TORONTO, Sept. 19, 2019 /PRNewswire/ - Denison
Mines Corp. ("Denison" or the "Company") (DML: TSX, DNN:
NYSE American) is pleased to announce that the initial In-Situ
Recovery ("ISR") field test results from Test Area 2 of the
Phoenix deposit ("Phoenix") have
confirmed hydraulic connectivity within a significant portion of
the ore zone tested. The initial field tests are part of the
ongoing ISR field test program at the Company's 90% owned Wheeler
River Uranium Project ("Wheeler River") in northern Saskatchewan, Canada.
View PDF version
Following the positive initial test results from Test Area 1
(outlined in Denison's press release dated August 27, 2019) and Test Area 2 (summarized
below), Denison has decided to advance to the second stage of ISR
field testing – the installation of large-diameter commercial scale
wells ("CSWs") and the completion of additional hydrogeological
field testing. One CSW is planned for each of Test Area 1 and
Test Area 2, with each well designed to meet the technical and
regulatory standards expected for a commercial ISR well at
Phoenix. Accordingly, each well's completion will provide key
inputs for the Environmental Impact Assessment ("EIA") process and
planned Feasibility Study ("FS") and will ultimately reduce the
risk associated with the application of the ISR mining method at
Phoenix.
David Cates, President and CEO of
Denison, commented, "The initial test results from Test
Area 1 and Test Area 2 have provided the confidence and information
needed to initiate the installation of commercial scale wells and
additional testing, as we de-risk the project in a staged,
disciplined, and cost effective manner. It is exciting to progress
to the next phase of the summer 2019 program and witness the
installation of the first large-diameter wells, designed for
commercial ISR production, in the Athabasca Basin. We are looking forward to
initiating further hydrogeological testing from these wells, which
should allow for the simulation of fluid flow within the deposit
under conditions similar to a commercial production
environment."
Initial Test Results from Test Area 2
As part of the ISR field test program, two Pump/Injection
("P/I") wells and four Observation wells were successfully
installed within Test Area 2 at Phoenix Zone A, as shown in Figures
1 and 2 and summarized in the table below. One of the Observation
wells is fitted with a Vibrating Wire Piezometer ("VWP") equipped
with pressure transducers at various depth locations. The well
installations for Test Area 2 were completed using the same
methodologies and specifications used for Test Area 1 (as outlined
in Denison's press release dated June 26,
2019, see 'Well Installations').
Location
|
Test
Well
|
Type
|
Test
Formation
|
Test Area
2
|
GWR-018
|
Observation
|
Adjacent
Sandstone
|
GWR-019
|
Pump/Injection
|
Ore Zone
|
GWR-021
|
Observation
|
Multiple
(VWP)
|
GWR-022
|
Pump/Injection
|
Ore Zone
|
GWR-023
|
Observation
|
Ore Zone
|
GWR-026
|
Observation
|
Ore Zone
|
Initial pump and injection tests were completed by Petrotek
Corporation ("Petrotek") by pumping water from, or injecting water
into, the P/I wells installed within Test Area 2. In tests
completed within P/I well GWR-019, a hydraulic response has been
observed at two of three Observation wells located within the ore
zone (GWR-023 and GWR-026). No response was observed in P/I well
GWR-022 or Observation well GWR-021 (Ore Zone - VWP), which are
also located within the ore zone. In tests completed within P/I
well GWR-022, no hydraulic responses were observed at the two
Observation wells within the ore zone (GWR-023 and GWR-026), the
other P/I well (GWR-019) or Observation well GWR-021 (Ore Zone –
VWP). These results are consistent with the hydraulic tests
conducted within P/I well GWR-019 and the geologic observations of
drill core recovered from GWR-022 (as described below).
Taken together, hydraulic responses have been observed
within a significant portion of the ore zone contained within Test
Area 2 – with hydraulic connectivity observed over an approximate
strike length of 15 metres (of a possible 30 metres) and
across-strike length of 16 metres (of a possible 16 metres) –
representing the maximum across-strike length response possible in
Test Area 2, given the design of the field test (see Figure 2).
