TORONTO, April 21, 2021 /CNW/ – Denison Mines Corp. (“Denison” or the “Company”) (TSX: DML) (NYSE American: DNN) is pleased to announce the initiation and ramp-up of In-Situ Recovery (“ISR”) field test activities, including the installation of a five-spot ISR test pattern (“Test Pattern”), at the Company’s 90% owned Wheeler River Uranium Project (“Wheeler River” or the “Project”). Mobilization of drilling equipment necessary to complete the large diameter drill holes, for each Commercial Scale Well (“CSW”) planned for the Test Pattern, was completed in early April 2021 and, to date, four of the five planned CSWs have been successfully drilled to target depths, cased, and cemented into position. The fifth CSW is in progress and is expected to be completed within the next week. The installation of the Test Pattern is the first step in an ambitious 2021 ISR field program, which is designed to support the further de-risking of the application of the ISR mining method at the high-grade Phoenix uranium deposit (“Phoenix”). View PDF version.
David Bronkhorst, Denison’s VP Operations, commented, “We are excited to have our 2021 ISR field program underway at Wheeler River. Our Saskatoon based technical team has assembled an industry-leading group of experts to design, install and operate the Test Pattern as part of our 2021 ISR field program. We are very pleased with the productivity achieved to date, for the installation of the large diameter CSWs, and are looking forward to further validating the effectiveness of various permeability enhancement tools and collecting additional hydrogeologic data to support the permitting and set-up of a lixiviant test in 2022. The lixiviant test is expected to be a key de-risking milestone for the Project – as it is intended to confirm technical feasibility by verifying the permeability, leachability, and containment parameters needed for the successful application of the ISR mining method at Phoenix.”
The 2021 ISR field program is expected to involve the following key components:
- Installation of a Five-spot Test Pattern: The Test Pattern is located in the Phase 1 area of the Phoenix deposit and is planned to consist of five new CSWs (see Figure 1 and Figure 2). The Test Pattern has been designed to facilitate the further evaluation of the ISR mining conditions at Phoenix – for incorporation into detailed mine planning that is expected to be completed as part of a future Feasibility Study (“FS”) for the Project;
- Installation of 11 Additional Monitoring Wells (“MWs”): In addition to the existing small-diameter MWs, eleven further MWs are planned to be installed in the Phase 1 area (see Figure 1 and Figure 2) and are designed to surround the Test Pattern on all sides and above the ore zone horizon, in order to facilitate detailed monitoring of pressure changes and observations of fluid flow patterns during active hydrogeological tests. Certain MWs will also allow for water quality sampling over the duration of test work;
- Extensive Hydrogeologic Testing: Approximately twenty-five hydrogeologic tests are planned to be completed during the ISR field program. Tests are expected to (1) evaluate baseline conditions, (2) evaluate the effectiveness of permeability enhancement tools deployed on an individual well basis, and (3) assess the Test Pattern’s total permeability on a full-scale basis. Additionally, ion tracer tests using inorganic salts are expected to be conducted on the full Test Pattern to establish breakthrough times for each CSW and confirm sub-surface pathways – thus allowing for a more complete understanding of the hydrogeologic characteristics expected throughout Phase 1, which is expected to support the permitting and design of a lixiviant test, planned for 2022, utilizing the existing Test Pattern.
Please refer to the Company’s news release dated February 8, 2021 for additional details related to the Company’s 2021 evaluation program plans for Wheeler River, which also includes information about the resumption of the Environmental Assessment process.
Phoenix Phase 1
As outlined in the Company’s freeze wall trade-off study (see news release dated Dec. 1, 2020), Denison has decided to adapt its plans for the Project to use a freeze wall in future Project design and environmental assessment efforts. The trade-off study highlighted a key opportunity for the Project – whereby the freeze wall could be installed in stages to facilitate a phased mining approach at Phoenix. In a phased mining approach, only a limited portion of the freeze wall is required to support first production, with the subsequent expansion of the freeze wall perimeter allowing for additional mining phases to be brought into production over the duration of the mine life.
The phased mining approach is expected to allow for the targeted extraction of the least capital-intensive reserves first, based on the grade and distribution of ore in various areas of the deposit. The trade-off study provides for mining to occur over 5 phases.
Phase 1 of the deposit is estimated to contain approximately 22.2 million pounds U3O8 (37,242 tonnes at 27.1% U3O8, above a cut-off grade of 0.8% U3O8) in Probable mineral reserves. Based on current designs, the Company estimates approximately 6.6 million pounds U3O8 (7,717 tonnes at 39.2% U3O8, above a cut-off grade of 0.8% U3O8) in Probable mineral reserves are contained within the expected operating perimeter of the Test Pattern (see Figure 1). These estimates are derived as a direct subset of those reported in the 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. The key assumptions, parameters and methods used to estimate the mineral reserves herein remain unchanged.
COVID-19
The Company is committed to ensuring that the Wheeler River site is a safe operating environment for its staff and contractors and that the Company’s field activities do not compromise the health and safety of the residents of northern Saskatchewan. In 2020, the Company’s Occupational Health and Safety Committee in Saskatoon developed a comprehensive guide for the safe resumption of work at Wheeler River. The protocols consider the unique health and safety risks associated with operating a remote work camp amidst the ongoing COVID-19 pandemic. Public health guidelines and best practices (including testing) have been incorporated into the Company’s protocols.
Despite the Company’s current intentions, it is possible that the 2021 ISR field program may be disrupted by the continuously evolving social and/or economic disruptions associated with the COVID-19 pandemic, which are outside of the control of the Company – for example, the ability of Company or contractor staff to attend to the site, Provincial or local travel restrictions, and changing public health guidelines.
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 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.
Denison suspended certain activities at Wheeler River during 2020, including the EA process, which is on the critical path to achieving the project development schedule outlined in the PFS. While the EA process has resumed, 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 interests in the Athabasca Basin include a 22.5% ownership interest in the McClean Lake joint venture (“MLJV”), 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 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. The Midwest, Midwest A, THT and Huskie deposits are located within 20 kilometres of the McClean Lake mill. In addition, Denison has an extensive portfolio of exploration projects covering approximately 280,000 hectares 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 Lakereclamation 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.
Qualified Persons
The technical information contained in this release has been reviewed and approved by Mr. David Bronkhorst, P.Eng, Denison’s Vice President, Operations, who is a Qualified Person in accordance with the requirements of NI 43-101.
Source: Denison Mines
