TORONTO, March 3, 2022 /CNW/ - Denison Mines
Corp. ('Denison' or the 'Company') (TSX: DML) (NYSE
American: DNN) today filed its Audited Consolidated Financial
Statements and Management's Discussion & Analysis ('MD&A')
for the year ended December 31, 2021.
Both documents will be available 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. The Company's results are highlighted by earnings
attributable to Denison shareholders of $0.02 per share for the year ended December 31, 2021. All amounts in this
release are in Canadian dollars unless otherwise stated. View PDF
Version.
David Cates, President and CEO of
Denison commented, "Our results from 2021 reflect a
significant improvement in the uranium market, as well as continued
operational progress advancing Wheeler River's Phoenix uranium deposit ('Phoenix') towards a development
decision.
Less than twelve months ago, Denison completed a novel
project financing initiative in support of the future development
of the Wheeler River project, involving the purchase of 2.5 million
pounds U3O8 in physical uranium holdings at
an average cost of US$29.66/lb
U3O8. The financing was designed to position
our shareholders to benefit from the additional financial stability
of our uranium holdings, while remaining fully leveraged to any
future appreciation of uranium prices that might occur prior to the
completion of a project financing for Wheeler River. Since then,
the uranium spot market has improved considerably, with continued
support from financial investors, leading to a significant increase
in the spot price in 2021 and a $41.4
million gain on Denison's physical uranium
holdings.
The improvement in the spot price was not only positive for
Denison's balance sheet, but it also appears to have catalyzed
further fundamental developments in the long-term supply
market. We have seen nuclear utilities seek to address
significant future uncovered requirements in an environment with
reduced visibility to available sources of supply – leading to
increased long-term contracting activity and prices. Combined with
positive demand signals coming from a growing chorus of support for
the critical role nuclear must play in the clean energy transition,
the narrative for the development of new top tier new uranium
mining projects has become quite positive.
Now several years into Denison's long-term plan for the
advancement of Wheeler River, our Company is uniquely aligned with
the improving uranium market, as we continue to successfully
demonstrate the potential for the Phoenix deposit to emerge as the first In-Situ
Recovery ('ISR') uranium mine in the Athabasca Basin region. Our de-risking efforts
at Phoenix have involved extensive
field and laboratory testing since completion of the
Pre-Feasibility Study in 2018, which to date culminated in the
completion of the installation and field testing of a 5-spot
commercial-scale ISR test pattern in 2021. The field test was
highly successful and confirmed key technical assumptions made in
the PFS. Taken together with our positive metallurgical results,
our work in 2021 has demonstrated tangible support for our
selection of the ISR mining method for Phoenix and our decision to initiate a formal
Feasibility Study.
Our plans for 2022 are ambitious – with a primary focus on
driving towards the completion of key technical and regulatory
milestones for Wheeler River, while also supporting a secondary
focus of unlocking value from Denison's vast project portfolio,
including continued exploration amongst our many highly-prospective
property interests, and the initial evaluation of potential
development plans for both the Midwest and McClean Lake
projects."
Highlights
- Completed highly successful ISR Field Tests at Phoenix, resulting in significant de-risking
and supporting the decision to advance to a formal Feasibility
Study ('FS')
The Company continued its systematic approach to de-risking the
technical risks identified for the ISR mining operation for
Phoenix at the Wheeler River
Uranium Project ('Wheeler River'), following completion of the 2018
Pre-Feasibility Study ('PFS'). Notably, in 2021 the Company
completed a highly successful ISR field test program including the
installation and testing of a pattern of five commercial scale
wells ('CSWs'). The results from the field test were
highlighted by the following:
-
- Achieved commercial-scale production flow rates consistent with
those assumed in the PFS;
- Demonstrated hydraulic control of injected solution during an
ion tracer test;
- Established breakthrough times between injection and recovery
wells consistent with previously prepared estimates; and
- Demonstrated the ability to remediate the five-spot CSW test
pattern ('Test Pattern').
Additionally, positive results
from ongoing metallurgical test work supported the decision to
increase the anticipated ISR mining head-grade for Phoenix by 50%.
Given consistently positive
results from field testing and laboratory testing, Denison and the
Wheeler River Joint Venture approved the initiation of the formal
FS report process for the Phoenix ISR project, and appointed Wood
PLC as independent lead author of the FS.
