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Denison Announces Initiation of ISR Field Testing as the Summer Field Program Commences at Wheeler River
TORONTO, 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.
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.
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.
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.
David Cates, President and Chief Executive Officer, (416) 979-1991 ext 362; Sophia Shane, Investor Relations, (604) 689-7842
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