TORONTO, Feb. 8, 2021 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE:
DNN) is pleased to announce its 2021 evaluation program plans
for the Company's 90% owned Wheeler River Uranium Project ("Wheeler
River" or the "Project"), including additional field testing
activities to support the further de-risking of the application of
the In-Situ Recovery ("ISR") mining method at the high-grade
Phoenix uranium deposit
("Phoenix"). View PDF Version
The Wheeler River Joint Venture ("WRJV") has adopted an approach
to advancing the Project whereby completion of a formal Feasibility
Study ("FS") would be coordinated with the submission of a final
Environmental Impact Statement ("EIS"). This approach respects the
interactive nature of the Environmental Assessment ("EA")
consultation process, allowing for the integration of outcomes from
environmental assessment, community consultation, and project
design efforts. Our current objectives target initiation of the
formal FS process in late 2021 and the submission of a draft EIS in
early 2022.
In support of these objectives, the WRJV approved a $24.0 million evaluation budget for 2021 (100%
basis), which is highlighted by the resumption of the EA process,
as well as the advancement of engineering studies, metallurgical
testing, and field programs. Denison's share of the 2021 evaluation
budget for Wheeler River, net of operator fee recoveries, is
$19.4 million.
This press release constitutes a "designated news release"
for the purposes of the Company's prospectus supplement dated
November 13, 2020 to its short form
base shelf prospectus dated June 2,
2020.
Highlights from Wheeler River 2021 Evaluation Program
- Resumption of EA process: Activities planned to support
the EA process in 2021 include the progression of engagement
activities, adapted to reflect COVID-19 protocols, to facilitate
information sharing with interested parties. Advancing the EA
process is also expected to involve the completion of various
third-party technical studies and Provincial and Federal regulatory
engagement ahead of the submission of a draft EIS, which is
currently targeted for early 2022. Significant work programs in
support of the EA process resumed in January.
- Advancement of ISR field programs: The installation of a
5-spot Test Pattern ("Test Pattern"), consisting of
commercial-scale wells ("CSWs"), is planned for Phoenix. The Test Pattern is expected to allow
for the further evaluation and confirmation of the ore body's
hydrogeological characteristics. Installation of the Test Pattern
is also expected to support the finalization of the production well
design pattern, confirm cost estimates and designs for the CSWs,
validate permeability enhancement options, and provide the
necessary datasets for 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, as well as verify the permeability, leachability, and
containment parameters needed for the successful application of the
ISR mining method at Phoenix. The
2021 field program is fully permitted, with all approvals received
from the provincial government to commence work on site.
- Continuation of detailed ISR metallurgical testing:
Extensive laboratory studies replicating the ISR process flowsheet
are planned to test and optimize the mineral processing aspects of
the Phoenix operation. Studies are
expected to include additional core leach tests followed by
uranium-bearing solution ("UBS") preparation, through column
leaching, to allow for bench-scale tests planned to simulate each
unit of operation in the process plant.
- Progression of engineering activities: Desktop and field
investigations are planned to finalize specific Project details
necessary for the EA and engineering inputs required to formally
initiate the FS. Areas of investigation are expected to include
site layout design and earthworks updates, electrical power
studies, borrow pit investigation, geotechnical analysis, final ISR
well designs and decommissioning plans.
David Cates, Denison's President
& CEO, commented, "Our Saskatoon-based technical team has made
considerable progress towards de-risking the use of the ISR mining
method at Phoenix since the
Pre-Feasibility Study for Wheeler River was released in late
2018. The Company is well-funded for 2021, and has developed
an ambitious evaluation program, which reflects a significant
ramp-up of our technical and environmental activities. Our
2021 plans are focused on achieving Denison's goals of initiating a
formal FS by late 2021 and submitting a draft EIS in early 2022 –
the completion of which are both important steps necessary for the
Company to make a future development decision for Phoenix."
David Bronkhorst, Denison's Vice
President Operations, added, "Despite the challenges of the
COVID-19 Pandemic, Denison's technical team made significant
progress de-risking critical elements of the Phoenix ISR project in
2020 – notably through the independent confirmation of 'proof of
concept', completion of another productive ISR field program, and
the decision to adopt a freeze wall design for ISR mining at
Phoenix. Building on these successes, we have developed a
plan for 2021 that is designed to result in significant progress
towards further de-risking the ISR mine plan for Phoenix – including the installation of a
5-spot Test Pattern, and the completion of various detailed
engineering and metallurgical test work programs."
Resumption of Environmental Assessment process
The Environmental Assessment is a key element of the Project's
critical path. EA related activities are expected to include
technical assessments and reviews associated with the preparation
of the draft EIS. The technical assessments will evaluate the
significance of the Project's potential effects on the biophysical
environment, as well as human health and cultural heritage.
Furthermore, a major component of the EIS will address both the
beneficial and potentially adverse socio-economic and land use
effects of the Project.
In connection with advancing the EA process, activities in 2021
are also planned to include the progression of engagement efforts
(adapted to reflect COVID-19 protocols) to facilitate information
sharing with interested parties, and the continued collection of
specific baseline environmental data to provide added continuity
and integrity to the information collected through each phase of
the project.
Advancement of ISR field programs
Additional field and laboratory work is planned in 2021 to
further increase confidence and reduce risk in the application of
the ISR mining method at Phoenix.
The main objectives of the 2021 ISR field program are to further
evaluate, confirm and model the hydrogeological characteristics of
the Phoenix ore body, finalize the
production well design pattern, confirm cost estimates and designs
for CSWs, validate permeability enhancement options, and provide
the necessary datasets for the permitting and preparation of a
lixiviant test in 2022. The lixiviant test is expected to be a key
milestone in the de-risking process – intended to confirm technical
feasibility and verify the permeability, leachability and
containment parameters needed for the successful application of the
ISR mining method at Phoenix. The
2021 field program is fully permitted, with all approvals received
from the provincial government to commence work.
