 |
Denison Mines
Corp.
1100 – 40
University Ave
Toronto, ON M5J
1T1
www.denisonmines.com
|
PRESS
RELEASE
DENISON ANNOUNCES INITIATION OF ISR FIELD TESTING
AS THE SUMMER FIELD PROGRAM COMMENCES
AT WHEELER RIVER
Toronto, ON – June 26,
2019. Denison Mines Corp. (“Denison” or the
“Company”) (DML: TSX, DNN: NYSE American) is pleased to
announce the commencement of In-Situ Recovery (“ISR”)
field testing, as part of an active summer 2019 field program
planned for the Company’s 90% owned Wheeler River Uranium
Project (“Wheeler River”) in northern Saskatchewan,
Canada. Key components of the field program
include:
●
ISR Field Testing:
Initiation of an ISR field test
program at the Phoenix deposit, designed to collect an extensive
database of hydrogeological data. The data will be used to evaluate
the ISR mining conditions present at the deposit, and is expected
to be incorporated into a detailed ISR mine plan, as part of the
completion of a Feasibility Study (“FS”) for the
project;
●
Environmental Baseline Data
Collection: Continuation and
expansion of the collection of certain environmental baseline data
to support the Wheeler River Environmental Impact Assessment
(“EIA”); and
●
Exploration Drilling:
Approximately 5,000 metres of diamond
drilling in 10 holes expected to focus on the follow-up and
expansion of unconformity-hosted uranium mineralization intersected
along the K-West trend during the summer 2018 and winter 2019
programs.
David Cates, President and CEO of Denison,
commented, “We are pleased to have our
summer field program at Wheeler River underway. A significant amount of work has gone into
preparing and planning for the ISR field test, which will be the
first of its kind in the Athabasca Basin. Denison has assembled a
team of seasoned ISR and drilling experts to complement our
extensive geological knowledge of the Phoenix deposit –
working together to facilitate the planning and implementation of
the program. These tests represent an important step in increasing
the confidence in the ISR application at Phoenix and de-risking the
project as we advance toward a Feasibility
Study.
On the exploration front, there remains significant potential on
the Wheeler River property. The prospect of discovering additional
high-grade deposits, with the potential to form satellite ISR
operations, is compelling from both an exploration and economic
perspective. Our exploration team has designed a focused program to
test for the initial indications of such deposits along the K West
trend, which will follow-up on previous encouraging
results”.
ISR Field Testing
As
outlined within the Company’s Pre-Feasibility Study
(“PFS”) completed in late 2018, additional field work
is required to increase confidence and reduce risk associated with
the application of the ISR mining method at Phoenix. Previous field
and laboratory testing, completed as part of the PFS, indicated
that flow of mining solution through the ore zone is expected to be
viable at rates envisaged for the planned rate of production. The
field work planned for 2019 is focused on in-situ testing in the
orebody, using water to evaluate hydraulic conditions that can be
used to assess mining solution flow between a series of test wells.
The information collected through this process is expected to
increase the overall confidence of the application of ISR and
facilitate detailed mine planning as part of a FS.
Denison
has engaged Petrotek Corporation (“Petrotek”) to
facilitate the design and implementation of ISR field testing at
Phoenix. Petrotek specializes in technical evaluation and field
operations regarding subsurface fluid flow and injection projects,
with experience ranging from feasibility studies to facility
operation. The firm has more than 20 years of experience in the ISR
uranium mining industry and currently provides consulting services
to each of the ISR uranium miners in the United
States.
Petrotek
and Denison have designed an ISR field testing program specific to
the unique geological characteristics of the Phoenix deposit. The
testing program aims to provide hydrogeological testing across four
areas (“Test Areas”) of Phoenix Zone A, covering
approximately 65% of the Indicated Mineral Resource estimated for
the deposit. The Test Areas have been selected with the objective
of covering each of the various fluid flow domains, and
combinations thereof, expected to exist within the deposit. The
domains have been defined from detailed geological databases and
associated models, such that the Test Areas are collectively
representative of the deposit as a whole. Data acquired from the
ISR field testing program will be utilized to create an integrated
hydrogeological model, which will form the basis for ISR wellfield
and freeze dome design necessary for the FS and to support the EIA
process.
Denison
has initiated testing within Test Area 1 and plans to advance to
Test Area 2 during the summer 2019 program, with the remaining Test
Areas (Test Area 3 and 4) to be completed during 2020. Figure 2
illustrates the Test Areas planned for ISR field testing within
Phoenix Zone A. The objective within each Test Area will be to
efficiently establish the fundamental hydraulic characteristics of
the orebody, the overlying sandstone and overburden formations, and
the underlying basement rocks. This will be achieved through the
installation of several near-vertical HQ and PQ sized wells between
7 and 15 metres apart and the subsequent pumping, injection and
monitoring of ground water to establish the hydraulic connectivity
between wells. The program will utilize existing exploration drill
holes for well installation, where possible. Certain large-diameter
wells, commencing with one well per Test Area, are also planned to
determine optimal drilling and installation methodologies for the
“commercial-scale wells” expected to be used for
production. At this stage, the large-diameter wells are designed to
allow for the insertion of larger pumps and additional downhole
equipment that will facilitate commercial scale pump and injection
tests and the evaluation of certain permeability enhancement
techniques.
