TORONTO, May 6, 2021 /PRNewswire/ - Denison Mines
Corp. ('Denison' or the 'Company') (TSX: DML) (NYSE
American: DNN) today filed its Condensed Consolidated Financial
Statements and Management's Discussion & Analysis ('MD&A')
for the quarter ended March 31,
2021. 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
2021, Denison capitalized on improved market sentiment for the role
of nuclear energy, as part of the global clean energy transition
movement, and entered into strategic financings that have
significantly de-risked the Company's balance sheet and provide
considerable financial flexibility for the Company. In addition to
securing funding to continue to advance our flagship Wheeler River
Uranium Project ('Wheeler River') through the Environmental
Assessment ('EA') and feasibility study ('FS') processes, we were
also the first to complete a novel future project financing
initiative – involving the acquisition of 2.5 million pounds of
U3O8 to be held as a long-term strategic
capital asset. Excluding the cash reserved to execute on our
uranium purchase commitments, the Company's cash and investment
holdings were reported at $96 million
at the end of the quarter.
In parallel, our Saskatoon-based technical team continues to
progress critical path projects related to the advancement of
Wheeler River – including the full resumption of the EA process
early in Q1, and the commencement of an ambitious 2021 Field
Program at Phoenix. To date, we have already successfully
drilled, cased and cemented the commercial scale wells in the
5-spot In-Situ Recovery ('ISR') test pattern located in Phase 1 of
the Phoenix deposit. In support of
our efforts at Wheeler River and in the Athabasca Basin region, the Company also
entered into a Participation and Funding agreement and Exploration
agreement with the English River First Nation ('ERFN'), whose
traditional territory includes the Wheeler River property, as well
as many of Denison's other interests in the Athabasca Basin region.
Additionally, in response to the unexpected announcement of a
sale of JCU (Canada) Exploration
Company Limited ('JCU') by Overseas Uranium Resources Development
Co., Ltd. ('OURD'), Denison promptly delivered a binding offer to
purchase JCU from OURD for $40.5
million, which we believe more appropriately reflects the
underlying value of JCU's assets – including their 10% interest in
Wheeler River."
HIGHLIGHTS
- Successful completion of equity financing to fund the
Environmental Assessment and Feasibility Study process for Wheeler
River
Denison completed equity financings for gross proceeds of
$40.2 million (including $3.9 million from an At-the-Market ('ATM')
offering) in the first quarter of 2021. Subject to a decision to
advance to a formal FS for the high-grade Phoenix uranium deposit ('Phoenix'), the proceeds from the offerings are
expected, based on current estimates, to be sufficient to complete
such FS process and the EA process.
- Financing completed for 2021 and 2022 high potential
exploration programs
The Company completed a flow-through equity financing of
$8.0 million in March 2021. Proceeds of the financing will be
used for eligible Canadian exploration activities in 2021 and 2022
– including the Company's planned follow up on the discovery of
high-grade uranium mineralization at the K-West target area,
located approximately 4 km west of Phoenix on the Wheeler River property.
- Funded a project financing initiative involving the
strategic acquisition of physical uranium
In March 2021, Denison
successfully completed a public offering for gross proceeds of
$107,949,000. The majority of the net
proceeds of the offering are anticipated to fund the strategic
purchase of uranium concentrates ('U3O8') to
be held by Denison as a long-term investment, which is intended to
support the potential future financing of the advancement and/or
construction of Wheeler River. At March 31,
2021, the Company has committed to purchase 2.5 million
pounds of U3O8 at a weighted average price of
US$29.61 per pound
U3O8.
- Executed agreements with the English River First Nation
In April 2021, Denison
announced that it has entered into a Participation and Funding
Agreement and Letter of Intent with the ERFN in connection with the
advancement of the proposed ISR operation at Wheeler River. The
Company also entered into an Exploration Agreement in respect of
Denison's exploration and evaluation activities within the ERFN
traditional territories. These agreements reflect Denison's desire
to operate its business in a progressive and sustainable manner
that respects ERFN rights and advances reconciliation with
Indigenous peoples. The agreements provide ERFN with economic
opportunities and other benefits, and establish a foundation for
future collaboration in an authentic, cooperative, and respectful
way.
- Commenced the 2021 ISR field program at Wheeler River
During the first quarter of 2021, the Company initiated
the 2021 ISR Field Program, including the installation of a
five-spot commercial scale well ('CSW') ISR test pattern at Wheeler
River. Mobilization of drilling equipment necessary to complete the
large diameter drill holes was completed in early April, and all
five CSWs have been successfully drilled to target depths, cased,
and cemented into position. The installation of the Test
Pattern is the first step in the 2021 field program, which is
designed to support the further de-risking of the application of
ISR mining at Phoenix.
- Discovery of new high-grade uranium mineralization at
McClean Lake South
New high-grade unconformity-hosted uranium mineralization
was discovered during the winter 2021 exploration program completed
at the Company's 22.5% owned McClean Lake Joint Venture. Three of
the final four drill holes completed by Orano Canada Inc., 77.5%
owner and operator of the MLJV, returned uranium mineralization at
the McClean South target area, with the results highlighted by
drill hole MCS-34, which returned 5.04% eU3O8
over 14.0 metres (including 14.86% eU3O8 over
3.9 metres).
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).
The 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),
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 the social, financial and market disruptions related to
COVID-19, and certain fiscally prudent measures, Denison
temporarily suspended certain activities at Wheeler River starting
in April 2020, including the formal
parts of the EA program, which is on the critical path to achieving
the project development schedule outlined in the PFS Technical
Report. While the formal EA process has resumed in early 2021, the
Company is not currently able to estimate the impact to the project
development schedule, outlined in the PFS Technical Report, and
users are cautioned that certain of the estimates provided therein,
particularly regarding the start of pre-production activities in
2021 and first production in 2024 should not be relied upon.
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. In addition
to the Company's flagship project, Wheeler River,
Denison's interests in Saskatchewan include a 22.5% ownership
interest in the 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 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,
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 (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 technical information contained in this press release has
been reviewed and approved by David
Bronkhorst, P.Eng, Denison's Vice President, Operations
and/or Andrew Yackulic, P. Geo,
Denison's Director, Exploration, each of whom is a Qualified Person
in accordance with the requirements of NI 43-101.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING
STATEMENTS
Certain information contained in this press 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 press release contains forward-looking
information pertaining to the following: projections with respect
to use of proceeds of recent financings; exploration, development
and expansion plans and objectives, including the plans and
objectives for Wheeler River and the related EA and FS processes
and 2021 Field Program, and exploration objectives, including plans
for follow-up work at the K-West target area; the impact of
COVID-19 on Denison's operations; the current objectives with
respect to the strategic acquisition of uranium;; the estimates of
Denison's mineral reserves and mineral resources or results of
exploration, such as the uranium mineralization reported from the
McClean Lake South exploration drilling program; expectations
regarding Denison's joint venture ownership interests; expectations
regarding the continuity of its agreements with third parties,
including the agreements with the ERFN and Denison's intentions and
objectives with respect thereto; and its interpretations of, and
expectations for, nuclear energy. 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 de-risking efforts such as
the 2021 Field Program discussed herein may not be maintained after
further testing or be representative of actual conditions within
the applicable deposits. In addition, Denison may decide or
otherwise be required to extend the EA and/or otherwise discontinue
testing, evaluation and development work, including a FS at Wheeler
River, 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 26, 2021 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 press 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 press release. Denison does not undertake any obligation to
publicly update or revise any forward-looking information after the
date of this press 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.
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SOURCE Denison Mines Corp.