TORONTO, July 29, 2021 /CNW/ - Denison Mines
Corp. ("Denison" or the "Company") (TSX: DML) (NYSE
American: DNN) is pleased to provide a progress update on the
In-Situ Recovery ("ISR") field test activities occurring at Phase 1
of the high-grade Phoenix uranium
deposit ("Phoenix") at the Company's 90% owned Wheeler River
Uranium Project ("Wheeler River" or the "Project"). The Company is
also pleased to announce the discovery of additional high-grade
uranium mineralization, including 22.0%
eU3O8 over 8.6 metres in drill hole
GWR-045, located outside of the existing high-grade resource domain
associated with Zone A and Phase 1 of the phased mining approach
currently planned for Phoenix.
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David Bronkhorst, Denison's VP
Operations, commented, "We are pleased to have safely and
successfully completed a substantial portion of the planned 2021
ISR field test program – including the installation of the
commercial-scale wells in our five-spot test pattern ("Test
Pattern") and nine of eleven planned monitoring wells. Baseline
hydrogeologic testing and permeability enhancement efforts
completed within the Test Pattern thus far are encouraging and will
inform future test work as we progress towards the initiation and
completion of a full-scale tracer test during the remainder of the
program. The tracer test is planned to be completed during
the third quarter and is expected to provide a more complete
understanding of the operating parameters in Phase 1 and important
information in support of our objective of permitting and
completing a lixiviant test in 2022 – which is considered a key
de-risking milestone for the project.
Additionally, the discovery of a thick interval of
high-grade uranium mineralization in GWR-045 is quite exciting, as
it has the potential to meaningfully increase the high-grade
mineral resources estimated within the area currently expected to
represent the first phase of ISR mining at Phoenix."
Interim progress highlights from the 2021 ISR field program
include the following:
- Completed installation of commercial-scale wells:
All five new commercial-scale well ("CSW") installations planned
for the Test Pattern, located in the Phase 1 area of Phoenix, are complete. The Test Pattern
consists of the newly installed five-spot pattern (GWR-038 to
GWR-042), and GWR-032, which was installed in 2019 (see Figure 1).
Taken together, the CSWs are spaced between 5 and 30 metres apart
and are expected to facilitate further hydrogeologic testing and
assessment of down-hole permeability enhancement tools as part of
the ongoing field program.
- Successful installation of monitoring wells: Nine of
eleven monitoring wells ("MWs") have been successfully installed
within the Phase 1 area (see Figure 1) and outfitted with the
associated materials and monitoring equipment to facilitate ongoing
observation of the current and future hydrogeological test work –
allowing for detailed hydrogeological assessment and water quality
sampling. The final two MWs are expected to be completed in early
August.
- Collected baseline hydrogeologic information and deployed
permeability enhancement: The MaxPERF drilling tool was
successfully deployed in all planned CSWs to create a series of
lateral drill holes (penetration tunnels) designed to mechanically
engineer increased access to the existing permeability of the ore
zone formation.
- Discovery of High-Grade Mineralization in GWR-045:
GWR-045 was completed as part of the ISR field test program to
install MWs to the northwest of the five-spot Test Pattern. Based
on the Phoenix block model,
GWR-045 was expected to intersect low-grade uranium mineralization
along the northwestern margin of the deposit, approximately 5
metres outside of the boundary of the Phoenix Zone A high-grade
resource domain. The drill hole, however, intersected a thick
interval of high-grade unconformity-associated uranium
mineralization grading 22.0% eU3O8 over 8.6
metres (see Figures 1 and 2; Table 1). The high-grade
mineralization intersected by GWR-045 remains open to the
northwest, representing an area for further exploration and
potential mineral resource expansion of Phoenix. Denison's exploration team is
currently incorporating the results of GWR-045 into the
Phoenix geological model to
evaluate the potential to extend the high-grade domain with
additional exploration drilling in the Phase 1 area of Phoenix.
