TORONTO, May 6, 2020 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (DML: TSX, DNN: NYSE
MKT) today filed its Consolidated Financial Statements and
Management's Discussion & Analysis ("MD&A") for the quarter
ended March 31, 2020. Both
documents can be found on the Company's website at
www.denisonmines.com or on SEDAR (at www.sedar.com) and EDGAR (at
www.sec.gov/edgar.shtml). The highlights provided below are derived
from these documents and should be read in conjunction with them.
All amounts in this release are in Canadian dollars unless
otherwise stated. View PDF version.
David Cates, President and CEO of
Denison commented, "During the first quarter of 2020,
Denison announced several positive developments related to the
application of the In-Situ Recovery ('ISR') mining method at the
Company's 90% owned Wheeler River uranium project. These results
have increased our technical confidence in advancing the
Phoenix deposit as the
Athabasca Basin's first ISR
uranium development project. Unfortunately, also during the first
quarter, the significant social and economic disruptions created by
the COVID-19 pandemic necessitated that Denison suspend the Wheeler
River Environmental Assessment ('EA') and certain other activities
planned for Wheeler River in 2020. While we are disappointed
to pause the EA process, we our proud of our swift action to ensure
employee safety, support public health efforts to limit
transmission of COVID-19, and exercise prudent financial
discipline.
An important element of our approach to the temporary
suspension is the retention of all senior technical and supporting
staff involved in the advancement of Wheeler River. With our
project development team in-tact during this time, we have
developed work plans that are financially prudent and designed to
make the most of this interim opportunity to organize our efforts
so that we can quickly resume activity in support of the
advancement of Phoenix, once
determined appropriate.
In recent days we have learned more about the troubling
out-break of COVID-19 in northern Saskatchewan. Denison was a first mover in
supporting several communities in northern Saskatchewan – with both financial support and
the procurement and distribution of critical preventative health
supplies, including nearly 1,000 litres of hand sanitizer, soap,
and other essential hygiene supplies. Northern Saskatchewan communities are
resilient, and we are continuing to actively support community-led
COVID-19 response initiatives that are foundational to achieving
success against these outbreaks and ensure the protection of
Northern Saskatchewan
citizens."
HIGHLIGHTS
- Temporary suspension of Wheeler River Environmental
Assessment ('EA') amidst COVID-19 disruptions
In March 2020, in light of the
significant social and economic disruption that has emerged as a
result of the COVID-19 pandemic and in line with the Company's
commitment to ensure employee safety, support public health efforts
to limit transmission of COVID-19, and in order to exercise prudent
financial discipline, Denison announced the decision to suspend the
EA process and certain other activities planned at Wheeler River
for 2020. The decision to temporarily suspend the EA process is
expected to impact the project development schedule outlined in the
Pre-Feasibility Study ('PFS') for Wheeler River, though the extent
of any such impact is currently unknown.
- Successful completion of equity financing to provide ongoing
funding for business activities
In April 2020, Denison
successfully completed a public offering of 28,750,000 common
shares at a price of USD$0.20 per
common share for gross proceeds of $8,041,000 (USD$5,750,000), which includes the full exercise
of the overallotment option of 3,750,000 common shares. The
estimated net proceeds of $6,800,000
are expected to be used to fund the Company's business activities
for the remainder of 2020 and into 2021.
- Uranium concentrations from initial core leach tests
reported up to four times the amount assumed in PFS for Phoenix
In-Situ Recovery ('ISR') operation
In December 2019, Denison
announced the initiation of the next phase of ISR metallurgical
laboratory testing for uranium recovery, which will utilize
mineralized drill core recovered through the installation of
various test wells during the 2019 ISR field test program. The
metallurgical laboratory test program builds upon the laboratory
tests completed for the recovery of uranium as part of the
project's PFS and is expected to further increase confidence and
reduce risk associated with the application of the ISR mining
method at the Phoenix
deposit. The results are expected to facilitate detailed mine
and process plant planning as part of a future Feasibility Study
('FS'), and will provide key inputs for the EA process. Significant
components of the metallurgical laboratory test program include
core leach tests, column leach tests, bench-scale tests and
metallurgical modelling.
