TORONTO, Oct. 28, 2021 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE
American: DNN) is pleased to announce the initial results of a
highly successful In-Situ Recovery ("ISR") field test program
("2021 ISR Field Test") completed within the commercial-scale ISR
test pattern installed in the Phase 1 area of the high-grade
Phoenix uranium deposit
("Phoenix") at the Company's 95% owned Wheeler River Uranium
Project ("Wheeler River" or the "Project") in northern
Saskatchewan. View PDF Version
- Achieved the commercial-scale production flowrate assumed in
the Pre-Feasibility Study ("PFS") prepared for the Project in
2018.
- Demonstrated hydraulic control of injected solution during
ion tracer test – reporting no elevated values of the tracer
element in the monitoring wells surrounding the commercial-scale
test pattern.
- Established breakthrough times between injection and
recovery wells, spaced 5 to 10 meters apart, that are consistent
with previous 'Proof of Concept' hydrogeological modelling
conducted by Petrotek Corporation ("Petrotek").
- Completed 'clean-up phase' following tracer test
demonstrating ability to remediate the test pattern – reducing
tracer concentrations to as low as 4% of peak test levels within
eight days of remediation.
David Cates, Denison's President
& CEO, commented, "We are pleased to have safely and
successfully completed another significant ISR field program at
Phoenix. Our evaluation team and
field staff have worked diligently over an eight-month period to
expertly carry out a complex project execution plan that has
delivered the data and results necessary for our Company to
continue our industry-leading efforts to further de-risk the
application of the ISR mining method in the Athabasca Basin region.
While our previous test work has provided considerable
support for the use of ISR at Phoenix, the achievement of the targeted
flowrate from the PFS in a commercial-scale well pattern located
within Phase 1 of Phoenix, and the
tangible demonstration of our ability to control fluid flows during
the tracer test, together mark another highly significant
de-risking milestone for the Project.
With the field test completed and the Company well
capitalized, our technical team is moving full-steam ahead with the
development of our field plans for 2022 while also supporting the
recent launch of the formal feasibility study process."
The 2021 ISR Field Test program was designed to further increase
confidence and reduce risk in the application of the ISR mining
method at Phoenix – with the
detailed results providing the necessary datasets for the
permitting and preparation of a planned lixiviant test in 2022,
which is expected to support the completion of the recently
announced Feasibility Study (or "FS") for the Project (see press
release dated September 22,
2021).
This press release constitutes a "designated news release"
for the purposes of the Company's prospectus supplement dated
September 28, 2021, to its short form
base shelf prospectus dated September 16,
2021.
Test Pattern Installation
A test pattern consisting of five commercial-scale wells
("CSWs"), including GWR-038 to GWR-042, and 10 additional small
diameter monitoring wells ("MWs") (together described as the "Test
Pattern"), was successfully installed within the Phase 1 area of
the Phoenix deposit (see Figure 1)
during the summer months (see press release dated July 29, 2021).
Three methods of permeability enhancement were successfully
evaluated on the five CSWs, with post permeability enhancement
testing resulting in observed improvement in hydraulic responses
and inter-well connectivity within the Test Pattern. These
results exhibit and confirm the ability to engineer additional
access to the natural permeability within the deposit.
Permeability enhancement methods included the use of the MaxPERF
drilling tool as well as wireline-conveyed tools designed to
perforate and stimulate well production using a controlled
propellant. The wireline tools can effectively "clean out"
restricted pathways within the well screen, well bore, and the
geological formation and provide increased flow rates in the wells
by intersecting and connecting to the naturally occurring fractures
within the ore zone.
Twenty single-well injection tests were completed on the Test
Pattern to evaluate natural permeability and the efficiency of
permeability enhancement methods deployed in the CSWs. Nine
single-well pump tests were completed amongst the five CSWs and
four of the MWs to evaluate permeability, sustainable pumping
rates, hydraulic connectivity, and baseline groundwater conditions.
Importantly, testing showed good hydraulic connection between the
CSWs in the ore zone horizon and no significant responses in any of
the MWs in overlying or underlying horizons (see Figure 2). One
step-rate injection test was conducted on the center CSW (GWR-040)
to evaluate hydraulic connectivity, maximum injection rates and
injection pressures.
Full-Scale Well Pattern Pump and Injection Test
A full-scale well pattern injection and pumping test was
conducted to determine hydraulic connectivity for the Test Pattern
as a whole, and to evaluate potential production rates for the
pattern. The test was run as a modified 4-spot pattern as there was
an unanticipated failure of the submersible pump in GWR-042. During
the test, injection rates were matched to pumping extraction rates
for balanced flow in the Test Pattern. Pumped groundwater from each
of the outer wells (GWR-038, GWR-039, and GWR-041) was recycled for
injection in the center well (GWR-040) to create a closed system.