Additionally, no hydraulic responses were observed in the
adjacent sandstone Observation well (GWR-018), located outside of
the ore zone test formation (similar to GWR-017 in Test Area 1, see
Denison Press release dated
August 27, 2019), or within the
overlying sandstone and underlying basement VWPs installed in
GWR-021. The lack of response in the basement VWP of GWR-021 is
further indicative of low permeability conditions within the
basement units below the Phoenix Zone A orebody. To date, no
hydraulic basement responses have been observed in either Test Area
1 or Test Area 2, which is generally supportive of the Company's
expectation that the basement units below the Phoenix deposit will be able to provide
containment of the ISR mining solution in conjunction with the
planned freeze dome.
At present, Test Area 2 is interpreted to be more geologically
complex than Test Area 1, relating to the variable structure and
alteration. During initial pump and injection tests, where
hydraulic responses were observed within the ore zone test horizon
(GWR-023, GWR-026 and GWR-019), the areas are geologically
characterized as variably high grade (~30%
U3O8 to 45% U3O8) to
very high grade (~60% U3O8 to 82%
U3O8), semi-massive to massive uraninite with
additional sections of strongly structured and friable ore.
Where hydraulic responses were not observed within the ore zone
test horizon (GWR-022 and GWR-021 VWP), the areas are geologically
characterized as more clay-rich, with sections of massive clays
occurring along fault zones with associated lower grades of uranium
mineralization.
The initial results for Test Area 2 are consistent with
expectations of fluid flow for that area of the deposit.
Importantly, testing in this geologically complex area, amongst
other Test Areas, will allow for the optimization of planned ISR
mining under the various geological conditions expected within the
Phoenix deposit. As part of
the Company's plans for further testing in 2019 and beyond,
permeability enhancement techniques, various well spacings and
patterns, and/or 'sweep' (injection-recovery between wells) versus
'soak' (injection-recovery within the same well) mining
methodologies, will all be evaluated ahead of the development of a
comprehensive mine plan.
Commercial Scale Wells
Following the completion of initial ISR field tests in Test Area
1 and Test Area 2, Denison has commenced the installation of a CSW
in Test Area 1. An additional CSW is planned for Test Area 2
and is expected to be initiated following the completion of
additional hydrogeological testing from the CSW in progress in Test
Area 1. The initial positive ISR field test results obtained from
lower-cost / smaller-diameter HQ and PQ sized wells in Test Area 1
and Test Area 2, have provided the confidence and information
required to commence with the installation of the higher-cost /
larger-diameter CSWs.
The CSWs are designed as vertical wells for the injection or
recovery of mining solution during commercial ISR operation. The
planned drilling process involves conductor casing of the
overburden (glacial till), followed by destructive drilling through
the Athabasca sandstone and
finally coring of the ore zone and approximately 10 metres of
underlying basement rocks. Materials used in the installation of
the wells are expected to include an outer casing and inner lined
casing – with the outer casing cemented in place – providing a
double-walled, fully-sealed piping system, which is mining solution
ready and expected to meet environmental and regulatory standards.
A well screen will be installed within the ore zone which, together
with the insertion of larger diameter downhole pumps, will allow
for the pumping/injection of water to simulate fluid flow within
the deposit under conditions similar to those expected for
commercial operation. The installation of each CSW during the
summer 2019 program is also expected to provide useful information
for the planned FS in regard to costs and schedule for the
development of the proposed ISR wellfield.
A permeability enhancement technique has also been selected for
initial evaluation during the summer 2019 program. The MaxPERF
drilling tool, developed and operated by Penetrators Canada Inc.,
is deployable from within the planned CSW and designed to drill a
0.7 inch (17 mm) roughly horizontal hole up to 72 inches (182 cm)
in length. The objective is to expose the permeability of the ore
zone in more challenging areas by completing multiple arrays of
holes at various elevations, potentially providing increased access
to hydraulic connectivity associated with the existing fracture
network. Hydrogeological testing is planned both before, and after,
the application of the MaxPERF drilling tool. Downhole geophysics
are also planned for each CSW, including nuclear magnetic resonance
and dual neutron, to provide additional supportive permeability and
porosity data, respectively.
