TORONTO, Aug. 9, 2023
/CNW/ - Denison Mines Corp. ("Denison" or the "Company") (TSX: DML)
(NYSE American: DNN) announces the filing of its technical report
supporting the results of (i) the Feasibility Study ("Phoenix FS")
completed for In-Situ Recovery ("ISR") mining of the high-grade
Phoenix uranium deposit
("Phoenix") and (ii) a cost update ("Gryphon Update") to the 2018
Pre-Feasibility Study ("2018 PFS") for conventional underground
mining of the basement-hosted Gryphon uranium deposit
("Gryphon"). The report is titled "NI 43-101 Technical Report
on the Wheeler River Project Athabasca Basin, Saskatchewan, Canada" dated August 8, 2023 with an effective date of
June 23, 2023 ("Technical Report").
View PDF version
The parties to the Wheeler River Joint Venture are Denison
(operator) and JCU (Canada)
Exploration Company Limited ("JCU"). Denison has an effective
95% ownership interest in the WRJV (90% directly, and 5% indirectly
through a 50% ownership in JCU).
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.
Wheeler River Technical Report
The Technical Report will be posted on the Company's website at
www.denisonmines.com and is or will be available under its profile
on SEDAR at www.sedarplus.ca and on EDGAR at
www.sec.gov/edgar.shtml.
This report supports the disclosure made by the Company in its
news release dated June 26, 2023,
"Denison reports significant increase in economic results for
Wheeler River" (the "News Release"). There are no material
differences in the Technical Report from the information disclosed
in the News Release.
As outlined below and in the News Release, (i) the Phoenix FS
confirms robust economics and the technical viability of an ISR
uranium mining operation with low initial capital costs and a high
rate of return, and (ii) the Gryphon PFS Update
demonstrates that the underground development of Gryphon is a
positive potential future use of cash flows generated from
Phoenix, as it is able to leverage
existing infrastructure to provide an additional source of low-cost
production.
|
Summary of
Economic Results (100% Basis) – Base
Case
|
|
Phoenix
|
Gryphon
|
|
Uranium selling
price
|
UxC Spot
Price(1)
(~USD$66 to USD$70/lb
U3O8)
|
USD$75/lb
U3O8(2)
(Fixed selling
price)
|
|
Exchange Rate
(USD$:CAD$)
|
1.35
|
1.35
|
|
Discount
Rate
|
8 %
|
8 %
|
|
Operating profit
margin(3)
|
90.9 %
|
83.0 %
|
|
Pre-tax
NPV8%(4) (Change from 2018 PFS)
(5)
|
$2.34 billion
(+150%)
|
(+148 %)
|
|
|
|
|
Pre-tax
IRR(4)
|
105.9 %
|
41.4 %
|
|
Pre-tax payback
period(6)
|
~10
months
|
~ 20
months
|
|
|
|
|
Post-tax
NPV8%(4)
|
$1.43
billion
|
$864.2
million
|
|
Post-tax
IRR(4)
|
82.3 %
|
37.6 %
|
|
Post-tax payback
period(6)
|
~11
months
|
~ 22
months
|
|
|
|
|
Adjusted
Post-tax
NPV8%(4)(7)
|
$1.56
billion
|
n/a
|
|
Adjusted
Post-tax
IRR(4)(7)
|
90.0 %
|
n/a
|
|
Adjusted
Post-tax payback
period(6)(7)
|
~10
months
|
n/a
|
|
(1)
|
Spot price forecast is
based on "Composite Midpoint" scenario from UxC's Q2'2023 Uranium
Market Outlook ("UMO") and is stated in constant (not-inflated)
dollars, see the News Release and Technical Report for
details.
|
|
(2)
|
Fixed selling price is
based on the forecasted annual "Composite Midpoint" long-term
uranium price from UxC's Q2'2023 UMO and is stated in constant
(not-inflated) dollars, see the News Release and Technical Report
for details.
|
|
(3)
|
Operating profit margin
is calculated as aggregate uranium revenue less aggregate operating
costs, divided by aggregate uranium revenue. Operating costs
exclude all royalties, surcharges and income taxes.
|
|
(4)
|
NPV and IRR are
calculated to the start of construction activities for the
applicable operation, and excludes $67.4 million and $56.5 million
in pre-FID expenditures for Phoenix and Gryphon,
respectively.
|
|
(5)
|
Change from 2018 PFS is
computed by reference to the same scenario from the 2018 PFS,
adjusted to incorporate certain pre-FID costs for consistent
comparability.
|
|
(6)
|
Payback period is
stated as number of months to payback from the start of uranium
production.