The 2021 ISR field program is expected to have the following key
components and objectives:
- Test Pattern: Installation of a 5-spot Test
Pattern in the area identified as Phase 1 of the planned
development sequence for Phoenix
(see Denison's news release dated Dec.
1, 2020). The Test Pattern will consist of five new
CSWs and is designed to evaluate hydraulic conductivities and
connections between wells (including GWR-032) spaced from 5 to 30
meters apart (see Figure 1). Permeability enhancement tools
will be utilized to engineer a minimum level of hydrogeologic
conductivity between the variably spaced wells. Subsequent
conductivity will depend on the natural permeability of the ore
body via the fracture/structure network. The variable spacing
approach will provide valuable data that will allow for the
continued evaluation of the natural hydrogeological conditions of
the deposit and our ability to effectively engineer minimum levels
of hydraulic conductivity, at different well spacing distances,
using permeability enhancement tools. The data will be critical in
optimizing the final wellfield design. Additionally, the Test
Pattern will help finalize construction sequencing, cost estimates,
and schedule for the installation of CSWs at Phoenix.
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 mineral reserves represent
approximately 30% of the 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 estimated
within the boundaries of Phase 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.
- Hydrogeological Tests: Hydrogeological pump
and injection tests will occur before and after each CSW
installation and will evaluate the effectiveness of permeability
enhancement on an individual well basis within the deposit test
area. After the hydrogeological tests are completed on
individual wells, multi-day pump and injection tests and additional
hydrogeological tests will be performed on the collective Test
Pattern. These tests are intended to assess the Test
Pattern's total permeability, and support an ongoing assessment of
the ability of various permeability enhancement tools to normalize
the varying levels of permeability associated with the natural
fracture/structure network of the deposit. A full-scale tracer test
is also planned for 2021, which is expected to support an
assessment of the arrival time from a centre well ("injection
well") to the outer ring wells ("recovery wells"). The test is
expected to establish breakthrough times for each CSW and confirm
sub-surface pathways, allowing for a more complete understanding of
the hydrogeologic elements expected throughout Phase 1. All
test work in 2021 will be conducted using site groundwater.
Following the field tests, detailed hydrogeological and geochemical
modelling of the test data will be carried out by various Qualified
Persons ("QPs").
The hydrogeologic test work planned for 2021 is also expected to
provide the necessary datasets for the design and permitting of a
lixiviant test in 2022, which is expected to make use of the same
Test Pattern installed during 2021.
- Monitoring Wells: The field program
includes the installation of 11 monitoring wells ("MWs") in the
Phase 1 area (see Figure 1). The MWs will surround the Test
Pattern on all sides and above the ore zone. Sensors installed at
varying depths, from 30 to 450 meters, will monitor pressure
changes and the distribution of fluid flow above, along strike, and
below the ore body during the various hydrogeological tests, pump
and injection tests, and during the full-scale Test Pattern tracer
test. The MWs will also help to define sub-aquifers and
confirm the basement units as suitable aquitards for the purposes
of finalizing the freeze wall design.
Continuation of detailed ISR metallurgical testing
As the Project advances towards the FS and as the EA progresses,
advanced metallurgical work will be conducted to verify and
optimize the metallurgical processing elements proposed for the
Phoenix ISR mining operation. This work will support plant designs
for the FS, and the technical assessments required for the EA, by
providing accurate process flow diagrams, mass balance and waste
stream information for all unit operations.
Studies are expected to include additional core leach tests (see
Denison news release dated Feb. 19,
2020) to verify the ISR mining process and the overall rate
of recovery expected from the deposit. The tests involve the
use of undisturbed core samples to assess metallurgical recovery
while simulating in-ground conditions. The results of these
tests are intended to confirm the lixiviant characteristics and the
UBS head grade anticipated for Phoenix, thus facilitating the definition of
the lixiviant composition required for the future lixiviant test
and informing the anticipated UBS characteristics.
Following the core leach tests, up to 3,000 litres of UBS will
be generated through column leaching – with the resulting solution
utilized for a bench-scale testing program that is expected to
consist of laboratory tests where each unit operation expected in
the process plant will be simulated.
Progression of engineering activities
Numerous engineering activities are planned for 2021 – focusing
on obtaining and finalizing the specific project details necessary
to support the EA process and the formal initiation of the FS.
These studies include overall site layout and earthworks updates,
electrical power studies to inform back-up generator and switchgear
selection, borrow pit location selection, geotechnical analyses,
final ISR well design, and decommissioning plans.
The results of the 2021 field program are expected to inform a
decision from the WRJV regarding the formal initiation of a FS
during the second half of 2021. If approved, transitioning
into the FS will mark the initiation of further engineering work in
the areas of surface infrastructure, plant design, and ground
freezing.
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
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 66.9% 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 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.
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 planned scope,
elements, and objectives of the 2021 evaluation program, including
the EA process, ISR field programs, metallurgical testing and
engineering activities; the results of the PFS and expectations
with respect thereto; development and expansion plans and
objectives, including plans for a feasibility study; 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 modelling and assumptions upon which the work
plans are based 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 2021 Field
Test 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.
Follow Denison on Twitter
@DenisonMinesCo
Figure 1: Plan Map Showing Location of
Phoenix Deposit (Phase 1) – ISR Test Pattern
View original content to download
multimedia:http://www.prnewswire.com/news-releases/denison-announces-ramp-up-of-wheeler-river-evaluation-activities-in-2021-301223680.html
SOURCE Denison Mines Corp.