TORONTO, Dec. 30, 2020 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (DML: TSX) (DNN: NYSE
American) today announces that it filed a technical report
under Canadian Securities Administrators' National Instrument
43-101 Standard of Disclosure for Mineral Projects titled
"Preliminary Economic Assessment for the Tthe Heldeth Túé (J
Zone) Deposit, Waterbury Lake Property, Northern Saskatchewan, Canada with an
effective date of October 30, 2020
(the "PEA"). View PDF version
The technical report is posted on the Company's website at
www.denisonmines.com, is available under its profile on SEDAR at
www.sedar.com and will be made available on EDGAR at
www.sec.gov/edgar.shtml. This report supports the disclosure
made by the Company in its news release dated November 17, 2020 (the "PEA Release") and there
are no material differences contained in the technical report from
the information previously disclosed in the PEA Release.
As outlined in the PEA Release, the PEA evaluates the potential
use of the in-situ recovery ("ISR") mining method at the Tthe
Heldeth Túé deposit ("THT", formerly named J Zone) (the
"Project") with associated processing at Denison's 22.5% owned
McClean Lake mill. The PEA was prepared by Engcomp
Engineering & Computing Professionals ("Engcomp") of
Saskatoon and demonstrates robust
economics for a small-scale Athabasca Basin ISR uranium mining project –
including low initial capital costs, low operating costs and
globally competitive all-in costs, as follows:
Mine life
|
~ 6 years (Avg.
~1.6 million lbs U3O8 per
year)
|
Projected mine
production (1)
|
9.7 million lbs
U3O8 (177,664 tonnes at 2.49%)
|
Average cash
operating costs
|
USD$12.23 ($16.27)
per lb U3O8
|
Initial capital costs
(2)
|
$112
million
|
Base case pre-tax IRR
(3)
|
39.1%
|
Base case pre-tax
NPV8% (3)
|
$177
million
|
Base case price
assumption
|
UxC spot
price(4) (Avg. USD$53.59 per lb
U3O8)
|
Operating profit
margin (5)
|
77% at USD$53.59
per lb U3O8
|
All-in cost
(6)
|
USD$24.93 ($33.16)
per lb U3O8
|
|
|
(1)
|
See the PEA or the
Deposit, Geology & Projected Mine Plan section of the PEA
Release for additional information regarding projected mine
production. Scheduled tonnes and grade do not represent an estimate
of mineral reserves.
|
(2)
|
Initial capital
costs exclude $20.1 million of estimated pre-construction Project
evaluation and development costs.
|
(3)
|
NPV and IRR are
calculated to the start of pre-production activities for the THT
operation.
|
(4)
|
Spot price
forecast is based on "Composite Midpoint" scenario from UxC's
Q3'2020 Uranium Market Outlook ("UMO") for the years 2028 to 2033,
and is stated in constant (not-inflated) dollars.
|
(5)
|
Operating profit
margin is calculated as uranium revenue less operating costs,
divided by uranium revenue. Operating costs exclude all
royalties, surcharges and income taxes.
|
(6)
|
All-in cost is
estimated on a pre-tax basis and includes all project operating
costs and capital costs, excluding project evaluation and
development costs, divided by the estimated number of finished
pounds U3O8 produced.
|
The PEA is a preliminary analysis of the potential viability of
the Project's mineral resources, and should not be considered the
same as a Pre-Feasibility or Feasibility Study, as various factors
are preliminary in nature. There is no certainty that the results
from the PEA will be realized. Mineral resources are not mineral
reserves and do not have demonstrated economic viability.
Preliminary Economic Assessment Highlights
- Selection of ISR mining method potentially unlocks the value
of the THT deposit: Following the release of the
Wheeler River Pre-Feasibility Study ("Wheeler PFS") in 2018 (see
Denison's news release dated September 24,
2018) and subsequent studies aimed at increasing confidence
in the ISR mining method for Wheeler River's Phoenix uranium deposit ("Phoenix"), including
the achievement of "proof of concept" (see Denison's news release
dated June 4, 2020), Denison
evaluated the application of the ISR mining method on the THT
deposit. Similar to Phoenix, the
THT deposit is an unconformity-related uranium deposit, where the
mineralization is interpreted to be situated in permeable ground –
expected to allow a mining solution to travel within the
mineralized zone. Additionally, the basement rock located below the
mineralized zone is interpreted to be highly impermeable and is
expected to allow for containment of the mining solution beneath
the deposit.
- Freeze Wall design expected to reduce technical risk and
upfront capital costs: Full hydraulic containment of the
orebody during mining activities has been planned for the Project
with the installation of a freeze wall from surface to the basement
rocks underlying the THT deposit– effectively creating containment
360 degrees around the deposit. This design makes use of
established ground-freezing technology and conventional diamond
drilling to create a physical perimeter around the deposit –
containing the mining solution used in the ISR mining process and
protecting the surrounding environment to minimize environmental
impacts of the Project. Several additional containment
methodologies were evaluated as part of the Concept Study –
including the freeze dome design outlined in the Wheeler PFS.
Results of the Concept Study showed that the freeze wall design
offered considerably lower technical risk, equal or greater
environmental protection, a smaller environmental footprint,
sustainability benefits associated with the utilization of drilling
techniques conducive to local employment, and improved economic
results with significantly lower initial capital costs.