Additional
supportive permeability and porosity tests are planned through the
ore zone, and are expected to include hydraulic conductivity tests
(packer testing) and downhole geophysics (nuclear magnetic
resonance and neutron), where borehole conditions allow.
Mineralized core samples from the orebody, obtained in new holes or
by wedging from existing boreholes, will be subject to detailed
onsite geological and geotechnical logging and permeability
(permeameter) testing, and will be preserved to facilitate future
planned laboratory-based metallurgical test work.
Environmental Baseline Data Collection
Denison
recently announced the initiation of the EIA process for Wheeler
River, following acceptance of the Provincial Technical Proposal
and Federal Project Description by the relevant regulatory agencies
(see Denison’s press release dated June 3, 2019). The summer
program at Wheeler River will include the continuation and
expansion of the collection of certain baseline environmental data
to support the EIA. Baseline data collection is expected to
include:
●
Regional
hydrogeological testing outside of the Phoenix deposit to establish
baseline conditions within the local and regional groundwater
system. The data collected, including groundwater levels, flow and
quality, will form key inputs to groundwater models for the
EIA;
●
Continuation
of the collection of aquatic, terrestrial, groundwater and
atmospheric data;
●
Continuation
of the collection of waste rock geochemical data; and
●
A heritage
survey designed to cover certain areas of the project footprint
outlined in the PFS (e.g. the airstrip), which were not completed
during the previous program in 2017.
Exploration Drilling
Reconnaissance
drill testing of the sub-Athabasca unconformity along the 4.5
kilometre-long K-West conductive trend has returned encouraging
uranium and base metal sulphide intercepts together with other
geological features commonly associated with unconformity-related
uranium deposits (see Denison’s press releases dated November
12, 2018 and May 1, 2019). Figure 3 illustrates the location of the
K-West exploration target area.
Systematic
follow-up drilling is warranted in this area, as many of the drill
holes completed to date have not intersected the interpreted
optimal target horizon, and the current drill hole spacing along
strike ranges from 300 to 600 metres.
The
summer 2019 exploration program is scheduled to commence in July
2019 and is expected to consist of approximately 5,000 metres of
diamond drilling in 10 holes. The drilling is expected to be
focused on testing targets along section and along strike of the
previous drill holes at K West.
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 at an average
grade of 3.3% U3O8, plus combined
Inferred Mineral Resources of 3.0 million pounds U3O8 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, 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.
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 approximately 310,000 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 66.51%
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 also engaged in mine decommissioning and environmental
services through its Denison Environmental Services division and is
the manager of Uranium Participation Corp., a publicly traded
company which invests in uranium oxide and uranium
hexafluoride.
For more information, please contact
|
David
Cates
|
(416) 979-1991
ext 362
|
|
President and
Chief Executive Officer
|
|
|
|
|
|
Sophia
Shane
|
(604)
689-7842
|
|
Investor
Relations
|
|
|
|
|
|
Follow Denison on
Twitter
|
@DenisonMinesCo
|
The disclosure of scientific and technical information regarding
the Wheeler River Project in this news release was reviewed and
approved by Dale Verran, MSc, P.Geo., Pr.Sci.Nat., the Company's
Vice President, Exploration, 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: exploration (including
drilling) and evaluation interpretations, activities, plans and
objectives; the results of the PFS and expectations with respect
thereto; development and expansion plans and objectives, including
plans for the EA and other regulatory and feasibility study
processes for Wheeler River; expectations regarding Denison’s
community engagement and MOUs with local communities; 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. 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 12, 2019 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 news
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, the United
States Securities and Exchange Commission ("SEC") does not
recognize them. '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. The estimates of mineral reserves in this news
release have been prepared in accordance with NI 43-101. The
definition of probable mineral reserves used in NI 43-101 differs
from the definition used by the SEC in the SEC's Industry Guide 7.
Under the requirements of the SEC, mineralization may not be
classified as a "reserve" unless the determination has been made,
pursuant to a "final" feasibility study that the mineralization
could be economically and legally produced or extracted at the time
the reserve determination is made. Denison has not prepared a
feasibility study for the purposes of NI 43-101 or the requirements
of the SEC. Accordingly, Denison's probable mineral reserves
disclosure may not be comparable to information from U.S. companies
subject to the reporting and disclosure requirements of the
SEC.
Figure 1. Location map of Wheeler River showing existing and
proposed infrastructure.
Figure 2. Phoenix Zone A plan view showing Test Areas delineated
for ISR field testing.
Figure 3. Basement geology map for Wheeler River showing the 2019
exploration targets areas, including K West.