TORONTO, Nov. 4, 2021 /PRNewswire/ - Denison Mines
Corp. ('Denison' or the 'Company') (TSX: DML) (NYSE
American: DNN) today filed its Condensed Interim Consolidated
Financial Statements and Management's Discussion & Analysis
('MD&A') for the quarter ended September
30, 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. All amounts in this release are in Canadian
dollars unless otherwise stated. View PDF version
David Cates, President and CEO of
Denison commented, "Our recent In-Situ
Recovery ('ISR') field test results reflect several years of
progress made towards systematically de-risking the use of the ISR
mining method at the high-grade Phoenix deposit – culminating in the
successful, and first of its kind, field test of a commercial-scale
well pattern located in the expected first phase of the
Phoenix orebody. Our
accomplishments in the field and the laboratory have significantly
increased our confidence in the use of the ISR mining method and
support our landmark decision to advance the planned Phoenix ISR
operation to the Feasibility Study design stage.
With increased interest in the uranium market and a recent
lift in both spot and long-term uranium prices, we are encouraged
that future utility customers are returning to the market and
looking at Denison's Wheeler River project as a potentially viable
source of reliable and low-cost future supply. Taken together
with our effective 95% interest in Wheeler River and strong balance
sheet, which, as of today, includes 2.5M lbs U3O8 of physical
uranium holdings acquired at a price under US$30/lb U3O8, we believe
Denison is well positioned to become an intermediate supplier of
choice in the second half of the decade at a time when market
fundamentals are predicted to be favourable as a result of growing
demand for uranium and a relative shortage of advanced low-cost
uranium development assets in stable jurisdictions.
Our team is focused on advancing Phoenix in the coming months and years to
realize on our vision of becoming the next new uranium producer in
the Athabasca Basin
region."
HIGHLIGHTS
- Successful completion of ISR field test activities at
Phoenix
The initial results of the 2021 ISR field test program
('2021 ISR Field Test') completed at the Phoenix uranium deposit ('Phoenix') include (1) the achievement of
commercial-scale production flow rates consistent with those
assumed in the pre-feasibility study ('PFS') prepared for the
Wheeler River Project ('Wheeler River' or the 'Project') in 2018;
(2) the demonstration of hydraulic control of injected solution
during the ion tracer test; and (3) the establishment of
breakthrough times between injection and recovery wells, spaced 5
to 10 metres apart, that are consistent with the hydrogeological
model prepared by Petrotek Corporation ('Petrotek') in 2020
demonstrating "proof of concept". In addition, the Company
completed the clean-up phase following the tracer test,
demonstrating the ability to remediate the commercial scale well
('CSW') test pattern, reducing tracer concentrations to as low as
4% of peak test levels, with eight days of remediation.
- Advancement of Phoenix to
feasibility study ('FS') stage and selection Wood PLC as
independent lead author
In September 2021, the
Wheeler River Joint Venture ('WRJV') approved the initiation of an
independent FS for the ISR mining operation proposed for
Phoenix. The completion of the FS
is a critical step in the progression of the project and is
intended to advance de-risking efforts to the point where the
Company and the WRJV will be able to make a definitive development
decision. The Company also selected leading global consulting and
engineering firm Wood PLC to lead and author the FS in accordance
with Canadian Securities National Instrument 43-101 ('NI
43-101').
- Initiated exploration drilling programs at Wheeler River and
Moon Lake South
In early September, Denison's exploration team initiated
diamond drilling exploration programs at Wheeler River, and the
Moon Lake South project. Approximately 6,500
m of diamond drilling is planned for Wheeler River, with
regional exploration drilling expected to be focused on expanding
mineralization encountered in 2020 at K West and M Zone, plus
additional exploration drilling at Phoenix Zone A to test the
extents of high-grade mineralization encountered in drill hole
GWR-045. Moon Lake South is a Denison-operated joint venture with
CanAlaska Uranium Ltd., in which Denison holds a 75% interest.
Drilling planned for Moon Lake South is expected to consist of
2,400 metres focused on testing geophysical targets.
- Completed acquisition of 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%).
- Completed the sale of shares and warrants of GoviEx Uranium
Limited ('GoviEx) for proceeds of up to $41,600,000
In October, the Company sold, by private agreement,
32,500,000 common shares of GoviEx, held by Denison for investment
purposes, and 32,500,000 common share purchase warrants, entitling
the holder of the warrant 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. 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.
- Recorded significant mark-to-market fair value gains on the
Company's long-term investments in uranium
During the nine months ending September 30, 2021, the Company acquired
2,400,000 pounds of uranium at a weighted average cost of
$36.59 (US$29.62) per pound U3O8
to be held as a long-term investment. Due to significant activity
in the uranium spot market in the third quarter, the spot price
appreciated from US$32.10 per pound
U3O8 to US$43.00 per pound U3O8
resulting in mark-to-market gains for the three months ended
September 30, 2021 of $36,138,000 on these uranium investments.
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 and is a joint
venture between Denison and Denison's 50%-owned JCU. Denison
is the operator of the project and holds an effective 95% ownership
interest. The project is host to the high-grade Phoenix and Gryphon uranium deposits,
discovered by Denison in 2008 and 2014, respectively, estimated to
have 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 PFS was completed 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 net present value ('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 was 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.
Given the social, financial and market disruptions related to
COVID-19, and certain fiscally prudent measures, Denison
temporarily suspended certain activities at Wheeler River starting
in April 2020, including the formal
parts of the EA program, which is on the critical path to achieving
the project development schedule outlined in the PFS Technical
Report. While the formal EA process resumed in early 2021, the
Company is not currently able to estimate the impact to the project
development schedule, outlined in the PFS Technical Report, and
users are cautioned that certain of the estimates provided therein,
particularly regarding the start of pre-production activities in
2021 and first production in 2024 should not be relied upon.
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. In
addition to its effective 95% interest in the Wheeler River Uranium
Project, Denison's interests in Saskatchewan 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, 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 280,000
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 post-closure mine and maintenance
services to a variety of industry and government clients.
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
activities at Wheeler River; the interpretation of the results of
its exploration drilling programs; its plans for the feasibility
study; its use of proceeds of recent financings; its investments in
uranium; the impact of COVID-19 on Denison's operations; 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 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 Annual Information Form dated
March 26, 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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SOURCE Denison Mines Corp.