- Existing regional infrastructure offers significant
benefit: The Waterbury Lake property is located approximately
15 kilometres from Denison's 22.5% owned McClean Lake uranium mill,
in the infrastructure rich eastern portion of the Athabasca Basin region. The PEA assumes the
McClean Lake uranium mill will be used to process the Uranium
Bearing Solution ("UBS") to be recovered from the ISR wellfield and
the nearby Points North Landing ("Points North") facilities will be
used for accommodations and other support services. Taken together,
this existing regional infrastructure results in a significant
reduction in the initial capital costs and operating costs
estimated in the PEA.
- Potential to be one of the most environmentally responsible
mining operations in the world: The combination of the ISR
mining method with a high-grade uranium deposit in the Athabasca Basin region has the potential to
result in one of the most environmentally protective mining
operations in the world – owing to the small foot print of the
operation and its minimal surface disturbances, as well as the fact
that there are no tailings expected to be generated and no site
water discharge planned. The modelled operation also has
access to the Provincial power grid and is not expected to rely on
diesel generators for primary power on site. Additionally, the
freeze wall design provides for the physical isolation of the ISR
mining operation from the surrounding environment, which alleviates
the primary environmental concern of conventional ISR mining
operations and facilitates a controlled restoration process once
mining has been completed.
The PEA is prepared on a Project (100% ownership) and pre-tax
basis, as each of the partners to the WLULP are subject to
different tax and other obligations. After-tax results attributable
to Denison's ownership interest are provided in the PEA Release and
the PEA. All amounts are in Canadian dollars unless otherwise
noted.
The PEA has been completed in accordance with NI 43-101,
Canadian Institute of Mining, Milling and Petroleum (CIM) standards
and best practices, as well as other standards such as the AACE
Cost Estimation Standards. The PEA is a preliminary analysis of the
potential viability of the Project's mineral resources, and
should not be considered the same as a Pre-Feasibility or
Feasibility Study, as various factors are preliminary in nature.
There is no certainty that the results from the PEA will be
realized. Mineral resources are not mineral reserves and do not
have demonstrated economic viability.
About Waterbury Lake
Waterbury Lake is owned by the Waterbury Lake Uranium Limited
Partnership ("WLULP"), of which Denison Waterbury Corp. (a
wholly-owned subsidiary of Denison) owns 66.90% and Korea Waterbury
Lake Uranium Limited Partnership ("KWULP") owns 33.10%. KWULP is
comprised of a consortium of investors, in which Korea Hydro &
Nuclear Power ("KHNP") holds a majority position. KHNP is
headquartered in Gyeongju, South
Korea and is the country's largest electrical power
generation company, operating 24 nuclear power reactors and
supplying approximately one-quarter of the country's electricity.
KHNP is also a significant shareholder in Denison.
About Denison
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, which is the largest undeveloped
uranium project in the infrastructure rich eastern portion of the
Athabasca Basin region of northern
Saskatchewan. Denison's interests
in Saskatchewan also include a
22.5% ownership interest in the MLJV, which includes several
uranium deposits and the McClean Lake uranium mill, which is
contracted to process the ore from the Cigar Lake mine under a toll
milling agreement, plus a 25.17% interest in the Midwest deposits
and a 66.90% interest in the THT and Huskie deposits on the
Waterbury Lake property. The Midwest, THT 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, which manages Denison's
Elliot Lake reclamation projects
and provides post-closure mine and maintenance services to industry
and government clients.
Denison is also the manager of Uranium Participation
Corporation, a publicly traded company listed on the TSX under the
symbol 'U', which invests in uranium oxide in concentrates and
uranium hexafluoride.
Follow Denison on Twitter
@DenisonMinesCo
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.
Data Verification
For a description of the data verification, assay procedures
and the quality assurance program and quality control measures
applied by Denison, please see Denison's Annual Information Form
dated March 13, 2020 filed under the
Company's profile on SEDAR at www.sedar.com.
The Mineral Resource estimates presented in the PEA were
independently reviewed and audited for the Tthe Heldeth Túé (J
Zone) Deposit and for the Husky Deposit as described in Technical
Report.
Further information about the PEA referenced in this news
release, including information in respect of data verification, key
assumptions, parameters, risks and other factors, can be found in
the Technical Report.
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 results of, and
estimates, assumptions and projections provided in the PEA
(including the PEA Release's summary thereof), including future
development methods and plans, market prices, costs and capital
expenditures; the Company's current plans with respect to the
development of the Project; the results of, and estimates,
assumptions and projections provided in, the Wheeler PFS; the
Company's current intentions to evaluate the potential benefits of
a freeze wall for use at the Wheeler River Phoenix deposit;
assumptions regarding Denison's intentions and ability to continue
to advance the Project, including its ability to obtain all
necessary regulatory approvals to commence development in
accordance with the PEA; Denison's percentage interest in its
projects and its agreements with its joint venture partners; and
the availability of services to be provided by third parties.
Statements relating to "mineral resources" are deemed to be
forward-looking information, as they involve the implied assessment
that, based on certain estimates and assumptions, the 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, further studies, including a PFS, may not be
undertaken if the results of the PEA are not maintained after
further testing; Denison may decide or otherwise be required to
discontinue the related work 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 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, 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.
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SOURCE Denison Mines Corp.