TORONTO, Nov. 5, 2020 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE-MKT:
DNN) today filed its Condensed Consolidated Financial Statements
and Management's Discussion & Analysis ("MD&A") for the
quarter ended September 30,
2020. 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, "Our third quarter highlights
illustrate the recent effort made by Denison to ensure the Company
remains on track for the future development of the Phoenix In-Situ
Recovery ('ISR') operation, which has the potential to become one
of the lowest cost uranium mining operation in the world. Our
team developed responsible return to work protocols and resumed
field activity at the Wheeler River site – including the completion
of an ISR field program designed to build confidence in the 'Proof
of Concept' hydrogeologic model, which was announced in June and
represents a significant project de-risking milestone. The
2020 ISR field program also included the completion of
environmental field work necessary to support the design and
permitting of further ISR test work. On the financial front, the
Company successfully completed a well-supported and significantly
up-sized public offering in early October – raising gross proceeds
of approximately US$19 million. At
the end of October, the Company is estimated to have over
CAD$29 million in cash and remains
debt free. Taken together, our operations and balance sheet are
poised to support the future advancement of the Environmental
Assessment and Feasibility Study for Wheeler River through 2021 and
beyond, as we move towards a definitive development
decision.
The uranium market has steadied through the balance of the
third quarter, following the announcement of the restart of the
Cigar Lake mine and Denison's 22.5% owned McClean Lake uranium
mill. The spot price has support around US$30/lb U3O8 – roughly 60%
above the lows the commodity reached in late 2016 – and is set to
benefit from a resumption of nuclear utility purchasing activity as
COVID-19 related protocols have been developed and deployed
throughout the sector over the last several months. Nuclear energy
has answered the call to provide reliable and cost competitive
energy during this time and is well positioned to participate in
green energy initiatives being considered around the world to
create economic stimulus and accelerate global plans to decarbonize
the energy mix.
With this positive outlook for the nuclear energy sector,
Denison is pleased to be nearing completion of its Preliminary
Economic Assessment for the J Zone uranium deposit on the Company's
Waterbury Lake property, assessing the applicability of the ISR
mining method to potentially mine the deposit. If results are
positive and applicable approvals obtained, J Zone could become the
Company's second ISR development-stage project."
HIGHLIGHTS
- Resumed evaluation and exploration field activities at
Wheeler River
In July 2020, Denison announced
the resumption of evaluation field activities at the Company's 90%
owned Wheeler River Uranium Project ('Wheeler River' or the
'Project') with the initiation of an In-Situ Recovery ('ISR') field
program ('2020 Field Program') focused on the high-grade
Phoenix uranium deposit
('Phoenix'). Field activities were
gradually expanded late in the third quarter to allow for the
initiation the Company's planned exploration activities. In order
to ensure the Company's operations comply with all applicable
health and safety guidelines associated with the COVID-19 pandemic,
all operating procedures at the Company's Wheeler River site have
been reviewed and adapted to incorporate physical distancing and
enhanced hygiene protocols, as well as special travel protocols
designed by Denison for northern Saskatchewan.
- Completed the 2020 ISR Field Program
In October 2020, Denison announced
the safe and successful completion of the 2020 Field Program, which
was designed to build additional confidence in the results of an
independent hydrogeologic model developed by Petrotek Corporation
('Petrotek') for Phoenix, and to
support the design and permitting of further field work expected to
be incorporated into a future Feasibility Study ('FS'). The
hydrogeologic model developed for Phoenix is based on actual field data
collected during an extensive field test program completed at
Phoenix in 2019 (the '2019 Field
Test'), with the model and associated simulations having already
demonstrated "proof-of-concept" for the application of the ISR
mining method at Phoenix, with
respect to potential operational extraction and injection rates
(see press release dated June 4,
2020)
- Capitalized the Company to fund future evaluation and
environmental assessment activities for Wheeler River
In October 2020, Denison
successfully completed a public offering of 51,347,321 common
shares at a price of US$0.37 per
common share for gross proceeds of CAD$24,962,000 (US$18,999,000), which includes 4,347,321 common
shares granted to the underwriters through the exercise, in part,
of an over-allotment option. The proceeds of the offering are
anticipated to be used to fund evaluation and environmental
assessment ('EA') activities on the Wheeler River project, as well
as for general working capital purposes.
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).
A pre-feasibility study ('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 recent social, financial and market disruptions, Denison
has suspended certain activities at Wheeler River, including the EA
program, which is on the critical path to achieving the project
development schedule outlined in the PFS. Given the uncertainty
associated with the duration of suspension, 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 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 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 deposits
and a 66.71% interest in the J Zone and Huskie deposits on the
Waterbury Lake property. The Midwest, J Zone 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
related to the 2019 Field Test, 2020 ISR Field Program and the
Wheeler River PFS has been reviewed and approved by David Bronkhorst, P.Eng, Denison's Vice
President, Operations, who is a Qualified Person in accordance with
the requirements of NI 43-101.
Mineral resource information contained in this press release has
been reviewed and approved by Andrew
Yackulic, P. Geo, Denison's Director, Exploration, 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 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: exploration, development
and expansion plans and objectives, including the results of, and
estimates and assumptions within, the PFS, the plans and objectives
for ISR and the related field and hydrogeological testing results,
models, "proof of concept", plans and objectives; expectations,
plans and objectives of a future FS for Wheeler and any work to be
undertaken in respect thereto; the suspension of EA activities and
anticipated results of such suspension; the impact of COVID-19 on
Denison's operations; evaluation activities and plans for a PEA for
the J Zone deposit and projections with respect thereto;
projections with respect to use of proceeds of recent financings;
the estimates of Denison's mineral reserves and mineral resources;
expectations regarding Denison's joint venture ownership interests;
expectations regarding the continuity of its agreements with third
parties; and its interpretations of, and expectations for, nuclear
power and uranium supply, demand and related market factors.
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 the ISR field test and
hydrogeological test programs 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 or PEA for J Zone at Waterbury
Lake, 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 13, 2020
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 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.
![Denison Reports Results From Q3 2020 (CNW Group/Denison Mines Corp.) Denison Reports Results From Q3 2020 (CNW Group/Denison Mines Corp.)](https://mma.prnewswire.com/media/1328077/Denison_Mines_Corp__Denison_Reports_Results_From_Q3_2020.pdf?p=pdfthumbnail)
View original content to download
multimedia:http://www.prnewswire.com/news-releases/denison-reports-results-from-q3-2020-301167628.html
SOURCE Denison Mines Corp.