In February 2020, Denison reported
that initial data from core leach tests includes the recovery of
elemental uranium concentrations, after test startup, in the range
of 13.5 grams per litre ('g/L') to 39.8 g/L, with an average of
29.8 g/L over 20 days of testing (see Denison's press release dated
February 19, 2020). This compares
favourably to the previous metallurgical test work completed to
assess the use of the ISR mining method at Phoenix – which supported a uranium
concentration of 10 g/L for the ISR processing plant design used in
the PFS.
- Ability to achieve hydraulic conductivity values consistent
with PFS confirmed by results from 2019 ISR field test at
Phoenix
Extensive hydrogeological data was collected during the 2019 ISR
field program to be incorporated into a hydrogeological model for
Phoenix. In February 2020, Denison reported that the results
from the hydrogeological test work completed to-date have confirmed
the ability to achieve bulk hydraulic conductivity values (a
measure of permeability) consistent with the PFS (see Denison press
release dated February 24, 2020).
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
and is a joint venture between Denison (90% and operator) and JCU
(Canada) Exploration Company
Limited (10%). The project is host to the
high-grade Phoenix and Gryphon uranium deposits,
discovered by Denison in 2008 and 2014, respectively, estimated to
have 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).
A pre-feasibility study ('PFS') was completed 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 net present value ('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), internal rate of
return ('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 was 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 EA
program, which is on the critical path to achieving the project
development schedule outlined in the PFS. Given the uncertainty
associated with the duration of suspension, 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 Mines Corp. was formed under the laws of Ontario and is a reporting issuer in all
Canadian provinces. Denison's common shares are listed on the
Toronto Stock Exchange (the 'TSX') under the symbol 'DML' and on
the NYSE American exchange under the symbol 'DNN'.
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. 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 currently processing ore from the Cigar Lake
mine under a toll milling agreement, plus a 25.17% interest in the
Midwest deposits and a 66.57% 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 (formerly Denison
Environmental Services), which manages Denison's Elliot Lake reclamation projects and provides
post-closure mine and maintenance services to a variety of industry
and government clients.
Denison is also the manager of Uranium Participation Corporation
('UPC'), a publicly traded company listed on the TSX under the
symbol 'U', which invests in uranium oxide in concentrates
('U3O8') and uranium hexafluoride
('UF6').
Technical Disclosure and Qualified Person
The disclosure of scientific and technical information regarding
Denison's material properties in this MD&A was prepared by, or
reviewed and approved by, Dale
Verran, MSc, Pr.Sci.Nat., the Company's Vice President
Exploration, or David Bronkhorst,
P.Eng., the Company's Vice President Operations, each 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: exploration, development
and expansion plans and objectives, including the results of, and
estimates and assumptions within, the PFS, the plans and objectives
for ISR and the related field and hydrogeological testing results,
plans and objectives; the suspension of EA activities and
anticipated results of such suspension; the impact of COVID-19 on
Denison's operations; expectations regarding environmental and
regulatory standards and permitting processes; the estimates of
Denison's mineral reserves and mineral resources; plans for any FS,
and any work to be undertaken in respect thereto; expectations
regarding Denison's joint venture ownership interests; and
expectations regarding the continuity of its agreements with third
parties. Statements relating to 'mineral reserves' or 'mineral
resources' are deemed to be forward-looking information, as they
involve the implied assessment, based on certain estimates and
assumptions that the mineral reserves and mineral resources
described can be profitably produced in the future.
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 and underlying assumptions and
interpretations of the PFS as well as the ISR field test and
hydrogeological test programs 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 extend the EA and/or otherwise discontinue testing,
evaluation and development work at Wheeler River, and may not
complete a FS, if it is unable to maintain or otherwise secure the
necessary approvals or resources (such as testing facilities,
capital funding, etc). 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
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 MD&A 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.
View original content to download
multimedia:http://www.prnewswire.com/news-releases/denison-reports-results-from-q1-2020-301054403.html
SOURCE Denison Mines Corp.