Table 1 – GWR-045
Mineralized Intersection
|
Drill
Hole
|
From
(m)
|
To
(m)
|
Length
(m)4
|
eU3O8
(%)1,2,3
|
GWR-045
|
406.95
|
415.55
|
8.6
|
22.0
|
Notes:
|
1.
eU3O8 is radiometric equivalent
U3O8 derived from a calibrated total
gamma down-hole probe.
|
2. Composited above a
cut-off grade of 0.1% eU3O8
|
3. Composited using a
1.0 metre minimum mineralization thickness and 1.0 metre maximum
waste
|
4. The stated length
is interpreted to represent true thickness as the drill hole is
oriented vertically, and the unconformity mineralization is
interpreted to lie horizontally
|
Activities Planned for Remainder of 2021 ISR Field
Program
Once the final two MWs are completed, the Test Pattern will be
ready for additional hydrogeologic test work, including the
following planned activities:
- Multi-day pump and injection tests to be conducted on the
full-scale Test Pattern. These tests are intended to assess the
Test Pattern's total permeability, and support an ongoing
assessment of the ability of various permeability enhancement tools
to normalize the varying levels of permeability associated with the
natural fracture/structure network of the deposit;
- Ion tracer tests will be conducted by injecting and recovering
solution with dissolved inorganic salts throughout the full-scale
Test Pattern. This process is expected to (1) establish
breakthrough times for each CSW, with injection from the centre
well in the Test Pattern and recovery from the outer ring wells,
and (2) confirm modelling of sub-surface pathways. Taken together,
this test is expected to provide a more complete understanding of
the hydrogeologic characteristics expected throughout Phase 1 and
the necessary datasets for the design and permitting of a lixiviant
test planned to make use of the same Test Pattern in 2022;
- Deployment and evaluation of additional permeability
enhancement techniques based on individual well characteristics and
associated hydrogeological assessments; and
- Extensive collection and analysis of permeameter samples from
new and historic drill core for the assessment of matrix
permeability spatially distributed throughout the areas
representative of all of the mining phases planned for Phoenix.
All test work in 2021 will be conducted using site groundwater.
Following the field tests and associated data collection, detailed
hydrogeological and geochemical modelling of the test data will be
carried out by various Qualified Persons ("QPs").
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.
Despite the Company's current intentions, it is possible that
the 2021 ISR field program may be disrupted by the continuously
evolving social and/or economic disruptions associated with the
COVID-19 pandemic, which are outside of the control of the Company
– for example, provincial or local travel restrictions, or changing
public health guidelines, could impact the ability of Company or
contractor staff to attend to
the site.
Use of Radiometric Equivalent Grades
The Company typically reports results as preliminary radiometric
equivalent grades ("eU3O8"), derived from a calibrated downhole
total gamma probe, during active exploration programs and
subsequently reports definitive assay grades following sampling and
chemical analysis of the mineralized drill core. In the case where
core recovery within a mineralized intersection is less than 80%,
radiometric grades are considered to be more representative of the
mineralized intersection and may be reported in the place of assay
grades. Radiometric equivalent probe results are subject to
verification procedures by qualified persons employed by Denison
prior to disclosure. For further details on the total gamma
downhole probe methods employed by Denison, QAQC procedures and
data verification procedures please see Denison's Annual
Information Form dated March 26, 2021
available on Denison's website and under its profile on SEDAR and
EDGAR.
About Phoenix Phase 1
Phase 1 of Phoenix 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 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 (90% and operator) and JCU
(Canada) Exploration Company
Limited (10%).
A Pre-Feasibility Study ("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 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 schedule estimates provided therein, including with
respect to 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
interests in the Athabasca Basin
include a 22.5% ownership interest in the McClean Lake joint
venture ("MLJV"), 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 located within 20
kilometres of the McClean Lake mill. In addition, Denison has an
extensive portfolio of exploration projects covering approximately
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 industry and government clients.
Follow Denison on Twitter @DenisonMinesCo
Qualified Persons
The technical information 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 planned scope,
elements, and objectives of the 2021 ISR field programs, including
the drilling of CSWs and MWs and development and objectives of the
Test Pattern; other evaluation activities, including a planned
future lixiviant test; the results of the PFS and expectations with
respect thereto; expectations with respect to phased development,
and the estimates of reserves in each such phase; other development
and expansion plans and objectives, including plans for an
environmental assessment and 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, 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 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.
Figure 1: Plan Map Showing Location of
Phoenix Deposit (Phase 1) – ISR Test Pattern
Figure 2: Cross Section View of the Phoenix
Deposit (Phase 1) – Through GWR-045 Showing Location
of Mineralized Intersection Relative to Existing
High-Grade Resource Domain
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SOURCE Denison Mines Corp.