|
|
(7)
|
The Adjusted Post-tax
NPV, IRR and payback period are based on the "adjusted Post-tax"
scenario, which includes the benefit of certain entity level tax
attributes which are expected to be available and used to reduce
taxable income from the Phoenix operation. There is no
"adjusted" post-tax case for Gryphon, given that the entity level
tax attributes of the WRJV owners are assumed to have been fully
depleted by the Phoenix operation. See the News Release and
Technical Report for details.
|
Front-End Engineering Design
The completion of the Phoenix FS is a key milestone to
support the next phases of engineering design for the
project. The front-end engineering design ("FEED") phase
has already commenced and is expected to be completed before the
end of the year. The objective of the FEED phase is to assess
optimization opportunities and identify key long lead procurement
requirements. Including the detailed design phase, project
engineering efforts are expected to be completed in approximately
two years.
Following a future final investment decision ("FID") and
completion of engineering, construction is expected to last
another two years. Assuming sufficient funding is secured by the
owners of the WRJV, engineering and other pre-construction
activities advance per plan, and timely receipt of required
regulatory approvals, first production is currently
anticipated to occur in 2027 or 2028.
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About Denison
Denison is a uranium exploration and development company with
interests focused in the Athabasca
Basin region of northern Saskatchewan,
Canada. The Company has an effective 95% interest in its
flagship 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.
The Feasibility Study was completed for Wheeler River's
Phoenix deposit as an ISR mining
operation, and the Gryphon Update to the previously prepared
Pre-Feasibility Study was completed for Wheeler River's Gryphon
deposit as a conventional underground mining operation. Based
on the respective studies, both deposits have the potential to be
competitive with the lowest cost uranium mining operations in the
world. Permitting efforts for the planned Phoenix ISR
operation commenced in 2019 and have advanced significantly, with
licensing in progress and a draft Environmental Impact Statement
submitted for regulatory and public review in October
2022.
Denison's interests in Saskatchewan also include a 22.5% ownership
interest in the McClean Lake Joint Venture, which comprises 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 67.41% 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
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, 33.8118%) and Christie Lake (JCU, 34.4508%).
Denison's exploration portfolio includes further interests in
properties covering ~285,000 hectares in the Athabasca Basin region.
Denison is also engaged in post-closure mine care and
maintenance services through its Closed Mines group, which manages
Denison's reclaimed mine sites in the Elliot Lake region and provides related
services to certain third-party projects.
Qualified Persons
The technical information contained in this release has been
reviewed and approved by Mr. Chad
Sorba, P.Geo, Denison's Director, Technical Services, and
Mr. Andrew Yackulic, P. Geo.,
Denison's Director, Exploration, each of whom is a Qualified Person
in accordance with the requirements of NI 43-101.
Non-GAAP Financial Measures
This release includes certain terms or performance measures
commonly used in the mining industry that are not defined under
International Financial Reporting Standards ("IFRS"). Such non-GAAP
performance measures, including NPV, are included because the
Company understands that investors use this information to
determine the Company's ability to generate earnings and cash
flows. The Company believes that conventional measures of
performance prepared in accordance with IFRS do not fully
illustrate the ability of mines to generate cash flows.
Non-GAAP financial measures should not be considered in isolation
as a substitute for measures of performance prepared in accordance
with IFRS and are not necessarily indicative of operating costs,
operating profit or cash flows presented under IFRS.
Cautionary Statement Regarding Forward-Looking
Statements
Certain information contained in this press release
constitutes "forward-looking information", within the meaning of
the United States Private Securities Litigation Reform Act of 1995
and similar 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 results of, and estimates,
assumptions and projections provided in, the Technical Report and
the interpretation of the Phoenix FS and Gryphon Update and
expectations with respect thereto, including estimates of NPV,
capital costs, operating costs and estimated uranium revenue;
expectations with respect to pre- and post-FID costs; expectations
with respect to taxes and royalties; assumptions with respect to
uranium prices; expectations with respect to project development
and permitting; plans for FEED and detailed design for Phoenix; future development methods and plans;
the timing for commencement of production; and joint venture
ownership interests and the continuity of its agreements with its
joint venture 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
interpretation of results are based may not be maintained after
further testing or be representative of actual conditions. Denison
believes that the expectations reflected in this forward-looking
information are reasonable but there can be no assurance that such
statements will prove to be accurate and 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 "Risk
Factors" in Denison's Annual Information Form dated March 27, 2023 available under its profile at
www.sedar.com and its Form 40-F available at
www.sec.gov/edgar.shtml. 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 its expectations except as
otherwise required by applicable legislation.
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SOURCE Denison Mines Corp.