TORONTO, Nov. 9, 2020 /PRNewswire/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE
American: DNN) is pleased to announce its decision to restart the
formal Environmental Assessment ("EA") process for the 90% owned
Wheeler River Uranium Project ("Wheeler River" or the "Project")
effective January 2021. The
decision to resume the EA process marks the end of the temporary
suspension announced in March 2020
amidst the significant social and economic disruption that emerged
as a result of the COVID-19 pandemic (see Denison's news release
from March 20, 2020). View PDF
Version.
David Cates, Denison's President
& CEO, commented, "In the coming days, formal notifications
will be submitted to the Canadian Nuclear Safety Commission
('CNSC') and the Saskatchewan Ministry of Environment ('MOE')to
restart the EA process. These notifications will inform the
regulators of Denison's intention to resume various activities
designed to meet the regulatory requirements for an Environmental
Impact Statement ('EIS') supporting the advancement of Wheeler
River as Canada's first In-Situ
Recovery ('ISR') uranium mine.
With over $29 million in cash
on the balance sheet at the end of October, Denison is well funded
to resume the Wheeler River EA process and is currently finalizing
its plans for the resumption of the EA as part of the Company's
2021 budgeting process. A key milestone for the EA process in
2021 is expected to be the resumption of community engagement
activities, adapted to reflect COVID-19 protocols and best
practices, to facilitate information sharing with interested
parties. Additionally, advancing the EA process will involve
the completion of third-party technical studies and assessments,
ahead of the preparation and submission of a draft EIS, which is
currently targeted for early 2022."
Background on the Environmental Assessment Process
The EA is an important planning and decision-making tool that
involves predicting potential environmental effects throughout the
project lifecycle (construction, operation, decommissioning and
post-decommissioning) at the site, and within the local and
regional assessment areas. The EA process is part of the
critical path for the advancement of Wheeler River to a future
development decision. Denison initiated the EA for Wheeler
River in 2019 with the submission of a Project Description and
Technical Proposal (together referred to as the "Project
Description") to the CNSC and MOE. The Project Description
was accepted in the second quarter of 2019, formally initiating the
EA process for the Project in accordance with the requirements of
both the Canadian Environmental Assessment Act, 2012 and the
Saskatchewan Environmental Assessment Act. In late
December 2019, Denison received a
Record of Decision from the CNSC on the scope of the factors to be
taken into account for the Wheeler River EA, which indicate that
the EA will follow the CNSC's generic guidelines.
The Wheeler River EA will draw on the knowledge and expertise of
various technical experts in the fields of hydrogeology, aquatics,
hydrology, terrestrial ecology, socio economics, and atmospheric
and acoustic sciences. The expert knowledge collected through
this process will be used to evaluate the potential project effects
on the environment and, where applicable, develop mitigation
criteria for the life of the operation. Denison considers
this process to be iterative – involving repeated and ongoing
interaction with project design, as the Company advances towards a
future feasibility study and further detailed engineering.
This integrated approach ensures the Project will meet regulatory
requirements, protect people and the environment, and maintain
operational efficiency.
Impact on the Company's Outlook for 2020
The Company previously announced plans for 2020 in its annual
Management Discussion & Analysis ("MD&A") for the year
ended December 31, 2019 (the "Initial
2020 Outlook"). Those plans identified discretionary work
related to the advancement of the Wheeler River EA with a total
cost of approximately $7.0
million. As updated in the Company's MD&A for the
quarters ended March 30, 2020 and
June 30, 2020, the Company's Outlook
for 2020 was adapted in response to the COVID-19 pandemic and the
decision to temporarily suspend the Wheeler River EA ("Updated 2020
Outlook"). While the Company's internal environmental and
technical teams continued to advance certain scopes of work related
to the EA during 2020 (see Denison's news release dated
October 28, 2020), the Updated 2020
Outlook did not include the discretionary EA work identified in the
Initial 2020 Outlook.
Now, in support of the planned resumption of the EA in 2021, the
Company has approved certain discretionary scopes of work for the
remainder of 2020 – each of which is designed to best position
Denison to resume the EA process. The Company's latest
Outlook for 2020 ("Latest 2020 Outlook") is outlined in its
MD&A for the period ended September 30,
2020 and reflects these additional discretionary scopes of
work as part of the $700,000 of
additional evaluation expenditures outlined for Wheeler River in
2020.
The future scope and cost associated with the resumption of the
EA and the associated activities for 2021 are still to be
determined, and are expected to be included in the Company's future
disclosure of its overall business plans for 2021, which is
expected to follow the completion of the Company's annual budgeting
process.
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 formal EA process, which is on the critical
path to achieving the project development schedule outlined in the
PFS. 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 66.71% 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 related
to mineral resource estimates has been reviewed and approved by Mr.
Andrew Yackulic, P. Geo, Denison's
Director, Exploration, who is a Qualified Person in accordance with
the requirements of NI 43-101.
The balance of 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 resumption of
the EA process, including regulatory notices and procedures, and
anticipated scope, objectives and timing; the duration and scope of
impacts of the COVID-19 pandemic and affiliated operational
adjustments; 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, Denison may be unable to resume or, once resumed,
decide or otherwise be required to discontinue the EA 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
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SOURCE Denison Mines Corp.