- Secured funding to complete the Environmental Assessment
('EA') and FS process for Wheeler River
Denison completed a series of equity financings during 2021
intending to fund the EA and FS processes for Wheeler River.
These financings raised gross proceeds of $48.2 million (including $11.9 million from At-the-Market offerings) from
the issuance of 39.7 million common shares and 15.8 million common
share purchase warrants. Based on current estimates, the net
proceeds from these financings are expected to be sufficient to
fund the completion of the FS and EA processes for Wheeler
River.
- Executed a Wheeler River project financing initiative
involving the strategic acquisition of physical uranium and
recorded significant uranium investment gains
In March 2021, Denison
successfully completed a public offering of units for gross
proceeds of $107.9 million. The
majority of the net proceeds of the offering were used to fund the
strategic purchase of 2.5 million pounds of uranium concentrates
('U3O8') at a weighted average price of
US$29.66 per pound
U3O8. The uranium is being held by Denison as
a long-term investment, which is intended to support the potential
future financing of the advancement and/or construction of Wheeler
River.
The uranium spot price appreciated to US$42.00 per pound U3O8 by
December 31, 2021, resulting in a
fair value gain on the Company's physical uranium holdings of
$41,440,000 for the year ended
December 31, 2021.
- Obtained funding for high-potential exploration programs in
2021 and 2022
The Company raised gross proceeds of $8.0 million in March
2021, from the issuance of common shares on a flow-through
basis, to fund eligible Canadian exploration activities in 2021 and
2022.
- Acquired 50% of JCU (Canada) Exploration Company, Limited ('JCU')
for $20.5 million
In August 2021, Denison
completed the acquisition of 50% of JCU from UEX Corporation
('UEX') for cash consideration of $20.5
million following UEX's acquisition of 100% of JCU from
Overseas Uranium Resources Development Co., Ltd. for $41 million. JCU holds a portfolio of 12 uranium
project joint venture interests in Canada, including a 10% interest in Wheeler
River, a 30.099% interest in the Millennium project (Cameco
Corporation, 69.901%), a 33.8123% interest in the Kiggavik project
(Orano Canada Inc., 66.1877%), and a 34.4508% interest in the
Christie Lake project (UEX, 65.5492%).
- Advanced actions to support reconciliation with Indigenous
peoples
Denison formally adopted an Indigenous People's Policy ('IPP') in
2021, which reflects the Company's recognition of the important
role of Canadian business in the process of reconciliation with
Indigenous peoples in Canada and
outlines the Company's commitment to take action towards advancing
reconciliation.
Also in 2021, the Company entered into a Participation and Funding
Agreement and Letter of Intent with the English River First Nation
('ERFN') in connection with the advancement of the proposed ISR
operation at Wheeler River, as well as an Exploration Agreement in
respect of Denison's exploration and evaluation activities within
the ERFN traditional territories. These agreements reflect
Denison's desire to operate its business in a progressive and
sustainable manner that respects ERFN rights and advances
reconciliation with Indigenous peoples. The agreements provide ERFN
with economic opportunities and other benefits, and establish a
foundation for future collaboration in an authentic, cooperative,
and respectful way.
- Discovery of high-grade uranium outside of the Phoenix Zone
A high-grade domain
Drill hole GWR-045, completed as part of the ISR field test
program as a monitoring well to the northwest of the CSW Test
Pattern, was, based on the mineral resources currently estimated
for Phoenix, expected to intersect
low grade uranium mineralization on the northwest margin of the
deposit. The drill hole, however, intersected a thick interval of
high-grade unconformity-associated uranium mineralization grading
22.0% eU3O8 over 8.6 metres. Follow up
drilling returned multiple additional intersections of high-grade
uranium mineralization, including 24.9% eU3O8
over 4.2 metres in drill hole GWR-049. Taken together, these
results are expected to expand the volume of the high-grade domain
to the northwest in the Phase 1 area of Phoenix Zone A.
- Sold shares and warrants in GoviEx Uranium Limited
('GoviEx') for proceeds of up to $41.6
million
In October 2021, the Company
sold 32,500,000 common shares of GoviEx, previously held by Denison
for investment purposes, and 32,500,000 common share purchase
warrants, entitling the holder to acquire one additional common
share of GoviEx owned by Denison at an exercise price of
$0.80 for a term of up to 18 months
(the 'GoviEx Warrants'). Denison received gross proceeds of
$15,600,000 on the sale of the shares
and warrants and continues to hold 32,644,000 common shares of
GoviEx. If the GoviEx Warrants are exercised in full, Denison will
receive further gross proceeds of $26,000,000 and will transfer a further
32,500,000 GoviEx common shares to the warrant holders.