Additional Supportive Permeability and Porosity
Tests
Supportive permeability and porosity tests, including hydraulic
conductivity tests (packer testing), geological and geotechnical
logging, and permeability (permeameter) testing, have been
completed for Test Area 1 and Test Area 2. This significant dataset
will undergo data verification followed by detailed analysis,
reporting, and integration into the hydrogeological model being
developed for Phoenix. In
addition, numerous mineralized core samples from the ore zone,
obtained from the summer 2019 field program, have been preserved to
facilitate future planned laboratory-based metallurgical test
work.
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.
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 approximately
305,000 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 66.51% 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 also engaged in mine decommissioning and
environmental services through its Denison Environmental Services
division and is the manager of Uranium Participation Corp., a
publicly traded company which invests in uranium oxide and uranium
hexafluoride.
Follow Denison on Twitter
@DenisonMinesCo
Qualified Persons
The hydrogeological results and interpretations thereof
contained in this release were prepared by Mr. Errol Lawrence, PG (Senior Hydrogeologist), and
Mr. Aaron Payne, PG (Senior
Hydrogeologist) at Petrotek, independent Qualified Persons in
accordance with the requirements of NI 43-101.
The other technical information contained in this release has
been reviewed and approved by Mr. Dale
Verran, MSc, P.Geo, Pr.Sci.Nat., Denison's Vice President,
Exploration, a Qualified Person in accordance with the requirements
of NI 43-101.
Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this news 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 news release contains forward-looking
information pertaining to the following: the field test program
(including drilling) and evaluation interpretations, activities,
plans and objectives; the results of the PFS and expectations with
respect thereto; development and expansion plans and objectives,
including plans for a feasibility study and environmental
assessments for Wheeler River; and expectations regarding its joint
venture ownership interests and the continuity of its agreements
with its partners.
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.
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 12, 2019
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 news 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 news release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this news release to conform such information to actual
results or to changes in Denison's expectations except as otherwise
required by applicable legislation.
Cautionary Note to United States Investors Concerning
Estimates of Measured, Indicated and Inferred Mineral Resources and
Probable Mineral Reserves: This news release may
use the terms 'measured', 'indicated' and 'inferred' mineral
resources. United States investors
are advised that while such terms have been prepared in accordance
with the definition standards on mineral reserves of the Canadian
Institute of Mining, Metallurgy and Petroleum referred to in
Canadian National Instrument 43-101 Mineral Disclosure Standards
("NI 43-101") and are recognized and required by Canadian
regulations, the United States Securities and Exchange Commission
("SEC") does not recognize them. 'Inferred mineral resources' have
a great amount of uncertainty as to their existence, and as to
their economic and legal feasibility. It cannot be assumed that all
or any part of an inferred mineral resource will ever be upgraded
to a higher category. Under Canadian rules, estimates of inferred
mineral resources may not form the basis of feasibility or other
economic studies. United States
investors are cautioned not to assume that all or any part of
measured or indicated mineral resources will ever be converted into
mineral reserves. United
States investors are also cautioned not to assume that all
or any part of an inferred mineral resource exists, or is
economically or legally mineable. The estimates of
mineral reserves in this news release have been prepared in
accordance with NI 43-101. The definition of probable mineral
reserves used in NI 43-101 differs from the definition used by the
SEC in the SEC's Industry Guide 7. Under the requirements of
the SEC, mineralization may not be classified as a "reserve" unless
the determination has been made, pursuant to a "final" feasibility
study that the mineralization could be economically and legally
produced or extracted at the time the reserve determination is
made. Denison has not prepared a feasibility study for the purposes
of NI 43-101 or the requirements of the SEC. Accordingly,
Denison's probable mineral reserves disclosure may not be
comparable to information from U.S. companies subject to the
reporting and disclosure requirements of the SEC.
Figure 1. Phoenix Zone A plan view showing Test Areas
delineated for ISR field testing. (Full Resolution)
Figure 2. Plan map and long section showing Pump/Injection
and Observation wells completed for ISR field testing in Test Area
2. (Full Resolution)
View original content to download
multimedia:http://www.prnewswire.com/news-releases/denison-reports-initial-results-from-isr-field-test-at-phoenix-test-area-2-and-advancement-to-commercial-scale-wells-300921351.html
SOURCE Denison Mines Corp.