Production rates for the Test Pattern achieved a sustainable rate
of 45.3 litres per minute ("L/min") injection in GWR-040 with
minimal pressure on surface balanced with 15.1 L/min extraction at
each GWR-038, GWR-039 and GWR-041. This test fundamentally achieved
the 50 L/min flow rate assumed in the PFS for an operating well
pattern. Hydraulic control of the Test Pattern was confirmed
by no significant hydrologic responses observed in any of the
overlying or underlying monitoring wells.
Ion Tracer Test
Following the full-scale injection and pumping test, an ion
tracer test was completed using the 4 functional CSWs in the Test
Pattern. Flow rates were run at the same levels as the
full-scale well pattern test with 45.3 L/min injection at the
center well and a balanced extraction flow of 15.1 L/min at each of
the three outer wells. The ion tracer, consisting of a 15%
concentration of potassium chloride (KCl) by weight, was injected
as an initial slug into the Test Pattern at GWR-040, followed by a
chase phase involving the recirculation of water extracted from the
three outer wells (closed system). The chase phase continued until
peak concentrations of the ion tracer, measured in total dissolved
solids ("TDS"), were observed at the three extraction wells
(GWR-038, GWR-039 and GWR-041), followed by a decline in TDS prior
to commencement of a remediation test.
Breakthrough of the ion tracer, as observed by an increase in
the TDS, occurred at the three extraction wells within 9 hours
(GWR-039), 12 hours (GWR-041), and 14 hours (GWR-038). These
breakthrough times observed during the field test are consistent
with previous hydrogeological modelling conducted by Petrotek (see
press release dated June 4, 2020).
Remediation Test
After completion of the ion tracer test, a "clean-up"
remediation test was conducted to simulate the ability to remove
injected fluid from the Test Pattern. For this test, injection was
halted at the center well (GWR-040) and the three extraction wells
were pumped to remove the remaining injected ion tracer.
Tracer concentrations measured during the eight-day clean-up
simulation, as observed by field TDS measurements, declined to as
low as 13% of the peak TDS value in GWR-038, 11% of the peak TDS
value in GWR-041, and 4% of the peak TDS value in GWR-039.
Hydrogeological Monitoring
Monitoring during the ion tracer test and subsequent clean-up
test included: 376 field measurements of TDS from the CSW
extraction wells to identify tracer concentrations; logging of
water levels in each of the CSWs along with all of the surrounding
MWs at five-minute intervals; logging of TDS values at five-minute
intervals in the three overlying MWs to confirm the absence of any
tracer concentrations in the overlying horizons; and daily
groundwater sampling to send for lab analysis to confirm TDS values
measured in the field and the exact concentration of the KCl
tracer.
The ability to maintain hydraulic control was established by
sampling the three overlying MWs for TDS values before and after
the ion tracer test. No elevated values in TDS were observed
during the test, thus confirming there was no migration of the
tracer to overlying horizons.
Data collected as part of the 2021 field program will be
utilized to update the Phoenix
hydrogeological model, and will provide the necessary data for the
permitting and preparation of a lixiviant test planned for the Test
Pattern in 2022.
Ongoing Permeameter Analysis
In addition to the hydrogeological tests described above, over
1,000 drill core samples were collected from historic holes,
re-logged for hydrogeologic characteristics, and analyzed for
permeability utilizing the permeameter on-site. Samples were
selected to ensure the database of on-core permeability results
included representative samples from all of the planned mining
phases at Phoenix.
COVID-19
The Company is committed to ensuring that the Wheeler River site
is a safe operating environment for its staff and contractors and
that the Company's field activities do not compromise the health
and safety of the residents of northern Saskatchewan. In
2020, the Company's Occupational Health and Safety Committee
in Saskatoon developed a comprehensive guide for the safe
resumption of work at Wheeler River. The protocols consider
the unique health and safety risks associated with operating a
remote work camp amidst the ongoing COVID-19 pandemic. Public
health guidelines and best practices (including testing) have been
incorporated into the Company's protocols.
The 2021 ISR Field Test was completed over an eight-month period
and involved the on-site support of over 100 different staff and
contractors. COVID-19 rapid testing was completed regularly at the
site, with no positive cases reported during the entire
program. These results demonstrate the effectiveness of the
Company's COVID-19 protocols and helped to ensure that the
extensive scope of the 2021 ISR Field Test was completed on
schedule.
Groundwater Measurement and Sampling Procedures
Individual wells are monitored and logged at five-minute
intervals utilizing In-Situ LevelTROLL 700 Data Logger transducers
installed on cables below the water table, providing water level,
water pressure, and temperature data based on factory calibrations.
Manual water level readings are recorded using a Heron Instruments
Inc. water level tape upon commencement and completion of each log.
Flow rates and cumulative flow volumes are measured 'in-line' on
injection and extraction hose lines and recorded at four-hour
minimum intervals, using Great Plains Industries Inc. FLOMEC
Turbine Stainless Steel Flowmeters calibrated to factory
specifications. TDS measurements from individual wells are
monitored and logged at five-minute intervals utilizing In-Situ
AquaTROLL 200 Data Logger transducers installed on cables below the
water table and in flow cells on surface 'in-line' with the
extraction hose lines. The AquaTROLLs provide water level, water
pressure, temperature, and conductivity data based on factory
calibration. TDS is calculated from conductivity measurements via
the AquaTROLLs based on factory calibration formulas as well as
field calibrations using standard solutions of known conductivity.
