow for long-term monitoring and the modelling of ground water impacts through construction, operations and decommissioning, each of which will be an important element of the effects assessments in an Environmental Impact Statement (“EIS”).

Exploration Drilling Program

The 2020 exploration drilling program at Wheeler River commenced late in the third quarter. The program is expected to include ~12,000 metres of diamond drilling, planned in 27-30 drill holes. The drill program is designed to be executed in several phases, with an initial focus on the area proximal to Phoenix where further exploration and delineation drilling is warranted to identify potential additional mineralization that could be included as part of a future FS. Of particular focus is the area around Zone B, where previous exploration results suggest that the potential for additional mineralization remains outside of the current extents of the estimated mineral resource. The program has also been designed to test for additional mineralization at Phoenix Zone C (where there are previous mineralized intercepts, but where no mineral resource is currently estimated) and to explore regional target areas elsewhere on the property with the potential to produce a discovery that could become a satellite deposit potentially amenable to ISR mining.

As of October 27th, the Company has completed approximately 5,460 metres of drilling, representing roughly 44% of the total planned for the 2020 exploration program.  A total of 12 holes have been completed to target depth, as well as three holes that were abandoned due to either excessive deviation or drilling difficulties. All drill holes completed to date have been located outside of the previously delineated mineralized zones for Phoenix, with results highlighted by the following mineralized intercepts:

  • WR-765D1 (Phoenix Zone B) intersected uranium mineralization straddling the unconformity contact, grading 0.39% eU3O8 over 3.8 metres (from 399.85 to 403.65 metres) – approximately 15.0 metres east of WR-333 (which previously intersected 14.6% U3O8 over 6.0 metres); and
  • WR-771 (Phoenix Zone C) encountered uranium mineralization approximately 4 metres below the unconformity contact, grading 0.86% eU3O8 over 1.2 metres (from 375.15 to 376.35 metres) – approximately 28.8 metres to the southwest of WR-368 (which previously intersected 1.59% U3O8 over 2.0 meters)

The remaining targets at Phoenix will be re-prioritized by incorporating the results of the recently completed drill holes. Dependent on results, exploration drilling proximal to Phoenix is expected to be completed in early to mid-November, with the expectation that the focus of the exploration drill program will shift to regional drill targets that have been prioritized based on their potential to result in the discovery of satellite uranium deposits that may be amenable to ISR mining.

The Company reports results as preliminary radiometric equivalent grades (“eU3O8“), derived from a calibrated downhole total gamma probe, during active exploration programs and subsequently reports definitive assay grades following sampling and chemical analysis of the mineralized drill core. Radiometric equivalent probe results are subject to verification procedures by qualified persons employed by Denison prior to disclosure. For further details on the total gamma downhole probe methods employed by Denison, QAQC procedures and data verification procedures please see Denison’s Annual Information Form dated March 13, 2020 filed under the Company’s profile on SEDAR (www.sedar.com).

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 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

Given recent social, financial and market disruptions, Denison has suspended certain activities at Wheeler River, including the formal EA process, which is on the critical path to achieving the project development schedule outlined in the PFS. The Company is not currently able to estimate the impact to the project development schedule outlined in the PFS, and users are cautioned against relying on the estimates provided therein regarding the start of pre-production activities in 2021 and first production in 2024.

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 over 250,000 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 66.71% 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 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 care and maintenance services to a variety of industry and government clients.

Denison is also the manager of Uranium Participation Corp., a publicly traded company which invests in uranium oxide and uranium hexafluoride.


Source: Denison Mines