TORONTO, Oct. 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. View PDF version
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.
Qualified Persons
The technical information contained in this release related
to the 2020 ISR Field Program and the Wheeler River PFS 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.
The technical information contained in this release related
to the Exploration Drilling Program has been reviewed and approved
by Mr. Andrew Yackulic, P. Geo,
Denison's Director, Exploration, who is 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 results of the 2019
Field Test and 2020 Field Program, including the hydrogeologic
model, and their underlying assumptions and interpretations; the
2020 exploration drilling program, including its intended scope and
timing, objectives and interpretations; the Company's intentions
with respect to the Waterbury PEA; the current and continued use
and availability of third party technologies for testing; the
results of the PFS and expectations with respect thereto;
development and expansion plans and objectives, including the
Company's intentions with respect to the resumption of the EA and
feasibility study support activities and the potential impacts to
the project schedule plans for a feasibility study; the duration
and scope of impacts of the COVID-19 pandemic and affiliated
operational adjustments; 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.
For example, the results of the 2020 exploration drilling program,
2019 Field Test, hydrogeologic model and/or 2020 Field Program
discussed herein may not be maintained after further testing or be
representative of actual conditions within the Phoenix deposit. In addition, Denison
may decide or otherwise be required to discontinue the 2020 Field
Program, exploration drilling program or other testing, evaluation
and development work at Wheeler River if it is unable to maintain
or otherwise secure the necessary resources (such as testing
facilities, capital funding, regulatory approvals, etc.) or
operations are otherwise affected by COVID-19 and its potentially
far-reaching impacts. 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 13, 2020
or subsequent quarterly financial reports 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 press 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, these terms are not defined under Industry Guide 7
under the United States Securities Act and, until recently, have
not been permitted to be used in reports and registration
statements filed with the United States Securities and Exchange
Commission ('SEC'). '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. In addition, the terms "mineral reserve",
"proven mineral reserve" and "probable mineral reserve" for the
purposes of NI 43-101 differ from the definitions and allowable
usage in Industry Guide 7. Effective February 2019, the SEC adopted amendments to its
disclosure rules to modernize the mineral property disclosure
requirements for issuers whose securities are registered with the
SEC under the Exchange Act and as a result, the SEC now recognizes
estimates of "measured mineral resources", "indicated mineral
resources" and "inferred mineral resources". In addition, the SEC
has amended its definitions of "proven mineral reserves" and
"probable mineral reserves" to be "substantially similar" to the
corresponding definitions under the CIM Standards, as required
under NI 43-101. However, information regarding mineral
resources or mineral reserves in Denison's disclosure may not be
comparable to similar information made public by United States companies.
Figure 1: Location Map of Wheeler River Showing Existing
Regional Infrastructure.
Figure 2: Plan Map of Phoenix Showing Location of 2020 ISR
Field Test Work
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SOURCE Denison Mines Corp.