The data from LevelTROLL and AquaTROLL transducers are downloaded
using Win-Situ 5 software. Manual field measurements of TDS,
conductivity, pH, and dissolved oxygen are taken from samples
collected from extraction wellhead sample ports, at 4 hour
intervals during active testing, using an YSI ProDSS Handheld
Multiparameter Water Quality Meter. The Water Quality Meter is
field calibrated at a minimum of once per week, based on
manufacturer specifications, using solutions of known pH and
conductivity. Groundwater samples for lab analysis are collected
from wells following the Company's standard Groundwater Sampling
Procedure for Wheeler River and are sent to Saskatchewan Research
Council ("SRC") Environmental Analytical Laboratories located in
Saskatoon. Samples are collected
from the sample port of the wellhead for extraction wells, during
pumping of MWs and after wells are purged. Quality control
groundwater samples for lab analysis included the collection of
field duplicate and field blank samples at a rate of 1 in 20, or a
minimum of 1 per month.
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 26, 2021 filed under the Company's profile on
SEDAR at www.sedar.com.
About Phoenix Phase 1
As outlined in the Company's news release dated December 1, 2020, Denison has decided to adapt
its plans for the Project to use a phased mining approach, which is
expected to allow for the targeted extraction of the least
capital-intensive reserves first, based on the grade and
distribution of ore in various areas of the deposit. The supporting
trade-off study provides for mining to occur over 5 phases.
Phase 1 of the deposit is estimated to contain 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.
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 CSWs in
the Test Pattern (see Figure 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.
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 (operator) and JCU (Canada) Exploration Company Limited
("JCU"). Denison has an effective 95% ownership interest in
Wheeler River (90% directly, and 5% indirectly through a 50%
ownership in JCU).
A PFS was completed for Wheeler River in 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 its effective 95% interest in the
Wheeler River project, Denison's interests in the Athabasca Basin include a 22.5% ownership
interest in the McClean Lake joint venture, which includes several
uranium deposits and the McClean Lake uranium mill that is
contracted to process the ore from the Cigar Lake mine under a toll
milling agreement, plus a 25.17% interest in the Midwest Main and
Midwest A deposits, and a 66.90% interest in the Tthe Heldeth Túé
("THT," formerly J Zone) and Huskie deposits on the Waterbury Lake
property. The Midwest Main, Midwest A, THT and Huskie deposits are
each located within 20 kilometres of the McClean Lake mill.
Through its 50% ownership of JCU, Denison holds additional
interests in various uranium project joint ventures in Canada, including the Millennium project (JCU
30.099%), the Kiggavik project (JCU 33.8123%) and Christie Lake (JCU 34.4508%). Denison's
exploration portfolio includes further interests in properties
covering ~280,000 hectares in the Athabasca Basin region.
Denison is also 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 third-party clients.
Follow Denison on Twitter @DenisonMinesCo
Qualified Persons
The disclosure of scientific or technical information related
to certain hydrogeological results and interpretations (including
the hydrogeological investigations carried out as part of the 2021
ISR Field Test and associated analysis) contained in this release
has been reviewed and approved by Mr. David
Bronkhorst, P.Eng, Denison's Vice President, Operations and
Mr. Andrew Yackulic, P. Geo.,
Denison's Director, Exploration, who are Qualified Persons 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 interpretation of
results of the ISR field program, including expectations regarding
further de-risking of the ISR mining method; Denison's
capitalization to enable further studies; the initiation of the FS
and the planned scope, elements, and objectives of the FS; other
evaluation activities, objectives and expectations, including the
permeameter analysis and the ongoing EA and related processes; the
results of the PFS and expectations with respect thereto, including
the mineral resource estimates and project designs disclosed
to-date and the ability to maintain or build upon such designs;
other development and expansion plans and objectives; Denison's
COVID-19 and other health and safety protocols; and expectations
regarding its joint venture ownership interests and the continuity
of its agreements with its partners and third
parties.
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 its field test
activities 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 26, 2021 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 Mineral Resources and Mineral Reserves:
This press release may use terms such as "measured", "indicated"
and/or "inferred" mineral resources and "proven" or "probable"
mineral reserves, which are terms defined with reference to the
guidelines set out in the Canadian Institute of Mining, Metallurgy
and Petroleum ("CIM") CIM Definition Standards on Mineral Resources
and Mineral Reserves ("CIM Standards"). The Company's
descriptions of its projects using CIM Standards may not be
comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements under
the United States federal
securities laws and the rules and regulations thereunder. .
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.
Figure 1: Plan Map Showing Location of Phoenix Deposit
(Phase 1) – ISR Test Pattern
Figure 2: Cross Section Showing Location of Test Pattern
Wells at Phase 1
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SOURCE Denison Mines Corp.