- Received $5.8 million in
connection with the conversion of Uranium Participation Corporation
('UPC') into the Sprott Physical Uranium Trust
In April 2021, UPC announced
that it had reached an agreement with Sprott Asset Management LP
('Sprott') for the Sprott Physical Uranium Trust to acquire UPC
(the 'UPC Transaction'). Upon completion of the UPC Transaction on
July 19, 2021, Sprott became the
manager of the Sprott Physical Uranium Trust, and the management
services agreement ('MSA') between Denison and UPC was terminated.
In accordance with the terms of the MSA, Denison received a cash
payment of approximately $5.8 million
in connection with the termination.
About Denison
Denison Mines Corp. was formed under the laws of Ontario and is a reporting issuer in all
Canadian provinces and territories. 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. The
Company has an effective 95% interest in its flagship Wheeler River
Uranium Project, which is the largest undeveloped uranium project
in the infrastructure rich eastern portion of the Athabasca Basin region of northern
Saskatchewan. A PFS was completed
for Wheeler River in late 2018, considering the potential economic
merit of developing Phoenix as an
ISR operation and the Gryphon deposit as a conventional underground
mining operation. Denison's interests in
Saskatchewan also include a 22.5%
ownership interest in the McClean Lake Joint Venture, which
includes several uranium deposits and the McClean Lake uranium
mill, which is contracted to process the ore from the Cigar Lake
mine under a toll milling agreement (see RESULTS OF OPERATIONS
below for more details), 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.
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, 33.8123%) and Christie Lake
(JCU, 34.4508%).
Denison's exploration portfolio includes further interests in
properties covering approximately 297,000 hectares in
the Athabasca Basin
region.
Denison is also engaged in mine decommissioning and
environmental services through its Closed Mines group, which
manages Denison's Elliot Lake
reclamation projects and provides third-party post-closure mine
care and maintenance services.
Prior to July 19, 2021, Denison
also served as the manager of UPC, a publicly traded company listed
on the TSX that invested in U3O8 and uranium
hexafluoride ('UF6'). In April
2021, UPC announced that it had entered into an agreement
with Sprott to convert UPC into the Sprott Physical Uranium Trust.
This transaction closed on July 19,
2021, and the MSA between Denison and UPC was
terminated.
Technical Disclosure and Qualified Person
The technical information contained in this press release has
been reviewed and approved by David
Bronkhorst, P.Eng, Denison's Vice President, Operations
and/or Andrew Yackulic, P. Geo,
Denison's Director, Exploration, each of whom is a Qualified Person
in accordance with the requirements of NI 43-101.
Follow Denison on Twitter @DenisonMinesCo
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: projections with respect
to exploration, development and expansion plans and objectives,
including the plans and objectives for Wheeler River and the
related evaluation field program activities and exploration
objectives; the interpretation of the results of the ISR field
test, metallurgical and other assessment and de-risking activities
at Wheeler River; the interpretation of the results of its
exploration drilling programs; plans and objectives for the
feasibility study and agreements with third parties related
thereto; its use of proceeds of recent financings; its investments
in uranium; the estimates of Denison's mineral reserves and mineral
resources or results of exploration; 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 energy and
uranium demand. 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 de-risking efforts such as
the ISR field 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 the FS and/or
otherwise discontinue testing, evaluation and development work 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
Management's Discussion & Analysis for the year ended
December 31, 2021 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 Mineral Resources and Mineral Reserves: This
press release may use terms such as "measured", "indicated" and/or
"inferred" mineral resources and "proven" or "probable" mineral
reserves, which are terms defined with reference to the guidelines
set out in the Canadian Institute of Mining, Metallurgy and
Petroleum ("CIM") CIM Definition Standards on Mineral Resources and
Mineral Reserves ("CIM Standards"). The Company's
descriptions of its projects using CIM Standards may not be
comparable to similar information made public by U.S. companies
subject to the reporting and disclosure requirements under
the United States federal
securities laws and the rules and regulations thereunder.
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.
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