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August 03, 2022
TORONTO – Denison Mines Corp. (“Denison” or the “Company”) (TSX: DML) (NYSE American: DNN) is pleased to announce the substantial completion of extensive metallurgical test work to define the mechanical components for the planned Phoenix processing plant (the “Phoenix Plant”), as part of the Feasibility Study (“FS”) underway for the Company’s 95% owned Wheeler River project (“Wheeler River” or the “Project”). In addition, the metallurgical program has confirmed the ability to produce a yellowcake product that meets industry standard ASTM C967-13 specifications (see below for details).
Metallurgical test work intended to define the mechanical components for the Phoenix Plant was initiated in April 2021 at the Saskatchewan Research Council (“SRC”) laboratories in Saskatoon. The test work consisted of bench-scale lab tests using uranium bearing solution (“UBS”) that was previously produced from lab-scale leaching of core samples from the Phoenix deposit. These samples are intended to be representative of what is expected to be recovered from the In-Situ Recovery (“ISR”) wellfield planned for the Phoenix deposit (see news release dated August 4, 2021).
Kevin Himbeault, Denison’s Vice President of Plant Operations & Regulatory Affairs, commented, “The comprehensive test work undertaken by the Denison team has demonstrated our ability to produce (i) a saleable uranium product utilizing a simplified chemical precipitation process and (ii) high-quality effluent for final discharge to the environment. This is a significant milestone from which we can continue to optimize the designs for the Phoenix Plant and further our de-risking of the overall Project as part of the FS.”
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.
The results of the metallurgical test work are highlighted by the following:
Additionally, the metallurgical test program has provided several important inputs for the FS processes underway in relation to the planned Phoenix Plant and ISR operation, including confirmation of the following:
Additionally, extensive test work has been completed in defining any potential elements of concern, required process components, reagents, and general operating parameters necessary to mitigate processing risks and ensure the production of a yellowcake product that meets industry standards. This has allowed for the significant progression of the plant and process designs for the FS.
Additional targeted metallurgical test work continues in the following areas:
The laboratory work for the 2022 Metallurgical Program to support the feasibility study is being carried out at the SRC Mineral Processing and Geoanalytical Laboratories in Saskatoon, under the supervision of Wood Canada Limited (see news release dated September 22, 2021).
ASTM C967-13 Standard
ASTM C967-13 is a set of quality specifications applied to uranium ore concentrate that are generally recognized in the uranium industry for meeting requirements for refining and conversion to uranium hexafluoride and, therefore, a saleable product. Parties may, however, agree to less or more stringent specifications of product quality on a case by case basis.
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 (operator) and JCU (Canada) Exploration Company Limited (“JCU”). Denison has an effective 95% ownership interest in Wheeler River (90% directly, and 5% indirectly through a 50% ownership in JCU).
A PFS was completed for Wheeler River in 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 estimates provided therein regarding the start of pre-production activities in 2021 and first production in 2024.
Denison is a uranium exploration and development company with interests focused in the Athabasca Basin region of northern Saskatchewan, Canada. In addition to its effective 95% interest in the Wheeler River project, Denison’s interests in the Athabasca Basin include a 22.5% ownership interest in the McClean Lake joint venture, 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 each 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 approximately 300,000 hectares in the Athabasca Basin region.
Denison is also engaged in post-closure mine care and maintenance services through its Closed Mines group (formerly Denison Environmental Services), which manages Denison’s reclaimed mine sites in the Elliot Lake region and provides related services to certain third-party projects.
Follow Denison on Twitter: @DenisonMinesCo
The disclosure of scientific or technical information related to the FFT or Wheeler River project contained in this release has been reviewed and approved, as applicable, by Mr. David Bronkhorst, P.Eng, Denison’s Vice President, Operations or Mr. Andrew Yackulic, P. Geo., Denison’s Director, Exploration, who are Qualified Persons in accordance with the requirements of NI 43-101.
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